FCA Mock Exam Questions With Correct
Answers
Which |of |the |following |does |not |have |any |rights |under |FSCS? |- |CORRECT |ANSWER✔✔-Authorized |
firm |with |respect |to |general |insurance.
- |A |retail |client, |trustee |of |scheme |with |assets |and |a |small |biz |with |regard |to |general |insurance |all |
have |rights
What |best |represents |FCA |view |on |industry |guidance? |- |CORRECT |ANSWER✔✔-The |FCA |will |not |
monitor |or |enforce |compliance |of |INDUSTRY |guidance |b/c |it |is |not |mandatory
Market |abuse |is |different |than |insider |dealing |in |all |of |the |following |ways |except? |- |CORRECT |
ANSWER✔✔-Market |abuse |is |based |on |civil |burden-balance |of |probabilities; |it |should |be |easier |for |
the |FCA |to |demonstrate |abusive |behavier; |and |it |can |be |applied |to |commodity |derivatives. |
It |is |not |true |that |it |should |be |easier |for |the |FCA |to |impose |a |custodial |sentence |as |only |FINES |can |be
|imposed.
What |best |reflects |the |firm |systematic |framework |(FSF) |of |FCA? |- |CORRECT |ANSWER✔✔-Risk-based |
approach
Proactive |Supervision |= |FSF |= |preventative |work |through |the |structured |conduct |assessment |of |firms. |
Event |driven |= |remedial/reactive |work |= |deals |with |problems |that |are |emerging |or |have |happened
Issues |and |Products |= |thematic |supervision/intensive |campaigns
Tools |= |Diagnostic; |Monitoring; |Preventative; |Remedial
,What |is |minimum |reflection |period |for |sale |of |life |or |pension |product |irrespective |of |whether |the |
firm |offers |advice? |- |CORRECT |ANSWER✔✔-30 |days |for |life |and |pension |products. |Firms |may |
voluntarily |offer |longer |periods |at |the |same |or |better |terms.
The |Collective |Investment |Scheme |Sourcebook |does |not |apply |to:
Depository |of |ICVC
Trustees |of |authorized |unit |trust
Director |of |investment |trust
Manager |of |an |authorized |unit |trust |- |CORRECT |ANSWER✔✔-Director |of |an |investment |trust
-Investment |companies |are |not |classified |as |a |CIS |and |therefore |not |covered |by |the |CIS |sourcebook
Which |is |responsibility |of |HOST:
Authorization |of |branch
COBS
Fitness |and |prop |of |firm |employees
Capital |adequacy |- |CORRECT |ANSWER✔✔-COBS |is |responsibility |of |HOST
- |A |firm |when |conducting |biz |in |another |EEA |state |under |MiFID |must |follow |HOST |COBS
The |Tax |and |Chancery |Chamber |of |the |Upper |Tribunal |is |operated |by? |- |CORRECT |ANSWER✔✔-A |
government |department
The |Tribunal |as |an |appeal |committee |is |independent |of |the |Regulator. |Run |by |Ministry |of |Justice.
To |which |do |COBS |apply:
Long |term |insurance |related |to |life |policy
Offering |car |breakdown |insurance
Credit |unions
Regulated |mortgages |- |CORRECT |ANSWER✔✔-Long |term |insurance |
,- |Insurance |is |DIB |and |rest |are |not
Under |FSMA |2000 |can |a |person |be |both |authorized |and |exempt |depending |on |activities? |- |CORRECT |
ANSWER✔✔-A |person |cannot |be |both |authorized |and |exempt |regardless |of |activities |at |the |same |
time. |
For |example, |a |firm |cannot |conduct |some |regulated |activities |as |an |authorized |person |and |others |in |
the |capacity |of |an |appointed |representative |of |another |firm.
Who |can |be |an |eligible |complainant |- |CORRECT |ANSWER✔✔-A |small |retail |customer
How |often |should |an |authorized |firm |report |to |the |FCA |re: |customer |complaints? |- |CORRECT |
ANSWER✔✔-Twice |a |year
Under |RDR |what |is |true |about |fees? |- |CORRECT |ANSWER✔✔-The |charge |can |be |ongoing |and |based |
on |a |percentage |of |the |funds |invested.
Advisors |must |move |to |fee-based |charging. |This |can |be |upfront |or |an |ongoing |fee |for |a |percentage |of
|funds |invested |(as |long |as |an |ongoing |service |is |provided). |Fees |should |be |itemied |and |disclosed |up |
front |and |based |on |service |not |on |product.
Which |is |client |money?
