FCA UK Regulation Sample Exam

Document Content and Description Below

FCA UK Regulation Sample Exam Which of the following is TRUE for a regulated firm under Money Laundering rules and regulations? - ✔✔Staff must be trained to recognise and deal with suspicious tr ... ansactions Under the Proceeds of Crime Act 2002, criminal property is defined as - ✔✔any benefit derived from criminal behaviour Under what legislative framework can certain consumer bodies alert the FCA to supercomplaints? - ✔✔Financial Services Act 2012 The FCA`s COBS rules apply to: - ✔✔a UK investment management company managing a pension fund for a Berlin based company What is the role of the Financial Ombudsman Service? - ✔✔Administer and operate a dispute resolution service for clients of FCA-authorised firms Which of the following must be disclosed to a retail client when holding designated investments or client money subject to MiFID? - ✔✔Details of any investor compensation scheme applicable Which of the following claimants would warrant compensation by the Financial Services Compensation Scheme? - ✔✔The trustee of a personal pension fund Which of the following constitutes a regulated activity under the FSMA 2000? - ✔✔Acting as a manager of an authorised unit trust Which of the following UK firms are directly subject to the requirements of MiFID when undertaking designated investment business? - ✔✔Stockbrokers A firm receives a complaint from a customer relating to MiFID business. What is the MINIMUM period records should be retained? - ✔✔Five years from the date the complaint was received Which of the following is TRUE in respect of the Client money rules - ✔✔Client money must be separate from the firm's bank accounts Which of the following imposes the anti-money laundering requirements of criminal law on a stockbroker? - ✔✔Proceeds of Crime Act 2002 The main focus of the FCA`s supervisory approach on which its resources are focused is to: - ✔✔achieve its statutory objectives Which of the following payments are permitted to a third party on behalf of a client, by an introducer of business? - ✔✔Fees which are necessary for the provision of the service - such as custody fees When looking for a personal recommendation for a client, why is it necessary to obtain so much information concerning their financial situation, investment objectives, knowledge and experience? - ✔✔So that the firm can make recommendations that are suitable for the client In order to comply with the Data Protection Act 2018, for how long should personal data be held? - ✔✔No longer than necessary A life office is launching a new product in the retail market. In order to satisfy the FCA`s treating customers fairly consumer outcomes, this product must be: - ✔✔appropriately targeted A client wishes to purchase a significant holding of a `complex` instrument but does not wish to enter in to an advisory or discretionary business relationship - ✔✔The rules on `appropriateness` for `non-advised` sales must be considered Which of the following statements is TRUE of a firm requesting authorisation to carry out investment business under the FSMA 2000? - ✔✔It must have adequate resources A client wants to cancel her investment in an authorised UK unit trust. What is the maximum number of days after her original purchase that she can cancel without incurring possible charges? - ✔✔14 days Financial firms which prepare research recommendations have to comply with detailed standards in relation to presentation and disclosure in order to ensure that: - ✔✔such recommendations are fairly presented The general defence of `not expecting any person to deal....` is only available against an allegation of insider dealing: - ✔✔in relation to the offence of disclosure For retail clients, periodic reports must contain prescribed information, which includes: - ✔✔the firm`s name Where a £1,000 cheque paid to a firm comprises £900 of client money and £100 to pay the firm`s fees, under what circumstances would this cheque be treated as client money? - ✔✔Always One of the key aims of the Disclosure and Transparency rules is to limit: - ✔✔the number of people accessing inside information Your role involves dealing with clients of your firm. One client`s dealings make you suspect money laundering. Who has INITIAL responsibility to report this suspicious activity and to whom? - ✔✔You, to report to the Money Laundering Reporting Office Which of the following is TRUE in relation to a portfolio manager`s duty to act in a client`s best interest when transmitting client orders? - ✔✔The portfolio manager must provide appropriate information to the client in respect of its execution policy In which of the following circumstances is a client agreement required when non-MiFID designated investment business is supplied? - ✔✔To a Retail Client When dealing for a number of clients, which of the following must a firm consider in order to provide best execution? - ✔✔Order of execution Which types of provisions which can be incorporated by the FCA are rules which are not binding in their own right? - ✔✔Evidential provisions Authorisation by the FCA is NOT required by which of the following in relation to specified investments? - ✔✔Trustees of an estate Which of the following is a special defence that is only available to market makers against the accusation of insider dealing? - ✔✔They were acting in good faith A firm wishes to approve a financial promotion for an overseas bank that is well known to the firm and is considered highly reputable. What must the communication to its UK retail clients contain? - ✔✔The extent to which UK compensation scheme arrangements will be available, or if it is not, a statement to that effect Who is responsible for the completeness and accuracy of information and the appropriateness of recommendations when a MiFID firm relies on a third party firm? - ✔✔The third party firm only Where information in one part of a firm`s business may either encourage or discourage another part from entering into a particular transaction with a client, what must a firm do? - ✔✔Manage the potential conflict so as to ensure fair treatment of the clients through information barriers, reporting lines and segregation of duties If an individual receives a `notice of discontinuance` from the FCA, this indicates that: - ✔✔proceedings set out in a previous notice are being withdrawn Who is primarily responsible for the regulatory compliance of a mailshot issued by a firm`s appointed representative (AR)? - ✔✔The authorised firm that is the AR`s principa If a client is classified as a `professional client` in respect of dealing in listed UK investments and a firm is engaged to manage investments on a discretionary basis for the client, which of the following is a firm entitled to assume? - ✔✔The client