SCA Market Conduct and Compliance 2

Question 1

What compliance program requirements does the SCA mandate for licensed firms?

Accepted Answer

Designated compliance officer, written policies and procedures, regular compliance monitoring, staff training, and annual compliance reporting to the SCA

Answer

Compliance programs are optional

Answer

Only large firms need compliance programs

Answer

Compliance is only about AML

Question 2

What are the SCA requirements for managing conflicts of interest?

Accepted Answer

Identify potential conflicts, implement controls to manage them, disclose material conflicts to clients, and maintain a conflicts register

Answer

Conflicts of interest are not addressed

Answer

Only disclose conflicts when asked by clients

Answer

Conflicts are managed internally without disclosure

Question 3

What record-keeping requirements does the SCA impose on licensed firms?

Accepted Answer

Maintain client records, transaction records, communication records, and compliance documentation for specified retention periods (typically 10 years)

Answer

No record-keeping is required

Answer

Only keep records for one year

Answer

Only financial records must be maintained

Question 4

What reporting obligations do SCA-licensed firms have?

Accepted Answer

Regular financial reports, transaction reports, suspicious activity reports, material event notifications, and annual compliance certifications to the SCA

Answer

No reporting obligations exist

Answer

Only annual financial statements

Answer

Reporting is voluntary

Question 5

What business continuity requirements does the SCA mandate?

Accepted Answer

Documented BCP plans, regular testing, data backup procedures, disaster recovery capabilities, and communication plans for market disruptions

Answer

No business continuity planning is required

Answer

Only data backup is required

Answer

BCP is only for exchange operators

Question 6

What professional qualification requirements does the SCA set for securities professionals?

Accepted Answer

Minimum education requirements, relevant professional certifications, ongoing CPD obligations, and fitness and propriety assessments for key personnel

Answer

No qualifications are needed

Answer

Only a university degree is required

Answer

Qualifications are only needed for senior management