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The COBS rules on the suitability requirements apply when firms... start learning
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... make personal investment advice (recommendations). also: managing investments | managing the occupational pension scheme assets
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The suitability rules For non-MiFID business, only apply to...? 2 start learning
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retail clients, | personal pension scheme assets The suitability rules exist to ensure that personal recommendations are suitable for their clients’ needs.
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When a firm makes a personal recommendation, it should obtain...? start learning
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necessary information the client. his knowledge and experience in the investment field. | financial situation, | present risk profile
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When assessing suitability, firms are required to have policies and procedures in place to assess whether any financial instrument could meet the client’s demands and needs. The FCA expects firms to consider if... start learning
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... if their incentive schemes increased the risk of misselling misselling - sprzedaż produktów w sposób wprowadzający w błąd and review whether their systems and controls were adequate.
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The FCA identified areas where firms may need to do more to manage incentive risks, in particular... start learning
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checking for spikes or trends in the sales patterns of individual advisers in order to identify areas of increased risk also: improving oversight of incentives used by appointed representatives, | monitor poor sales practices in face-to-face sales conversations
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In order to carry out a suitability assessment, a firm should gather information from its client to understand to understand... start learning
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... the essential facts about them ('fact-finding'). also important: reasonable basis to believe that transaction meets their investment objectives, | carries a level of investment risk which the client can bear financially. | client’s knowledge and experience,
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If a firm does not obtain the necessary information from the client, to assess service suitability, it must... start learning
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... not make a personal recommendation or decision to the client.
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What is a elective professiona client? start learning
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A client that would normally be a retail client, but chooses (elects) to be treated as a professional client. Typically, the client must satisfy at least two of the following: has carried out significant transactions | portfolio above a specified threshold, |has worked in financial sector
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What can a firm assume about financial ability to bear investment risk for per se vs elective professional clients under UK MiFID? start learning
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That a per se professional client is able to financially bear investment risks consistent with their objectives, | but it cannot make this assumption for elective professional clients.
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What can a firm assume about professional clients (per se and elective) under UK MiFID regarding knowledge and experience? start learning
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That both per se and elective professional clients have the necessary experience and knowledge in relation to the relevant investment services.
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start learning
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The activity of over-dealing or trading more frequently for a client in order to generate additional fees or commissions for the firm. for MiFID and non-MiFID business
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start learning
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The activity of selling one investment and replacing it with another. for MiFID and non-MiFID business
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A firm must provide a client with a suitability report if it makes a personal recommendation. This applies to any investment advice to acquire or sell any investment including equities, derivatives, structured products and...? start learning
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... unregulated collective investments.
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start learning
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Collective Investment Scheme
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A firm must provide a client with a suitability report. This also applies to those products that were covered under the previous regime (ie, MiFID) if the recommendation is to acquire or sell a holding in...? start learning
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Collective Investment Scheme also: Investment trust under investment trust savings scheme, | investment trust where the shares are to be held in an ISA
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Suitability report requirement exceptions. Ff the personal recommendation is made by a friendly society with a premium not exceeding __? start learning
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£50 a year (or £1 a week). also: if the client is habitually resident outside the UK or is not present in the UK
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Suitability report requirement exceptions. if the personal recommendation is to increase a...? start learning
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regular premium to an existing contract. also: if it is to invest additional single premiums to an existing packaged product.
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In terms of timing, a Suitability Report must be provided in connection with a life policy, before the contract is concluded – unless the necessary information is... start learning
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or unless the agreement is concluded using a distant marketing communication.
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In terms of timing, a suitability report must be provided in connection with a pension scheme within __ days of concluding the contract. start learning
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If the transaction is the sale of a life policy by telephone, the suitability report must comply with the... start learning
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Distance Marketing Directive (DMD) rules. and be provided immediately, in a durable medium.
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An insistent client is the client decides not to enter into a transaction or enter into a transaction which is different from that recommended by the firm in the personal recommendation, andthe client wishes the firm to... start learning
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... to facilitate the transaction. A firmis not obliged to execute the transaction. However, if it chooses to do so, it must clearly inform the client that the transaction is not in line with the firm’s recommendation and explain why, in a clear way.
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The information which the firm should communicate to the Insistent Client is... start learning
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... the reasons why the transaction will not be in accordance with the firm’s personal recommendation
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The rules on non-advised sales apply to a range of MiFID (and some non-MiFID) investment services which do not involve advice or... start learning
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... discretionary portfolio management. including arranging or dealing in warrants and derivatives for retail clients in response to a direct offer financial promotion, or assessing appropriateness on behalf of other UK MiFID firms.
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The purpose of the appropriateness test is to...? start learning
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... provide a degree of protection for non-advised transactions.
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In assessing appropriateness, the firm must determine whether the client has the... start learning
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experience and risk knowledge. and for a Professional Client, a firm may assume it has the necessary knowledge and experience in that field.
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In assessing appropriateness, the firm must determine whether the client has the experience and risk knowledge. And for a Professional Client, a firm may assume that... start learning
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... it has the necessary knowledge and experience in that field. level of education, profession, | Nature and frequency in such transactions, | Type of transactions.
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If a firm believes, that the product is not appropriate for the client, it must... start learning
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... WARN the client of that fact. It is up to the firm to decide whether to process a given transaction. also, when the client declines to provide the requested. information
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Firms are NOT required to ask clients to assess appropriateness if... start learning
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the service is execution-only, also: receipt and transmission of client orders,
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Particular financial instruments for which an appropriateness assessment is unnecessary include UK and EEA listed shares, money market instruments, UCITS funds and...? start learning
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... non-complex investments.
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A financial instrument is classed as 'non-complex' if, | it is not a derivative, | has sufficient liquidity, | it does not involve liability for the client and... start learning
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... it is publicly available.
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Firms do not need to reassess appropriateness each time if a client is engaged in a series of similar transactions, but the firm must do so before beginning to... start learning
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to provide a new service. Clients engaged before MiFID (2007) were assumed to have sufficient knowledge and experience.
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Does a suitability report have to be issued for recommendations to buy or sell rights under pension scheme, | elect to make income withdrawals a short-term annuity, | or enter into a pension transfer or pension opt-out, | or a life assurance policy? start learning
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this is covered under the previous regime (ie, MiFID)
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