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CeMAP Unit 2 > Topic 24 Other Regulation Affecting The Advice Process > Flashcards

Topic 24 Other Regulation Affecting The Advice Process Flashcards

1
Q

Which organisation is responsible for the prevention of fraud arising from identity theft?

A

Financial Conduct Authority (FCA)

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2
Q

What is the main EU Legislation for online activity and the rise of social media that came into force in May 2016?

A

General Data Protection Regulation (GDPR)

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3
Q

The primary UK legislation for Data Protection is what?

A

Data Protection Act 2018

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4
Q

Personal data is defined as an individual who can be identified by?

A
  • Name
  • Identification Number
  • Location Data
  • Online Identifier
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5
Q

The below are what in relation to General Data Protection Regulation (GDPR)?

  1. Processed lawfully, fairly & in a transparent manner in relation to all individuals
  2. Collected for specied, explicit & legimate purposes & not further processed in a manner that is incompatible with those purposes
  3. Adequate, relevent & limited to what is necessary in relation to the purposes for which they are processed
A

UK GDPR

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6
Q

The below are what in relation to General Data Protection Regulation (GDPR)?

  1. Kept accurate & up to date
  2. Kept in a form that permits identification of data subjects for no longer than is necessary
  3. Processed in a manner that ensures appropriate security of the personal data
A

UK GDPR

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7
Q

Which UK GDPR definition is this?

An individual (natural person) who’s personal data is processed?

A

Data Subject

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8
Q

Which UK GDPR definition is this?

Information that can directly or indirectly identity a natural person. Information can be in any format

A

Personal data

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9
Q

Special categories of personal data require the individuals consent.

True or False

A

True

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10
Q

What are the below in relation to UK GDPR?

  • Race
  • Religious Beliefs
  • Political persuasion
  • Trade Union Membership
A

Special categories of personal data

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11
Q

What are the below in relation to UK GDPR?

  • Sexual Orientation
  • Health
  • Biometric data
  • Genetic data
A

Special categories of personal data

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12
Q

Processing covers all aspects of owning data but what does it include?

A
  • Owning data
  • Recording of data
  • Organisation or alteration of data
  • Disclosure of data
  • Destruction of data
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13
Q

What are the below in relation to UK GDPR?

The “legal person” determines the purposes for which data are processed. Data controller is normally an organisation/ employer

A

Data Controller

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14
Q

What is a data processor?

A

Person who processes personal data on behalf of the data controller

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15
Q

What are the 6 lawful basis for data processing?

A
  1. Consent
  2. Contract
  3. Legal Obligation
  4. Vital Interests
  5. Public Task
  6. Legitimate Interests
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16
Q

The below are what in relation to a data subject?

  • Access personal data
  • Correct inaccurate person data
  • Have personal data erased
  • Object
  • Move personal data from one service provider to another
A

Rights a Data Subject has

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17
Q

The below are what in relation to UK GDPR

  • Establish a governance structure with roles and responsibilities
  • Keep a detailed record of data processing operations
  • Document data protection policies & procedures
  • Carry out data protection impact assessments for high risk processing operations
A

How an organisation demonstrates compliance with UK GDPR

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18
Q

The below are what relating to UK GDPR?

  • If receiver is located in a third country
  • Is an international organisation
  • Particular country covered by UK “adequacy rules”
A

When restricted transfers are permitted

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19
Q

Who is responsible for the overseeing of UK GDPR?

A

Information Commissioner

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20
Q

Which of the Information Commissioner’s power is this?

Requiring organisations to provide the Information Commissioner’s office with specified information within a certain period

A

Serve Information Notices

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21
Q

Which of the Information Commissioner’s power is this?

Committing an organisation to a particular course of action in order to improve its compliance

A

Issue Undertakings

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22
Q

Which of the Information Commissioner’s power is this?

Requiring organisations to take (or refrain from taking) specified steps to ensure they comply with the law

A

Serve enforcement notices & “stop now” orders when there has been a breach

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23
Q

Which of the Information Commissioner’s power is this?

