Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CISI: UK Regulation 2.0 > Fitch: Incorrect Answers > Flashcards

Fitch: Incorrect Answers Flashcards

1
Q

Steve is a director within a broking firm. Under the general requirements in the Senior Manager Arrangements, Systems and Controls Sourcebook, the FCA would expect Steve to have which of the following characteristics?

A

He must be of good repute and sufficiently experienced

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Firm XYZ is an authorised person in the UK and communicates a promotion from Firm JKL, an authorised overseas person. Which of the following is TRUE?
A - There would be no compensation cover
B - As the promotion is being relayed through a UK firm the compensation scheme is available
C - The extent to which the compensation will or will not be available must be stated
D - The compensation cover follows home state rules

A

The extent to which the compensation will or will not be available must be stated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

To whom is the PRA directly accountable?

A

Court of the Bank of England

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Can a person be both authorised and exempt regardless of activities?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Which of the following is not a threshold condition for a firm seeking Part 4A permission under the Financial Services and Markets Act 2000?
A - Location of offices
B - Effective supervision
C - Market conduct
D - Appropriate resources

A

Market Conduct

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Are general insurance contracts subject to the FSCS?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Can an elective professional client be classed as an eligible counterparty?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

If, during the reconciliation process, discrepancies are noticed, which of the following must the firm do?

A

Make up for the shortfall themselves

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Under FCA rules on client categorisation, which of the following would ALWAYS be considered a per se professional client?
A -Special purpose vehicle
B - A public company
C - A public body
D - An overseas individual

A

SPV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

To whom do the client money rules apply?

which clients

A

All clients

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

When considering best execution criteria for a retail client, which of the following would NOT be considered when obtaining the best possible result?
A - The characteristics of the order
B - The characteristics of the investment
C - The costs incurred by the client payable to the firm
D - The costs incurred by the client payable to the execution venue

A

The costs incurred by the client payable to the firm

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

All of the following could be considered a professional client. Which of them is MOST LIKELY to have reached that status through election?
A - Local authority
B - National body that manages public debt
C - Limited liability partnership
D - Designated investment exchange

A

Local authority, as the others are per se pro client

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

In which of the following situations would the firm need to apply the client money rules? If the money……….

A

Is interest paid on any holdings of client money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

A website is a permissible method of communication with clients if which of the following criteria are met?

A

Providing the information in that medium is appropriate to the investment, service and client

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

When providing which of the following activities must a retail client be assessed for appropriate levels of knowledge by the firm?
A - An execution only share transaction
B - Executing a deal on an equity warrant
C - Recommending a foreign exchange spot transaction
D - Arranging a transaction on a corporate bond

A

Executing a deal on an equity warrant

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

To whom should a firm produce a document about compensation claims when carrying on MiFID business?

A

All clients

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Which of the following best describes the cancelation period offered to a client of the firm?

A

Compulsory for certain products

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What must the firm’s conflict of interest policy ensure?

A

All groups have sufficient guards on the information flow between each other

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

A firm is approached by an authorised collective investment scheme (CIS) in relation to designated investment business. Which of the following best represents the conditions under which the CIS will get classified as a professional client?

A

It is always a professional client

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Which of the following sets of information is not required in a direct offer financial promotion to a retail client?
A - The firm and its services
B - Costs and charges
C - Safekeeping of client money
D - Execution venues where trading will occur

Why?

A

Execution venues where trading will occur

This is in the order execution policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What information must always be included in a firm’s order execution policy for retail clients?

A

The process the firm uses to specify relative importance to execution factors

22
Q

The following are true of investment advertisements sent to retail clients except that they must

A

Not use any past performance data

23
Q

An analyst at an authorised firm makes a trade for their personal account in the units of a UCITS collective investment scheme. According to the FCA rules, how soon should they contact their compliance team to inform them of any increase in the number of units they hold?

A

There is no need if the analyst has no management relationship with the CIS

24
Q

A firm may treat a client as an elective professional client for non-MiFID business if:

A

The qualitative test is passed and there is a statement that protection will be lost

25
Q

With regard to financial promotions, the need to be ‘fair, clear and not misleading’ applies to:

A

Retail clients only

26
Q

In approving a financial promotion, who takes on responsibility for the promotion.

A

the approving firm takes on responsibility for the promotion

27
Q

Which of the CISI principles are mandatory?

A

The first 8

28
Q

The FCA has decided to discipline a firm or employee for a breach of a regulation. Which of the following notices are used to inform them?

A

Decision notice

29
Q

Is the “What happens if provider of the PRIIP is unable to pay out”, included in a KID?

A

Yes

30
Q

The main objective of the ‘Persons Discharging Managerial Responsibility’ (PDMR) regime is?

