RE5 Questions PDF

Final Assessment Reps - FAIS Level 1 Questions 1. The FAIS Act requires that the FSP/Key Individual must ensure that the Representatives are fit and proper at recruitment and appointment stage and secondly that the Representatives remain fit and proper throughout t...

Final Assessment Reps - FAIS Level 1 Questions 1. The FAIS Act requires that the FSP/Key Individual must ensure that the Representatives are fit and proper at recruitment and appointment stage and secondly that the Representatives remain fit and proper throughout their employment. Consider the following statements carefully and then choose the statement that is FALSE. a) To ensure honesty and integrity you can check the data bureau. b) To ensure honesty and integrity you should only rely on the applicant's disclosure of information as the FAIS Act prohibits any checking of information submitted by prospective Representatives. c) To ensure honesty and integrity you can check the validity of membership of professional bodies or other institutions. d) To ensure honesty and integrity you can check the FSB website to see if a Representative has been debarred. 2. Consider the following statements carefully and then choose the statement that is FALSE. a) The definition of "advice" includes any recommendation, guidance or proposal of a financial nature given to a client about buying, investing in a financial product. b) In order to qualify as advice in terms of the FAIS Act, the advice must be given in writing. c) "Advice" is not an analysis or report on a financial product without an express or implied recommendation, guidance or proposal that a transaction in respect of the product meet the client's needs, investment objectives or financial situation. d) Intermediary service is defined in the FAIS Act as any act other than the furnishing of advice, performed by a person for or on behalf of a client or product supplier, which results in a transaction. 3. Which of the following requirements are not applicable to Custody of Client Funds and Premiums? a) The FSP must have a separate bank account at a bank. b) The bank account must be designated to receive funds and premiums from clients. c) The account may contain other funds of the FSP. d) The FSP is responsible for bank charges except deposit or withdrawal charges. 4. Consider the following statements carefully and then choose the statement that is FALSE. a) The FAIS Act was introduced to regulate the business of all Financial Service Providers who give advice or provide intermediary services to clients, regarding a wide range of financial products. b) Administration of the FAIS Act is done by the FAIS Registrar. The Registrar has defined functions, powers and obligations. c) The FAIS Act only applies to Financial Service Providers who give advice in relation to financial products. d) The enforcement part of the FAIS Act deals with the FAIS Ombud and related matters. It also deals with civil remedies, undesirable practices, offences and penalties, voluntary sequestration, winding-up and closure. 5. Which of the following statements are TRUE regarding record keeping obligations in terms of the Act? a) The FSP must ensure that records are kept for a minimum of fifteen years except if the Registrar allowed specific exemptions in this regard. b) The FSP, and by implication it will be part of the management duties of a Key Individual, must ensure that records are kept for a minimum of five years except if the Registrar allowed specific exemptions in this regard. c) The FSB, and by implication it will be part of the management duties of a Key Individual, must ensure that records are kept for a minimum of two years. d) The FAIS Registrar, and by implication it will be part of the management duties of a Key Individual, must ensure that records are kept for a minimum of five years except if the Registrar allowed specific exemptions in this regard. 6. Consider the following statements carefully and then choose the statement that is FALSE. a) A FSP must ensure that a compliance function exists or is established as part of the risk management framework of the business. b) FSPs are not allowed to outsource the compliance function. c) The compliance function must be supervised by an approved Compliance Officer as required by the Act, or managed and controlled by the FSP alone (where the FSP has less than one Key Individual or Representative). d) 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. 7. The FAIS Act requires that a Key Individual needs to be appointed in certain circumstances. Choose the INCORRECT statement: a) When an entity applies for a licence in terms of FAIS. b) When a Key Individual is replaced. c) When the FSP expands its operations to include additional financial products. d) When a Key Individual has operational ability. 8. Once a Representative has been removed from the FSP Representative's register, who needs to be informed in writing of this? Choose one answer. a) FAIS Registrar. b) National Credit Regulator. c) Financial Services Board. d) FAIS Ombud. 9. Which of the following statements is TRUE regarding record keeping? Choose one answer. a) The documents used to identify and verify clients as well as records of all transactions must be retained for a period of at least five years from the date on which the business relationship was terminated. b) The documents used to identify and verify clients as well as records of all transactions must be retained for a period of at least two and a half years from the date on, which the business relationship was terminated. c) The documents used to identify and verify clients as well as records of only transactions, which are regarded important must be retained for a period of at least five years from the date on, which the business relationship commenced. d) The documents used to identify and verify clients as well as records of all transactions do not have to be retained. 10. Which of the statements is TRUE regarding the lapsing of a license? Choose one answer. a) The Registrar may publish notification of the lapsing only in the Gazette. b) The Registrar may publish notification of the lapsing in the Gazette as well as in any other appropriate media. c) The Registrar may not publish the notification under any circumstances. It is a matter between the Registrar and the licensee. d) The Registrar may only publish the notification of lapsing a license in the media as preferred by the licensee. 11. Whose responsibility is it to ensure that client information is securely filed and protected against any misuse by any unauthorised person? Choose one answer. a) Compliance Officer. b) Registrar. c) Representatives. d) Key Individuals/ FSP. 12. Providers such as FSPs and their Representatives have specific duties when giving financial advice and representations to their clients. Which statement is TRUE? a) Representations have to be factually correct. b) Representations have to be in plain language, readable and a clear format. c) Provided in specific monetary terms relating to amounts, sums and fees unless not reasonably determined. d) All of the above. 13. The person appointed in the supervisory capacity has certain duties. Which statement below is INCORRECT and is NOT included in their duties? a) The sign-off on advice given to clients. b) Do appropriate post-transaction sampling. c) Observe selected meetings between the supervisee and customers. d) Compliance monitoring of the supervisee's duties. 14. All Key Individuals must meet certain criteria to be approved. Which one of the following statements is INCORRECT? a) All Key Individuals need to have the minimum MANAGEMENT experience requirements b) All Key Individuals need to have the required qualifications. c) All Key Individuals need to have completed the relevant regulatory examinations for the main categories and sub-categories of the financial products. d) All Key Individuals need to have completed the relevant regulatory examinations or sub-categories of the financial products only. 15. If a FSP who wants to register as a Sole Proprietor he/ she must have meet certain criteria before the licence is granted. Which statement is INCORRECT? a) The FSP must have the minimum experience requirements. b) The FSP must have the required qualifications. c) The FSP must complete the relevant regulatory examinations for the categories and sub-categories of the financial products. d) The FSP must have completed the relevant Regulatory Examinations for the main categories only. 16. When a Representative is debarred from the FAIS Register, what would the purpose be? Choose the CORRECT one. 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) None of the above. 17. 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. 18. 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. d) None of the above. 19. 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 Registrar. 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. 20. 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 21. A licence lapses under certain circumstances. Choose the INCORRECT Statement. a) Where the licensee is 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. 22. 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. 23. 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. 24. Certain records need to be kept in terms of the FAIS requirement. 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. 25. 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 26. 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. 27. 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 FSB 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. 28. There are certain disclosures that a Representative needs to disclose to a client. Choose the INCORRECT statement. a) Details of the financial services that he is authorised to provide in terms of the mandate or appointment by the FSP. b) Name and contact details of the product provider. 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. 29. Who is responsible for approving Representatives? a) The FSB. b) The FAIS Registrar. c) The FSP. d) The FAIS Ombud. 30. Several Code of Conducts have been published to date. Which of the following is NOT a Code of Conduct? a) Code of Conduct for FSPs and Representatives who are involved in Forex Investment business. b) The General Code of Conduct for Authorised Financial Service Providers. c) The Specific Code of Conduct, which relates to long term deposit business. d) None of the above. 