Unit 2 Flashcards
Name the three operational objectives of the FCA
Protect consumers
Enhance integrity of the UK financial system
Maintain competitive markets and promote competition in the interests of consumers
What is the difference between Rules and Guidance in the FCA handbook?
Rules create binding regulations whereas guidance provides assistance in understanding how to abide by the rules
How according to the ‘Principles for Business’ must authorised firms behave in their dealings with their regulators?
In an open and co-operative way, disclosing anything that the FCA or PRA might reasonably expect to be told
What, according the the FCA, must be ‘embedded into the culture and day to day operations’ of authorised firms?
The principle of TFC
Whose rights are protected by the Public Interest Disclosure act 1998?
- Borrowers for fall into arrears
- Whistle-blowing employees
- Bank deposit account holders
Whistle-blowing employees
What are the two forms of market abuse defined by the EU?
- Insider dealing
- Market manipulation
Which of the following is NOT a ‘regulated investment’ under the Financial Services and Markets act 2000?
- Works of art
- Funeral plans
- Insurance policies
Works of art
What is ‘Basel 2’?
An international standard for the capital adequacy requirements of financial institutions
‘The risk of losses from failed or inadequate internal processes, people and systems, or from external events.’ What is this a description of?
Operational risk
What European legislation determines the capital adequacy requirements of investment businesses?
The capital requirements directive (CRD)
In relation to the FCA’s enforcement powers, explain the difference between ‘restitution’ and ‘redress’
Restitution is the FCA’s power with a court order to require a person of firm to forfeit any profit made from contravening an FCA rules.
Redress is an identifiable customer has made a loss as a result of contravention of a rule and the FCA with a court order can require the loss to be made good
The role of Financial advisor is a ‘controlled function’ Which category of controlled function is it?
Customer function
During what hours can an unsolicited sales call be made be a financial advisor?
At an appropriate time (between 9am - 9pm Monday to Saturday) to an existing client.
What is an eligible counter party?
Someone who is ‘in the business’ i.e. someone who transacts the same kind of business for their own customers as they are proposing to transact for themselves.
An advisor has just sold a personal pension plan to a client. What is the minimum period for which the fact find and related information must be retained?
5 years
If the current BoE base rate is 4.5%, what is the minimum rate of interest that can be offered on a stakeholder cash deposit scheme?
- 1.5%
- 2.5%
- 3.5%
3.5%
Transferring criminally obtained money through different accounts is not the only action treated as money laundering. What other activities are also defined as money laundering?
- Concealing the true nature or source of property that you know to result from criminal activity.
- Acquiring or using property that you know to result from criminal activity.
- Aiding or abetting any of type of money laundering activity
What is the name of the international body that co-ordinates the fight against Money laundering?
The Financial Action Task Force (FATF)
What is the transaction level above which firms must obtain evidence of identity of the client?
15,000 EUROS
How often must a Money Laundering Reporting Officer provide a report to their firm’s senior management?
Once a year
What is tipping off?
Disclosing to a person who is suspected of money laundering that they are under investigation
How long must evince of identification be retained for anti-money laundering purposes?
Five years after the relationship with the client has ended
If a Money Laundering reports Officer suspects a case of attempted money laundering, to whom must this be reported?
The National Crime Agency (NCA)
Which types of financial services employees must be given training about money laundering?
Anyone who handles transactions that could involve money laundering