What does SEC regulate in the US?
Markets
The SEC is responsible for overseeing securities markets to protect investors and maintain fair, orderly, and efficient markets.
Define per-se professional clients.
- Big companies
- MIFID 40m in turnover, 20m in balance sheet, 2m own funds
These clients meet specific financial thresholds set by regulations.
What are the criteria for elective professional clients?
Need a qualitative test: Knowledge,expertise, experience
Quantitative: 2 of…
* 10 transactions per quarter (4 quarters)
* 500k portfolio
* 1 year professional sector experience
These criteria help determine a client’s professional status.
For banks, what are deposits classified as?
Liabilities
Loans are classified as assets.
What does the Consumer Credit Act 1974 bring into law?
True APR
One copy when signing and second copy if not made in time.
Cannot approach cleint for 7 days
Cancelation extra 5 days after second letter
credit agencies must say what info they hold
It mandates transparency in the annual percentage rate for consumers.
What changes did the Consumer Credit 2006 bring in?
25k limit lifted
Individual now partnership of 3 or less
Court can change deal if unfair
Regulted advice
FOS inclusion
This regulation changed the previous limit on consumer credit.
What are the three levels or tools of the FPC?
- Cyclical buffers
- Variable weight: Capital Requirement
- Leverage Limits
These tools help manage financial stability.
What are the code of practice for approved persons.
1: Intergrity
2: Skill
3: Market Conduct
4: Openess
5: Organisational Control
6: Senior managemnt skill
7: Compliance
This principle emphasizes accountability within business operations.
True or false: If an IFA doesn’t pass on material circumstances, the client is still liable.
TRUE
The IFA acts as an agent, making the client responsible for any undisclosed information.
In market abuse, manipulating transactions for fake demand is classified as civil and not criminal.
TRUE
This distinction affects the legal consequences of such actions.
What are the three levels to fit and proper?
- Financial Soundness
- Competence
- Integrity
These criteria ensure that individuals meet necessary standards for financial roles.
What are some features of **Pension Protection Fund?
- Covers DB schemes where there has been fraud
- One of the biggest Fund managers
- Board of protections
- Also runs the Fraud Compensation Fund
This fund protects pension benefits in case of employer insolvency.
What is the Banking Act 2009 focused on?
All about increasing banking powers to help failing banks
Special Regime
Irish and Scotish Banknotes
Statutory Respobisbility to BOE
Oversight of payment systems
It aims to provide support for failing banks and enhance regulatory oversight.
What must firms show regarding fees?
Commission must be shown
Firms need to obtain permission to disclose commission details.
What are the FCA’s regulatory principles vs Operational Objectives?
Regulatory Principles (how they govern)
Transparency
Recognise Differnces
Openess
Proportionality
Efficiency
Consumer Responsibility
Senior Man Responsibility
Objectives: What they want
Consumer Protection
Intergity of markets
Competition
Who do COCON related to and what are they?
Relate to all employees of SM and CR firms: Code of Conduct
Intergrity
Skill
Openess
Fair treatment
Market conduct
Good outcomes
Senior Man
Delegation
Controls
Compliance
What are teh 6 outcomes for fair treatment?
Confidence in fair treatment
Product meets need
Product works as expected
Clear information
Advice is suitable
Post sale barriers
Consumer Duty is made up of what?
3 levels:
Comsumer Outcome: Good outcomes for consumers
Crosscutting rules:
Avoid Harm
Good faith
Consumer achieve goals
Four Outcomes:
Price, product, consumer understanding , Consumer support
