RO1: Chapter 7 Flashcards
For which regulated activities do designated Professional Bodies (DPB) member firms not require FCA authorisation?
Activities which are incidental to their professional services, for example assisting a client but not providing advice in their field (Insurer = Insurance)
Employees of FCA regulated firms advertising retail clients should obtain ongoing training in changes in which areas?
- changes in the market
- products
- legislation and regulation.
What are the three stages of money laundering?
- Placement
- Layering
- Integration
What is exempt status?
A person that is exempt from regulatory activity as an authorised firm has accepted responsibility in writing for them.
What is a appointed representative?
A firm which has a contract with an authorised firm, not liable for its actions but can act on behalf of the authorised firm.
What is a tied agent?
Person who is under the responsibility of one investment firm and acts on their behalf.
How long can an individual cover for senior management in their absence?
Up to twelve weeks over twelve months without approval where the absence is temporary, as soon as it becomes apparent that the individual will be performing as Senior Manager for more than 12 weeks.
What are the senior management aims?
- Aim to reduce harm to consumers and strengthen market integrity by making individuals accountable for their conduct and competence
- Encourages staff at all levels to take personal responsibility for their actions and make sure they can demonstrate where their responsibility lies.
What is a solo-regulated firm?
A firm regulated by one regulator for example just the FCA.
What are limited scope firms?
Smaller firms that are subject to fewer requirements such as Sole Traders and Authorised Professional Firms.
What is a enhanced firm?
Larger firms with higher risks, will need additional requirements compared to limited and core firms.
What is a core firm?
Do not qualify to be limited or enhanced and are subject to the baseline regime
What sort of disciplinary powers does the FCA have over a approved person?
an approved person can be withdrawn if it is decided they are no longer Fit and Proper such as behaviour changes falling below standard, this can result in banning from regulated activities.
What are prescribed responsibilities ?
Allocated to senior managers, if the firm breaches a FCA requirement the senior manager in charge of that responsibility will be held accountable if they did not take steps to prevent it.
What does the certification regime do?
covers specific roles and functions which are not senior management function but still have a impact on customers such as financial advisers and mortgage advisers.
Who approves financial advisers?
It is up to the firm to make sure they are suitable and fit and proper by ensuring they are competent and capable to do their job (such as relevant qualifications).
What records should be kept indefinitely?
- Pension transfers
- Pension opt-outs
- Free-standing additional voluntary contributions
Which records should be kept for 5 years?
-Life policies documents
-Pension contracts
(If promotions on these products they must be kept for 6 years!)
What records should be kept for 3 years?
MIFID firms only need to hold information for 3 years.
How often should firms produce a report which discloses the number of complaints received?
Twice yearly
What does T&C stand for?
Training and Comptetence
What is the purpose of T&C’s?
Designed to make sure that firms’ employees are competent in the work they do and are properly supervised and regularly reviewed.
Why could a employee not be allowed to deal with a retail client?
Not competent, must pass regulatory module of an approved examination (RO1 for example)
How soon should a firm report changes in a employees competence status?
ASAP to the FCA
