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RO1 - Mock Exam guide > Learning outcome 5 > Flashcards

Learning outcome 5 Flashcards

1
Q
  1. 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

A

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2
Q
  1. The Financial Conduct Authority’s strategic objective is to
    A. ensure that the relevant markets function well.
    B. increase consumer protection for financial products and investments.
    C. reduce financial crime.
    D. work with the Bank of England to increase financial stability.
A

A

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3
Q
  1. 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

A

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4
Q
  1. 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.
A

B

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5
Q
  1. What is the maximum term of imprisonment which may be imposed, if any, on an individual who is
    found guilty of insider dealing?
    A. One year.
    B. Five years.
    C. Seven years.
    D. Unlimited.
A

C

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6
Q
  1. 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.
A

D

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7
Q
  1. A financial adviser is suspected of financial mis-conduct in relation to her regulated activities. How
    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.
A

D

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8
Q
  1. How is an authorised firm affected by the Financial Conduct Authority’s fair treatment of customers
    requirements?
    A. They must be evidenced in all areas of the firm.
    B. They only apply to customer-facing staff.
    C. They only apply to senior management.
    D. They only apply to investment-related business.
A

A

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9
Q
  1. In the Prudential Standards section of the combined handbook of the Financial Conduct Authority
    Handbook and the Prudential Regulation Authority, which type(s) of firm are covered by the MIPRU
    requirements?
    A. All authorised firms.
    B. Discretionary fund managers only.
    C. Administrators, home finance providers, intermediaries, and general insurance intermediaries
    only.
    D. Investment management firms only.
A

C

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10
Q
  1. The rules in section 12 of the Prudential Sourcebook for Banks, Building Societies and Investment
    Firms (BIPRU), are primarily aimed at dealing with the issues of
    A. liquidity and the management of liquidity issues.
    B. money laundering responsibilities.
    C. professional indemnity insurance requirements.
    D. training and competence requirements.
A

A

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11
Q
  1. Gavin, a financial adviser, has sold a payment protection insurance contract to his client. In respect
    of this sale, he should be aware that the sale is
    A. not regulated.
    B. regulated by the provisions of the Insurance: Conduct of Business sourcebook (ICOBS).
    C. regulated by the provisions of the Mortgages and Home Finance: Conduct of Business
    Sourcebook (MCOB).
    D. regulated by the provisions of the Financial Services Act 2012.
A

B

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12
Q
  1. A financial adviser may transact business without the prior existence of a client agreement when
    A. the client is a retail client.
    B. a stakeholder pension is being effected.
    C. risk warnings are not required.
    D. the business is transacted by telephone.
A

D

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13
Q
  1. The client’s best interests rule applies to
    A. all types of client except those transacting execution-only business.
    B. retail clients only.
    C. execution-only clients only.
    D. eligible counterparties only.
A

A

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14
Q
  1. An independent financial adviser is comparing free asset ratios. This is most likely to be because
    she is
    A. considering a with-profits investment.
    B. completing her six-monthly Financial Conduct Authority return.
    C. compiling complaints data.
    D. seeking to comply with data protection requirements.
A

A

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15
Q
  1. An authorised firm holding client money for designated investment purposes must carry out a
    reconciliation of client bank account records at least once
    A. every business day.
    B. every two business days.
    C. per week.
    D. per month.
A

A

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16
Q
  1. In an authorised firm, the services of a nominee company are being used. This would typically be
    to
    A. protect the assets of a client.
    B. increase the returns on an investment or deposit.
    C. reduce the level of client fees charged.
    D. comply with Data Protection legislation.
A

A

17
Q
  1. What is the maximum financial penalty, if any, that the Financial Conduct Authority can impose on
    an authorised advisory firm engaging in misleading conduct?
    A. No financial penalties may be imposed.
    B. £5,000,000
    C. £10,000,000
    D. There is no upper limit.
A

D

18
Q
  1. Which authorised firms undertaking financial advice activities in the UK are exempt from the
    Financial Conduct Authority’s Training and Competence Rules?
    A. Building societies only.
    B. General insurance intermediaries only.
    C. Discretionary fund managers.
    D. Non-UK-domiciled firms only.
A

D

19
Q
  1. Danny is employed as a financial adviser by an appointed representative of an authorised firm.
    With whom does the primary responsibility for assessing Danny’s continuing competency lie?
    A. Both Danny and the appointed representative.
    B. Both the authorised firm and the appointed representative.
    C. The appointed representative only.
    D. The authorised firm only.
A

D

20
Q
  1. Following the cessation of her employment, for how long must training and competence records be
    kept in respect of an employee engaged in retail investment mediation only under MiFID II rules?
    A. One year.
    B. Three years.
    C. Five years.
    D. Indefinitely.
A

C

21
Q
  1. Patrick has recently left an authorised firm where he advised on pension transfers. For what
    minimum period, if any, must the firm retain his training records?
    A. Three years.
    B. Five years.
    C. Seven years.
    D. Indefinitely.
A

D

22
Q
  1. How, if at all, does being made bankrupt affect an individual in terms of being fit and proper to give financial advice that is regulated by the Financial Conduct Authority (FCA)?
    A. Bankrupt individuals cannot give regulated advice in any circumstances.
    B. Bankrupt individuals can always give regulated advice, but cannot have any oversight responsibilities.
    C. Bankruptcy has no impact if a person is already authorised.
    D. Bankruptcy would not automatically preclude an individual from giving advice and each case is individually assessed by the FCA.
A

D

23
Q
  1. By what latest point must an authorised firm satisfy itself that a new employee meets the Financial
    Conduct Authority’s fit and proper criteria?
    A. On receipt of a completed job application form.
    B. Before the start date.
    C. Within 3 months of the start date.
    D. Within 12 months of the start date.
A

B

24
Q
  1. Martin has recently become a trainee financial adviser for the first time, although he has no financial services qualifications. In what circumstances, if any, may he be allowed to provide advice
    to clients without supervision?
    A. In no circumstances.
    B. Only when advising existing clients of the firm.
    C. Only when providing advice and recommendations for auto-enrolment scheme provision.
    D. Only when conducting execution-only business.
A

A

25
Q
  1. In relation to enforcement action against an authorised firm, the main options open to the Financial
    Conduct Authority are
    A. civil proceedings and criminal proceedings only.
    B. disciplinary action and civil proceedings only.
    C. disciplinary action and criminal proceedings only.
    D. disciplinary action, civil proceedings and criminal proceedings.
A

D

26
Q
  1. 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.
A

C

27
Q
  1. A director of a publicly-quoted company has been found guilty of insider dealing and misconduct.
    What is the maximum fine, if any, that may be imposed?
    A. £250,000
    B. £500,000
    C. £1,000,000
    D. Unlimited.
A

D

28
Q
  1. 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.
A

B

RO1 - Mock Exam guide (11 decks)

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