Regulating Firms And Individuals Flashcards
What is part 4A permission?
Permission under 4A of the financial and markets act 2000 to carry out specified regulated activities
One of the reasons why direct investment in shares is considered higher risk is because it is not classified as a regulated investment. True or false?
False
Investment in shares is a regulated investment
When assessing a person is fit and proper to perform a senior management function, the FCA requires that particular attention be given to certain factors. Which if the following is NOT a factor that the FCA requires to be considered?
A) whether the person has obtained a relevant qualification
B) whether the person has undergone or is undergoing training
C) whether the person possesses a relevant degree of competence
D) whether the person has worked in the financial services industry for at least five years
D) whether the person has worked in the financial services industry for at least five years
Which one ofnthe following job applicants is least likely to meet the FCA ‘fit and proper’ requirements?
A) george, who has recently been made redundent from a firm of independent financial advisors
B) irene, who currently has an authorised overdraft of £2000
C) francois, whose father’s house was taken into repossession by the lender three years ago
D) Yvette, who has missed her last two mortgage payments following a divorce
D) Yvette, who has missed her last two mortgage payments following a divorce
What was the main reason behind the the introduction of the senior managers and certification regime in 2016?
The regime was introduced in order to clarify responsibilities within a firm, thus making it easier to hold individuals to account for a particular failing.
Prior to its introduction the FCA and PRA had found it difficult to determine individual responsibility when seeking to take action against firms in the financial industry.
An employee is being reviewed to ensure theybare maintaining their competence, as required bybthe TC sourcebook. What three areas will the review focus on?
Technical knowledge and application
Skills and expertise
Understanding of changes in the market and to products, legislation and regulation
What is a fixed portfolio firm?
A fixed portfolio firm is one that has a large customer base and the potential to have a major impact on the market
It receives the highest level of supervision, involving continuous assessment and a designated supervisor
If the FCA discovers a contravention of its rules one of the steps it may take is to vary the firms permissions. This means that:
A) the firm may not be able to carry out one or more of the regulated activities
B) the firm maybe required to sell assets to provide restitution
C) the firm will need to seek authorisation from a different regulator
D) the form will be required to submit each sale to the FCA for approval
A) the firm may not be able to carry out one or more of the regulated activities
In relation to the FCA’s enforcement powers, what is the difference between restitution and redress?
Restitution refers to the FCA’s power with a court order, to require a person or firm to forfeit any profit any made as a result of contravening an FCA rule.
Redress applies to a situation in which an identifiable customer has made a loss as a result of a contravention of an FCS rule, the FCA, with a court order, can require that the loss be made good.
Whose rights are protected by the public interest disclosure act 1998?
A) shareholders who oppose directors remunerations package
B) employees who raise concerns about breaches of regulation or other misconduct
C) bank/building society deposit account holders in the event of a provider becoming insolvent
D) MPs who raise concerns about financial services providers in parliament
B) employees who raise concerns about breaches of regulation or other misconduct
Why is regulatory attention focused on fixed portfolio firms?
Fixed portfolio firms are those that have the greatest impact on consumers and the financial services marketplace; therefor, the FCA directs most of its resources to supervising these firms.
What are the 3 pillars of the FCA supervision model?
Pillar 1 - proactive firm or group supervision
Pillar 2 - event-driven, reactive supervision
Pillar 3 - issues and products
Record keeping for training and competence must be maintained for a minimum period from when the person ceases to carry out the activity or leaves the company, what are the time limits?
Non-Mifid business - 3 years
Mifid business - 5 years
Pension transfer business - indefinitely
