Learning Material Sample
Financial services, regulation and ethics1. The UK financial services industry: an overviewLearning outcome 1: Understand the UK financial services industry in its European and global context
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11 chapters of study text Revision assessments for each chapter to help confirm your understanding. Each chapter covers the learning outcom... Shortened demo course. See details at foot of page. ...l be added to your CPD certificate when you complete each assessment. Your CPD certificate can be viewed and printed from the CPD certificate link on the left hand menu at any time. As well as acting as training module to help you pass the exam this online course can also be used for CPD.
By studying each chapter and then taking the end of chapter assessment this will create an entry on your CPD certificate containing: Your personal details Course name Chapter name Assessment results for each chapter Estimated CPD time for each chapter. After taking a chapter assessment if you go to the CPD certificate link you can produce a CPD certificate. By selecting the date filter you can choose which items to include on your certificate. You can also download this to excel which will allow you to edit the certificate as required. The estimated CPD times allocated the first time you take the end of chapter assessments are: R01 Hours Chapter 1 3.5 Chapter 2 7 Chapter 3 5.5 Chapter 4 3.5 Chapter 5 5 Chapter 6 12 Chapter 7 5.5 Chapter 8 8 Chapter 9 2.5 Chapter 10 4.5 Chapter 11 3 Total &nb... Shortened demo course. See details at foot of page. ...requirements. This is an example of the type of possible issue we will seek to monitor as part of our ongoing oversight of the accredited bodies."Statement of Professional Standing (SPS) All advisers giving independent or restricted advice must hold a Statement of Professional Standing (SPS). This details evidence they subscribe to a code of ethics, are qualified and have kept their knowledge up to date. Bodies accredited by the FCA will be responsible for issuing individuals with an SPS and for ensuring that advisers hold an appropriate QCF Level 4 qualification. If an SPS is removed from an adviser, the FCA could levy a fine on them, suspend them or even decide to remove their approved person status, although it could also agree to an action plan being undertaken before reinstatement. FCA monitoring Firms are obliged to inform the FCA if any of their advisers fall below its competence or ethical standards. The FCA collects information about individual advisers, such as the qualifications they hold and which accredited body they use. The FCA uses this database to help identify the highest risk individuals. 2.1 Financial infrastructure The financial sector relies on collective infrastructure, including payment, settlement, clearing, and trading systems: Payment systems handle either very high-value transactions used in wholesale financial ma... Shortened demo course. See details at foot of page. ... handle the clearing and settlement of securities and derivatives marketsThe FCA regulates recognised investment exchanges The Bank of England supervises recognised clearing houses as part of its financial market infrastructure oversight Financial services perform four key functions:
Protect and channel savings into capital manage... Shortened demo course. See details at foot of page. ...roductsSavings can take many forms, from bank and building society deposits to gilts or shares. 1.1 Short-term savings Banks and building societies provide a safe place for money that remains easily accessible while being used to generate returns Banks lend deposits to borrowers, keeping sufficient ... Shortened demo course. See details at foot of page. ...rrowersBanks and building societies still transform short-term savings into long-term lending but now also offer a wide range of deposit options and act as intermediaries for other providers’ products 1.2 Government savings The UK Government uses savings from private individuals to fund its borrowing The main method is issuing fixed interest investments via the UK Debt Management Office These i... Shortened demo course. See details at foot of page. ...upporting net zero goals, often offering different interest rates to conventional giltsNational Savings and Investments (NS&I) also funds Government borrowing, with products including Premium Bonds 1.3 Insurance and risk management Insurance and risk management protect assets from financial loss or damage, either by insuring against risks or reducing the chance of loss through risk control Both individuals and companies may need protec... Shortened demo course. See details at foot of page. ...Lloyd’s of London is a well-known specialist insurance and reinsurance market operating through underwriting syndicates Protection for financial transactions can use derivatives to offset potential losses instead of insurance policies 1.4 Longer-term investment and capital markets Capital markets developed to provide opportunities for real growth above inflation and ... Shortened demo course. See details at foot of page. ...t private individuals access shares and bonds indirectly through collective schemes such as savings plans, investment funds, and pensions2. UK financial services structure The UK financial sector has four m... Shortened demo course. See details at foot of page. ...tion Authority (PRA), Financial Conduct Authority (FCA), and HM Treasury2.2 Financial markets Financial markets operate through... Shortened demo course. See details at foot of page. ...formed committees that monitor and review market practices2.3 Financial firms The UK financial services industry is part of a wider network of institutions and markets connected to everyday banking and other financial services: Money market – wholesa... Shortened demo course. See details at foot of page. ...ts and open-ended