Ch 1 · Regulatory objectives + venues
| 3 regulatory objectives | Confidence · Consumer · Stability |
| Sharia prohibitions | Riba · Gharar · Haram |
| FATCA reach | US persons anywhere; 30% withholding |
| CRS jurisdictions | 110+ · US does NOT participate |
| MiFID II venues | RM · MTF · SI · OTF |
| SI vs MTF | SI = bilateral · MTF = multilateral |
| OTF scope | Non-equity only |
Trap: OFT extraterritorial reach — USD clearing pulls US jurisdiction. BNP Paribas $8.9bn (2014).
Ch 1 · International bodies
| BCBS | Basel — banking (Basel I/II/III) |
| IOSCO | 38 Principles · securities · MMoU enforcement |
| IAIS | Insurance Core Principles |
| FSB | Post-2008 systemic coordinator |
| BIS | "Central bank of central banks" · hosts BCBS |
| MMoU signatories | 130+ regulators |
| Basel Concordat trigger | BCCI collapse 1991 |
| Home state | Prudential (capital) |
| Host state | Conduct of business |
Trap: which body sets banking rules? BCBS (not BIS itself). Insurance? IAIS (not IOSCO).
Ch 2 · Compliance structure
| Compliance = which line? | 2nd |
| Internal audit = which line? | 3rd |
| Business = which line? | 1st (OWNS risk) |
| Head of compliance reports to | Board / CEO (NOT sales) |
| Fit & proper pillars | Honesty · Competence · Financial soundness |
| Conflicts hierarchy | Avoid > Manage > Disclose |
| FCA Principle 11 | Open + cooperative with regulator |
Trap: BUSINESS owns compliance. Compliance oversees. If the exam says "the compliance function is responsible for compliance in the business" — WRONG.
Ch 2 · SMCR + accountability
| UK SMCR started | 2016 (expanded 2023+) |
| Australia FAR started | 2024 |
| HK Manager-in-Charge | 2017 |
| Duty of Responsibility test | "Reasonable steps a person in their position would have taken" |
| Outsourcing rule | Firm retains FULL regulatory accountability |
| MLRO reports SARs to | National FIU (UK NCA, US FinCEN) |
Trap: "I didn't know" is NOT automatically a defence under Duty of Responsibility.
Ch 3 · ML + AML basics
| ML stages | Placement · Layering · Integration |
| ML vs TF | ML = dirty origin · TF = often legit origin, criminal use |
| FATF | 40 Recommendations · founded 1989 |
| BO threshold | >25% OR control |
| SDD | LIGHTER, not NONE |
| SAR threshold | Know / suspect / reasonable grounds |
| Tipping off | SEPARATE offence (POCA s.333A) |
Trap: Tipping off ≠ failure to disclose. Two different offences.
Ch 3 · EDD / PEPs / sanctions
| EDD triggers | PEP · high-risk country · non-F2F · complex ownership · cash-intensive · correspondent · private banking |
| PEP definition | Prominent public function + family + close associates |
| SoF vs SoW | Funds (this txn) vs wealth (overall net worth) |
| OFSI strict liability | June 2022+ |
| OFAC extraterritorial | USD · US person · US goods · US infra |
| Sanctions types | Asset freeze · Prohibitions · Sectoral · Country embargo · Trade |
Trap: post-2022 Russia sanctions dramatically expanded sectoral scope — not in Ed 8 workbook.
Ch 3 · Bribery + tax
| UK Bribery Act | 2010 · 4 offences |
| Adequate procedures | 6 principles |
| UKBA facilitation payments | PROHIBITED |
| FCPA facilitation payments | Narrow exemption, rarely used |
| UK CFA 2017 | Failure to prevent tax evasion facilitation (ALL sizes) |
| UK ECCT 2023 fraud offence | Sept 2025 · large orgs only |
| FATCA withholding | 30% |
| UK crypto travel rule | Sept 2023 |
| EU AMLA operational | 2025 |
Trap: UK vs US on facilitation payments — UK prohibits, US allows narrowly. Different regimes.
