Part B Flashcards
(25 cards)
An FSP must ensure that when it appoints a person as a representative, the person:
A.Is not declared insolvent or provisionally insolvent
B.Is not subject to pending proceedings which may lead to an outcome of insolvency or provisional insolvency.
C.Insolvency is not a fit and proper requirement for representatives as it does not apply to representatives
D.a and b
D.a and b
Choose one statement below that DOES NOT describe the aspects that need to be considered before proposing a product to the client.
A.The FAIS Act states that a client must be offered a product that matches his specific needs.
B.Establish the amount of additional income the client has to meet his financial goals.
C.Establish the client’s experience and financial know how.
D.None of the above.
D.None of the above.
There is a time period that the FSP has to adhere to regarding the confirmation of information provided to the client. Choose the CORRECT amount of days that is required. How many days does an FSP have, to confirm the information provided to the client verbally, regarding product supplied?
A.Within 45 days from date of transaction.
B.Within 30 days from date of transaction.
C.Within 12 months from date of transaction.
D.Immediately.
B.Within 30 days from date of transaction.
To give the client a fair advantage of making an informed decision, how should FSPs format and work their terms and conditions within a contract? Choose the CORRECT one.
A.All terms and conditions have to be clearly set out in the format of marketing material.
B.All terms and conditions have to contain legal language applicable to the specific product.
C.All terms and conditions have to be set out in plain language and avoid technical terminology.
D.All terms and conditions have to be set out clearly; however, they must never include the rights of the client
C.All terms and conditions have to be set out in plain language and avoid technical terminology.
FSPs and Representatives have certain responsibilities with regard to qualifications of Representatives and duties of FSPs towards the maintenance of the FAIS license as contained in the FAIS Act.
Which statement describes such a responsibility best?
A.Nobody may act as a key individual for a FSP unless the person can confirm to clients (certified by the FSP) that s/he has an employment or mandate agreement with the FSP, to represent the FSP and that the FSP accepts responsibility for the activities of the key individual performed in terms of the agreement.
B.The Board of Directors must at all times take reasonable steps to ensure that Representatives comply with applicable codes of conduct and with other applicable laws on conduct of business.
C.Nobody may act as a representative for a FSP unless the person can confirm to clients (certified by the FSP) that s/he has an employment or mandate agreement with the FSP, to represent the FSP and that the FSP accepts responsibility for the activities of the representative performed in terms of the agreement.
D.If a representative was debarred, s/he can never operate as a representative again.
C.Nobody may act as a representative for a FSP unless the person can confirm to clients (certified by the FSP) that s/he has an employment or mandate agreement with the FSP, to represent the FSP and that the FSP accepts responsibility for the activities of the representative performed in terms of the agreement.
The FICA imposes certain following duties on accountable institutions. Which of the following statements are FALSE with regard to these duties?
i. Accountable institutions may establish a business relationship or conclude a single transaction with an anonymous client with a fictitious name but must immediately contact FIC with the transaction.
ii. Accountable institutions must conduct ongoing due diligence throughout the course of the relationship including monitoring the source of funds and that the transactions are consistent with the accountable institutions knowledge of the client business.
iii. Accountable institutions must be able to establish and verify the identity of their clients.
iv. Accountable institutions must implement measures that will assist them in complying with the FICA.
A.i only.
B.i and iii only.
C.i and ii only.
D.ii and iv only.
A.i only.
The role of the FAIS Ombud is to settle disagreements between the client and an FSP. When is he allowed to do this? Choose the CORRECT one.
A.Where the amount of money involved exceeds R800 000.00.
B.Where the amount of the claim involved does not exceed R800 000.00.
C.Where the disagreement relates to services provided by the FSP which does not include financial service.
D.Only when the client wants to cancel the insurance contracts.
B.Where the amount of the claim involved does not exceed R800 000.00.
The FAIS Act prescribes that the FSP must keep records regarding the payment of a claim for a certain period of time. What is the prescribed period? Choose the CORRECT option.
