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Record Keeping Comply with regulated record keeping requirements
A client instructs an FSP to buy units in a named fund for her, and the FSP gives no advice at all. The compliance officer asks whether a record of advice is needed. 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.
- a) No records at all are needed, because no financial service was rendered.
- b) A record of advice is needed, but only if the fund falls in value later.
- c) No record of advice is needed, but her instruction and the transaction must be recorded.Correct
- d) A full record of advice is needed, because every purchase through an FSP is presumed in law to be advised.
Why this is the answer
A record of advice records advice; where none was given, there is nothing to record as advice. But carrying out her instruction is an intermediary service, and the FSP must keep records of the instruction and the transaction for the retention period. Records must also show clearly that no advice was given.
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