Regulation Flashcards
Where were EU Directives established? What are they?
Section 58 of the European Treaty - aim is the harmonisation of laws across EU member states by prescribing a desired result by a particular date - not direct regulation
How are EU directives implemented (in the UK)
a) by primary legislation
b) by delegated legislation under section 2 of the European Communities Act (1972) - regulations alter a statute as is necessary to implement directive
What is MiFID?
Markets in Financial Instruments Directive - allows investment firm in one EU country to operate throughout EEA (without separate authorisation from member state)
Firms must hold complaints for 5 years
What is the UCITS Directive?
Undertakings for Collectives Investments in Transferable Securities - gives automatic recognition in the UK to collective investment schemes constituted in any other EU state
What is the AIFMD?
Alternative Investment Fund Managers Directive (AIFMD) came in in 2013 - covers, administration, marketing, and management of AIFs
What is the EMIR?
European Market Infrastructure Regulation (EMIR) (2012), covers OTC derivatives, central counter-parties and trade repositories - mandates that anyone within a derivative contract must report and risk manager their derivative position
What is the BMR? Why did it come in?
Benchmarks Regulation (BMR) by Practical Law Financial Services came in 2018 in the wake of the LIBOR and EURIBOR scandals
What is FATCA?
Foreign Account Tax Compliance Act - US Law requiring citizens to disclose funds in oversea funds that total $50,000
What is the CRS
Common Reporting Standards - OECD initiative setting information standard for automatic exchange of tax and financial information at global level (fatca gone global)
What are three financial regulatory bodies in the UK?
1) the Financial Conduct Authority (FCA) - regulate business conduct - prudentially regulate all but largest firms
2) the Prudential Regulation Authority (PRA) - responsible for the prudential regulation of banks, insurance companies, and systemically important investment firms
3) Financial Policy Committee (FPC) - macro-prudential (systemic) regulation of financial system
What are the operational objectives of the FCA?
1) Consumer protection
2) Integrity of system - transparent, open markets that can be trusted
3) Competition
What is the CMA?
Competition and Markets Authority is independent competition authority - BEIS sec. will intervene in exceptional cases
When does CMA investigate mergers?
Where it will control more than 25% of UK market, or where UK turnover exceeds £70 million
What is the PTM? How is it funded?
The Panel on Takeovers and Mergers enforces the City Code on Takeovers and Mergers. The “PTM levy” of £1 for every trade £10,000 or above pays for the PTM (they also receive info from all such larger trades)
What are the two key rules for companies looking to acquire another company?
A bidder acquiring 30% of voting rights is required to make a cash off to other shareholders.
Where a company acquires 90% of a company it can force the remaining shareholders to sell their shares
