Free RE5 exam questions
Real-style RE5 questions with the correct answer and a full explanation for each one — covering the FAIS Act, the General Code of Conduct, FICA and the wider FSCA regulatory framework. Browse a sample below, then jump into the simulator for 700+ more questions.
Client Onboarding
Code of Conduct
- Sive receives premium money from a client to pass on to the product supplier. Under the General Code of Con…
- Israel receives cash directly from a client into safe custody, without it going through a bank first. Under…
- Terrific Custody Services has started holding clients' documents of title. Under the General Code of Conduc…
- Lwazi gives a client advice orally, and the client proceeds to buy the recommended product. What does the G…
- On 30 October a client accepts Tebogo's proposal, which includes a recommended financial product and a sepa…
- When a client is advised to replace one financial product with another, what must the provider disclose bef…
- Naledi recommends that a client replace an existing long-term insurance policy with a new one. Besides advi…
- Innocent gives every new client a standard disclosure document at the first meeting. Which of the following…
- Under the FAIS General Code of Conduct, which of the following is NOT actually a duty imposed on providers…
- Tony owns Venda Financial Brokers. Which of the following would amount to a breach of the General Code of C…
- When following a proper advice process under FAIS, what is the FIRST thing a representative should establis…
- Before recommending a product, the General Code requires the representative to obtain appropriate informati…
- A client refuses to disclose certain financial information needed for a full analysis but still wants a pro…
- Before a transaction is concluded, which of the following must an FSP disclose to the client?
- Which of the following items is the FSP required to disclose to a client about itself and the relationship?
- Under the General Code, advertising by an FSP must above all be:
- An FSP receives money or premiums on behalf of a client and a product supplier. Under the General Code, how…
- A representative tells a client that an investment 'cannot lose money and will definitely double in three y…
- Which of the following is the clearest example of 'churning' that the replacement rules are designed to pre…
- Under the General Code, before concluding a product purchase based on advice, what must the representative…
Complaints Management
Conflicts of Interest
- Under the General Code, how must an FSP deal with a conflict of interest between itself (or a representativ…
- Which of the following would most likely be an impermissible conflicted incentive under the conflict-of-int…
- What is the purpose of requiring an FSP to keep a conflict-of-interest management policy?
- An FSP runs a competition where representatives who sell the most of a single insurer's product win an over…
- Which action by an FSP would breach the requirement to avoid or manage conflicts of interest?
Consumer Protection
Ethics
FAIS Act
- Under the FAIS definition of 'advice', which of the following actions by Mandla would actually amount to ad…
- Which person fits the FAIS definition of a 'representative'?
- In terms of the FAIS Act, which of the following roles is EXCLUDED from the definition of a representative?
- After an illness, Zinhle voluntarily surrendered her FSP licence; she has now recovered and wants it back.…
- Themba's FSP licence was suspended and then withdrawn. He now wants to operate again. Which statement refle…
- Facing sequestration, Gugu is weighing whether to surrender her licence or let it be suspended, and asks wh…
- The Registrar has published a notice in the Government Gazette declaring a particular business practice und…
- An FSP ignored a Gazetted declaration that its practice was undesirable and carried on regardless. What san…
- Xolani has obtained accreditation under section 65(3) of the Medical Schemes Act. Before he may market the…
- Which statement correctly reflects the relationship between a product supplier and a financial services pro…
- Which of the following best describes the relationship a representative must have with the FSP under sectio…
- The Registrar may suspend or withdraw an FSP's licence in which circumstance?
- Once the Registrar has declared a business practice 'undesirable' by Gazette notice, how long does an affec…
- What penalty does the FAIS Act provide for serious contraventions such as continuing a declared undesirable…
- Which of the following is within the FSCA's regulatory powers over FSPs?
- Which statement about levies in the financial-services regulatory system is correct?
- Which statement about a representative's mandate under the FAIS Act is correct?
- Which statement about the difference between 'advice' and an 'intermediary service' under FAIS is correct?
