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UK Financial Regulation > The Regulatory Environment > Flashcards

The Regulatory Environment Flashcards

1
Q

what are the principles for business

A 
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
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2
Q

what is SYSC 4

A

general requirements

  • sound governance
  • experienced management
  • receive written reports on compliance and audit annually
  • apportionment of responsibilities must be clear and appropriate
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3
Q

what is the FCA’s risk-based approach to supervision

A

more effort allocated to firms posing largest threat to consumers or market integrity

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4
Q

what does the financial policy committee (FPC) of the Bank of England do

A

take action to reduce systemic risks with view to protect and enhance the resilience of the UK financial system

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5
Q

what are the provisions of the FCA handbook

A

(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

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6
Q

what is the FCA’s strategic objective

A

ensuring that relevant markets function well

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7
Q

what is SYSC 7, 8, 9, 10, 11, 12, 19

A 
risk control
outsourcing
record keeping
conflicts of interest
group risk control
remuneration
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8
Q

what does the information commissioner’s office do

A

uphold information rights in public interest, ensure data privacy and promote openness by public bodies

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9
Q

what is the Upper Tribunal (Tax and Chancery Chamber)

A

hears appeals against FCA, PRA or pensions regulator decisions

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10
Q

what is the PRA’s general objective

A

promote the safety and soundness of PRA-authorised firms

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11
Q

who is the FCA funded by

A

regulated firms authorised under fsma 2000

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12
Q

what does statutory mean

A

in law

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13
Q

what are the non-binding provisions of the FCA handbook

A

(E) Evidential provisions
(G) Guidance
(C) Conduct

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14
Q

what is the purpose of SYSC (senior management arrangements, systems and controls)

A

encourage directors to take responsibility for firm’s arrangements on regulatory matters

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15
Q

what are the FCA’s stated operational/statutory objectives

A 
consumer protection (secure appropriate degree of protection for consumers)
integrity (protect and enhance integrity of UK financial system)
competition
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16
Q

what does the FPC stand for and how often do they meet

A

Financial Policy Committee - meet four times a year, and issues a biannual Financial Stability Report

17
Q

who is the fca accountable to and appointed by

A

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

18
Q

what is SYSC 6

A

compliance, audit and financial crime

19
Q

what does PRA stand for

A

prudential regulation authority

20
Q

what is a common platform firm

A

covered by either capital requirements directive (CRD) , MiFID or both

21
Q

who regulates ISAs

A

HMRC due to their tax-preferential treatment

22
Q

what are the six outcomes under the Treating Customers Fairly (TCF) regime

A

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

23
Q

what is event driven work

A

dealing with issues as they are emerging

24
Q

who is the PRA

A

the Bank of England, known by another name

25
Q

what are the binding provisions of the FCA handbook

A

(R) Rules
(D) Directions
(P) Statements of Principle

26
Q

what is the difference between FCA guidelines and rules and principles

A

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

27
Q

what does fca stand for

A

financial conduct authority

28
Q

is the fca a government body

A

no, it is a company limited by guarantee.

29
Q

what does the pensions regulator do

A

protect members of work-based pension schemes

30
Q

what are PRA firms

A

systemic firms
deposit takers
insurers
significant investment firms

31
Q

what is SYSC 5

A

employees, agents and other relevant persons

  • skills, knowledge and expertise
  • segregation of duties
  • awareness of procedures
  • monitoring
32
Q

what does CMA do

A

block takeovers or mergers in interest of competition and consumers
enforce consumer protection legislation
prosecute unlawful cartel members

33
Q

what is the statutory objective of the Bank of England

A

contribute to protecting and enhancing the stability of the financial systems in the UK

34
Q

what is the difference between rule based and outcome focused

A

rule based - specific, prescriptive, big compliance department
outcome focused - high level rules, focus on outcome not detail, more accessible

35
Q

what does sysc stand for

A

senior management arrangements, systems and controls

36
Q

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)

A

6 years

UK Financial Regulation (7 decks)

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