FCA REGULATORY EXAM 2025 SOLVED
100% CORRECT!!
1 of 143
Definition
1. Proactive firm supervision: for fixed portfolio firms only
- look at the business model and strategy, and compare it with
statutory objectives (preemptive)
2. Event-driven work: for all firms
- Reactive work: responding to specific events (where things have
gone wrong)
3. Thematic: for all firms
- Referred to as 'Issues & Products' e.g. market abuse surveillance
,within asset management firms, transaction reports (how well are
asset management firms monitoring their risk to market abuse and
how are they identifying that risk)
Give this one a try later!
FCA supervisory model - 3
4 Tools of Supervison under FCA
steps
Excluded specified investments FCA 11 Principles of Business
Don't know?
2 of 143
Definition
Compulsory Justrrictions: authorized firms conducting regulated
activity is subject to this under FOS
Voluntary Justrrictions: firms conducting investment business can be
subject to this
Firm must accept Compulsory but can choose to accept Voluntary
Give this one a try later!
Suitability reporting
3 outcomes of part 4a permission - purpose
- format
, Compulsory vs voluntary Warning notice decision Notice
Justrrictions
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3 of 143
Term
The Panel on Takeovers and Mergers (takeover panel)
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Firms obligations; administrative processes
1. Risk assesment: appoint MRLO, SYNC, etc responsible for compliance
2. Customer Due Diligence (CDD) (enhanced CDD (PEP, high risk ) vs simplfied
CDD)
3. Reliance
4. Education and training for all employees
- recognize suspicion
- Report: employee --> MRLO --> NCA (national price agency)
5. Record keeping: 5 years
6. Criminal offences for directors/senior managers
- FIRM Failure to comply with ML regulators: 2 years jail +/- fine
**Firm will be prosecuted
Takeover Code: focuses on the fair treatment of affected parties during the
process of the takeover or merger
- Issue and administer the City Code on Takeovers and Mergers (the 'Code')
- Independent body of FCA and PRA
, Allowed: if it is unlikely to disadvantage any costumers
--> but must disclose any disadvantages (oral/written)
Allocate: to costumers first (before firm) in a timely manner (pro rata)
- UNLESS: firm has reasonable grounds to allocate proportionally
Purpose: stop firms to try exploit any loopholes
Cover: all firms must ensure that they act honestly, fairly and professionally -->
Clients' best interests rule
Don't know?
4 of 143
Definition
WHO Directors, head of, chair, chief officers, money laundering
officer, non-executive director, chairman of board, Head of Internal
Audit, the Financial Controller (a.k.a. 'Head of financial reporting)
Pre-Approval by regulator
ONLY: MUST have approval from regulator: Acting as a non-
executive director
Give this one a try later!
Elective eligible counter-party
- Who can? PRA Statutory Objectives
- Procedure?
100% CORRECT!!
1 of 143
Definition
1. Proactive firm supervision: for fixed portfolio firms only
- look at the business model and strategy, and compare it with
statutory objectives (preemptive)
2. Event-driven work: for all firms
- Reactive work: responding to specific events (where things have
gone wrong)
3. Thematic: for all firms
- Referred to as 'Issues & Products' e.g. market abuse surveillance
,within asset management firms, transaction reports (how well are
asset management firms monitoring their risk to market abuse and
how are they identifying that risk)
Give this one a try later!
FCA supervisory model - 3
4 Tools of Supervison under FCA
steps
Excluded specified investments FCA 11 Principles of Business
Don't know?
2 of 143
Definition
Compulsory Justrrictions: authorized firms conducting regulated
activity is subject to this under FOS
Voluntary Justrrictions: firms conducting investment business can be
subject to this
Firm must accept Compulsory but can choose to accept Voluntary
Give this one a try later!
Suitability reporting
3 outcomes of part 4a permission - purpose
- format
, Compulsory vs voluntary Warning notice decision Notice
Justrrictions
Don't know?
3 of 143
Term
The Panel on Takeovers and Mergers (takeover panel)
Give this one a try later!
Firms obligations; administrative processes
1. Risk assesment: appoint MRLO, SYNC, etc responsible for compliance
2. Customer Due Diligence (CDD) (enhanced CDD (PEP, high risk ) vs simplfied
CDD)
3. Reliance
4. Education and training for all employees
- recognize suspicion
- Report: employee --> MRLO --> NCA (national price agency)
5. Record keeping: 5 years
6. Criminal offences for directors/senior managers
- FIRM Failure to comply with ML regulators: 2 years jail +/- fine
**Firm will be prosecuted
Takeover Code: focuses on the fair treatment of affected parties during the
process of the takeover or merger
- Issue and administer the City Code on Takeovers and Mergers (the 'Code')
- Independent body of FCA and PRA
, Allowed: if it is unlikely to disadvantage any costumers
--> but must disclose any disadvantages (oral/written)
Allocate: to costumers first (before firm) in a timely manner (pro rata)
- UNLESS: firm has reasonable grounds to allocate proportionally
Purpose: stop firms to try exploit any loopholes
Cover: all firms must ensure that they act honestly, fairly and professionally -->
Clients' best interests rule
Don't know?
4 of 143
Definition
WHO Directors, head of, chair, chief officers, money laundering
officer, non-executive director, chairman of board, Head of Internal
Audit, the Financial Controller (a.k.a. 'Head of financial reporting)
Pre-Approval by regulator
ONLY: MUST have approval from regulator: Acting as a non-
executive director
Give this one a try later!
Elective eligible counter-party
- Who can? PRA Statutory Objectives
- Procedure?
