THE ULTIMATE PSC FINANCIAL &
BUSINESS SKILLS EXAM CRAM BANK
– 100% PASS RATE GUIDE
This premium, high-yield study bank delivers distinction-level
practice questions meticulously structured for the open-book
exam format. It provides instant answers and exhaustive, step-by-
step statutory rationales spanning SRA Accounts Rules, RAO
articles, and business accounting ratios. It serves as the ultimate
digital cheat sheet to help law students spot compliance breaches,
execute financial calculations, and secure a top grade.
📘 Module 1: FSMA, RAO, & Regulated Financial
Activities (Questions 1–15)
Q1. A commercial client asks a corporate
solicitor to review an investment portfolio
consisting entirely of physical commercial real
estate property. Does this advice trigger the
General Prohibition under s.19 FSMA 2000?
A) Yes, because real estate is an investment.
B) Yes, because advising on any commercial asset
is regulated.
C) No, because real estate property is not a
Specified Investment under the RAO.
D) No, because the advice is given in the course of
,legal business.
Answer: C
Rationale: Under the Regulated Activities Order
(RAO), physical property or land is not classified
as a "Specified Investment." Therefore, advising
a client on it cannot trigger a breach of the
general prohibition under section 19 of the
Financial Services and Markets Act (FSMA) 2000.
Q2. A solicitor assists an executor in transferring
ordinary corporate shares from a deceased
person's estate to a named beneficiary. Which
article of the Regulated Activities Order (RAO)
identifies these shares as a Specified
Investment?
A) Article 25
B) Article 53
C) Article 76
D) Article 85
Answer: C
Rationale: Article 76 of the Regulated Activities
Order (RAO) explicitly defines corporate shares
(ordinary or preference) as a "Specified
Investment." Articles 25 and 53 cover specified
activities (arranging and advising), not
investments.
,Q3. While managing a corporate restructuring, a
solicitor advises a company director to sell their
specific shareholding in a competitor to avoid a
conflict of interest. What specific activity under
the RAO has been performed?
A) Article 21 (Dealing in investments as principal)
B) Article 25 (Arranging deals in investments)
C) Article 53 (Advising on investments)
D) Article 64 (Agreeing to carry on a regulated
activity)
Answer: C
Rationale: Article 53 of the RAO regulates the
activity of providing advice to a person in their
capacity as an investor or potential investor on
the merits of buying or selling a specific
investment (such as shares).
Q4. A solicitor introduces a client to an
independent financial advisor (IFA) without
making any further arrangements or receiving a
financial kickback. Has the solicitor conducted a
regulated activity under Article 25 RAO?
A) Yes, because any introduction to an IFA is
regulated.
B) No, because a mere introduction that does not
facilitate the transaction itself does not constitute
, "arranging" under Article 25.
C) Yes, because the solicitor is acting in a
professional capacity.
D) No, because the introduction was made
completely free of charge.
Answer: B
Rationale: A simple introduction does not satisfy
the statutory threshold for "arranging" under
Article 25 RAO unless it directly brings about the
transaction or assists in its execution.
Q5. To rely on the s.327 FSMA exemption for
Designated Professional Bodies (DPB), what
core condition must the solicitor's firm satisfy
regarding the financial services provided?
A) The firm must hold an independent FCA license.
B) The financial service must be separate from any
legal matter.
C) The financial service must be strictly incidental to
the provision of comprehensive legal services to that
specific client.
D) The firm must not hold any client money.
Answer: C
Rationale: Section 327 of FSMA 2000 provides an
exemption for professional firms regulated by a
Designated Professional Body (like the SRA)
BUSINESS SKILLS EXAM CRAM BANK
– 100% PASS RATE GUIDE
This premium, high-yield study bank delivers distinction-level
practice questions meticulously structured for the open-book
exam format. It provides instant answers and exhaustive, step-by-
step statutory rationales spanning SRA Accounts Rules, RAO
articles, and business accounting ratios. It serves as the ultimate
digital cheat sheet to help law students spot compliance breaches,
execute financial calculations, and secure a top grade.
📘 Module 1: FSMA, RAO, & Regulated Financial
Activities (Questions 1–15)
Q1. A commercial client asks a corporate
solicitor to review an investment portfolio
consisting entirely of physical commercial real
estate property. Does this advice trigger the
General Prohibition under s.19 FSMA 2000?
A) Yes, because real estate is an investment.
B) Yes, because advising on any commercial asset
is regulated.
C) No, because real estate property is not a
Specified Investment under the RAO.
D) No, because the advice is given in the course of
,legal business.
Answer: C
Rationale: Under the Regulated Activities Order
(RAO), physical property or land is not classified
as a "Specified Investment." Therefore, advising
a client on it cannot trigger a breach of the
general prohibition under section 19 of the
Financial Services and Markets Act (FSMA) 2000.
Q2. A solicitor assists an executor in transferring
ordinary corporate shares from a deceased
person's estate to a named beneficiary. Which
article of the Regulated Activities Order (RAO)
identifies these shares as a Specified
Investment?
A) Article 25
B) Article 53
C) Article 76
D) Article 85
Answer: C
Rationale: Article 76 of the Regulated Activities
Order (RAO) explicitly defines corporate shares
(ordinary or preference) as a "Specified
Investment." Articles 25 and 53 cover specified
activities (arranging and advising), not
investments.
,Q3. While managing a corporate restructuring, a
solicitor advises a company director to sell their
specific shareholding in a competitor to avoid a
conflict of interest. What specific activity under
the RAO has been performed?
A) Article 21 (Dealing in investments as principal)
B) Article 25 (Arranging deals in investments)
C) Article 53 (Advising on investments)
D) Article 64 (Agreeing to carry on a regulated
activity)
Answer: C
Rationale: Article 53 of the RAO regulates the
activity of providing advice to a person in their
capacity as an investor or potential investor on
the merits of buying or selling a specific
investment (such as shares).
Q4. A solicitor introduces a client to an
independent financial advisor (IFA) without
making any further arrangements or receiving a
financial kickback. Has the solicitor conducted a
regulated activity under Article 25 RAO?
A) Yes, because any introduction to an IFA is
regulated.
B) No, because a mere introduction that does not
facilitate the transaction itself does not constitute
, "arranging" under Article 25.
C) Yes, because the solicitor is acting in a
professional capacity.
D) No, because the introduction was made
completely free of charge.
Answer: B
Rationale: A simple introduction does not satisfy
the statutory threshold for "arranging" under
Article 25 RAO unless it directly brings about the
transaction or assists in its execution.
Q5. To rely on the s.327 FSMA exemption for
Designated Professional Bodies (DPB), what
core condition must the solicitor's firm satisfy
regarding the financial services provided?
A) The firm must hold an independent FCA license.
B) The financial service must be separate from any
legal matter.
C) The financial service must be strictly incidental to
the provision of comprehensive legal services to that
specific client.
D) The firm must not hold any client money.
Answer: C
Rationale: Section 327 of FSMA 2000 provides an
exemption for professional firms regulated by a
Designated Professional Body (like the SRA)
