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RE1 and RE5 Exam Example Questions and Answers

Here are 5 RE1 and RE5 Example Exam questions and answers that you can test yourself with, the answers are at the end. Good luck!

Question 1

Which of the following are a duty of the key individual under the FAIS Act?

i. Overseeing the compliance function and reporting to the Financial Sector Conduct Authority.
ii. Debarment of representatives not meeting the fit and proper requirements.
iii. Ensuring that complaints are handled in an effective and fair manner.
iv. Maintaining the register of representatives.

A) i & iv only
B) ii & iv only
C) i ; ii & iii only
D) ii; iii & iv only

Question 2

Jane Seno invested R1,4 million with Big Bank. She suffered a loss of R1 million on her investment due to misinformation from the representative. Big Bank did not resolve her complaint. Which of the following recourse measures does Jane have?

A) Jane can refer the matter the FAIS ombud if Big Bank agrees that the loss of complaint against them can exceed the prescribed loss limit.
B) Jane can refer the matter the Banking Adjudicator if Big Bank agrees that the loss of complaint against them can exceed the prescribed loss limit.
C) Jane can refer the matter the FAIS ombud if she abandons at least R600 000 of the amount she requests to be compensated for.
D) Jane can refer the matter the Banking Adjudicator if she abandons at least R600 000 of the amount she requests to be compensated for.

Question 3

The FAIS Commissioner may declare a business practice undesirable, after consultation, if which of the following factors are present?

i. The business practice must have had a lot of bad publicity in local media, alerting the general public to potential harm.
ii. The business practice must have, or be likely to have, a direct effect resulting in unreasonable prejudice to clients.
iii. The business practice must be likely to have an effect resulting in unfairly affecting a client and, if allowed to continue, defeating one or more objectives of the FAIS Act.
iv. The business practice must have been reported to the FAIS Ombud.

A) i & iv only
B) iii & iv only
C) ii & iii only
D) i, ii; iii & iv

Question 4

Which of the following recourse actions are available to the Commissioner should a financial services provider not comply with an undesirable practice notice?

i. Imposing a fine of R10 million and/or 10 years imprisonment on the Financial Services Provider.
ii. Issue a notice to the financial services provider to reinstate any damage or loss caused to a client by the carrying on with the practice within 30 days.
iii. Taking such a financial services provider to the enforcement committee to enforce compliance.
iv. Imposing unlimited cost orders on the financial services provider as per the Protection of Funds Act.

A) i & ii only
B) i & iii only
C) ii & iii only
D) i, iii & iv only

Question 5

Jane has been appointed as a representative working under supervision at M&M Financial Services. M&M Financial Services must determine the supervision arrangements and the level of intensity of supervision that must apply to Jane, having regard to which of the following?

i. The assessed level of competency of Jane.
ii. Complexity of the products offered.
iii. The supervisor’s level of expertise and knowledge.
iv. The risk inherent to M&M Financial Services.

A) ii & iv only
B) iii & iv only
C) i, ii & iv only
D) i, ii, iii & iv

Answers

Answers to the above questions:

Question 1: D
Question 2: A
Question 3: C
Question 4: D
Question 5: C

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