A |transaction |fee |due |the |firm
Money |deposited |in |an |approved |bank |account
Settlement |charge |due |the |firm
Money |held |in |excess |to |client's |obligations |- |CORRECT |ANSWER✔✔-Money |held |in |excess |to |client's |
obligations
Any |money |due |the |firm |is |not |client |money. |Approved |banks |do |not |need |to |treat |money |deposited |
with |them |as |client |money. |Where |a |firm |sells |assets |held |as |security |against |client |obligations, |the |
amount |equal |to |the |obligation |is |the |firm's |money. |However |anything |in |excess |of |this |obligation |has
|to |be |returned |to |the |client |or |treated |as |client |money.
, Which |is |always |a |specified |activity?
Acting |as |ccy |dealer
An |accountant |offering |investment |advice
Operating |a |stakeholder |pension |scheme
Acting |as |trustee |for |a |trust |- |CORRECT |ANSWER✔✔-Operating |a |stakeholder |pension |scheme
- |Currency |options |and |currency |futures |would |be |specified |but |not |spot |or |forward |deals. |
Accountant |offering |advice |will |not |be |specified |if |incindental. |Acting |as |a |trustee |is |not |specified |
provided |he |is |not |being |paid.
A |financial |advisor |makes |a |personal |recommendation |on |a |retail |investment |product |to |a |retail |
client. |When |would |he |NOT |send |suitability |report?
Transactions |in |a |reg |CIS
Surrender |of |stakeholder |pension
Making |withdrawals |on |short |term |annuity
Small |life |policy |from |friendly |society |- |CORRECT |ANSWER✔✔-Small |life |policy
Other |exclusions |are |recommendations |relating |to: |a |regulated |CIS |where |the |firm |is |acting |as |
investment |manager, |the |client |is |habitually |resident |outside |EEA, |increases |to |a |reg |premium |in |an |
exsiting |contract; |an |additional |single |contribution |to |a |product |where |a |single |contribution |had |
already |been |paid.
According |to |JMLSG, |how |long |must |client |verification |records |be |kept? |- |CORRECT |ANSWER✔✔-5 |
years |from |date |account |was |closed
Which |is |not |a |per |se |eligible |cpty?
Insurance |co
UCITS |scheme
Local |authority
Supranational |org |- |CORRECT |ANSWER✔✔-Local |authority
Answers
Which |of |the |following |does |not |have |any |rights |under |FSCS? |- |CORRECT |ANSWER✔✔-Authorized |
firm |with |respect |to |general |insurance.
- |A |retail |client, |trustee |of |scheme |with |assets |and |a |small |biz |with |regard |to |general |insurance |all |
have |rights
What |best |represents |FCA |view |on |industry |guidance? |- |CORRECT |ANSWER✔✔-The |FCA |will |not |
monitor |or |enforce |compliance |of |INDUSTRY |guidance |b/c |it |is |not |mandatory
Market |abuse |is |different |than |insider |dealing |in |all |of |the |following |ways |except? |- |CORRECT |
ANSWER✔✔-Market |abuse |is |based |on |civil |burden-balance |of |probabilities; |it |should |be |easier |for |
the |FCA |to |demonstrate |abusive |behavier; |and |it |can |be |applied |to |commodity |derivatives. |
It |is |not |true |that |it |should |be |easier |for |the |FCA |to |impose |a |custodial |sentence |as |only |FINES |can |be
|imposed.
What |best |reflects |the |firm |systematic |framework |(FSF) |of |FCA? |- |CORRECT |ANSWER✔✔-Risk-based |
approach
Proactive |Supervision |= |FSF |= |preventative |work |through |the |structured |conduct |assessment |of |firms. |
Event |driven |= |remedial/reactive |work |= |deals |with |problems |that |are |emerging |or |have |happened
Issues |and |Products |= |thematic |supervision/intensive |campaigns
Tools |= |Diagnostic; |Monitoring; |Preventative; |Remedial
,What |is |minimum |reflection |period |for |sale |of |life |or |pension |product |irrespective |of |whether |the |
firm |offers |advice? |- |CORRECT |ANSWER✔✔-30 |days |for |life |and |pension |products. |Firms |may |
voluntarily |offer |longer |periods |at |the |same |or |better |terms.
