Podcast
Questions and Answers
What is the primary advantage of seeking advice from an Independent Financial Advisor (IFA)?
What is the primary advantage of seeking advice from an Independent Financial Advisor (IFA)?
- They are more experienced in the financial services industry.
- They have access to a wider range of products on the market. (correct)
- They are tied to a specific provider, ensuring a more personalized experience.
- They are more cost-effective than other types of advisors.
What is the primary limitation of seeking advice from an Appointed Representative?
What is the primary limitation of seeking advice from an Appointed Representative?
- They are limited to providing advice on products from a specific provider. (correct)
- They are more expensive than other types of advisors.
- They are not knowledgeable about investments.
- They lack experience in the financial services industry.
What is the primary role of governments in the financial services industry today?
What is the primary role of governments in the financial services industry today?
- To protect consumers and combat financial crime. (correct)
- To regulate the activities of Independent Financial Advisors.
- To provide financial advice to investors.
- To control interest rates and trading in the money markets.
What is the primary difference between an Independent Financial Advisor and an Appointed Representative?
What is the primary difference between an Independent Financial Advisor and an Appointed Representative?
What is the historical role of governments in the financial services industry?
What is the historical role of governments in the financial services industry?
What is the primary benefit of seeking advice from a financial advisor?
What is the primary benefit of seeking advice from a financial advisor?
What is the primary characteristic of an Independent Financial Advisor?
What is the primary characteristic of an Independent Financial Advisor?
What has been the trend in the UK industry's contribution to the Gross Domestic Product since the 1970s?
What has been the trend in the UK industry's contribution to the Gross Domestic Product since the 1970s?
What is the primary limitation of the role of governments in the financial services industry today?
What is the primary limitation of the role of governments in the financial services industry today?
What do critics of the light touch approach recommend?
What do critics of the light touch approach recommend?
What is the role of the UK Government in the financial services industry?
What is the role of the UK Government in the financial services industry?
What is the name of the Act that empowered the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA) to be regulators for the UK financial markets?
What is the name of the Act that empowered the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA) to be regulators for the UK financial markets?
What is the name of the Act that amended the Financial Services and Markets Act 2000?
What is the name of the Act that amended the Financial Services and Markets Act 2000?
What does the UK Government's leadership role involve in promoting industry?
What does the UK Government's leadership role involve in promoting industry?
What is a characteristic of the light touch approach?
What is a characteristic of the light touch approach?
What is the role of the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA) in the UK financial markets?
What is the role of the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA) in the UK financial markets?
What is a primary focus of social policy in terms of administration?
What is a primary focus of social policy in terms of administration?
How is a significant portion of social services funded in the UK?
How is a significant portion of social services funded in the UK?
What is the primary goal of the European Union, according to the Treaty on European Union?
What is the primary goal of the European Union, according to the Treaty on European Union?
What was the outcome of the UK referendum held on 23 June 2016?
What was the outcome of the UK referendum held on 23 June 2016?
When did the UK officially leave the EU?
When did the UK officially leave the EU?
What was the duration of the transitional period after the UK left the EU?
What was the duration of the transitional period after the UK left the EU?
What is the name of the act passed by the UK Government in 2018, as amended by the European Union (Withdrawal Agreement) Act 2020?
What is the name of the act passed by the UK Government in 2018, as amended by the European Union (Withdrawal Agreement) Act 2020?
What was the status of the UK during the transitional period after leaving the EU?
What was the status of the UK during the transitional period after leaving the EU?
What is the primary focus of the Financial Policy Committee (FPC)?
What is the primary focus of the Financial Policy Committee (FPC)?
Which regulator is responsible for delivering better levels of protection to consumers?
Which regulator is responsible for delivering better levels of protection to consumers?
What is the primary funding mechanism for the Financial Conduct Authority (FCA)?
What is the primary funding mechanism for the Financial Conduct Authority (FCA)?
