Special Regulatory Requirements

Question 1

The regulator of US derivatives exchanges is:

Answer 1

CFTC

Question 2

Which of the following is the purpose of assessing the suitability of an investment or service before doing business with a client?

Answer 2

To ensure that the client understands the risks and is financially able to bear them

Question 3

Which of the following is not true of the FCA’s treating customers fairly (TCF) initiative?

Answer 3

There are 11 outcomes that need to be achieved

Question 4

A client moves into physically delivered OTC traded commodity derivatives. Which of the following statements is true in relation to the application of MiFID?

Answer 4

MiFID will always apply

Question 5

Suitability needs to be applied in which of the following situations?

Answer 5

Advisory or discretionary management services

Question 6

Which of the following is the main US regulator for the futures markets?

Answer 6

CFTC

Question 7

In order to assess the suitability of a service or an investment a firm should first assess all of the following except:

Answer 7

The client’s success in previous trades

Question 8

Which of the following would not be permitted under CFTC Part 30?

Answer 8

A UK firm trading on behalf of a US client on a non-US exchange

Question 9

The SEC regulates which exchange?

Answer 9

CBOE

Question 10

Which act in the USA increased transparency and mandatory clearing of OTC transactions?

Answer 10

Dodd Frank Act

Question 11

What is the purpose of MiFID?

Answer 11

To cover passporting and outline the difference between home and host state regulations.

Question 12

Which of the below body is responsible for the conduct of a deposit taking institution?

Answer 12

FCA

Question 13

Who is the regulator of US stock indices?

Answer 13

SEC

Question 14

The transparency directive has been implemented to achieve all of the following, except:

Answer 14

To increase disclosures of periodic information of private companies

Question 15

Which of the below is false? EMIR introduced:

Answer 15

Clearing obligation for eligible exchange traded derivatives

Question 16

How are principles-based regulation best defined?

Answer 16

Use of high-level objectives that are binding on the firm

Question 17

What is the main purpose of the markets in financial instruments directive (MiFID)?

Answer 17

To bring EEA firms and markets under one regulatory process

Question 18

Which of the following is NOT taken into account when assessing the suitability of an investment for a client?

Answer 18

Whether the client has been categorised as a retail or professional client

Question 19

Which of the below is not a major role or aim of regulation?

Answer 19

Ensuring a financial firm is stable and does not go into liquidation

Question 20

Who regulates Single Stock Futures in US?

Answer 20

CFTC and SEC

Question 21

Who regulates the CBOE?

Answer 21

SEC

Question 22

Under the Commodities Futures Modernization Act 2000, who has the responsibility to regulate single stock futures?

Answer 22

SEC and CFTC

Question 23

Under CFTC Part 30, if a UK firm wishes to trade with a US client, it must:

Answer 23

Be accompanied by an NFA registered firm

Question 24

Which statement about the NFA is false?

Answer 24

They regulate all US exchanges

Question 25

The purpose of regulators around the world can be described by all of the following, except:

Answer 25

To impose high level standards on firms, but not prescriptive rules

Question 26

What is the objective of the EU transparency directive?

Answer 26

To establish minimum requirements on periodic financial reporting

Question 27

Which of the following describes the most important benefit of using a Trade Repository?

Answer 27

To provide a transparent record

Question 28

Which piece of legislation states that regulation of single stock futures should be a joint effort between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC)?

Answer 28

Commodities Futures Modernisation Act