Legal and Regulatory Requirements of Asset Finance

Your coursework should be between 2,000 and 2,500 words.
You should ensure that any quotes used conform to our exact referencing format. If
references are used, a reference list must be provided at the end. Please see the
Course Site for guidance on referencing and creating a reference list.
The word count includes any: footnotes, endnotes, glossaries, diagrams, figures or
tables. The word count does not include the title page, or appendices. Appendices
should be used occasionally, with the intention of providing further detail about points
made in the main body of the coursework. They will not be taken into account where
they are used to include detail that should have been in the main body of the coursework
Assignment
Answer all questions from both sections.
Section A
Case study scenario:
With several years’ experience as a new business administrator at a small
independent asset finance company, you were successful in applying for a new
position as pay-out supervisor at a bank-owned asset finance company.
Your main responsibility in your new role is to carry out final checks on documentation
for all larger transactions (where the net advance exceeds £250,000) prior to them
being authorised for pay-out.
One of the first cases presented to you relates to a hire purchase agreement with a
long-established customer of the bank and all documentation has been completed
ready for pay-out. However, in the file are a number of copy emails between the
customer and your Sales Manager. In one of the emails, the customer asks the Sales
Manager what the implicit interest rate is in the agreement and the response is that it
is 6%. You check the calculations and find that the correct rate is 6.75%.
Required:
With reference to the above scenario, answer the question below:
1. Explain what action you would take following your discovery of the
interest rate discrepancy and analyse how ethics, business culture
and personal morality would influence how someone in your
position might respond in this scenario. (50 marks)
Section B
Required:
Answer both questions below:
2. The Finance and Leasing Association’s Business Finance Code
contains recommendations to customers taking out business
finance agreements. Outline the recommendations and how they
might assist those customers in gaining a positive outcome from
using asset finance. (25 marks)
3. In relation to fair treatment of customers (FTC), outline the
outcomes that the Financial Conduct Authority expects FTC to
achieve for consumers and how it expects asset finance companies
to apply FTC.(25 marks)
(Total = 100 marks)
Essential reading
Bank of England (2019) Financial Policy Committee [online]. Available at: https://www.bankofengland.co.uk/about/people/financial-policy-committee opens in new windowFCA (no date) CONC 2.5 Conduct of business: credit broking [online]. Available at: https://www.handbook.fca.org.uk/handbook/CONC/2/5.html opens in new window .FCA (no date) Strengthening accountability in Banking [pdf] Available at: https://www.fca.org.uk/publication/documents/strengthening-accountability-in-banking-slides.pdf opens in new windowLlewellyn, D. (1999) The economic rationale for financial regulation. Occasional paper series 1 [pdf]. Available at: http://www.fsa.gov.uk/pubs/occpapers/op01.pdf opens in new windowNo actual limit on sources but please use a least a few from the above