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Code of Conduct Adhere to the specific Codes of Conduct
An FSP's **Conflict of Interest Management Policy** is mandatory. Which of the following is the primary purpose of this policy?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) To prohibit all FSP staff from ever having a conflict.
- b) To justify why a representative should receive higher commission.
- c) To identify, mitigate, and disclose conflicts that might influence objective advice.Correct
- d) To keep the policy secret from the FSCA.
Why this is the answer
The General Code of Conduct (Sec 3(1)(c)) requires every FSP to have a Conflict of Interest Management Policy. Its purpose is not to prohibit all conflicts (which is impossible), but to ensure a formal process exists to identify, mitigate (reduce the effect of), and disclose those conflicts to the client.
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