Brian Ndimande
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Chapter 1

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Brian Ndimande
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RE5 - Chapter 1 Quiz

Question 1 of 4

1

A CLIENT, AS DEFINED IN THE ACT, DOES NOT INCLUDE THE FOLLOWING;

Select one of the following:

  • The client that concluded the original transaction

  • The person who is a successor in title

  • The beneficiary of the product

  • The general public

Explanation

Question 2 of 4

1

WHICH OF THE BELOW FROM PART OF THE TWIN PEAKS REGIME?

Select one of the following:

  • The Financial Services Board and the Ombud for financial services

  • The Financial Services Board and the Financial Services Conduct Authority

  • The Prudential Authority and the Financial Services Conduct Authority

  • The Prudential Authority and the Financial Services Board

Explanation

Question 3 of 4

1

WHICH OF THE FOLLOWING PRODUCTS IS NOT GOVERNED IN TERMS OF THE FAIS ACT?

Select one of the following:

  • Cheque Account

  • Credit life protection plan

  • 32-day notice call account

  • Insurance on a bond

Explanation

Question 4 of 4

1

WHICH SUBCATEGORY FROM THE LIST BELOW APPEARS ON CATEGORY I BUT NOT ON CATEGORY II?

Select one of the following:

  • Short-term Commercial Lines

  • Participative interests in one or more collective investments

  • Forex investment business

  • Long-term subcategory B1

Explanation

Question 5 of 4

1

NO PROVIDER MAY ACT AS A FINANCIAL SERVICES PROVIDER UNLESS SUCH PROVIDER HAS;

Select one of the following:

  • Been approved by the Compliance Institute of Southern Africa

  • Been authorised by the Financial Sector Conduct Authority

  • Been appointed by the Prudential Authority

  • Been granted a license by the Financial Intelligence Centre

Explanation

Question 6 of 4

1

RANGER (PTY) LTD. WOULD LIKE TO APPLY FOR AUTHORISATION AS A FINANCIAL SERVICES PROVIDER TO THE FSCA, WHICH DEPARTMENT WITHIN THE FSCA WILL DEAL WITH HIS APPLICATION FOR LICENSE?

Select one of the following:

  • The Supervision Department

  • The Enforcement Department

  • The Registrations Department

  • d) The licensing Department

Explanation

Question 7 of 4

1

SELECT THE OPTION BELOW WHICH BEST DESCRIBES A CATEGORY IIA FINANCIAL SERVICES PROVIDER:

Select one of the following:

  • This category of FSP provides intermediary services of a discretionary nature regarding hedge funds.

  • This category of FSP renders intermediary services of a discretionary nature through the method of bulking. The category includes LISPs, for example.

  • This category of FSP provides intermediary services of a discretionary nature, such as investment managers.

  • This category of FSP renders intermediary service in relation to the administration of assistance policies (funeral policies).

Explanation

Question 8 of 4

1

MPHO CONTACTS JOHN FOR MORE INFORMATION ON PREPARING FOR HIS RETIREMENT. JOHN EXPLAINS THE DIFFERENT RETIREMENT PRODUCTS TO MPHO AS WELL AS ADVISES HIM ON WHICH PRODUCTS WOULD BE BEST SUITED TO HIS NEEDS. WHAT TYPE OF FINANCIAL SERVICE DID JOHN PROVIDE?

Select one of the following:

  • John provided only factual information so this is not a financial service.

  • John provided only factual information but this could lead the client into making a financial decision so this is an intermediary service.

  • John provided advised on which products are suitable to Mpho’s needs which means that John provided financial advice.

  • John provided both an intermediary service and advice as factual information was provided as well as advice on the best products suitable.

Explanation

Question 9 of 4

1

THE FAIS ACT WAS PROMULGATED ON WHICH DATE AND BECAME EFFECTIVE WHEN?

Select one of the following:

  • Was enacted in 2000 and became fully effective 31 October 2002.

  • Was enacted in 2002 and became fully effective30 September 2004.

  • Was enacted in 2002 and became fully effective 31 October 2004.

  • Was enacted in 2000 and became fully effective 30 September 2002.

Explanation

Question 10 of 4

1

Fill the blank spaces to complete the text.

The FAIS Act aims to the financial services industry and to , maintain In the industry and maintaining .

Explanation

Question 11 of 4

1

THE ACT FOLLOWS A FUNCTIONAL APPROACH, MEANING THAT IT FOCUSES ON SPECIFIC INSTITUTIONS LIKE LOAN CREDIT GRANTORS REGISTERED UNDER NATIONAL CREDIT REGULATORS.

