UK Financial Regulation (Capital Markets Programme) Quiz 02

Last Updated: June 2024

Table of Contents

UK Financial Regulation (Capital Markets Programme)
2.4.10 know the legal and regulatory basis for whistleblowing [SYSC
18.1, 18.3, 18.4.3/4]

Element 3 Associated Legislation and Regulation
3.1 Market Abuse
On completion, the candidate should:
3.1.1 understand the scope and status of the UK Market Abuse
Regulation [The Market Abuse (Amendment) (EU Exit)
Regulations 2019
3.1.2 understand the civil [FCA MAR 1.1.3 & DEPP 6] and criminal [CJA
1993 Part V and Financial Services Act 2012 Sections 89-92,
FSMA s.402, EG 12.3] regime for market abuse and insider
dealing
3.1.3 understand the requirement to prevent and detect market abuse
including the obligation on firms to make suspicious transaction
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and order reports [UK MAR Article 16]
3.2 Insider Dealing
On completion, the candidate should:
3.2.1 know the prohibition for insider dealing [UK MAR Article 14]
3.2.2 understand the definition of inside information [UK MAR Article 7],
insider dealing [UK MAR Article 8] and unlawful disclosure of
inside information [UK MAR Article 10]
3.2.3 understand market soundings [UK MAR Article 11] and market
manipulation [UK MAR Article 12]
3.2.4 understand the disclosure requirements for inside information [UK
MAR Article 17] and the requirement for insider lists [UK MAR
Article 18]
3.2.5 understand the meaning of ‘inside information’ and ‘insider’; the
offences and the instruments covered by the legislation [CJA 1993
s.52/56/57/58 + Schedule 2]
3.2.6 know the general defences available with regard to insider dealing
[CJA 1993 s.53]
3.2.7 know the special defences: market makers acting in good faith,
market information and price stabilisation [CJA 1993 s.53 and
Schedule 1 paras 1-5]
3.3 Market Manipulation
On completion, the candidate should:
3.3.1 know the prohibition for market manipulation [UK MAR Article 15]
3.3.2 understand the four forms of market manipulation: Manipulating
transactions; Manipulating devices; Dissemination; and
Benchmark manipulation. [UK MAR Article 12]
3.3.3 understand legitimate behaviour [UK MAR Article 9] and the
concept of accepted market practices [UK MAR Article 13]
3.3.4 understand the obligation on Persons discharging managerial
responsibilities [UK MAR Article 19]
3.3.5 understand the obligations where providing investment
recommendations [UK MAR Article 20]
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3.4 Money Laundering and Financial Crime
On completion, the candidate should:
3.4.1 understand the terms ‘money laundering’, ‘criminal conduct’ and
‘criminal property’ and the application of money laundering to all
crimes [Proceeds of Crime Act 2002 s.340] and the power of the
Secretary of State to determine what is ‘relevant criminal conduct’
3.4.2 understand that the UK legislation on money laundering is found in
the Proceeds of Crime Act 2002 [POCA], as amended by the
Serious Organised Crime and Police Act 2005 [SOCPA], the
Money Laundering, Terrorist Financing and Transfer of Funds
(Information on the Payer) Regulations 2017 (MLR 2017), the
Senior Management Arrangements, Systems and Controls
Sourcebook [SYSC] and that guidance to these provisions is found
in the Joint Money Laundering Steering Group Guidance and
Financial Crime Guide and understand the interaction between
them
3.4.3 understand the obligations on firms for adequate training of
individuals on money laundering (MLR 2017 Section 24)
3.4.4 understand the three stages of money laundering
3.4.5 understand the main offences set out in POCA Part 7 Sections
327, 328, 329, 330, 333A, 342 [assistance i.e. concealing,
arrangements, acquisition, use and possession; failure to disclose;
tipping off in the regulated sector] and the implications of Part 7
regarding the objective test in relation to reporting suspicious
transactions; that appropriate disclosure [internal for staff and to
the National Crime Agency for the firm] is a defence
3.4.6 understand the approach covered by the Senior Management
Arrangements, Systems and Controls Sourcebook [SYSC], in
particular, the systems and controls that the FCA and PRA expect
firms to have adopted, the role of the Money Laundering Reporting
Officer and Nominated Officer. [SYSC 3.2.6, 3.2.6 (A)-(J), SYSC
6.3 (FCA)]
3.4.7 understand the standards expected by the JMLSG Guidance
particularly in relation to:
• Risk-based approach
• Requirements for directors and senior managers to be
responsible for money laundering precautions
• Need for risk assessment
• Need for enhanced due diligence in relation to politically
exposed persons [JMLSG 5.5.1 – 5.5.36]
• Need for high-level policy statement
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• Detailed procedures implementing the firm’s risk-based
approach [JMLSG 1.1-1.8, 1.53 – 1.59, 2.1-2.21, 4.3 – 4.77]
• Financial Sanctions Regime [JMLSG Part III 5.3.54 – 5.3.62]
3.4.8 understand the money laundering aspects of know your customer:
• JMLSG 5.1.1 – 5.1.15
• credit reference agencies
3.4.9 understand the importance of ongoing monitoring of business
relationships and being able to recognise a suspicious transaction
and the requirement for staff to report to the MLRO and for the firm
to report to the National Crime Agency (NCA)
3.4.10 know the role of the Financial Action Task Force (FATF)
3.4.11 know what activities are regarded as ‘terrorism’ in the UK
[Terrorism Act 2000 Part 1], the obligations on regulated firms
under the Counter-Terrorism Act 2008 [money laundering of
terrorist funds] [part 5 section 62 and s.7 parts 1-7] and the AntiTerrorism Crime and Security Act 2001 Schedule 2 Part 3
[Disclosure of Information] and where to find the sanction list for
terrorist activities
3.4.12 understand the importance of preventative measures in respect of
terrorist financing and the essential differences between
laundering the proceeds of crime and the financing of terrorist acts
[JMLSG Preface 9] and the interaction between the rules of the
FCA (The Financial Crime Guide), the PRA, the Terrorism Act
2000 and the JMLSG Guidance regarding terrorism [JMLSG
Preface 27, 28, 29]
3.5 Bribery and Corruption
On completion, the candidate should:
3.5.1 know the main purpose of the Bribery Act 2010 and the categories
of offences covered in Sections 1 – 7 Bribery Act 2010
3.6 Record Keeping Requirements
On completion, the candidate should:
3.6.1 know record keeping requirements in relation to:
• Anti – Money Laundering (AML)
• Combating the Financing of Terrorism (CFT)
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3.7 Disclosure and Transparency rules
On completion, the candidate should:
3.7.1 know the purpose of the Disclosure and Transparency rules and
the control of information [DTR 2.1.3, 2.6.1]

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