uk financial regulations easily understood from ruksons (cemap 1 revision guide preview)

7/25/2019 UK Financial Regulations Easily Understood from Ruksons (CeMAP 1 Revision Guide Preview)

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Financial Regulations Easily Understood 2015/16 Copyright Adetomi midiora

UNIT 1: FINANCIAL SERVICES ENVIROMENT AND

PRODUCTS

Changes in UK Regulation

n 1st April 201! there emerged a ne" Financial #er$ices Act 2012 to

strengthen regulation%

Re&orms &or &inancial sta'ility has 'een split 'et"een the (reasury) the

*E and the FCA%

(he FCA replaced the F#A "ho came in to 'eing in 1++, a&ter ta-ing o$er

responsi'ility &rom the *E% (he chancellor announced that the F#A "illcease to 'e on 1/6/2010%

(he *odies

1% Financial .olicy Committee F.C Accounta'le to parliament 'ut

is part o& *E "ith o$erall regulatory po"ers% F.C is also epectedto pre$ent macro3economic issues economy and &inancial mar-etsas "ell as in$estigating systematic ris-s that occur in and out o& theU4 &rom anuary 2011% (he conduct o& *usiness regulator FCAis responsi'le &or progressing interests o& all users and participants%

2% .rudential Regulation Authority .RA .art o& *E "ith regulatorypo"ers% (he .RA is also accounta'le &or super$ision o& indi$idual&irms i%e% 'uilding societies) 'an-s) credit unions etc% to ensuresa&ety and soundness and "ill manage 'alance sheet ris-s%

!% Financial Conduct Authority FCA ill ensure customerprotection and ensure practices &ollo" the rules mar-et integrity%

*usiness must 'e seen to impro$e the interests o& all participants%7% (he role o& the *E and (reasury is clearly stipulated% 8& there is a

&inancial crisis threat to &inancial sta'ility and pu'lic &unds) theChancellor o& the Eche9uer is empo"ered to instruct the *E%

an! o" Englan#

Under the current regime the *E is charged "ith the o$ersight o& macro3

prudential responsi'ility%

*E is U4:s central 'an-) granted the Royal Charter 'y illiam 111 'ut

"as &ounded 'y "ealthy ;ondon


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Regulation o& the money supply%

En#o$%ent Ta&le

Full $ith '(o"itsEn#o$%ent

Lo$ )ost $ith'(o"its

Unit lin!e#En#o$%ent

Non*'(o"itEn#o$%ent

?#A is e9ual to themortgage amount%?uaranteed to paymortgage atmaturity%

?#A is less than themortgage amount50360@% =otguaranteed to pay'ac- the mortgageloan at maturity%.ossi'ility o& ashortage or surplus%

=o ?#A=ot guaranteed topay 'ac- themortgage%


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La$ o" Agen)+

An Agent acts on 'ehal& o& the .rincipal another person% 8t is necessary

that the agent can conclude contracts on 'ehal& o& the principal%

Apparent Authority is "hen the Agent has acted 'eyond his scope actualauthority) 'ut something said or done 'y the principal gi$es theimpression he has authorised the agent:s actions% hen this happens theprincipal can rati&y this e$ent 'y agreeing to "hat the agent has actuallydone this is -no"n as Rati&ication%

8& Rati&ication is not gi$en the agent may 'e lia'le) the principal could also

'e held lia'le 'ecause o& the contract%

Po$e( o" Atto(ne+

An Attorney is an indi$idual "ho is gi$en legal responsi'ility to act on

'ehal& o& someone else% E%g% a &ather "ho "ants to 'uy a house in U4'ut li$es a'road can gi$e the po"er o& attorney to his daughter "horesides in U4 to conclude the deal on his 'ehal&%

(he onor is the person "ho creates i%e% gi$es the .o"er o& Attorney%

(he onee is the person "ho is acting &or the onor Attorney%


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In,est%ent Fi(%s an# Mo(tgage A#,i)e an# A((anging

100@ o& initial 50)000 .ost 1/1/2010

De'osit ta!ing Fi(%s * an!s-uil#ing So)ieties-C(e#it unions

here a .RA regulated &irm goes into de&ault administration/li9uidity

100@ o& the initial ,5)000 post !1/12/2010

1m &or temporary held deposits high 'alances must ha$e 'een held

&or less than si months% nus is on the person to pro$ide the proo& that&unds "ere 'eing held due to a rele$ant li&e e$ent%

Rele$ant li&e e$ents in$ol$e &unds/'ene&its &rom house sale) inheritance)

redundancy) di$orce) pension and criminal inuries%

.o%e Finan)e


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(he decisions and #uper$isory actions that can call &or appeal are

1% arying the .art 8 permission o& a &irm(he .ro$isions

#ecurity 'reaches e%g% losing data should 'e noti&ied to the .A "ithin 27

hours to a$oid legal sanctions%

.u'lic authorities and 'usinesses more than 250 employees can appoint

an independent data protection o&&icer%

ata su'ects need to gi$e the eplicit consent 'e&ore their data can 'e

collected and used) and ha$e the right to 'e &orgotten all data held 'y'usinesses to 'e deleted including photographs) social net"or- etc%%

here the regulation is 'reached) the &ine could 'e up to 5@ o& the

esta'lishment:s annual glo'al turno$er or 100m Euros the higher &igure isen&orced%

Othe( Legislation Rele,ant to Client A#,i)e

Consu%e( C(e#it A)t 1045 /O""i)e o" "ai( T(a#ing2

(he Act regulates most types o& lending including personal loans) second

charges and re$ol$ing credits%

8t is also to protect indi$iduals &rom rogue lenders%

;oans) "hich are termed HRegulated


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The Consu%e( C(e#it A)t 67is an updated $ersion o& the 1+D7 Act "ith anintention o& pro$iding 'etter ser$ice le$els rights and redress3 more e&&icientoptions in sol$ing disputes &or clientsK enhancing &air practices o& customer

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uk financial regulations easily understood from ruksons (cemap 1 revision guide preview)

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