The Regulatory Environment Flashcards
what are the principles for business
integrity skill, care and diligence management and control financial prudence market conduct customer's interests communications with clients conflicts of interest customers: relationship of trust client's assets relations with regulators
what is SYSC 4
general requirements
- sound governance
- experienced management
- receive written reports on compliance and audit annually
- apportionment of responsibilities must be clear and appropriate
what is the FCA’s risk-based approach to supervision
more effort allocated to firms posing largest threat to consumers or market integrity
what does the financial policy committee (FPC) of the Bank of England do
take action to reduce systemic risks with view to protect and enhance the resilience of the UK financial system
what are the provisions of the FCA handbook
(R) Rules - binding on authorised persons
(E) Evidential provisions - non-binding, but show evidence required to demonstrate compliance with a rule
(G) Guidance - non-binding, recommends means of compliance or courses of action to take
(D) Directions - binding on those to whom they relate, dictate behaviour to be taken
(P) Statements of Principle - binding upon approved persons
(C) Conduct - behaviour that does not amount to market abuse
what is the FCA’s strategic objective
ensuring that relevant markets function well
what is SYSC 7, 8, 9, 10, 11, 12, 19
risk control outsourcing record keeping conflicts of interest group risk control remuneration
what does the information commissioner’s office do
uphold information rights in public interest, ensure data privacy and promote openness by public bodies
what is the Upper Tribunal (Tax and Chancery Chamber)
hears appeals against FCA, PRA or pensions regulator decisions
what is the PRA’s general objective
promote the safety and soundness of PRA-authorised firms
who is the FCA funded by
regulated firms authorised under fsma 2000
what does statutory mean
in law
what are the non-binding provisions of the FCA handbook
(E) Evidential provisions
(G) Guidance
(C) Conduct
what is the purpose of SYSC (senior management arrangements, systems and controls)
encourage directors to take responsibility for firm’s arrangements on regulatory matters
what are the FCA’s stated operational/statutory objectives
consumer protection (secure appropriate degree of protection for consumers) integrity (protect and enhance integrity of UK financial system) competition
what does the FPC stand for and how often do they meet
Financial Policy Committee - meet four times a year, and issues a biannual Financial Stability Report
who is the fca accountable to and appointed by
fca is accountable to the treasury and must make annual reports. Chairman is appointed by the chancellor, and the rest of the board by treasury civil servants
what is SYSC 6
compliance, audit and financial crime
what does PRA stand for
prudential regulation authority
what is a common platform firm
covered by either capital requirements directive (CRD) , MiFID or both
who regulates ISAs
HMRC due to their tax-preferential treatment
what are the six outcomes under the Treating Customers Fairly (TCF) regime
1) fair treatment of customers central to culture of firms
2) products and services meet the needs of identified consumer groups and are targeted accordingly
3) consumers provided with clear info before, during and after point of sale
4) advice is suitable and takes account of their circumstances
5) products and services perform as firms have led consumers to expect
6) consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint
what is event driven work
dealing with issues as they are emerging
who is the PRA
the Bank of England, known by another name
what are the binding provisions of the FCA handbook
(R) Rules
(D) Directions
(P) Statements of Principle
what is the difference between FCA guidelines and rules and principles
a firm may choose not to follow guidelines (on cold calling hours for example) but failure to comply with rules and guidance is an offence
what does fca stand for
financial conduct authority
is the fca a government body
no, it is a company limited by guarantee.
what does the pensions regulator do
protect members of work-based pension schemes
what are PRA firms
systemic firms
deposit takers
insurers
significant investment firms
what is SYSC 5
employees, agents and other relevant persons
- skills, knowledge and expertise
- segregation of duties
- awareness of procedures
- monitoring
what does CMA do
block takeovers or mergers in interest of competition and consumers
enforce consumer protection legislation
prosecute unlawful cartel members
what is the statutory objective of the Bank of England
contribute to protecting and enhancing the stability of the financial systems in the UK
what is the difference between rule based and outcome focused
rule based - specific, prescriptive, big compliance department
outcome focused - high level rules, focus on outcome not detail, more accessible
what does sysc stand for
senior management arrangements, systems and controls
the senior management arrangements, systems and controls sourcebook (SYSC) states that firms must apportion and allocate responsibilities to senior managers, for how long after senior managers have left the firm do records on their activities need to be kept (acc q)
6 years
