CISI Exam Registration – certification process, exam requirements, and
preparation guidance
Criminal offence: General defenses insider dealing - correct answer ✔✔No advantage was
expected.
A belief that the information had been widely disclosed
Would have dealt anyway
Did not expect the recipient to deal
Special defences : insider dealing - correct answer ✔✔Stabilisation
Market information
Market makers in the ordinary course of business
If a UK company offers an inducement to a foreign agent in order to gain business does the UK
company have a defence against an accusation of bribery in contravention of the Bribery Act
2010? - correct answer ✔✔Yes, if it can show that local law requires the payment of the
inducement
The Act recognises that overseas laws may be applicable if in that particular country an
inducement is required.
For which one of the following financial services firms is jurisdiction of the FOS compulsory? The
firm is:
A. A fund manager selling UCITS compliant funds
B. Only offering secondary mortgages
C. A pre-paid plastic card company
,D. An incoming German general insurer - correct answer ✔✔The fund manager is involved in
regulated activities and therefore subject to compulsory jurisdiction. The other three may elect
for voluntary jurisdiction.
The FCA are currently pursuing a proven accusation of market abuse, what might cause them to
discontinue their investigations?
A The sum gained was less than £20,000
B The defendant is a market maker
C The defendant is a private individual
D Criminal proceedings are taking place - correct answer ✔✔D Criminal proceedings are taking
place
[1054109] Which of the following is true in regard of the Senior Management Arrangements,
Systems and Controls Sourcebook (SYSC) in the FCA Handbook?
A Firms must take reasonable care to organise and control its affairs responsibly and effectively
B Firm should vest responsibility for an effective and responsible organisation in specific named
directors and senior managers
C It creates a common and binding platform of systems and controls for both scope and non-
scope firms
D These arrangements, processes and mechanisms must be comprehensive and applied equally
across affected firms - correct answer ✔✔Firms must take reasonable care to organise and
control its affairs responsibly and effectively
,When considering the current account element of the balance of payments in the economy,
which of the following would be true? It measures:
A Flows in relation to trade in goods and services and current transfers
B Flows in relation to goods and services and overseas investments
C Flows in relation to goods and services and overseas companies operating in the UK
D Financial service activity in the economy only - correct answer ✔✔A Flows in relation to trade
in goods and services and current transfers
[1013863] Which one of these is not an acceptable reason for a firm to fail to execute otherwise
comparable orders sequentially?
A A retail client's order was given priority over other clients
B Prevailing market conditions made it impracticable
C It was in the interests of the client to delay execution
D The characteristics of the client's order made it impracticable - correct answer ✔✔A A retail
client's order was given priority over other clients
the objective test in respect of money laundering - correct answer ✔✔The objective test looks
at whether a reasonable person would have known or been suspicious in the same situation.
When there is evidence or knowledge that an offence is being committed,
Which of the following would not be able to take advantage of the FSCS? - correct answer
✔✔An authorised collective investment scheme investing in designated investments
When will the Financial Ombudsman Service offer free assistance to a client? - correct answer
✔✔When an authorised firm is unable to deal with a complaint from an eligible complainant
Question 41
[1000700] An authorised firm, acting on behalf of a client, has received an order to buy 5,000
shares in XYZ plc just before the market opens. The firm believes that the market will open with
, a sharp fall due to significant losses on the S&P 500 overnight. When should the firm execute
the transaction?
A
The order should be executed as soon as possible at all times
B
The transaction may be postponed, providing the firm has obtained permission from the client
to delay the transaction
C
The firm may delay execution if it believes it is in the best interests of the client
D
The transaction must be executed as soon as the market opens - correct answer ✔✔C The firm
may delay execution if it believes it is in the best interests of the client
[1016031] Who is the Tax and Chancery Chamber of the Upper Tribunal set up by?
A Financial Ombudsman Service
B Her Majesty's Treasury
C Financial Services Compensation Scheme
D The Ministry of Justice - correct answer ✔✔D The Ministry of Justice
Which of the following statements relating to the legal relationships between financial advisors
and their clients is FALSE?
A multi-tied agent can work for two or three separate providers if she wishes
B
An independent financial advisor acts as the agent of the client
C
The COBS apply directly to both tied- and multi-tied agents
preparation guidance
Criminal offence: General defenses insider dealing - correct answer ✔✔No advantage was
expected.