A

To ensure the LSE is perceived to be a fair and orderly market

31
Q

The FCA intend to take action against a firm for a breach of a rule. Which of the following will inform the firm of the action proposed?

A

A warning notice

32
Q

What best describes the relationship between the FCA, the PRA and the board of the Financial Services Compensation Scheme (FSCS)?

A

The Chairman of the board of the FSCS is appointed by the FCA

33
Q

Under the Securities Financing Transactions Regulation (SFTR) which of the following is true of the reporting obligations?
A - Securities financing transactions do not need to be reported
B - Securities financing transactions need to be reported at initiation only
C - Securities financing transactions need to be reported at initiation and for lifecycle events
D - Securities financing transactions need to be reported on a daily basis

A

C - Securities financing transactions need to be reported at initiation and for lifecycle events

34
Q

An authorised firm, acting on behalf of a client, has received an order to buy 5,000 shares in XYZ plc just before the market opens. The firm believes that the market will open with a sharp fall due to significant losses on the S&P 500 overnight. When should the firm execute the transaction?

A

The firm may delay execution if it believes it is in the best interests of the client

35
Q

Who performs the regulatory check of a mail-shot sent by an appointed representative?

A

The compliance department of the appointing firm

36
Q

Which of the following instruments is NOT within the scope of the Criminal Justice Act 1993 (Insider Dealing)?
A - Building Society share account
B - Warrant
C - Equity future
D - Gilt

Why?

A

A - Building Society share account

Not MiFID business

37
Q

Who is allowed to make a mass detriment reference?

A

The FOS and authorised firms

38
Q

What must the firm do when a specific instruction from a client would prevent a firm from following its order execution policy when carrying out the transaction?

A

Carry out the order as instructed

39
Q

What is the scope of the United Kingdom’s Bribery Act 2010?

A

Worldwide

40
Q

A retail client who is habitually resident overseas does not wish to be sent a basic agreement letter for insurance business. The firm should

A

Not send them a client agreement

41
Q

Does the FATF continuously revise its scope to adress new risks?

A

Yes

42
Q

Where a dual-regulated firm applies for Part 4A permission, which of the following threshold conditions is the sole responsibility of the Financial Conduct Authority?

A

Appropriate non-financial resources

43
Q

Which of the following is true with regard to the Training and Competence Sourcebook?
A - Authorised firms are only required to ensure that their approved persons are competent for their role in the firm B - FCA firm employees must have their competence regularly reviewed
C - Appropriate examinations must be obtained for relevant roles within three years of working in the financial services
D - All employees must take appropriate examinations

A

FCA firm employees must have their competence regularly reviewed

44
Q

An individual who is 24 years of age and earns £28,000 per annum was employed 8 months ago by a professional services firm. Today the firm auto-enrols them into the work-based pension. Under the Pensions Act of 2008, what is the employee’s entitlement in relation to employer’s missed contributions? The employee is:

A

Entitles to 100% of missed contributions

45
Q

What must be true of research to satisfy front running rule?

Who must the research be for?

A

Another party, if its is for the firms own use then it would be permitted.

46
Q

According to the FCA’s client money rules (CASS 7), which of the following is considered ‘client money’?
A - Money held by a firm as collateral for a client’s margin obligation
B - Money owed by the client to the firm
C - Money received by the firm from a client in relation to a proposed transaction
D - Money invested by the firm on behalf of the client

A

C - Money received by the firm from a client in relation to a proposed transaction

47
Q

Although a client provides a firm with specific instructions, the firm executes the trade in accordance with their own trade execution policy. What must the firm do?

A

Report itself to the FCA, as it is potentially in breach of regulations

48
Q

Assuming that the activity is to be performed in the UK, which of the following would require authorisation under s19 of the Financial Services and Markets Act 2000, the ‘General Prohibition’?

A - Dealing as principal for your own account
B - Arranging currency options
C - Dealing in commodities
D - Newspapers giving incidental investment advice

A

Arranging currency options

49
Q

Which of the following gives the FCA the power to prosecute insider dealing offences?

A

FSMA

50
Q

In the absence of agreement to the contrary, what must the firm do if a per se eligible counterparty asks to be subject to conduct of business protections?

Recategorise the client as what? What type of client?

A

A professional client

51
Q

Arthur has telephoned his financial advisor, asking them to post him a copy of the suitability report relating to a stakeholder pension they recommended to Arthur four years ago. To comply with consumer duty obligations and all other relevant regulations, what should the financial advisor do next?

A

Produce a paper copy of the report, and post this to Arthur’s home address

52
Q

Do certification functions need to be reviewed annually?

A

Yes

CISI: UK Regulation 2.0 (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions