Free CeMAP 1 Quiz Test Unit 2 Topic 17

1 / 22

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

integrity

control

diligence

honesty

2 / 22

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

Interim Prudential

Redress

Specialist

Market Conduct

3 / 22

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

The existing regulatory structure was too bureaucratic

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

The existing regulatory structure was too fragmented

It was necessary to make the Treasury the main authorising body

4 / 22

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

Lack of consumer confidence in existing provisions

The need for integrated legislation and regulation A

Increasingly high levels of fraud

The lack of compliance within the banking industry

5 / 22

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

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

preventing any single firm from dominating the market

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

customers are engaged to drive competition

6 / 22

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

authorised persons

appointed persons

appropriate persons

approved persons

7 / 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:

PRA

Competition and Markets Authority A

Competition Commission

Office of Fair Trading

8 / 22

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

Conduct business with integrity

Observe proper standards of market conduct

Be open and honest with the market in all respects

Communicate with clients in a clear manner

9 / 22

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

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.

maintain market confidence and recommend suitable investments.

10 / 22

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

Protecting and enhancing the integrity of the UK financial system

Securing an appropriate degree of protection for consumers

Reducing the scope for financial crime

Protecting competition in the interests of consumers

11 / 22

When did mortgages become regulated?

October 2004

January 2005

June 1998

April 2006

12 / 22

Who has prudential responsibility for deposit takers and insurers?

Financial Policy Committee

Financial Services Authority

Financial Conduct Authority

Prudential Regulatory Authority

13 / 22

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

Procedures

Rules

Standards

Guidelines

14 / 22

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

Market Conduct

Interim Prudential

Redress

Specialist

15 / 22

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

money laundering

insider dealing

market manipulation

best execution

16 / 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

Criminal market conduct

Fraud and dishonesty

Money laundering

17 / 22

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

Conduct its business with integrity

Observe proper standards of market conduct

Maintain an independent compliance function

Communicate with customers in a clear manner

18 / 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:

deal with its regulators in an open way

disclose appropriate data to its regulator

deal with its regulators in a co-operative way

disclose data on a regular basis to its regulator

19 / 22

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

A firm’s senior management

All employees

Operational managers

A firm’s advisers

20 / 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.

21 / 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:

money laundering

best execution

market manipulation

insider dealing

22 / 22

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

Maintenance of adequate financial resources

Guidelines on financial promotions

A firm’s relations with its regulators

The protection of customers’ assets

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