investment companies (OEICs)All these markets and institutions are part of the UK financial services industry, though focus here is on those interacting most directly with the public 2.3.1 Banks and building societies Banks and building societies have expanded their services beyond traditional banking, leveraging their high-street presence and brand recognition. Core and indirect services include: Current accounts – flexible accounts offering secure access to money, payment ... Shortened demo course. See details at foot of page. ...rmInsurance and pensions – life insurance, pensions, and general insurance products (motor, household, travel, payment protection); some banks operate their own life insurance companies, forming the basis of bancassurance models, though this is less common today as banks refocus on core activities 2.3.2 Life assurance companies Life assurance companies distribute products either via intermediaries or their ow... Shortened demo course. See details at foot of page. ...he Retail Distribution Review (RDR) significantly changed how financial products are distributed across all channels 2.3.3 Friendly societies
The UK financial sector includes friendly societies, which: Originated in the 1... Shortened demo course. See details at foot of page. ...ince the Friendly Societies Act 1992, can apply for corporate status and offer unit trusts, OEICs, and ISAs2.3.4 Multi-distribution organisations The UK financial sector includes multi-distribution organisations th... Shortened demo course. See details at foot of page. ... its banking business to Barclays, which now operates the Tesco Bank brand, both to refocus on core operations 3. How global regulation impacts UK regulation
The UK financial sector has evolved post-Brexit while remaining largely aligned with EU rules: • Be... Shortened demo course. See details at foot of page. ...losure Requirements (CP22/20) with EU and proposed US SEC climate disclosure rules• The FCA continues to work with bodies like the EBA, EIOPA and ESMA 3.1 EU regulation of financial services
The FSAP improved the EU single market for financial services and influenced ... Shortened demo course. See details at foot of page. ...sing capitalMany UK regulations were created under this regime, and these areas remain priorities for UK regulators 3.2 UK regulation of financial services
The UK’s financial services are regulated through legislation and a dual supervisory structure: The Treasury, under the Chancellor of the Exchequer, is responsible for regulation and cond... Shortened demo course. See details at foot of page. ...AThe model features independent but coordinated regulation, where prudential and conduct supervisors coordinate internally but act separately when engaging with firms Regulatory data is collected only once to minimise duplication 4. The role of Gover...
Shortened demo course. See details at foot of page. ...sts of UK citizens 4.1 Taxation within the UK
Taxation significantly affects the economy and the financial services industry High taxation reduces consumer spending and business investment, slowing private sector growth but increasing Government funds for public services Low taxation leaves more money for private spen... Shortened demo course. See details at foot of page. ..., reducing appeal of such productsTaxation influences investment choices, investor willingness, and advisers’ recommendations depending on tax bracket Tax rates determine Treasury revenue, impact economic activity, affect investment ability, and influence the suitability of different investments 4.2 Economic policy
Economic policy is the set of government actio... Shortened demo course. See details at foot of page. ...licy Committee (MPC) is responsible for controlling interest rates 4.2.1 Government spending
4.2.2 Government borrowing
The Government can borrow from individuals and institutions at low rates by issuing financial instruments such as conventional... Shortened demo course. See details at foot of page. ...ng during the COVID-19 pandemic to reduce its financial impactBy October 2021, total quantitative easing (pre and post pandemic) reached £895bn 4.2.3 Interest rates
The Bank of England primarily uses the Gilt Repo Market to influence short‑term interest rates A repo (sale and repurchase agreement) is where... Shortened demo course. See details at foot of page. ...wered the UK rate to 0.1% (the lowest official rate since 1694) to mitigate the economic shock, and began raising rates again from December 2021 to address rising inflation 4.2.4 Controlling the economy without using interest rates
While interest rates are the primary tool for controlling the e... Shortened demo course. See details at foot of page. ...rnational imports to boost domestic production and consumption, which caused significant global financial market reactions 5 Benefit provision
The UK benefit system covers sickness and disability benefits, unemployment benefit, tax credits, the State Pension, and pension credits State benefits use existing Government resources, but without them private insurance and pension provision needs would be much greater The system is intended a... Shortened demo course. See details at foot of page. ...ude extending compulsory pension contributions and raising State pension ageArguments against such measures cite introduction costs, while counterarguments note potential long-term savings The Government could reduce Health Service pressures with compulsory private medical insurance or tax breaks for related cover NOTE - These questions are designed for revision purposes only and are therefore not written in an exam style. If you require exam style que... Shortened demo course. See details at foot of page. ...the R01 exam. Note that the number of questions in the R01 exam for each learning outcome is an estimate and can vary by plus or minus 2 questions. |
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