The |Collective |Investment |Scheme |Sourcebook |does |not |apply |to:
Depository |of |ICVC
Trustees |of |authorized |unit |trust
Director |of |investment |trust
Manager |of |an |authorized |unit |trust |- |CORRECT |ANSWER✔✔-Director |of |an |investment |trust
-Investment |companies |are |not |classified |as |a |CIS |and |therefore |not |covered |by |the |CIS |sourcebook
Which |is |responsibility |of |HOST:
Authorization |of |branch
COBS
Fitness |and |prop |of |firm |employees
Capital |adequacy |- |CORRECT |ANSWER✔✔-COBS |is |responsibility |of |HOST
- |A |firm |when |conducting |biz |in |another |EEA |state |under |MiFID |must |follow |HOST |COBS
The |Tax |and |Chancery |Chamber |of |the |Upper |Tribunal |is |operated |by? |- |CORRECT |ANSWER✔✔-A |
government |department
The |Tribunal |as |an |appeal |committee |is |independent |of |the |Regulator. |Run |by |Ministry |of |Justice.
To |which |do |COBS |apply:
Long |term |insurance |related |to |life |policy
Offering |car |breakdown |insurance
Credit |unions
Regulated |mortgages |- |CORRECT |ANSWER✔✔-Long |term |insurance |
,- |Insurance |is |DIB |and |rest |are |not
Under |FSMA |2000 |can |a |person |be |both |authorized |and |exempt |depending |on |activities? |- |CORRECT |
ANSWER✔✔-A |person |cannot |be |both |authorized |and |exempt |regardless |of |activities |at |the |same |
time. |
For |example, |a |firm |cannot |conduct |some |regulated |activities |as |an |authorized |person |and |others |in |
the |capacity |of |an |appointed |representative |of |another |firm.
Who |can |be |an |eligible |complainant |- |CORRECT |ANSWER✔✔-A |small |retail |customer
How |often |should |an |authorized |firm |report |to |the |FCA |re: |customer |complaints? |- |CORRECT |
ANSWER✔✔-Twice |a |year
Under |RDR |what |is |true |about |fees? |- |CORRECT |ANSWER✔✔-The |charge |can |be |ongoing |and |based |
on |a |percentage |of |the |funds |invested.
Advisors |must |move |to |fee-based |charging. |This |can |be |upfront |or |an |ongoing |fee |for |a |percentage |of
|funds |invested |(as |long |as |an |ongoing |service |is |provided). |Fees |should |be |itemied |and |disclosed |up |
front |and |based |on |service |not |on |product.
Which |is |client |money?
A |transaction |fee |due |the |firm
Money |deposited |in |an |approved |bank |account
Settlement |charge |due |the |firm
Money |held |in |excess |to |client's |obligations |- |CORRECT |ANSWER✔✔-Money |held |in |excess |to |client's |
obligations
Any |money |due |the |firm |is |not |client |money. |Approved |banks |do |not |need |to |treat |money |deposited |
with |them |as |client |money. |Where |a |firm |sells |assets |held |as |security |against |client |obligations, |the |
amount |equal |to |the |obligation |is |the |firm's |money. |However |anything |in |excess |of |this |obligation |has
|to |be |returned |to |the |client |or |treated |as |client |money.
, Which |is |always |a |specified |activity?
Acting |as |ccy |dealer
An |accountant |offering |investment |advice
Operating |a |stakeholder |pension |scheme
Acting |as |trustee |for |a |trust |- |CORRECT |ANSWER✔✔-Operating |a |stakeholder |pension |scheme
- |Currency |options |and |currency |futures |would |be |specified |but |not |spot |or |forward |deals. |
Accountant |offering |advice |will |not |be |specified |if |incindental. |Acting |as |a |trustee |is |not |specified |
provided |he |is |not |being |paid.
A |financial |advisor |makes |a |personal |recommendation |on |a |retail |investment |product |to |a |retail |
client. |When |would |he |NOT |send |suitability |report?
Transactions |in |a |reg |CIS
Surrender |of |stakeholder |pension
Making |withdrawals |on |short |term |annuity
Small |life |policy |from |friendly |society |- |CORRECT |ANSWER✔✔-Small |life |policy
Other |exclusions |are |recommendations |relating |to: |a |regulated |CIS |where |the |firm |is |acting |as |
investment |manager, |the |client |is |habitually |resident |outside |EEA, |increases |to |a |reg |premium |in |an |
exsiting |contract; |an |additional |single |contribution |to |a |product |where |a |single |contribution |had |
already |been |paid.
According |to |JMLSG, |how |long |must |client |verification |records |be |kept? |- |CORRECT |ANSWER✔✔-5 |
years |from |date |account |was |closed
Which |is |not |a |per |se |eligible |cpty?
Insurance |co
UCITS |scheme
Local |authority
Supranational |org |- |CORRECT |ANSWER✔✔-Local |authority