What is the primary difference between the FCA and the old FSA?
What is the primary difference between the FCA and the old FSA?
Which regulator is responsible for setting and enforcing clear expectations for firms and market participants?
Which regulator is responsible for setting and enforcing clear expectations for firms and market participants?
What is the primary goal of the new regulatory framework established by the FSA 2012?
What is the primary goal of the new regulatory framework established by the FSA 2012?
In what year did the Prudential Regulation Authority (PRA) become a subsidiary of the Bank of England?
In what year did the Prudential Regulation Authority (PRA) become a subsidiary of the Bank of England?
What is the primary focus of the Prudential Regulation Authority (PRA)?
What is the primary focus of the Prudential Regulation Authority (PRA)?
What is one of the powers of the PSR?
What is one of the powers of the PSR?
What is the primary focus of the Financial Policy Committee (FPC)?
What is the primary focus of the Financial Policy Committee (FPC)?
Who chairs the Financial Policy Committee (FPC)?
Who chairs the Financial Policy Committee (FPC)?
What is a power of the FPC in relation to institutions responsible for oversight and policy?
What is a power of the FPC in relation to institutions responsible for oversight and policy?
How many non-Bank members are part of the FPC?
How many non-Bank members are part of the FPC?
What is the purpose of the FPC's power to intervene?
What is the purpose of the FPC's power to intervene?
Who is a non-voting member of the FPC?
Who is a non-voting member of the FPC?
What is the relationship between the PSR and the Competition & Markets Authority?
What is the relationship between the PSR and the Competition & Markets Authority?
What is the primary reason for the retail market being heavily regulated?
What is the primary reason for the retail market being heavily regulated?
What is the primary role of investment banks?
What is the primary role of investment banks?
What is the primary difference between retail banks and building societies?
What is the primary difference between retail banks and building societies?
What is the primary function of market making by investment banks?
What is the primary function of market making by investment banks?
What is the primary role of retail banks?
What is the primary role of retail banks?
What is the primary characteristic of building societies?
What is the primary characteristic of building societies?
What is the primary role of corporate finance in investment banks?
What is the primary role of corporate finance in investment banks?
What is the primary reason for the distinction between the retail and wholesale markets?
What is the primary reason for the distinction between the retail and wholesale markets?
What is the primary role of the FCA when considering an application for authorisation by a dual-regulated firm?
What is the primary role of the FCA when considering an application for authorisation by a dual-regulated firm?
What is the aim of the Payment Systems Regulator (PSR)?
What is the aim of the Payment Systems Regulator (PSR)?
What is the role of the PRA in considering an application for authorisation by a dual-regulated firm?
What is the role of the PRA in considering an application for authorisation by a dual-regulated firm?
What is the process used by the PRA when the FCA does not give consent to an application for authorisation?
What is the process used by the PRA when the FCA does not give consent to an application for authorisation?
What is a statutory objective of the PSR?
What is a statutory objective of the PSR?
What do dual-regulated firms have to meet?
What do dual-regulated firms have to meet?
What is the relationship between the PSR and the FCA?
What is the relationship between the PSR and the FCA?
What is the focus of the PRA when considering the application for authorisation by a dual-regulated firm?
What is the focus of the PRA when considering the application for authorisation by a dual-regulated firm?
What is a consequence of the UK's industry slipping in its contribution to the Gross Domestic Product since the 1970s?
What is a consequence of the UK's industry slipping in its contribution to the Gross Domestic Product since the 1970s?
What is the primary role of the His Majesty's Treasury (HMT) in the financial services industry?
What is the primary role of the His Majesty's Treasury (HMT) in the financial services industry?
What is a key feature of the Financial Services and Markets Act 2000 (FSMA 2000)?
What is a key feature of the Financial Services and Markets Act 2000 (FSMA 2000)?
What is a consequence of the light touch approach to industry regulation?
What is a consequence of the light touch approach to industry regulation?
