Topic 17 Flashcards
The Financial Conduct Authority’s single strategic objective is to:
A. govern organisations that manage investments on behalf of other people.
B. ensure that relevant markets work well so that customers get a fair deal.
C. regulate the marketing and sale of all life assurance products.
D. oversee the administration of all types of investment business.
B. ensure that relevant markets work well so that customers get a fair deal.
Individuals who are allowed to carry out certain functions in relation to a firm’s regulated activities are often referred to as:
A. authorised persons
B. approved persons
C. appointed persons
D. appropriate persons
B. approved persons
The second key Principle of Business as defined by the regulator is that firms must act with skill, care and:
A. control
B. integrity
C. diligence
D. honesty
C. diligence
A situation where individuals use information about a company that is not generally available to deal for their own financial advantage’ is a definition of:
A. insider dealing
B. best execution
C. market manipulation
D. money laundering
A. insider dealing
When did mortgages become regulated?
A. October 2004
B. January 2005
C. April 2006
D. June 1998
A. October 2004
Which of the following is NOT one of the FCA’s operational objectives?
A. Reducing the scope for financial crime
B. Protecting and enhancing the integrity of the UK financial system
C. Protecting competition in the interests of consumers
D. Securing an appropriate degree of protection for consumers
A. Reducing the scope for financial crime
Which one of the following is NOT one of the Financial Conduct Authority’s Principles for Business with which a firm must comply?
A. Conduct its business with integrity
B. Communicate with customers in a clear manner
C. Observe proper standards of market conduct
D. Maintain an independent compliance function
D. Maintain an independent compliance function
Knowingly giving out false information to influence the price of shares for personal gain is known as:
A. money laundering
B. market manipulation
C. best execution
D. insider dealing
B. market manipulation
In seeking to promote competition, the FCA uses its power to ensure all of the following except which of the following:
A. customers are engaged to drive competition
B. there are no undue barriers preventing new providers from entering the market
C. offering ‘light touch’ regulation for providers that show a strong record in product innovation
D. preventing any single firm from dominating the market
C. offering ‘light touch’ regulation for providers that show a strong record in product innovation
What was the main driver for the Financial Services and Markets Act 2000?
A. Increasingly high levels of fraud
B. The lack of compliance within the banking industry
C. Lack of consumer confidence in existing provisions
D. The need for integrated legislation and regulation
D. The need for integrated legislation and regulation
One of the operational objectives of the Financial Conduct Authority is to:
A. oversee the activities of financial organisations such as clearing houses, the London Stock Exchange and Lloyd’s.
B. provide appropriate customer protection.
C. regulate mortgage lending and enforce the Mortgage Code.
D. maintain market confidence and recommend suitable investments.
B. provide appropriate customer protection.
Who has prudential responsibility for deposit takers and insurers?
A. Financial Policy Committee
B. Financial Conduct Authority
C. Financial Services Authority
D. Prudential Regulatory Authority
D. Prudential Regulatory Authority
There are three main areas of financial crime that the FCA seeks to control. Which one of the following is the exception?
A. Mis-selling investments
B. Money laundering
C. Fraud and dishonesty
D. Criminal market conduct
A. Mis-selling investments
The FCA has powers under the Competition Act 1998 and the Enterprise Act 2002, meaning in respect of competition, it is a concurrent regulator with the:
A. Competition Commission
B. Office of Fair Trading
C. PRA
D. Competition and Markets Authority
D. Competition and Markets Authority
Which one of the following contained within the FCA Handbook is binding on authorised firms?
A. Rules
B. Guidelines
C. Standards
D. Procedures
A. Rules
In which sourcebook does the FCA Handbook cover standards for stockbrokers and financial market traders?
A. Interim Prudential
B. Market Conduct
C. Specialist
D. Redress
B. Market Conduct
Which one of the following BEST describes the reason why the Financial Services and Markets Act 2000 was introduced?
A. The existing regulatory structure was too fragmented
B. It was necessary to make the Treasury the main authorising body
C. The existing regulatory structure was too bureaucratic
D. It was necessary to make the Home Office the main authorising body
A. The existing regulatory structure was too fragmented
Which one of the following is NOT covered by the Financial Conduct Authority’s Principles for Business?
A. A firm’s relations with its regulators
B. The protection of customers’ assets
C. Guidelines on financial promotions
D. Maintenance of adequate financial resources
C. Guidelines on financial promotions
In relation to how a firm deals with its regulator, which one of the following is NOT defined within the Principles of Business? A firm must:
A. deal with its regulators in an open way
B. disclose appropriate data to its regulator
C. deal with its regulators in a co-operative way
D. disclose data on a regular basis to its regulator
D. disclose data on a regular basis to its regulator
Which of the following is NOT one of the Financial Conduct Authority’s Principles of Business with which a firm must comply?
A. Be open and honest with the market in all respects
B. Communicate with clients in a clear manner
C. Conduct business with integrity
D. Observe proper standards of market conduct
A. Be open and honest with the market in all respects
The FCA considers that responsibility for the fair treatment of consumers lies with which of the following?
A. A firm’s advisers
B. A firm’s senior management
C. All employees
D. Operational managers
B. A firm’s senior management
In which sourcebook does the FCA Handbook cover investor complaints and compensation?
A. Interim Prudential
B. Market Conduct
C. Specialist
D. Redress
D. Redress
