Role Of Regulatory Bodies

Question 1

Other people - accountants

Answer 1

• accountants need experienced people when dealing with fca firms
• it would be considered a specialised topic for an accountant
• they need to know the fca requirements of capital adequacy
• They need to go over the companies house act 2006 which governs most of them

Question 2

Other people - auditors

Answer 2

• firms that do not falmunder UCTIS undertakings for collective investment in transferable securities don’t have to have an external audit.
• firms that are regulated under to companies house act 2006 have to have an external audit yearly
• firms that do not fall under midis don’t have to have an external one
• firms that hold client assets are required to have an FCA report

Question 3

Compliance firms

Answer 3

• all firms should be acting on the compliance consultants recommendations
• the fca does not expect firms to have a compliance consultant
• firms can not outsource their responsibility to a compliance consultant
• the firms can use their services as well as the fca
• the fca recommends the compliance consultants make agreements with the firms
• most important is that the firm shouldn’t attempt to use the consultant as a way to prove they are. They can still not be complaint

Question 4

Senior managers

Answer 4

• they should make sure that all taksnare carried out.
• they should be able to ensure that the work is compliant.
• treating customers fairly should be at the heart of this
• they should always be wanting to improve the business and how it acts with clients
• they need to make sure all the reports are sent to the fca

Question 5

Other regulators

Answer 5

• Pension Regulator is responsible for the regulation of UK workplace pension
• Anti-money laundering powers and responsibilities are in the remit of the fca in respect of consumer credit financial institutions, and HMRC in respect of estate agent
• competition is regulated by the competition and market authorities authority, who act for the uk and abroad

Question 6

Competition and markets authority

Answer 6

• they promote competition within the industry and ensure business is fair
• it deleivers expands competition
• refocuses on protecting the consumer
• it handles the market I’d it believes there are consumer problems
• since brexit it deals with international merges

Question 7

ICO

Answer 7

• it ensures all data is processed in accordance with GDPR and the Data Protection Act 2018

Question 8

The pension regulator

Answer 8

• regulates work based pension schemes
• promotes good administration
• stops peoples being trustees
• it can force fines
• it can stop funds from pension schemes being misused
• it can appoint a new trustee
• it winds up the scheme
• it will act to ensure compliance with auto enrolment
• it acts to protect members
• it wants to protect all the benefits of people who have pensions

Question 9

Basel accords

Answer 9

• Agreed in 1988
• capital requirements directive - minimum capital requirements firms will be required to meet for credit market and operational risks
• improve market discipline by making firms produce their risk
• supervisors have to take a decision on whether they should have more capital

Question 10

Money laundering directives

Answer 10

• directive number 4 - the money laurndeting regulations 2017 (MLR) was created for the FATF and created PEPs it also made trusts that paid tax be known to HMRC
• directive number 5 - this created enhanced due dillebfendebhu suggesting what is more at risk. It highlighted countries at risk and also created ultimate beneficial ownership lists along with requirements for all trusts to be with HMRC

Question 11

FATF

Answer 11

Financial Action Task Force that is created by the international community it sets anti money laundering standards

Question 12

MIFID

Answer 12

• MIDID 1 came into affect in 2007. Mifid1 was the party that Created regulation for firms linked to client instruments
• it was a maximum harmonisation directive
• some advisers are exempt from mifid as they don’t hold assets and don’t provide any investment service other than reception and transmission of orders for investment advice - article 3 mifid excemot firms

Question 13

2

Answer 13

• increases mifid and makes firms more transparent it makes inducements suitability governance and fees and be told and it also makes new requirements for distributors and manufacturers of investments such ad bonds and Isas

Question 14

European supervisory authorities

Answer 14

The European banking authority European insurance and o violations k pensions and european securities and markets authority

• they can ban certain financial activities
• the european supervisory authorities will mediate situations between different countries regulators
• they can see whether regulators are instructing European law and make recommendations. If they don’t they can then the commission can make binding decisions

Question 15

Role of the European Union

Answer 15

• legislation - secondary after treaties made by European institutions to carry out their responsibilities under the treaty estabikishing the eu

Treaties - the eus primary form of legislation outline the constitutional framework they set out the principles of the eu and made by direct negotiations between the governments of the member states

• regulations - apply to all leave states they are binding they are usually day to day like princes take immediate effect binding jn their entirety create same law throughout the community d take immediate effect and none need approval from parliaments

Directives - they are goals and the member states then have to state how to achieve these

Decisions - are made to both and subjects and are fully binding to those who brought the decision