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RE5 - Chapter 1 Quiz
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Questions in this quiz (39)
1A CLIENT, AS DEFINED IN THE ACT, DOES NOT INCLUDE THE FOLLOWING;
- AThe client that concluded the original transaction
- BThe person who is a successor in title
- CThe beneficiary of the product
- DThe general public
2WHICH OF THE BELOW FROM PART OF THE TWIN PEAKS REGIME?
- AThe Financial Services Board and the Ombud for financial services
- BThe Financial Services Board and the Financial Services Conduct Authority
- CThe Prudential Authority and the Financial Services Conduct Authority
- DThe Prudential Authority and the Financial Services Board
3WHICH OF THE FOLLOWING PRODUCTS IS NOT GOVERNED IN TERMS OF THE FAIS ACT?
- ACheque Account
- BCredit life protection plan
- C32-day notice call account
- DInsurance on a bond
4WHICH SUBCATEGORY FROM THE LIST BELOW APPEARS ON CATEGORY I BUT NOT ON CATEGORY II?
- AShort-term Commercial Lines
- BParticipative interests in one or more collective investments
- CForex investment business
- DLong-term subcategory B1
5NO PROVIDER MAY ACT AS A FINANCIAL SERVICES PROVIDER UNLESS SUCH PROVIDER HAS;
- ABeen approved by the Compliance Institute of Southern Africa
- BBeen authorised by the Financial Sector Conduct Authority
- CBeen appointed by the Prudential Authority
- DBeen granted a license by the Financial Intelligence Centre
6RANGER (PTY) LTD. WOULD LIKE TO APPLY FOR AUTHORISATION AS A FINANCIAL SERVICES PROVIDER TO THE FSCA, WHICH DEPARTMENT WITHIN THE FSCA WILL DEAL WITH HIS APPLICATION FOR LICENSE?
- AThe Supervision Department
- BThe Enforcement Department
- CThe Registrations Department
- Dd) The licensing Department
7SELECT THE OPTION BELOW WHICH BEST DESCRIBES A CATEGORY IIA FINANCIAL SERVICES PROVIDER:
- AThis category of FSP provides intermediary services of a discretionary nature regarding hedge funds.
- BThis category of FSP renders intermediary services of a discretionary nature through the method of bulking. The category includes LISPs, for example.
- CThis category of FSP provides intermediary services of a discretionary nature, such as investment managers.
- DThis category of FSP renders intermediary service in relation to the administration of assistance policies (funeral policies).
8MPHO CONTACTS JOHN FOR MORE INFORMATION ON PREPARING FOR HIS RETIREMENT. JOHN EXPLAINS THE DIFFERENT RETIREMENT PRODUCTS TO MPHO AS WELL AS ADVISES HIM ON WHICH PRODUCTS WOULD BE BEST SUITED TO HIS NEEDS. WHAT TYPE OF FINANCIAL SERVICE DID JOHN PROVIDE?
- AJohn provided only factual information so this is not a financial service.
- BJohn provided only factual information but this could lead the client into making a financial decision so this is an intermediary service.
- CJohn provided advised on which products are suitable to Mpho’s needs which means that John provided financial advice.
- DJohn provided both an intermediary service and advice as factual information was provided as well as advice on the best products suitable.
9THE FAIS ACT WAS PROMULGATED ON WHICH DATE AND BECAME EFFECTIVE WHEN?
- AWas enacted in 2000 and became fully effective 31 October 2002.
- BWas enacted in 2002 and became fully effective30 September 2004.
- CWas enacted in 2002 and became fully effective 31 October 2004.
- DWas enacted in 2000 and became fully effective 30 September 2002.
10The FAIS Act aims to [blank_start]professionalize[blank_end] the financial services industry and to [blank_start]adequately protect consumers[blank_end], maintain [blank_start]trust[blank_end] In the industry and maintaining [blank_start]systematic stability[blank_end].
- Aprofessionalize
- Badequately protect consumers
- Ctrust
- Dsystematic stability
11THE ACT FOLLOWS A FUNCTIONAL APPROACH, MEANING THAT IT FOCUSES ON SPECIFIC INSTITUTIONS LIKE LOAN CREDIT GRANTORS REGISTERED UNDER NATIONAL CREDIT REGULATORS.