31. Competency requirements include the following: a) minimum experience requirements. b) once-off compliance with Continuous Professional Development requirements. c) honesty and integrity. d) the successful completion of relevant Regulatory Examinations within 7 years of appointment. 32. What does section 14(2) of the FAIS Act allow? a) A FSP may use information regarding the conduct of the Representative provided by the registrar, the Ombud or any other interested person. b) A FSP must inform the registrar within 15 days after the removal of a name of a Representative or key individual. c) A FSP must debar a Representative in certain circumstances. d) The registrar may publish the names of people who are debarred. 33. When can a policy according to the FAIS Act be regarded as invalid? Choose the CORRECT one. a) The FSP underwriting the policy does not have a licence from the FSB to do so. b) The client is registered as a policyholder on the insurer’s database. c) The client has not read his policy summary and the details within the policy are not correct. d) None of the above. 34. What is the aim of FICA? Choose the INCORRECT one. a) To establish the Financial Intelligence Centre. b) To combat money laundering activities. c) To impose certain duties on institutions who might be used for money laundering services. d) To combat money laundering and impose certain duties on institutions who might be used for money laundering services. 35. Money launders try to achieve certain main objectives. Choose the one that describes their objective best. a) They try to disguise the ownership and origin from where the money comes. b) They try to disguise the profit and source of crime. c) They try to disguise the audit trail of the money and transactions. d) All of the above. 36. Red Financial is looking to appoint a Category III Representative. Which of the following individuals meet the general and specific experience requirements? a) Jessica worked in various categories within financial services intermittently for the last ten years in the UK and Australia. b) Robbie worked in England in Category III for eight years and returned to South Africa four years ago to start his own insurance business. c) Amy worked for one year in England and two and a half years in South Africa providing Category III services. d) Caleb has worked at a company offering Category III financial services for the last five years in various roles including office management and graphic design. 37. Below is a list of some provisions a Code of Conduct might relate to. Which one is FALSE? a) Canvassing and marketing. b) How to insure proper safe keeping. c) Record keeping. d) Counterfeit money. 38. Which of the following statements is TRUE? a) The FICA requires accountable institutions to provide training to its employees to enable them to comply with the provisions of FICA and internal rules applicable to them. b) The FIC Act internal rules must be made available to the compliance officers and money laundering control officers, and on request, a copy thereof must be made available to the FIC and relevant supervisory bodies. c) The FIC Act internal rules must include record keeping and financial service advice procedures. d) The FIC Act prescribes the format of the required training. 40. There are certain procedures to be considered with regard to debarment – choose the CORRECT statement. A FSP/key individual must: a) Ensure internal processes (usually a disciplinary enquiry / incapacity hearing) and procedures exist and are followed when Representatives are debarred. b) Ensure that debarment is excluded from the contract of employment or mandate. c) Ensure that the debarment is kept confidential for fear of creating panic in the market. d) Ensure that reasons for the debarment, together with the FSB prescribed debarment notification form, are sent to the registrar within 15 days before removal of the name of the Representative from the Representative register. 41. Which of the following statements are TRUE: Choose one answer. a) Records of ongoing compliance by Representatives as required by Section 13(1) and (2) of the Act include the necessary documentation to confirm that they represent the FSP in terms of a mandate or contract and that the FSP accepts responsibility for the activities of the Representative accordingly. b) Complaints must be recorded in accordance with the complaints policy of the FSB. c) It is the compliance officer’s duty to ensure that client information is securely filed and protected against any misuse by any unauthorised person. d) A FSP may disclose confidential information acquired or obtained from a client if the client's employer requested information verbally and in writing. 42. What are the main duties of accountable institutions in respect of FICA? Choose the CORRECT one. a) Duties to identify and verify clients. b) Duties to report suspicious transactions. c) Duties to train staff and put reporting procedures in place. d) All of the above. 43. Indicate which of the following sectors are NOT classified as financial services. a) Banks. b) Long term insurance. c) Collective investment. d) Post Office. 44. What is a debenture? Choose one answer. a) Secured debt. b) Unsecured debt. c) Bond d) None of the above. 45. Which of the following statements is FALSE? Choose one answer. a) Conflict of interest means a situation where a provider or a Representative has an actual or potential interest that may influence the objective exercising of obligations to the client or prevent the rendering of financial services in an unbiased and fair manner. b) Conflict of interest will therefore occur when two or more interests conflict with one another and can render the financial service biased or inadequate. c) Conflict of interest means a situation where a Representative acts for more than one product provider. d) The requirements for commission disclosures apply to the management of conflict of interests as well. 46. What does Section 14A of the FAIS Act allow for? a) A FSP must inform the registrar within 15 days after the removal of a name of a Representative or key individual. b) A FSP must consult the Ombud or the Registrar before debaring a person. c) Debarment must happen within 15 days of the disciplinary hearing. d) Debarment of persons by the FAIS Registrar. 47. There are certain powers that a supervisory body has. Choose the INCORRECT one. a) They can compel an accountable institution to comply with any provision of the Act. b) They can compel an accountable institution to cease contravening a provision of the Act. c) They can apply to a court for an order restraining an accountable institution from using an auditing service. d) None of the above. 48. The experience requirements for a CATEGORY II FSP Representative are: a) All the general experience requirements must be met in respect of Category II and the subcategories concerned, and in addition the experience could have been gained in a team environment where the person participated in the process of making investment decisions but not whilst working under supervision. b) All the general experience requirements must be met in respect of Category II and the subcategories concerned, and if the license changes to include the financial services in other subcategories, only the experience requirements of original Category must be met. c) All the general experience requirements must be met in respect of Category II and the subcategories concerned, and in addition the experience could have been gained in a team environment where the person participated in the process of making investment decisions whilst working under supervision. d) All the general experience requirements must be met in respect of Category II and Category I and the subcategories concerned, and in addition the experience could have been gained in a team environment where the person participated in the process of making investment decisions but not whilst working under supervision. 49. What are the client’s rights if he / she wanted to terminate an agreement? Choose the CORRECT statement. a) Clients can never terminate an agreement; once an agreement is signed the client cannot change the rules associated with the agreement. b) Clients can terminate the agreement; however, they must understand that there are consequences and penalties for terminating the agreement that can affect the capital amount of the initial investment. c) Clients cannot terminate an agreement but they can lodge a complaint using the bank’s complaints process. d) Clients can terminate an agreement whenever they like, as this is their money. 50. In terms of the FAIS Act, records are to be kept in a certain way. Choose the CORRECT statement. a) In a steel cabinet that is fireproof and is easily accessible. b) In the basement of the office building and is easily accessible. c) In a manner which is safe from destruction. d) In a safe at the insurer’s bank that is easily accessible. 51. Where a Representative adds a product category, he/she is required: a) To only meet the honesty and integrity requirements. b) To obtain 50% of the experience requirements pertaining to that additional product category. c) To obtain 50% of the experience requirements pertaining to that additional product category within one year. d) To obtain 100% of the experience requirements pertaining to that additional product category. 52. In which year did the Financial Intelligence Centre Act (FICA) become effective? a) 2001. b) 2002. c) 2003. d) 2004. 53. What is the purpose of Continuous Professional Development? a) To ensure that FSPs (who are sole proprietors), Key Individuals and Representatives develop and maintain professional competence in order to provide the best financial service to a client. b) To ensure that the FSP, Key Individual and Compliance Officer render a service with due care, competence and diligence with a continuing duty to maintain knowledge and skill. c) To ensure that the FSP, Key Individual and Representative render a service with due care, competence and diligence with a continuing duty to maintain knowledge and skill at a level to ensure that a client receives competent professional service. d) All of the above. 