KEY STUFF CHAPTER 2

Question 1

what manual says if you need a licence

Answer 1

perimeter guidance manual

Question 2

what conditions tell how to get a licence

Answer 2

threshold conditions

Question 3

specified investments key ones from main list you wouldnt have thought (there are 5)

Answer 3

lloyds syndicates, insurance contracts and funeral plans

regulated mortgages and home finance

deposits and electronic money

loans and other forms of credit

benchmarks

Question 4

what two instruments are always specified no matter underlying

Answer 4

futures and CFDs

Question 5

which options are specified

Answer 5

options on specified investments
options on precious metals
options on currency

Question 6

when are derivatives as a whole not specified

Answer 6

derivatives for commercial purposes

Question 7

what are the 7 MiFID investments

Answer 7

shares/ depositary receipts / warrants
debt instruments
units in a CIS
options
futures
CFDs
emissions allowances

Question 8

relating to CIS, what is always specified no matter if CIS is regulated and what function is always regulated/needs authorisation

Answer 8

units/shares of CIS are always specified investments

management is always a regulated activity

Question 9

which type of CIS has units traded on secondary market

Answer 9

closed end CIS

Question 10

which type of insurance is not a specified activity

Answer 10

car breakdown insurance (not car insurance though)

Question 11

4 main non-specified investments

Answer 11

property and other tangible assets
currencies
national savings and investment products
derivatives for commercial purposes

Question 12

4 excluded (non specified) activities which are in the green box

Answer 12

group or joint enterprises

dealing and principal and end user

primary market sale or buybacks

derivatives for risk management

Question 13

what are the 6 exempt persons and which 2 are not ‘defined’

Answer 13

BoE
appointed reps
recognised clearing houses
recognised investment exchanges

lloyds syndicate members
members of designated professional bodies

(last two are not defined)

Question 14

what are the 8 threshold conditions (LLEAAPS B)

Answer 14

Legal status
location of offices
Effective supervision
Appropriate resources
Appropriate non-financial resources
Prudent Conduct
Suitability (Fit and Proper)
Business Model

Question 15

which two functions are subject to fit and proper, and which rules apply to all staff except ancillary

Answer 15

senior manager and certified functions

conduct rules

Question 16

how do identify senior manager functions + the 2 FCA ones

Answer 16

Chief, director, chair, head of

MLRO and Compliance oversight

Question 17

which 2 roles require certification

Answer 17

material risk takers
supervisors of certification functions

(but also client facing people)

Question 18

6 conduct rules

which replaces which under consumer duty

Answer 18

1. act with integrity
2. due skill care and diligence
3. cooperate with regulators
4. interest of customers and treat them fairly
5. proper standards of market conduct
6. deliver good outcomes for retail customers

6 replaces 4 where consumer duty applies

Question 19

how to identify senior management conduct rules

Answer 19

include ‘reasonable steps’ or ‘business of the firm’

Question 20

vary or withdraw permission - when to identify which

Answer 20

appears to - vary
categorically - withdraw