CISI - CHAPTER 8 FINANCIAL
SERVICES REGULATION AND
PROFESSIONAL INTEGRITY
CORRECT 100%
What are the main purposes and aims of regulation? - ANSWER-Maintain and promote
the fairness, efficiency, competitiveness, transparency and orderliness of markets
-Promote understanding by the public of the operation and functioning of the financial
sector
-Provide protection for members of the public investing in or holding financial products
-Minimise crime and misconduct in the sector
-Reduce systemic risk
-Assist in maintaining the market's financial stability by taking appropriate steps.
Lamfalussy Process - ANSWERUsed to introduce the Markets in Financial Instruments
Directive (MiFID)
Which introduced European-wide rules and regulations regarding the conduct of
business and organisation or firms within the financial industry.
When did the MiFD come into force? - ANSWERNovember 2007 and replaced the
investment services directive.
Markets in Financial Instruments Directive
European Securities and Markets Authority (ESMA) - ANSWERAn EU authority which is
responsible for both drafting the legislation and for guiding it through EU
implementation, overseeing national implementation and enforcement.
Under FSMA who is responsible for the regulation of the financial services sector? -
ANSWERFinancial services Authority
(Financial services and markets act)
Financial policy committe - ANSWEREstablished in the BoE, with responsibility for
'macro-prudential' regulation, or regulation of the stability and resilience of the financial
system as a whole.
, It identifies and takes action to remove or reduce systemic risk.
Prudential Regulation Authority (PRA) - ANSWERResponsible for the regulation and
supervision of 'significant' individual firms including all deposit-taking institutions,
insurers and other prudentially significant investment firms.
What is the Prudential regulation authority (PRA) primary objective? -
ANSWEREnhancing financial stability by promoting the safety and soundness of PRA-
authorised firms in a way which minimises the disruption caused by any firms which do
fail.
Financial Conduct Authority (FCA) - ANSWERResponsible for the conduct of all firms
and the prudential regulation of firms not supervised by the PRA.
The FCA focuses on the day-to-day regulation of all firms in retail and wholesale
financial markets.
What is the FCA responsible for under the FSMA? - ANSWER-Regulating standards of
conduct in retail and wholesale markets
-Supervising trading infrastructures that support those markets
-The prudential supervision of firms that are not PRA-regulated
-The functions of the UK Listing Authority (UKLA).
What are the 3 statutory objectives of the FCA? - ANSWER-Protect consumers
-Enhance the integrity of the UK financial system
-Help maintain competitive markets and promote effective competition in the interests of
consumers.
Who is the main US regulator? - ANSWERSecurities and Exchange Commission (SEC)
What is the Securities and Exchange commissions main mission? - ANSWERTo protect
investors; to maintain fair, orderly, and efficient markets; and to facilitate capital
formation.
The SEC oversees the key participants in the securities world, including securities
exchanges, securities brokers and dealers, investment advisers and mutual funds.
Who do Solo-regulated firms need to be authorised by to provide financial services in
the UK? - ANSWERFCA
SERVICES REGULATION AND
PROFESSIONAL INTEGRITY
CORRECT 100%
What are the main purposes and aims of regulation? - ANSWER-Maintain and promote
the fairness, efficiency, competitiveness, transparency and orderliness of markets
-Promote understanding by the public of the operation and functioning of the financial
sector
-Provide protection for members of the public investing in or holding financial products
-Minimise crime and misconduct in the sector
-Reduce systemic risk
-Assist in maintaining the market's financial stability by taking appropriate steps.
Lamfalussy Process - ANSWERUsed to introduce the Markets in Financial Instruments
Directive (MiFID)
Which introduced European-wide rules and regulations regarding the conduct of
business and organisation or firms within the financial industry.
When did the MiFD come into force? - ANSWERNovember 2007 and replaced the
investment services directive.
Markets in Financial Instruments Directive
European Securities and Markets Authority (ESMA) - ANSWERAn EU authority which is
responsible for both drafting the legislation and for guiding it through EU
implementation, overseeing national implementation and enforcement.
Under FSMA who is responsible for the regulation of the financial services sector? -
ANSWERFinancial services Authority
(Financial services and markets act)
Financial policy committe - ANSWEREstablished in the BoE, with responsibility for
'macro-prudential' regulation, or regulation of the stability and resilience of the financial
system as a whole.
, It identifies and takes action to remove or reduce systemic risk.
Prudential Regulation Authority (PRA) - ANSWERResponsible for the regulation and
supervision of 'significant' individual firms including all deposit-taking institutions,
insurers and other prudentially significant investment firms.
What is the Prudential regulation authority (PRA) primary objective? -
ANSWEREnhancing financial stability by promoting the safety and soundness of PRA-
authorised firms in a way which minimises the disruption caused by any firms which do
fail.
Financial Conduct Authority (FCA) - ANSWERResponsible for the conduct of all firms
and the prudential regulation of firms not supervised by the PRA.
The FCA focuses on the day-to-day regulation of all firms in retail and wholesale
financial markets.
What is the FCA responsible for under the FSMA? - ANSWER-Regulating standards of
conduct in retail and wholesale markets
-Supervising trading infrastructures that support those markets
-The prudential supervision of firms that are not PRA-regulated
-The functions of the UK Listing Authority (UKLA).
What are the 3 statutory objectives of the FCA? - ANSWER-Protect consumers
-Enhance the integrity of the UK financial system
-Help maintain competitive markets and promote effective competition in the interests of
consumers.
Who is the main US regulator? - ANSWERSecurities and Exchange Commission (SEC)
What is the Securities and Exchange commissions main mission? - ANSWERTo protect
investors; to maintain fair, orderly, and efficient markets; and to facilitate capital
formation.
The SEC oversees the key participants in the securities world, including securities
exchanges, securities brokers and dealers, investment advisers and mutual funds.
Who do Solo-regulated firms need to be authorised by to provide financial services in
the UK? - ANSWERFCA