54. The sole proprietor FSP has different roles. Choose the CORRECT statement. a) That of a Key Individual and a Representative as well as a FSP. b) That of a Key Individual and a Compliance Officer. c) That of a Key Individual and a FSP. d) A and B. 55. Who determines if a Key Individual is Fit and Proper? Choose the CORRECT one. a) The FAIS Registrar. b) The Compliance Officer. c) The Long Term Insurance Registrar. d) All of the above. 56. Which of the following is TRUE? A Representative: a) gives advice or provides an intermediary service to the clients of the FSP. b) will always act for him/herself. c) can never operate as a Representative again if debarred once. d) can never be a Key Individual as well. 57. Which of the following apply to the FIC Act? a) Persons filing suspicious transaction reports are not guaranteed protection against criminal and civil liability for complying in good faith with the provisions of FICA and must therefore take care not to be identified. b) The reports required under the FIC Act for FAIS purposes, must be sent to the FAIS department at the FSB. c) Accountable institutions must have and implement internal rules, which include client identification and verification and steps to be taken to determine and report suspicious transactions. d) FICA requires only financial institutions, their managers and employees of such businesses to identify and report suspicious and unusual transactions to the Financial Intelligence Centre. 58. Which of the following statements is FALSE? a) A Compliance Officer must be in a position to avoid conflict of interest between his/her and other employees and functions. b) The internal audit and compliance functions may be combined and integrated as both functions supervise FAIS related activities in the business. c) If the Compliance Officer does not have access to and support from senior management then they will lack the necessary authority required to do their job. It is up to the Key Individual to ensure that the correct channels of communication exist for the Compliance Officer. d) There are different compliance reports for the different licence categories and the reports also differ between the FSPs with and without Compliance Officers. 59. Which of the following requirements are not applicable when a FSP receives money from a client without a bank being involved? a) The FSP must issue a written confirmation when the money is received. b) The FSP must pay the money into the bank account within one day of receipt. c) The FSP must pay the money into the bank account within a month of receipt. d) Where the provider, or third party on behalf of either of them is in control of such financial products or funds, take reasonable steps to ensure that they are adequately safe guarded. 60. If a Representative does not meet one or more of the competence requirements by the cut off date: a) the FSP should give him a written warning and leave him on the rep register. b) he can continue to render financial services until he meets the requirements but must be supervised. c) he is not fit and proper and must be removed from the rep register. d) he can continue to render intermediary services only. 61. In which year was the FAIS Act promulgated? a) 2001. b) 2002. c) 2003. d) 2004. 62. Which actions define a breach in honesty and integrity within the FAIS Act? Choose the CORRECT description. a) Dishonesty and Fraud. b) Negligence and Incompetence. c) Mismanagement of funds. d) All of the above. 63. The Code of Conduct makes it clear that Representatives have to do a client profile assessment before offering advice. Choose the CORRECT statement. a) Obtain information from clients and keep records of advice given. b) Base their advice on the clients financial situation and needs. c) Act honestly and ethically in all dealings with clients. d) All of the above. 64. An administrative FSP has certain obligations towards the client. Choose the CORRECT one. a) To render to the client, on request any reasonable information regarding the financial products of the client and market practices and the risk inherent in the different markets and products concerned. b) To render to the client, on request, within a period of 30 days, any reasonable information regarding the financial products of the client and market practices and the risk inherent in the different markets and products concerned. c) To obtain and transmit to a client any information which a relevant product supplier must disclose in terms of any law, unless the client specifically has requested in writing the administrative FSP not to provide such information. d) A and B. 65. What is the definition of the “Forex Code”? Choose the INCORRECT one. a) The Code of Conduct for FSPs and their Representatives involved in the long term investment business. b) The Code of Conduct for FSPs and their Representatives involved in the overseas international investment business. c) The Code of Conduct for FSPs and their representatives involved in the Forex investment business. d) A and C. 66. What is the definition of “Financial Services” as indicated in the FAIS Act? a) Rendering intermediary services and providing advice. b) Providing advice or rendering an intermediary service. c) Providing advice. d) A and B. 67. A discretionary FSP renders certain services. Choose the INCORRECT one. a) Intermediary services, advice. b) Advice and intermediary services. c) Advice or intermediary services. d) A, B and C. 68. An FSP must have certain procedures in place. Choose the CORRECT statement. a) Compliance procedures. b) Disclose all conflicts of interest. c) Maintain adequate accounting procedures. d) All of the above. 69. A sole proprietor FSP is which of the following: Choose the FALSE statement. a) A FSP, as a sole proprietor is the natural person, who "owns the business" (as opposed to a company or closed Corporation), and may be authorised/licensed as a FSP. b) The sole proprietor FSP may also fulfil the role of a Key Individual (who is the same person as the sole proprietor FSP) c) The sole proprietor may also be the Representative for the sole proprietor FSP. d) The sole proprietor also fulfils the role of a Compliance Officer. 70. As the owner of a policy, you as the client have to meet certain obligations. Choose the CORRECT one. a) You are entitled to the benefits of the policy. b) You are responsible for the payment of the premiums of the policy. c) You are entitled to the benefits of the policy and are also responsible for the payment of the premiums on the policy. d) You are entitled to the benefits of the policy and are responsible to accepting the risk of the lives assured on the policy. 71. What is the POCA? Choose the correct definition. a) The Prevention of the Organised Crime Act. b) The Product of the Organised Crime Act. c) The Profits of the Organised Crime Act. d) The Proof of the Organised Crime Act. 72. What is the definition of “unlawful activity”? a) It is defined as any conduct which constitutes a crime or which contravenes any law. b) It is defined as any conduct which constitutes a crime or which contravenes any law and such conduct occurred in the Republic. c) It is defined as any conduct which constitutes a crime or which contravenes any law and such conduct occurred in the Republic or outside or elsewhere. d) A and B. 73. A Compliance Officer has certain responsibilities, choose the INCORRECT statement. a) Needs to take responsibility for liaising with the Registrars. b) Submit Compliance Reports and other compliance functions to the Ombud for FAIS. c) Monitor compliance within the FAIS Act. d) All of the above. 74. Choose the CORRECT statement that an individual has to register as a Representative? Choose one answer. a) If he/she renders financial services on behalf of a licenced FSP. b) If he/she renders admin services on behalf of a licenced FSP. c) If she is appointed as a personal assistant to Representative of a licenced FSP. d) If she is appointed as the training manager of the licenced FSP. 75. Which ONE of the following activities does NOT qualify as a Continuous Professional Development (CPD) activity? a) Courses. b) Conferences, workshops and seminars. c) Self-study programmes. d) Passing a regulatory examination. 76. Who is the FSPs licence granted by? Choose the CORRECT statement. a) The South African Reserve Bank. b) The Insurance Institute. c) The Banking Council. d) The Financial Services Board. 77. What are the key licensing requirements for a Representative? Choose the CORRECT statement below. a) Personal character qualities of honesty and integrity, competency requirements and CPD. b) Number of employees in the organisation. c) Financial soundness for the FSP. d) Location and premises of the FSP. 78. What are the two main requirements of giving advice to clients? a) Establishing a good relationship with clients and suitability. b) Keeping a record of advice and making sure the FIC Act requirements are met. c) Keeping a record of advice and updating client details. d) Establish suitability of products and keeping a record of advice. 79. When may an urgent suspension or withdrawal of a licence happen? Choose the CORRECT statement. a) After the Registrar has obtained a court order. b) After the Registrar has consulted with all the parties. c) If there are reasonable grounds that the public or clients may be substantially prejudiced. d) All of the above. 80. What do Financial Services include? Choose the CORRECT statement. a) Instructions on the development of products. b) The rendering of advice and/or intermediary services. c) The processing of policy applications. d) Overseeing of the compliance processes. 81. When the FAIS Registrar informs the FSP to reinstate loss or damage, the FSP must do so within a prescribed period of time. Choose the CORRECT statement. a) Within 60 days after the direction was issued. b) Within 90 days after the direction was issued. c) Within 60 days after the business was closed. d) Immediately. 