FCA Regulations Exam with all Correct & 100% Verified
Answers |Actual Complete Exam |Already Graded A+
FSMA 2012 Regulator's ✔Correct Answer-FCA - Regulate firms conduct
PRA - Regulate safety & financial soundness
Monetary Stability ✔Correct Answer-Monetary policy committee (MPC) controls inflation
Financial stability ✔Correct Answer-Financial policy committee (FPC) - Macro focus directing PRA
PRA - Micro focus on individual firms
PRA Objective ✔Correct Answer-Promote the safety & soundness of banks, insurers and other
deposit takers. Also work on special resolutions regimes (winding down banks)
FCA Powers ✔Correct Answer-Supervise all firms conduct
Prudential supervision for non PRA firms
Authorise firms & approve persons
Authority for listing & prospectus
FCA Objectives (strategic and operational (PIC) ✔Correct Answer-Strategic - Ensure markets
function well
Operational - Protect consumers
Integrity of markets
Competition
FCA is accountable to ✔Correct Answer-The treasury (HMT)
General prohibition S19 FSMA 2000 ✔Correct Answer-A person must be authorised to carry out a
regulated activity relating to a specified investment unless exempt or the activity excluded
Penalties for breaching general prohibition ✔Correct Answer-Magistrates - 6 months, £5000 fine
Crown - 2 years, unlimited fine
Non Specified or designated investments ✔Correct Answer-Property, commodities or any tangible
asset
Options on commodities (unless precious metals)
Spot FX, Premium bonds & National savings
Fixed odds betting, letters of credit
Excluded activities (DEMOTe) ✔Correct Answer-Dealing as principle
Employee share schemes
Media (advice)
Overseas person (unsolicited and only if not promoting in UK)
Trustees (unpaid)
Exempt Persons (APRIL) ✔Correct Answer-Appointed representations (e.g X firms only sells y
products, y takes responsibility)
Professional body members
Recognised investment exchanges & clearing houses
, Certain Institutions (e.g central banks)
Llyods members
Recognised entities ✔Correct Answer-RIE & ROIE are recognised by the FCA and RCH are
recognised by the BOE and thus exempt from regulations
Key principles for business which must be followed by all authorised firms ✔Correct Answer-1.
Integrity
2. Skill care and dilligence
3. Mgmt & control
4. Financial prudence
5. Market conduct
6. Customer interessts
7. Communications with clients
8. Conflicts of interest
9. Customer trust
10. Client assets
11. Relations with regulators
12. Consumer duty (New principle)
Principle 12 Consumer duty obligations ✔Correct Answer-Act in good faith to retail customers
Avoid causing foreseeable harm to retail customers
Enable and support customer to pursue their financial objectives
FCA supervision ✔Correct Answer-1. Pro active supervision - For Fixed portfolio firms (Large firms
e.g HSBC) there is a named FCA supervisor and a pre emptive approach with 12-36 month cycle of
meetings and reviews
2. Reactive supervision - Flexible portfolio firms, dealing with issues that emerge
FCA Supervisory tools (RIDE) ✔Correct Answer-Remedy
Identify
Diagnose
Evaluate
Senior Managers & Certification Regime (SM&CR) ✔Correct Answer-A process where key senior
individuals are approved by the regulator, and assigned key responsibilities, who then internally
assess the fitness of any other employee who poses risk to customers or firm "material risk taker"
Controlled Functions ✔Correct Answer-1. Governing Functions
2. Customer Dealing functions
Individuals performing controlled functions must be approved by the FCA. Must notify the FCA within
7 days if a person performing a controlled function withdraws
Approved persons ✔Correct Answer-Individuals performing controlled functions must be deemed
fit and proper including honesty & integrity as well s competence and financial soundness
Code of Conduct Rules (COCON) ✔Correct Answer-Applies to all staff except ancillary staff
FCA enforcement regime: Notices (First 4 are statutory) ✔Correct Answer-Warning notice (Possibly
published)
