Test Chapter 1 Flashcards
What should firms ensure regarding client orders?
Client orders are executed promptly and accurately recorded
Firms must also inform retail clients of any difficulties in placing an order as soon as they are aware.
What is the requirement for executing comparable orders?
Comparable orders are executed sequentially.
What must firms disclose if aggregating client deals may disadvantage clients?
This must be disclosed.
What is the priority rule for aggregating orders?
Client orders must have priority over the firm’s own orders unless less favorable terms can be evidenced.
What must a firm do if it cannot place a client limit order?
The firm must make the limit order public.
What are the FCA’s objectives regarding telephone recording?
Deterring market abuse.
What is required for communications surrounding client orders?
Good quality voice recording that must be retained for 6 months.
What types of transactions do telephone recording rules apply to?
- Client orders
- Carrying out transactions
- Discretionary investment management
What must quarterly statements to clients include?
- Details of all financial instruments held by the firm for the client
- Assets subject to MiFID protections
- Market estimated value
What do CASS rules pertain to?
Client money.
What types of clients do CASS rules apply to?
- Retail
- Professional
- ECP
What does client money include?
- E-money
- Cheques
- Not coins
What are the requirements for client money accounts?
- Separate from firm’s own accounts
- Recognized as client accounts by the bank
- Not mixed with other accounts
What venues can firms hold client money in?
- Central Bank
- Credit institution
- Bank authorized in another country
- Qualifying MMF
What are the requirements for client assets under CASS rules?
- Registered separately
- Identifiable and protected
What must custodians do with client assets?
Pass due diligence checks to ensure responsibility.
What are the three areas of the FCA’s complaint handling rules?
- Consumer Awareness
- Complaints Handling
- Complaint Resolution
What must firms publish regarding complaints?
Their internal complaints procedure.
What is the time limit for a firm to issue a final response to a complaint?
8 weeks from receipt of a complaint.
What is the role of the Financial Ombudsman Service (FOS)?
To resolve complaints when a firm and a client cannot resolve them themselves.
What are the two types of jurisdiction of the FOS?
- Compulsory Jurisdiction
- Voluntary Jurisdiction
What are the eligibility criteria for consumers to complain to the FOS?
- Consumers
- Charities with less than £6.5m income
- Trusts with NAV < £5m
- Small Businesses
What is the current payout cap for eligible complaints handled by the FOS?
£430,000.
What does the Financial Services Compensation Scheme (FSCS) protect?
Deposits for eligible customers.
What is the limit for FSCS protection per person per firm?
£85,000.
What are the six legal bases for processing personal data under GDPR?
- Consent
- Contract
- Legal obligation
- Vital interests
- Public task
- Legitimate interest
What must a data processor do in case of a data breach?
Notify the controller of data breaches immediately.
What is the time limit for the controller to report to ICO after becoming aware of a data breach?
Within 72 hours.