82. Disclosures on a financial product to a client that were supplied verbally must be confirmed in writing within a certain period of time. Choose the CORRECT one. a) 60 days. b) 10 days. c) 30 days. d) 5 days. 83. Choose the CORRECT statement which describes what type of complaints the FAIS Ombud can deal with. a) Mis-selling of long-term insurance products. b) Mis-selling of unit trust and investment products. c) Conduct of Representatives who sold products after 01/10/2004. d) Conduct of Representatives who sold products after 01/11/2004. 84. The FAIS Registrar may consider certain information when an FSP applies for a licence. Choose the statement which is NOT considered. a) Only refer to the documentation submitted by the applicant. b) Consider additional information obtained from external sources without giving the applicant an opportunity to comment on the information. c) Consider additional information obtained from external sources provided the applicant was given opportunity to comment on the information. d) A and B. 85. What is the purpose of disclosures to a client within the FAIS Act? Choose the CORRECT statement. a) To enable the client to make an informed decision. b) To enable the insurer to evaluate the risk. c) To be used as an agenda for a discussion with the client. d) To inform the representative of the attitude of the client towards the recommended product of the Registrar. 86. Choose the CORRECT statement that would describe the purpose of debarment. a) A representative, under certain circumstances, is prevented from rendering financial services to clients. b) A FSP, under certain circumstances, is prevented from rendering financial services to clients. c) A compliance officer, under certain circumstances, is prevented from providing compliance service to clients. d) All the above 87. When can a licence of ANY FSP lapse? Choose the CORRECT statement. a) If the licensee is finally liquidated or dissolved. b) If the business of the licensee has become dormant. c) In any other case where the licensee voluntarily and finally surrenders the licence to the Registrar. d) All the above. 88. Under what type of circumstances could a Representatives debarment happen? a) A FSP grants the authority to a Representative to act on its behalf. b) A FSP withdraws the authority granted to a Representative to act on its behalf. c) A Representative retires. d) A Representative resigns 89. Who is the person PRIMARILY responsible for the debarment of a Representative? Choose the CORRECT statement. a) The FSP. b) The Registrar. c) The Compliance Officer. d) The Money Laundering Officer. 90. What is the difference between the suspension and the lapsing of a licence? Choose the CORRECT statement below. a) Suspension or withdrawal of a licence is the result of factors other than non- compliance with the requirements of the FAIS Act. Lapsing of a licence may be the result of a person's death. b) Suspension or withdrawal of a licence is the result of noncompliance with the requirements of the FAIS Act. Lapsing of a licence is the result of factors other than non-compliance. c) Suspension or withdrawal of a licence is the result of noncompliance with the requirements of the FAIS Act. Lapsing of a licence is the result of a person not meeting the competency fit and proper requirement. d) Suspension or withdrawal of a licence is the result of one's resignation from the services of an FSP. Lapsing of a licence is the result of factors other than non- compliance. 91. When a FSP removes a Representative's name from its Register for the purpose of debarment, what must the FSP do? Choose the CORRECT statement. a) Inform the Representative in writing of the debarment only. b) Inform the Representative in writing of the debarment and inform him of the reasons for the debarment as well as the conditions for lifting it. c) Inform him of the reasons for the debarment only. d) Inform him of the conditions for lifting it only. 92. Choose ONE of the statements below that is an example of unethical behaviour in terms  of FAIS. a) Depositing a client's funds into a separate account. b) Driving at a speed higher than the speed limit to be in time for an appointment with a client. c) Signing an application form for a financial product on behalf of the client without the client knowing about it. d) Not keeping an appointment with a client. 93. Who does the accountability for being FAIS compliant fall to? Choose the CORRECT statement. a) The Compliance Officer. b) The FSP. c) All senior managers. d) All Representatives. 94. Why are Representatives debarred? Choose the CORRECT statement. a) To give them an opportunity to complete their regulatory examinations. b) To protect consumers from dealing with persons who are unfit to render financial services. c) When they work under supervision. d) To enable them to gain experience. 95. Where a FSP voluntarily cancels its license the licence will only be lapsed. Choose the CORRECT statement that describes a lapsed licence. a) On receipt of a written request from the Key Individual of the FSP or another person in control of the affairs of the licence holder. b) If all levy payments are up to date. c) If all annual compliance reports have been received. d) All of the above. 96. The FAIS Registrar may withdraw the FSPs licence at any time. Choose the CORRECT reasons below why this could be done. a) Did not disclose all relevant information to the Registrar during application for the licence. b) Offered false or misleading information to the Registrar when applying for a licence c) Contravened or failed to comply with FAIS in a material matter. d) All of the above. 97. Choose the description of “withdrawal” of a licence by the FAIS Registrar. a) Withdrawal of a licence means that the Registrar purposefully removes a licence from a FSP. b) Withdrawal of a licence means that the Registrar conditionally removes a licence from a FSP. c) Withdrawal of a licence means that the Registrar suspends a licence from a FSP indefinitely. d) None of the above. 98. When can a licence that has been withdrawn by the FAIS Registrar be reinstated? Choose the CORRECT statement. a) When the FSP proves that he can meet the fit and proper requirements. b) A withdrawn licence cannot be reinstated. c) When the FSP proves that he has the operational ability to maintain customer’s financial affairs. d) A and C. 99. Choose the CORRECT explanation of a suspended licence. a) Suspension of a licence occurs when the Registrar purposefully removes a licence of a FSP. b) Suspension of a licence occurs when the Registrar conditionally removes the licence of a FSP. c) Suspension of a licence occurs when the Registrar cancels the licence of a FSP. d) A and B. 100. Can a suspended licence be reinstated? Choose the CORRECT statement. a) Yes. b) No. c) Maybe. d) A and C. 101. A FSPs licence is granted by which governing body? Choose the CORRECT statement. a) Insurance Institute. b) The Financial Services Board. c) The Banking Council. d) A and B. 102. To whom does the FAIS legislation apply? Choose the CORRECT statement. a) A Financial Services Provider. b) Key Individuals and Representatives. c) Employees of Financial Service Providers. d) All of the above. 103. When may the FAIS Registrar suspend a FSPs licence? Choose the CORRECT  statement. a) When the licensee fails to meet the FAIS requirements. b) When the licensee does not display a certified copy of his licence on his business premises. c) When the licensee does not have a fixed telephone line. d) All of the above. 104. Which one of the following fit and proper requirements does not apply to Representatives? a) Honesty and integrity. b) Competency. c) Experience. d) Financial soundness. 105. Under which of the following circumstances may a licence lapse? Choose the CORRECT one. a) Only when the licensee has died. b) Only when the licensee voluntarily surrenders his licence. c) When the licensee has died, is sequestrated, forgets to pay the annual licence fee or voluntarily surrenders his licence. d) When the licence is withdrawn. 106. In addition to a FSP who is authorized to debar a Representative or FSP? Choose the CORRECT statement a) The Registrar. b) The Financial Services Board. c) The FAIS Ombud. d) The Banking Council. 107. Which of the following is NOT part of the monitoring role of the Compliance Officer? a) Identifying and improving weak or vulnerable areas in the business. b) Sample checking the advice that has been generated. c) Ensuring that the compliance controls in the business are effective and implemented. d) Testing or reviewing the integrity of the compliance controls. 108. Choose the CORRECT statements which are classed as offences in FAIS. a) Failure to display a FAIS licence. b) Failure to get a licence to operate as an FSP. c) Failure to have the licence available when proof is requested. d) All the above. 109. How often does the FSP have to pay the licensing fee? Choose the CORRECT statement. a) On a monthly basis. b) On an annual basis. c) Once every three months. d) Once every six months. 110. If a FSP is licenced, does the Key Individual that is employed by the FSP have to be licenced too? Choose the CORRECT statement. a) Yes. b) No. c) Only if the Key Individual is a permanent employee. d) Only if the FSP does not meet the fit and proper requirements 111. There are certain details of their licence that a FSP needs to disclose to a client. Choose the CORRECT statement. a) Details of the financial services that the FSP is authorised to provide. b) Any conditions or restrictions to the FSPs licence. c) Any exemptions granted to the FSP by the Registrar. d) All of the above. 112. What might prompt a FSP to debar a Representative? Choose the CORRECT statement. a) If the Representative is no longer fit and proper. b) If the Representative has treated a client unfairly. c) If the Representative has contravened or failed to comply with any provisions of FAIS. d) A and C. 113. When may Representatives still act as Representatives once debarred? Choose the CORRECT statement. a) Only under supervision. b) Under no circumstances at all. c) Only when a FSP is present. d) A and C. 114. Direct supervision means: a) the supervision of the financial services rendered by a Representative under the guidance, instructions and supervision of a supervisor and, which occurs on a monthly basis. b) the supervision of the financial services rendered by a Representative under the guidance, instructions and supervision of a supervisor and, which occurs on a regular (ranging between daily and weekly) basis. c) the way in, which supervision is exercised after the initial period of services under direct supervision has been completed. d) supervision of records rendered by a third party Compliance Officer. 