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RO1 > RO1 - S.6 - Principles & Rules as set out in the regulatory framework > Flashcards

RO1 - S.6 - Principles & Rules as set out in the regulatory framework Flashcards

1
Q

When would a firm be exempt from applying for Part 4a permission for regulatory authorisation to operate?

A

When they are an Appointed Representative of a network, they operate on the networks license

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2
Q

what does SM&CR stand for?

A

Senior Management & Certification Regime

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3
Q

What are the three categories the FCA use for SM&CR firms?

A

Enhanced firms - highest impact & first to embed
Core firms - mass market firms and second to embed
Limited scope firms - lightest touch regulation needed and last to embed SM&CR

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4
Q

What did the SMF functions replace when SM&CR was brought in?

A

Controlled Functions

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5
Q

What are the three different types of SMFs under SM&CR?

A

1) Governing (CEO SMF1)
2) Required by statute ( SMF16 Compliance oversight)
3) Systems & controls (Internal Audit head)

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6
Q

Who does the Certification regime apply to?

A

Material risk takers within the firm e.g financial advisers

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7
Q

Who does the Senior Managers Regime apply to?

A

Most senior members in the firm with a statutory duty of responsibility

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8
Q

Who do senior managers need to be pre approved by before carrying out their roles?

A

The FCA

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9
Q

Who is required to identify and assess those on an ongoing basis who are subject to the certification regime?

A

The authorised firm

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10
Q

Who do the conduct rules apply to?

A

The majority of staff within an authorised firm

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11
Q

Which rules apply to an Appointed Representative who works for an SM&CR firm?

A

The APER (Approved Persons Regime)

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12
Q

What is a tied agent?

A

An Appointed Representative working for an authorised firm

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13
Q

What is a controlled function?

A

A certified role equivalent for ARs, for advisers undertaking a customer facing controlled function (CF30) but assessed under APER as opposed to SM&CR

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14
Q

What are the 3 key areas of SM&CR?

A

1) Senior Managers Regime
2) Certification Regime
3) Conduct Rules

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15
Q

For how long to Non-Mifid firms have to keep records?

A

3 years

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16
Q

For how long do MIFID firms have to keep records for?

A

5 years

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17
Q

For what types of products do records have to be kept indefinitely?

A

Pension Transfers & opt out, Free standing additional voluntary contributions

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18
Q

Through what system do firms have to provide FCA reports through?

A

GABRIEL

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19
Q

When do reports have to be sent in to the FCA?

A

Within 30 days of the reporting date

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20
Q

Give 2 examples of when the FCA would need to be immediately notified

A

1) Insolvency
2) Core changes to key personnel
3) Significant breach of principles
4) Incorrect information submitted to regulator

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21
Q

How many hours of CPD do advisers need to complete a year, how much of this should be structured?

A

35 hrs, 21 should be structuredq

22
Q

How long do new advisers have to pass the appropriate level 4 qualification when entering the industry?

A

48 months

23
Q

For how long do firms need to keep records for AML training?

A

5 years

24
Q

What 2 pieces of information need to be obtained as a minimum before onboarding clients?

A

their name and their adress

25
Q

Under the Proceeds of Crime Act 2002, what is the potential punishment for failing to keep records?

A

2 years imprisonment

26
Q

Under the Proceeds of Crime Act 2002, what is the potential punishment for failing to disclose?

A

5 years imprisonment

27
Q

Under the Proceeds of Crime Act 2002, what is the potential punishment for helping money laundering?

A

14 years imprisonment

28
Q

When did GDPR come in to effect in the UK and which statute brought it in?

A

2018 through the Data Protection Act 2018

29
Q

Under GDPR, what is the rule of lawful processing?

A

Firms need a defined process about how data is handled

30
Q

Name 3 rights which were brought in for data subjects under GDPR

A

Right of access, right to be informed, right to rectify, erase & object

31
Q

How much of global turnover can the ICO fine if a firm breaches data protection rules?

A

4%

32
Q

In how many days can a rapid resolution complaint be resolved in?

A

3 days

33
Q

When do complaints have to be acknowledged within?

A

5 days

34
Q

How many weeks should a firm provide a final response to a complaint within?

A

8 weeks

35
Q

How many complaints per year would require firms to disclose their complaints statistics to the public?

A

500+

36
Q

Which Act brought in the Financial Ombudsman Service (FOS) ?

A

FSMA 2000

37
Q

How is the FOS funded?

A

Paid for by FCA levy

38
Q

What is the maximum monetary award the FOS can instruct firms to pay out?

A

£430k

39
Q

Which Act brought in the Financial Services Compensation Scheme (FSCS)?

A

FSMA 2000

40
Q

Which 3 areas are covered by FSCS?

A

Cash deposits
Insurance contracts
Investment business

41
Q

How much is covered under FSCS for insurance contracts & investment business?

A
  • Insurance contracts - 100% of the claim w no upper limit
  • Investment business – 100% of the claim up to £85k
42
Q

How much will the FSCS cover under the temporary high balances rule?

A

Up to £1m from date of deposit for up to 6 months

43
Q

Name the 3 circumstances which would be covered by the temporary high balances rule

A

house sales, divorces, lottery wins

44
Q

What type of pension schemes do the Pensions Regulator regulate?

A

Work based pensions schemes

45
Q

How much can TPR fine trustees and firms?

A

Trustees - £5k
Firms £50k

46
Q

what is the remit of the Money and Pensions Service (MAPS)?

A

To provide guidance re money, debt & pensions

47
Q

What is the pensions advisory service and what body does sit sit under?

A

there to provide independent guidance around pensions – free for public and helped by DWP - sits under MPAS

48
Q

What is Pension Wise?

A

Available to those over 50, free service which provides info on drawing pension benefits

49
Q

What is the Pensions Ombudsman Service and who funds it?

A

POS is Pensions version of FOS for pension administration/ maladministration – directly funded by DWP through Pensions regulator levy

50
Q

What is the The Pension protection fund (PPF) and how is it funded?

A

There to help as compensation when DB pensions go in to insolvency – funded by levies on firms which operate DB schemes

51
Q
A

RO1 (10 decks)

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