RegulatoryExams
All RE5 questions
Code of Conduct Adhere to the specific Codes of Conduct

On Monday a client emails a clear instruction to switch her investment out of an equity fund. The adviser is busy with new business and processes the switch on Friday. The fund falls 6% during the week. 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.

  1. a) He complied with the Code, because instructions must be executed within five business days.
  2. b) He complied with the Code, because market movements are a risk the client accepted.
  3. c) He breached the Code: instructions must be executed as soon as reasonably possible.Correct
  4. d) He breached the Code only if he personally profited from the delay.

Why this is the answer

A provider must render services in accordance with the client's reasonable requests and instructions, which must be executed as soon as reasonably possible and with due regard to the client's interests, which take priority over the provider's own. Putting new business first is not a justification. There is no five-day allowance, and personal profit is not an element of the breach.

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.

Start the free simulator Open the RE5 study guide

More Code of Conduct questions