Exam (elaborations)
CISI - UK Financial regs
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Competition and Markets Authority (CMA) -
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CISI - UK Financial regsFCA Objectives - Answer-Strategic - ensuring relevant markets function well
1. Consumer protection
2. Integrity
3. Competition
Principles for business - Answer-1. Integrity
2. Skill, care and diligence
3. Management and control
4. Financial prudence
5. Market conduct
6. Customers' interests
7. Communications with clients
8. Conflicts of interest
9. Customers: relationships of trust
10. Clients' assets
11. Relations with regulators
12. From July 2023 the following Principle will apply, and Principles 6 and 7 cease to apply to firms, that
are subject to the FCA Consumer Duty rules: A firm must act to deliver good outcomes for retail
customers - firms need to consider the characteristics and objectives of their customer. As well as acting
to deliver good customer outcomes, firms will need to understand and provide evidence whether those
outcomes are being met.
SM&CR - Answer-Senior Managers and Certification Regime
Financial Ombudsman Service (FOS) - Answer-Part XVI of FSMA provides for a single scheme for
dealing with disputes between consumers and financial services firms.
The Financial Services Compensation Scheme (FSCS) - Answer-Similarly, FSMA required the
establishment of a body, known as the Financial Services Compensation Scheme (FSCS), to provide a
safety net for customers of financial services firms when those firms become unable to repay them. This
single scheme replaced several existing compensation schemes.
Competition and Markets Authority (CMA) - Answer-The Competition and Markets Authority (CMA) took
over the role and functions previously carried out by the Competition Commission and the Office of Fair
Trading. The CMA came into being on 1 April 2014. It works to promote competition for the benefit of
consumers - both within and outside of the UK. Its main aim is to make markets work well for consumers,
businesses and the economy. The Commission does not solely look at competition within the financial
services sector.
The Information Commissioner's Office (ICO) - Answer-The Information Commissioner's Office (ICO) is
an independent official body for upholding information rights. This entails both promoting access to official
information in appropriate circumstances and protecting people's personal data. It is the ICO that is
responsible for administering the provisions of the Data Protection Act (DPA) 2018 and the Freedom of
Information Act 2000.
The Pensions Regulator (TPR) - Answer-The Pensions Regulator is the UK regulator of work-based
pension schemes. Under the Pensions Acts of 2004 and 2008 The Pensions Regulator has been given
specific objectives to:
1. protect the benefits of members of work-based pension schemes
2. promote and improve the understanding of, and good administration of work-based pension schemes
, reduce the risk of situations arising which may lead to compensation being payable from the Pension
Protection Fund (PPF), and
3. maximise employer compliance with employer duties (including the requirement to enrol eligible
employees automatically into a qualifying pension provision with a minimum contribution), providing them
with certain employment safeguards.
The Pension Protection Fund (PPF) - Answer-The Pension Protection Fund (PPF) is a public corporation,
set up by the Pensions Act 2004, and run by an independent board. It reports to Parliament through the
Secretary of State for Work and Pensions. It protects millions of people throughout the UK who belong to
defined benefit (final salary) pension schemes. If their employers become insolvent, and their pension
schemes cannot afford to pay people their promised pensions, the PPF will compensate them financially
for the money they have lost. The PPF takes over responsibility for payments once they have assessed
that a scheme cannot afford to buy from an insurance company benefits which are equal to, or more than,
the PPF would pay.
HM Revenue & Customs (HMRC) (His Majesty's) - Answer-In addition to being the primary revenue
raising agency in the UK, the FCA, the PRA and HM Revenue & Customs (HMRC) have agreed that they
will share information and expertise.
A cross-cutting rule under the consumer duty - Answer-Firms must act in good faith towards retail
customers
Where a firm is subject to the consumer Duty, which principle no longer applies to dealing with retail
clients? - Answer-Principle 6 -Customer Interests
Principle 7 - Communications with clients
Main aims of the FTOC - Answer-Help customers fully understand the features, benefits, risk and costs of
the financial products they buy and minimise the sale of unsuitable products by encouraging best
practices before, during and after a sale
To which government body is the FCA accountable - Answer-Treasury and Parliament
Consumer Duty - Answer-Sets higher and clearer standards of consumer protection across financial
services, and requires firms to put their customers' needs first.
Purpose behind the FCA requirements for senior management - Answer-Designed to ensure that those in
the most senior positions have the skills, knowledge and capability required to do the job and are
accountable for their actions.
Relationship between FCA and the FOS - Answer-The FOS is empowered as a regulatory body, and
makes sure that the FCA's decisions are implemented
FSAVCs - Answer-Free standing added voluntary contributions
cobs - Answer-Conduct of Business Sourcebook
Common Platform firm - Answer-a BIPRU firm; or
an exempt CAD firm; or
a UK MiFID investment firm which falls within the definition of 'local firm' in Article 3.1P of the Capital
Adequacy Directive; or; or
a dormant account fund operator.
When must written portfolio statements from investment managers normally be sent to retail clients? -
Answer-At least every 3 months
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