Unit 2 Flashcards
BOE responsibilities
Protecting & enchanting monetary & financial stability
What does financial committee do
Identify risks that may threaten the stability as a whole
Who does the PRA authorise
Large, systemically important providers banks and insurance companies
Who are the FCA responsible for
Retail and wholesale firms
FCA strategic objective
To make sure relevant markets work well so consumers get a fail deal
What are the 3 operational objectives
Protect consumers, protect financial markets and promote competition
Who is responsible for investigating mergers that could restrict competition
Competitions and markets authority
What does conduct business sourcebook set out
Business standards (MCOBS, ICOBS, BCOBS)
Who do principle of business conduct rules apply to
Individuals working in financial services apart from ancillary roles
The new consumer duty principle 12 does not apply to who
Institutional investors, professional clients, eligible counterparties
What is part 4a permission
To carry out regulated activities
If a firm had taken disciplinary action against a senior manager how long should the firm report to FCA
7 days
What is a fixed portfolio
Small number of firms with highest level of supervisory attention
Flexible portfolio is
Lower level of risk and are supervised through a mixture
Who does training and competence apply to
Financial advisers, supervisors of those advisers and supervisors who oversee back office admin functions
What is capital adequacy
If a business runs into difficulties the business has sufficient capital to make it unlikely deposits will be at risk
Solvency ratio is
Capital as a percentage of the risk adjusted value of assets
What is it called if a business assets exceed its liabilities
Solvency
What is the risk of loss as a result of failed internal processes people and systems
Operational risk
If a firm calls themselves individual what must they offer
Offer one product but advise everything within that product
What are real time promotions
Personal visits, telephone conversations
What are non real time promotions
Written promotions, newspaper
Timescale for issuing SR for investment advice to a retail client in case of life policies
Before transaction is concluded
Timescale for issuing SR for personal pension/stakeholder where cancellations apply
No later than 14th day after the contract concluded
Cancellation period for life and pension, insurance
30 days
Cancellation period for investments
14 days
Cancellation for mortgages
7 days
Which type of mortgage is not regulated
Consumer buy to let
What applies to just solely stakeholder products
Basic advice
What is core investments
Clients with simple straightforward needs
What did the FCA introduce for high cost short term credit
Interest and fees charged must not exceed 0.8% of the amount borrowed and default fees cannot exceed £15
What does the financial action task force do
Co ordinate international fight against money laundering terrorist financing
Under the proceeds of crime act 2002 what is the conviction for concealing, arranging
14 years imprisonment, unlimited fine or both
What is the offence for failing to disclose and tipping off
Prison up to 5 years unlimited fine or both
Offence for partner/director failing to comply
2 years prison fine or both
Who is the pension regulator responsible for
Regulation of work based pension schemes and personal pension schemes
Who does MIFID apply to
Firms that provide services to clients in relation to tradable financial instruments
Who does non MIFID apply to
Life assurance pensions and mortgages
Who is the FPC a committee of?
The Bank of England
Who are the PRA & FCS jointly responsible for
Financial compensation scheme FSCS and FCA is solely responsible for FCA
Record keeping for non mifid business
Three years
Record keeping for carrying out mifid business
5 years
Record keeping for carrying out pension transfer business
Indefinitely
What min solvency ratio does Basel III require banks to reach
10.5 %
What is regulatory capital
The amount of capital that a bank is required to hold in order to meet regulatory requirements
What is the liquidity coverage ratio aimed at
Ensuring a banks short term liquidity
What is the aim of the net stable funding ratio
Long term financial resources exceed long term commitments
