Need to know Flashcards by sami Cochrane

what are the statutory objectives of the FCA

ensure that relevant markets perform well
consumer protection
integrity of financial system
competition

How well did you know this?

Not at all

Perfectly

what can the FCA not do

delegate their legislative role
put an individual into jail (they can prosecute)
can not award an injunction
can not award a restitution order

How well did you know this?

Not at all

Perfectly

what is the FCA’s approach to regulation

principles based approach

How well did you know this?

Not at all

Perfectly

what are the FCA’s 3 pillars of supervision

1 - firm systematic framework (prevent)
2 - event driven work (react)
3 - issues and products (resolve/fix)

How well did you know this?

Not at all

Perfectly

who are the regulatory bodies

FCA
PRA
ESMA
Information Commissioners Office
CMA
TCCUT
Pensions regulator

How well did you know this?

Not at all

Perfectly

FCA firms are assessed by the FCA for part 4a permisson

Location of offices
Effective supervision
Appropriate resources
Suitability
Business model

How well did you know this?

Not at all

Perfectly

who assesses legal status for part 4a permission for dual regulated firms

PRA

How well did you know this?

Not at all

Perfectly

who assesses the location of office for part 4a permission for dual regulated firms

PRA

How well did you know this?

Not at all

Perfectly

who assesses effective supervision for part 4a permission for dual regulated firms

FCA / PRA

How well did you know this?

Not at all

Perfectly

who assesses appropriate non financial resources for part 4a permission for dual regulated firms

FCA

How well did you know this?

Not at all

Perfectly

who assesses prudent conduct for part 4a permission for dual regulated firms

PRA

How well did you know this?

Not at all

Perfectly

who assesses suitability for part 4a permission for dual regulated firms

FCA/PRA

How well did you know this?

Not at all

Perfectly

who assesses business model for part 4a permission for dual regulated firms

FCA / PRA

How well did you know this?

Not at all

Perfectly

what are MiFID activities

deal, arrange, manage, advise

How well did you know this?

Not at all

Perfectly

what is the purpose of EU MiFID legislation

to harmonise the trading rules in EEA member states

How well did you know this?

Not at all

Perfectly

the statement - a firm must take reasonable care to ensure the stability of its advice and its discretionary decisions for any customer who is entitled to rely upon its judgement - applies to which business principle

9: customer relationship of trust

How well did you know this?

Not at all

Perfectly

how do you remember the business principles

I - intregrity
See - skill, care and diligence
Many - management
Fair - financial prudence
Maidens - market conduct
at the 5c’s - customer interest, communicate, conlficts of interest, client assets,
regatta - relationship with regulator

How well did you know this?

Not at all

Perfectly

for an individual what principle of business rules apply

I - integrity
See - skill, care and diligence
Many - management and control
Fair - financial prudence
Maidens - market conduct

How well did you know this?

Not at all

Perfectly

principles for business for firms

I - integrity
See - skill, care and diligence
Maidens - management and control
Customer Interests
Cooperate with market regulators

what is the best execution criteria

client categorization
type of order
type of financial instrument being traded
characteristics of execution venues

what is in the investment policy statement

risk objective
return objective
liquidity needed
time horizon
tax
regulatory issues
other unique circumstances

if the trust deed does not specify trustee investment powers who are trustees governed by

the Trustees Act 2000

who has more assets under management UK, France or Germany?

the UK has 6 times more than Germany and 12 times more than France

who holds more fixed income UK or Germany, France in pension funds

Germany and France

when a financial advisor arranges a sale are they exempt from income tax

yes arranging a sale counts as execution only

what do the information commissioner issue notices about

data breach issues

what is the max penalty for a breach of GDPR

fined up to 20 mill euro or 4% annual turnover

what are the changes brought in by MIFD II

- created OTFs - new rules regarding transparency of algorithmic trading - imposed greater restrictions on the funding of 3rd party trading - introduced assessing a clients whole portfolio

who need to appoint a whistleblower champion

deposit takers with assets more than £250 mill

what is a product manufacturer required to do

- stress test products - have a product approval process in place - identify target market and specify types of client that the product is compatible with - make appropriate info available to distributors

does the know your customer policy include knowing expectations?

yes

rules on market abuse apply to who

regulated individuals and members of the public

are clients always permitted to opt down

yes

are purchase of share exempt from the insider dealing policy

no they are not

for non MIFID business who needs a client agreement

only retail clients

what sort of correlation does an emerging market have with a developing market

a low correlation

what type of risk occurs when there is a strong correlation between local currency and local equities

currency risk

are gilts subject to CGT

are corporate bonds subject to CGT

are permanent interest bearing shares subject to CGT

is taxable gain calculated before or after the annual exemption is applied

after

do net assets include loss and exemption

no they do include any outstanding costs though i.e. mortage

is a transfer of 200,000 to a daughter exempt from IHT

yes as below the nil rate band

are transfers into a trust exempt from IHT tax

no - they are chargable if they exceed the nil rate band

is a gain on an insurance bond liable to capital gains tax

No only liable to income tax

examples of systematic risk

economic crash, interest rates rising, price of commodity falling