The following update has been made to your workbook edition.
Chapter 2, Section 2.5 – this text has been amended to read:
The basic state pension from April 2020 will be £134.25, while those receiving the full flat rate introduced in 2016 will see their pension increased to £175.20. In addition, there was the announcement of a guarantee on annual rises which means that they will rise by whatever is the highest of price inflation, average earnings growth or 2.5% – often called the ‘triple lock’.
The individual’s starting amount will be the higher of either:
• the amount they would get under the old state pension rules (which includes basic state pension and additional state pension), or
• the amount they would get if the new state pension had been in place at the start of their working life.
If the Individual’s Starting Amount is Less than the Full New State Pension
The individual can get more state pension by adding more qualifying years to their NI record after 5 April 2016. They can do this until they reach the full new state pension amount or reach state pension age – whichever is first.
The amount of an individual’s state pension will be calculated entirely under the new state pension rules – meaning that they will need at least ten qualifying years on their NI record to get any state pension. They will also need 35 qualifying years to get the full new state pension.
They will get a proportion of the new state pension if they have between ten and 35 qualifying years.
The age at which the state pension will be payable has changed. From December 2018, the state pension age for both men and women has increased and will reach 66 by April 2020. There are plans to increase the age to 67 by 2028, however this is being kept under review by the UK Government and may change in the future.
Chapter 5, Section 1.12 – this text has been amended to read:
The FPC makes recommendations and gives directions to the PRA on specific actions that should be taken in order to achieve its objectives. The PRA is responsible for implementing FPC recommendations on a ‘comply or explain’ basis, and for complying with the FPC’s directions in relation to the use of macro-prudential tools, specified by HMT legislation. The PRA reports to the FPC on its delivery of these recommendations and directions.
Multiple Choice Question 20 – this text has been amended to read:
20. Which of the following is true about the Remuneration Code, which applies to both PRA and FCA regulated firms?
A. It applies to UK branches of EEA firms
B. It apples to UK branches of non-EEA firms
C. Overseas subsidiaries and branches of a UK bank are not in scope and would not need to comply with the Renumeration Code
D. Principle 5 (Control Functions) does not apply to overseas branches of a UK bank
Q20. Answer: B Ref: Chapter 6, Section 5
Option B is correct as the Code will apply to UK branches of firms who would otherwise be caught (if they were domiciled in the UK) but whose home state is outside the EEA. UK branches of EEA firms are not in scope, the home state would be responsible for the setting of a Remuneration Code. Overseas subsidiaries and branches of UK firms are in scope and Principle 5 applies to any firm for which is subject to the Remuneration Code.
Multiple Choice Question 23 – this text has been amended to read:
23. The FCA interacts with a number of other bodies. In terms of its relationship with the Financial Ombudsman Service (FOS), which of the following is TRUE?
A. FSMA 2000 directed the FCA to create an independent body to oversee complaints against the FCA and to set compensation levels for investors
B. The FOS can award unlimited costs against a firm as a result of a complaint
C. The board members of the FOS are appointed by the FCA but they remain independent
D. The FCA oversees and reviews the outcomes of the FOS where compensation is awarded against firms
Multiple Choice Question 16 – this text has been amended to read:
Q16. Answer: D Ref: Chapter 7, Section 4.2.3, 4.3 & 4.4
With the introduction of the SM&CR to FCA solo-regulated firms (which includes asset managers), option D is the correct answer. Only Thomas will be performing a Senior Management Function role, Sandra and Wendy will be certified individuals. Bill’s role is not classed as being subject to the Senior Managers Regime or the certification regime, therefore he will be subject to just the Conduct Rules.
Multiple Choice Question 63 – this text has been amended to read:
63. Under the UK Market Abuse Regulation (UK MAR), to be found guilty of insider dealing, a person must be in possession of ‘inside information’ and either attempt to or deal on that information and/or encourage others to deal.
Which of the following financial instruments would an individual, with inside knowledge, be found guilty of insider dealing if they carried out a transaction in that instrument?
A. Units in an unregulated unit trust
B. Foreign exchange spot contract
C. Security listed on the New York Stock Exchange (NYSE)
D. A six-month exchange traded wheat option contract
Q63. Answer: D Ref: Chapter 8, Section 2.2
Option D is correct as it is a MiFID financial instrument and can be traded on a trading venue. Although option A is a MiFID financial instrument it cannot be traded on trading venue. Option C is out of scope on the basis that it is not traded on either a UK or EU trading venue. With regards to option B, it is incorrect as FX spot contracts are out of scope as they are not deemed to be a MiFID financial instrument.