Comply with Financial Services Regulation

This study material covers various aspects of complying with financial services regulation. It discusses duty of care considerations, qualifications for responsible officers, benefits of Product Disclosure Statements, disclosure of capacity, relevant regulations, industry codes of practice, internal audit programs, fiduciary duties, and statutory records.

FNSFMK505 Comply with
financial services regulation

Table of Contents
MAIN BODY..................................................................................................................................3
REFERENCES................................................................................................................................5

MAIN BODY
Activity 1
Two duty of care considerations are: they should verify the details properly and then give
loan. Second duty of care consideration is that they should advice Mr. X that they are not eligible
for taking loan (Ferran, 2017). They are not capable of taking loan because according to rules it
is not correct.
Activity 2
a) Two reasons: licence holder should have necessary resources to provide financial
services and secondly, they should have ability to manage risk. It is their responsibility to
manage risk and also handle conflicts which may arise.
b) Qualification needed to fulfil obligations of responsible officer are: be of good character,
manage conflicts and risk management, provide regular duties.
Activity 3
As per section 211, principal is having right to file a case or sue agent for damages when
it is breach of duty. There are many risks associated with it as they have to manage conflicts and
there should be no duty of breach. An agent should follow instructions given by principal.
Activity 4
Key benefits of PDS’s (Product Disclosure Statement) are:
 It includes details about features and fees.
 Product disclosure statement helps in handling issues and manage risk.
 It provides commissions.
Features of organisation’s financial products and services are, it is intangible, customer oriented,
its nature is perishable and cannot be stored (He and et.al., 2017).
Activity 5
Disclosure of capacity includes, address and name of registered adviser, any relationship with
adviser, statement which indicates whether to sell a product or give advice related to product.
There are issues like, which type of advice should be given to customers which is beneficial for
them.
Activity 6

Key features of relevant regulation pertaining to financial services industry are, it is asset based
finance and leasing, helps in fund management, hedge funds, investment banking, private
banking, private equity or venture capital, payment system. It is important to choose correct
option so that there will be no issue and conflicts will not arise.
Activity 7
Key features of industry code of practice are, it has specific measures for compliance, provide
relevant guidelines, has standards and practices, it has risk management strategies, process for
periodic review of code, handling issues. Industry code of conducts are having rules and
regulations which has to be followed by employees so that they can work properly.
Activity 8
Internal audit program is a process which helps in assessing performance of an organisation or
rules and regulations are made so that there will be no issue and work can be done properly.
Audit include, controlling business activities and proper reporting is being done.
Activity 9
Fiduciary duties refer to a commitment which is in interest of person or entity. Generally, there
are three fiduciary duties i.e., duty of care, duty of loyalty and duty of obedience. Issues of
fiduciary duty is, there may be breach of this duty and penalties are decided.
Activity 10
Statutory records which an organisation has to maintain are, financial statements which help in
calculating profit and loss, general ledgers and journals, cash records, bank statement and loan
documents. They should also maintain electronic copies of critical documents, any unpaid
invoices. In an organisation there must be proper record of sales and debtors so that there will eb
no confusion and work can be done properly. This will help in maintaining all records and
reduces chances of mistakes.

REFERENCES
Books and Journals
Ferran, E., 2017. The UK as a third country actor in EU financial services regulation. Journal of
Financial Regulation. 3(1). pp.40-65.
He, M. D., and et.al., 2017. Fintech and financial services: initial considerations. International
Monetary Fund.