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Fit & Proper FSP License (Fit & Proper/Operational Ability)
Three failures occur at an FSP: 1. A server crash destroys client records and there were no backups. 2. Its liabilities now exceed its assets. 3. A key individual is found to have falsified his qualifications. Which Fit and Proper requirement does each failure breach?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) 1 financial soundness, 2 financial soundness, 3 competence
- b) 1 competence, 2 financial soundness, 3 honesty and integrity
- c) 1 operational ability, 2 financial soundness, 3 honesty and integrityCorrect
- d) 1 operational ability, 2 operational ability, 3 honesty and integrity
Why this is the answer
Safe record storage, systems and continuity arrangements are part of operational ability. Assets exceeding liabilities is the core of financial soundness. Falsifying qualifications is dishonesty, which goes to honesty and integrity; the lie matters more than the missing qualification.
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