UK Financial Regulation (Capital Markets Programme) Quiz 01

Last Updated: June 2024

Table of Contents

UK Financial Regulation (Capital Markets Programme)
Element 1 The Regulatory Environment
1.1 The Role of the FCA and PRA
On completion, the candidate should:
1.1.1 know the FCA’s and PRA’s statutory objectives and rule-making
powers in respect of authorisation, supervision, enforcement,
sanctions and disciplinary action [FSMA]
1.1.2 understand the Principles for Businesses [PRIN 1.1.2 (FCA),
1.1.7, 2.1.1 (FCA/PRA)], the Consumer Duty [PRIN 2A} and the
requirement to act honestly, fairly and professionally and to treat
customers fairly [COBS 2.1]
1.1.3 know the requirements of the Senior Managers & Certification
Regime (SM&CR)

1.1.4 know the rules and guidance regarding certain of the key Senior
Management Arrangements, Systems and Controls for both MiFID
and Non-MiFID investment firms [SYSC 1.2.1, 4.1.1/2]
1.1.5 know the FCA’s and PRA’s supervisory approach to regulation
including outcome-based, early intervention and conduct risk
1.1.6 know the recording of voice conversations and electronic
communications across all media [SYSC 10A]

1.2 The Regulatory Infrastructure
On completion, the candidate should:
Understand the wider structure of UK financial regulation including
the responsibilities of the main regulating bodies and the
relationship between them:
1.2.1 Market regulators: The Financial Conduct Authority and the
Prudential Regulation Authority
1.2.2 Other regulators: The Competition and Markets Authority, The
Information Commissioner and The Pensions Regulator
1.2.3 The relationships and coordination between the following:
• The Financial Conduct Authority (FCA)
• The Payment Systems Regulator (PSR)
• The Prudential Regulation Authority (PRA)
• The Competition and Markets Authority (CMA)
UK Financial Regulation
V31 © Chartered Institute for Securities & Investment 8
• HM Revenue & Customs (HMRC)
• The Financial Ombudsman Scheme (FOS)
• The Financial Services Compensation Scheme (FSCS)
• The Financial Policy Committee (FPC)
• The Upper Tribunal (Tax and Chancery)
• The Bank of England (BoE)
• HM Treasury (HMT)
• The Pension Ombudsman (PO)
• The Pension Protection Fund (PPF)
• The Panel of Takeovers and Mergers (POTM)
——————————————–

1.2.4 know the type of provisions used by the FCA and PRA in their
handbooks/rulebooks and the status of their approved sector
guidance
1.2.5 know relevant aspects of the Consumer Rights Act 2015 (CRA):
1.2.6 know the Pension regulator’s rules with respect to occupational
pension schemes

1.2.7 understand the Chartered Institute for Securities & Investment’s
Code of Conduct
1.2.8 understand the relevance of EU legislation and guidance
(directives and regulations approved by the European Parliament
and European Supervisory Authorities)
1.2.9 know the role played by oversight, influencing bodies and relevant
codes of conduct:
• internal audit
• external audit
• trustees
• compliance
• industry bodies, professional bodies and trade associations
UK Financial Regulation
V31 © Chartered Institute for Securities & Investment 9

Element 2 The Financial Services and Markets Act 2000 and Financial Services
Act 2012
2.1 Regulated and Prohibited Activities
On completion, the candidate should:
2.1.1 know the regulated and prohibited activities [Parts II/III of FSMA
2000, Regulated Activities Order 2001 and the under-noted
guidance in the Perimeter Guidance Manual (PERG)]:
• authorised persons [PERG 2.2.3]
• exempt persons [PERG 2.10] and FSMA [Exemption Order
2001 (SI 2001/1201)]
• offences under the Act [PERG 2.2.1/2]
• enforceability of agreements entered into with an unauthorised
business [PERG 2.2.2]
• defences available under the Act [PERG 2.2.1]
2.1.2 understand the regulators’ actions in respect of prohibition orders
and actions for damages and how private persons can sue for
damages when a firm is declared in breach [(FSMA 2000 s.56, 59,
71) (FSA 2012 s.138D)]
2.2 Performance of Regulated Activities
On completion, the candidate should:
2.2.1 know the role of the FCA and PRA enforcement divisions, the
power of the FCA and PRA to make decisions by executive
procedures and the role, scope and consequences of the
Regulatory Decisions Committee’s responsibility for decision
making [DEPP 3.1 – 3.4, 4.1]

2.2.2 know the outcomes of the FCA’s and PRA’s statutory notices
[DEPP 1.2], the regulatory enforcement processes: warning,
decision, supervisory and final notices [DEPP 2.2 + 2.3] and the
firm’s right to refer to the tribunal [DEPP 2.3.2/3]
2.2.3 know the FCA’s powers of intervention (products and financial
promotions)
UK Financial Regulation
V31 © Chartered Institute for Securities & Investment 10
2.3 Information Gathering and Investigations
On completion, the candidate should:
2.3.1 know the regulators’ power to require information and to appoint
persons to carry out investigations [FSMA 2000 s.165 – 8]

2.4 Regulated Activities
On completion, the candidate should:
2.4.1 know the activities specified in Part II of the Regulated Activities
Order
2.4.2 know the main exclusions from the need for authorisation under
the FSMA 2000 [Regulated Activities Order]
• absence of holding out [PERG 2.8.4(1)]
• groups and joint enterprises (PERG 2.9.9/10)
• advice in newspapers [PERG 2.8.12 & 7.1.2]
• trustees, nominees and personal representatives [PERG 2.9.3]
• employee share schemes [PERG 2.9.13]
• overseas persons [PERG 2.9.15]
2.4.3 know the investments specified in Part III of the Regulated
Activities Order

2.4.4 know the authorisation procedures for firms:
• the need for authorisation [FSMA s.19. PERG 2.3, Annex 1 and
2, 2.10.9 – 16]
• the threshold conditions for authorisation [FSMA Sch 6. COND
2]
2.4.5 know the supervisory process:
• purpose of supervision arrangements [SUP 1A.2/3]
• focus on a firm’s senior management [SUP 1A.1.4, SYSC
1.2.1(1)/4.2.1/4.3.1]
• tools for supervision [SUP 1A.4.1/2/4/5]
2.4.6 understand the PRA and FCA individual accountability
requirements for all firms, the requirements for individuals to be
registered and be subject to the Senior Managers & Certification
UK Financial Regulation
V31 © Chartered Institute for Securities & Investment 11
Regime and what this means, and who is subject to the Conduct
Rules [SYSC 23, 24 and SUP 10C]

2.4.7 know the approval process for individuals performing or intending
to perform a Senior Management Function under the Senior
Managers & Certification Regime [SUP 10C (Guidance), SUP
10C.2 (for FCA-designated Senior Management Functions); PRA
Rulebook Senior Managers Regime – applications and
notifications (2)]
2.4.8 understand the processes and provisions relating to the Directory,
a new public register for key individuals working in financial
services
2.4.9 know the Training and Competence regime:
• the application of the systems and control responsibilities in
relation to the competence of employees [SYSC 5.1.1
(FCA/PRA)]
• the application of T&C for retail activities [TC 1.1.1/3]
• assessing and maintaining competence [TC 2.1.1(1), 2.1.2], the
examination requirements before starting activities [TC
2.1.6/7(1)], firms must assess at the outset and at regular
intervals the training needs of its employees [TC 2.1.11],
maintaining competence [TC 2.1.12/13] and the need for a
Statement of Professional Standing
• activities to which the T&C rules apply [TC Appendix 1]

Continue Reading