115. How often should the Representative register be updated? a) Every month. b) Bi-annually. c) Every 15 days. d) As soon as there are any changes to the Representative’s fit and proper circumstances. 116. The FSB has three FAIS departments. Which of the following is not one of these? a) Regulation Department. b) Registration Department. c) Supervision Department. d) Enforcement Department. 117. Which one of the products listed below is not a “Financial Product”? a) Shares in a company including a “Share Block” company. b) Debentures and Securities. c) Any money-market instrument. d) A long-term or a short-term insurance contract or policy. 118. Debarment is: a) To remove all individuals from rendering financial services to clients. b) Not a requirement of the FAIS Act. c) An optional extra. d) A requirement of the FAIS Act in respect of Representatives who are no longer fit and proper. 119. Ongoing level of supervision means: a) the supervisee still requires supervision, and such supervision occurs as, and when it is needed. b) the supervision of the financial services rendered by a Representative under the guidance, instructions and supervision of a supervisor and, which occurs on a regular (ranging between daily and weekly) basis. c) the way in which supervision is exercised after the initial period of services under direct supervision has been completed, but the supervisee still requires supervision, and such supervision occurs on at least a biweekly to monthly basis. d) the supervision of all services within the FSPs by the Financial Services Board. 120. When may a sole proprietor FSP lapse its FAIS license voluntarily? Choose one answer. a) In the event of the FSP being sequestrated. b) In the event of the FAIS Regulator declaring it an undesirable business. c) In the event of the FSP transgressing its licensing conditions. d) When the license is withdrawn. 121. Which FAIS Department should be contacted with regards to Profile Changes? a) Regulation Department. b) Registration Department. c) Supervision Department. d) Enforcement Department. 122. Telephonic conversations regarding the provision of financial services must be recorded and the records kept after the termination of the service being provided for at least: a) 3 years. b) 12 months. c) 5 years. d) 7 years. 123. A financial interest can be described as many things. Which statement does not describe a financial interest? Choose the INCORRECT one. a) A financial interest is cash or a cash equivalent. b) A financial interest is a voucher, gift or discount. c) A financial interest is an advantage or benefit. d) A financial interest is training that is not exclusively available to a selected group of providers or representatives. 124. Choose the CORRECT statement which describes the financial soundness requirements. a) Operational ability and competence. b) Capital adequacy. c) Liquidity. d) Capital adequacy and liquidity. 125. Which section of the FAIS Act allows the Registrar to debar both Key Individuals and Representatives? a) 15 b) 12 c) 14 d) 18 126. What does FAIS stand for? a) Financial Advice Information Services. b) Financial Advisory Intermediary Services. c) Finance Act Information Services. d) None of the above. 127. From the statements listed below, which one is FALSE? Money laundering happens throughout the financial services sector and it is important that: a) Financial advisors and intermediaries know with whom they are doing business. b) The paper trail of transactions through the financial system can be identified and preserved. c) Possible money laundering transactions are identified and reported. d) Business relationships and transactions be kept for a period of six months. 128. The difference between lapsing, suspension or withdrawal of a FSP licence is: a) Suspension or withdrawal of a licence is voluntary and lapsing is initiated by the FAIS Registrar if there has been no business activities within the FSP. b) Suspension or withdrawal of a licence is initiated by the Registrar following actions or omissions by the FSP. Lapsing of a licence is initiated by the FSP following an event, which gave reason for the lapse. c) Suspension or withdrawal of a licence is initiated by the FAIS Ombud and lapsing of a licence is initiated by the FSP following an event, which gave reason for the lapse. d) Suspension or withdrawal of a licence is initiated by the FSP following an event, which caused it. Lapsing of a licence is initiated by the Registrar following an investigation of the affairs of the FSP. 129. Key Individuals need to ensure that there are adequate documented processes in place  to: a) Record the CPD hours. b) Record non-compliance. c) Record financial services. d) Record some information relating to services under supervision. 130. When did the FAIS Act become effective? a) 2002 b) 2004 c) 2006 d) 2008 131. What is the definition for an “intermediary service”? a) Any act other than the furnishing of advice performed by a person, for or on behalf of a client or product supplier, which results in a transaction. b) Any recommendation, guidance or proposal of a financial nature, furnished by any means or medium to any client or group of clients. c) An analysis or report on a financial report without an express or implied recommendation, guidance or proposal that a transaction in respect of the product, meet the client’s needs, investment objectives or financial situation. d) An intermediary service by a product supplier, which is also a financial institution and regulated as such. 132. Which of the following is not a control measure introduced by FICA? a) Institutions must be able to establish and verify the identity of their clients. b) Institutions are not allowed to keep any records whatsoever. c) Institutions must report certain information. d) Institutions must implement measures that will assist them in complying with the FICA. 133. Which Regulatory Examinations for Representatives needs to be passed before the representative can assume his/her role? Choose the CORRECT one. a) Regulatory Examination Level 1 is not compulsory for Representatives. b) Representatives must first obtain the required qualifications before completing Regulatory Examination Level 1. c) Regulatory Examination Level 2 applies to Key Individuals only. d) Regulatory Examination Level 1 is compulsory for Representatives. 134. Which of the following is NOT a fit and proper requirement for Representatives?  a) Continued Professional Development. b) Trustworthiness. c) Experience. d) Qualifications. 135. When appointed by the FSP, the Key Individuals are then approved by which entity? a) The company appointing the Key Individual. b) The FSP. c) The FAIS Registrar. d) The supervisor. 136. Who is the regulatory body of the FAIS Act? a) The Financial Services Board. b) The FAIS Ombud. c) The Financial Intermediaries Association. d) None of the above. 139. Where would you find the prescribed steps to be taken and the action to be taken when Representatives give advice to clients? a) Financial Advisory Intermediary Services Act. b) General Code. c) Financial Intelligence Centre Act. d) National Credit Act. 140. From which body must the FSP get "approval" before sequestration, winding-up or closure of the business? a) FAIS Ombud. b) FAIS Registrar. c) Financial Services Board. d) Financial Intelligence Centre. 141. Compliance reports will be submitted to, which department? a) Enforcement Department. b) Registration Department. c) Regulation Department. d) Supervision Department. 142. Whose duty is it to monitor and report on whether or not the correct procedures are in place to ensure the security of confidential information? a) Compliance Officer. b) FSP. c) Representatives. d) Key Individuals. 143. The Registrar may, at any time suspend or withdraw any licence. He has to have all relevant facts before he can make that decision. Which one of the facts listed is NOT relevant to his decision? Choose the INCORRECT statement. a) That the licensee no longer meets the requirements. b) That the FSP did not, when applying for the licence, make a full disclosure of all relevant information to the Registrar. c) That the FSP furnished false or misleading information d) That the FSP showed a loss in premium income on the current financial year. 144. A licence lapses under certain circumstances. Choose the INCORRECT Statement. a) Where the licensee is 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. 145. With regard to a sole proprietor or closed corporation, the Key Individual is: a) Not present. b) Also the Financial Services Provider. c) The Juristic person. d) Also the FSP and the juristic person. 146. What duties fall within a Compliance Officer's scope? a) Ensuring all staff receive quarterly FAIS training. b) Ensuring all staff receive their FAIS qualifications. c) Ensuring all staff complete annual training reports. d) None of the above. 147. There are two MAIN requirements of giving advice. What are they? a) Establishing suitability and keeping a record of advice. b) Keeping a record of advice and sustainability. c) Sustainability and establishing suitability. d) Providing disclosures and keeping a record of advice. 148. FICA does not provide for: a) Regulation of access to information. b) The establishment and operation of the Financial Intelligence Centre and Money Laundering Advisory Council. c) Accept a complaint for investigation. d) Creation of money laundering control obligations for specific persons and institutions. Level 2 Questions 1. Which of the following statements describe a Key Individual best? a) A Key Individual is a person within a company who takes full responsibility for the management and the supervision of the company in relation to the FAIS Act requirements. b) A person must be a senior manager or director to qualify for appointment as a Key Individual. c) Key Individuals may not act as Representatives for an FSP. d) In a sole proprietorship, it is not permissible for the Key Individual to also act as a Representative. 