What is a key characteristic of the UK Government's approach to promoting industry?
What is a key characteristic of the UK Government's approach to promoting industry?
What is the role of the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA) in the UK financial markets?
What is the role of the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA) in the UK financial markets?
What is the consequence of the UK Government's approach to industry regulation?
What is the consequence of the UK Government's approach to industry regulation?
What is a limitation of consent under the GDPR?
What is a limitation of consent under the GDPR?
What is a key feature of the Financial Services Act 2012?
What is a key feature of the Financial Services Act 2012?
What is an enhanced right of data subjects under the GDPR?
What is an enhanced right of data subjects under the GDPR?
What is a notification requirement under the GDPR in the UK?
What is a notification requirement under the GDPR in the UK?
What is the strategic objective of the FCA?
What is the strategic objective of the FCA?
What are the three operational objectives of the FCA?
What are the three operational objectives of the FCA?
What is a focus of the FCA's conduct regulation?
What is a focus of the FCA's conduct regulation?
What does the FCA do in addition to its stated objectives?
What does the FCA do in addition to its stated objectives?
What is the scope of the FCA's regulation?
What is the scope of the FCA's regulation?
What is the primary criterion for the FCA to make rules and provisions?
What is the primary criterion for the FCA to make rules and provisions?
How many blocks does the FCA Handbook have?
How many blocks does the FCA Handbook have?
What is the primary focus of Block 1 in the FCA Handbook?
What is the primary focus of Block 1 in the FCA Handbook?
Which block in the FCA Handbook deals with the conduct of business rules?
Which block in the FCA Handbook deals with the conduct of business rules?
What is the primary focus of Block 4 in the FCA Handbook?
What is the primary focus of Block 4 in the FCA Handbook?
Which sourcebook in the FCA Handbook deals with the fit and proper criteria for approved persons?
Which sourcebook in the FCA Handbook deals with the fit and proper criteria for approved persons?
What is the primary focus of Block 5 in the FCA Handbook?
What is the primary focus of Block 5 in the FCA Handbook?
Which sourcebook in the FCA Handbook deals with the code of conduct for staff?
Which sourcebook in the FCA Handbook deals with the code of conduct for staff?
What is the primary purpose of financial markets?
What is the primary purpose of financial markets?
What is the result of sophisticated deal-making procedures in financial markets?
What is the result of sophisticated deal-making procedures in financial markets?
What is an example of conscious saving?
What is an example of conscious saving?
What is the role of fund managers in financial markets?
What is the role of fund managers in financial markets?
What is the primary function of financial markets?
What is the primary function of financial markets?
What is the result of the development of complex financial instruments?
What is the result of the development of complex financial instruments?
What is the primary characteristic of unconscious saving?
What is the primary characteristic of unconscious saving?
What is the role of the City of London in the context of financial markets?
What is the role of the City of London in the context of financial markets?
What is the primary goal of economic and industrial policies in the UK?
What is the primary goal of economic and industrial policies in the UK?
Who is responsible for setting and implementing economic policy in the UK?
Who is responsible for setting and implementing economic policy in the UK?
What is the primary target of the UK Government's economic policy?
What is the primary target of the UK Government's economic policy?
What is the role of the Bank of England's monetary policy in the UK's economic policy?
What is the role of the Bank of England's monetary policy in the UK's economic policy?
What is the primary focus of the UK's industrial policy?
What is the primary focus of the UK's industrial policy?
What is the relationship between the UK Government's fiscal policy and the Bank of England's monetary policy?
What is the relationship between the UK Government's fiscal policy and the Bank of England's monetary policy?
What is the primary goal of the UK Government's economic policy in recent times?
What is the primary goal of the UK Government's economic policy in recent times?
What is the role of the balance of payments in the UK's economic policy?
What is the role of the balance of payments in the UK's economic policy?
In which scenario would an investor be more likely to receive a wider range of pension options?