A belief that the information had been widely disclosed
Would have dealt anyway
Did not expect the recipient to deal
Special defences : insider dealing - correct answer ✔✔Stabilisation
Market information
Market makers in the ordinary course of business
If a UK company offers an inducement to a foreign agent in order to gain business does the UK
company have a defence against an accusation of bribery in contravention of the Bribery Act
2010? - correct answer ✔✔Yes, if it can show that local law requires the payment of the
inducement
The Act recognises that overseas laws may be applicable if in that particular country an
inducement is required.
For which one of the following financial services firms is jurisdiction of the FOS compulsory? The
firm is:
A. A fund manager selling UCITS compliant funds
B. Only offering secondary mortgages
C. A pre-paid plastic card company
,D. An incoming German general insurer - correct answer ✔✔The fund manager is involved in
regulated activities and therefore subject to compulsory jurisdiction. The other three may elect
for voluntary jurisdiction.
The FCA are currently pursuing a proven accusation of market abuse, what might cause them to
discontinue their investigations?
A The sum gained was less than £20,000
B The defendant is a market maker
C The defendant is a private individual
D Criminal proceedings are taking place - correct answer ✔✔D Criminal proceedings are taking
place
[1054109] Which of the following is true in regard of the Senior Management Arrangements,
Systems and Controls Sourcebook (SYSC) in the FCA Handbook?
A Firms must take reasonable care to organise and control its affairs responsibly and effectively
B Firm should vest responsibility for an effective and responsible organisation in specific named
directors and senior managers
C It creates a common and binding platform of systems and controls for both scope and non-
scope firms
D These arrangements, processes and mechanisms must be comprehensive and applied equally
across affected firms - correct answer ✔✔Firms must take reasonable care to organise and
control its affairs responsibly and effectively
,When considering the current account element of the balance of payments in the economy,
which of the following would be true? It measures:
A Flows in relation to trade in goods and services and current transfers
B Flows in relation to goods and services and overseas investments
C Flows in relation to goods and services and overseas companies operating in the UK
D Financial service activity in the economy only - correct answer ✔✔A Flows in relation to trade
in goods and services and current transfers
[1013863] Which one of these is not an acceptable reason for a firm to fail to execute otherwise
comparable orders sequentially?
A A retail client's order was given priority over other clients
B Prevailing market conditions made it impracticable
C It was in the interests of the client to delay execution
D The characteristics of the client's order made it impracticable - correct answer ✔✔A A retail
client's order was given priority over other clients
the objective test in respect of money laundering - correct answer ✔✔The objective test looks
at whether a reasonable person would have known or been suspicious in the same situation.
When there is evidence or knowledge that an offence is being committed,
Which of the following would not be able to take advantage of the FSCS? - correct answer
✔✔An authorised collective investment scheme investing in designated investments
When will the Financial Ombudsman Service offer free assistance to a client? - correct answer
✔✔When an authorised firm is unable to deal with a complaint from an eligible complainant
Question 41
[1000700] An authorised firm, acting on behalf of a client, has received an order to buy 5,000
shares in XYZ plc just before the market opens. The firm believes that the market will open with
, a sharp fall due to significant losses on the S&P 500 overnight. When should the firm execute
the transaction?
A
The order should be executed as soon as possible at all times
B
The transaction may be postponed, providing the firm has obtained permission from the client
to delay the transaction
C
The firm may delay execution if it believes it is in the best interests of the client
D
The transaction must be executed as soon as the market opens - correct answer ✔✔C The firm
may delay execution if it believes it is in the best interests of the client
[1016031] Who is the Tax and Chancery Chamber of the Upper Tribunal set up by?
A Financial Ombudsman Service
B Her Majesty's Treasury
C Financial Services Compensation Scheme
D The Ministry of Justice - correct answer ✔✔D The Ministry of Justice
Which of the following statements relating to the legal relationships between financial advisors
and their clients is FALSE?
A multi-tied agent can work for two or three separate providers if she wishes
B
An independent financial advisor acts as the agent of the client
C
The COBS apply directly to both tied- and multi-tied agents
