Fais Re5 Test I
- 1.The minimum entry qualification for a Category 1 Rep is
- A.
University degree
- B.
College diploma
- C.
Matric or equivalent
- D.
RE5
- 2.An FSP must keep records for
- A.
Minimum 5yrs
- B.
Minimum 5yrs & if the Registrar requested record you must keep it for 10 years
- C.
Max 5yrs
- D.
Only for 5yrs
- 3.A Rep is authorised to render intermediary services only. The KI realised that the Rep rendered advice to a client. What must the KI do?
- A.
KI must write a letter to the FSCA stating that Rep is only allowed to render intermediary services & will not give advice anymore.
- B.
The KI must debar the Rep.
- C.
The Rep must get experience to render advice.
- D.
The Rep must write a letter to the FSCA asking to be pardoned and give reasons.
- 4.The KI disclosed a commission of R4,000 to a client. The Rep noticed an error on the commission & that the commission charged is wrong, it is supposed to be R14,000. The product has been running for 3 years, so what must the Rep do?
- A.
The Rep must call the client and inform them of the correct commission.
- B.
The Rep must replace the product.
- C.
The Rep must deduct the commission not received for the past three years.
- D.
The Rep must keep quiet because this was disclosed by the KI.
- 5.Keith Johnson has been working for 3yrs as a Business Consultant at Standard Bank acting as a Rep. Tired of corporate life, he decides to work their family insurance company, Johnson Legacy Ltd, as a Key Individual. Will the Registrar approve his application to act as a Key Individual for Johnson Legacy Ltd?
- A.
Yes because he was been working as a Representative for 3yrs at a reputable bank.
- B.
Yes provided he first works as a key individual under supervision for at least 1 year.
- C.
No because the FAIS Act doesn't allow for someone to work in their family company.
- D.
No because he does not have the required 1 year experience in an overseer role in an FSP.
- 6.Category 1 Reps doing execution of sales need only have Matric.
- A.
This is true to some extent
- B.
True
- C.
Grade 10 is also acceptable if they have good command of the English Language
- D.
False
- 7.What is a Board Notice
- A.
Its a notice board found at the FSCA offices
- B.
Its a notice issued by the board of directors of an authorised FSP
- C.
It is a notice issued by the FSCA to amend/update sections of the FAIS Act
- D.
Its a notice board that every FSP should display at its offices
- 8.Which of the following does not form part of the FAIS Act and its subordinate legislation
- A.
POPI Act No. 4 of 2013
- B.
FIC Act No. 1 of 2017
- C.
Board Notice BN194 of 2017
- D.
FAIS General Code of Conduct
- 9.Sean advises gogo Makhubalo to her Old Mutual pension payout is going to be R1800 per month till she dies or gets to age 80 years
- A.
This falls under the definition of advice according to the FAIS Act
- B.
This is not advice according to FAIS because Sean is merely providing information about a financial product without expecting gogo Makhubalo to make a decision about it
- C.
Sean is giving advice about a financial product hence he is considered to be giving advice according to FAIS
- D.
Sean is not providing advice because a pension is not a financial product
- 10.Shane, a financial adviser from Discovery Medical Aid visits Bidvest to do a presentation on the 2020/21 medical aid benefit changes
- A.
Shane is considered to be providing advice according to FAIS
- B.
This not advice as Shane is merely sharing the new benefits that Discovery will be offering to its members in 2021
- C.
Medical Aid products are not financial products according to FAIS
- D.
Shane is providing intermediary services
- 11.Dlamini sells funeral policies as a Representative under FSP Licence No. 53219. Before starting this funeral business, Dlamini was a minibus taxi driver driver for 30 years. He has no qualifications as he dropped out of school when he was at Standard 3. You are the Key Individual for Mr Dlamini's business and you've been asked to confirm if Mr Dlamini should be debarred for working without qualifications. You will:
- A.
Debar Mr Dlamini for acting as a Rep yet he does not possess any qualifications.
- B.
Mr Dlamini can continue operating as a Rep since he's only selling funeral policies.
- C.
Report Mr Dlamini to the FAIS Registrar
- D.
Advise Mr Dlamini to go back to the taxi industry where there's no government regulation.
- 12.Choose the incorrect definition
- A.
Category IV FSPs render intermediary services in relation to the administration of assistance policies on behalf of an insurer as per the mandate. Examples include FSPs selling funeral policies and stokvels.
- B.
Category II FSPs use their own discretion to decide how to handle the client's financial products but without implementing bulking. Examples include fund managers who buy & sell shares on the JSE.
- C.
Category III FSPs are administrative FSPs who render intermediary services using the method of bulking. Examples include Linked Investment Services Providers (LISP).
