CISI IAD UK and International Regulatory Framework

Question 1

What is MiFID II and what are its main objectives?

Accepted Answer

The EU Markets in Financial Instruments Directive II, a comprehensive regulatory framework governing investment services across EU/EEA member states, aiming to improve transparency, investor protection, and market integrity

Answer

A UK-specific regulation covering the mortgage market

Answer

A regulation governing cryptoasset trading in the UK

Answer

A directive governing insurance product distribution across the EU

Question 2

How has Brexit affected the application of MiFID II to UK firms?

Accepted Answer

The UK retained MiFID II requirements in UK domestic law, referred to as 'onshored MiFID II' or UK MiFID, which continues to apply to UK-authorised investment firms

Answer

MiFID II no longer applies in any form to UK firms following Brexit

Answer

UK firms are now exempt from all EU financial regulations

Answer

UK firms must still apply full EU MiFID II rules as a condition of selling into EU markets from the UK

Question 3

What is the EU's AIFMD (Alternative Investment Fund Managers Directive) designed to regulate?

Accepted Answer

The management of alternative investment funds (hedge funds, private equity, real estate funds) by alternative investment fund managers operating in or marketing into the EU

Answer

The management of UCITS retail funds across the EU

Answer

The regulation of individual retail investors investing in alternatives

Answer

The rules governing crypto fund management across EU member states

Question 4

What is the FCA's 'Senior Managers and Certification Regime' (SM&CR) designed to achieve?

Accepted Answer

To improve individual accountability in financial services by requiring firms to identify senior managers responsible for key functions, certify the fitness of certain staff annually, and apply conduct rules to all employees

Answer

To provide senior managers with enhanced pay protections

Answer

To exempt senior managers from whistleblowing obligations

Answer

To require senior managers to hold the CFA qualification

Question 5

What is the purpose of the EU's Markets Abuse Regulation (MAR)?

Accepted Answer

To prohibit insider trading and market manipulation, maintaining the integrity of EU financial markets by criminalising the misuse of inside information

Answer

To regulate the advertising of investment products to retail investors

Answer

To regulate the merger and acquisition of EU-listed companies

Answer

To set capital adequacy requirements for market makers

Question 6

What is the 'UCITS' framework?

Accepted Answer

An EU regulatory framework for collective investment schemes (Undertakings for Collective Investment in Transferable Securities) allowing passporting of retail funds across EU member states

Answer

A UK framework for regulating defined benefit pension schemes

Answer

A US framework for exchange-traded funds

Answer

An OECD framework for sovereign wealth fund governance