Regulatory Requirements Of Asset Finance

Front 1

What does 'zeitgeist' mean?

Back 1

Dominant set of beliefs that influence actions of the members of a society in a given period of time.

Hint 1

Think 2007/2008 financial crisis?

Front 2

What does FCA stand for?

Back 2

Financial Conduct Authority

Front 3

What does the FCA deal with?

Back 3

Financial Conduct

Front 4

What does PRA deal with?

Back 4

Capitalisation of the banks / requirement of banks to hold sufficient funds to cover losses from customers defaulting on loans

Front 5

Who is responsible for the consumer credit regime?

Back 5

FCA

Front 6

Which regime was set up in June 1998 to improve regulation of financial services?

Back 6

the Financial Services and Market act 2000

Hint 6

It's name has a different year in it (not 1998)

Front 7

Which three companies form the current tripartite system under the Financial and Markets Act 2000? Also, what are they collectively known as?

Back 7

HM Treasury, Bank of England, FCA. Collectively known as "The Authorities."

Front 8

A memorandum of understanding was set up between "the authorities."

What committee did they set up?

Back 8

Tripartite Standing Committee

Front 9

Who formed the Tripartite Committee and when did they meet?

Back 9

Senior representatives of Bank of England, FCA, HM Treasury (the Authorities). Monthly meetings or at a time to deal with emergency.

Front 10

From 1st April 2013 what new regulation was introduced to amend the Financial Services and Markets Act 2000? Also, what was the model called?

Back 10

Financial Services Act 2012

Twin Peaks model

Front 11

The "twin peaks" regulatory structure divides responsibility for regulation between which two regulatory bodies?

Back 11

The PRA and the FCA

Front 12

What is it called when a firm is regulated by both the FCA and the PRA?

Back 12

Dual regulated

Front 13

What is systemic risk?

Back 13

Risk which relates to the whole market/market segment. A risk that could trigger instability / collapse of a total industry.

Front 14

What is the FPC?

Back 14

Financial Policy Committee

Front 15

What is macroprudential supervision?

Back 15

Approach to financial regulation that aims to reduce the risk to the Financial system as a whole.

Front 16

Name two FPC powers and responsibilities:

Back 16

1) Ability to recommend actions to reduce risks

2) To direct the PRA to adjust capital requirements.

Front 17

Three statutory primary objectives of the PRA....

1) Promote ....... and ....... of the firm's they regulate

2) Facilitate effective ..........

3) Contribute appropriate ........... for current/potential...........

Back 17

1) safety and soundness

2) competition

3) protection / policyholders

Front 18

The PRA is part of the Bank Of England as of.....

Back 18

1st March 2017

Front 19

The PRA Board has been replaced by the ....

Back 19

Prudential Regulation Committee (PRC)

Front 20

Relating to PRA - Firms are subject to a baseline level of supervision, which comprises:

- Ensuring the firm's compliance with capital......... standards.

- Liquidity, value of ........, provisioning and .........

- An annual assessment of the risks posed by the firm to the ....... objectives

-Assessment of the firm's .......... plans for recovery and potential exit from the market.

Back 20

1) prudential

2) assets / reserves

3) PRA's

4) Contingency

Front 21

The FCA board, which makes it's policy decisions, is appointed by the .....

Back 21

Treasury

Front 22

The FCA has a number of specific responsibilities:

- Ensuring that relevant ....... function well.

- Supervising the ......... of financial services firms.

- The ........... supervision of firms not supervised by the PRA.

Back 22

1) Markets

2) Conduct

3) Prudential

Front 23

What is the FCA's one strategic objective?

Back 23

To ensure that the relevant markets function well.

Front 24

The FCA has three operational objectives to support the strategic objective ..

1) To secure an appropriate degree of........... for customers.

2) To protect and enhance the ........... of the UK Financial system.

3) To promote effective.......... in the interest of customers.

Back 24

1) protection

2) integrity

3) competition

Front 25

What are the two main areas of FCA regulation that relate to Asset Finance?

