U2: T24 - OTHER REGULATION AFFECTING THE ADVICE PROCESS Flashcards
What is the difference between a data controller and a data processor?
A data controller is legally accountable for the purposes for which data is processed and the way such processing is carried out. A data controller is a ‘legal person’ but not necessarily a ‘natural person’, ie it might be an organisation rather than an individual. A data processor is a person who processes personal data on behalf of the data controller.
What does GDPR define as ‘sensitive data’?
Sensitive data includes information about an individual’s:
- race;
- religious beliefs;
- political persuasion;
- trade union membership;
- sexual orientation;
- health;
- biometric data;
- genetic data.
Which of the following is not one of the GDPR principles?
a) Data must be adequate (but not excessive) and relevant to the purpose for which it is processed.
b) Data controllers must take appropriate technical and organisational measures to keep data secure from accidental or deliberate misuse, damage or destruction.
c) Data must not be kept for longer than five years from the point at which it is gathered.
d) Data must be kept accurate and up to date.
C) This statement is incorrect.
The principle actually states that data must not be kept for longer than is necessary. In a financial services context, this will be determined by the record‐keeping requirements relating to specific products or to money‐laundering rules.
What is the penalty for committing a criminal offence in relation to UK GDPR?
The maximum penalty for a criminal offence in relation to UK GDPR is the higher of £17.5m or 4 per cent of the organisation’s worldwide turnover of the previous financial year.
The Pensions Regulator is responsible for the regulation of occupational pension schemes only.
True or false?
False.
The Pensions Regulator is responsible for occupational pension schemes and for personal pension schemes where the employer has a direct pay arrangement.
What is the role of the Pension Protection Fund?
The Pension Protection Fund provides compensation payments to members of defined‐benefit pension schemes if a firm becomes insolvent with insufficient funds to maintain full benefits for scheme members.
Which of the following products are not subject to MiFID?
a) Units in a collective investment.
b) Shares.
c) Life assurance.
d) Bonds.
c) Life assurance is not subject to MiFID.
What investment activities are subject to MiFID?
Receipt and transmission of orders from investors, execution of those orders on behalf of customers, investment advice, discretionary portfolio management (on a client‐by‐client basis, in accordance with mandates given by investors), and underwriting the issue of specified financial instruments.
A general insurer with a head office in one of the member states may set up branches in other member states; these branches will be regulated by the national regulator of the state in which the head office is situated.
True or false?
True
With which regulator must UK-based IFAs whose ll life assurance or general insurance be registered?
a) The FCA.
b) The PRA.
c) The CMA.
d) The IDD.
Answer is A)
Note that d) the IDD is the abbreviation for the Directive that governs insurance distribution, not for a regulatory body.
Which of the following is defined as a special category of personal data under data protection legislation?
a) Address.
b) Age.
c) Race.
d) Sex.
c) Race.
Special categories of personal data – this data is more sensitive and so
needs more protection. Generally (although there are exceptions) such data
can only be processed if the individual has given explicit consent. Sensitive
data includes information about an individual’s:
— race;
— religious beliefs;
— political persuasion;
— trade union membership;
— sexual orientation;
— health;
— biometric data;
— genetic data.
. Processing – this
The Markets in Financial Instruments Directive applies to advising on:
a) unit trusts.
b) life assurance.
c) personal pension.
d) mortgages.
a) unit trusts.
Markets in Financial Instruments Directive (MiFID). MiFID applies to firms that provide services to clients in relation to tradeable financial instruments, which include shares, bonds, units in a collective investment, and derivatives. Life assurance, pensions and mortgages are outside the scope of MiFID.
Which of the following is true in relation to UK domiciled alternative investment funds (AIFs)?
a) UK AIFs sold in EU countries are subject to UK marketing rules.
b) AIFs is the term used for UK UCITS wishing to market into the EU since Brexit.
c) UK AIFs can be marketed cross-border to a retail investor using the marketing passport.
d) Passporting rights give UK AIFs the facility to be marketed in EU member states under a streamlined process.
b) AIFs is the term used for UK UCITS wishing to market into the EU since Brexit.
Which of the following data protection principles is incorrectly stated?
a) Principle 1: data must be processed lawfully, fairly and in a transparent manner in relation to individuals.
b) Principle 2: data must be collected for specified, explicit and legitimate purposes.
c) Principle 3: data must be adequate, relevant and limited to what is necessary in relation to the purposes for which they are processed.
d) Principle 5: data must be kept in a form which does not identify data subjects in any circumstances.
d) Principle 5: data must be kept in a form which does not identify data subjects in any circumstances.
Principle 5 allows data to be kept in a form which permits identification of data subjects for no longer than is necessary for the purposes for which the personal data are processed, although archiving is allowed in certain circumstances.
he Pension Protection Fund does not protect members of personal pension schemes.
a) True b) False
a) True
The Pension Protection Fund provides compensation payments to members of defined-benefit pension schemes if a firm becomes insolvent with insufficient funds to maintain full benefits for scheme members.
