FIA Regulatory Compliance & Ethics 4

Question 1

Under the USA PATRIOT Act, financial institutions must implement a Customer Identification Program (CIP) to verify the identity of customers when:

Accepted Answer

Opening a new account for an individual or entity

Answer

The CIP requirement under the USA PATRIOT Act is triggered when a new account is opened, requiring identity verification of the customer.

Question 2

The Employee Retirement Income Security Act (ERISA) imposes which of the following duties on plan fiduciaries?

Accepted Answer

Acting solely in the interest of plan participants and beneficiaries

Answer

ERISA's duty of loyalty requires fiduciaries to act solely in the interest of plan participants and beneficiaries when managing plan assets.

Question 3

A financial information professional who discovers an error in a previously distributed research report is ethically obligated to:

Accepted Answer

Promptly issue a correction to all recipients of the original report

Answer

Ethical standards require prompt, complete correction to all recipients when errors are discovered in distributed research to prevent ongoing harm from inaccurate information.

Question 4

The SEC's Market Access Rule (Rule 15c3-5) requires broker-dealers to implement risk management controls before providing customers with:

Accepted Answer

Direct market access or sponsored access to trade in securities

Answer

Rule 15c3-5 requires broker-dealers to establish risk management controls and supervisory procedures for customers who have direct or sponsored access to trading systems.

Question 5

In the context of financial services ethics, 'window dressing' refers to the practice of:

Accepted Answer

Buying high-performing securities at period-end to make a portfolio look better in reports

Answer

Window dressing involves purchasing recent high-performers near reporting period-end to make a portfolio appear to have held winning investments, which is a deceptive practice.

(FIA) Financial Information Associate Certification Practice Test

(FIA) Financial Information Associate Certification Practice Test

FIA Regulatory Compliance & Ethics 4