Aplicación de LCSA a PSS

1) Caroline and Anne are both approved persons, but only Caroline performs a significant influence function, which means that: (12.7.4)

A Caroline’s requirement to exercise due skill, care and diligence, is broader B Caroline’s requirement to observe proper market conduct standards lasts longer

C only Caroline can be personally fined for an offence D only Caroline can be imprisoned for an offence

2) Stuart, an employee of an investment management company, is subject to an ongoing fit and proper test because he: (12.7.4.1)

A is an administration manager B undertakes a controlled function C is a senior manager

D does not require individual registration

3) An authorised firm’s senior management controls should : (12.7.2.2) A be approved by the Financial Services Authority annually B form part of the firm’s disclosure documentation

C be reviewed regularly by the firm D conform to accepted industry practice

4) If the FSA discovers a contravention of its rules, one of the steps it may take is to ‘vary a firm’s permissions’ – this means that : (12.6.1)

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 vary its authorisation from a different regulator.

D the firm will need to submit each sale to the regulator for approval.

5) An authorized person has made a direct profit of £500,000 by contravening an investment regulation.

The FSA is now seeking restitution from the Court. The restitution order will require the person to forfeit the profit to whom ? (12.6.1)

A The Police Authority

B The Financial Services Compensation Scheme C The Regulator

D The Stock Exchange Council

44 6) Phil has been asked by his firm’s senior management to carry out an audit of their systems and

compliance procedures. Under FSA regulations, Phil must have: (12.7.2.2) A no operational involvement.

B been a former member of the firm’s sales team.

C been an employee for at least 5 years.

D a governing function.

7) The Public Interest Disclosure Act 1998 covers which of the following ? : (12.7.2.3) A Data protection

B Disclosure C Whistle-blowing D Prevention of crime

8) There are eleven Principles for Business which apply to the behaviour of firms and those that carry out the firm’s activities; the principle covering ‘conflicts of interest’ means that firms must : (12.4)

A take reasonable care to ensure the suitability of its advice.

B arrange adequate protection for clients’ assets when conflicts of interest arise.

C deal in a fair way between itself and its customers.

D deal with its regulator in a way that does not cause conflicts of interest.

9) A ‘prudential’ risk is described as : (12.1.2)

A The risk of the firm collapsing because of incompetent management.

B The risk of loss due to mis-selling or misrepresentation.

C The risk of a customer not understanding a product.

D The risk that investments fail to deliver the expected returns.

10) Which part of the FSA Handbook contains the Principles for Businesses (12.3.1) A Prudential standards

B High level standards C Specialist standards D Business standards

11) Which one of the following roles in a regulated firm would be classified as a ‘customer function’ ? (12.5.1)

A John, a director of a multi-national insurance company.

B George, the manager of a department dealing in risk-assessment.

C Paul, in charge of a claims department.

D Stuart, a pension transfer specialist.

45 12) Which set of criteria has the FSA established in order for an individual to be approved to undertake a

controlled function ? (12.7.4.1) A Authorisation

B Fit and Proper test

C Part 4 Permission Eligibility D Controlled Functionality test

13) Which of the following types of risk is closely associated with fraud, in relation to the selling of investment products. (12.1.2)

A Prudential risk B Fraud risk C Provider risk D Bad faith

14) Any firm applying for permission to carry out a regulated activity must satisfy the FSA by meeting a set of : (12.7.3)

A high level standards B threshold conditions C OFT guidelines D statutory objectives

15) In which category of controlled function would insurance underwriting be listed ? (12.5.1) A significant management

B governing

C systems and control D required

16) The concept of Treating Customers Fairly developed from which of the following FSA initiatives ? (12.4.1.)

A Threshold Conditions for approved persons B Statutory objectives

C Principles for Business D Prudential standards

17) Which of the following is not one of the FSA’s Statutory objectives ? (12.1.1) A To maintain confidence in the UK financial system

B To promote financial stability

C Secure an appropriate level of protection for consumers D To employ a risk-based approach to regulation

46 18) Which of the following roles is not included in the categories of ‘controlled functions’ ? (12.5.1)

A Head actuary B Mortgage adviser C Investment adviser

D Money Laundering Reporting Officer

19) Which of the five sections of the FSA handbook deals with the requirements firms must meet in relation to their financial soundness ? (12.3.2)

A High Level Standards B Prudential Standards C Business Standards D Regulatory Processes

20) Arrangements for the supervision of professional firms, such as accountants and solicitors, can be found in which section of the FSA Handbook ? (12.3.5)

A High Level Standards B Regulatory Processes C Business Standards D Specialist Sourcebooks

21) In which category of controlled function would a Money Laundering Reporting Officer be included ? (12.5.1)

A Governing B Required

C Systems and control D Significant management

22) Effective balance sheet management is seen as a way of mitigating which one of the following risks ? (12.1.2)

A Prudential risk B Capital adequacy risk C Credit risk

D Operational risk

23) Which of the following would not be a step that the FSA would take if it discovered a contravention of its rules ? (12.6.1)

A Rendition

B Variation of a firm’s permissions C Injunction

D Restitution

47