CISI: UK Financial Regulation
UK Takeover Code 6 General Principles - Answer-- All shareholders given equal treatment and protected
- Shareholders given sufficient time and information to decide
- Board of target to act in best interests of company as a whole
- False markets must not be cr...
CISI: UK Financial Regulation
UK Takeover Code 6 General Principles - Answer-- All shareholders given equal treatment and protected
- Shareholders given sufficient time and information to decide
- Board of target to act in best interests of company as a whole
- False markets must not be created
- Predator to make a bid only after ensuring they can meet cash requirements of bid
- Target company not to be hindered in its business affairs for any longer than is necessary
UK Takeover Code is Administered by.... - Answer-Administered by the Takeover Panel (also known as
the Panel on Takeovers and Mergers, or 'PTM')
Acting in concert - Answer-• A company and other members of the same group
• A company and its directors
• A company and its pension fund
• A fund manager and its discretionary portfolio
• A client and its professional adviser
Dealings - Answer-• Any action that may increase or decrease a holding in a relevant security
Interest in shares - Answer-A person who owns relevant securities or has a right to exercise or direct the
voting rights on them
Brexit - Answer-- MIFID
- Withdrawal Action
- UK Firms Passporting through EEA Subsidiaries
Scope of MiFID
Purpose, Core, Ancillary - Answer-- To create a common market with harmonised rules in the financial
industry
- Facilitates frictionless cross-border trading (passporting)
Core activities
- Reception and transmission of orders
- Execution of orders
- Portfolio management
- Investment advice
- Underwriting and placing
- Operating an MTF or OTF
Ancillary
- Safekeeping and administration
- Loans to carry out transactions
- Investment research and financial analysis
MiFID Instruments - Answer-- Transferable securities
- Units in collective investment schemes
- Money market instruments
- Derivatives on securities, currencies, interest rates or yields
- Commodity derivatives (whether settled for cash or physically when traded on a regulated market, MTF
or OTF)
- Credit derivatives
- Financial CFD
MiFID Excluded Instruments - Answer-• Bank accounts
• Foreign exchange (unless this relates to the provision of an investment activity or service)
• Physically settled OTC derivatives if used for commercial purposes
• Commodity spot trading
MiFID Responsibilities of respective regulators (Home & Host Regulators) - Answer-Home state regulator
- Authorisation
- Prudential supervision (capital adequacy)
- Fitness and propriety
- Conduct of business in home state
- Conduct of business for cross-border services from any state
- Client assets
Host state regulator
- Conduct of business in host state when performed from a branch in the host state (for MiFID business
these rules should be the same)
Definition of a Collective Investment Scheme (CIS) - Answer-• Unit trusts
• Open ended investment companies (OEICs): now referred to by the FCA as investment companies with
variable capital (ICVCs)
Regulation of CISs by FCA - Answer-Authorised
- UK Funds
Recognised
- UCITS (undertakings for the collective investment in transferable securities)
UCITS status
- How to obtain
- What it means - Answer-• A regulated CIS may apply to FCA to seek UCITS (Undertaking for Collective
Investments in Transferable Securities) status
• Such schemes can then be marketed throughout the EEA
UCITS funds
• The Product Directive allows...
• What are they not allowed to invest in? - Answer-- Transferable securities
• Maximum of 10% of NAV of fund in any single issuer
- Money market instruments
- Other UCITS funds
• Fund of funds
- Bank deposits
- Financial derivatives
- Index tracker funds
- Borrowing restrictions
• UCITS funds cannot invest in commodity derivatives and property
UCITS IV
- Date of implementation
- What it changes - Answer-Implemented on 1 July 2011 and introduced the following changes:
• Passporting for management companies
• Key Investor Information Documents (KIIDs)
• Improved cross-border marketing of authorised funds
• A single framework for mergers • Master-feeder structures
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