Select one of the following:

  • True
  • False

Explanation

Question 12 of 4

1

GENERAL CODE OF CONDUCT

Select one of the following:

  • For authorized financial services providers and representatives involved in Forex
    Trade

  • For authorized financial services providers and representative

  • For authorized financial services providers Administrative and Discretionary FSP’s

  • For authorized financial services providers and Representative conducting Short-term Deposit Business.

Explanation

Question 13 of 4

1

FOREX INVESTMENT BUSINESS

Select one of the following:

  • For authorized financial services providers and Representative conducting Short-term Deposit Business.

  • For authorized financial services providers Administrative and Discretionary FSP’s

  • For authorized financial services providers and representative

  • For authorized financial services providers and representatives involved in Forex
    Trade

Explanation

Question 14 of 4

1

SPECIFIC CODE OF CONDUCT

Select one of the following:

  • For authorized financial services providers and Representative conducting Short-term Deposit Business.

  • For authorized financial services providers Administrative and Discretionary FSP’s

  • For authorized financial services providers and representative

  • For authorized financial services providers and representatives involved in Forex
    Trade

Explanation

Question 15 of 4

1

NOTICE ON CODES OF CONDUCT

Select one of the following:

  • For authorized financial services providers and Representative conducting Short-term Deposit Business.

  • For authorized financial services providers Administrative and Discretionary FSP’s

  • For authorized financial services providers and representative

  • For authorized financial services providers and representatives involved in Forex
    Trade

Explanation

Question 16 of 4

1

The purpose of the Codes is to provide more detailed provisions regarding the rendering of
financial services. These Code are part of the subordinate Legislation and are not binding on all
FSP’s, Key Individuals and Representatives.

Select one of the following:

  • True
  • False

Explanation

Question 17 of 4

1

Friendly Society Benefits and Health Services Benefits are subcategories which are regulated under category I but not under category II/IIA.

Select one of the following:

  • True
  • False

Explanation

Question 18 of 4

1

In terms of the FAIS Act, to provide a financial service means to;

A. Give advice only
B. Provide an intermediary service only
C. Give advice and provide an intermediary service only
D. Give advice and/or provide an intermediary service only

Select one of the following:

  • I. A

  • II. B

  • III. C

  • IV. A & B

  • V. D

  • VI. C & D

Explanation

Question 19 of 4

1

Fill the blank spaces to complete the text.

Giving advice is to ❶, ❷…. and ❸

Recommend
Suggest
Propose

Explanation

Question 20 of 4

1

Fill the blank spaces to complete the text.

Giving advice is to ❶., ❷ and ❸

Explanation

Question 21 of 4

1

An analysis or report on a financial report with an express or implied recommendation, guidance or proposal that a transaction in respect of the product meets the client’s needs, investment objectives or financial situation in terms of the FAIS Act, is not regarded as advice.

Select one of the following:

  • True
  • False

Explanation

Question 22 of 4

1

In terms of the Act, when a board member of any pension fund organization or friendly society advice members on benefits to be enjoyed by the members is not regarded as advice.

Select one of the following:

  • True
  • False

Explanation

Question 23 of 4

1

Fill the blank spaces to complete the text.

Mention four departments of the FAIS Division within the FSCA
1)
2)
3)
4)

Explanation

Question 24 of 4

1

Select from the dropdown list to complete the text.

( Hedge Fund FSP, Assistance Business FSP, Administrative FSP, Ordinary FSP )

Explanation

Question 25 of 4

1

Select from the dropdown list to complete the text.

( Assistance Business FSP, Hedge Fund FSP, Ordinary FSP, Discretionary FSP, Administrative FSP )

Explanation

Question 26 of 4

1

Select from the dropdown list to complete the text.

( Ordinary FSP, Administrative FSP, Hedge Fund FSP, Assistance Business FSP, Discretionary FSP )

Explanation

Question 27 of 4

1

Select from the dropdown list to complete the text.

( Ordinary FSP, Discretionary FSP, Hedge Fund FSP, Assistance Business FSP, Administrative FSP )

Explanation

Question 28 of 4

1

An FSP can appoint a Key Individual and the Compliance Officer without the approval of the FSCA.

Select one of the following:

  • True
  • False

Explanation

Question 29 of 4

1

An FSP can appoint Joseph as a representative for their Joburg branch without the approval of the FSCA.

