UK Regulation & Professional Integrity (Investment Advice Diploma) Quiz 06

Last Updated: June 2024

Table of Contents

UK Regulation & Professional Integrity (Investment Advice Diploma)
– Investment Advice and Product Disclosure-understand the main FCA principles, rules and requirements relating
to the provision of investment advice and product disclosure:
• Assessment of client suitability requirements for MiFID business
[COBS 9A.2.1/4/5/6/7/8/9/10/11/12/13/15] and Non- MiFID
business [COBS 9.1.1 – 9.1.4, 9.2.1-6, 9.3.1]
• The timing of suitability reports for MiFID business [COBS 9A.3.2
and Non-MiFID business [COBS 9.4.1-3]
• Obligations for assessing appropriateness & circumstances not
necessary for MiFID business [COBS 10A.2.1/3/4, 10A.4.1] and
Non-MiFID business [COBS 10.2, 10.4-10.6]
• Cancellation & withdrawal rights [COBS 15.1.1; 15.2.1; 15.2.3;
15.2.5; 15.3.1; 15.3.2]
– Investment Advice and Product Disclosure-understand the requirements for a firm making a personal
recommendation to be independent or restricted
-Product Governance-understand product governance requirements for investments
[PROD 3.1.1/2]
-understand proportionality [PROD 3.2.19/22/24/25]
UK Regulation and Professional Integrity
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– Client Assets Protection
– understand the principles of client money segregation,
holding assets in trust and the requirements for senior management
systems, controls and oversight over client money and custody
assets [CASS 7.10.41 , 7.12.1-3 , 7.13.1-2 , 6.1.22-23 , 6.2.1-2 ,
7.17.1-2 , 1A.3.1/1-A/1A/1B/2A]
– understand the processes for the establishment of client
bank and custody accounts: importance of due diligence and
statutory trust status of client bank accounts; the mitigation of
counterparty and settlement risks and risks arising from overseas
investment activity
-understand the CASS client money and custody rules and the
client money reconciliation including the timing, identification,
resolution and reporting of discrepancies [CASS 6.2.1-3;
6.6.11/13/16/17/19/22/24/27/28/34/37/44/54; 7.12.1-2; 7.13.2/3/5/12
& 7.15.5/20/22/29/31/32/33]
10.10.4 apply the rules relating to the application and exemption from
the requirements of the CASS rules [CASS 1.2.3-4; 6.1.1-6;
6.2.10/13/14/15; 7.10.1-10 & 7.10.12]
-know the requirement for the CASS auditor to understand
the business model of the firm [FRC 11, 55], when a limited
assurance Client Assets Report is required [FRC 16, 17] and the
need for a firm to have its own risk assessment [FRC 77] – FRC –
Client Asset Assurance Standard (Revised November 2019)
-know the two types of arrangement under which a firm is
given rights of use and when the CASS 3 rules apply [CASS 3.1.5,
-know the purpose of the requirement to have a CASS
Resolution Pack [CASS 10.1.2], the required retrieval period [CASS
10.1.7] and the requirement to keep information up to date [CASS
-know the definition of a mandate [CASS 8.2.1], the forms
they can take [CASS 8.2.2], the importance of the ability to give
instructions to another person [CASS 8.2.4] and the requirement to
maintain a list of mandates [CASS 8.3.2A – 8.3.2D]
-Client Interaction
-understand the skills necessary to listen and communicate
professionally, and to adapt to individual needs and capabilities
within a diverse customer base
UK Regulation and Professional Integrity
31 © Chartered Institute for Securities & Investment Version 16
-understand the skills necessary to: elicit, confirm and record
client information relevant to the investment advisory process;
assess and analyse clients’ needs and circumstances; reach a
shared conclusion and make appropriate recommendations
-apply relevant principles, rules and sound judgement in
working within the scope of authorisation, professional competence
and job description
-apply relevant principles, rules and sound judgment when
monitoring and reviewing clients’ plans and circumstances, taking
into account relevant changes
-apply an understanding of the potential outcomes of
unethical sales practices, improper investment activity, abuse of
bankruptcy and other unethical practice in terms of multiple and
systemic risks, reputational risk and damage to public confidence
-understand how conduct risk should be taken into account
when interacting with clients

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