- Which of the following best describes the relationship between the Prudential Authority and the FSCA under…
- Which statement about the relationship between the FAIS Act and the FIC Act for a typical FSP is correct?
FAIS Ombud
- Julius is unhappy with a determination the FAIS Ombud made against him and believes the process was unfair.…
- A FAIS Ombud determination has the same effect as which of the following once it is registered with the app…
- Under the General Code, when an FSP receives a client complaint, which of the following is the compliant wa…
- Under FAIS, what is a 'complaint' for the purposes of the complaints-handling rules?
- A client wants to approach the FAIS Ombud about a dispute. What must usually happen first?
- Which statement about the FAIS Ombud's jurisdiction is correct?
- After the FAIS Ombud issues a determination, what is the route for a party who disagrees with it?
- Which of the following correctly reflects an FSP's duty when it receives a complaint it cannot resolve to t…
- Once registered with the appropriate court, a FAIS Ombud determination:
- Which body provides independent reconsideration of decisions such as an Ombud determination or certain regu…
- Why does the General Code require an FSP to have a documented complaints-management process?
- Which body hears appeals/reconsiderations of decisions by the FSCA and the FAIS Ombud?
- Which statement about the FAIS Ombud's service to complainants is correct?
- A client complains in writing about poor advice. What is the FSP's first proper step under its complaints p…
- A client of an FSP suffers loss and the FAIS Ombud makes a determination in the client's favour. What is th…
- What must a client do first before the FAIS Ombud will investigate a complaint against an FSP?
- An FSP fails to respond to a client’s internal complaint within the six-week period. What is the client the…
- A client receives the FSP’s final written rejection of their complaint on 1 March. By when must they refer…
- A client complains to the Ombud that their investment fund lost value because of a global market downturn —…
- An unappealed final determination of the FAIS Ombud against an FSP is legally equivalent to:
FIC Act
- Mahlatse Brokers is an authorised FSP that also falls within the definition of an 'accountable institution'…
- Under the FIC Act, when must an accountable institution establish and verify a new client's identity?
- A client of Boitumelo's firm deposits cash above the prescribed cash-threshold amount. What does the FIC Ac…
- Sizwe notices a transaction pattern that has no apparent lawful purpose and looks like it may involve the p…
- Which document must every accountable institution develop, document and keep up to date under the FIC Act t…
- A prospective client is a senior government official who fits the definition of a domestic prominent influe…
- For how long must an accountable institution keep the CDD and transaction records required by the FIC Act?
- Why does the FIC Act prohibit 'tipping off' a client about a suspicious transaction report?
- Busi works at an accountable institution and is asked to apply 'ongoing due diligence' to an existing clien…
- An accountable institution must verify a client's identity. For a South African individual, this typically…
- Which of the following transactions would most likely trigger a suspicious-transaction report rather than a…
- What must an FSP do to meet the FIC Act's record-keeping duty for a client it onboarded and later stopped d…
- A representative is unsure whether a client qualifies as a politically exposed person. What is the prudent…
- What does 'know your client' (KYC) primarily achieve for an FSP?
- What does the FIC Act require of an accountable institution that identifies a reportable transaction?
- Before Lindiwe may open a business relationship with a new client, the FIC Act requires her firm to carry o…
- The FIC Act classifies the FSP as an accountable institution. What is its key foundational compliance oblig…
- When must an FSP generally carry out customer due diligence under the FIC Act?
- A representative notices a client trying to split a R90 000 cash deposit into three R30 000 deposits at dif…
- After filing a suspicious transaction report, an FSP must not let the client know a report has been made. T…
Financial Products
- Which licence category is held by an FSP that gives advice and/or renders intermediary services in the ordi…
- Under the FAIS Act, who qualifies for a Category IIA licence?
- Which of the following are 'financial products' as contemplated by the FAIS Act? i) Debentures. ii) A money…
- When categorising products under the FAIS Act, which of the following is NOT a recognised product subcategory?
