CISI UK Financial Regulation flashcards
CISI UK Financial Regulation · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Bank of England
- The UK's central bank, responsible for monetary policy through the Monetary Policy Committee and hosting the Prudential Regulation Authority as a subsidiary.
- Prudential Regulation Authority
- A subsidiary of the Bank of England that prudentially regulates banks, insurers and major investment firms, promoting their safety and soundness.
- Financial Conduct Authority
- The independent UK regulator responsible for conduct regulation of all authorised firms and prudential regulation of firms not covered by the PRA.
- Financial Policy Committee
- A Bank of England committee that identifies and addresses systemic risks to financial stability, with a secondary objective to support growth.
- Financial Ombudsman Service
- An independent body that resolves complaints between consumers and financial firms free of charge to the consumer, with statutory powers to award compensation.
- Financial Services Compensation Scheme
- The UK's statutory compensation scheme that pays consumers up to specified limits when an authorised financial firm fails.
- Twin peaks model
- The UK regulatory structure created by the Financial Services Act 2012, separating prudential regulation (PRA) from conduct regulation (FCA).
- FSMA 2000
- The Financial Services and Markets Act 2000, the core UK statute establishing the regulator, the general prohibition and the regulatory framework.
- Threshold Conditions
- The minimum requirements in FSMA Schedule 6 that a firm must satisfy to be authorised and to remain authorised, covering resources, suitability and business model.
- Senior Managers and Certification Regime
- A regime requiring FCA or PRA approval for Senior Managers and annual fitness assessments by firms for Certification staff, covering banking, insurance and solo-regulated firms.
- Consumer Duty
- An FCA rule (PRIN 2A) requiring firms to act in good faith, avoid foreseeable harm and enable retail customers to pursue their financial objectives across four outcomes.
- FCA Handbook
- The collection of rules and guidance modules, including PRIN, SYSC, COBS, CASS and DEPP, that authorised firms must comply with.
- Duty of Responsibility
- A Senior Manager can be liable for a breach in their area of responsibility unless they took reasonable steps to prevent it.
- General prohibition
- FSMA s.19 prohibits any person from carrying on a regulated activity in the UK unless authorised or exempt; breach is a criminal offence.
- Regulated Activities Order
- The RAO 2001 specifies which activities and investments are regulated, including dealing, arranging, managing investments and advising.
- Specified investments
- Investments listed in the RAO, including shares, bonds, collective investment scheme units, options, futures, contracts for differences and insurance contracts.
- Suitability (COBS 9)
- The requirement to assess whether a recommended product is suitable for a client's circumstances, needs and objectives in advised sales.
- Appropriateness (COBS 10)
- The requirement to assess a client's knowledge and experience before non-advised sales of complex products, warning where appropriate.
- Financial promotion restriction
- FSMA s.21 prohibits communicating an invitation or inducement to engage in investment activity unless by an authorised person or approved by one.
- Client money (CASS 7)
- Rules requiring firms to segregate client money in trust accounts, with a statutory trust arising on receipt and regular reconciliations.
- POCA 2002
- The Proceeds of Crime Act 2002, which creates the principal money laundering offences and the failure to disclose offence for regulated firms.
- Money laundering stages
- The three stages of placement (introducing criminal proceeds), layering (obscuring the source) and integration (reintroducing funds into the legitimate economy).
- Suspicious activity report
- A report submitted to the National Crime Agency by a nominated officer when a firm suspects money laundering or terrorist financing.
- MLRs 2017
- The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, requiring risk-based customer due diligence, monitoring and a nominated officer.
- Bribery Act 2010
- UK legislation creating offences of bribing, receiving a bribe and bribing foreign officials, plus a corporate offence of failing to prevent bribery.
- OFSI
- HM Treasury's Office of Financial Sanctions Implementation, which administers UK financial sanctions and asset freezes.
- UK MAR
- The UK Market Abuse Regulation, prohibiting insider dealing, unlawful disclosure and market manipulation and requiring issuer disclosure.
- Insider dealing
- A criminal offence under the Criminal Justice Act 1993 of dealing on inside information, encouraging others to deal, or disclosing such information.
- Principles for Businesses
- The FCA's high-level PRIN rules, including integrity, skill care and diligence, customers' interests and conflicts of interest.
- Conduct Rules (COCON)
- Individual rules requiring integrity, due skill and care, cooperation with regulators, fair treatment of customers and proper market conduct.
- Treating Customers Fairly
- An FCA principle requiring firms to pay due regard to customers' interests and treat them fairly, now embedded in the Consumer Duty.
- Conflicts of interest (SYSC 10)
- Rules requiring firms to identify, prevent or manage conflicts of interest that could damage clients' interests.