2. The FAIS Registrar exempted Representatives from meeting the competence requirements under certain conditions. This exemption applies to services under supervision. Services under supervision will apply: Choose one answer. a) to Representatives who are first appointed in a FAIS role from the first of January 2011. b) to Representatives who are first appointed in a FAIS role from the first of January 2010. c) to Representatives working in Categories I and IV who have Grade 12 or an appropriate certificate at NQF level 4. d) to Representatives who, on appointment, are exempted from the fit and proper requirements relating to full and partial qualifications if they meet the criteria. 3. As a Representative of TrustUs, you need to understand the requirements to comply with the FICA requirements embedded in the FAIS legislation. Consider the following statements carefully and then choose the statement that is TRUE. a) One of the objectives of FICA is to introduce control measures to assist the detection and investigation of credit granting activities. b) In terms of FICA, accountable institutions are required to obtain statements from customers suspected to be laundering money. c) The FAIS compliance report requires information relating to a FSPs adherence to the FAIS General Code with regard to "the necessary policies, procedures and systems to ensure full compliance with FICA and other applicable anti-money laundering or terrorist financing legislation". d) FICA empowers the Financial Intelligence Centre to supervise the accountable institutions. 4. InsureMe, an authorised short term insurance provider appoints John as a representative and place him on the rep register. A complaint is later lodged against him for mis-selling. Who will be held responsible?? a) John will be held entirely responsible. b) InsureMe and the compliance officer will be held responsible. c) The FSB will be held responsible. d) InsureMe will be held responsible 5. The General Code under Section 10 details the steps a Representative must take in the recording of the advice given. The records of advice for authorised FSPs and their Representatives involved in Forex Investment Business include one additional step, what is this? a) To record the investments owned by each client individually. b) To record a brief summary of the information and material on, which the advice was based. c) To record the financial product or products recommended with an explanation of why the product or products selected, is or are likely to satisfy the client’s identified needs and objectives. d) To record the investments owned by clients collectively. 6. The Registrar may publish Codes of Conduct, which contain the detail of the requirements when FSPs and Representatives render financial services to clients. There are a number of Codes of, which the most important is the General Code of Conduct. Which of the following is NOT covered in the General Code of Conduct? a) Disclosure requirements. b) Furnishing of advice. c) Advertising and direct marketing. d) Debarment of Representatives. 7. With regard to specific responsibilities of a FSP or Key Individual in respect of the actual supervision, the supervisor must observe selected meetings between the supervisee and customers. The frequency of this may vary depending on: a) the complexity of the supervisee. b) the complexity of the products offered. c) the advice given by the supervisee for appropriateness. d) exposure to the categories and subcategories provided in the financial service. 8. The FSP and Key Individual are responsible to ensure that the appointed FAIS Compliance Officer has adequate resources available to meet all the compliance requirements of the FAIS Act. Which of the following is NOT the responsibility of the Compliance Officer? a) To submit regular reports to the Registrar as required by the Act. b) To supervise the compliance function. c) To monitor compliance with the FAIS Act as per Section 17 of the Act. d) To ensure that the compliance function is established as part of the risk management framework of the business. 9. When a Representative terminates their employment or mandate with an FSP, thus ending their representation, what are the Representatives obligations in terms of the General Code of Conduct? a) To inform the FAIS Registrar. b) To notify the FSB in writing. c) To consult with clients and product suppliers. d) There are no specific obligations. 10. There are certain timelines that have to be met for successful completion of the experience, qualifications, regulatory examinations and CPD requirements. Failure by a Representative to meet the competency requirements by the relevant date means that the FSP is required to take appropriate action. Which statement is TRUE? a) Ensure ongoing compliance with continuous professional development (CPD) requirements. b) Ensure compliance within a time period of two years from application. c) Ensure compliance within a time frame of three years. d) None of the above. 11. All Key Individuals have to meet certain criteria regarding management experience before they will be approved by the Registrar. One of the statements below reflects the required criteria, choose the CORRECT one. a) The Key Individual needs to have product-specific experience as it relates to the subcategories that the Key Individual is responsible for. b) The Key Individual needs to have five years practical experience in the management of a business. c) The Key Individual needs to have one year of practical experience in the management of a business. d) All of the above. 12. There are certain Regulatory Examinations that Representatives need to complete before they can act as a Representative. Which one is a requirement for a Representative? Choose the CORRECT one. a) Regulatory Examination Level 1 is not compulsory for Representatives. b) Regulatory Examination Level 1 is compulsory for Representatives. c) Representatives must first obtain the required qualifications before completing Regulatory Examination Level 1. d) Regulatory Examination Level 2 applies to Key Individuals only. 13. In Section 13 of the FAIS Act, certain duties and responsibilities on FSPs are imposed. Which of the following statements is INCORRECT? a) If a Representative was debarred, he can never operate as a Representative again. b) FSPs must 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 provide Financial Services to clients for or on behalf of unauthorised FSPs who are not exempted from the FAIS Act. d) All of the above. 15. If a Representative is found guilty of misconduct regarding the Code of Conduct and is no longer Fit and Proper, what will be the restrictions imposed? Choose the CORRECT one. a) The Representative will be placed under supervision and left on the register. b) The Representative will be left on the register but with a note that he is not Fit and Proper. c) The Representative will be removed from the representative register and therefore debarred. d) All the above 16. When a FSP wants to appoint a Representative, it may do the following to establish if a Representative indeed meets the requirements for honesty and integrity requirements: a) The FSP may only rely on declarations made by the Representative. b) The FSP can use whatever means to establish if a Representative meets the requirements for honesty and integrity. c) The FSP may only rely on declarations made by the Representative and contact previous employers. d) The FSP is limited with regard to means it may use to establish if a Representative meets the requirements for honesty and integrity requirements 17. Which of the following statements is FALSE in respect of the Representatives register? a) The FSP must have a register of all Representatives and Key Individuals employed or mandated by the FSP. b) The Representatives register must be updated every 30 days and sent to the FSB. c) Updates to the Representatives register include any changes in the fit and proper circumstances of either a Representative or Key Individual and these changes are reflected on the register. d) If a Representative or Key Individual is no longer employed by an FSP then the individual must be removed from the list completely. 18. Section 24 (3) 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 which body? a) Financial Ombuds Centre. b) Financial Intelligence Centre. c) Financial Intelligence Centre Act. d) Money Laundering Act. 19. The Exemption for Representatives appointed for the first time into a FAIS role between 30 September 2004 and 31 December 2009 states that: a) Those Representatives will not have to comply, in respect of the experience requirements set for the Representative at the date of appointment. b) Those Representatives are obliged to render financial services under supervision whilst obtaining a Qualification, or completing the Regulatory exam. c) The Exemption is not subject to additional conditions as long as the Representative was appointed during the stated period. d) Those Representatives will have to comply, in respect of the experience requirements set for the Representative at the date of appointment 20. The Act requires that certain prescribed information be recorded on a record of advice. Which of the following statements is FALSE? a) A record of advice is required to contain the financial product or products recommended b) A record of advice must contain detailed and comprehensive information and material on which the advice was based; c) A record of advice must contain an explanation of why the product or products selected, is or are likely to satisfy the client's identified needs and objectives; d) A record of advice must contain the financial products which were considered; 21. 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 Registrar. b) A fine of an amount not exceeding R10 000.00. c) A fine of an amount not less that R10 000.00. d) None of the above. 22. 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 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 one month of receipt. d) None of the above. 23. Mpho has been found guilty of misappropriating client’s funds by his FSP WeInsure. What should they do? a) WeInsure should immediately dismiss Mpho. b) WeInsure should issue Mpho with a fine and command him to compensate his clients. c) WeInsure should debar Mpho and remove his name from the Representative's register. d) WeInsure should inform law enforcement to send a warrant for his arrest. 