FSC522/AS1
Ver: A1.2
FSC522 The Regulatory
Framework
Learning Outcomes
This assessment assesses the following learning outcomes:
• LO2: Apply legal obligations in a financial advice situation.
Instructions
• Submit all your answers in one document.
Assessment
1
• Write the number of each part of the question you are answering.
• Create a header with your name, student number and assessment number, and number your pages.
• You must make a reasonable attempt to complete your assessment before you submit.
Submission
• Submit your work through your iQualify course. Emailed assessments will not be accepted.
• You will receive an automated notice following submission.
• By submitting, you confirm that the work presented is your own original work.
Referencing and Plagiarism
Refer to Referencing and plagiarism for information on APA referencing and avoiding plagiarism.
Task Instructions:
• Read the case study provided in the separate document Appendix 1 Aotearoa Mortgages and respond to the tasks below.
• Complete all tasks.
• Accurate citation is important; note how we have cited sections (including sub sections of legislation throughout Modules 1 and 2).
Task 1: Applying Regulatory Acts
a. Regulated financial advice
Do Nikau and Mia give regulated financial advice in this situation? Give reasons for your answer.
You are required to:
i. Explain whether Nikau gives financial advice and regulated financial advice in this situation?
ii. Explain whether Mia gives financial advice and regulated financial advice in this situation?
iii. Cite and explain the relevant section(s), including sub-section(s), of the Financial Markets Conduct Act 2013 that support your view.
(150 words)
b. Disclosure
In the case study, Nikau works through a client interview and provides disclosure at two different stages (Transcript 1 and Transcript 3).
I. Transcript 1: What information will Nikau disclose at this stage?
You are required to:
• Identify and explain four pieces of information Nikau’s disclosure statement will include about him and Aotearoa Mortgages Limited, to meet obligations under the Financial Markets Conduct Regulations 2014.
• Ensure you use relevant information from the case study when explaining the information Nikau will disclose.
II. Transcript 3: What information will Nikau disclose at this stage?
You are required to:
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• Identify and explain three pieces of information Nikau’s disclosure statement will include about him and Aotearoa Mortgages Limited, to meet obligations under the Financial Markets Conduct Regulations 2014.
• Ensure you use relevant information from the case study when explaining the information Nikau will disclose.
[300 words]
c. Privacy Act
From each of the following categories, select two information privacy principles (IPPs) that are complied with in the case study:
I. Collecting personal information
II. Holding and accessing personal information
III. Using and sharing of personal information
For each IPP provide one example from the case study to show how Nikau complies with that IPP. Clearly identify which IPP relates to each example.
(200 words) d. Duties
For each of the following duties, provide one example from the case study to show how Nikau complies with that duty:
• 431J
• 431K
• 431L
(75 words)
e. AML/ CFT Act
In Transcript 2, Mia carries out customer due diligence (CDD on Ari). You are required to:
I. Summarise the differences between the three levels of CDD and determine which level applies in this situation. Cite the section of the Act that applies to your response.
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II. Cite the section of the AML/CFT Act that covers the identity requirements for the level of CDD you identified in i. Explain which identity requirements apply in this situation.
III. Cite the section of the AML/CFT Act that covers the verification of identity requirements for the level of CDD you identified in i. Explain which verification of identify requirements apply in this situation.
IV. Verification of identify requirements:
• Name the document that provides suggested best practice for verifying customer name and date of birth in this situation.
• Explain whether Mia complies with best practice for verifying customer name and date of birth in this situation.
• Assuming Ari does not have any other primary photographic identification, recommend an alternative combination of identification requirements Mia could have requested to comply with best practice requirements in this situation.
V. Enforcement:
• Explain four possible sanctions that may apply to Aotearoa Mortgages for a breach of AML/CFT Act requirements.
• Name the supervising entity responsible for monitoring and enforcing Aotearoa Mortgages compliance with the AML/CFT Act.
(300 words)
f. Fair Trading Act
In the email from Ari to Nikau: Issue 1. What argument could Ari make that Aotearoa Mortgages has breached the Fair-Trading Act?
You are required to:
i. Cite the section of the Fair-Trading Act that could have been breached.
ii. Explain why this section could have been breached.
(50 words)
g. Consumer Guarantees Act (CGA)
Email from Ari to Nikau: Issue 2. What argument could Ari make that Aotearoa Mortgages has breached the Consumer Guarantees Act?
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You are required to:
i. Cite the two sections of the Consumer Guarantees Act that could have been breached.
ii. Explain why these two sections could have been breached.
(100 words)
Task 2: Licensing
After many years of experience giving financial advice under Aotearoa Mortgages, Nikau has decided to set up a financial adviser business with a small group of other existing advisers. They will operate as financial advisers engaged by the new financial adviser business. The business will be called Tohutohu Mokete Limited (TML).