To check organisations are complying

A

Conduct consensual assessments (audits)

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24
Q

Which of the Information Commissioner’s power is this?

To conduct compulsory audits to assess whether organisations processing of personal data follows good practice

A

Serve assessment notices

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25
Q

Which of the Information Commissioner’s power is this?

Notification that the organisation is subject to a financial penalty as a result of a serious breach of UK GDPR

A

Issue Monetary Penalty Notices

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26
Q

Which of the Information Commissioner’s power is this?

Those who commit criminal offences under UK GDPR

A

Prosecute

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27
Q

Which of the Information Commissioner’s power is this?

A temporary or permanent ban on data prosecution can be imposed

A

Issue a ban

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28
Q

The below are what in relation to UK GDPR?

  • Failure to comply with information or enforcement notice (Data Controller)
  • Failure to make a proper notification to the information controller
  • Processing of data without authorisation from the commissioner
  • Intentionally or recklessly re-identifying individuals from data that is pseudonmised
A

Criminal offences under UK GDPR

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29
Q

What is the maximum penalty for criminal offences under UK GDPR for a firm?

A

Higher of

  • £17.5 Million
  • 4% of an organisation’s total annual worldwide revenue
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30
Q

The below is the responsibility of who?

  • “automatic enrolment” of staff onto work based pension scheme
  • Protect the benefits of personal pension schemes & people’s savings
  • Protect the benefits of personal pension schemes where this is a direct pay arrangement
  • Promote good adminstration of work based pension schemes
A

The Pensions Regulator (TPR)

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31
Q

The below is the responsibility of who?

  • Reduce the risk of situations arising that could lead to claims from the Pension Protection Fund
  • Maximise employer compliance with duties & safeguards under Pensions Act 2008
  • Minimise any adverse impact of the sustainable growth of an employer
A

The Pensions Regulator (TPR)

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32
Q

The Pensions Regulator aims to consider the combined effect of what?

A
  1. Likelihood of an event occuring
  2. Impact of the event on the scheme and it’s members
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33
Q

The Pensions Regulator is required to issue what?

A

Issue voluntary codes of practice on a range of subjects

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34
Q

Which power of the Pensions regulator is this?

  • Identifying & investigating risks
  • Requiring all schemes to make regular returns to the regulator
  • Requiring trustees/scheme managers give notification of any changes to important information such as type of benefit provided by the scheme
  • Regulator be informed quickly if the scheme cannot meet it’s funding requirements
A

Investigating Schemes

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35
Q

Which power of the Pensions regulator is this?

  • Requiring specific action be taken to improve matters within a certain period of time
  • Recovering unpaid contributions from an employer who does not pay them into a scheme within the required period
  • Disqualifying trustees who are considered not fit & proper persons
  • Imposing finest or prosecuting offences in criminal courts
A

Putting this right

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36
Q

When recovering unpaid contributions from an employer what date in the month should the employer pay them into the scheme?

A

19th day in the month after they were deducted from the employee

37
Q

The Pension Protection Fund (PPF) was established to protect who?

A

Members of a private sector defined-benefit scheme in the event of it’s insolvency

38
Q

Which power of the Pensions regulator is this?

  • Preventing employers from deliberately avoiding their pension obligations leaving the Pension Protection Fund (PPF) to cover their pension liabilities
A

Acting against avoidance

39
Q

How else could the Pensions Regulator act against avoidance of pension payment in to a employer scheme by the employer?

A
  • Contribution Notices requiring payment into the Pension Protection Fund (PPF)
  • Financial Support Directions to be put in place for an underfunded scheme
40
Q

What is Fraud Compensation Fund?

A

Provides compensation to occupational pension schemes that have suffered loss through dishonesty

41
Q

Who is responsible for overseeing the Fraud Compensation Scheme?

A

Pension Protection Fund (PPF)

42
Q

The below are relevant to the Pension Protection Fund (PPF) but what are they?

