Free CeMAP 1 Quiz Test Unit 2 Topic 18

1 / 22

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:

the firm will be required to sell assets to provide restitution

the firm will be required to submit each sale to the FSA for approval

the firm may have one of its regulated activities removed

the firm will need to seek authorisation from a different regulator

2 / 22

Which one of the following areas is NOT specifically covered by the ‘Training and Competence’ requirements?

Ongoing supervision of ‘competent’ advisors

Practical Assessment

Initial training

Business production levels

3 / 22

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?

He may do so provided investments are below an agreed level

Under no circumstances can he offer advice to customers

He may do so provided he acts under appropriate supervision

If all advice is double-checked by a representative of the FCA

4 / 22

Which of the following statements is FALSE in relation to Training and Competence regulation?

All approved persons are subject to the detailed rules

Records of assessment criteria must be kept

Those subject to the rules may need to pass a detailed examination

Firms must monitor continuing competence

5 / 22

Which one of the following areas is NOT included in the ‘fit and proper’ test required by the FCA?

Previous levels of earning

Disqualification as a director

Complaints received

Criminal record

6 / 22

What is the FCA’s most severe disciplinary power?

Public censure

Withdrawal of authorisation

Private warning

Financial penalties

7 / 22

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:

five years

ten years

three years

seven years

8 / 22

In the FCA Handbook there is a section on rules relating to arrangements, systems and controls within authorised firms. These rules:

detail the actual size, staffing structure and form which all firms’ control systems must take.

identify and categorise all the types of risks which firms are required to manage.

require directors and senior managers to take responsibility for the effective management of their firms.

state that all responsibilities relating to a firm’s control systems must only be delegated to the firm’s compliance officer.

9 / 22

The FCA’s supervisory model would see a fixed portfolio firm as being one that:

does not have a named supervisor at the FCA

is supervised through targeted supervisory work and programmes of communication and education

is a small firm and has a small market presence

is subject to the highest level of supervisory attention

10 / 22

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:

carried out only by approved persons

at least 50 hours per annum

evaluated to check its success

documented and retained for 12 months

11 / 22

Which statement BEST describes the relationship between the ‘fit and proper’ test and the Senior Managers and Certification Regime?

A satisfactory ‘fit and proper’ test is necessary before an individual can be accepted for a senior management role.

The ‘fit and proper’ test relates solely to previous business activity in a controlled function

The ‘fit and proper’ test is mainly designed to establish the creditworthiness of an approved person

A ‘fit and proper’ test is recommended by the FCA for anyone applying for a senior management role.

12 / 22

Those individuals categorised by the FCA/PRA as performing a ‘significant harm’ function must be approved by:

either the FCA or PRA

both the FCA and PRA

their employing firm under the certification regime

their employing firm under the senior managers’ regime

13 / 22

Individuals performing which of the following roles will be individually vetted and approved by the FCA/PRA?

Those in significant harm and senior management functions

Those performing senior management functions

Those performing an ancillary role

Those in significant harm functions

14 / 22

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?

They must be agreed by the FCA before implementation

They must meet an agreed industry standard A

They must be regularly reviewed

They must be notified to customers

15 / 22

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:

the company accountants, financial advisers and supervisors of certain ‘back office’ functions

supervisors of certain ‘back office’ functions, clerical claims staff and supervisors of advisers.

financial advisers, supervisors of those advisers and supervisors of certain ‘back office’ functions.

supervisors of advisers, supervisors of certain ‘back office’ functions and clerical staff.

16 / 22

Which of the following bank employees would not normally require individual FCA/PRA approval?

Director of regulated sales

Money laundering reporting officer

Chair Person

A financial adviser

17 / 22

The FCA categorises roles into various functions; into which type of function would the Money Laundering Reporting function be categorised?

Risk function

Customer function

Senior management function

Governing function

18 / 22

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?

Investment advisers

Back office supervisors

Directors

Sellers of stakeholder pensions

19 / 22

What is the FCA’s most severe disciplinary power?

Private warning

Financial penalties

Withdrawal of authorisation

Public censure

20 / 22

Which one of the following job applicants is LEAST likely to meet the FCA ‘fit and proper’ requirements?

Gill, who has recently been made redundant from a firm of independent financial advisers

Irene, who currently has an authorised overdraft limit of £2000

Veronica, who has missed her last two mortgage payments following a divorce

Josie, whose father’s house was repossessed three years ago

21 / 22

Before an employee carries out duties that fall under the FCA’s regulatory responsibility he should:

be assessed on technical knowledge and its application.

assessed as competent to undertake the role without supervision.

have completed the required number of hours’ continuing professional development.

have successfully completed his probation period.

22 / 22

Tom has been successful in his training as an authorised adviser. What happens next?

His continued competence will be monitored

He will be required to take further examinations

His line-manager will draw up a development plan

He will have to complete 15 hours continuing professional development per annum