There will be no Nominated Representatives in the business.
TML will recruit additional new-to-industry advisers once the new business becomes operational.
You are required to:
a. For TML:
I. Identity the six steps in the pathway to become operational and outline the key requirement(s) at each step.
II. Identify the financial advice service license class required and outline what this class of license will permit TML to do.
III. Once operational, explain four consequences for TML breaching its licensed obligations.
b. For the new-to-industry financial advisers that will be working for TML in the future:
I. Identity the three steps in the pathway each must take to become operational and outline the key requirement(s) at each step.
II. Once operational, explain the five consequences for one of these financial advisers if they breach a FMCA duty.
c. For complaints:
One of the standard conditions imposed on TML will be that they must have an internal process for resolving client complaints.
I. Identify at least five key elements of an effective complaints process.
II. For each element, give one example of a policy or process that supports that element.
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(300 words)
Marking Schedule
Task Competent
Task 1: Applying Regulatory Acts
a: Regulated financial advice To be competent for this task you must
Recognise whether Nikau gives financial advice and regulated financial advice in this situation.
Recognise whether Mia gives financial advice and regulated financial advice in this situation
Accurately cite the relevant sections and subsections of the Financial Market
Conduct Act 2013
b: Disclosure To be competent for this task you must:
Correctly identify and explain four pieces of information to be disclosed during transcript 1
Correctly identify and explain three pieces of Assessment Brief Task Help information to be disclosed during transcript 3
Use relevant information from the case study
c: Privacy Act To be competent for this task you must:
Correctly identify two IPPs from each of the listed categories
Provide one relevant example of compliance from the case study for each IPP identified.
d: Duties To be competent for this task you must Explain one relevant example from the case study for each of the following duties:
431J
431K
431L
e. AML-CFT To be competent for this task you must:
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Accurately summarise the differences between the three levels of CDD, correctly determine which level applies in this situation and cite the relevant section of the Act.
Accurately explain which identity requirements apply in this situation and cite the relevant section of the AML/CFT Act
Accurately explain which verification of identify requirements apply in this situation and cite the relevant section of the AML/CFT Act.
Correctly name the document that provides suggested best practice for verifying customer name and date of birth in this situation.
FSC522/AS1 Version: A1.2 FSC522/AS1 Version: A1.2 FSC522/AS1 Version: A1.2 FSC522/AS1 Version: A1.2 FSC522/AS1 Version: A1.2 FSC522/AS1 Version: A1.2 The Regulatory Framework
Framework
Learning Outcomes are the results of your learning.
The following learning outcomes are assessed using this assessment:
• LO2: Apply legal requirements in a situation involving financial advice.
Instructions
• Please submit all of your responses in a single document.
Assessment
1
• Make a note of the number of each section of the question you are responding to.
• Incorporate a header that includes your name, student number, and assessment number, and number the pages.
• You must make a reasonable effort to finish your assessment prior to submitting it to the university.
Submission
• Submit your work through the iQualify course you are taking. Assessments sent via email will not be accepted.
• After submitting the form, you will receive an automated confirmation.
When you submit your work, you certify that the work you’ve submitted is your own work.
Referencing and Plagiarism are two types of plagiarism.
Refer to the section on APA citing and plagiarism for more information on preventing plagiarism and APA referencing.
Instructions for the task:
• Read the case study provided in the supplementary document Appendix 1 Aotearoa Mortgages and reply to the tasks outlined in the following sections.
• Complete all of the duties assigned to you.
• It is critical to use accurate citations; take note of how we have cited portions (including sub sections of legislation throughout Modules 1 and 2).
Task 1: Putting Regulatory Acts into Practice
a. Financial advice that is regulated
Is it possible for Nikau and Mia to provide regulated financial advice in this circumstance? Give specific reasons for your response.
You must comply with the following requirements:
Please explain whether Nikau is providing financial advice, specifically regulated financial advice, in this circumstance.
If Mia is providing financial advice, and specifically regulated financial counsel in this circumstance, please explain.
Please cite and explain the relevant section(s), including sub-section(s), of the Financial Markets Conduct Act 2013 that you believe support your point of view.
(about 150 words)
b. Transparency
In the case study, Nikau goes through a client interview with the client and gives disclosure at two separate points in the process (Transcript 1 and Transcript 3).
I. Transcript No. 1: What information will Nikau divulge at this point in the process?
You must comply with the following requirements:
Nikau’s disclosure statement will include four pieces of information about him and Aotearoa Mortgages Limited, and he must identify and explain each piece of information in order to comply with the Financial Markets Conduct Regulations 2014.
