NZFMA BRIDGING UPDATED FINAL EXAM
QUESTIONS AND CORRECT ANSWERS
Can FO input information in the processing or settlement of transactions? - CORRECT
ANSWERS Yes
What are the broker conduct obligations - CORRECT 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? - CORRECT ANSWERS yes it is
What can a RFA provide? - CORRECT 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? - CORRECT ANSWERS Disclosures pre personalised
services
Conduct and care
,Ongoing compliance
Advisor business statement
To give digital advice you must - CORRECT ANSWERS FMA approved exemption
Reg'ed fspr
Approved dispute scheme
What must the QFE disclosure obligation contain? - CORRECT 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) - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT ANSWERS · Suspension,
deregistration, ordering training or a fine of up to 10k
QUESTIONS AND CORRECT ANSWERS
Can FO input information in the processing or settlement of transactions? - CORRECT
ANSWERS Yes
What are the broker conduct obligations - CORRECT 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? - CORRECT ANSWERS yes it is
What can a RFA provide? - CORRECT 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? - CORRECT ANSWERS Disclosures pre personalised
services
Conduct and care
,Ongoing compliance
Advisor business statement
To give digital advice you must - CORRECT ANSWERS FMA approved exemption
Reg'ed fspr
Approved dispute scheme
What must the QFE disclosure obligation contain? - CORRECT 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) - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT ANSWERS · Suspension,
deregistration, ordering training or a fine of up to 10k
