NZFMA Bridging Test Questions with Correct Answers

NZFMA Bridging Test Questions with Correct Answers Can FO input information in the processing or settlement of transactions? - Answers Yes What are the broker conduct obligations - Answers § exercise competence that a reasonable broker would exercise in the same circumstances § No misleading or deceptive conduct § Don't advertise in a way that is misleading, deceptive or confusing § Not to receive client money or client property for the acquisition of a product if that product is not legal Is a a call debt security a cat 2 product? - Answers yes it is What can a RFA provide? - Answers Can provide personalised service to retail clients on cat 2 products Class service other than DIMS to retail clients Financial advisor service to wholesale clients QFE requirements pre and ongoing? - Answers Disclosures pre personalised services Conduct and care Ongoing compliance Advisor business statement To give digital advice you must - Answers FMA approved exemption Reg'ed fspr Approved dispute scheme What must the QFE disclosure obligation contain? - Answers Name of QFE Address, tel and email Info on disputes process Contact details of disputes scheme If other services are provided: Nature of service Approvee of said service Every other matter req. to be disclosed as a condition of QFA Required disclosures by other financial advisers (not QFE) - Answers The required formcovers the following: · Contact details of the adviser · Sections titled: o It's important that you read this o What sort of adviser am I? o What should you do if something goes wrong? o How am I regulated A form of declaration to be signed by the adviser Personalised service via phone disclosure requirements - Answers Must orally disclose: What type of adviser they are (RFA, AFA, QFE) Adviser belongs to approved dispute resolution scheme name of scheme any other discl. required by T&C of licence That the adviser will provide the client with full disclosure if required Penalties for breach of disclosure obligation - Answers FMA may give the advisor direction which could be: · Comply with the disclosure · List steps the advisor must take in order to comply · Require the advisor to report how and when the direction will be implemented Failure to comply = fine of up to $5000 A person who knowingly or recklessly breaches = fine of up to $100,000 for individuals and $300,000 for firms Conduct obligations that apply to all advisors - Answers Exercise reasonable care, diligence and skill that a reasonable financial adviser would exercise in the same circumstances, taking into account · Nature and requirements of client / clients · Nature and circumstances of the service provided · Type of advisor Do not be misleading or deceptive Do not advertise your service in a way that is misleading deceptive or confusing AFA conduct obligations - Answers · Comply with code of prof. conduct for AFA's · Not recommend illegal products · When providing DIMS: o Act honestly o Act in best interests of the client o Exercise the care, diligence and skill that a competent person would o Not use information gained through service to gain improper advantage or disadvantage the client o Ensure a client agreement and investment authority for the personalised DIMS is in place o To ensure that client money and property is held on behalf of client by something that meets the custodian requirements of the FA Act Comply with T&C of their authorisation Report breaches to the FMA QFE conduct obligations - Answers Comply with T&C of their authorisation No misleading or deceptive conduct Do not advertise service in misleading, deceptive or confusing manner Breaches of code for financial advisers penalties - Answers Financial advisers disciplinary committee may: · recommend that the FMA cancel or suspend the AFA's authorisation · censure the AFA · impose conditions on the provision of financial adviser services by the AFA · order that the AFA undertake training · order that the AFA pay a fine of up to $10,000. Disciplinary actions for new financial advice regime - Answers · Suspension, deregistration, ordering training or a fine of up to 10k · Nominated reps will not be subject to disciplinary action as advice is controlled by provider · Both may be liable if they intentionally contravene a duty in order to defraud a client