In which scenario would an investor be more likely to receive a wider range of pension options?
What is a key difference between the historical and modern role of governments in the financial services industry?
What is a key difference between the historical and modern role of governments in the financial services industry?
What is a key benefit of seeking advice from an IFA or appointed representative?
What is a key benefit of seeking advice from an IFA or appointed representative?
What is a primary function of governments in the financial services industry today?
What is a primary function of governments in the financial services industry today?
What is a key difference between an IFA and an appointed representative?
What is a key difference between an IFA and an appointed representative?
What is the primary focus of governments in the financial services industry, historically?
What is the primary focus of governments in the financial services industry, historically?
What is a benefit of seeking advice from a financial advisor, whether an IFA or appointed representative?
What is a benefit of seeking advice from a financial advisor, whether an IFA or appointed representative?
What is the primary role of governments in the financial services industry, in relation to financial crime?
What is the primary role of governments in the financial services industry, in relation to financial crime?
What is the purpose of 'onshoring' in the context of the EUWA?
What is the purpose of 'onshoring' in the context of the EUWA?
What is the status of the UK in the eyes of the EU after 31 December 2020?
What is the status of the UK in the eyes of the EU after 31 December 2020?
What allows EEA-based financial services firms to continue operating in the UK after the transition period?
What allows EEA-based financial services firms to continue operating in the UK after the transition period?
What is the purpose of the powers given to the FCA, PRA, BoE, and PSR?
What is the purpose of the powers given to the FCA, PRA, BoE, and PSR?
What is the current status of EU-derived legislation in the UK?
What is the current status of EU-derived legislation in the UK?
What is the primary goal of the European Commission in implementing EU legislation?
What is the primary goal of the European Commission in implementing EU legislation?
What is the effect of the UK's withdrawal from the EU single market and customs union?
What is the effect of the UK's withdrawal from the EU single market and customs union?
What is the term used to describe the adoption of EU legislation as part of UK law?
What is the term used to describe the adoption of EU legislation as part of UK law?
What is the role of the Committee of 'Wise Men' in the EU legislative process?
What is the role of the Committee of 'Wise Men' in the EU legislative process?
What is the primary benefit of the Lamfalussy approach?
What is the primary benefit of the Lamfalussy approach?
What is the primary objective of the EUWA?
What is the primary objective of the EUWA?
What is the purpose of the amendments made to retained EU law?
What is the purpose of the amendments made to retained EU law?
What is the relationship between the European Commission and the European Council?
What is the relationship between the European Commission and the European Council?
What is the primary role of the European Commission in EU legislation?
What is the primary role of the European Commission in EU legislation?
What is the primary focus of the European Commission in performing its role?
What is the primary focus of the European Commission in performing its role?
What is the outcome of the Lamfalussy approach on EU legislation?
What is the outcome of the Lamfalussy approach on EU legislation?
What is the primary reason for the crew and the City trader having similar jobs despite the vast time difference?
What is the primary reason for the crew and the City trader having similar jobs despite the vast time difference?
What is the primary goal of the crew and the City trader?
What is the primary goal of the crew and the City trader?
What do the crew and the City trader rely on to complete their jobs?
What do the crew and the City trader rely on to complete their jobs?
What is the primary difference between the crew and the City trader?
What is the primary difference between the crew and the City trader?
What is the primary motivation for the crew and the City trader?
What is the primary motivation for the crew and the City trader?
What is the primary similarity between the crew and the City trader?
What is the primary similarity between the crew and the City trader?
What do the merchants and the bank expect from the crew and the City trader?
What do the merchants and the bank expect from the crew and the City trader?
What is the outcome of a successful trade for the crew and the City trader?
What is the outcome of a successful trade for the crew and the City trader?
What is the primary objective of the FCA's consumer protection operational objective?
What is the primary objective of the FCA's consumer protection operational objective?
How does the UK Government influence the financial services industry through taxation?
