Topic 18 Flashcards
The FCA rules insist that an organisation’s systems and controls are clearly documented. Which ONE of the following is also an FCA rule with regard to systems and controls?
A. They must be regularly reviewed
B. They must be notified to customers
C. They must be agreed by the FCA before implementation
D. They must meet an agreed industry standard
A. They must be regularly reviewed
Which statement BEST describes the relationship between the ‘fit and proper’ test and the Senior Managers and Certification Regime?
A. A ‘fit and proper’ test is recommended by the FCA for anyone applying for a senior management role.
B. A satisfactory ‘fit and proper’ test is necessary before an individual can be accepted for a senior management role.
C. The ‘fit and proper’ test is mainly designed to establish the creditworthiness of an approved person
D. The ‘fit and proper’ test relates solely to previous business activity in a controlled function
B. A satisfactory ‘fit and proper’ test is necessary before an individual can be accepted for a senior management role.
If the FCA discovers a contravention of its rules, one of the steps it may take is to vary a firm’s permissions. This means that:
A. the firm may have one of its regulated activities removed
B. the firm will be required to sell assets to provide restitution
C. the firm will need to seek authorisation from a different regulator
D. the firm will be required to submit each sale to the FSA for approval
A. the firm may have one of its regulated activities removed
Which one of the following areas is NOT included in the ‘fit and proper’ test required by the FCA?
A. Criminal record
B. Complaints received
C. Disqualification as a director
D. Previous levels of earning
D. Previous levels of earning
In the FCA Handbook there is a section on rules relating to arrangements, systems and controls within authorised firms. These rules:
A. detail the actual size, staffing structure and form which all firms’ control systems must take.
B. identify and categorise all the types of risks which firms are required to manage.
C. require directors and senior managers to take responsibility for the effective management of their firms.
D. state that all responsibilities relating to a firm’s control systems must only be delegated to the firm’s compliance officer.
C. require directors and senior managers to take responsibility for the effective management of their firms.
What is the FCA’s most severe disciplinary power?
A. Financial penalties
B. Withdrawal of authorisation
C. Public censure
D. Private warning
B. Withdrawal of authorisation
Which one of the following job applicants is LEAST likely to meet the FCA ‘fit and proper’ requirements?
A. Gill, who has recently been made redundant from a firm of independent financial advisers
B. Veronica, who has missed her last two mortgage payments following a divorce
C. Josie, whose father’s house was repossessed three years ago
D. Irene, who currently has an authorised overdraft limit of £2000
B. Veronica, who has missed her last two mortgage payments following a divorce
The FCA Training and Competence Sourcebook is PARTICULARLY prescriptive in relation to three groups of employees who are subject to detailed training and competence rules. These three groups include:
A. the company accountants, financial advisers and supervisors of certain ‘back office’ functions.
B. supervisors of certain ‘back office’ functions, clerical claims staff and supervisors of advisers.
C. financial advisers, supervisors of those advisers and supervisors of certain ‘back office’ functions.
D. supervisors of advisers, supervisors of certain ‘back office’ functions and clerical staff.
C. financial advisers, supervisors of those advisers and supervisors of certain ‘back office’ functions.
Training and competence records for an individual working for a non MIFID firm must be retained for a specified period after they have left the firm. This period is:
A. three years
B. five years
C. seven years
D. ten years
A. three years
Peter has almost completed his induction training with Haddon Bank, prior to taking up a position of trainee financial adviser. The FCA require that the training he receives is:
A. documented and retained for 12 months
B. evaluated to check its success
C. at least 50 hours per annum
D. carried out only by approved persons
B. evaluated to check its success
Simon has undergone his initial financial adviser training with Brighton Bank but has not yet passed an appropriate examination. Under what circumstances might he be allowed to advise customers about regulated products, if at all?
A. He may do so provided investments are below an agreed level
B. Under no circumstances can he offer advice to customers
C. He may do so provided he acts under appropriate supervision
D. If all advice is double-checked by a representative of the FCA
B. Under no circumstances can he offer advice to customers
Which of the following statements is FALSE in relation to Training and Competence regulation?
A. Firms must monitor continuing competence
B. Records of assessment criteria must be kept
C. All approved persons are subject to the detailed rules
D. Those subject to the rules may need to pass a detailed examination
C. All approved persons are subject to the detailed rules
Which one of the following areas is NOT specifically covered by the ‘Training and Competence’ requirements?
A. Practical Assessment
B. Initial training
C. Business production levels
D. Ongoing supervision of ‘competent’ advisors
C. Business production levels
Tom has been successful in his training as an authorised adviser. What happens next?
A. His continued competence will be monitored
B. He will have to complete 15 hours continuing professional development per annum
C. He will be required to take further examinations
D. His line-manager will draw up a development plan
A. His continued competence will be monitored
Which of the following group of company employees would NOT be subject to detailed rules of training and competence under the FCA’s Conduct of Business rules?
A. Directors
B. Back office supervisors
C. Investment advisers
D. Sellers of stakeholder pensions
A. Directors
