topic 24 - other regulation affecting the advice process

Question 1

A data processor is….

Answer 1

a person who processes personal data on behalf of the data controller

Question 2

The maximum penalty for a criminal offence in relation to UK GDPR is….

Answer 2

the higher of £17.5m or 4% of the organisation’s worldwide turnover of the previous financial year

Question 3

The General Data Protection Regulation GDPR

Answer 3

• May 2018 – the General Data Protection Regulation (GDPR) came into effect in the UK
• Applies to personal data – information relating to an individual who can be identified
• Reflects changes in technology and the way information is collected

Question 4

Information Commissioner

Answer 4

• Responsible for overseeing the application of the UK GDPR.
• Firms should report significant personal data breaches to them

Question 5

Criminal offences under the UK GDPR

Answer 5

• For a data controller to fail to comply with an information or enforcement notice
• Failure to make a proper notification to the Information Commissioner
• Processing of data without authorisation from the Commissioner
• Intentionally or recklessly reidentifying individuals from data that is pseudonymised and anonymised

Question 6

Role of the Pensions Regulator

Answer 6

is responsible for the regulation of work-based pension schemes and aims to:

• Ensure employers enrol their staff – automatic enrolment
• Protect the benefits, as well as people’s savings
• Protect benefits where there is a direct pay arrangement
• Promote good administration
• Reduce risk of situations arising that might lead to claims for compensation from the Pension Protection Fund
• Maximise employer compliance with duties and safeguards under the Pensions Act 2008
• Minimise any adverse impact on the sustainable growth of an employer

Question 7

Pension Protection Fund (PPF)

Answer 7

• Established by the Pensions Act 2004
• To protect members of private sector defined-benefit pension schemes in the event that a firms becomes insolvent with insufficient funds to maintain full benefits for all its scheme members
• Does not protect members of personal pension schemes
• also responsible for the Fraud Compensation Fund
• provides varying levels of compensation, depending on circumstances

Question 8

Markets in Financial Instruments Directive (MiFID)

Answer 8

• Applies to firms providing services to clients in relation to tradable financial instruments
• Does not apply to life assurance, pensions and mortgages
• Effective from November 2007
• Aims to harmonise the regulation of investment services across the EU
• Objectives- to increase both competition and consumer protection
• Aim of directive is to make cross-border activity easier to conduct by imposing a single set of rules across the EEA

Question 9

UCITS

Answer 9

• Applies to regulated investment funds that can be sold to the general public throughout the EU
• Provides common framework of investor protection and product control
• UK domiciled alternative investment funds (AIFs) -term used for UK UCITS wishing to market into the EU since Brexit

Question 10

Consolidated Life Directive 2002

Answer 10

sets the framework for the regulation of life assurance in the EU and was retained in UK law after Brexit

Question 11

External auditors

Answer 11

• Concerned with published financial statements and accounts
  .
• independent of the business whose accounts are being audited – eg firms of accountants
  .
• must conform to the professional standards of the Auditing Practices Board and the Accounting Standards Committee

Question 12

Internal auditors

Answer 12

• may be in-house members of staff or the process may be outsourced
• check that operations are being conducted effectively and economically in line with the organisations policies
• role is to inform management decisions

Question 13

Trustees

Answer 13

• a person responsible for ensuring that any property held in trust is dealt with in accordance with the trust deed for the benefit of the trust’s beneficiaries
• the key legislation is the Trustee Act 1925 (concerned with the general duties of trustees) and the Trustee Investment Act 2000 (the way in which trustees deal with the investment of trust assets)

Question 14

Compliance officers

Answer 14

• Firms authorised by the FCA and PRA are required to appoint a compliance officer. Also, a money laundering officer (MLRO)