R01 Brand Exam 3

What is Reinsurance

Assessing and accepting a risk but passing it on for a proportion of the premium

Describe impact of EU on uk regulation

Around 70% of FCA policy is driven by EU initiatives

what benefits would members of a building society get if it demutualised

Get a cash payment or shares in the new listed company

Definition of a mortgage

The security offered in exchange for a loan

What is a unstructured loan

• loan back by collateral (eg a house on a mortgage)

• The IR is linked to a base rate

What is a structured loan

• loan not backed by collateral

• Seen as more high risk than unstructured

• Tend to be for smaller amounts

What feature is the same under an income protection and a personal accident and sickness

Regular payment made in event of being unable to work due to illness or accident

How many qualifying years needed for new state pension

35 qualifying years

Qualifying year - a year you paid NI

What’s a derivative

The right to buy/sell another type of asset at a specified price at a specified date and time in future

Bank of England 2 core purposes

Monetary stability

Financial stability

What’s a contingent interest in a trust

Having an entitlement dependent on something else happening first

Difference between EU regulation and EU Directive

Both are binding

But for Directive the member state determines the method to achieve the objective

EU Regulation is binding entirely

CMA Strategic goals

Deliver effective enforcement

Extend competition frontiers

Refocus consumer protection

Achieve professional excellence

FCA has power of intervention including banning products. Who is this only allowed to be used on

Retail customers

Rules for firm using insurance to pay for FCA penalties is

Cannot use insurance to cover the actual penalty

Can use it against the cost of defending enforcement action or costs ordered to pay

FCA determine period payments based on

The product areas they have permission to advise on and the income from each

How are IFA businesses affected by capital adequacy rules

Some small IFA firms are exempt and don’t have to undertake rigorous assessment

Who does COBS only apply to

Regulated life, pension and investment businesses

As well as the investment parts is building societies and banks

Who carries the compliance responsibility of an appointed representative

The firms principle

Under MCD what is the product disclosure document called

European standardised information sheet

Client money reconciliation must be done how often

Every 25 days