Topic 21&22 Flashcards

1
Q

The suggested range of stakeholder-type products have a proposed level of charges limited to what MAXIMUM percentage for the first ten years?

A. 1%
B. 1.5%
C. 2%
D. 2.5%

A

B. 1.5%

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2
Q

James, who is taking out a mortgage that falls within FCA regulation, has just received his customer specific illustration. This means that he is at what stage of the mortgage application process.

A. He has received the mortgage offer

B. He has signed and returned the mortgage offer

C. He has not yet completed the mortgage application form

D. He has completed on the house purchase

A

C. He has not yet completed the mortgage application form

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3
Q

If a customer decides that they want to cancel their general insurance contract within the cooling off period, they must do so within:

A. 14 days
B. 7 days
C. 28 days
D. 30 days

A

A. 14 days

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4
Q

If a customer cancels their general insurance contract within the cooling off period, the insurance company must return any sums to it, within how many days?

A. 14 days
B. 30 days
C. 7 days
D. 28 days

A

B. 30 days

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5
Q

Chiara, a mortgage adviser, is assessing the suitability of a mortgage for her client. She will take into account all of the following except:

A. whether a mortgage is suitable for her client in the first place.

B. selecting the most appropriate property type for her client.

C. what type of mortgage product is suitable for the client.

D. selecting the best mortgage and provider to suit her client’s needs.

A

B. selecting the most appropriate property type for her client.

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6
Q

All of the following are arranging mortgages after October 2004. Which mortgage is NOT regulated by the Financial Conduct Authority?

A. Tony and Anne, who are joint borrowers

B. Malcolm and Paul, who are creating the mortgage in their capacity as trustees

C. John, who is a sole borrower

D. Paste It’ plc, which is a public limited company

A

D. Paste It’ plc, which is a public limited company

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7
Q

Philip, a mortgage adviser, has to satisfy additional training and competence requirements under Financial Conduct Authority regulation because he offers advice on:

A. further advances
B. buy-to-let mortgages
C. second charges
D. lifetime mortgages

A

D. lifetime mortgages

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8
Q

Which of the following statements is NOT true regarding the mortgage offer document?

A. It must contain details of the mortgage payments

B. It must state how long the offer is valid for and how the customer can withdraw from the contract once the mortgage has completed

C. It must be accompanied by an up-to-date tariff of charges

D. It must contain details of any fees associated with the mortgage.

A

B. It must state how long the offer is valid for and how the customer can withdraw from the contract once the mortgage has completed

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9
Q

Mortgage Brokers Ltd have just offered advice, post-October 2004, to a residential mortgage client and have NOT yet issued a suitability letter. This is permitted because:

A. suitability letters need to be issued for commercial mortgages only.

B. there is no Financial Conduct Authority requirement for the issuing of mortgage suitability letters.

C. suitability letters need only be issued on buy-to-let mortgages.

D. it is only necessary for a mortgage suitability letter to be issued after completion of the mortgage.

A

B. there is no Financial Conduct Authority requirement for the issuing of mortgage suitability letters.

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10
Q

Which of the following will not be included in an initial disclosure document?

A. Product recommendations
B. Complaints procedure
C. Name of the regulator
D. Services offered

A

A. Product recommendations

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11
Q

When MUST the Initial Disclosure Document be provided by a mortgage adviser?

A. At the start of the first meeting with a prospective client
B. As soon as regulated business is transacted
C. Within 14 days of the first meeting
D. As soon as the client requests it

A

A. At the start of the first meeting with a prospective client

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12
Q

Gary has found that the mortgage he is arranging post-October 2004, and which is secured by a first charge is NOT regulated by the Financial Conduct Authority. This is because:

A. he is using the mortgage to buy a property to as a commercial venture to let out to tenants.

B. the mortgage will be partly used to repay credit card debts.

C. he is using the mortgage to build an extension on his existing residential property.

D. the mortgage will be used to repay a more expensive mortgage on existing main residence.

A

A. he is using the mortgage to buy a property to as a commercial venture to let out to tenants.

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13
Q

The creation of stakeholder products outlined what KEY proposal for the industry?

A. The development of simple, low cost risk-controlled products that would appeal to the less financially sophisticated.

B. Tighter regulation of Occupational Pension Schemes.

C. The introduction of polarisation for financial advisers

D. Higher limits on the permitted Free Asset Ratio for Financial Services Companies

A

A. The development of simple, low cost risk-controlled products that would appeal to the less financially sophisticated.

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14
Q

Where MCOB rules apply to a residential mortgage, what minimum percentage of property must be occupied as a residence by the borrower?

A. 100%
B. 60%
C. 40%
D. 10%

A

C. 40%

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15
Q

Mortgage Advice Ltd has found that their primary method of obtaining new business is NOT permitted under Financial Conduct Authority regulation. This means that they must have been using which of the following methods?

A. Cold calling
B. Mortgage introducers
C. TV advertising
D. Radio advertising

A

A. Cold calling

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16
Q

In respect of mortgage advice, which of the following pieces of information is NOT required as part of the initial disclosures under MCOB 4?

A. Fees associated with the service
B. Arrears arrangements
C. Complaints and compensation details
D. The providers of mortgages under discussion

A

B. Arrears arrangements

17
Q

Pauline is offering mortgage advice to a client. Who is ultimately responsible for assuring that the mortgage is affordable?

A. Adviser
B. Adviser’s compliance department
C. Client
D. The lender

A

D. The lender

18
Q

Which of the following types of mortgage became regulated by the FCA under MCOB for the first time from March 2016?

A. Buy to let mortgages for consumers
B. Equity release
C. Home improvement loans
D. Lifetime mortgages

A

A. Buy to let mortgages for consumers

19
Q

A firm intends to make a series of cold calls to promote certain mortgage contracts. What rule applies?

A. A transcript of the call must be passed to the customer
B. Cold calls are not permitted
C. Extended cooling off periods will apply
D. Only existing clients can be approached

A

B. Cold calls are not permitted

20
Q

Which of the following is exempt from the provisions of the Consumer Credit Acts of 1974 and 2006?

A. A credit card with a limit of £5,000
B. A further advance for £20,000 for home improvements with the existing lender
C. An authorised overdraft for £18,000
D. An unsecured loan for £10,000

A

B. A further advance for £20,000 for home improvements with the existing lender

21
Q

The maximum size of loan, if any, regulated by the Consumer Credit Act is:

A. £15,000
B. £20,000
C. £25,000
D. unlimited

A

D. unlimited

22
Q

Ben, an adviser, is required under FCA rules to provide a key facts illustration (KFI) detailing the APRC to his client. This confirms that the client has expressed an interest in:

A. collective investment business
B. mortgage business
C. offshore business
D. protection business

A

B. mortgage business

23
Q

Jason is in the process of applying for a mortgage and he has just received a tariff of charges from the lender. What is the latest point in the process that he has reached?

A. Issue of the initial disclosure documentation
B. Pre application disclosure
C. Offer stage
D. Legal completion

A

C. Offer stage

24
Q

Which of the following must be included on all quotations for loans regulated under the Consumer Credit Act?

A. The annual percentage rate
B. The Bank of England base rate
C. The lender’s registered office address
D. The purpose of the loan

A

A. The annual percentage rate

25
Q

Jeremy and Sandra have an interest only mortgage and have received written advice to check the performance of their repayment vehicle. Under MCOB rules, this is most likely to have been issued by:

A. the FCA
B. the investment product provider
C. their financial adviser
D. their mortgage lender

A

D. their mortgage lender