- An FSP that manages client investments on a discretionary basis (deciding what to buy and sell without refe…
- Which licence category applies to an administrative FSP (for example, a LISP that administers investments a…
- Which of the following is a recognised product subcategory under FAIS?
- A long-term insurance client changes their mind shortly after taking out a policy. Which mechanism may allo…
- Which of the following is an example of a LONG-TERM insurance product?
- Which of the following is best classified as a SHORT-TERM insurance product?
- A participatory interest in a unit trust is an example of which kind of financial product?
- Which statement about a retirement annuity (RA) is correct for advice purposes?
- Which of the following is NOT a financial product regulated under the FAIS Act?
- A client wants to invest a lump sum but cannot afford to lose any capital and may need the money within six…
- Which of the following is a 'financial product' under the FAIS Act?
- A discretionary FSP makes investment decisions for clients. Which extra obligation distinguishes it from an…
- Which of the following is the correct classification of a unit trust investment?
- A client wants exposure to listed shares without buying individual shares directly. Which product is most a…
- Which of the following correctly describes the 'cooling-off' right in long-term insurance?
- A client asks whether a foreign-currency-denominated investment is covered by FAIS. Which answer is correct?
Fit & Proper
- Naledi is a star performer at Olwethu Wealth (Pty) Ltd, yet her personal debts currently exceed what she ow…
- Every authorised FSP must maintain a register of its representatives. What is the principal regulatory reas…
- Thandeka maintains the representative register at her FSP. A representative's licensed category changes thi…
- Which of the following is NOT information that an FSP is required to keep on its representative register?
- Over the past CPD cycle Kabelo, a representative authorised for investments, did several things. Which of t…
- A year ago Rofhiwa was acquitted of fraud, and an earlier court order that had barred him from managing a c…
- Yusuf supervises Ayanda, a newly-appointed representative who has not yet met the full competence requireme…
- Under the post-2010 fit-and-proper entry rules, Refilwe wants to start as a Category I short-term insurance…
- Under the fit-and-proper competence requirements, which component is specifically tested by the regulatory…
- Apart from the regulatory exam and a recognised qualification, which competence component must representati…
- Continuous professional development (CPD) under the fit-and-proper requirements is best described as:
- An FSP wants to demonstrate the operational ability and risk cover expected of it. Which of the following i…
- Which statement about a representative working under supervision is correct?
- A newly appointed representative is working under supervision. What must happen regarding their disclosure…
- Which statement about completing competence requirements while under supervision is correct?
- An entity wishing to render financial services applies for an FSP licence. To whom is the application made,…
- If the Registrar is not satisfied that an FSP licence applicant meets the requirements, what must the Regis…
- Which of the following is part of the 'operational ability' an FSP must demonstrate?
- What is the basic financial-soundness requirement that applies to an FSP (and to a sole proprietor who is t…
- Why do discretionary (Category II) and administrative (Category III) FSPs face additional financial require…
Insurance Principles
Key Individual
- Under the FAIS Act, which combination of roles may one and the same person hold within an FSP?
- Abel holds an NQF 5 financial-planning certificate and has run a funeral-services unit for four years. His…
- George trains financial-services staff but never deals with clients; Jack is a funeral-policy call-centre a…
- Which regulatory examination must a key individual pass that a representative-only role does not require?
- Which statement correctly distinguishes a compliance officer's role from a key individual's role?
- What is the core statutory function of a key individual within an FSP?
- Before a person may act as a key individual, what is required?
- A large FSP renders financial services across several distinct product divisions. What does this typically…
- Part of a key individual's oversight role includes which of the following in relation to representatives un…
- George provides only generic financial-literacy training and never deals with clients on specific products;…
- Which of the following correctly states what a key individual must satisfy to be approved?
- Under the FAIS Act, who carries ultimate responsibility for ensuring that an FSP's representatives remain f…
- A key individual oversees ten representatives. One repeatedly fails to keep proper records of advice. What…
- Which of these is a key individual NOT permitted to do?
