Chapter 2 - CISI IT

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What powers does the FSA have in UK markets?
Prudential and business conduct
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Regulation concerned with the way in which the business is done and protecting investors from unethical businesses is what type?
Business Cunduct
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Under FSMA, who can give permission for a firm to be authorized to deal on the UK markets?
FSA
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How many principles under FSMA, are firms expected to adhere to if they're regulated?
11
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What committee was established by the Bank of England with responsibility for "macro-prudential" regulation and reducing systemic risk?
FPC
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What authority is responsible for prudential regulation over firms with significant risk on their balance sheets?
PRA (Prudential Regulation Authority)
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What is ESMA's mission?
enhance the protection of investors and build a single rule book for EU financial markets ("watch dog")
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What areas does MiFID II apply ?
regulated markets in EEA
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Under MiFID II. MTFs & SIs must make aggregated order information available of what?
5 best available prices
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Under MiFID II "post-trade transparency" reporting, where does TRANSACTION REPORTING need to be performed?
ARM (approved reporting mechanism)
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Under MiFID II "post-trade transparency" reporting, where does PUBLICATION REPORTING need to be performed?
APA (approved publication arrangement)
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How often does APA trade publication reporting need to be performed?
Real time basis or within 15 min
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What is transaction reporting used for by the regulators?
to monitor market abuse & insider dealing
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What is Best Execution?
An obligation on the sell-side firm to take "all sufficient steps" to get the lowest available price for its customers.
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What areas under MiFID II "handling of client money and assets" are covered?
Record Keeping, Segregation, reconciliation
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If a portfolio value drops by more than 10% , how soon will this need to be reported to the investor?
24hrs
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What security market does EMIR cover?
Derivitives
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Who did EMIR establish common prudential and conduct of business standards for?
Central Counterparties (CCPs) & trade repositories
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Under Basel II, what does Pillar 2 cover?
Supervisory review
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Under Basel II, what is the minimum capital ratio?
8%-15%
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Under the Basic Indicator Approach, what is the fixed % of operational risk capital set by Basel Committee?
15%
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What type of institutions would typically used the Basic Indicator Approach?
smaller, domestic institutions without sophisticated risk management tools
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What is the principle behind the Standardized Approach?
allocated different risk profiles across different lines of business via risk-weighted assets
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What type of institution would use the Standardised Approach?
those moving towards more sophisticated methodology but still relying on indicators and factors set by regulators.
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Banks using their own VaR models in the Advanced Measurement Approach must have a confidence level of what %?
99%
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Banks using their own VaR models in the Advanced Measurement Approach must calculate their losses on the basis of what holding day period?
10 days holding period
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Under Basel III, banks are requited to hold what % of common equity?
4.5%
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What does the liquidity coverage ratio (LCR) require banks to hold under Basel III?
sufficient high quality liquid asses to cover total cash outflows over 30 days
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What is the maximum penalty for not complying with GDPR rules?
$20 million fine or 4% of group worldwide turnover (whichever is greater)
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What firms is GDPR applied to?
Those based in the UK and outside UK
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What is the purpose of the SYSC (Senior Management Arrangements, Systems and Controls)?
To ensure senior managers and directors are responsible for their firm's arrangements (eg effective risk management systems).
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Under FCA rules, what is the purpose of CASS?
How assets (including cash & securities) that belong to clients must be managed by segregating them from the asset's of the firm.
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What is the purpose of SMR ( Senior Managers Regime)?
Increase individual accountability of senior managers if at fault of misconduct
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Under SMR, what is the "duty of responsibility"?
Requires managers to take steps that are reasonable to prevent a regulatory breach from occuring
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Under SMR, to who does the Certification Regime apply to?
Material risk takers
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Who does the APPROVED PERSON'S REGIME apply to?
An individual who is approved to do one or more activities or "controlled functions" for an authorized firm
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In order to meet the FCA's "Approved Person" certification, what requirements does the individual need to pass?
Meet FCA's "fit and proper" test
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Under the Money Luandering Regulations, under what circumstance would a firm employ "ENHANCED DUE DILIGENCE" (EDD) checks?
Persons who were not personally present during CDD and "politically exposed persons" (PEPs)
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What system is built by firms to act as a central repository for client information and conduct KYC procedures?
Customer Relationship Management (CRM)
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Other cards in this set

Card 2

Front

Regulation concerned with the way in which the business is done and protecting investors from unethical businesses is what type?

Back

Business Cunduct

Card 3

Front

Under FSMA, who can give permission for a firm to be authorized to deal on the UK markets?

Back

Preview of the front of card 3

Card 4

Front

How many principles under FSMA, are firms expected to adhere to if they're regulated?

Back

Preview of the front of card 4

Card 5

Front

What committee was established by the Bank of England with responsibility for "macro-prudential" regulation and reducing systemic risk?

Back

Preview of the front of card 5
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