HND Financial Services Regulatory Framework金融服务业规范.doc

Regulatory Objectives of the Authority1. Market ConfidenceThe Financial Services Authority is given the responsibility for maintaining confidence in the United Kingdoms financial markets and exchanges, and for regulated activities.2. Public AwarenessThe Financial Services Authority is given the responsibility for promoting awareness of benefits and risks associated with different kinds of investments and other financial dealings. It must also provide appropriate information and advice on investment matters.Types of Customer1. Private Customersl Has limited or no know ledge of investmentl Must receive full and detailed explanations(用自己的话扩充，不要原封不动写上去)2. Intermediate Customersl It ensures that the client has the experience and understanding of investments to allow him/her to be classed as suchl It gives the client a written warning that advises him/her of the protection he/she will lose, and gives him/her time to consider the implications of being classed this way, andl It has obtained the clients written consent.3. Market CounterpartyThese are persons in the same or similar line of business as the adviser, e.g. a gilt-edged market maker seeking advice on shares. The duty of care given to such persons is very low.The Act defines regulated activities 1. ArrangingThis applies to making, or offering or agreeing to make:l Arrangements with a view to another person buying, selling, subscribing for, or underwriting a particular investment, orl Arrangements with a view to a person who participates in the arrangement buying, selling, subscribing for or underwriting investments.2. Deposit TakingAccepting deposits3. Managing InvestmentManaging, or offering or agreeing to manage, other peoples assets if they consist of, or include, investments or may include investments, e.g. portfolio management activities undertaken by banks.4. Investment AdviceGiving, offering, or agreeing to give, to investors or potential investors, investment advice on the merits of buying, selling, subscribing for or underwriting investments or exercising rights to any disposal, underwriting or conversionA distinction must be drawn between investment advice and information.5. Establishing Collective Investment Schemes Establishing, operating, winding up or acting as trustee for any authorized unit trust scheme.Exempt Activitiesl Dealing for your own account in securitiesl Operating an employee share schemel Acting as a trusteePrinciples for business1. IntegrityA firm must conduct its business with integrity2. Skill Care and DiligenceA firm must conduct its business with due skill, care and diligence.3. Financial PrudenceA firm must maintain adequate financial resources4. Market ConductA firm must observe proper standards of market conduct.5. Customers Interests A firm must pay due regard to the interests of its customers and treat them fairly.6. Conflicts of Interest A firm must manage conflicts of interest fairly, both between itself and its assets and between a customer and another client.7. Clients Assets A firm must arrange adequate protection for clients; assets when it is responsible for them.l Must communicate information to consumers in ways that are clear and not misleadingl Applies to advertising, literature and verbal statementsl Products and services given on behalf of the firm by employees=Chinese WallsChinese Walls refer to internal procedures within a firm that are used to ensure that information is controlled within the firm to guard against misuse or conflict of interestFor example, suppose that a firm is both a broker and a market maker. To ensure that the two functions are kept distinct and that one may not benefit as a result of obtaining information unfairly from the other, Chinese Walls may be put in place.This can be achieved by keeping the two functions on separate premisesSuitability LetterThe suitability letter must contain the following:l An explanation of why the provider considers that the transaction is suitable for the customers needs based on their personal and financial circumstancesl A summary of the main consequences of completing the transaction and any disadvantages that might result from completionl Where a personal pension plan or FSAVC has been recommended, why this is more suitable than a Stakeholder Pension Schemel Why an FSAVC is at least as suitable as AVCsl The name of the individual who is authorized by the firm to give advice on the product that is being recommendedConflicts of Interest and Material InterestIf the firm finds that it is in a position where there is a conflict of interest with the customer, the firm must manage this fairly. If it has a material interest in a transaction or might enter into a transaction that creates a conflict, it must not knowingly advise or deal on behalf of the customer unless it takes steps to ensure fair treatment for the customer.Disclosing the interest to the customers, relying on a policy of independence, establishing Chinese Walls or declining to act on behalf of the customer can overcome the material interest dilemma.The Compliance OfficerThe appointment of a compliance officer is an essential feature o compliance procedures and the compliance officer must be an employee of the firm.Responsibility for compliance is delegated to the compliance officer but ultimately rests with the board of the company, or the partners of the firm.The compliance officer must have direct access to a member of the bo