How does the UK Government influence the financial services industry through taxation?
What is the primary focus of social policy in the context of the financial services industry?
What is the primary focus of social policy in the context of the financial services industry?
What is the name of the Act that set the FCA's four objectives?
What is the name of the Act that set the FCA's four objectives?
What is the FCA's strategic objective?
What is the FCA's strategic objective?
What is the primary purpose of the FCA's integrity operational objective?
What is the primary purpose of the FCA's integrity operational objective?
What is the primary impact of taxation on the financial services industry?
What is the primary impact of taxation on the financial services industry?
What is the primary focus of the FCA's competition operational objective?
What is the primary focus of the FCA's competition operational objective?
What is the primary purpose of the Value for Money Assessment for authorised fund managers?
What is the primary purpose of the Value for Money Assessment for authorised fund managers?
What is the primary role of the Pensions Regulator in the UK?
What is the primary role of the Pensions Regulator in the UK?
What is the primary purpose of the Pension Protection Fund (PPF)?
What is the primary purpose of the Pension Protection Fund (PPF)?
What is the primary difference between an occupational pension scheme and a stakeholder pension?
What is the primary difference between an occupational pension scheme and a stakeholder pension?
What is the primary purpose of the statement of investment principles?
What is the primary purpose of the statement of investment principles?
What is the primary role of the Alternative Investment Fund Managers' Directive (AIFMD)?
What is the primary role of the Alternative Investment Fund Managers' Directive (AIFMD)?
What is the primary purpose of the Undertakings for Collective Investment in Transferable Securities (UCITS)?
What is the primary purpose of the Undertakings for Collective Investment in Transferable Securities (UCITS)?
What is the primary objective of the Fund Regulations in the UK?
What is the primary objective of the Fund Regulations in the UK?
What is the primary objective of the Prudential Regulation Authority (PRA)?
What is the primary objective of the Prudential Regulation Authority (PRA)?
What is the approach taken by the PRA in its regulatory role?
What is the approach taken by the PRA in its regulatory role?
How many firms are regulated by the PRA?
How many firms are regulated by the PRA?
What is the relationship between the FCA and the PRA in terms of authorisation functions?
What is the relationship between the FCA and the PRA in terms of authorisation functions?
What is the primary criticism of the 'light-touch' regulatory regime?
What is the primary criticism of the 'light-touch' regulatory regime?
What is the PRA's approach to challenging the management of firms?
What is the PRA's approach to challenging the management of firms?
What is the primary role of the PRA in terms of its regulated firms?
What is the primary role of the PRA in terms of its regulated firms?
What is the relationship between the PRA and the Bank of England?
What is the relationship between the PRA and the Bank of England?
What is the primary role of the Payment Systems Regulator (PSR)?
What is the primary role of the Payment Systems Regulator (PSR)?
What is the primary focus of the Financial Policy Committee (FPC)?
What is the primary focus of the Financial Policy Committee (FPC)?
Who chairs the Financial Policy Committee (FPC)?
Who chairs the Financial Policy Committee (FPC)?
What is a power of the FPC in relation to institutions responsible for oversight and policy?
What is a power of the FPC in relation to institutions responsible for oversight and policy?
What is one of the powers of the PSR?
What is one of the powers of the PSR?
How many non-Bank members are part of the FPC?
How many non-Bank members are part of the FPC?
What is the purpose of the FPC's power to intervene?
What is the purpose of the FPC's power to intervene?
What is the relationship between the PSR and the Competition & Markets Authority?
What is the relationship between the PSR and the Competition & Markets Authority?
