- •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)!
- •8. Briefly explain the 3 lines of defense!
- •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!
- •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?
24. Briefly explain different types of corruption!
Types of corruption
1) Active bribery in the private sector means that a person who heads or works in any capacity for an institution of the private sector is directly or indirectly promised, offered or granted an advantage for himself/herself or for another person in order that he/she perform or refrain from performing an act in breach of his/her duties:
•Breach of trust/ § 159 Austrian Criminal Law
–Fraudulent/intentional violations of duties
•Gifts and bribery/ § 309 Austrian Criminal Law
–Any advantage
–Perform or refrain from performing a public act in breach of his/her duties
2) Passive bribery in the private sector applies to a person who heads or demanding or accepting an unjustified advantage
3) Passive bribery of a public official/accepting a public official’s demands or accepts an immediate or future:
•Unjustified advantages/ § 307a Austrian Criminal Law
–Material advantage
–Perform or refrain from perfor
,ustrian Criminal Law
–Unjustified influencing decisions/actions of public officials
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)?
–Public sector: Invitations and gifts are generally forbidden (active and passive)
–Private sector: Unjustified influencing the counterparty by gifts/advantages
There are different laws:
Public:
- Bribery/ § 307 Austrian Criminal Law
–contains any advantage
–Perform or refrain from performing an public act in breach of his/her duties
- Unjustified advantages/ § 307a Austrian Criminal Law
–Material advantage
–Perform or refrain from performing an public act in breach of his/her duties
- “Feeding”/ § 307b Austrian Criminal Law
–Material advantage
–Influencing decisions/actions of public officials
- Restricted intervention/§ 308 Austrian Criminal Law
–Unjustified influencing decisions/actions of public officials
Private:
- Breach of trust/ § 159 Austrian Criminal Law
–Fraudulent/intentional violations of duties
- Gifts and bribery/ § 309 Austrian Criminal Law
–Any advantage
–Perform or refrain from performing a public act in breach of his/her duties
There are different penalties:
Public:
Penalties:
-Go to prison up to 3 years/ up to Euro 30,000
-Go to prison more than 10 years/ more than Euro 50,000
Private Sector:
Penalties for breach of trust (§ 159 Austrian Criminal Law):
-Go to prison up to 6 months/ up to Euro 30,000
-Go to prison more than 10 years/ more than Euro 50,000
Penalties for bribery (§ 309 Austrian Criminal Law):
-Go to prison up to 2 months/ up to Euro 30,000
-Go to prison more than 5 years/ more than Euro 50,000
26. How are banks combating corruption? Why and what are there different internal regulations in case private sector or public officials?
Gifts and invitations public sector:
–Gifts in general not permitted
–Small attentions (flowers, bottle of wine, etc.) permissible as long as the value corresponds with small attentions
–Invitations: one-time invitation to a meal or to a professional, social or sports event that is in accordance with fair market practice are in principle permissible (to be agreed with CO in advance)
Gifts and invitations in the private sector:
- Gifts (such as Christmas, anniversary or birthday presents) allowed up to a certain amount (e.g. Euro 100) but they need to be reported to CO
- Small attentions (flowers, bottle of wine, etc.) permissible as long as the value corresponds with small attentions (no need for reporting to CO)
- Invitations: one-time invitation to a meal or to a professional, social or sports event that is in accordance with fair market practice are in principle permissible (to be agreed with CO in advance)
Sponsoring and charitable contributions
- Guidelines concerning sponsoring and charitable contributions
- utmost transparency and clear documentation (e.g. sponsoring contract, reasonable amount, return for sponsoring, etc.)
Lobbying and contributions to political parties
- Transparency regarding Political Party Financing and Lobbying according to Austrian Law
- Internal guidelines
Taking internal regulations (Compliance Manual, others) into account!