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R01 > Responsibilities and Approach to Regulation > Flashcards

Responsibilities and Approach to Regulation Flashcards

1
Q

PRA’s two key tools for advancing objectives

A
  1. Regulation

2. Supervision

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2
Q

Three characteristics of PRA’s approach to regulation and supervision

A
  1. Judgement-based
  2. Outcomes-based
  3. Focused
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3
Q

4 international bodies the PRA is actively involved with

A
  1. Financial Stability Board
  2. Basel Committee on Banking Supervision
  3. International Association of Insurance supervisors
  4. Joint Forum
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4
Q

3 examples of macro-prudential tools the FPC can use.

A
  1. Setting countercyclical capital buffers
  2. Variable risk weights
  3. Leverage limits
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5
Q

How many members does the FPC have, who is it’s chair, and what areas are covered by the four deputy governors.
Who else sits?

A

13, chaired by the Governor of the Bank of England
Deputies for monetary policy, financial stability, prudential regulation, and markets and banking.
Chief executive of the FCA and 5 independent external members also sit.

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6
Q

Does the FPC have to follow the Treasury’s policy recommendations?

A

No, however it must respond and state the extent to which it agrees

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7
Q

3 powers of FCA

A
  1. Ban or restrict financial products
  2. Published details of warning notices
  3. Take formal action against misleading financial promotions
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8
Q

How frequently does the Bank of England Act 1998 require the Treasury to make recommendations to the PRC about the government’s economic policy?

A

Once each parliament

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9
Q

6 considerations for the PRC when deciding how to implement PRA’s objectives.

A
  1. Competition
  2. Growth
  3. Competitiveness
  4. Innovation
  5. Trade
  6. Better outcome for consumers
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10
Q

3 purposes of the FCA’s objectives

A
  1. Provide political and public accountability
  2. Govern the way the FCA carries out it’s general functions
  3. Assist in providing legal accountability
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11
Q

Which institutions do the PRA and FCA authorise respectively?

A

PRA: institutions accepting deposits or insurance contracts

FCA: smaller firms advising on and selling investments, home finance activities, or general insurance

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12
Q

What powers does the FCA have on enforcement matters?

A
  1. Impose penalties for market abuse
  2. Carry out investigations
  3. Take disciplinary action
  4. Instigate criminal proceedings
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13
Q

What powers does the FCA have on supervision matters?

A
  1. Make rules
  2. Require authorised person to provide information or documents
  3. Regulate changes of control
  4. Keep Lloyds insurance market under review
  5. Cooperate with other regulators
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14
Q

What powers does the FCA have on authorisation matters?

A
  1. Grant, vary & cancel authorisations
  2. Approve individuals and take action for their misconduct
  3. Authorise unit trusts
  4. Recognise overseas investment trusts
  5. Recognise investment exchange and clearing houses
  6. Maintain public record of authorised and prohibited persons
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15
Q

What four panels is the FCA required to maintain to represent interest of different stakeholder groups.

A
  1. Practitioner
  2. Consumer
  3. Smaller business
  4. Markets
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16
Q

Which body considers the recommended actions suggested by FCA enforcement staff?

A

Regulatory Decisions Committee

17
Q

3 main civil actions the FCA can pursue

A
  1. Asking High Court to grant injunction
  2. Ordering payment of restitution
  3. Granting insolvency orders
18
Q

4 examples of offences FCA can prosecute in the criminal court

A
  1. Falsely claiming to be authorised
  2. Carrying on regulated activity w/o authorisation
  3. Making misleading statements to induce investments
  4. Failing to cooperate with FCA investigations
19
Q

6 types of market abuse behaviour

A
  1. Insider dealing
  2. Unlawful disclosure
  3. Manipulating transactions
  4. Manipulating devices
  5. Dissemination
  6. Misleading behaviour and distortion
20
Q

Maximum sentence for misleading statements, misleading conduct, or insider dealing

A

7 years or an unlimited fine

21
Q

Maximum sentence for breach of 4MLD

A

2 years, fine, or both

22
Q

Maximum sentence for offences under Proceeds of Crime Act 2002

A

14 years and/or an unlimited fine

23
Q

Maximum sentence for failing to report money laundering or funding of terrorism

A

5 years and/or a fine

R01 (5 decks)

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