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IOC - UK Financial Regulation > IOC - COBS and CASS > Flashcards

IOC - COBS and CASS Flashcards

1
Q 
When can a UK firm communicate a real time unsolicited financial promotions to an oversees client?
A: never
B: when it complies with UK COBs
C: when it complies with the host state
D: without any restriction
A

B

They can communicate with some restrictions - COBS must be followed

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2
Q

When will a authorised CIS get classified as a professional client?
A: turnover euro 40m and own funds of euro 2 m
B: turnover euro 40m and balance sheet of euro 15 m
C: it is always a professional client
D: it can never be a professional client

A

C

Its authorised

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3
Q

Which is always a per se professional client?
A: special purpose vehicle
B: a corporate body whose shares are lists
C: public authority

A

A

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4
Q

Which is most likely to have received a professional status via election?
A: local authority
B: national body that manages public debt
C: limited liability partnership
D: designated investment exchange

A

C

All others are per se

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5
Q

A professional or eligible client can be asked for recategorisation in which of the following cases? (Can be more than one)?
A: trade by trade basis
B: General all trades
C: on individual instrument classes
D: only available for complex financial instruments

A

A,b, c

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6
Q

A professional client can be assumed to have sufficient knowledge of:
A: risks in all designated investments
B: the risks involved with options
C: the risks involved in designated investments for which they are classed as professional
D: the risks involved with package products

A

C

Professional can be for a particular investment or transaction

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7
Q

A firm may treat a client as an elective professional client for non-MiFID business if:
A: the qualitative test alone is passed
B: the quantitative test alone is passed
C: both the quantitative and qualitative tests are passed
D: the qualitative test is passed and there is a statement that protection will be lost

A

D
Quantitative test is only used for MiFID business. The qualitative test and a statement of protection are always required.

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8
Q

If a firm is aware that Bob is acting as an agent for Bill, then bill will be the firms client if:
A: Bob and the firm have agreed in writing to treat bill as the client
B: bill and the firm have agreed in writing to treat bill as the client
C: Bill and Bob have agreed in writing that bill will be treated as a client
D: only if all three agree in writing

A

A

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9
Q

To who should a firm produce a document about compensation claims when carrying ok MiFID business?
A: to professional clients only
B: to retail and professional clients and eligible counter parties only
C: to retail clients only
D: to retail client and professional clients

A

D

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10
Q

Which would not be automatically given retail client protection:
A: a trustees with assets of 5m euros and funds of 1m euros
B: a listed company with funds of 2 m euros and assets of 25 m euros
C: a body corporate with net turnover of 30 m euros and assets of 1 m euros

A

B

Funds Greater than 2 m euros and assets greater than 20m euros is professional

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11
Q

What is client money if the firm is in possession of money that belongs to a client?
A: money as part of a transaction due for settlement within 1 business day
B: money is interest paid on any holidays of client money
C: if the money has been paid to the client or authorised representative of the client

A

B

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12
Q

The custody rules do not apply to DvP if which is met:
A: delivery due within one day or payment
B: delivery is due within 5 days of payment
C: delivery must occur simultaneously wit payment
D: custody rules always apply to DvP

A

A

DvP money can be held by a firm for up to 3 bus days before having to apply the custody rules

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13
Q

If during the reconciliation process discrepancies are notices, what must the firm do?
A: make up for the shortfall
B: notify the FCA by the end of the next business day

A

A

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14
Q 
Who does client money rules apply?
A: all clients
B: all customers 
C: retail only
D: professional clients only
A

A

Client = customer + eligible counterpart

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15
Q

When will a authorised CIS get classified as a professional client?
A: turnover euro 40m and own funds of euro 2 m
B: turnover euro 40m and balance sheet of euro 15 m
C: it is always a professional client
D: it can never be a professional client

A

C

Its authorised

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16
Q

Which is always a per se professional client?
A: special purpose vehicle
B: a corporate body whose shares are lists
C: public authority

A

A

17
Q

Which is most likely to have received a professional status via election?
A: local authority
B: national body that manages public debt
C: limited liability partnership
D: designated investment exchange

A

C

All others are per se

18
Q

A professional or eligible client can be asked for recategorisation in which of the following cases? (Can be more than one)?
A: trade by trade basis
B: General all trades
C: on individual instrument classes
D: only available for complex financial instruments

A

A,b, c

19
Q

A professional client can be assumed to have sufficient knowledge of:
A: risks in all designated investments
B: the risks involved with options
C: the risks involved in designated investments for which they are classed as professional
D: the risks involved with package products

A

C

Professional can be for a particular investment or transaction

20
Q

All are true for CASS except:
A: professional clients may opt out of client money protection providing they have given written consent and the firm has warned them of the risks
B: all client accounts must be reconciled on a daily basis
C: interest earned on client money need not be paid to clients

A

B
Reconciliation does not have to be daily.
The interest need not be paid on client money - only if the firm chooses to will the interest be client money

21
Q

The firm must keep client money segregated from:
A: money belonging to the firm
B: money belonging to the firm and eligible counterparties
C: the firm and other retail client money
D: the firm and all other client money

A

A

22
Q

All key feature documents must include information:
A: that the firm is passported under MiFID
B: explaining the cancellation procedure
C: commenting on the applicability of stakeholder pensions rather than the product covered
D: containing sufficient material such that a professional client is able to make an informed decision

A

B

23
Q

A firm provides services to many products. In which of the following situations would it need to prepare a key feature document (KFD)?
A: the client has previously received a KFD on the same product
B: the service relates to a unit with a simplified prospectus scheme
C: the client requires advice in a readily realisable share
D: the client wishes to open a cash deposit ISA

A

D

KFD is for packages products

24
Q 
When a firm discloses to a retail client their right to cancel an agreement to purchase units in an authorised unit trust?
A: before entering the agreement
B: after the agreement
C: before and after the agreement
D: either before or after the agreement
A

C
For non-distant contracts there is a cancellation period of 14 days. This must be notified in the KFD, before the client buys and in the confirmation after the client has bought

25
Q

For an authorised firm to assess the suitability transaction in MiFID business for an elective professional, the firm must assess:
A: investment objectives
B: investment objectives and financial situation
C: investment objectives, investment knowledge and experience
D: investment knowledge, experience, financial situation and investment objectives

A

B

Note, for a per se professional client the answer is A.

26
Q 
What sort of financial promotion clay a firm not approve on behalf of an unauthorised firm.
A: telephone
B: unsolicited mail shots
C: online advertising
D: tv and radio market
A

A

As they can’t approve non- written communication

27
Q 
Under RDR financial advisors must perform CPD. How many of these a year must be structured?
A: 10
B: 21
C: 35
D: 36
A

B

21 structured learning hours, 35 in total

28
Q

For a marketing campaign to retail clients, which case would the FCAs requirement for direct offers under COBS need to be fulfilled?
A: pure protection products such as insurance
B: a non-ISA cash deposit
C: an ISA cash deposit
D: a financial promotion subject to the takeover code

A

C

29
Q 
According to COBS, which of the following is not considered an execution venue?
A: marker maker
B: retail broker
C: multilateral trading facility
D: regulated market
A 
B
Liquidity providers (MMs) can be considered as execution venues

IOC - UK Financial Regulation (5 decks)

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