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R01 > The UK Financial Regulators > Flashcards

The UK Financial Regulators Flashcards

1
Q

Which regulator is responsible for authorisation, prudential regulation and supervision of building societies, credit unions, insurers and major investment firms

A

PRA

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2
Q

Who governs the PRA

A

PRC

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3
Q

What is the primaryobjective of the PRA

A

Promoting safety and soundness

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4
Q

Who is responsible for macro-prudential oversight of the EU system

A

European systemic risk board

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5
Q

What is the responsibilities of the financial policy committee

A

Spotting systemic risks in structural features of financial Markets or distribution of risk in a sector

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6
Q

What are the 8 regulatory principles of the FCA

A 
Efficiency and economy 
Proportionality
Sustainable growth 
Responsibility of consumers 
Senior management responsibility 
Recognising differences in diff types of business
Openness and disclosure
Transparency
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7
Q

What are the 3 objectives of the FCA

A

Protect consumers
Protect financial markets
Promote competition

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8
Q

What is authorisation aka

A

Part 4a permission

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9
Q

To whom is the FCA answerable to

A

Treasury

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10
Q

Which panels is the FCA required to ,so twin and consider the views of

A

Financial services practitioner panel
Consumer panel
Small business practitioner panel
Market practitioner panel

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11
Q

Who recommends disciplinary actions by the FCA and which committee then considers these

A

Enforcement staff and the regulatory decisions committee

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12
Q

Who handles appeals on FCA decisions

A

The upper tribunal

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13
Q

What civil actions can the FCA take

A

Injunctions
Ordering payment of restitution
Granting insolvency orders

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14
Q

What activities can result in criminal proceedings

A

Falsely claiming to be FCA authorised
Carrying on regulated activity without authorisation
Making misleading statements to induce investment
Failing to cooperate with FCA investigations

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15
Q

What is the maximum sentence for insider dealing

A

7 years and an unlimited fine

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16
Q

What is the maximum sentence an AMLO could receive

A

Up to 2 years in prison and a fine

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17
Q

What is the sentence for failure to report money laundering

A

5 years in prison

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18
Q

How does FCA approach risk based supervision

A

Individually risk asses firms and focuses on higher risk,

Potential risks are prioritised by impact and probability analysis

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19
Q

What are the 3 pillars of The FCA risk framework

A
  1. Proactive firm/group supervision
  2. Event driven, reactive supervision
  3. Thematic approach
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20
Q

What are the 2 categories of firms in relation to the level of FCA supervision

A

Fixed portfolio

Flexible portfolio

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21
Q

How many firms does the FCA supervise for prudential matters

A

18,000

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22
Q

What are the categories, in order of highest to lowest risk, of firms for prudential supervision by the FCA

A

P1
P2
P3

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23
Q

What is the compliance controlled function

A

Cf10

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24
Q

What is free asset ratio

A

Surplus assets held by life office divided by its liabilities expressed as a % of total assets

