All RE5 questions
Financial Products Apply knowledge of the financial products and services environment
A client asks whether advice on a foreign currency deposit falls under FAIS. Which statement is correct?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) It is outside FAIS, because the currency is not the rand.
- b) It is outside FAIS, because only the Reserve Bank regulates foreign currency.
- c) It can be a financial product, so the advice and disclosure rules apply.Correct
- d) It is within FAIS only if the deposit is held in South Africa.
Why this is the answer
Foreign currency denominated investment instruments, including certain deposits, fall within the FAIS definition of financial products, so the usual advice, disclosure and suitability duties apply. Exchange control is a separate matter and does not take them outside FAIS.
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