Back 25

1) 'regulated' finance agreements

2) Regulation of credit brokers who act as intermediaries

Front 26

What is the definition of a 'tied' asset finance company?

Back 26

An asset finance company which may be part of a large bank entity and therefore have lots of rules and regulations already in place.

Front 27

What are the five categories of FCA controlled functions:

G

R

S

S

C

Back 27

Governing Functions

Required Functions

Systems + Control Function

Significant Management Function

Customer Functions

Front 28

Name an example of a GOVERNING FUNCTION role....

Back 28

Chief executive

Director

Front 29

Give the definition of a REQUIRED FUNCTIONS role (one of the 5 FCA controlled functions) + give an example role....

Back 29

Roles required by regulation I.e. Compliance manager, money laundering officer.

Front 30

Give three examples of someone who would be considered SYSTEMS + CONTROL FUNCTIONS under one of the five FCA controlled functions.

Back 30

Heads of finance

Risk assessment

Internal Audit

Front 31

Describe someone who has a role under CUSTOMER FUNCTIONS (one of the five FCA controlled functions.)

Back 31

Those involved with giving advice to customers. I.e Financial / pension advisor.

Front 32

'Approved Persons' is a term which relates to a person who carried out a 'controlled function'. They must be approved by.....

Back 32

The FCA or PRA

Front 33

'Approved persons' must be Fit and Proper for the role they perform. Firms have to demonstrate the individual meets the criteria. Name the three main criteria:

Back 33

1) Honesty, integrity and reputation

2) Competence and capability

3) Financial Soundness

Front 34

Regarding an application for an ' Approved person' - if the firm is dual regulated who will coordinate the application on behalf of the PRA/FCA?

Back 34

PRA

Front 35

The requirements for those covered by the approved persons regime are stated in the APER. What does this stand for?

Back 35

Code of Practise for Approved Persons

Front 36

Which act introduced the senior managers regime and the certification regime?

Back 36

The Financial Services (Banking Reform) Act 2013

Front 37

The Senior Managers Regime and the Certification Regime came about from recommendations of the PCBS.... What does this stand for?

Back 37

Parliamentary Commission on Banking Standards

Front 38

What is the maximum penalty under a criminal offence relating to a decision by a senior manager that causes a bank to fail?

Back 38

Seven years in prison and/or An unlimited fine.

Front 39

Bank employees who do not carry out a senior management function but carry out a 'significant harm function' (with potential to cause harm to the firm or customer) will be subject to what regime?

Back 39

Certification Regime

Front 40

The Conduct Rules set out a basic standard for behaviour that the regulators expect to be met.

The FCA applies conduct rules to:

- Individuals approved as......... managers

- Individuals subject to the .......... Regime.

-(from March 2017) all other employees unless they are ......... staff

Back 40

1) Senior

2) Certification

3) Ancillary

Front 41

Unsecured lending is regulated by the FCA, under CONC.

What does CONC stand for?

Back 41

Consumer Credit Sourcebook

Front 42

The Consumer Credit Act 2006 covers the regulation of loans to which three types of customer?

Back 42

Individuals, Small partnerships and unincorporated bodies (not companies)

Front 43

Consumer Credit agreements and Consumer Hire agreements will be regulated if classed as regulated activities under what order?

Back 43

The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO)

Front 44

There are six REGULATED activities:

1) Credit broking

2) Debt related activities

3) An owner entering into a regulated hire agreement

4) An owner entering into a Regulated agreement

5) Providing credit information/references

6) Operating an electronic system relating to lending.

Name the two occasions when you may be EXEMPT from requiring authorisation ...

Back 44

1) Where the firm doing the business is a representative of an authorised firm.

2) Where a firm only introduces and doesn't give advice/do paperwork.

Front 45

The Consumer Credit Sourcebook (CONC) was established as a result of the FCA taking over regulation of consumer lending from the Office of Fair Trading in April 2014.

It implements the requirements of the Consumer Credit Acts of which two years?

Back 45

1974 and 2006

Front 46

Which body is responsible for macroprudential supervision in the UK?

Back 46

FINANCIAL POLICY COMMITTEE (FPC)