A.For a maximum of 5 years after payment of the claim.
B.For a minimum of 5 years after payment of the claim.
C.For a maximum of 1 years if records are stored at an off-site facility.
D.For a minimum of 10 years if the deceased died an accidental death.
B.For a minimum of 5 years after payment of the claim.
Which of the following FSP requires to appoint a compliance officer
A.Sole proprietor with no representative
B.Close corporation with one approved key individual and no representatives
C.Sole proprietor with one representative
D.Company with two approved Key Individuals and no representatives
C.Sole proprietor with one representative
Which of the following must be disclosed to clients as soon as possible?
i. Detail about the legal relationships between FSP, product supplier and Representative (if any); so that it is clear to the client who accepts responsibility for the actions of the FSP or Representative or the extent to which the client must accept such responsibility.
ii. Names and contact details of the relevant legal departments or, in the case of a Representative, the contact details of the Representative.
iii. Details of the financial services which the provider is authorized to provide and of any conditions or restrictions applicable to the license and whether the FSP has guarantees or professional indemnity or fidelity insurance cover or not.
iv. Whether a Representative of a provider is rendering services under supervision as defined in the Determination of Fit and Proper Requirements.
A.i, iii and iv only.
B.i, ii and iii only.
C.iii and iv only.
D.i and iii only.
A.i, iii and iv only.
Roci is a financial advisor and recommends that his long standing client replace his existing motor vehicle insurance policy held with ABC Insure (originally sold by Roci to the client), with a similar policy offered by Iensure. Roci is required to provide certain information to client when recommending replacement of a product.
Which of the options below are correct?
i. Lenon must provide a comparison of fees and charges between the terminated product and the replacement product.
ii. Lenon must provide a comparison of special terms and conditions, exclusions of liability, waiting periods, loadings, penalties, excesses between the terminated product and the replacement product.
iii. Lenon must provide reasons why the replacement product is considered to be more suitable to the client’s needs than keeping or modifying the terminated product.
iv. Lenon is not required to provide any of the information above as he sold the original product to client with full product and fee explanation.
A.i, ii, iii and iv.
B.iv only.
C.i, ii and iv only.
D.i, ii and iii only.
D.i, ii and iii only.
Which of the following is not a component of a COMPETENCE requirements
A.Experience
B.CPD
C.Class of Business
D.RE
B.CPD
Ryan is a Representative of InsureA and he needs to disclose the following with regard to the product supplier:
i. Name, physical location, postal and telephone contact details of the product supplier.
ii. The contractual relationship between FSP and the product supplier (if any), and whether the FSP has contractual relationships with other product suppliers.
iii. Names and contact details of the relevant legal and complaints departments of the product supplier.
iv. If applicable, that the FSP holds more than 30% shares or has the equivalent financial interest in the product supplier and that the FSP received more than 10% of total remuneration, including commission in the last 12 months, from the product supplier.
A.i, ii and iv only.
B.i, iii and iv only.
C.ii and iv only.
D.i and ii only.
D.i and ii only.
As Nthabi’s supervisor, Boitumelo has certain responsibilities. Which of the following statements BEST describe Boitumelo’s responsibilities as a supervisor?
i. Boitumelo must ensure that the FAIS compliance officer signs off all transactions which Nthabi completes.
ii. Boitumelo must immediately report to the FSP any unfair treatment of clients by Nthabi
iii. Boitumelo must ensure that Nthabi has a good understanding of an exposure to the categories / subcategories she is providing financial service in.
iv. Boitumelo must observe all meetings between clients and Nthabi.
A.i and ii only.
B.i and iii only.
C.ii and iii only.
D.iii and iv only.
D.iii and iv only
A licence lapses under certain circumstances. Choose the INCORRECT Statement.
A.Where the licensee is finally sequestrated.
B.Where the licensee is finally liquidated or dissolved
C.Where the business of the licensee has become dormant.
