Name the 3 European Supervisory Authorities (ESA’S)
- European Banking Authority (Banking).
- European Securities & Markets Authority (stock market & credit rating agencies).
- European Insurance & Occupational Pensions Authority (Life & Pensions).
What is the European Central Bank responsible for?
Controls monetary policy & interest rates across EU states.
What does the European Systemic Risk Board do?
MONITOR & ASSESS stability of financial system (Macro-prudential regulation)
What does the European System of Financial Supervisors do?
SUPERVISION of individual financial institutions. (Micro-prudential regulation).
What does the Financial Action Task Force do?
Monitors WORLDWIDE GLOBAL ANTI-MONEY LAUNDERING POLICY & DEVELOPMENT.
What are the 4 key components of UK Financial Services Sector?
F: Firms
I: Infrastructure
R: Regulatory Authorities
M: Markets
What does financial infrastructure relate to?
Systems and processes for money movement overseen by the Bank of England.
The Bank of England’s role forms part of the European system of what?
CENTRAL COUNTERPARTIES covered under EUROPEAN MARKET INFRASTRUCTURE REGULATION (EMIR).
Who regulates clearing companies in UK that are responsible for cheque processing, standing order administration etc?
FCA
What is the PURPOSE of the Payment Systems Regulator?
TO MAKE PAYMENT SYSTEMS WORK WELL FOR THOSE THAT USE THEM.
What is the PSR’S 3 STATUTORY OBJECTIVES?
- Ensure payment systems operated & developed to consider & promote interests of businesses that use them
- Promote effective competition for payment services between operators, payment service & infrastructure providers.
- Promote development & innovation in payment systems.
What type of powers does the PSR have?
Regulatory & Competition.
What are 3 examples of the PSR Competition & Regulatory powers?
- Acting against Anti-Competetive Behaviour.
- Imposing requirements for system rules
- Provide direction to direct bodies setting standards.
What are 2 ways of organising financial markets & what are they?
- ON-EXCHANGE MARKETS: FCA regulated trading floors for stocks & shares
- OVER-THE-COUNTER MARKETS: COMMITTEES formed by market users ensuring smooth operation
What is a key difference been On-Exchange Markets & OTC?
OTC markets less Transparent & Subject Fewer regulations
What are the 3 main financial markets to be aware of?
- Capital Markets (stock market)
- Money Markets (commercial lenders)
- Foreign Exchange Markets (OTC market for currency trading).
What is KEY to remember regarding international markets & the UK?
INTERNATIONAL MARKETS are INTERLINKED WITH UK AS MAJOR FINANCIAL CENTRE.
MONIES FLOW IN & OUT.
What are the CORE services offered by Banks & Building societies?
(OFTEN TESTED)
- Current/cheque accounts
- Deposit/Savings accounts
- Wills & executorship services
- Mortgages & Loans
What are INDIRECT activities/services offered by Banks & Building Societies?
(OFTEN TESTED)
- Portfolio Management
- Discretionary Management Service
- Advisory Management Service
- Execution Only Service
- Stockbroking Services
- Offering access to COLLECTIVE INVESTMENTS (OEIC’S).
Define Core & Indirect Services provided by Banks/Building Societies.
- CORE SERVICES: Main activities organisation originally set up to conduct
- INDIRECT SERVICES: ‘Peripheral to business’ & developed to meet consumer needs.
What are the 2 main categories of advice?
- INDEPENDANT
2. RESTRICTED
What are the 3 types of RESTRICTED advice?
- WHOLE OF MARKET
- RESTRICTED (MULTI-TIED): Providers from panel considered & restricted to panel.
- RESTRICTED (TIED): Advise on products from one company
What are the 2 methods life assurance companies use to distribute their products?
- Intermediaries (providers of advice)
2. Direct Sales Team.
Outline 2 key features of ‘FRIENDLY SOCIETIES’…
- Profits shared between members/customers
2. Tax free status