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25
What are the HLS: Threshold Conditions (basic description as opposed to list of what they actually are)
The minimum terms for a firm to retain authorisation
26
What is the 2nd threshold condition
If a person is a corporate body constituted under UK law, it's head office and registered office should be in the UK
27
What is the 3rd Threshold Condition
A person must be capable of being effectively supervised by the FCA
28
What is the 4th Threshold Condition
Resources must be appropriate in relation to the regulated activity they wish to carry out
29
What is the 5th threshold condition
A firm must satisfy that they are fit and proper
30
What is the 7th threshold condition
The business model must be suitable
31
What is HLS: Principles of business (PRIN)
General statement if fundamental obligations of all authorised firms
32
What does SYSC 2 Senior Management Arrangement state
Firms should appoint individuals to controlled functions | Ultimate responsibility lies with the CEO
33
What does SYSC3Systems and Controls state
``` They should be appropriate, regularly reviewed and should cover: Reporting lines The compliance function. Risk assessment Mi Honesty and competency of employees Remuneration Business continuity Record keeping ```
34
What is included in SYSC 11-17
Risk systems and Controls, mainly concerned with insurers
35
What does SYSC 18 Whistleblowing state
Workers should be protected if aware of suspicious or criminal activity
36
What does SYSC19 Remuneration state
Firms should establish procedures that are consistent with and pro,one effective risk management
37
Who does SYSC20 Reverse stress testing apply to
PRA authorised banks, building societies, large investment firms
38
What do the 2 parts of HLS: Financial Stability and Market Confidence (FINMAR) state
Ability to require information relevant to stability | Rules and guidance in relation to short selling
39
When did Training and Competence (TC) become an HLS
2011
40
What are the main HLS regulatory obligations for individuals
APER - code of practice for approved persons FIT - fit and proper test COCON-code of conduct
41
What does GENPRU of block 2. Of the handbook state (1-2.2)
GENPRU1- general requirements of adequacy of financial resource GENPRU2- capital resource including CRD GENPRU2.1- introduces fixed overhead requirement for BIPRU investment firms GENPRU2.2- guidance on eligible capital
42
Which firms does BIPRU affect
Those subject to CRDIII
43
What does BIPRU state
Firms should ensure their business model has a sufficient level of liquid capital
44
Who does IFPRU apply to
Firms subject to CRDIV
45
What does MIPRU set out
Professional indemnity insurance and CRRs for home finance providers and intermediaries and GI intermediaries
46
What does IPRU-INV set out
Professional indemnity and CRRs for simpler investment firms
47
What Block 3 business standards apply to investment advice firms
COBS
48
What does COBS1 state
Detailed guidance on how to deal with customers
49
What are the COBS obligations (COBS2)
Firms must take steps to ensure it doesn't give, accept, offer or solicit inducements
50
Who does ICOBS apply to
Non investment or insurance advice firms
51
What are the 3 product categories set out in ICOBS
GI products Pure protection PPI
52
Under ICOBS, what is the cancellation period for GI products
14 days
53
Under ICOBS what is the cancellation period for protection and PPI
30 days
54
When must clients be given notice of renewal terms according to ICOBS
In good time
55
Under ICOBS what must the intermediary provide the client with before offering advice
Initial disclosures and or terms of business
56
What is MCOBS
Regulatory rules on home finance advice
57
What are the 4 categories of mortgage firms under MCOBS
Lenders Administrators arrangers Advisors
58
Which mortgage contracts aren't regulated
Where the buyer is a company | Buy to let mortgages
59
What type of info should clients receive before proceeding with equity release
Clear, concise and consistent information including risk warnings
60
What regulations protect consumers for sale and rent back schemes
Ensure have security of tenure of at least 5 years Non advised sales aren't allowed 14 day cooling off period Banned use of emotive terms Independent valuation must be carried out
61
When was the mortgage market review reviewed
2009
62
What are the key features of the mortgage market review
Affordability tests, Banning self certified mortgages Banning toxic combinations Banning arrears charges where the borrowe is already repaying Mortgage advisers personally accountable to FCA
63
In what circumstances does the FCA regulate mortgages (3)
Where a lender provides credit The obligation is secured by a legal first mortgage on uk land At least 40% will be used as dwelling for the borrower
64
When were the rules of the mortgage credit directive implemented by the FCA
21/3/2016
65
Does the mortgage credit directive apply to second charge mortgages
Yes
66
What were the main changes to mcobs as a result of the mortgage credit directive
Need to provide a binding mortgage offer with at least a 7 day reflection period New disclosure requirements Clients can ask for info on commission
67
What level of qualification must a mortgage advisor have following mortgage credit directive
Relevant level 3
68
Under the CASS rules relating to assets, what must a firm do
Separate clients assets from its own | Must create a resolution pack to promote speedier return of client assets and money to the client upon failure of firm
69
UnderCASS relating to client money, what must a firm do
Must be held seperately and then paid into the account by cob the next day Client money reconciliation must be performed as often as necessary (1x a day)
70
What does Market Conduct (MAR) rules prohibit
Disseminating false or misleading information Giving a false or misleading impression Making artificial transactions
71
What does Block4: Regulatory processes describe
Operation of the FCA supervisory and disciplinary functions
72
What does Regulatory Processes:decision procedure and penalties (DEPP) say about enforcement
Enforcement officers can visit, demand access to documents and take copies, or if necessary obtain a warrant to do so
73
What are the notification requirements under block 4 regulatory processes
The FCA is required to notify a person under investigation that they are and must state the reasons and provisions under which it has begun and further tell them if the scope changes.UNLESS regarding insider dealing, market abuse, misleading statements and breaches of restriction of FP
74
What does Block5: redress-complaints and compensation set out
The FCA has appointed a complaints commissioner to investigate and report to FCA Complaints can be made by anyone directly affected by FCA action or inaction
75
What is block 6 of the FCA handbook
Specialist sourcebooks applying to individual business sectors
76
What is in block 7 of the FCA handbook
Listing, prospectus and disclosure | U.K. Listing authority rules
77
What is block 8 of the FCA
Handbook guides | A basic overview of certain topics
78
What is in block 9 of he FCA handbook
Regulatory guides - The enforcement guide Financial crime guide Perimeter guidance rule
79
When was the first consumer credit act
1974
80
What were the main things in the consumer credit act
Affects anyone who provides credit or advice On loans up to£25,000 Required licence from Office of Fair Trading Regulates advertisements and quotations Regulates cancellation rights and cooling off periods Defines the action a lender must take to enforce the agreement if a borrower defaults
81
When was the second consumer credit act
2006
82
What were the main changes made by the consumer credit act 2006
Definition of individual was changed to include sole traders, small partnerships and unincorporated associations Extended the jurisdiction of the FOS £25,000 limit given exemption of purpose of business and high net worth individuals Debt administration services and credit info services now regulated
83
When did the FCA take over from the office of fair trading
2014
84
When did the consumer credit directive come into force
2011
85
What changes did the consumer credit directive make
None
86
What is the role of the FCA in unfair contract terms
Responsible for considering fairness of standard terms in financial services contracts

R01 (10 decks)

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