1. What is the primary purpose of the FAIS Act?

b) To regulate the conduct of all financial services providers and representatives

2. Who ensures compliance within an FSP?

d) The compliance officer within the FSP

3. What is considered 'advice' under FAIS?

b) A representative recommending a specific financial product to the consumer
based on their needs

4. Core requirement under FAIS for all representatives?

b) Representatives must undergo ongoing training and pass the RE5 exam

5. What does "fit and proper" refer to?

c) The qualifications, training, and ethical standards that representatives must
meet

6. Key responsibility of FSPs under FAIS?

b) To disclose to clients the risks and costs of financial products

7. Correct definition of ‘intermediary services’?

b) Facilitating the purchase of a financial product without providing advice

8. Requirement when receiving commission?

a) They must disclose the commission received to the client

9. Role of FSCA under FAIS?

b) To license financial service providers and ensure compliance with regulatory
standards

10. Example of conflict of interest?

a) The representative receiving a commission from a financial product provider

11. Ethical conduct under FAIS?

c) Acting with honesty, fairness, and diligence in all client interactions

12. NOT one of the six fairness outcomes?

c) Clients must be encouraged to purchase high-return products

13. Failure of TCF principles?

d) A representative pressures a client into purchasing a product that does not align
with their financial needs

14. Primary responsibility of a Key Individual?

a) To ensure compliance with FAIS legislation and oversee representatives

15. If a Key Individual fails to comply?

b) The FSP’s licence may be suspended or withdrawn by the FSCA
16. Best defines a Financial Services Provider (FSP)?
d) A company or person licensed by the FSCA to provide financial services

17. Requirement to operate as FSP?

b) The FSP must obtain a licence from the FSCA and comply with FAIS
requirements

18. What must an FSP do to maintain its licence?

a) Submit financial statements and compliance reports to the FSCA

19. When must an FSP renew its licence?

d) Every year, before the expiry date set by the FSCA

20. Primary responsibility of a representative?

a) To act in the best interests of clients and provide suitable financial advice

21. Representative must do when giving advice?

b) Ensure the product is aligned with the client’s needs and financial goals

22. NOT a Fit and Proper Requirement?

c) A representative must always offer financial products from multiple providers

23. What happens if Fit and Proper Requirements not met?

a) The representative must immediately stop rendering financial services

24. Best describes short-term insurance?

b) A policy that offers coverage for specified risks over a short period, typically 12
months, and is renewable

25. Product for long-term wealth accumulation?

a) Unit trusts

26. Product category requiring Category II licence?

b) An FSP that manages discretionary investments on behalf of clients, such as
hedge funds

27. Objective of General Code of Conduct?

c) To set ethical and professional standards that ensure fair treatment of clients

28. FSP must disclose when giving advice?

b) The product’s features, fees, risks, and exclusions to allow informed decision-
making

29. Example of Category I financial product?

b) Providing unit trusts, long-term insurance, and short-term insurance policies
30. Requirement for selling retirement annuities?
b) The FSP must hold a valid FAIS licence for Category I and ensure representatives
meet Fit and Proper requirements

31. Action violating FAIS Code of Conduct?

c) Providing misleading information by only highlighting potential gains and
omitting possible risks

32. Marketing materials must include?

c) A clear, truthful explanation of the product, its terms, benefits, and exclusions

33. Record-keeping requirement?

a) Keep records of all client interactions and financial advice given for at least 5
years

34. Purpose of FAIS Code of Conduct?

b) To provide guidelines for ethical behaviour and professional conduct in financial
services

35. Must disclose before giving advice?

c) The FSP’s licence details, product risks, fees, and any potential conflicts of
interest

36. Example of conflict of interest?

b) A representative recommends a product because it offers a higher commission
rather than being in the client’s best interest

37. Record retention period?

c) 5 years

38. Objective of TCF?

c) Ensuring that clients receive fair treatment, transparent communication, and
suitable advice

39. How to manage conflicts of interest?

a) Implement a Conflict of Interest Policy and ensure full disclosure of incentives

40. Requirement for electronic records?

d) Records must be easily accessible, tamper-proof, and comply with data
protection laws

41. Purpose of FIC under FIC Act?

c) To identify and combat money laundering and terrorist financing activities

42. NOT money laundering?

d) A client declares all income sources and uses a transparent bank account
43. Enforces FIC Act?
b) Financial Intelligence Centre (FIC)

