CISI REGULATIONS CHAPTER 2 || 10% FAULTLESS
ANSWERS.
General prohibition (S19 FSMA 2000) correct answers No person may carry on a regulated
activity in the UK unless he is an authorised person or an exempt person
Regulated activity definition correct answers Regulated activities order - 'specified activity
undertaken with a specified investment'
Definition of a person correct answers A legal person (company, partnership, trust)
Individuals correct answers Local or sole traders (EG)
What does it mean if you get Part 4A permission? correct answers You are authorised
Civil law consequences of contravening the General Prohibition - 1 correct answers 1 -
injunctions
Civil law consequences of contravening the General Prohibition - 2 correct answers 2 -
restitution orders
Civil law consequences of contravening the General Prohibition - 3 correct answers 3 - contracts
voidable at the discretion of the investor
What's an injunction? correct answers Firm is prohibited from continuing activities
What's a restitution order? correct answers Where a firm is instructed to pay back any losses to a
client
What defences are there in criminal cases? correct answers People taking reasonable precautions
and exercising all due diligence to avoid committing an offence
First cycle of a criminal penalty for contravening the general prohibition correct answers
Magistrate
Second cycle of a criminal penalty for contravening the general prohibition correct answers
Crown court
Third cycle of a criminal penalty for contravening the general prohibition correct answers Two
years imprisonment and/or unlimited fine
Specified investments - 1 correct answers Shares/Depository receipts/Warrants (MiFID)
Specified investments - 2 correct answers Debt instruments. Bonds, commercial paper (MiFID)
Specified investments - 3 correct answers Units in a collective investment scheme (MiFID)
, Specified investments - 4 correct answers Options (MiFID)
Specified investments - 5 correct answers Futures (MiFID)
Specified investments - 6 correct answers Lloyds syndicates. Insurance contracts, funeral plans
Specified investments - 7 correct answers Contacts for difference (CDF) (MiFID)
Specified investments - 8 correct answers Pensions
Specified investments - 9 correct answers Regulated mortgages and home finance
Specified investments - 10 correct answers Deposits and electronic money
Specified investments - 11 correct answers Right to specified investments
Specified investments - 12 correct answers Loans and other forms of credit
Specified investments - 13 correct answers Emissions auction products
Specified investments - 14 correct answers Benchmarks
When are options specified investments? - 1 correct answers Options on specified investments
When are options specified investments? - 2 correct answers Options on precious metals
When are options specified investments? - 3 correct answers Options on currency
Commercials purposes exclusion correct answers Derivative used for commercial purposes are
excluded from specified investments
Regulated mortgages correct answers A first legal charge on residential property
Home finance includes correct answers Equity release/lifetime mortgage, home purchase plan
(Sharia mortgage), regulated sale and rent back
Debt instruments include correct answers Green bonds, blue bonds, sukuk
Other forms of credit include correct answers Consumer hire agreements
Specified activities 1 correct answers Dealing in investments (MiFID)
Specified activities 2 correct answers Arranging deals in investments (MiFID)
Specified activities 3 correct answers Managing investments (MiFID)
ANSWERS.
General prohibition (S19 FSMA 2000) correct answers No person may carry on a regulated
activity in the UK unless he is an authorised person or an exempt person
Regulated activity definition correct answers Regulated activities order - 'specified activity
undertaken with a specified investment'
Definition of a person correct answers A legal person (company, partnership, trust)
Individuals correct answers Local or sole traders (EG)
What does it mean if you get Part 4A permission? correct answers You are authorised
Civil law consequences of contravening the General Prohibition - 1 correct answers 1 -
injunctions
Civil law consequences of contravening the General Prohibition - 2 correct answers 2 -
restitution orders
Civil law consequences of contravening the General Prohibition - 3 correct answers 3 - contracts
voidable at the discretion of the investor
What's an injunction? correct answers Firm is prohibited from continuing activities
What's a restitution order? correct answers Where a firm is instructed to pay back any losses to a
client
What defences are there in criminal cases? correct answers People taking reasonable precautions
and exercising all due diligence to avoid committing an offence
First cycle of a criminal penalty for contravening the general prohibition correct answers
Magistrate
Second cycle of a criminal penalty for contravening the general prohibition correct answers
Crown court
Third cycle of a criminal penalty for contravening the general prohibition correct answers Two
years imprisonment and/or unlimited fine
Specified investments - 1 correct answers Shares/Depository receipts/Warrants (MiFID)
Specified investments - 2 correct answers Debt instruments. Bonds, commercial paper (MiFID)
Specified investments - 3 correct answers Units in a collective investment scheme (MiFID)
, Specified investments - 4 correct answers Options (MiFID)
Specified investments - 5 correct answers Futures (MiFID)
Specified investments - 6 correct answers Lloyds syndicates. Insurance contracts, funeral plans
Specified investments - 7 correct answers Contacts for difference (CDF) (MiFID)
Specified investments - 8 correct answers Pensions
Specified investments - 9 correct answers Regulated mortgages and home finance
Specified investments - 10 correct answers Deposits and electronic money
Specified investments - 11 correct answers Right to specified investments
Specified investments - 12 correct answers Loans and other forms of credit
Specified investments - 13 correct answers Emissions auction products
Specified investments - 14 correct answers Benchmarks
When are options specified investments? - 1 correct answers Options on specified investments
When are options specified investments? - 2 correct answers Options on precious metals
When are options specified investments? - 3 correct answers Options on currency
Commercials purposes exclusion correct answers Derivative used for commercial purposes are
excluded from specified investments
Regulated mortgages correct answers A first legal charge on residential property
Home finance includes correct answers Equity release/lifetime mortgage, home purchase plan
(Sharia mortgage), regulated sale and rent back
Debt instruments include correct answers Green bonds, blue bonds, sukuk
Other forms of credit include correct answers Consumer hire agreements
Specified activities 1 correct answers Dealing in investments (MiFID)
Specified activities 2 correct answers Arranging deals in investments (MiFID)
Specified activities 3 correct answers Managing investments (MiFID)