- Which of the following persons must write the regulatory examinations?
- What is the primary responsibility of a key individual under the FAIS Act?
- Which scenario represents a failure of a key individual’s management and oversight duty?
- A representative fails to submit the required annual Fit and Proper declaration. What is the key individual…
- An FSP is licensed for both Category I and Category II. For which categories must its key individual be app…
- Which document is the key individual primarily responsible for ensuring is accurate and submitted to the FS…
Licensing
Needs Analysis
Organizational Structure
POPIA
- In handling client personal information, an FSP acts as a 'responsible party' under POPIA. Which statement…
- An FSP wants to use client contact details collected for policy administration to run an unrelated marketin…
- Under POPIA, a data subject (the client) generally has which right regarding their personal information hel…
- Under POPIA, an FSP suffers a security compromise that exposes clients' personal information. What is a cor…
- Under POPIA, what is the lawful basis most commonly relied on to send a client direct marketing about new p…
- What is the principal purpose of the Protection of Personal Information Act (POPIA)?
- POPIA says personal information should be kept only for as long as necessary for the purpose it was collect…
- POPIA sets out eight conditions for the lawful processing of personal information. Which of the following i…
Professional Development
Record Keeping
- FSPs must keep client records safe from destruction. For how long must records generally be retained?
- Which of the following is NOT among the records of advice an FSP must keep and be able to furnish to a client?
- What must a record of advice issued to a client contain?
- For how long must an FSP retain records of advice and related client documentation under FAIS?
- On receiving documents of title into safekeeping, what must the FSP do under the General Code?
- An FSP wants to confirm it is meeting the operational-ability requirement for record-keeping. Which arrange…
- A client asks for a copy of the record of advice from a meeting last year. What is the FSP's obligation?
- Mr Chetty advises a client on a long-term insurance policy on 10 November 2025. For how long must the FSP k…
- A client complains about advice given two years ago. For how long must the FSP keep the record of the compl…
- An FSP keeps all required records electronically. Which of the following is NOT a FAIS requirement for thos…
- A representative resigns from the FSP. What is the FSP’s continuing obligation regarding the records that r…
- An FSP must keep its records available for inspection by which body or person?
- An internal audit finds that records of new representative appointments are kept for only two years before…
- The record of advice must show that the client was told of their right to complain. Capturing this primaril…
- An FSP loses client records to a system crash and has no backup. Which Fit and Proper requirement is breached?
- For an ongoing service with no fixed end date (such as a living annuity), when does the five-year retention…
- A representative must record the material aspects of the service rendered. Which of the following is NOT a…
- The record of advice should clearly distinguish advice from intermediary services rendered. Why does this d…
- A representative records client details and the needs analysis only in a personal notebook they keep at hom…
- An FSP must keep its internal compliance reports and audit records. This is chiefly important to evidence:
Regulatory Bodies
Regulatory Framework
TCF
- The 'Treating Customers Fairly' (TCF) framework is built around six fairness outcomes. Which of the followi…
- Under TCF, a product provider designs an investment aimed at retirees seeking income. Which TCF outcome doe…
- A client complains that, after buying a policy, the insurer made it unreasonably difficult to claim, switch…
- Under TCF Outcome 4, advice given to a client must be:
- Mpho gives a client clear pre-sale information, keeps them informed during the policy term, and explains ch…
- Under TCF, 'Outcome 5' concerns products performing as customers were led to expect. Which scenario breache…
- Which of the following is an example of treating a customer fairly under TCF Outcome 2 (product design)?
- Under the Treating Customers Fairly framework, which outcome is most directly concerned with ensuring that…
- Within an FSP, who carries ultimate responsibility for embedding a Treating Customers Fairly culture?
- Which TCF outcome requires that customers be given clear information and kept appropriately informed before…
- Under Treating Customers Fairly, what does the 'product lifecycle' refer to?
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