RO1 Chapter 4

Question 1

Financial policy committee

Answer 1

Committee within the Bank of England responsible for watching for emerging risks to the financial system as a whole

Question 2

Prudential regulation authority

Answer 2

Responsible for stability and resolvable of systematically important financial institutions such as banks, building societies and insurers

Question 3

The financial conduct authority

Answer 3

Responsible for conduct of business and market issues for all firms and prudential regulation of smaller firms

Question 4

Bank of England and financial services act 2016

Answer 4

Strengthening the banks governance and ability to operate more effectively as ‘one bank’

Question 5

What is HM Treasury responsible for?

Answer 5

Responsible for storm lasting and putting into effect the uk governments and financial and economic policy

Question 6

What is the Bank of England responsible for?

Answer 6

• 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

Question 7

PRA objectives:

Answer 7

• promote the safety and soundness of firms
• facilitate effective competition

Question 8

Who is in the the PRC?

Answer 8

• 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

Question 9

FCA objectives:

Answer 9

• consumer protection
• integrity of the UK Financial System
• Competition

Question 10

Does the EU influence uk Law?

Answer 10

Yes. MiFid II was influenced by the EU

Question 11

Which country try can UK firms still passport?

Answer 11

Gibraltar.

Question 12

Treaties

Answer 12

• EUs primary form of legislation
• outline its constructional framework
• concern the fundamental principles of the EU

Question 13

Legislation

Answer 13

• ‘secondary’
• made in order to carry out responsibilities under the treaty establishing the EU
• comprise legal and non-binding legal instruments

Question 14

Regulations

Answer 14

• apply to all member states
• usually concerned with day to day admin
• binding in their entirety
• take effect immediately

Question 15

EU directives (name a few)

Answer 15

-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

Question 16

European supervisory authorities

Answer 16

-European securities and markets authority
-European banking authority
-European insurance and occupational pensions authority

Question 17

What are European Supervisory Authorities roles?

Answer 17

• create a single rule book across EU countries
• temporarily ban certain financial activities

Question 18

What does MiFid stand for?

Answer 18

Markets in Financial Instruments Directies

Question 19

When did MiFid 1 come into effect?

Answer 19

01/11/2007

Question 20

What was MiFid 1

Answer 20

Legislation that regulates firms which provide services to clients linked to ‘financial instruments’ (shares, bonds, units in collected investment schemes).

Question 21

When was MiFid II introduced

Answer 21

03/01/2018

Question 22

What extra requirements does MiFid II require?

Answer 22

• 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

Question 23

What is the Insurance Distribution directive?

Answer 23

Set common minimum standards across EU countries for the regulation of the sale and administration of insurance

Question 24

Insurance distribution directive objectives:

Answer 24

• professionalism
• commission disclosure
• harmonisation
• product governance

Question 25

The Basel accords and CRD

Answer 25

Helped to strengthen the soundness and stability of the international banking system as a result of higher capital ratios

Question 26

Competition and markets authority

Answer 26

CMA works with HM Treasury and the FCA to ensure competition between companies in the UK remains fair

Question 27

Competition and markets authority responsibilities:

Answer 27

• 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

Question 28

The Pensions Regulator

Answer 28

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

Question 29

Information commissioners office

Answer 29

From data protection and electronic communications to freedom of information and environmental regulations.

Question 30

Client and support services

Answer 30

Firms cannot contract out their regulatory obligations.

Question 31

What FCA framework must firms have?

Answer 31

• assessing and covering risks to their business
• meeting regulatory requirements
• checking the firm continues to be compliant

Question 32

What levels of service are available for firms?

Answer 32

Initial risk assessment
Business development
File audits
Training
Remedial work
PII cover