Sector regulators Flashcards
3 primary sectors that have sector-specific risk-man regulations
Financial services
Health and safety
Environmental risk-management
Through which legislation form are EU regulations on risk-management usually documented and enforced?
Directives
EU financial services regulations are not usually enforced through directives, but rather:
Are dictated by the European Central Bank, to allow for regulation to be more easily updated to reflect necessary changes
* ECB unusually has direct authority on these matters
For which countries is the ECB the central bank for?
Those that have adopted the Euro
What is the role of the ECB?
Maintaining financial stability, including enforcing risk-man regulations for all systemically important financial institutions
Other than ECB, 3 of the many EU-wide risk-man regulators
- European Aviation Safety Agency
- European Food Safety Authority
- European Medicines Agency
2 reasons why financial services sector has the largest amount of risk-man regulation
- Effect that financial institutions have on financial stability
- High levels of information asymmetry that exist between financial services institutions and stakeholders (which could lead to misconduct
3 main areas of risk-management regulation for financial institutions
Prudential regulation
1. Financial solvency (of the financial institutions)
2. Financial market stability
Conduct of business regulation
3. Conduct of financial institutions, their employees and intermediaries
British financial regulators (6)
- Prudential Regulation Authority (PRA)
- Financial Conduct Authority (FCA)
- Financial Ombudsman
- Guernsey Financial Services Commission (GFSC)
- Jersey Financial Services Commission (GFSC)
- Isle of Man Financial Services Authority
3 objectives of the Prudential Regulation Authority (PRA)
- Promote the financial safety and soundness of the firms it regulates
- For insurers, securing an appropriate degree of protection for existing and potential future policyholders
- Facilitating effective competition
PRA rulebook includes re.: (4)
- Role of auditors and audit committees
- Management of specific types of risk, such as market, credit and operational risk
- Risk control in general
- Risk reporting to external stakeholders
The PRA supervises organisations to ensure they comply with its rulebook. This supervision includes: (4)
- Demanding detailed financial and risk-man reports
- Review of risk-man policies and other documents
- Visits to talk with board members, senior managers, risk-man and audit professionals
- Enforcement action, including fines, where necessary
3 objectives of the FCA
- Consumer protection
- Protecting integrity of financial markets from misconduct (such as insider trading)
- Promoting competition in financial markets to ensure customers get a fair deal
FCA policy and supervisory activities cover many risk-man activities, including: (4)
- Management of fin. crime risks, including money laundering and terrorist financing
- Compliance management
- Whistleblowing
- Disclosing risks associated with fin. products and investments
What is the role of the Financial Ombudsman?
To resolve disputes between fin. orgs and their customers
Which institution regulates the systemically important financial institutions of Ireland?
&
Which institution regulates the non-systemically important financial institutions of Ireland?
European Central Bank
Central Bank of Ireland
Guernsey and Jersey financial services commissions and the Isle of Man (3)
- Not part of EU or UK’s financial services regime and have their own fin. regulations
- Balance attracting fin. services organisations and investment against protecting consumers and financial stability
- Generally lower regulation than UK, RoI, and rest of Europe
Which stakeholders are protected by H&S regulation? (3)
- Employees
- Customers
- Third parties
Why does H&S regulation exist?
As marker-based incentives for appropriate H&S are generally considered insufficient
Health and safety regulations cover the following risk-management activities: (4)
- Identification and assessment of H&S hazards, inc. who might be affected and how
- Taking appropriate measures to control H&S hazards to protect stakeholders from harm
- Recording H&S incidents and reporting major incidents to relevant regulatory agency
- Implementing appropriate policies and procedures for all of the above
Most countries H&S agencies generally have power to: (3)
- Implement new rules and guidance to H&S management process and control of specific hazards
- Supervise H&S management activities of orgs
- Take enforcement action to address non-compliance
British H&S agencies
- the Health and Safety Executive (HSE) for the UK
- the Guernsey Health and Safety Executive
- the Health and Safety Inspectorate for Jersey
- the Heath and Safety at Work Inspectorate for the Isle of Man
UK Heath and Safety Executive draws its regulatory powers from what legislation?
Health and Safety at Work Act 1974
Health and Safety at Work Act 1974 places expectations on who (2), and who primarily out of these two?
Employers (primarily) & employees
