Services Flashcards
Regulated Activities: The 4 Tests
1) Business Test: carried out by way of business
2) Specified Investments Test (not land or certain national savings product)
3) Specified Investments Activities
4) Exclusions
What are the 6 exclusions?
1) Introducing
2) Using authorized third party
3) Execution-only client exclusion
4) Trustees or PRs (not if receive additional renumeration to that they receive for acting in this role)
5) Professional/Necessity Exclusion (does not apply if remunerated separately)
6) Takeover Exclusion (shares consist of 50% or more of voting shares or acquisition of day to day control AND between parties of body corporate, partnership or group of connected individuals)
What is the exemption for professional firms? And exceptions to this
Must be incidental and complementary to other work being carried out for client and cannot be a major part of firm’s activites
Status disclosure
Cannot:
a) Personal pension schemes
b) Creating or underwriting Insurance contract
c) Advise client to be part of certain Lloyd’s syndicate
What regulations must a firm have in place?
1) Risk Assessment
2) Internal Controls:
a) MLRO and MLCO
b) Screening of employees
c) Independent audit function
d) Controls to be able to respond to whether or not maintained during past 8 years a business relationship with a person and nature of that relationship
3) Client Due Diligence
4) Training
5) Record Keeping (5 years from end)
Standard Due Diligence
1) Natural persons: name, addresses: two forms of ID
2) Corporate: name, company number and registered address
UNLESS LISTED ALSO: constitution and name of board of directors or other senior members
Beneficial Owners (standard due diligence does not apply)
1) Companies and LLPs and General Partnership: ultimate control or PSC (and for parent too) (DOES NOT APPLY TO LISTED COMPANIES)
2) Trust: settlor, trustees and the beneficaries
PEP
If PEP or family member or close associate PEP
Family members: spouse/civil partner, children, children’s spouses/civil partner and parents
Must have senior management approval and take adequate measures to establish source of wealth and funds and enhanced ongoing monitoring
Arranging
Knows or suspects
No need that assets actually pass
Authorized disclosure defense
Authorized Disclosure Defence
1) Prior: as soon as practicable prior to transaction and consent received from nominated officer
2) During: must not have known or suspected before and as soon as practicable on own initiative
3) After: must have been good reason for failure to disclose
Overseas Defence
Carried out abroad and conduct in question lawful when it took place
Acquisition, use or possession
Acquire or have possession of criminal property
Authorized disclosure defence
Overseas Defence
Adequate consideration defence
Concealing
Conceal, disguise, convert or transfer
Authorized Disclosure Defence
Overseas Defence
Failure to Disclose
Comes in course of business in regulated sector
Not necessary money is actually laundered
Objective test: should have
Defence:
Reasonable Excuse
Legal Professional Privilege Defense (unless for purpose of carrying out offense)
Overseas Defense
