Professional Conduct- business Flashcards
what are the 4 steps under the FSMA decision tree?
- Is the investment specified under FSMA?
- Is the activity a specified activity under FSMA? (e.g advising or arranging deals)
- Is the activity excluded under FSMA?
- Does is satisfy the three conditions in s327 FSMA and scope rules 2?
What is excluded under fsma?
- introducing a client to an authorised person.
- activity is a necessary part of the other services being provided by the law firm.
- sale of a body corporate (50% of shares or more).
what are the three conditions under s327 of FSMA and scope rule 2?
- member of a profession.
2/ cannot receive commission for the work you are doing. - incidental to the overall provision of services that the law firm is doing.
scope rule 22- ensure that the activity you are doing arises out of and is complementary to the work you are doing for that particular client.
is it a criminal offence for an unauthorised person to communicate a financial promotion ?
YES, unless an authorised person has approved its contents or a relevant exemption applies.
what are the exemptions which apply for financial promotions?
1, sale of a body corporate.
2. distribution to investment professionals, high net worth companies and high net worth individuals.
is it a criminal offence to offer share to the public without a prospectus approved? what are the exemptions?
YES, unless
- offer is directed at fewer than 150 persons.
- offer is only sent to qualified investors.
What are the three direct involvement offences under the Proceeds of Crime Act 2002?
s327- concealing, disguising, converting or transferring criminal property.
s328- entering or becoming concerned in an arrangement which facilitates in the acquisition, retention, use or control of criminal property and
s329- acquiring, using or having possession of criminal property.
what is the most common defence against the proceeds of crime act 2003?
make an authorised disclosure to MLRO or nominated officer.
(disclosure must of of own initative and as soon as practicable)
what is the indirect offence under proceeds of crime act?
ss330- knows, suspects or have reasonable grounds for knowing or suspecting that another person is engaged in money laundering and does not disclose this.
under s336 of proceeds of crime act, the person who informed the MLRO or the MLRO cannot authorise or undertake any prohibited act unless….
- Authorised by NCA.
- Seven working days has passed from the disclosure to the NCA during which time the NCA has not refused authority to proceed.
- NCA refused consent during the notice period and moratorium period (31 days starting with refused consent) has expired.
what does standard due diligence involve?
- verify identity- passport.
- if a company- company number, address of registered office, directors, managers (people owning more than 25% of voting right in company).
- CDD on beneficial owners.
what does enhanced customer due diligence involve?
where there is a higher risk of money laundering,
e.g from a high risk country, politically exposed person, false identification.
when to carry out simplified CDD?
customer may be in public administration, financial or credit institution, company regulated on stock market.
