List the FCA mandatory requirements that need to be demonstrated by all retail investment advisers during the advice process.
- Disclosure of status, service & costs.
- Establishing ‘know your customer’
requirements. - Product or service disclosure.
- Cancellation rights and money laundering.
State the criminal offences and penalties an individual might face in relation to Money Laundering.
Knowingly assisting in laundering criminal funds
- up to 14 years imprisonment, a fine or both.
Failure to report knowledge or suspicion of money laundering
- up to 5 years imprisonment, a fine or both.
‘Tipping off’ a suspected launderer
- up to 5 years imprisonment, a fine or both.
List the actions a firm must take in resolving client complaints.
- Investigate the complaint impartially.
- Assess fairly, consistently & promptly.
- Offer redress or remedial action where appropriate.
- Explain to the complainant promptly the assessment, decision and offer of any remedial action or redress.
- Comply promptly with any offer of remedial action or redress accept by the complainant.
State the timescales within which the FOS will consider complaints.
- Within six months of the final response from the firm.
- Within six years of the event or 3 years of the complainant becoming aware if longer.
- Complaints outside these timescales can be considered in exceptional circumstances.
Explain what information the GDPR rules apply to.
- Personal data of an identified living individual.
- Personal data includes, ethic origin, health and religion.
- Applies to automated personal data and manual filling systems.
- Personal data that have been anonymised can be included depending on how easily it can be attributed to a particular individual.
State the six Data Protection Principles.
- Lawfulness, fairness & transparency.
- Purpose limitations.
- Data minimisation.
- Accuracy.
- Storage limitations.
- Integrity and confidentiality.
Explain the purpose of the FCA’s Consumer Duty initiative.
- Achieve a higher and more consistent standard of consumer protection.
- Stop harm before it happens.
Explain the overarching cross-cutting rules firms must adhere to with respect to Consumer Duty.
- Act in good faith towards retails customers.
- Avoid causing foreseeable harm to retail customers.
- Enable and support retails customers to pursue their financial objectives.
State the four key consumer outcomes firms must comply with in dealing with retail customers with respect of Consumer Duty.
- Product and Service.
- Price and value.
- Consumer understanding.
- Consumer support.
List the four broad stages of the advice process.
- Know your customer.
- Analysis of needs.
- Presentation of recommendations.
- Ongoing service.
State the three mandatory requirements that a retail investment adviser must undertake when meeting a new investor to provide retail investment advice.
- The client agreement (terms of business letter) must be presented.
- The adviser’s status must be clearly explained – independent or restricted. If restricted, an additional oral disclosure must be made.
- The adviser must explain the firm’s services and costs.
Briefly explain what is meant by the expression ‘customer due diligence’ under antimoney laundering rules.
Customer due diligence (CDD) involves verifying the identity of the customer (and the beneficial owner, if different) and obtaining information on the purpose and intended nature of the business relationship. This can be done in person or using data provided by a reliable and independent third party.
A firm of general insurance brokers sends marketing to a customer. Where the customer has given consent, state the five principal requirements the firm must be able to evidence under the UK GDPR.
The customer’s consent:
1. must be freely given;
2. must be specific;
3. must be informed;
4. must be unambiguous; and
5. cannot be inferred from silence/inactivity.
A customer has complained about an inaccurate policy statement they have received. Explain what they should have received from the firm if nine weeks have gone by since the date of the complaint and it remains unresolved.
They should have received:
* a written acknowledgement of the complaint at the outset; and
* a final response (within eight weeks).
If this is not the case, they should have received a written explanation of why a final response cannot be made. This will advise them of their right to refer the complaint to the FOS. The firm must also enclose an explanatory leaflet about the FOS.
State the rights an individual can exercise, in accordance with the General Data Protection Regulation (GDPR) provisions.
- Right to object/draw consent.
- Right to erasure/data removed.
- Right to restrict processing.
What are categories of Sensitive Personal Data?
- race;
- ethnic origin;
- politics;
- religion;
- trade union membership;
- genetics;
- biometrics (where used for ID purposes);
- health;
- sex life; or
- sexual orientation.
What are forms of GDPR rights?
- Right to be informed
- Righter of access
- Right to rectification
- Right to erasure
- Right to restrict processing
- Right to data portability
- Right to object
