RO1 Chapter 4 Flashcards
Financial policy committee
Committee within the Bank of England responsible for watching for emerging risks to the financial system as a whole
Prudential regulation authority
Responsible for stability and resolvable of systematically important financial institutions such as banks, building societies and insurers
The financial conduct authority
Responsible for conduct of business and market issues for all firms and prudential regulation of smaller firms
Bank of England and financial services act 2016
Strengthening the banks governance and ability to operate more effectively as ‘one bank’
What is HM Treasury responsible for?
Responsible for storm lasting and putting into effect the uk governments and financial and economic policy
What is the Bank of England responsible for?
- settling of payments
- functioning of UK markets
- regulation of uk banks and larger financial firms
- provision of routing and emergency liquidity to the banking system
PRA objectives:
- promote the safety and soundness of firms
- facilitate effective competition
Who is in the the PRC?
- Governor of the Bank of England
- deputy governor for prudential regulation
-deputy governor for financial stability - deputy governor for markets and banking
- one member appointed by the governor of the bank
- chief executive of the FCA
- at least 6 external members appointed by the Chancellor of the Exchequer
FCA objectives:
- consumer protection
- integrity of the UK Financial System
- Competition
Does the EU influence uk Law?
Yes. MiFid II was influenced by the EU
Which country try can UK firms still passport?
Gibraltar.
Treaties
- EUs primary form of legislation
- outline its constructional framework
- concern the fundamental principles of the EU
Legislation
- ‘secondary’
- made in order to carry out responsibilities under the treaty establishing the EU
- comprise legal and non-binding legal instruments
Regulations
- apply to all member states
- usually concerned with day to day admin
- binding in their entirety
- take effect immediately
EU directives (name a few)
-Alternative investment fund managers directive
- banking directives
- capital requirements directives
- consolidated life assurance directives
- distance marketing directives
- fifth money laundering directive
- insurance mediation directive
- market abuse directive
- mortgage credit directive
- payment services directive
European supervisory authorities
-European securities and markets authority
-European banking authority
-European insurance and occupational pensions authority
What are European Supervisory Authorities roles?
- create a single rule book across EU countries
- temporarily ban certain financial activities
What does MiFid stand for?
Markets in Financial Instruments Directies
When did MiFid 1 come into effect?
01/11/2007
What was MiFid 1
Legislation that regulates firms which provide services to clients linked to ‘financial instruments’ (shares, bonds, units in collected investment schemes).
When was MiFid II introduced
03/01/2018
What extra requirements does MiFid II require?
- new market structure requirements
- requirements in transparency
- new rules in research and inducements
- disclosure of charges and costs
- reporting of significant loss
- product governance
- suitability
- describing advice services
What is the Insurance Distribution directive?
Set common minimum standards across EU countries for the regulation of the sale and administration of insurance
Insurance distribution directive objectives:
- professionalism
- commission disclosure
- harmonisation
- product governance
The Basel accords and CRD
Helped to strengthen the soundness and stability of the international banking system as a result of higher capital ratios
Competition and markets authority
CMA works with HM Treasury and the FCA to ensure competition between companies in the UK remains fair
Competition and markets authority responsibilities:
- investigating mergers
- investigating entire markets if it believes there are competition or consumer problems
- taking action against business that take part in cartels or anti competitive behaviour
The Pensions Regulator
Regulates work based pension schemes
- protect the benefits of members of occupational and personal pension schemes
- promote and improve the understanding of good administration
- maximise employer compliance
Information commissioners office
From data protection and electronic communications to freedom of information and environmental regulations.
Client and support services
Firms cannot contract out their regulatory obligations.
What FCA framework must firms have?
- assessing and covering risks to their business
- meeting regulatory requirements
- checking the firm continues to be compliant
What levels of service are available for firms?
Initial risk assessment
Business development
File audits
Training
Remedial work
PII cover
