Free CeMAP 1 Quiz Test Unit 2 Topic 17

1 / 22

Which one of the following BEST describes the reason why the Financial Services and Markets Act 2000 was introduced?

It was necessary to make the Home Office the main authorising body

The existing regulatory structure was too fragmented

The existing regulatory structure was too bureaucratic

It was necessary to make the Treasury the main authorising body

2 / 22

In which sourcebook does the FCA Handbook cover standards for stockbrokers and financial market traders?

Interim Prudential

Specialist

Redress

Market Conduct

3 / 22

Which one of the following contained within the FCA Handbook is binding on authorised firms?

Standards

Procedures

Guidelines

Rules

4 / 22

One of the operational objectives of the Financial Conduct Authority is to:

maintain market confidence and recommend suitable investments.

oversee the activities of financial organisations such as clearing houses, the London Stock Exchange and Lloyd’s.

regulate mortgage lending and enforce the Mortgage Code.

provide appropriate customer protection.

5 / 22

The FCA has powers under the Competition Act 1998 and the Enterprise Act 2002, meaning in respect of competition, it is a concurrent regulator with the:

Competition and Markets Authority A

PRA

Competition Commission

Office of Fair Trading

6 / 22

In seeking to promote competition, the FCA uses its power to ensure all of the following except which of the following:

preventing any single firm from dominating the market

customers are engaged to drive competition

there are no undue barriers preventing new providers from entering the market

offering ‘light touch’ regulation for providers that show a strong record in product innovation

7 / 22

Which one of the following is NOT covered by the Financial Conduct Authority’s Principles for Business?

The protection of customers’ assets

A firm’s relations with its regulators

Maintenance of adequate financial resources

Guidelines on financial promotions

8 / 22

Individuals who are allowed to carry out certain functions in relation to a firm’s regulated activities are often referred to as:

appropriate persons

authorised persons

appointed persons

approved persons

9 / 22

Knowingly giving out false information to influence the price of shares for personal gain is known as:

insider dealing

best execution

market manipulation

money laundering

10 / 22

The second key Principle of Business as defined by the regulator is that firms must act with skill, care and

control

honesty

diligence

integrity

11 / 22

In relation to how a firm deals with its regulator, which one of the following is NOT defined within the Principles of Business? A firm must:

disclose appropriate data to its regulator

disclose data on a regular basis to its regulator

deal with its regulators in a co-operative way

deal with its regulators in an open way

12 / 22

Which of the following is NOT one of the FCA’s operational objectives?

Protecting and enhancing the integrity of the UK financial system

Reducing the scope for financial crime

Securing an appropriate degree of protection for consumers

Protecting competition in the interests of consumers

13 / 22

The Financial Conduct Authority’s single strategic objective is to:

oversee the administration of all types of investment business.

govern organisations that manage investments on behalf of other people.

ensure that relevant markets work well so that customers get a fair deal.

regulate the marketing and sale of all life assurance products.

14 / 22

Who has prudential responsibility for deposit takers and insurers?

Financial Conduct Authority

Prudential Regulatory Authority

Financial Services Authority

Financial Policy Committee

15 / 22

The FCA considers that responsibility for the fair treatment of consumers lies with which of the following?

A firm’s senior management

A firm’s advisers

All employees

Operational managers

16 / 22

What was the main driver for the Financial Services and Markets Act 2000?

The need for integrated legislation and regulation A

Lack of consumer confidence in existing provisions

Increasingly high levels of fraud

The lack of compliance within the banking industry

17 / 22

A situation where individuals use information about a company that is not generally available to deal for their own financial advantage’ is a definition of:

market manipulation

insider dealing

best execution

money laundering

18 / 22

Which of the following is NOT one of the Financial Conduct Authority’s Principles of Business with which a firm must comply?

Be open and honest with the market in all respects

Conduct business with integrity

Observe proper standards of market conduct

Communicate with clients in a clear manner

19 / 22

When did mortgages become regulated?

January 2005

June 1998

April 2006

October 2004

20 / 22

In which sourcebook does the FCA Handbook cover investor complaints and compensation?

Interim Prudential

Specialist

Redress

Market Conduct

21 / 22

Which one of the following is NOT one of the Financial Conduct Authority’s Principles for Business with which a firm must comply?

Communicate with customers in a clear manner

Conduct its business with integrity

Observe proper standards of market conduct

Maintain an independent compliance function

22 / 22

There are three main areas of financial crime that the FCA seeks to control. Which one of the following is the exception?

Mis-selling investments

Money laundering

Fraud and dishonesty

Criminal market conduct

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