How must aggregated costs and charges be expressed to a client, according to Chapter 3, Section 4.3?
Explanation
To ensure full transparency on the impact of costs on investment returns, firms are required to present the total aggregated costs to clients in two ways: as a clear monetary value and as a percentage. This dual presentation helps clients understand both the absolute and relative impact of charges.
Other questions
According to Chapter 3, Section 1, which of the following is a key organisational requirement for investment firms?
What is the primary purpose of the compliance function within a CIF, as described in Chapter 3, Section 2.1?
For how long must investment firms retain records of telephone conversations and electronic communications with clients?
Which of the following functions is NOT considered 'critical or important' for the purpose of outsourcing, according to Chapter 3, Section 2.3?
When an investment firm outsources a critical operational function, who remains fully responsible for discharging all obligations?
What must a firm do before using a client's financial instruments for securities financing transactions?
Which of the following situations describes a conflict of interest as defined in Chapter 3, Section 3?
When are investment firms permitted to use disclosure of a conflict of interest to a client?
What is the minimum frequency for reviewing the conflicts of interest policy?
According to Chapter 3, Section 4, what must be included in information provided to clients about past performance?
Which of the following entities would automatically be considered a professional client?
A large undertaking can be treated as a professional client if it meets at least two of three size requirements. Which of the following combinations meets these requirements according to Chapter 3, Section 4.1?
When providing information about financial instruments, what does the description of risks need to explain regarding leverage?
If a firm provides both independent and non-independent advice to the same client, what is it obligated to do?
What is the stated reason for undertaking a suitability assessment for a client?
When providing portfolio management services, a firm may assume what about a professional client?
What must a firm do when its advice includes switching investments?
In the context of best execution, which of the following is NOT a characteristic that a firm needs to take into account?
How often must a firm review its execution policy and order execution arrangements?
What is a firm required to do with comparable client orders according to the client order handling rules?
A compliance officer is appointed by whom?
When outsourcing portfolio management to a service provider in a third country, what is a key condition that must be satisfied?
What does a firm's internal audit function have a responsibility to do, as per Chapter 3, Section 2.5?
Over-reliance on which of the following is considered a deficiency in a firm’s conflicts of interest policy?
A recommendation made by an investment firm that does not meet the definition of 'investment research' shall be treated as what?
When must a firm provide a retail client with a suitability report?
What effect does a client providing specific instructions have on a firm's best execution obligation?
If a firm receives an instruction to provide investment services on behalf of a client through another firm, who is responsible for the suitability of the recommendation?
A firm's internal control mechanisms are designed to secure compliance with decisions and procedures at which level of the investment firm?
A compliance function can be exempted from the requirement that its staff are not involved in the services they monitor if what condition is met?
Which of the following must be recorded on a durable medium for relevant face-to-face conversations with clients?
If a firm holds client funds in an omnibus account with a third party, what must it do?
What is one of the effective procedures firms should have in their conflicts of interest policy to ensure independence?
If a professional client requests to be treated as a non-professional, what is the consequence?
A firm needs to obtain sufficient information to assess a client's financial situation. This information includes the source and extent of their:
Under the client order handling rules in Chapter 3, Section 7.1, a firm may aggregate a client order with another order if:
If an aggregated order is only partially executed, which orders are given priority?
What is the primary consideration for a firm's systems and procedures regarding business interruptions?
What is the minimum frequency for the risk management function to be reviewed?
If a firm determines a product is not appropriate for a potential client, what must it do?
When can a firm that only receives and executes client orders be exempted from assessing the client's knowledge and expertise?
Firms providing independent investment advice must implement a selection process to assess and compare what?
If a periodic suitability assessment review is provided to a client, what is the minimum frequency for this review?
Which of the following elements must a firm assess to determine a client's knowledge and experience?
What information must a firm provide to a retail client in its summary of the execution policy?
A firm is required to inform a retail client about what, promptly upon becoming aware of it?
An investment firm must monitor and, on a regular basis, evaluate the adequacy and effectiveness of its:
A firm's risk management function must be independent from what?
What is the consequence for a client who elects not to provide sufficient information for a suitability assessment?