Remember to incorporate essential material from the case study when explaining the information that Nikau will reveal.
Nikau will reveal any facts he has at this point in the transcript.
You must comply with the following requirements:
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Nikau’s disclosure statement will include three pieces of information about him and Aotearoa Mortgages Limited, and you must identify and explain each piece of information in order to comply with the Financial Markets Conduct Regulations 2014.
Remember to incorporate essential material from the case study when explaining the information that Nikau will reveal.
[about 300 words]
(around 300 words)
Scheduling of Markings
Competent in the task
Task 1: Putting Regulatory Acts into Practice
A: Financial advice that is regulated You must possess the following qualifications in order to do this task effectively:
In this circumstance, determine whether Nikau provides financial advice and whether such guidance is regulated financial advice.
Recognize whether Mia is providing financial advice and whether she is providing regulated financial advise in this case.
Cite the relevant parts and subsections of the Financial Markets Act in an accurate manner.
The Conduct Act of 2013
b: Transparency To be qualified for this position, you must be able to:
Identify and explain four bits of knowledge that will be revealed during transcript 1 in the proper manner.
Identify and explain three bits of knowledge that will be revealed during transcript 3 in the proper manner.
Accurately summarize and accurately identify which level of CDD applies in this case, and correctly reference the applicable part of the Act to support your conclusion.
Explain in detail which identity criteria apply in this case and mention the appropriate clause of the Anti-Money Laundering and Counter-Terrorism Financing Act.
In this circumstance, accurately describe which verification of identity requirements apply to you and reference the applicable part of the Anti-Money Laundering/Criminal Justice Act.
The document that gives a best practice for verifying the customer’s identity and date of birth in this situation should be appropriately named.
Give an accurate explanation of whether Mia adheres to standard practices when it comes to validating the customer’s name and date of birth in this particular instance.
Correctly identify an alternate combination of identification criteria that Mia may have requested based on her circumstances.
In this case, it is necessary to adhere to best practice guidelines.
Explain in detail the four possible fines that may be imposed on Aotearoa Mortgages if the company fails to comply with the AML/CFT Act requirements.
Correctly identify the supervisory entity responsible for monitoring and enforcing Aotearoa Mortgages’ compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act.
f. The Unfair Trading Practices Act To be qualified for this position, you must be able to:
Cite the correct section of the book in an accurate manner.
FTA
Please provide a thorough explanation as to how this section could have been violated.
f. Consumer Protection and Guarantees Act To be qualified for this position, you must be able to:
Cite the correct portions of the CGA in the proper order.
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Please provide a thorough explanation as to how this section could have been violated.
Licensing is the second task.
a. TML is an abbreviation for Text Markup Language. To be qualified for this position, you must be able to:
Identify the six steps that must be completed in order to become operational.
Clearly define the most important criteria at each stage.
Accurately determine the type of license that is necessary.
Clearly define what TML is permitted to do under the terms of the license class.
Explain in detail the four implications of failing to comply with licensing requirements.
b. Financial advisors who are new to the industry To be qualified for this position, you must be able to:
Identify the three stages necessary to become operational correctly.
Clearly define the most important criteria at each stage.
Explain five ramifications of failing to comply with an FMCA responsibility in an accurate manner.
b. Complaints and reprimands To be qualified for this position, you must be able to:
Correctly identify the five most important components of a successful complaints procedure.
For each piece, provide an accurate description of one related policy or process.
Accurately explain whether Mia complies with best practice for verifying customer name and date of birth in this situation.
Correctly identify an alternative combination of identification requirements Mia could have requested
to comply with best practice requirements in this situation.
Accurately explain four possible sanctions that may apply to Aotearoa Mortgages for a breach of AML/CFT Act requirements.
Correctly name the supervising entity responsible for monitoring and enforcing Aotearoa Mortgages compliance with the AML/CFT Act.
f. Fair Trading Act To be competent for this task you must:
Accurately cite the correct section of
FTA
Accurately explain why this section could have been breached.
g. Consumer Guarantees Act To be competent for this task you must:
Accurately cite the correct sections of CGA
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Accurately explain why this section could have been breached.
Task 2: Licensing
a. TML To be competent for this task you must:
Correctly identify the six steps to become operational
Accurately outline the key requirements at each step
Correctly identify the class of license required
Accurately outline what the class of license permits TML to do
Accurately explain four consequences for breaching licensed obligations.
b. New-to-industry financial advisers To be competent for this task you must:
Correctly identify the three steps to become operational
Accurately outline the key requirements at each step.
Accurately explain five consequences for breaching a FMCA duty.
c. Complaints To be competent for this task you must:
Correctly identify five key elements of an effective complaints process.
Accurately describe one relevant policy or process for each element.