Select one of the following:

  • True
  • False

Explanation

Question 30 of 4

1

Angel a daughter to the Director of Sisonke Brokers CC wants to join her father’s business as a representative to learn the business. She currently has a judgement with Forschini. Can Sisonke
Broker CC employ her and register her name on their register with FSCA as their representative?

Select one of the following:

  • True
  • False

Explanation

Question 31 of 4

1

An FSP plans to provide discretionary services in unit trust in which ONE of the following categories must they be authorized?

Select one of the following:

  • Category I Collective Investment Schemes

  • Category I Structured deposits

  • Category II Collective investment schemes

  • Category II Structured deposits

Explanation

Question 32 of 4

1

WHICH OF THE FOLLOWING STATEMENTS WITH REGARD TO THE FUNCTION OF THE ROLE PLAYERS IN TERMS OF THE FAIS ACT ARE CORRECT?
I. The representative must ensure that records are kept in the correct manner.
II. The key individual must ensure that complaints are handled in a procedural fair manner.
III. The compliance officer must establish and maintain the compliance function.
IV. The Authority must ensure that all financial services providers comply with the FAIS Act.

Select one of the following:

  • ii and iv only

  • ii, iii and iv only

  • i, iii and iv only

  • i, ii, iii and iv

Explanation

Question 33 of 4

1

What classification of financial service is the following scenario in terms of the FAIS Act?
“Audrey Selepe advises Edward Nkosi that it is a requirement to take out a short-term insurance policy when taking out a mortgage bond of Bank A”

Select one of the following:

  • Advice

  • Intermediary Services

  • Advice and Intermediary services

  • Neither

Explanation

Question 34 of 4

1

Which of the following would qualify as a representative of an FSP in terms of the FAIS Act?

Select one of the following:

  • An accountant whose job does not lead clients to buying a financial product.

  • A clerk who does not have to use judgement in performing his job functions

  • An admin manager who handles general admin queries only

  • A contractor who renders financial services.

Explanation

Question 35 of 4

1

Financial services include:

Select one of the following:

  • Instructions on the development of products

  • The rendering of advice and/or intermediary services

  • The processing of policy applications

  • Overseeing of the compliance processes.

Explanation

Question 36 of 4

1

CHOOSE THE CORRECT COMBINATION
A. A functional approach means that the Act regulates certain functions across institutions ( (insurance
companies, brokerages and banks).
B. A functional approach focuses on specific institutions.
C. The function of providing financial services across various institutions is governed by the FAIS

Select one of the following:

  • B and C

  • A and C

Explanation

Question 37 of 4

1

What is the definition of “advice” in terms of the FAIS Act?

Select one of the following:

  • Any recommendation, guidance or proposal, of a financial nature, by any means or medium, to any client or group of clients regarding the purchase or investing of any banking products or the conclusion of any other transaction of the varying any term or condition irrespective of whether the advice is furnished in the course of or incidental to financial planning or results in purchasing, investing, transacting, varying, replacing or terminating.

  • Any recommendation, guidance or proposal, of a financial nature, by any means or medium, to general public regarding the purchase or investing of any banking products or the conclusion of any other transaction of the varying any term or condition irrespective of whether the advice is furnished in the course of or incidental to financial planning or results in purchasing, investing, transacting,
    varying, replacing or terminating.

  • Any recommendation, guidance or proposal, of a financial nature, by any means or medium, to any client or group of clients regarding the purchase or investing of any financial products or the conclusion of any other transaction of the varying any term or condition irrespective of whether the advice is furnished in the course of or incidental to financial planning or results in purchasing, investing, transacting, varying, replacing or terminating.

  • Advice by a board member of any pension fund organization or friendly society, to their members on benefits to be enjoyed by the members. Advice by the board of trustees of a medical scheme to members of the medical scheme on healthcare benefits.

Explanation

Question 38 of 4

1

What are the objectives of the FAIS Act?

Select one of the following:

  • To regulate the rendering of certain financial advisory services to clients only

  • To regulate the rendering of certain intermediary services to clients only

  • To regulate the rendering of certain financial advice and intermediary services to clients.

  • To regulate the rendering of certain financial advisory and intermediary services to clients.

Explanation

Question 39 of 4

1

Albert works at Medical Aid Broker. On the 17th January 2011, Mr Mkhwanazi called in to advise that his new born son, Julius born on the 16th January 2011, needs to be added into his medical aid with immediate effect. Albert sends the request through Momentous Cover, the underwriter.
Which of the following financial services do Albert provide;

Select one of the following:

  • Advice only

  • Intermediary Service only

  • Advice and Intermediary services

  • Intermediary and Administrative services

Explanation

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