  • Imposes a levy on defined benefits schemes
  • Takes on assets of a scheme that are transferred to the fund
  • Seeks recovery of assets from insolvent employers
  • Seeks to grow it’s funds through investment
A

How the Pension Protection Fund (PPF) funds compensation schemes

43
Q

Electronic Money (E-Money) is what

A

Electronically stored monetary value issued on receipt of funds for making transactions online

44
Q

The second Electronic Money Directive (2EMD) was introduced when?

A

April 30th 2011

45
Q

The Electronic Money, Payment Card Interchange Fee & payment Service (Amended) regulations 2023 removed a limitation on the FCA’S power to make rules relating to what?

A
  • Authorised & Small Electronic Money Institutions
  • Authorised & Small Money Institutions
  • Registered account information service providers
46
Q

Which directive covers the following?

  • Issues shares
  • Bonds
  • Units in a collective investment
  • Derivatives
A

Financial Instruments Directives (MiFID)

47
Q

Markets in Financial Instruments Directives (MiFID) aims to increase competition & consumer protection in which 3 arrears?

A
  1. Conduct of Business
  2. Organisation
  3. Market Transparency
48
Q

“Core Activities” of Markets in Financial Instruments Directives (MiFID) are what?

A

Investment services & activities

49
Q

“Non- Core Activities” of Markets in Financial Instruments Directives (MiFID) are what?

A

Ancillary Services

50
Q

The below are what in relation to Markets in Financial Instruments Directives (MiFID)

  • Receipt & Transmission of orders from investors
  • Executive of orders on behalf of customers
  • Investment Advice
  • Discretionary portfolio Management
  • Underwriting the issue of specified financial instruments
A

Investment activities covered by MiFID

51
Q

Which reform under MiFID 2 is this?

Enhancing the level of protection for different types of Investor

A

Conduct of business rules

52
Q

Which reform under MiFID 2 is this?

The MiFLD pre & post trade transparency regime for share is extended to non-equity shares

A

Transparency

53
Q

Which reform under MiFID 2 is this?

Designed to produce comprehensive regulation of secondary training

A

Developments in market structures

54
Q

Which reform under MiFID 2 is this?

Enhanced requirements in respect of the management of firms, explicit organisational & conduct requirements relating to product governance

A

Organisation requirements

55
Q

Which reform under MiFID 2 is this?

Refinement of & augmentation of existing MiFID requirements

A

Commodity Derivatives

56
Q

Which reform under MiFID 2 is this?

Measures to ensure high frequency trading does not adversely impact on markets

A

High Frequency trading

57
Q

Which reform under MiFID 2 is this?

Requirement for aggregated cost disclosure detailing all adviser charges & product charges

A

Disclosure

58
Q

Which reform under MiFID 2 is this?

The requirement to assess sustainability when recommending an Investor, buys, holds or sells (rather than buys or sells)

A

Sustainability

59
Q

What do the below do?

  • Undertakings for Collective Investments in Transferable Securities (UCITS)
  • Alternative Investment Find Managers Directive (AIFMD)
A

Regulate investment funds & their managers in the EU

60
Q

Mutual recognition of authorisation that facilities free circulation within the EU covers which directive?

A

Undertakings for Collective Investments in Transferable Securities (UCITS)

61
Q

Applies to the managers of Alternative Investment Funds (AIF) that are sold to professional investors. Covers which EU directive?

A

Alternative Investment Fund Managers Directive (AIFMD)

62
Q

In relation to life assurance the below are what?

  • Provide EU citizens with access to the widest range of insurance products
  • Enable an insurance company authorised in member states to pursue it’s activities throughout the EU
A

Main objectives of European Single Market for insurance

63
Q

To achieve it’s objective the EU has always dealt with life assurance & non-assurance different?

True or False

A

True

64
Q

The Consolidated Life Assurance Directive (2022) does what? It includes the following parts.

