Conduct of Business

Question 1

What is the suitability test?

Answer 1

meets objectives
client can bear financial risk
client has necessary knowledge and experience

Question 2

Who do you send a suitability report to and what does it include?

Answer 2

retail clients - why firm believes the recommendation is suitable, must be provided in durable medium before the contract is concluded.

dont need one if to do with pre-exisitng/ friendly society or make a personal recommendation in connection to regulated CIS

Question 3

when is the appropriate test not required?

Answer 3

If professional client responds to direct offer, if service is just advising and managing, execution only deal, non complex financial instruments

Question 4

What is appropriate test?

Answer 4

same as suitability test without objective test

can bear financial risk? do they have knowledge and experience?

Question 5

What are the exceptions to the CASS rules?

Answer 5

ICVC and Ucits schemes
Incoming EEA firms (follow own cass rules)
BCD credit institution (as use reserve fractional banking)
Coins held for the value of their metal
money held for delivery vs payment (max 3 days)
money due to the fir

Question 6

If deposit banks discover a shortfall, how long must they rectify What does BCD stand for and what is it?

Answer 6

same dayBanking Consolidation Directive, basically for normal deposit taking banks

Question 7

How long do you have to keep data for on client assets?

Answer 7

mifid - 5 years
non mifid business - 3 years
pension transfers, opt ins/outs etc. - indefinitely (as risky non mifid business)
telephone communications - 6 months