Ch 4 · Ethics + fairness
| 3 ethical frameworks | Utility · Duty · Virtue |
| TCF outcomes | 6 |
| UK Consumer Duty in force | 31 July 2023 |
| Consumer Duty outcome-areas | 4 (products · price/value · understanding · support) |
| FG21/1 vulnerability drivers | Health · Life events · Resilience · Capability |
| FCA Principle 1 | Integrity |
Trap: vulnerability ≠ elderly. It's dynamic + spectrum. ~50% of adults at some point.
Ch 4 · Fiduciary + suitability
| Fiduciary content | No conflict · No secret profit · Loyalty · Confidentiality |
| Suitability factors | Objectives · Financial situation · K&E |
| Appropriateness factor | K&E only |
| Best interests rule | COBS 2.1.1R (UK) · MiFID II Art 24(1) · Reg BI (US, June 2020) |
| Product gov — who | Manufacturer + distributor BOTH accountable |
| Fair value | Reasonable price vs benefits (NOT cheapest) |
Trap: suitability (advised, 3 factors) vs appropriateness (complex execution-only, K&E only). Don't mix them up.
Ch 5 · Governance + board
| OECD definition | System by which companies are directed & controlled |
| UK Code basis | "Comply or explain" (premium-listed) |
| Board committees | Audit · Risk · Remuneration · Nomination |
| Chair-CEO separation | Standard in UK |
| Independence exclusions | Employed within 5y · material biz relationship · >9y tenure |
| Internal audit reports to | Audit committee (NOT CEO) |
Ch 5 · Risk + Op Res
| Risk (ISO 31000) | Effect of uncertainty on objectives |
| Appetite vs capacity vs tolerance | Willing · Max possible · Acceptable deviation |
| Basel op risk categories | 7 (EXCLUDES strategic + reputational) |
| UK Op Res in force | 31 March 2022 |
| UK Op Res deadline | 31 March 2025 |
| EU DORA in force | January 2025 |
| ISSB standards | IFRS S1 / S2 (2023) |
| Twin peaks UK | PRA (prudential) + FCA (conduct) |
| UK s.166 | Skilled person review (firm pays) |
Trap: impact tolerance is BOARD-SET based on client / market impact — not internal aspiration.
Top 10 GFC traps (memorise these)
| 1. Compliance vs business | Business OWNS · Compliance oversees |
| 2. Tipping off ≠ failure to disclose | Two separate offences |
| 3. SI vs MTF | SI = bilateral · MTF = multilateral |
| 4. BO test | >25% OR control (not JUST %) |
| 5. SDD ≠ no DD | Just lighter |
| 6. Facilitation payments | UK prohibits · US narrow exemption |
| 7. FATCA vs CRS | US uses FATCA · does NOT do CRS |
| 8. Suitability vs appropriateness | Advised (3 factors) vs complex-execution (K&E only) |
| 9. Op risk categories | 7 · EXCLUDES strategic + reputational |
| 10. Duty of Responsibility | "Should have known" can be enough |
Post-2019 developments — modern syllabus flags
| UK Consumer Duty | 31 July 2023 |
| UK Op Resilience (PS21/3) | March 2022 |
| UK OFSI strict liability | June 2022 |
| UK crypto travel rule | Sept 2023 |
| UK ECCT 2023 fraud offence | Sept 2025 |
| EU 6MLD | June 2021 (FIs) |
| EU AMLA operational | 2025 |
| EU DORA | January 2025 |
| ISSB IFRS S1/S2 | 2023 |
| Australia FAR | 2024 |
| US SEC Reg BI | June 2020 |
Note: the 2019 Ed 8 workbook predates most of these. Current syllabus likely tests them — flagged in this app's explanations.