Friday Five Focus on Regulation – 20 August – 5 Questions in 5 Minutes

Friday Five Focus on Regulation – 5 Questions in 5 Minutes Every Friday

What’s this all about?

Each week, we ask questions relating to one of these topics: Investments, Taxation, Pensions, Protection, or Regulation. This week, our Friday Five is relevant to Regulation; this is useful as you prepare for either of the CII’s R01 or CF1 exams. The challenge is for you to answer them in 5 minutes. Answers at the bottom of the page.

Questions

IMPORTANT! These questions relate to examinable tax year 2020/21, examinable by the CII until 31 August 2021. They do not relate to tax year 2021/22 which is only examinable by the CII from 1 September 2021.

1. What does Part 4A permission as set out by the FSMA refer to?
   1. Where a partnership is allowed to remain authorised in the event of one partner’s death
   2. A firm wishing to change its legal status e.g., from a partnership to a limited company
   3. The public record of all the successful FCA authorisation applications in the past year
   4. Applying to the FCA for direct authorisation to allow the firm to carry out the regulated activities they have applied for

2. What is the purpose behind a firm’s ethics code?
   1. Sets out the firm’s ethical commitment in high level terms, and often also includes more specific regulations for specific responsibilities
   2. Details the investment processes for clients wishing to consider ethical investment
   3. To specify the rules of conduct the firm expects from all advisers
   4. To visually demonstrate, to all staff, the commitment via internal promotion e.g., intranet sites, staff room posters

3. What is a ‘demand and needs’ statement?
   1. Documentation used to allow the client to prioritise their requirements
   2. The IFA’s requirements in terms of charges for product or time
   3. A statement detailing the client’s needs with the reasons for recommendations
   4. A list of requirements for new clients with the services the client can expect

4. Which of the following is NOT covered by the Financial Services and Markets Act 2000?
   1. Futures
   2. National Savings and Investment products
   3. Stocks and shares
   4. Unit trusts

5. When a client wishes to take a different route to the one recommended by their adviser they are commonly referred to as:
   1. a professional client.
   2. an insistent client.
   3. a counterparty.
   4. a retail client.

Answers

1. D – See R01 Study Text, Chp 7
   Grab our taster mock exam paper for CII R01. Click here to download.

2. A – See R01 Study Text, Chp 11
   Grab our taster mock exam paper for CII R01. Click here to download.

3. C – See R01 Study Text, Chp 6
   Grab our taster mock exam paper for CII R01. Click here to download.

4. B – See CF1 Study Text, Chp 10
   Grab our taster mock exam paper for CII CF1 Click here to download.

5. B – See CF1 Study Text, Chp 11
   Grab our taster mock exam paper for CII CF1. Click here to download.

How did you find this week’s questions? Did you complete them in 5 minutes? Did you get them all correct? Do you disagree with any?

If you found this quiz useful for your CII exam revision, please do share it with your colleagues.