Market Conduct and Compliance Flashcards

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

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

SCA-licensed firms must maintain comprehensive compliance programs: appointed compliance officer with appropriate authority, documented policies and procedures, regular monitoring and testing, staff training, and periodic SCA reporting.

What are the SCA requirements for managing conflicts of interest?

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

SCA requires firms to identify all potential conflicts of interest, implement organizational controls (information barriers, restricted lists), disclose material conflicts to affected clients, and maintain documented conflicts registers.

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

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

SCA-licensed firms must maintain comprehensive records including client files, transaction history, all communications, order records, compliance documentation, and complaints, typically for a minimum of 10 years.

What reporting obligations do SCA-licensed firms have?

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

SCA reporting obligations include regular financial returns, transaction reporting, suspicious activity reports (SARs), material event notifications, capital adequacy reports, and annual compliance certifications.

What business continuity requirements does the SCA mandate?

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

The SCA requires licensed firms to maintain documented business continuity plans, conduct regular testing and drills, implement data backup and disaster recovery systems, and have communication plans for operational disruptions.

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

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

The SCA sets professional standards including minimum education and experience, recognized professional certifications (such as CFA, CISI), ongoing CPD requirements, and fit and proper assessments for all approved persons.