- •Compliance Sample Questions – Final Exam
- •1. Briefly explain financial stability and its importance to shareholders, depositors, taxpayers etc.!
- •2. Briefly explain goals, tasks and enforcement powers of banking supervisors!
- •3. Briefly give an overview of the European and the Austrian banking supervisors: Name them Their roles and tasks Cooperation between European and Austrian banking supervisors
- •4. Briefly explain the function of the Banking Union and the Single Resolution Mechanism (srm/ssm)!
- •5. Briefly explain significant banks and name some of Austrian significant banks!
- •6. Briefly explain the system of the Austrian (national) banking supervision system!
- •7. Name and briefly explain the roles of external banking supervisors and internal control authorities (within banks)!
- •9. Briefly explain the role of Compliance within a bank:
- •10. Briefly explain the Standard Compliance Code!
- •11. Name essential aspects/topics regulated in the Compliance Manual!
- •8. Briefly explain the 3 lines of defense!
- •12. What are areas of confidentiality? What is the function of them?
- •13. What is understood by compliance relevant information?
- •14. What is understood by insider trading and/or market manipulation?
- •Insider trading:
- •15. Explain the Watch List and the Restricted List!
- •16. Briefly explain Front Running!
- •17. What does a bank employee have to do in case of knowledge of compliance relevant information?
- •18. Briefly explain the tasks of a bank employee in case of employee transactions (he/she wishes to trade securities)!
- •19. What are the tasks of bank employees who work in areas of confidentiality in case of employee transactions (he/she wishes to trade securities)!
- •24. Briefly explain different types of corruption!
- •25. Why is it important to know if a person is engaged in the private sector or if a person is a public official (in the context of combating corruption)?
- •26. How are banks combating corruption? Why and what are there different internal regulations in case private sector or public officials?
- •27. Briefly explain Money Laundering and Terrorism Financing!
- •28. Briefly explain the 3 steps of Money Laundering!
- •29. Briefly explain some of the risks factors in order to identify Money Laundering and/or Terrorism Financing!
- •34. Name situations when a Know-Your-Customer (kyc) check is not necessary!
- •35. Briefly explain prohibited business relations!
- •36. What are the main tasks of the money laundering officer within a bank?
- •37. Give a detailed overview of steps/requirements by a bank employee in order to fulfill the rules of conduct (§ 38-62 ssa)!
- •38. Which information a bank is to give to its customers to fulfill the rules of conduct?
- •39. Explain the different customer definitions and explain the consequences of the customer classification in order to fulfill the rules of conduct!
- •40. For which customers a bank must prepare a customer profile? Which information does a bank employee need to prepare the customer profile? What are the consequences of a customer profile?
- •41. Explain the differences of transactions requiring advisory/clarification and transactions without advisory/clarification!
- •42. Briefly explain the requirements for the execution of orders by retail customers? What is understood by Best-Execution-Policy?
- •43. Is doorstep selling allowed in Austria?
- •44. Explain and give examples of essential risks regulated in the ssa (in context with securities business)!
- •45. Explain essential differences of the roles and tasks of internal auditors and external auditors!
- •Internal Audit
- •46. Name essential stakeholders of the internal audit function! Explain the interaction between them and the internal audit function!
- •47. Briefly explain the steps of audit planning (internal audit): Risk based planning versus mandatory audit fields!
- •48. Briefly explain Material Misstatement and possible consequences thereof!
- •49. Explain Audits risks and how external auditors can mitigate them!
- •50. Explain the 4 types of (external) Audit Opinions! Which type do banks require for assessing the credit risks of customers?
4. Briefly explain the function of the Banking Union and the Single Resolution Mechanism (srm/ssm)!
Establishment of The Single Supervisory Mechanism (SSM) which granted the European Central Bank (ECB) a supervisory role to monitor the financial stability of banks based in participating states, starting from 4 November 2014
Why the SSM?
· Private debt has become public debt, with a risk for public finances, and hence for the euro; local bank rescues may affect other member states
· Differences in supervisory regimes are considerable
· Strict, political neutral supervision as a precondition for financial support ESM/ health EMU
· Strengthening the supervisory regime as a precondition for re-establishing market confidence- part of overall political strategy of the Euro states for integration
· Step to the overall strengthening of the Euro zone and the Union in general
What is the SSM?
· Supervisory role granted to ECB to monitor the stability of banks based in participating states, starting from 4 November 2014
· Not an institution but a Mechanism within the ECB
· Regulation v supervision - Difference EBA v SSM
· Scope of the SSM - Only “credit institutions”- Formal criterion - Not insurance, not all other financial institutions - Not: Shadow banking, infrastructure, asset managers etc.
· Only Euro area - The 19 eurozone member states participate automatically in the SSM (the last country to join was Lithuania, when it joined the eurozone on 1 January 2015) - Opt-in for non-euro states (participating states) on voluntary basis
5. Briefly explain significant banks and name some of Austrian significant banks!
Size/ Economic importance: total value of assets exceeds €30 billion for the specific country or EU economy as a whole
Cross-border activities: total value of assets exceeds €5 billion & ratio of cross-border assets/liabilities in more than one other participating member state to its total assets/liabilities is above 20 %.
Direct public financial assistance: has requested or received funding from ESM (European Stability Mechanism) or EFSF (European Financial Stability Facility)
Three most significant banks: A supervised bank can also be considered significant if it is one of the three most significant banks established in a particular country.
Significant Austrian banks: Bawag, Erste Group, Volksbank, Raiffeisen NÖ, Raiffeisen OÖ, RZB/RBI, Sberbank, VTB Bank
6. Briefly explain the system of the Austrian (national) banking supervision system!
The (Austrian) national banking supervision system consists of the following entities:
-Ministry of Finance: Supervision of supervisors, measures to prevent crisis in the Austrian banking and financial system,
-Austrian National Bank (OeNB): On-site inspection of banks, banking analysis, supervisory reporting, assignment for financial market stability
-Financial Monetary Authority (FMA): comprehensive financial services authority, on-site inspection of less significant institutions
-Staatskommissionär: permanent body of FMA for banks of total assets >€1 bn, supervision of financial development, present with annual general meetings, reporting to FMA