Learning objective 5.1 Flashcards
20/21 Q35. The objective of the Money Advice Service in implementing the National Strategy for Financial Capability is to do so by primarily providing information to
A. any individual seeking information on financial products and debt advice.
B. individuals who do not have their own financial adviser.
C. those on low incomes who require debt advice.
D. younger people who do not hold any financial products.
A
20/21 Q36. The Financial Conduct Authority’s strategic objective is to
A - ensure that the relevant markets function well.
Just have to learn “The FCA’s strategic objective is to ensure that the relevant markets function well”
20/21 Q37. What is the main purpose of the stress-testing which the Financial Conduct Authority requires of certain authorised firms?
A. To assess firms’ ability to meet capital and liquidity levels during challenging economic circumstances.
B. To assess the impact on investors’ returns when stock markets are subject to volatility.
C. To measure firms’ levels of customer service when business volumes are high.
D. To test firms’ disaster recovery procedures in the event of loss of data.
A
20/21 Q38. In relation to breaches of the current Money Laundering and Terrorist Financing (Amendment) Regulations 2019, the Financial Conduct Authority (FCA) has the power to act against
A. any firms, but not individuals, regardless of whether they are on the FCA register.
B. any firms or individuals regardless of whether they are on the FCA register.
C. only firms on the FCA register.
D. only firms or individuals on the FCA register.
B
20/21 Q39. What is the maximum term of imprisonment which may be imposed, if any, on an individual who is found guilty of insider dealing?
C. Seven years
20/21 Q40. Following a breach of their rules, the Financial Conduct Authority has issued a public statement about a firm’s behaviour. The offence is most likely to have been
A. market manipulation.
B. insider dealing.
C. money laundering.
D. a significant failure in financial reporting.
D - These “most likely” questions are tricky, but the answer is D because the FCA at that point still don’t know what shady stuff the firm are up to so they feel it is proportionate to warn the public and other firms that they might be up to something.
20/21 Q41. A financial adviser is suspected of financial mis-conduct in relation to her regulated activities. Now may the Financial Conduct Authority deal with the matter?
A. It cannot deal with the matter directly and must instruct the Crown Prosecution Service.
B. It may deal with the matter using civil proceedings only.
C. It may deal with the matter using criminal proceedings only.
D. It may deal with the matter using civil or criminal proceedings
D
20/21 Q60. If the Financial Conduct Authority identifies an unfavourable trend in pension advice that may NOT be in the best interests of consumers, how is it most likely to react in the first instance?
A. Complete an immediate programme of inspections across all authorised firms.
B. Introduce a new minimum qualification level requirement for all pension advisers.
C. Issue a guidance statement to all authorised firms.
D. Temporarily prohibit all pension advice activities for authorised firms.
C
20/21 Q62. To assist in delivering the Financial Conduct Authority’s National Strategy for Financial Capability, the main role of the Money Advice Service is to provide consumers with
A. generic information on relevant product types, excluding regulated investments and debt advice.
B. generic information on relevant product types, including regulated investments and debt advice.
C. personalised recommendations on products of a limited number of providers, excluding regulated investments and debt advice.
D. personalised recommendations on products of a limited number of providers, including regulated investments and debt advice.
B - The Money Advice Service is not allowed to give personal recommendations, but they are allowed to give advice on regulated investments and debt management. I had assumed they weren’t allowed to give advice on investment but whatever
2021 mock paper Q34. The Prudential Regulation Authority (PRA) is part of which body?
A. The Bank of England
2021 mock paper Q35. Which of the following is one of the FCA's regulatory principles? A. Consumer protection B. Efficiency and economy C. Promoting competition D. Protecting financial markets
B - we know now that the three operational objectives are protect consumes protect financial markets promote competition which leaves one answer
2021 mock paper Q36. Which of the following factors does the FCA take into account when conducting a risk assessment for a regulated firm?
A. Geographical location and volume of transactions
B. Proximity of competitors and the average age of the client base
C. Average age of the client base and the type of products sold
D. Volume of transactions, type of products sold and the type of customer
D
2021 mock paper Q37. Which of the following could be a consequence of failing to monitor compliance adequately? A. Reduced income levels B. Move to a multi-tied basis C. Restrictions on business D. Unwelcome publicity
D - i guess it’s similar to failure to report things properly
2021 mock paper Q38. What is the minimum frequency a firm should test its capital adequacy?
C - every year
Just remember it
2021 mock paper Q39. The PRA divides the firms it supervises into categories of ‘potential impact’. How many categories are there?
A. 5
