Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Actuarial F203 - General Insurance > Twin Peaks (Financial Sector Regulation Bill, 34D of 2015) > Flashcards

Twin Peaks (Financial Sector Regulation Bill, 34D of 2015) Flashcards

1
Q

Twin Peaks model of financial regulation

A

The Twin Peaks model will see:

  • the creation of a prudential regulator (the Prudential Authority) housed in the South African Reserve Bank (SARB)
  • while the FSB will be transformed into a dedicated market conduct regulator (the Financial Sector Conduct Authority)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

2 Fundamental objectives of the Twin Peaks model

A
  • to strengthen South Africa’s approach to consumer protection and market conduct in financial services, and
  • to create a more resilient and stable financial system
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Objective of the Prudential Authority

A

To promote and enhance the safety and soundness of

  • FINANCIAL INSTITUTIONS that provide financial products and securities services, and
  • MARKET INFRASTRUCTURES.

To protect financial customers against the risk that those financial institutions may FAIL TO MEET THEIR OBLIGATIONS;

To assist in MAINTAINING FINANCIAL STABILITY

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Objective of the Financial Sector Conduct Authority

A

Enhance and support the EFFICIENCY AND INTEGRITY of the financial markets.

To PROTECT financial customers, by:

  • ensuring that financial institutions treat financial customers fairly;
  • providing financial customers and potential financial customers with financial education programs, and otherwise promoting financial literacy and financial capability.

To assist in maintaining financial STABILITY

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

8 Principles of commonalities between the Prudential Authority and the Financial Sector Conduct Authority

A
  • Transparent
  • Comprehensive & Consistent
  • Appropriate, Intensive & Intrusive
  • Outcomes-based
  • Risk-based & Proportional
  • Pre-emptive & Pro-active
  • A credible deterrent to Misconduct
  • Aligned with applicable International Standards
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Key functions of the prudential regulator (SARB)?

A

The SARB will be responsible for both micro and macro-prudential regulation and supervision.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Aims of Micro-prudential regulation

A

Aims to secure the safety and soundness of:

  • banks
  • insurers
  • financial conglomerates
  • financial market infrastructure
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Aims of Macro-prudential regulation

A

Seeks to promote the stability of the financial system as a whole.

The stability function will also look at crisis management and resolution.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Key functions of the new market conduct regulator (FSB)?

A

Focus on protecting consumers of financial product and services.

Will oversee the market conduct of all financial services institutions, including banks.

Will regulate Market integrity.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Market integrity typically involves

A

setting and enforcing:

  • rules governing product disclosure
  • rules to promote orderly and efficient trading and price formation
  • rules to avoid market abuse
  • requirements to oversee the operation of exchanges and market infrastructure
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Primary objectives of the Financial Stability Oversight Committee (2)

A
  • to support the Reserve Bank when the Reserve Bank performs its functions in relation to financial stability; and
  • to facility co-operation between the Reserve Bank and financial sector regulators in respect of matters relating to financial stability.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Functions of the Financial Stability Oversight Committee (4)

A
  • To serve as a forum for representatives of the Reserve Bank and of each of the financial sector regulators regarding financial stability
  • To make recommendations to the Governor on the designation of systemically important financial institutions.
  • To advise the Minister and the Reserve bank on
  • – steps to be taken to promote, protect or maintain financial stability
  • – matters relating to crisis management and prevention
  • To make recommendations to other organs of state regarding steps that are appropriate for them to take to assist in promoting, protecting or maintaining, or managing or preventing risks to financial stability
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

8 Members of the Financial stability oversight committee

A
  • The Governor
  • Deputy Governor responsible for financial stability matters;
  • the Chief Executive Officer of the Prudential authority;
  • the Commissioner of the Financial Sector Conduct Authority;
  • the Chief Executive Officer of the National Credit Regulator;
  • the Director-General of the National Treasury;
  • the Director of the Financial Intelligence Centre and
  • a maximum of 2 additional persons appointed by the Governor.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Primary objective of the Financial Sector Contingency Forum

A

To assist the Financial Stability Oversight Committee with:

a) the identification of potential risks that systemic events will occur; and
b) the co-ordination of appropriate plans, mechanisms and structures to mitigate those risks.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

The Financial Sector Contingency Forum is composed of at least 8 members, including - (4)

A

a) a Deputy Governor designated by the Governor, which Deputy Governor is the Chairperson;
b) representatives of each of the financial sector regulators;
c) representatives of other organs of state, as the Chairperson may determine; and
d) representatives of financial sector industry bodies and any other relevant person as the Chairperson may determine.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Requirements that the Prudential Authority may impose

A

Requirements applicable to one or more specific systemically important financial institutions, or to such institutions generally, in relation to any of the following matters:

a) Solvency measures and capital requirements
b) leverage ratios
c) liquidity
d) organisational structures
e) risk management arrangements
f) sectoral and geographical exposures
g) required statistical returns;
h) recovery and resolution planning; and
i) any other matter in respect of which a prudential standard or regulator’s directive may be made that is prescribed by Regulations made for this serrction on the recommendation of the Governor.