44. FSP responsibility under FIC Act?

a) To verify client identities and report suspicious transactions

45. Before financial transaction, FSP must?

a) Conduct Know Your Customer (KYC) verification

46. NOT required under FICA?

d) Advising clients on investment strategies

47. Suspicious transaction example?

b) A client refuses to disclose the source of large cash deposits

48. CTR submission time?

a) 1 business day

49. Must be reported to FIC?

c) Transactions linked to suspected money laundering or terrorist financing

50. Max fine for failure to report?

d) R100 million

51. Consequence of non-compliance with FICA?

b) The FSP could be fined or lose its licence

52. Purpose of needs analysis?

c) To ensure the advice is tailored to the client's financial situation and goals

53. Most important when advising a client?

b) Offering a product that meets the client’s needs, objectives, and risk tolerance

54. First step in handling complaint?

c) Listen to the client’s concerns carefully, acknowledging their frustration

55. Next step after unresolved complaint?

a) File a complaint with the FAIS Ombud

56. Consequence of giving advice without needs analysis?

b) The advice could be inappropriate, leading to potential legal action or loss of
client trust

57. What Ombud investigates?

d) Whether the client was fully informed about product risks and features

58. Max period to resolve complaint?

b) 60 days
59. What should be documented in complaints?
d) The entire complaint process, including correspondence and actions taken

60. If Ombud is involved?

a) The Ombud will issue a binding determination and may order compensation or
corrective action

61. Prevent future complaints?

c) Document the client’s financial situation, needs, and goals in detail

62. Representative requirement?

b) Representatives must provide full and transparent information to clients,
including conflicts of interest

63. Purpose of "fit and proper"?

c) To ensure that representatives have the necessary qualifications, competence,
and integrity to provide financial services

64. Ethical responsibility?

b) To act in the best interest of clients at all times

65. Disclosure requirement?

d) The potential risks and benefits of the products, as well as any conflicts of
interest

66. How long must records be retained?

c) 5 years

67. Key advice responsibility?

a) To provide financial advice that aligns with the client's financial situation and
goals

68. Non-compliance with Fit and Proper?

a) They may face suspension or revocation of their registration with the FSCA

69. Complaint handling responsibility?

c) To handle complaints professionally, following the FSP’s complaint
management procedure

70. FSCA replaced which body?

b) Financial Services Board (FSB)

71. Objective of FAIS Act?

c) Protect consumers of financial products and services

72. Twin Peaks model introduced:

b) Prudential Authority and FSCA
73. Financial services must be provided with:
b) Honesty, fairness, and diligence

74. FSCA ensures:

a) Clients are treated fairly

75. FSCA’s primary mandate?

c) Regulate the conduct of financial institutions

76. Who licenses FSPs?

b) FSCA

77. Key Individual responsible for:

b) Overseeing Representatives' compliance

78. FAIS Ombud does NOT:

b) Impose administrative penalties

79. Who ensures Fit & Proper compliance?

a) Key Individual

80. What is financial advice under FAIS?

d) Recommending a product based on needs

81. NOT an intermediary service?

c) Providing general training

82. Document to provide when recommending a product?

d) Record of Advice

83. What defines financial services?

b) Advice or intermediary services related to financial products

84. NOT a financial product?

c) Holiday club membership

85. Representative under supervision must:

a) Work under direct oversight

86. Supervision agreement must include:

b) Reporting lines and responsibilities

87. Who ensures supervised compliance?

c) Supervisor

88. NOT required in supervision agreement?

b) Performance bonuses
89. When does supervision end?
a) The Representative achieves Fit & Proper status

90. Purpose of record-keeping?

b) To prove that suitable advice was given

91. Governs record-keeping under FAIS?

d) General Code of Conduct

92. Reason for maintaining records?

a) Prove that client needs and circumstances were considered

93. Principle supported by record-keeping?

d) Treating Customers Fairly (TCF)

94. Who ensures proper record-keeping?

c) FSPs, Key Individuals, and Representatives

95. Competency requirement?

b) Class of Business (CoB) Training

96. Purpose of CPD?

a) Maintain professional standards and update knowledge

97. When must Representative Register be updated?

b) Whenever there is a change in status or competence

98. NOT valid reason for debarment?

c) Personal financial difficulties unrelated to clients

99. Representatives must always act:

b) In the client’s best interest

100. Representatives must comply with:

b) All relevant legislation, including FSCA rules