24. 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. 25. When dealing with complaints the Ombud must be independent and impartial. The objective of the Ombud is to consider and dispose of 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 and economical and expeditious manner. d) All of the above. 26. When a Representative furnishes financial advice, what 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. 27. 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 28. 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) Be a member of a professional body. d) Have a separate bank account for premium collection and be a member of a professional body. 29. Representatives working in Category II, IIA and III must have the following to qualify for the exemption: a) Representatives working in these categories must have a degree which meets the qualification requirements when appointed by the FSP. b) Representatives working in these categories must have a degree and similar professional qualification which meets the qualification requirements when appointed by the FSP. c) Representatives working in these categories must have a degree or similar professional qualification which meets the qualification requirements when appointed by the FSP. d) Those Representatives will have to comply, in respect of the experience requirements set for the Representative at the date of appointment. 30. The Registrar 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 Registrar by the Compliance Officer. c) Each page of the report needs to be initialled. d) Reports have to be accompanied by financial statements. 31. 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. 32. 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. 33. 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 Code. 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. 34. 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. 35. 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 Section 13 of 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. 36. 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 keep certain records. ii. Accountable institutions may report certain information. 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 and iv only b) i and iii only c) i and ii only d) ii and iv only 37. 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) None of the above 38. When you lodge a complaint with the FAIS Ombudsman, do you as a client have to pay a fee? Choose the INCORRECT one. a) A standard administration fee b) A fee as determined by the Ombudsman c) There is no cost d) A standard administration fee which is determined by the Ombudsman 39. 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 in 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 in which they did not comply with the FAIS Act. d) Only when the client wants to cancel the insurance contracts. 40. 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 one. 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 3 years if records are stored at an off-site facility. d) For a minimum of 7 years if the deceased died an accidental death. 41. There are certain requirements that have to be met regarding record keeping in terms of the FAIS Act. Which statement is TRUE? a) The FSP must store all records on its premises. b) The FSP must store records off-site only with special permission. c) The FSP must store records in an appropriate facility which is safe from destruction. d) The FSP must store records in electronic format only with special permission in a facility that cannot be destroyed. 42. How must a complaint that has been lodged with the FAIS Ombud be completed? Choose the CORRECT statement. a) Writing a letter and with it send a copy of the insurer’s final response. b) Completing a complaint form. c) Sending correspondence from the FSP regarding the complaint. d) Completing a complaint form and sending correspondence from the FSP regarding the complaint. 43. When a complaint is lodged with the FAIS Ombud, what language should be used?  Choose the CORRECT one. a) The language of choice of the policyholder. b) The language specified in the contract only. c) In English only. d) The language as instructed by the Ombud. 44. Once a complaint has been lodged with the FAIS Ombud, what is the duty of the FAIS Ombud in regard to the client’s complaint? Choose the CORRECT one. a) Inform the client that he only deals with complaints up to the amount of R800 000.00. b) Inform the client that he only deals with complaints up to R700 000.00. c) The Ombud takes steps to settle the disagreement by each party having a lawyer present, when he considers the complaint. d) The Ombud takes steps to settle the disagreement by having all the parties present to state their case. 45. Any FSP with more than one Key Individual or one or more Representatives must, appoint one or more Compliance Officers to monitor compliance within the Act. Choose the INCORRECT statement. a) A Compliance Officer must be approved by the Registrar. b) A Compliance Officer must be appointed in accordance with the criteria and guidelines determined by the Registrar. c) A Compliance Officer must be approved by the FSP. d) A and B 46. When a licence has been suspended the Registrar must within a reasonable time after receipt of any response consider the response and may decide to take action. Which action is the CORRECT action to take? a) The Registrar can lift the provisional suspension or have it withdrawn. b) The Registrar may render the suspension or withdrawal final. c) The Registrar must make known the terms of and reasons for final suspension or withdrawal, or the lifting thereof, by notice in the Gazette. d) All of the above. 47. The FAIS Act makes provision for Codes of Conduct to be part of the enforceable legislation. How is this relevant? a) To ensure any changes in the financial industry can be enforced via legislation. b) To give businesses the guidelines and the rules of how to carry out appropriate business practices. c) It is not relevant. d) None of the above. 48. Which one of the following is not a main role player in the complaints resolution process? Choose the Correct one. a) Complainant. b) Key Individual. c) Respondent. d) Ombud. 49. What is the requirement instituted under the FIC Act, 38 of 2001 which the Accountable Institutions need to adhere to? Choose the INCORRECT statement. a) Accountable Institutions need to identify and verify their clients. b) They need to report cash transactions over R100 000.00. c) They need to keep records of all transactions. d) All of the above. 50. If an employee of an accountable institution accepts money from a client, which is suspicious, what does the employee have to do according to FICA? Choose the statement that does NOT apply. a) The employee must report the suspicious transaction via his company’s internal procedure. b) The employee may not inform the client he has reported the transaction. c) The employee has to report the suspicious transaction via the Ombud. d) A and B 51. There are prescribed accountable institutions in terms of FICA. Choose the one that is not an accountable institution. a) An attorney. b) An estate agent. c) A bank. d) A church. 52. The definition of money laundering is defined as an activity which is the effect of concealing the proceeds of unlawful activities. Choose the description that does NOT apply. a) Money laundering disguises the nature and source of "dirty money". b) It disguises the movement of the proceeds of the unlawful activities. c) Money laundering does not include the interest earned on the proceeds of the unlawful activities. d) None of the above. 53. If a staff member or organisation does not comply with FICA, there are certain penalties that can be imposed on the staff member or organization. Choose the penalty that would be imposed. a) A maximum prison sentence of 15 years or a fine not exceeding R1 0000 000.00. b) A maximum prison sentence of 15 years. c) A fine not exceeding R1 0000 000.00 and a maximum prison sentence of 15 years. d) All of the above. 54. Once a suspicious transaction has been reported and the authorities have investigated, The FIC must obtain information on the unlawful activities. How would they go about obtaining such information? Choose the INCORRECT statement. a) They can apply for a warrant to access records. b) They can apply for a warrant to access records provided that there are reasonable grounds to believe that the records will assist in identifying the proceeds of unlawful activities. c) They can only apply for a warrant to access record of a bank. d) B and C 55. Certain documentation is required from a South African citizen for identification and verification purposed in line with FICA. Choose the statement that does NOT apply to an SA citizen. a) A copy of a green, barcoded ID book. b) A utility bill for proof of residential address. c) A letter of confirmation from a colleague stating that you are who you say you are. d) A bank statement from another bank reflecting your name and address.\ 56. What is described as an unlawful activity under FICA? Choose the CORRECT description. a) Tax evasion. b) Drug trafficking. c) Theft. d) All of the above. 57. There are prescribed principles that must be taken into account before the Registrar can declare the practice undesirable, including: a) The business practice must have had a direct or indirect effect during the preceding two months resulting in harming the relations between FSPs or any FSP or category of FSPs, and clients or the general public. b) The business practice must have, or is likely to have, a direct or indirect effect resulting in the Ombud making determinations against brokers. c) The business practice must have, or is likely to have, a direct or indirect effect resulting in harming the relations between FSPs or any FSP or category of FSPs, and clients or the general public. d) The business practice must have, or is likely to have, a direct or indirect effect resulting in the share price of the affected FSPs declining. 