- D.
Category IIA FSPs are discretionary FSPs who render intermediary services with respect to short-term insurance products. Examples include motor or fire policy.
- 13.What is a juristic representative?
- A.
A representative who is not a natural person
- B.
A representative who does not have jurisdiction in the financial products that they sell
- C.
A representative who does not offer intermediary services
- D.
A representative who offers legal products and services
- 14.From which date should Category I juristic representatives comply with solvency requirements
- A.
01 March 2019
- B.
01 March 2020
- C.
01 March 2021
- D.
01 March 2022
- 15.Sipho, a sole proprietor, is celebrating receiving his FSP licence from the FSCA. Does he need to employ someone who will act as a Key Individual for his FSP?
- A.
Yes. FSPs cannot operate without a Key Individual.
- B.
No. He will be the Representative and Key Individual for his sole practice.
- C.
Sole proprietors don't need a Key Individual because there's no one to manage and oversee.
- D.
Yes. He will get arrested if runs his FSP without appointing a Key Individual.
- 16.Is it possible to have more than one Key Individual at an FSP?
- A.
Yes. The size and complexity of the financial products the FSP offers will determine how many Key Individuals will be appointed.
- B.
No. Each FSP should have only one Key Individual.
- C.
Yes provided that the FSP applies for dispensation from the Registrar to do so.
- D.
No. Appointing a Key Individual is not necessary under the latest FAIS regulations.
- E.
Option 5
- 17.One of the Fit & Proper Requirements is Competence. Which of the following does not form part of the competence requirements:
- A.
Honesty, Integrity and Good Standing
- B.
Qualifications
- C.
Experience
- D.
RE Exams
- 18.Which of the following does not form part of the FAIS Fit & Proper Requirements
- A.
FAIS Licence
- B.
Product Specific Training
- C.
Class of Business Training
- D.
CPD
- 19.John finished college on 01 April 2015 and started working for Investec as a Representative. After 3yrs he left Investec to join Allan Gray. On 01 January 2020 he went back to Investec as a Senior Manager and getting 3 times the salary he used to earn. What is John's DOFA date?
- A.
01 April 2015
- B.
01 April 2018
- C.
01 January 2020
- D.
None of the above
- 20.Sibongile has bad relationship with her line manager, Mr Pillay who has dug and discovered that she lied about the salary she was earning at her previous job. Mr Pillay can
- A.
Debar Sibongile and terminate her employment contract
- B.
Report Sibongile to the national newspaper to embarass her
- C.
Advise Sibongile to approach the CCMA and confess her lie to them.
- D.
Do nothing because lying about salary is not related to the provision of financial advice.
- 21.Operational Ability is one the FAIS Fit & Proper Requirements. It refers to the functional skill, capability and capacity of a person or organisation to perform certain duties, task & obligations. Which of the following is not one of the operational requirements for FSPs
- A.
Business Physical Address
- B.
Telkom Landline
- C.
Communication Facilities
- D.
Bank Account
- 22.Choose the correct statement from the following statements
- A.
A juristic FSP does not have to appoint a Key Individual
- B.
Juristic Representatives do not have to comply with the Fit & Proper Requirements because they are not FSPs
- C.
Before an FSP can appoint a Juristic Representative, it has to make sure that the Juristic Representative has the operational ability and financial resources to perform the activities they've been appointed to do.
- D.
Operational Ability does not apply to Key Individuals
- 23.The new FSCA regulations require FSP to implement Risk Management protocols to protect consumers of financial products and the integrity of the financial industry. Part of these Risk Management controls include establishment of a Governance Framework. Which of the following does not form part of the Governance Framework for FSPs
- A.
Corporate Social Responsibility (CSR)
- B.
Business Continuity Plan
- C.
Security Policy
- D.
Risk Management Policy
- 24.An FSP has to ensure that its Representatives have the operational ability to function as Representatives. Which of the following does not form part of these operational requirements for representatives
- A.
The Rep should not be declared insolvent or under liquidation
- B.
The Rep should not have any ongoing court action that may lead to insolvency/liquidation
- C.
The remuneration of Reps should not be structured in a manner that may increase the chances of unfair treatment of clients
- D.
The Rep should have the required CPD points
- 25.Which of the following is not true of Key Individuals
- A.
A Key Individual is responsible for managing & overseeing the activities of an FSP in relation to the rendering of any financial service
- B.
Key Individuals may be appointed to more than one FSP
- C.
Every Juristic Representative should appoint a Key Individual before it can start rendering financial services to clients
- D.
Operational Requirements do not apply to Key Individuals
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