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FCA - Regulations > Relevant Legislation > Flashcards

Relevant Legislation Flashcards

1
Q

Who is exempt from authorisation?

A

Appointed reps, Profressional bodies, Recognised bodies, other institutions, Lloyd’s syndicate members §

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2
Q

Max sentence in magistrate’s court?

A

6 months and 5G fine

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3
Q

Max sentence in crown court?

A

two years and unlimited fine

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4
Q

What is the general sentence for breaking FSMA or MLR 2007

A

two years and unlimited fine

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5
Q

What are the civil law consequences of contravening the general prohibition?

A

Injuctions, restitution orders, contracts voidable at discretion of investor

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6
Q

What pensions are specified investments?

A

ALL

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7
Q

What options are considered specified under FSMA?

A

Options on all specified investments, currencies and precious metals

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8
Q

Are forwards and/or futures specified investments under FSMA?

A

forwards are NOT, futures are

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9
Q

Which instruments were added to the specified investment list recently?

A

Bencmarks, emissions products, loads and other forms of credit

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10
Q

Excluded activities under FSMA

A 
Newspapers and television broadcasts
providing information
UNPAID trustees
employee share scheme
dealing as principle and end user 
for commercial purposes
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11
Q

Excluded investments

A

Property
tangible assets currencies
premium bonds
national savings certificates

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12
Q

Who are part 4a authorisation forms for?

A

UK firms

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13
Q

Who do dual regulated firms send their form to?

A

the PRA, then they forward on relevant parts to FCA

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14
Q

When you are dual regulated, what is ‘appropriate resources’ split up to on Part 4A forms?

A

appropriate non-financial resources and prudent conduct

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15
Q

What two threshold conditions are looked at by both PRA and FCA is dual regulated on Part 4A forms?

A

Effective supervision (who owns you) and suitability (fitness and proprietary)

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16
Q

What is the popular exception to Mifid passporting that the examiners like to use?

A

Switzerland and the USA

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17
Q

What does passport allow for?

A

for firms within the EEA to open branches and cross border sell without the need for licensing in each separate jurisdiction

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18
Q

What is the additional core activity under mifid?

A

underwritiing

19
Q

What are the three ancillary services under mifid?

A

safekeeping and administration, loans to carry out transactions, investment research

20
Q

What is an overarching definition of Mifid activities?

A

shares bonds and ALL derivatives

Note mifid excludes sports bets

21
Q

IF you conduct business in a branch outside of home state, who regulates you?

A

Host state

22
Q

Who is the regulator on cross boundary sales?

A

HOMESTATE

23
Q

What is binding and for who?

A

RaPiD

Rules are for authorised firms
Principles are for individuals
Directions - whoever they specify

24
Q

What are not binding?

A

Evidential and guidance, conclusive behaviour not related to market abuse

25
Q

Under mifid, what is the home state regulator responsible for?

A

Authorisation, fitness and propriety, conduct of business, cross border services, prudential supervision, client assets

26
Q

What are the 11 principles for business (High Level Rule)

A
  1. Integrity
  2. due dilligence
  3. management and control
  4. financial prudence
  5. market conduct
  6. customer interest
  7. communications with client
  8. conflicts of interest
  9. relationship of trust with customer
  10. look after client assets
  11. relationship with regulators
27
Q

What are the PRA fundamental rules?

A

same as PfB, but replace 5-10 with

  1. adequate financial resources
  2. effective risk management
  3. resolution procedures
28
Q

What is the difference between a client and a customer?

A

Customer is both retail and private client, client includes eligible counterparts as well

29
Q

Under SYSC, what are the general requirements?

A

Sound governance, experienced management, receive written reports form compliance and internal audit annually, apportionment of responsibilities

30
Q

Under Sysc, what is required of employees and other relevant persons?

A

skills knowledge expertise, segregation of duties, awareness of procedures, monitoring

31
Q

Under approved person regime, who needs to be approved?

A

Governance functions, Required functions, Systems and Control Functions, Significant management functions, Customer function

32
Q

Who has a significant influence function?

A

governance function, required function, systems and control function, significant management function

33
Q

What are governing functions?

A

directors, CEO, partners etc

34
Q

What are required functions?

A

Compliance oversight, CASS oversight, Money Laundering Reporting Officer, Acturial function (for insurance firms)

35
Q

What are systems and controls functions?

A

risk, internal audit, financial affairs

36
Q

what is significant management function?

A

head of equities, settlement etc. someone who affects pnl

37
Q

Who regulates dual regulated firms controlled functions?

A

FCA and PRA

38
Q

how long after resigning as an approved person is an individual still eligible for disciplinary action from fca?

A

3 years

39
Q

What does the fit and proper test involve for approved persons?

A

Honesty and integrity, competence and capability, financial soundness

40
Q

What statements of principles are for all approved persons?

A

1, 2, 5, 11 from PfB

41
Q

What are the additional statements of principles for significant influence functions only?

A
  1. organised so a business can be controlled effectively
  2. exercise due diligence in managing the business of the firm
  3. ensure business complies with requirements and standards of reg
42
Q

Who follows the CISI code of conduct?

A

its members only as it is not part of FSMA or FCA

43
Q

When you have issues in work, what is the line of talk?

A

line manager, seek advice of compliance, approach non executive director or audit committee, contact CISI for advice

FCA - Regulations (4 decks)

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