58. There are certain restrictions and conditions in relation to the functions of Representatives. Read the following statements carefully and choose the INCORRECT statement. a) A Representative may only represent a Key Individual. b) A Representative may represent a FSP. c) A Representative must maintain their Fit and Proper status. d) A Representative may not be reinstated once debarred. 59. Any person who benefits from illegal activities under FICA is guilty of an offense. The penalties are harsh and include one of the following: (choose the CORRECT one). a) A maximum fine of R1 0000 000.00. b) Imprisonment of up to 30 years. c) A maximum fine of R1 0000 000.00 and imprisonment of up to 30 years. d) None of the above. 60. “Dirty” money is disguised in certain investments so that the illegal funds avoid detection. How are the profits disguised? Choose the CORRECT one. a) Property and vehicles b) Life assurance investments c) Travellers cheques d) All of the above 61. The law within FICA has a number of control measures aimed at facilitating the detection and investigation of money laundering. Which one of the control measures below does NOT apply? a) Intermediaries of behalf of the financial institution must know with whom they are doing business (verification). b) A paper trail of transactions through the financial institution must be preserved (record keeping). c) Suspicious transactions must be brought to the attention of the Compliance Officer of the institution only. d) Possible money laundering transactions must be reported to the investigating authorities. 62. The need to maintain adequate records is to give effect to provisions of FICA and to assist the investigation and prosecution of crime. What is the prescribed period that records need to be kept? Choose the CORRECT one. a) For at least 5 years from the date on which the business relationship is terminated. b) For at least 5 years from the date on which the transaction is concluded. c) For at least 5 years from the date of filling the suspicious transaction. d) All of the above. 63. Foreign nationals must provide certain documents to the accountable institution at which they are opening an account or investing money. Which document is NOT a requirement? a) An issued identity document with his name and date of birth on it. b) A legal document that indicates his nationality. c) A legal document with his passport number on. d) A document with his fingerprints on it. 64. A person rendering services to clients in respect of the FAIS Act, 2002 must apply for a licence in terms of the Act. What are the consequences if a licence is not applied for before he / she may render a service? Choose the CORRECT one. a) It may lead to criminal prosecution. b) It may lead to suspension. c) It may lead to a fine. d) All of the above. 65. The law requires the intermediary to make certain disclosures to his/her clients. Indicate which of the following detail is NOT a disclosure requirement. a) The intermediaries’ relationship with the FSP. b) The intermediaries’ marital status. c) The product supplier or suppliers that the intermediary represents. d) The services and products that the intermediary can offer to the client. 66. FICA provides in section 45 that it is the responsibility of supervisory bodies to supervise compliance with the Act by the institutions under their supervision. Which one of the following is NOT a supervisory body? a) The Financial Services Board. b) The South African Reserve Bank. c) The National Gambling Board. d) The Post Office. 67. When a CATEGORY I FSP changes its license to include other financial services or other subcategories: (Choose the CORRECT option) a) the experience requirements of the other subcategories must be met provided that if the change includes additional financial service (advice and intermediary service), the Representative must obtain 50% of the experience requirements applicable to the additional financial services (as indicated in the applicable Table) b) the experience requirements of the other subcategories must be met provided that if the change includes additional financial service (advice and intermediary service), the Representative must obtain 100% of the experience requirements applicable to the additional financial services (as indicated in the applicable Table) c) the experience requirements of the other subcategories must be met provided that if the change relates to an additional subcategory the Representative must obtain 80% of the experience requirements applicable to the additional subcategory (as indicated in the applicable Table). d) the experience requirements of the other subcategories must be met provided that if the change relates to an additional subcategory the Representative must obtain 50% of the experience requirements applicable to the additional subcategory (as indicated in the applicable Table). 68. The law requires that the Registrar may withdraw the FSP’s licence at any time. Choose the CORRECT one. a) If the FSP did not disclose all relevant information to the Registrar during applying for the licence. b) If the FSP offered false or misleading information to the Registrar when applying for the licence. c) If the FSP failed to comply with FAIS in a material manner. d) All of the above. 69. A FSP may also lose its licence due to lapsing. Choose the CORRECT statement. Lapsing may happen when, a) The FSP forgets to pay the annual licence fee. b) The FSP makes a business decision not to offer their product any longer. c) The FSP makes a business decision to only offer their product quarterly. d) The FSP is sequestrated. 70. All Key Individuals must meet critical Fit and Proper requirements. Choose the INCORRECT statement. Fit and Proper includes: a) Honesty and Integrity. b) Competence in all financial product categories. c) Operational ability. d) All of the above. 71. A Representative is defined as a person who represents a FSP under contract of employment. Which contract of employment may apply? Choose the CORRECT one. a) A temporary contract of employment. b) A casual contract of employment or an outsourced person. c) A consultancy agreement. d) All of the above. 72. There are certain licensing requirements that have to be met, which are the main licensing requirements? a) Personal character qualities of honesty and integrity, competence and operational ability. b) The number of employees in the organisation. c) Financial soundness of the FSP. d) Personal character and financial soundness. 73. The FSPs licence is granted by which governing body? Choose the CORRECT one. a) The South African Reserve Bank. b) The Insurance Institute. c) The Banking Council. d) The Financial Services Board. 74. All FSPs, Key Individuals and Representatives need to meet specific requirements and criteria to be able to render a service and be licenced. Choose the CORRECT one. a) Honesty and integrity. b) Competence (qualifications and experience). c) Management ability. d) All of the above. 75. The Financial Intelligence Centre Act has certain objectives. Which of the following statements is NOT AN OBJECTIVE OF FICA? a) To process, analyse and interpret information disclosed to it and obtained by it in terms of FICA, POCA and POCDATARA. b) To inform, advise and co-operate with investigating authorities. c) To monitor and give advice to accountable institutions, supervisory bodies and other persons regarding the performance of their duties and compliance with the provisions of the Act. d) To supervise regulatory bodies in terms of FICA. 76. Key Individuals are responsible for certain processes within the industry. Which statement is NOT a responsibility within their job function? a) Managing and overseeing the activities relating to the FSP. b) Key Individuals bring both technical and managerial skill to their organization. c) Legal and accounting reporting. d) A and C. 77. Continuous Professional Development has three main aims. Which of the following is NOT one of these? a) Develop and maintain professional competence in order to provide financial services of a high quality in the public interest that will support the professionalisation of the Financial Services Industry. b) Understand that the primary responsibility of competence vests in the individual, and that they have an obligation to develop and maintain their professional competence. c) Ensure that the financial services profession continues to gain an influx of individuals wanting to pursue the profession. d) Render financial services with due care, competence and diligence with an ongoing duty to maintain knowledge and skill at a level required to ensure that the client receives competent professional service based on up-to-date developments in legislation and the Financial Services Industry. 78. Category I, Subcategory 1.8, Securities and Instruments, Shares is described in the FAIS Act as: a) Shares in a company other than a share block company. b) Shares in two companies that share a financial interest. c) Share Blocks Control Act. d) None of the above. 79. Which of the following statements are TRUE with regard to the record keeping requirements of the FIC Act? a) Records can only be kept manually. b) Section 22 of the FICA requires accountable institutions who establish a business relationship or conclude a transaction with a client, to keep records of a single transaction or of additional transactions concluded in the course of a business relationship. c) The documents used to identify and verify clients as well as records of all transactions must be retained for a period of at least five years from the date on which the business relationship was started. d) In terms of Section 24 (1), the record keeping obligation may not be outsourced to a third party. 80. Any person wanting to offer a financial service in respect of a financial product will need a licence. The Registrar will not issue a licence unless the FSP and Key Individual are able to meet all the requirements. Which one of the following statements is NOT a requirement and is INCORRECT? a) Personal qualities of honesty and integrity. b) Competence and operational ability. c) Must have passed matric. d) Financial soundness. 81. Where a supervisory body grants any licence or approval to carry on a business, the applicant has to comply with the certain obligations imposed by the Act. Which obligations must NOT be met? a) He / she are a “fit and proper” person. b) He / she have been involved in money laundering activities. c) He / she have not