D.When a licensee does not pay for the licence within 30 days.
D.When a licensee does not pay for the licence within 30 days.
There are additional steps to take by the FSP when debarring a Representative. They include:
i. ensure that concluded business of the Representative is properly recorded by the Registrar.
ii. take immediate steps to ensure that the debarment does not prejudice the interests of the clients of the Representative.
iii. ensure that unconcluded business of the Representative is properly concluded.
iv. ensure that all clients get a warning not to do business with the debarred Representative.
A.i and iii only.
B.ii and iii only.
C.iii and iv only.
D.ii and iv only.
B.ii and iii only.
Which of the following statements pertain to the record keeping obligations in terms of the General Code?
i. Telephonic conversations regarding the provision of financial services must be recorded and the records kept for a minimum of five years, but if no financial service is provided within 45 days of the telephonic advertisement, the record may be discarded.
ii. The records must be kept for five years from inception of the product.
iii. There must be provision in the systems and procedures for a FSP to access and convert voice logged records to a written format if required.
iv. Clients must be able to get copies of the telephonic advertisement records within ten days of request.
Choose one answer.
A.i and iii only.
B.ii and iii only.
C.i, ii and iii only.
D.ii and iv only.
C.i, ii and iii only.
When a client lodges a complaint with the FAIS Ombudsman, does a client have to pay a fee? Choose the CORRECT one.
A.A standard case fee
B.A case fee as determined by the Ombudsman but not exceeding R1000.
C.There is no cost
D.A standard administration fee which is determined by the Ombudsman
B.A case fee as determined by the Ombudsman but not exceeding R1000.
There are certain policies regarding disclosure to a client. With whom does the duty of disclosure lie? Choose the CORRECT one.
A.The intermediary.
B.The intermediary and insurer.
C.The insured.
D.All of the above.
D.All of the above.
Certain records need to be kept in terms of the FAIS requirements. Which one of the statements is TRUE?
A.A copy of the insured’s payslip.
B.A copy of the insured’s bank statement.
C.A copy of the recommendation made to the client.
D.A copy of the insured’s financial arrangement account agreements.
C.A copy of the recommendation made to the client.
When telephonic advertising is done, what must be kept as proof of a client’s acceptance of the transaction? Choose the CORRECT statement.
A.There is no proof necessary.
B.A record of the telephone call between the client and the representative.
C.A contract signed before a commissioner of oaths.
D.A record of the telephone call and the signed contract.
B.A record of the telephone call between the client and the representative.
It is important to record changes to a policy. Why is this so? Choose the CORRECT statement.
A.The FAIS Act stipulates that it is required.
B.For the Representative to show that he has contacted his client.
C.For the insurer to have an accurate policy record in the event of a claim.
D.To check that the client operates in the terms and conditions of the policy.
A.The FAIS Act stipulates that it is required.
If a client wants to lodge a complaint, what is the procedure that can be followed? Choose the CORRECT one.
A.The client must go into FSP offices to lodge a complaint and needs to request a meeting with the manager prior to doing this.
B.The client must be given the complaints resolution process and has the option to inform the FSCA or the Ombud.
C.The client should be informed that she can use any format that is convenient for her, either the branch, network, email, website or call centre help desk. She should also be provided with a copy of the complaints resolution policy.
D.The client will not be able to lodge a complaint until a reference number has been generated for her.
C.The client should be informed that she can use any format that is convenient for her, either the branch, network, email, website or call centre help desk. She should also be provided with a copy of the complaints resolution policy.
There are certain disclosures that a Representative needs to disclose to a client. Choose the INCORRECT statement.
A.Details of the financial services and all financial products which the FSP offers.
B.Name and contact details of the product supplier.
C.Whether more than 30% of his total commission for the previous 12 months was from one product supplier.
D.Details of the financial services that he is authorised to provide and whether more than 30% of his total commission for previous 12 months was from one product supplier.
A.Details of the financial services and all financial products which the FSP offers.