has the necessary level of experience and knowledge in respect of such dealings Which of the following requirements is a Statement of Principle relating to approved persons? - ✔✔To act with due skill, care and diligence A firm has received an instruction from a third party IFA. When must the firm report the transaction to the client following receipt? - ✔✔By the end of the following day Which of the following is TRUE of the FCA`s principles based approach to money laundering? - ✔✔The firm has to have appropriate and adequate systems and controls based on the firm`s business activities The primary purpose of the regulator`s supervision arrangements is to: - ✔✔mitigate and manage risks to the achievement of the statutory objectives In line with the FCA Conduct of Business Sourcebook, what method of information storage meets the requirements for a durable medium? - ✔✔Email from an investment manage Which ONE of the following is a defence against an accusation of bribery? - ✔✔Adequate procedures to prevent bribery were put in place Under the FCA`s COBS Financial Promotion rules, a firm must take reasonable steps to ensure that an individual who makes a non-written financial promotion on its behalf: - ✔✔always identifies themselves and the firm that they represent When carrying out a reasonable assurance Client Assets Report the auditor must take into account: - ✔✔the firm`s own risk assessment In assessing the appropriateness of an investment for a client, a firm must: - ✔✔determine the client's understanding of the investment Which one of the following bodies is responsible for identifying and monitoring systemic risks with a view to protecting the UK financial system? - ✔✔The Financial Policy Committee The FCA deems a financial promotion poses an unacceptable risk to consumers. What powers of intervention does it have? Ban the product: - ✔✔for up to 12 months without consultation A professional client receives a financial promotion. Which one of the following statements relating to this promotion is TRUE? - ✔✔The promotion need not be clearly identifiable as a financial promotion as it is being made to a professional client Which of the following would be an offence under the Proceeds of Crime Act 2002, Part 7 Money Laundering? - ✔✔A firm`s nominated officer suspects money laundering is occurring. However, she is about to travel abroad for a vital business trip and decides to delay the disclosure to the authorities by a week Under the personal account dealing rules, which of the following must a firm ensure when placing a personal deal? - ✔✔It does not conflict with the interests of its clients A bank advertises securities to the public. What must be included in this advertisement? - ✔✔Details of where investors can obtain the full prospectus One of the key purposes of the Capital Requirements Directive is to ensure that firms: - ✔✔hold adequate capital and systems to manage their business and its associated risks A firm receives an order from Client A to buy some shares and also receives an order from Client B to sell some shares. In which case, if either, are the firm`s resulting actions NORMALLY subject to the FCA`s COBS `best possible result` requirements? - ✔✔Both When the FCA requires a firm to provide specified information, how much notice MUST be given to the firm? - ✔✔A reasonable period Which activity falls within the scope of the Training and Competence Sourcebook and requires an individual to have a full qualification before commencing that activity? - ✔✔Advising on friendly society tax-exempt policies Which of the following circumstances requires a regulated firm to seek approval for an individual to be an approved person? If the individual is going to be: - ✔✔a non-executive director If a firm is unable to provide a retail client with the total adviser charge it will levy before it makes a personal recommendation, then the firm must - ✔✔provide its charging structure before it gives any advice In which of the following circumstances do the FCA`s Conduct of Business Sourcebook rules apply to a trader dealing on their own personal account? - ✔✔They work for a UK firm and the trader buys UK or international shares Why does the Joint Money Laundering Steering Group guidance regard `politically exposed persons` as a greater money laundering risk? - ✔✔Their position may make them vulnerable to corruption A firm produces a circular to existing retail clients promoting an Individual Savings Account (ISA) product. What must this promotion contain? - ✔✔A statement that tax treatment depends on individual circumstances and is subject to change Which of the following is a statutory objective of the FCA? - ✔✔To secure an appropriate degree of protection for consumers Which of the following is eligible to lodge a complaint with the Financial Ombudsman Service? - ✔✔A trustee of a trust with a net asset value of less than £1 million Which body has the power to refuse an application for Part 4A permission or cancel an existing permission? - ✔✔Regulatory Decisions Committee What is the status of the Joint Money Laundering Steering Group guidance? - ✔✔It provides an indication of how firms should apply the law An exemption from the FCA`s CASS rules is granted in connection with: - ✔✔ICVCs Which of the following is exposed to the offence of insider dealing under the Criminal Justice Act 1993? - ✔✔The audit partner who sells the company`s shares after reviewing the audit file prior to signing the annual accounts With respect to clients, what is the general purpose of the provision of information rules within FCA`s COBS? - ✔✔To enable the client to assess the performance of the firm Which of the following statements about suspected money laundering transactions is TRUE? - ✔✔Failure to report suspicious transactions is itself a criminal offence The rules relating to the use of dealing commission apply to firms that: - ✔✔act as an investment manage In accordance with the rules on client classification for a MiFID firm, which of the following is in the Quantitative test in respect of elective professional clients? - ✔✔The client's portfolio exceeds Euro 500,000 In accordance with the SYSC rules on conflicts of interests, where a conflict arises, which of the following must the firm do as a MINIMUM requirement? - ✔✔Email the client with sufficient information and ask the client to decide how to proceed Which of the following is NOT a specified investment as defined by the Regulated Activities Order 2001? - ✔✔Commodities such as gold What is the overriding principle to be applied in determining the categorisation status of a client? - ✔✔Any client is a retail client unless they meet the criteria of a professional investor or eligible counterparty [Show More]

Last updated: 2 years ago

Preview 1 out of 12 pages