Part A Flashcards
(25 cards)
Which of the following statements are TRUE with regard to the record keeping requirements of the FIC Act?
i. In terms of FICA, the record keeping obligation may be outsourced to a third party provided the accountable institution is given free and easy access to these records.
ii. Outsourcing of the record keeping function to a third party discharges the accountable institution from the record keeping responsibility.
iii. FICA stipulates that if the accountable institution may appoints a third party to keep records on its behalf, and the particulars of the third party keeping records on behalf of the accountable institution must only be kept by the accountable institution.
iv. FICA stipulates that if the accountable institution appoints a third party to keep records on its behalf, then particulars of the third party keeping records on behalf of the accountable institution must be provided to the FSCA.
A.i only.
B.ii, ii and iii only.
C.i and iii only.
D.i, ii, iii and iv.
A.i only.
When a Representative is debarred, what is the purpose of updating the register? Choose the CORRECT option.
A.It would prevent a Representative, under certain circumstances, from rendering Financial Services to clients.
B.It would prevent an FSP, under certain circumstances, from rendering Financial Services to clients.
C.It would prevent a Compliance Officer, under certain circumstances, from providing compliance services to clients.
D.It would prevent a Key Individual, under certain circumstances, from rendering Financial Services to clients.
A.It would prevent a Representative, under certain circumstances, from rendering Financial Services to clients.
How often should the Representative register be updated?
A.Every month.
B.Bi-annually.
C.Within 15 days of any changes to the Representative’s fit and proper circumstances.
D.As soon as there are any changes to the Representative’s fit and proper circumstances.
C.Within 15 days of any changes to the Representative’s fit and proper circumstances.
What is the definition of Money Laundering? Choose the FALSE statement.
A.Money laundering refers to any act that obscures the illicit nature or the existence, location or application of proceeds of crime.
B.Money laundering is the processing of proceeds received from criminal activities, to disguise their origin.
C.Money Laundering refers to an act that obscures the illicit nature of the location of criminal activity.
D.A and C
D.A and C
Which of the following statements apply to Representatives who give advice and/or render intermediary services in respect of multiple license categories or product subcategories?
i. The relevant minimum and maximum periods of supervision start on the date that the Representative is appointed to render services in a particular license category or product subcategory
ii. They can gain the experience at the same time, and will remain under supervision until the most onerous experience requirement is met.
iii. They must gain the experience separately for the different categories, and will remain under supervision until the most onerous experience requirement is met.
iv. Any significant interruption, being eight consecutive weeks or longer, must be compensated for by arranging an additional period under supervision, equal to the interrupted period.
A.i and iii only.
B.i and ii only.
C.ii and iii only.
D.iii and iv only
B.i and ii only.
When is a company technically insolvent? Choose the CORRECT description.
A.When assets exceed liabilities.
B.When it does not show a profit.
C.When liabilities exceed assets.
D.When the rates are not paid.
C.When liabilities exceed assets.
Non-compliance occurs when people do not adhere to statutory regulatory and supervisory requirements. You will be seen as non-compliant with FAIS when you ignore the regulations in FAIS. What is the fine for non-compliance?
Choose the CORRECT statement.
A.A fine of an amount determined by the Commissioner.
B.A fine of an amount not exceeding R10 000 000.
C.A fine of an amount not less that R100 000 000.
D.None of the above.
B.A fine of an amount not exceeding R10 000 000.
There are certain requirements that need to be met when an FSP receives money from a client without a bank being involved. Which one of the following requirements is NOT applicable?
A.The FSP must pay the money into the bank account within one business day of receipt.
B.The FSP must issue a written confirmation when the money is received.
C.The FSP must pay the money into the bank account within 24 hours of receipt.
D.The FSP must take reasonable steps to ensure that the funds are adequately safeguarded.
C.The FSP must pay the money into the bank account within 24 hours of receipt.
