Other High - Level Standards

Question 1

SYSC

Answer 1

Senior Management Arrangements, Systems & Controls

Question 2

Purpose of SYSC

Answer 2

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

Question 3

SYSC 4 + 5 Name

Answer 3

SYSC 4 - Corporate Governance Requirement of Board

SYSC 5 - Corporate Governance being applied to the rest of firm

Question 4

SYSC 4 detail

Answer 4

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

Question 5

SYSC 5 detail

Answer 5

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

Question 6

SYSC 10 Name

Answer 6

Conflicts of Interest

Question 7

How to deal with conflicts

Answer 7

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

Question 8

Details about Conflicts of Interest

Answer 8

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

Question 9

Types of conflicts of interest

Answer 9

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

Question 10

SYSC 6

Answer 10

Compliance, audit and financial crime

Question 11

SYSC 7

Answer 11

Risk Control

Question 12

SYSC 8

Answer 12

Outsourcing

Question 13

SYSC 9

Answer 13

Record keeping

Question 14

SYSC 18

Answer 14

Guidance o Public Interest Disclosure act - whistleblowing

Question 15

FTOC

Answer 15

Fair Treatment of Customers

Principle for businesses 6 - customer’s interest

Question 16

6 Improved outcomes for consumers (FTOC)

Answer 16

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

Question 17

FINMAR

Answer 17

Financial Stability and Market Confidence

Question 18

2 Aspects of FINMAR

Answer 18

1) Gathering Financial stability information (PRA only)

2) Short Selling ( FCA only)

Question 19

Gathering Financial stability information (PRA only)

Answer 19

Rules apply to firms/individuals

PRA believing activities pose a risk to stability of financial system

PRA may impose financial stability info requirement

Question 20

Short Selling ( FCA only)

Answer 20

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

Question 21

Training + Competence background/regs

Answer 21

PRIN 3 
SYSC 5
COND 4 (suitability) 
FIT 2 (Competence + capability) 
COCON 2 (due skill, care, diligence)

Enforced by FCA only
Retail clients only

Question 22

Demonstration of Competence

Answer 22

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)

Question 23

Certain roles requiring appropriate exam

Answer 23

• Performing certain advising and dealing activities
• Acting as a broker fund advisor
• Advising on syndicate participation at Lloyd’s
• Acting as pension transfer specialist