Decision notices (published)
Answers |Actual Complete Exam |Already Graded A+
FSMA 2012 Regulator's ✔Correct Answer-FCA - Regulate firms conduct
PRA - Regulate safety & financial soundness
Monetary Stability ✔Correct Answer-Monetary policy committee (MPC) controls inflation
Financial stability ✔Correct Answer-Financial policy committee (FPC) - Macro focus directing PRA
PRA - Micro focus on individual firms
PRA Objective ✔Correct Answer-Promote the safety & soundness of banks, insurers and other
deposit takers. Also work on special resolutions regimes (winding down banks)
FCA Powers ✔Correct Answer-Supervise all firms conduct
Prudential supervision for non PRA firms
Authorise firms & approve persons
Authority for listing & prospectus
FCA Objectives (strategic and operational (PIC) ✔Correct Answer-Strategic - Ensure markets
function well
Operational - Protect consumers
Integrity of markets
Competition
FCA is accountable to ✔Correct Answer-The treasury (HMT)
General prohibition S19 FSMA 2000 ✔Correct Answer-A person must be authorised to carry out a
regulated activity relating to a specified investment unless exempt or the activity excluded
Penalties for breaching general prohibition ✔Correct Answer-Magistrates - 6 months, £5000 fine
Crown - 2 years, unlimited fine
Non Specified or designated investments ✔Correct Answer-Property, commodities or any tangible
asset
Options on commodities (unless precious metals)
Spot FX, Premium bonds & National savings
Fixed odds betting, letters of credit
Excluded activities (DEMOTe) ✔Correct Answer-Dealing as principle
Employee share schemes
Media (advice)
Overseas person (unsolicited and only if not promoting in UK)
Trustees (unpaid)
Exempt Persons (APRIL) ✔Correct Answer-Appointed representations (e.g X firms only sells y
products, y takes responsibility)
Professional body members
Recognised investment exchanges & clearing houses
, Certain Institutions (e.g central banks)
Llyods members
Recognised entities ✔Correct Answer-RIE & ROIE are recognised by the FCA and RCH are
recognised by the BOE and thus exempt from regulations
Key principles for business which must be followed by all authorised firms ✔Correct Answer-1.
Integrity
2. Skill care and dilligence
3. Mgmt & control
4. Financial prudence
5. Market conduct
6. Customer interessts
7. Communications with clients
8. Conflicts of interest
9. Customer trust
10. Client assets
11. Relations with regulators
12. Consumer duty (New principle)
Principle 12 Consumer duty obligations ✔Correct Answer-Act in good faith to retail customers
Avoid causing foreseeable harm to retail customers
Enable and support customer to pursue their financial objectives
FCA supervision ✔Correct Answer-1. Pro active supervision - For Fixed portfolio firms (Large firms
e.g HSBC) there is a named FCA supervisor and a pre emptive approach with 12-36 month cycle of
meetings and reviews
2. Reactive supervision - Flexible portfolio firms, dealing with issues that emerge
FCA Supervisory tools (RIDE) ✔Correct Answer-Remedy
Identify
Diagnose
Evaluate
Senior Managers & Certification Regime (SM&CR) ✔Correct Answer-A process where key senior
individuals are approved by the regulator, and assigned key responsibilities, who then internally
assess the fitness of any other employee who poses risk to customers or firm "material risk taker"
Controlled Functions ✔Correct Answer-1. Governing Functions
2. Customer Dealing functions
Individuals performing controlled functions must be approved by the FCA. Must notify the FCA within
7 days if a person performing a controlled function withdraws
Approved persons ✔Correct Answer-Individuals performing controlled functions must be deemed
fit and proper including honesty & integrity as well s competence and financial soundness
Code of Conduct Rules (COCON) ✔Correct Answer-Applies to all staff except ancillary staff
FCA enforcement regime: Notices (First 4 are statutory) ✔Correct Answer-Warning notice (Possibly
published)
Decision notices (published)