In order for an intermediary to collect premiums, he must comply with certain conditions. Which of the statements are not requirements? Choose the INCORRECT one.
A.Have a separate bank account for premium collection.
B.Be authorised by the insurer in writing.
C.Have suitable guarantees, professional indemnity and fidelity insurance.
D.Have a separate bank account for premium collection and be a member of a professional body.
D.Have a separate bank account for premium collection and be a member of a professional body.
Mpho has been found guilty of misappropriating client’s funds by his FSP Iensure. What should Iensure do?
A.Iensure should immediately dismiss Mpho.
B.Iensure should issue Mpho with a fine and command him to compensate his clients.
C.Iensure should debar Mpho and remove his name from the Representative’s register.
D.Iensure should inform law enforcement to send a warrant for his arrest.
C.Iensure should debar Mpho and remove his name from the Representative’s register.
There are different product categories and subcategories in the FAIS Act.
Which of the following is NOT a subcategory?
A.Securities and Instruments; Debentures and securitised debt.
B.Participatory Interests in one or more collective investment schemes.
C.Friendly Society Benefits.
D.Retail Insurance Benefits
D.Retail Insurance Benefits
The FAIS General Code of Conduct prescribes that certain disclosures should be made during the Representative’s interaction with the client. When should these disclosures be made? Choose the Correct statement.
A.At contact stage.
B.At quotation stage.
C.At contact and quotation stage.
D.At quotation and acceptance stage.
D.At quotation and acceptance stage.
When dealing with complaints the Ombud must be independent and impartial. The objective of the Ombud is to consider and dispose complaints. What is the manner in which the Ombud must deal with a complaint? Choose the CORRECT statement.
A.In a fair manner.
B.In an informal manner.
C.In an economical and expeditious manner.
D.All of the above.
D.All of the above.
What is the CORRECT description of a Category III FSP?
Choose one answer.
A.An investment manager or person who manages client funds.
B.An investment manager or person who cannot give advice but can only maintain the administrative functions of the investments.
C.An investment manager whose business consists of implementing or capturing instructions given by a client in respect of the management of investments which includes bulking.
D.None of the above.
C.An investment manager whose business consists of implementing or capturing instructions given by a client in respect of the management of investments which includes bulking.
When a Representative furnishes financial advice, what disclosure regarding the premium should a Representative disclose to the client? Choose the CORRECT one.
A.All aspects making up the premium charged must be disclosed.
B.The admin charges.
C.The broker commission.
D.The premium per section of the policy.
A.All aspects making up the premium charged must be disclosed.
Once a policy has been issued, which one of the following is required for quality assuring a policy? Choose the CORRECT statement.
A.The agreement between the proposal, quotation and the policy itself.
B.That the administrator issuing the policy has a relevant qualification.
C.That the policy schedule has similar amounts to those quoted.
D.All of the above
A.The agreement between the proposal, quotation and the policy itself.
Which of the following statements is FALSE?
A.The FSP/Key Individual is responsible to ensure that the appointed FAIS compliance officer has adequate resources available to meet all the compliance requirements of the FAIS Act.
B.A compliance officer must ensure that a compliance function exists or is established as part of the risk management framework of the business.
C.Compliance officers are responsible for the compliance functions in relation to the particular Categories and subcategories in terms of the FSP license, for which they are approved by the commissioner.
D.The compliance function must be supervised by an approved compliance officer as required by the Act, or managed and controlled by the FSP alone.
C.Compliance officers are responsible for the compliance functions in relation to the particular Categories and subcategories in terms of the FSP license, for which they are approved by the commissioner.
The Commissioner of FSPs specifies the way in which compliance reports must be submitted.
Read the following statements carefully and choose the statement which is FALSE.
A.Reports have to be in written form and signed by the Compliance Officer.
B.Reports must be submitted to the Commissioner by the Compliance Officer.
C.Each page of the report needs to be initialled.
D.Reports have to be accompanied by financial statements.
C.Each page of the report needs to be initialled.