17
Q

Systemically important financial institutions

A

Financial institutions whose distress or disorderly failure, because of their

  • size,
  • complexity and
  • systemic interconnectedness,

would CAUSE SIGNIFICANT DISRUPTION to the wider financial system and economic activity.

18
Q

Market infrastructure (5)

A

“Market infrastructure” means each of the following:

  • A central counterparty
  • A central securities depository
  • A clearing house
  • An exchange
  • A trade repository
19
Q

Financial Institution (5)

A

Means any of the following, other than a representative:

  • A financial product provider
  • A financial service provider
  • A market infrastructure
  • A holding company of a financial comglomerate
  • or a person licensed or required to be licensed in terms of a financial sector law
20
Q

Financial Product Provider

A

Means a person that, as a business, or as part of a business, provides a financial product.

21
Q

Financial Sector Body (6)

A

Means each of the following:

  • The Prudential Authority;
  • the Financial Sector Conduct Authority;
  • the Tribunal;
  • the Ombud Council;
  • the Office of the Pension Funds Adjudicator
  • the Office of the Ombud for Financial Services Providers.
22
Q

Financial Sector Regulator (4)

A

Means:

  • the Prudential Authority
  • the Financial Sector Conduct Authority
  • (parts of) the National Credit Regulator
  • (parts of) the Financial Intelligence Centre
23
Q

Financial Service Provider

A

A person that, as a business, provides a financial service.

24
Q

Objective of the Financial System Council of Regulators

A

To facilitate
- co-operation and collaboration, and
- consistency of action
between the institutions represented on the Financial System Council of Regulators

by providing a forum for senior representatives of those institutions to discuss, and inform themselves about matters of common interest.

25
Q

Objective of the Financial Sector Inter-Ministerial Council

A

To facilitate co-operation and collaboration
between Cabinet members responsible for administering legislation relevant to the regulation and supervision of the financial sector,

by providing a forum for discussion and consideration of matters of common interest.

26
Q

Members of the Inter-Ministerial Council (4)

A
  • the Minister of Finance
  • Cabinet members responsible for consumer protection and consumer credit matters;
  • the Cabinet member responsible for health; and
  • the Cabinet member responsible for economic development.
27
Q

The Prudential authority may make prudential standards for, or in respect of - (3)

A
  • financial institutions that provide financial products or securities services;
  • financial institutions that are market infrastructures
  • key persons of such financial institutions
28
Q

A prudential standard must be aimed at one or more of (3)

A
  • Ensuring the safety and SOUNDNESS of those financial institutions
  • reducing the risk that financial institutions and key persons engage in conduct that amounts to, or contributes to, FINANCIAL CRIME, and
  • assisting in maintaining FINANCIAL STABILITY
29
Q

The Financial Sector Conduct Authority may make conduct standards for or in respect of (4)

A
  • financial institutions
  • representatives of financial institutions
  • key persons of financial institutions
  • contractors
30
Q

A conduct standard must be aimed at one or more of the following: (5)

A
  • ensuring the EFFICIENCY AND INTEGRITY of financial markets
  • ensuring that FINANCIAL EDUCATION programs, or other activities promoting financial literacy are appropriate
  • reducing the risk that financial institutions, representatives, key persons and contractors engage in conduct that is or contributes to FINANCIAL CRIME;
  • assisting in maintaining FINANCIAL STABILITY
31
Q

A conduct standard may declare specific conduct in connection with a financial product or a financial service to be unfair business conduct if the conduct - (4)

A
  • is likely to be materially inconsistent with the fair treatment of financial customers
  • is likely to deceive or mislead financial customers;
  • is likely to unfairly prejudice financial customers
  • impedes in any other way the achievement of any of the objectives of a financial sector law

Actuarial F203 - General Insurance (43 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions