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Conflicts of Interest Code of Conduct
What is the purpose of requiring an FSP to keep a conflict-of-interest management policy?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) To set out how the FSP identifies, avoids, discloses and mitigates conflicts so clients’ interests are protected.Correct
- b) To record the representatives’ personal investment portfolios for tax.
- c) To list which clients the FSP intends to overcharge.
- d) To replace the need for any disclosure to clients.
Why this is the answer
A conflict-of-interest management policy documents how conflicts are identified, avoided, disclosed and mitigated, and how related parties and incentives are handled — protecting clients. It supplements, not replaces, the duty to disclose conflicts to clients.
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