- ATrue
- BFalse
12GENERAL CODE OF CONDUCT
- AFor authorized financial services providers and representatives involved in Forex
Trade - BFor authorized financial services providers and representative
- CFor authorized financial services providers Administrative and Discretionary FSP’s
- DFor authorized financial services providers and Representative conducting Short-term Deposit Business.
- AFor authorized financial services providers and representatives involved in Forex
13FOREX INVESTMENT BUSINESS
- AFor authorized financial services providers and Representative conducting Short-term Deposit Business.
- BFor authorized financial services providers Administrative and Discretionary FSP’s
- CFor authorized financial services providers and representative
- DFor authorized financial services providers and representatives involved in Forex
Trade
14SPECIFIC CODE OF CONDUCT
- AFor authorized financial services providers and Representative conducting Short-term Deposit Business.
- BFor authorized financial services providers Administrative and Discretionary FSP’s
- CFor authorized financial services providers and representative
- DFor authorized financial services providers and representatives involved in Forex
Trade
15NOTICE ON CODES OF CONDUCT
- AFor authorized financial services providers and Representative conducting Short-term Deposit Business.
- BFor authorized financial services providers Administrative and Discretionary FSP’s
- CFor authorized financial services providers and representative
- DFor authorized financial services providers and representatives involved in Forex
Trade
16The purpose of the Codes is to provide more detailed provisions regarding the rendering of
financial services. These Code are part of the subordinate Legislation and are not binding on all
FSP’s, Key Individuals and Representatives.- ATrue
- BFalse
17 Friendly Society Benefits and Health Services Benefits are subcategories which are regulated under category I but not under category II/IIA.
- ATrue
- BFalse
18In terms of the FAIS Act, to provide a financial service means to;
A. Give advice only
B. Provide an intermediary service only
C. Give advice and provide an intermediary service only
D. Give advice and/or provide an intermediary service only- AI. A
- BII. B
- CIII. C
- DIV. A & B
- EV. D
- FVI. C & D
19Giving advice is to ❶[blank_start]…………………………..[blank_end], ❷…[blank_start]……………………….[blank_end]. and ❸[blank_start]………………………….[blank_end]
Recommend
Suggest
Propose- ARecommend
- BSuggest
- CPropose
20Giving advice is to ❶[blank_start]………………………….[blank_end]., ❷[blank_start]…………………………..[blank_end] and ❸[blank_start]………………………….[blank_end]
- ARecommend
- BSuggest
- CPropose
21An analysis or report on a financial report with an express or implied recommendation, guidance or proposal that a transaction in respect of the product meets the client’s needs, investment objectives or financial situation in terms of the FAIS Act, is not regarded as advice.
- ATrue
- BFalse
22In terms of the Act, when a board member of any pension fund organization or friendly society advice members on benefits to be enjoyed by the members is not regarded as advice.
- ATrue
- BFalse
23Mention four departments of the FAIS Division within the FSCA
1) [blank_start].......................................[blank_end]
2) [blank_start]……………………………………..[blank_end]
3) [blank_start]……………………………………..[blank_end]
4) [blank_start]……………………………………..[blank_end]- ARegistration
- BSupervision
- CEnforcement
- DCompliance
24[blank_start]Category I[blank_end]
- AHedge Fund FSP
- BAssistance Business FSP
- CAdministrative FSP
- DOrdinary FSP
25[blank_start]Catagory IIA[blank_end]
- AAssistance Business FSP
- BHedge Fund FSP
- COrdinary FSP
- DDiscretionary FSP
- EAdministrative FSP
26[blank_start]Catagory III[blank_end]
- AOrdinary FSP
- BAdministrative FSP
- CHedge Fund FSP
- DAssistance Business FSP
- EDiscretionary FSP
27[blank_start]Catagory IV[blank_end]
- AOrdinary FSP
- BDiscretionary FSP
- CHedge Fund FSP
- DAssistance Business FSP
- EAdministrative FSP
28An FSP can appoint a Key Individual and the Compliance Officer without the approval of the FSCA.
- ATrue
- BFalse
29An FSP can appoint Joseph as a representative for their Joburg branch without the approval of the FSCA.
