Chapter 3 Book test Flashcards
The financial Policy Committee (FPC) is responsible for which of the following?
a) Monetary policy
b) prudential regulations of banks
c) Conduct regulation of financial firms
d) Marco-prudential policy
d) Marco-prudential policy is responsible for FPC
the prudential regulation authority (PRA) is responsible for prudential regulation of banks.
The financial Conduct Authority (FCA) is responsible for regulating the conduct of financial firms
the Bank of England (boE) is responsible for monetary policy
which one of the following investments is not regulated investment under the regulated activities order
a) land
b) traded options
c) Commodity futures
d) Gilt-edged securities
A) physical investments such as land are not regulated investments
The competitions and markets Authority (CMA) has a duty to investigate all mergers where the target company has a UK turnover exceeding:
a) £30m
b)£50m
c)£70m
d)£100m
c)£70m
A company seeking to take over a target company needs to acquire what percentage of the target company’s shares before it can force the minority shareholders in the target company to sell their shares ?
a) 50%
b)70%
c)75%
d)90%
d) 90%
once an acquiring company has acquired 90% or more of a target company’s shares, it can force the remaining shareholder to sell
the Sccorlotti trust fund is governed by the trsutee Act 2000. which of the following types of investments is the fund permitted to investment in?
i) uk growth unit trust unit
ii)commercail property
iii) gilt edged securities
a) i and ii only
b) i and iii only
c)ii and iii only
d) i, ii and iii
d)
the trustee act 2000 is relatively permissive and allows a fund governed by it t invest in most asset classes, including land and property
The Financial Conduct Authority (FCA) principles for business (PRIN) apply to:
a) appointed representatives only
b)banks only
c)Invesment firm only
d) All FCA authorities person
d) All FCA authorities person
the FCA PRIN apply to all FCA-regulated firms and set out the fundamental principles under which all FCA-regulated firm are expected to operate
A large undertaking with asset valued at £20m and with own funds of £5m approaches a firm for investment advice. under which one of the following categories would this client normally be classed?
a) A retail client
b) a professional client
c) an eligible counterparty
d) an exempted person
b) a professional client
a large undertaking meeting two of the following size requriments on a compnay basis would be classed as per se profeesional client;
- balance sheet total of £20m
- net turnover of £40m
- own funds of £2m
when a finnaical protion aimed at retial clients uses comparison with other products, the coparison should be;
i) meaningful
ii) balanced
iii) sourced
a) i) only
b) i and ii only
c) i and iii onlu
d) i, ii and iii only
d) i, ii and iii only
for promotions aimed at retail clients, all three characteristics are important
the requirement to assess to suitability of a client is for which type of investment services.
i) Investment advice
ii) discretionary portfolio management
iii) derivates business
a) i only
b) i and ii only
c) i and iii only
d) i, ii and iii only
b) i and ii only
investment advice and discretionary portfolio management require an assessment of suitability.
Derivatives business would normally be classed as complex business and, if the transactions are entrusted by the client on a non-advised basis, would require a test of appropriateness
which one of the following is not classed as a packaged product?
a) personal pension
b) life policy
c) gilt-edged security
d) units in an authorised unit trust
c) gilt-edged security
gilt - edged security is an original security and therefore cannot be a packaged product
under which circumstances is a firm that is holding client moeny able to hold this in the firm’s own bank account?
a) where it holds the money for a peroid of less than two weeks
b) where it can demonstrated it earns a better rate of interest
c) where the account is held with one of the UK clearing banks
d) where the firm can demonstrate compliance with the alternative approach
d) where the firm can demonstrate compliance with the alternative approach
a firm is not permitted to hold client money in one its own account unless it can demonstrate compliance with the alternative approach
which of the following Acts of Pariament makes it easier to recover funds from someone who has evaded tax?
a) the criminal justice Act 1993
b) the UK Criminal finances Act 2017
c) the UK bribery Act 2010
d) the enterprise and regulatory reform Act 2013
b) the UK Criminal finances Act 2017
the UK Criminal Finances Act 2017 targets corruption, money laundering and tax evasion. it aims to make it easier to seize funds obtained through criminal means
under which one of the following circumstances is a firm not required to provide immediate confirmation to a customer
a) a one-off transaction in an authorized unit trust
b) a one-off transaction in a share
c)a one- off transaction in a share relating to a discretionary management agreement
d) a one- off transaction in a gilt-edge security
c)a one- off transaction in a share relating to a discretionary management agreement
one-off transaction as part of a discretionary management agreement do not have to be immediately confirmed to the client
if an investment firm receives a complaint from a customer and is unable to settle it to the satisfaction of the customer, after what period of time can the customer take up the matter with the Financial Ombudsman
a) 2 weeks
b) 4 weeks
c) 6 weeks
d) 8 weeks
d) 8 weeks
Which of the following types of dealing is/are covered by the insider dealing provisions of the Criminal Justice Act 1993?
i) dealing in ICE futures Europe (IFE) traded options
ii) Underwriting of a share issue by a professional intermediary
iii) A placing of new shares by a professional intermediary
a) i only
b) i and ii only
c) ii and iii only
d) i, ii and iii
d) the financial conduct authority (FCA)
all of the categories are covered by insider dealing regulations
