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An FSP holds client premiums briefly before paying them to the insurer. How must these funds be treated?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Kept separate from the FSP’s own money and paid into the designated client account within one business day.Correct
- b) Held in the representative’s personal account.
- c) Used to fund the FSP’s payroll until the insurer asks for them.
- d) Mixed with the FSP’s trading account for convenience.
Why this is the answer
Client money must be segregated from the FSP's own funds and deposited into the designated account within one business day. Using or commingling client money is a serious breach.
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