RE1 Exam Format: The Question Types and How to Handle Each

Knowing the law is half of passing the RE1. The other half is recognising what a question is really asking. The exam uses a small number of question styles again and again, and each has its own trap.

The numbers

• 80 multiple-choice questions
• 150 minutes, so about 1 minute 50 seconds each
• 65% to pass: 52 correct, which means you can get 28 wrong

A practical pacing rule is 27 questions every 50 minutes. If you reach question 27 after an hour, you are behind.

Style 1: Direct knowledge

By when must an FSP notify the Authority that it has debarred a representative?

There is nothing to interpret. You know it is five days or you do not. These should take 30 seconds each, and the time you save pays for the scenarios.

Method: answer in your head before you read the options. If your answer is there, take it and move on.

Style 2: The scenario

An FSP discovers in July that a representative, who left at the end of May, falsified client records while employed. It knew nothing before she left. What may the FSP do?

A scenario hides one or two facts that decide the answer. Here the fact is "it knew nothing before she left". An FSP can only debar where the reasons occurred and became known while the person was its representative. So the FSP cannot debar and should pass the information to the Authority.

Method: read the last sentence first, so you know what you are looking for. Then read the story and underline dates, roles and words like "knew", "after" and "before".

Style 3: Roman-numeral statements

Consider these statements: i) A key individual may be a juristic person. ii) A juristic representative must have at least one key individual. iii) A key individual who advises clients must be on the register of representatives. Which are correct?

Method: judge each statement on its own and mark it true or false before looking at the options. Here (i) is false, (ii) and (iii) are true. One statement you are sure of usually removes two options.

Style 4: NOT and EXCEPT

Which of the following is NOT one of an FSP's duties when it outsources a function?

Your brain looks for the right thing. This question wants the wrong one.

Method: rewrite it as four true-or-false statements. Three are true duties. The odd one out is your answer.

Style 5: Calculations

The RE1 has more arithmetic than the RE5. Typical examples:

• Dates. A debarment on 2 September: grounds and reasons are due within 15 days, so by 17 September.
• Liquidity. A Category III FSP with annual expenditure of R10.4 million must hold liquid assets of 13/52 of that, which is R2.6 million.
• Early warning. Assets of R2.1 million against liabilities of R2.0 million exceed them by 5%. That is under 10%, so the Authority must be told immediately.
• Penalties. A return that is 12 days late can attract up to R1 000 a day, so R12 000.

Method: write the sum down. Do not do it in your head at minute 140.

Style 6: BEST and MOST

Which control BEST ensures that the FSP renders services only within its licence?

All four options may be sensible things to do. Only one actually achieves the aim. A system that blocks a transaction outside a representative's authorised products prevents the problem. A reminder email only hopes it will not happen.

Method: prefer the option that prevents over the one that informs, and the one that is specific over the one that is general.

The traps that repeat

Trap	Example
Right rule, wrong period	15 days offered where the answer is 5
Right duty, wrong person	The compliance officer offered where the FSP carries the duty
"May" against "must"	A power described as an obligation
A true statement that does not answer the question	Correct law, wrong topic
Absolute words	"Always", "never", "in no circumstances"

A routine for the day

1. First pass: answer everything you know, flag the rest. Do not get stuck.
2. Second pass: work the flagged scenarios and calculations.
3. Last ten minutes: check that every question has an answer. There is no negative marking, so never leave a blank.

Practise this routine on full 80-question papers. The format stops being a surprise, and your attention goes to the law.