IEnsure is a compliance practice and in terms of the FAIS Act they can act as compliance officers for FSPs who want to outsource the compliance function. What is required from IEnsure?
i. There are no legal requirements for outsourcing of the compliance function as the FSP remains responsible.
ii. IEnsure must have a FSP license as well.
iii. IEnsure must have adequate staff, resources and skills.
iv. The FSP must ensure that IEnsure can use the FSPs resources and staff if IEnsure does not have sufficient resources and staff.
A.i and iv only.
B.i and iii only.
C.i and ii only.
D.iii only.
D.iii only.
Raquel wants to apply for a position as a Representative at a bank. Which of the following statements are TRUE with regard to Raquel being fit and proper:
i. Raquel will not meet the ‘honesty and integrity’ requirements if she was found guilty by any statutory professional body or voluntary professional body (whether in the Republic or elsewhere) recognised by the FSCA, of an act of dishonesty, negligence, incompetence or mismanagement, sufficiently serious to impugn the honesty and integrity of the Representative, within three years before the date of appointment by the FSP.
ii. Raquel will not meet the ‘honesty and integrity’ requirements if she has been denied membership of any statutory professional body or voluntary professional body because of an act of dishonesty, negligence, incompetence or mismanagement, sufficiently serious to impugn the honesty and integrity of the Representative, within five years before the date of appointment by the FSP
iii. Raquel will not meet the “honesty & integrity” requirement if she had been a sole proprietor FSP who had its authorisation to carry on business/any license granted been withdrawn or suspended by any regulatory or supervisory body because of an act of dishonesty, negligence, incompetence or mismanagement sufficiently serious to impugn the honesty and integrity of the Representative within five years before the date of appointment by the FSP.
iv. Raquel will not meet the ‘honesty and integrity’ requirements if she was found guilty by any statutory professional body or voluntary professional body (whether in the Republic or elsewhere) recognised by the FSCA, of an act of dishonesty, negligence, incompetence or mismanagement, sufficiently serious to impugn the honesty and integrity of the Representative, within five years before the date of appointment by the FSP.
A.i and iii only.
B.ii, iii and iv only.
C.iii and iv only.
D.i and iv only.
B.ii, iii and iv only.
Which fit and proper requirements are the same for both Key Individuals and Representatives?
i. Honesty and integrity
ii. CPD
iii. Competence
iv. Operational Ability
A.i, ii and iii only.
B.i only.
C.iv only.
D.ii and iii only.
A.i, ii and iii only.
Consumers of financial products have the right to complain about any inappropriate advice given or service rendered in relation to a particular financial product. What is the correct amount for the complaint to be considered by the Ombud? Choose the TRUE amount.
A.The claim must exceed R800 000.00
B.The claim must not exceed R700 000.00
C.The claim must not exceed R800 000.00
D.The claim must not exceed R1M as from Dec 2017
C.The claim must not exceed R800 000.00
Which of the following is TRUE?
i. The license of an FSP has an expiring date
ii. FSPs may only have one license.
iii. The licensing conditions will never include exemptions applicable to the FSP.
iv. The financial services of the FSP are limited to the specific sub product Category for which a license is issued.
A.i and iv only.
B.i and iii only.
C.i and ii only.
D.iv only
D.iv only
The FSP’s FAIS compliance report must include information about the FSP’s compliance with the FIC Act. What must be included?
i. The necessary policies, procedures and systems to ensure risk rating of clients.
ii. The necessary policies, procedures and systems when a person represents or acts on the authority of another
iii. The necessary policies, procedures and systems to ensure full compliance with FICA and other applicable anti‐money laundering or terrorist financing legislation.
iv. The necessary policies, procedures and systems to verify non face to face clients in the absence of a contact person.
A.i, iii and iv only.
B.i , ii and iii only.
C.ii, iii and iv only.
D.i, ii, iii and iv.
C.ii, iii and iv only.