- ATrue
- BFalse
30Angel a daughter to the Director of Sisonke Brokers CC wants to join her father’s business as a representative to learn the business. She currently has a judgement with Forschini. Can Sisonke
Broker CC employ her and register her name on their register with FSCA as their representative?- ATrue
- BFalse
31An FSP plans to provide discretionary services in unit trust in which ONE of the following categories must they be authorized?
- ACategory I Collective Investment Schemes
- BCategory I Structured deposits
- CCategory II Collective investment schemes
- DCategory II Structured deposits
32WHICH OF THE FOLLOWING STATEMENTS WITH REGARD TO THE FUNCTION OF THE ROLE PLAYERS IN TERMS OF THE FAIS ACT ARE CORRECT?
I. The representative must ensure that records are kept in the correct manner.
II. The key individual must ensure that complaints are handled in a procedural fair manner.
III. The compliance officer must establish and maintain the compliance function.
IV. The Authority must ensure that all financial services providers comply with the FAIS Act.- Aii and iv only
- Bii, iii and iv only
- Ci, iii and iv only
- Di, ii, iii and iv
33What classification of financial service is the following scenario in terms of the FAIS Act?
“Audrey Selepe advises Edward Nkosi that it is a requirement to take out a short-term insurance policy when taking out a mortgage bond of Bank A”- AAdvice
- BIntermediary Services
- CAdvice and Intermediary services
- DNeither
34Which of the following would qualify as a representative of an FSP in terms of the FAIS Act?
- AAn accountant whose job does not lead clients to buying a financial product.
- BA clerk who does not have to use judgement in performing his job functions
- CAn admin manager who handles general admin queries only
- DA contractor who renders financial services.
35Financial services include:
- AInstructions on the development of products
- BThe rendering of advice and/or intermediary services
- CThe processing of policy applications
- DOverseeing of the compliance processes.
36CHOOSE THE CORRECT COMBINATION
A. A functional approach means that the Act regulates certain functions across institutions ( (insurance
companies, brokerages and banks).
B. A functional approach focuses on specific institutions.
C. The function of providing financial services across various institutions is governed by the FAIS- AB and C
- BA and C
37What is the definition of “advice” in terms of the FAIS Act?
- AAny recommendation, guidance or proposal, of a financial nature, by any means or medium, to any client or group of clients regarding the purchase or investing of any banking products or the conclusion of any other transaction of the varying any term or condition irrespective of whether the advice is furnished in the course of or incidental to financial planning or results in purchasing, investing, transacting, varying, replacing or terminating.
- BAny recommendation, guidance or proposal, of a financial nature, by any means or medium, to general public regarding the purchase or investing of any banking products or the conclusion of any other transaction of the varying any term or condition irrespective of whether the advice is furnished in the course of or incidental to financial planning or results in purchasing, investing, transacting,
varying, replacing or terminating. - CAny recommendation, guidance or proposal, of a financial nature, by any means or medium, to any client or group of clients regarding the purchase or investing of any financial products or the conclusion of any other transaction of the varying any term or condition irrespective of whether the advice is furnished in the course of or incidental to financial planning or results in purchasing, investing, transacting, varying, replacing or terminating.
- DAdvice by a board member of any pension fund organization or friendly society, to their members on benefits to be enjoyed by the members. Advice by the board of trustees of a medical scheme to members of the medical scheme on healthcare benefits.
38What are the objectives of the FAIS Act?
- ATo regulate the rendering of certain financial advisory services to clients only
- BTo regulate the rendering of certain intermediary services to clients only
- CTo regulate the rendering of certain financial advice and intermediary services to clients.
- DTo regulate the rendering of certain financial advisory and intermediary services to clients.
39Albert works at Medical Aid Broker. On the 17th January 2011, Mr Mkhwanazi called in to advise that his new born son, Julius born on the 16th January 2011, needs to be added into his medical aid with immediate effect. Albert sends the request through Momentous Cover, the underwriter.
Which of the following financial services do Albert provide;- AAdvice only
- BIntermediary Service only
- CAdvice and Intermediary services
- DIntermediary and Administrative services
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- Chapter 1
- Author
- Brian Ndimande
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- English
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