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Study Notes
Financial Services and Markets
- Social services policies include health, housing, income maintenance, education, and social work
- The UK government funds and controls the delivery of welfare through taxation and national insurance contributions
The European Union and Brexit
- The European Union (EU) was established by the Treaty on European Union (Maastricht, 1992)
- The EU's objectives include promoting economic and social progress, sustainable development, and an area without internal frontiers
- The UK held a referendum in 2016 and chose to leave the EU (Brexit)
- The UK left the EU on January 31, 2020, and entered an 11-month transitional period
Financial Regulation
- The Financial Services Authority (FSA) was disbanded and replaced by:
- The Financial Conduct Authority (FCA)
- The Prudential Regulation Authority (PRA)
- The Financial Policy Committee (FPC)
- The FCA focuses on conduct regulation, the PRA on prudential supervision, and the FPC on macro-prudential regulation
- The Payment Systems Regulator (PSR) is a subsidiary of the FCA and regulates payment systems
Financial Institutions
- Investment banks undertake security-related activities, including trading, broking, market making, research, corporate finance, and fund management
- Retail banks provide high-street presence for accepting deposits and giving loans, and may also offer pensions, life assurance, and share dealing services
- Building societies are mutual societies that provide similar services to retail banks
The Financial Conduct Authority
- The FCA's strategic objective is to ensure relevant markets work well
- The FCA's operational objectives include protecting consumers, promoting effective competition, and maintaining the integrity of the UK financial system
- The FCA has a handbook with seven main blocks, each dealing with different aspects of regulation
Markets
- Financial markets bring together people seeking to trade with one another
- Markets for capital include lending and borrowing, with lenders and borrowers being matched up
- Complex transactions require sophisticated deal-making procedures and the financial markets continue to develop in order to meet this challenge### The European Union Withdrawal Agreement
- The UK-EU withdrawal agreement was implemented through legislation, adopting EU laws as 'retained EU law' in the UK.
- The process of 'onshoring' involved amending retained EU law to ensure its effectiveness in the UK and remedy any deficiencies.
Post-Transition Period
- The UK left the EU single market and customs union on 31 December 2020, becoming a 'third country' in the eyes of the EU.
- The Temporary Permissions Regime (TPR) was introduced to mitigate regulatory uncertainty, allowing EEA-based financial services firms to continue operating in the UK for a limited period.
The Lamfalussy Approach
- The Lamfalussy approach is a four-level procedure that speeds up the legislative process, dividing legislation into high-level framework provisions and implementing measures.
- It was recommended by the Committee of 'Wise Men', chaired by Baron Alexandre Lamfalussy.
The European Commission
- The European Commission is the driving force behind EU legislation and directives, responsible for implementing, managing, and controlling common policies.
- Its goal is to create harmonization in legislation among member states and prevent policy measures that would benefit one economy at the expense of others.
The Financial Conduct Authority (FCA)
- The FCA has four objectives:
- Ensure the relevant markets work well
- Consumer protection
- Integrity
- Competition
- The FCA's second objective was changed from public awareness to financial stability in 2010.
Taxation
- Taxation affects the financial services industry through corporate tax, personal taxation, and other taxes such as stamp duty and VAT.
- The UK Government has great influence over the industry through its control of the tax system.
Social Welfare
- Social welfare, also known as social policy, considers social services and the welfare state.
The City of London
- The City has evolved from a trading hub in the past to a modern financial center, with traders using technology to make decisions and finance trade.
Financial Regulations
- Various regulations and directives affect the financial services industry, including UCITS, AIFMD, and Value for Money Assessment.
Pension Funds
- Pension funds have features such as stakeholder pensions, occupational pension schemes, and a statement of investment principles.
- The Pensions Regulator and Pension Protection Fund (PPF) play important roles in regulating and protecting pension funds.
The Payment Systems Regulator (PSR)
- The PSR has powers to set standards, impose rules, and carry out investigations, as well as work with the Competition & Markets Authority to address anti-competitive behavior.
The Financial Policy Committee (FPC)
- The FPC is responsible for macro-prudential regulation, ensuring the stability and resilience of the financial system.
- It has the authority to give directions, make recommendations, and offer advice to institutions, and can intervene to ensure stability.
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