Other High - Level Standards Flashcards
SYSC
Senior Management Arrangements, Systems & Controls
Purpose of SYSC
1) Corporate Governance
2) Business Risk
Directors take personal responsibility for firm
Show how to comply with PRIN 3 (Management & Control)
Holding directors responsible for their actions
Create common platform subject to CRD + MIFID
SYSC 4 + 5 Name
SYSC 4 - Corporate Governance Requirement of Board
SYSC 5 - Corporate Governance being applied to the rest of firm
SYSC 4 detail
SYSC 4 - Corporate Governance Requirement of Board
1) Sound Governance
experienced managers + clear organisation structure with defined lines of responsibility
2) Receiving written reports on compliance and internal audit ANNUALLY
3) Apportion responsibilty clear and appropriate
records kept for 6 years
SYSC 5 detail
SYSC 5 - Corporate Governance being applied to the rest of firm
Skills, Knowledge & Expertise (training, awareness)
Segregation of duties (signing off other’s work)
Awareness + monitoring of procedures
SYSC 10 Name
Conflicts of Interest
How to deal with conflicts
1) avoid them altogether if possible
2) Manage ones inevitable or choose to expose too Chinese wall Independence policy disclose to clients affected decline/withdraw from new business
Last 2 = last resort
Details about Conflicts of Interest
Firm must have systems and controls to manage
Conflicts policy written, maintained and implemented
- writing
- identifies potential conflicts
- producers to manage conflicts
- client description of policy
Implement Chinese wall
Types of conflicts of interest
1) Firm deals as principal (firm selling own shares)
2) Agency trade
3) An agency cross trade (buy + sell even )
4) Firm recommends to clinet whilst trading on market
two divisions e.g. broking and banking
SYSC 6
Compliance, audit and financial crime
SYSC 7
Risk Control
SYSC 8
Outsourcing
SYSC 9
Record keeping
SYSC 18
Guidance o Public Interest Disclosure act - whistleblowing
FTOC
Fair Treatment of Customers
Principle for businesses 6 - customer’s interest
6 Improved outcomes for consumers (FTOC)
Outcome 1) Central to the corporate culture of all firms
Outcome 2) Products + services meet needs of identified consumer groups and are targeted accordingly
Outcome 3) Clear info provided to consumers before, during and after sale
Outcome 4) Advice suitable and takes account of circumstances
Outcome 5) Products perform as firm have led consumers to expect
Outcome 6) Don’t face unreasonable post-sale barriers imposed by firms to change product/submit claim or make complaint
FINMAR
Financial Stability and Market Confidence
2 Aspects of FINMAR
1) Gathering Financial stability information (PRA only)
2) Short Selling ( FCA only)
Gathering Financial stability information (PRA only)
Rules apply to firms/individuals
PRA believing activities pose a risk to stability of financial system
PRA may impose financial stability info requirement
Short Selling ( FCA only)
Guidance under FCA regs of UK Short Selling Regulation
Price falling of a FI significantly since yesterdays’s close
Should FCA prohibit or restrict short selling otherwise limit transactions in instrument
- Whether price fall may become disorderly
- whether measures taken by FCA prevent further disorderly decline in price
Training + Competence background/regs
PRIN 3 SYSC 5 COND 4 (suitability) FIT 2 (Competence + capability) COCON 2 (due skill, care, diligence)
Enforced by FCA only
Retail clients only
Demonstration of Competence
Employee carrying activites for retail clients must demonstrate competence
- Exam success
- Firm responsible for assessment of competence
- Employee supervised by competent supervisor
- Regularly reviewed ( ensure competence - CPD)
Certain roles requiring appropriate exam
- Performing certain advising and dealing activities
- Acting as a broker fund advisor
- Advising on syndicate participation at Lloyd’s
- Acting as pension transfer specialist
