All RE5 questions
Financial Products Apply knowledge of the financial products and services environment
Which statements distinguish a discretionary FSP from an advice-only FSP? i) It needs Category II authorisation. ii) It acts under a written mandate from the client. iii) It makes investment decisions without the client approving each one. iv) It may ignore the client's stated investment limits.
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) All four statements
- b) Statements ii, iii and iv
- c) Statements i and ii
- d) Statements i, ii and iiiCorrect
Why this is the answer
A discretionary FSP needs Category II authorisation, acts under a written mandate, and makes investment decisions within that mandate without seeking the client's approval each time. It must stay within the mandate, including any limits the client has set.
Want to test yourself on 700+ more questions like this?
Start your free RE5 simulator today — timed mock exams, full answer explanations and cloud-synced progress tracking.
More Financial Products questions
- A house worth R1 000 000 is insured for R600 000 under a short-term policy subject to a…
- A retiree puts all her savings into a five-year fixed deposit at one small bank. Two ye…
- A car with a market value of R180 000 is insured for R250 000 under a short-term policy…
- Four representatives each deal in one product only: Asha: funeral policies. Ben: retire…