  • Definitions of what constitutes life assurance also (annuities & Income Protection)
  • Rules applying to an insurer that wishes to provide life assurance on a cross border basis
  • Requirements that must be adhered to for a life assurance company to be authorised
A

EU legislation on life assurance

65
Q

The Consolidated Life Assurance Directive (2022) does what? It includes the following parts.

  • Requirements for ongoing supervision of a life assurance company
  • Requirements for policy holders to be provided with clear and precise information about the features of a product
  • Cancellation rights
A

EU legislation on life assurance

66
Q

What did the 2nd & 3rd Non-Life Council Directives do?

A

Enables a non-life insurance firm to sell insurance in a different country from where it’s head office is located

67
Q

What does a Directive on Insurance Medium (IDM) do?

A

Enables insurance intermediaries to provide services in all EU states

68
Q

What must all independent insurance intermediaries do to be covered by the Directive on Insurance Mediation (IMD)

A

Be registered with a competent authority in their home state

69
Q

To operate as an insurance intermediary an intermediary must not have been?

A
  1. Convicted of crimes against property or other financial crimes
  2. Declared bankrupt
70
Q

Rules for insurance intermediaries state what regarding financial capacity of a firm?

A

The insurance company have reserves equivalent to an amount equal to a percentage of the premiums received per annum

71
Q

The Directive on Insurance Medium (IMD) was replaced by what in October 2018?

A

Insurance Distribution Directive (IDD)

72
Q

Which reform under the Insurance Distribution Directive (IDD) is this?

To cover insurance sale and some aspects of price comparison websites

A

Extension of the scope of (IMD)

73
Q

Which reform under the Insurance Distribution Directive (IDD) is this?

Formal requirement for intermediaries to undertake at least 15 hours of continuing professional development each year

A

Enhanced Professional Requirements

74
Q

Which reform under the Insurance Distribution Directive (IDD) is this?

Requirement that insurance distributions must always act honestly, fairly & professionally in the best interests of customers

A

Conduct of business rules

75
Q

Which reform under the Insurance Distribution Directive (IDD) is this?

Before an application for insurance is made to ensure customers receive clear information

A

Mandatory Disclosures

76
Q

Which reform under the Insurance Distribution Directive (IDD) is this?

For non-life contracts

A

Requirement for a standardised “insurance product information document”

77
Q

Which reform under the Insurance Distribution Directive (IDD) is this?

For the sale of life insurance products with investment elements

A

Stricter requirements

78
Q

Which reform under the Insurance Distribution Directive (IDD) is this?

For the sale of bundled products

A

Additional information requirements

79
Q

Which reform under the Insurance Distribution Directive (IDD) is this?

Single electronic database of cross border insurance intermediaries

A

Simplified procedure for cross border entry to insurance markets across the EU

80
Q

What is the role of External Auditors?

A

Published financial statements & account and are separate from the business who’s accounts are being audited

81
Q

What is the role of Internal Auditors?

A

Check operations are being conducted effectively & economically in line with organisations policies

82
Q

The below are what in relation to Internal Auditors?

  • Review how an organisation is managing it’s risks
  • Ascertain whether appropriate controls have been established
  • Evaluate & suggest improvements to control & governance processes
A

Tasks of Internal Auditors

83
Q

What is the role of Trustees?

A

Ensure that any property held in trust is dealt with in accordance with the trust deed

84
Q

Why are most occupational pension schemes set up under a trust deed?

A

Pension assets are kept separate from the employers business assets

85
Q

All the below are what in relation to oversight groups?

  • Production &; publication of compliance manual
  • Maintenance of compliance records such as complaints register & promotions records
  • Responding to & correspondence with FCA on compliance matters
  • Ensuring staff meet FCA’S requirements regarding recruitment, training, supervision & selling practices
A

Responsibility of a compliance officer

86
Q

What is the professional body for a compliance officer?

A

Association of Professional Compliance Consultants

87
Q

What is the pensions regulator responsible for?

A
  • Occupational pension schemes
  • Personal pension schemes where employer has direct pay arrangement
88
Q

Is a Data control a senior manager?

A

No

CeMAP Unit 2 (11 decks)

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