R01 High Level Standards: COND, SYSC, GEN and FEES: free practice questions

1. Question 1 of 5

   Which block of the FCA Handbook contains the Principles for Businesses, SYSC and the Threshold Conditions?

   Option A: High Level StandardsOption B: Specialist SourcebooksOption C: Regulatory ProcessesOption D: Business Standards

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   The answer is A: High Level Standards

   High Level Standards contains the obligations for all firms, senior management and approved persons, including PRIN, SYSC, COCON, COND, APER, FIT, FINMAR, T&C, GEN and FEES.

   Why the other options are wrong

   B

   Specialist Sourcebooks cover particular sectors, such as COLL and CONC.

   C

   Regulatory Processes holds SUP and DEPP.

   D

   Business Standards holds the conduct rules such as COBS, ICOBS, MCOB and CASS.

2. Question 2 of 5

   Which of the following is NOT one of the Threshold Conditions?

   Option A: A minimum of 1,000 clientsOption B: Effective supervisionOption C: Appropriate resourcesOption D: A suitable business model

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   The answer is A: A minimum of 1,000 clients

   The Threshold Conditions include location of offices, effective supervision, appropriate resources, suitability and business model. There's no minimum client number.

   Why the other options are wrong

   B

   Effective supervision is a Threshold Condition.

   C

   Appropriate resources is a Threshold Condition.

   D

   A suitable business model is a Threshold Condition.

3. Question 3 of 5

   Why might the FCA restrict short selling under FINMAR?

   Option A: To raise extra tax revenue for the Treasury from trading profitsOption B: To support the price of gilts during periods of Government borrowingOption C: To keep markets orderly when prices move violently or trading is improperOption D: To stop firms from making any profit at all from falling markets

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   The answer is C: To keep markets orderly when prices move violently or trading is improper

   Short selling restrictions aim to prevent disorderly markets, for example after violent price movements, unusual trading or false rumours, supporting consumer protection and integrity.

   Why the other options are wrong

   A

   Restrictions aren't about raising tax.

   B

   They aren't aimed at supporting gilt prices.

   D

   They're about orderly markets, not banning all profit from falls.

4. Question 4 of 5

   Can an authorised firm use the FCA logo on its own materials?

   Option A: Yes, on any materialsOption B: No; authorised firms can no longer use the FCA logoOption C: Only if the FCA has approved the specific documentOption D: Yes, but only on its website

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   The answer is B: No; authorised firms can no longer use the FCA logo

   Under GEN 5.1.3A, authorised firms can't use the FCA logo on their materials. The separate 'keyfacts' logo may be used only on prescribed documents.

   Why the other options are wrong

   A

   Use of the FCA logo isn't permitted.

   C

   There's no document-by-document approval for the logo.

   D

   Website use isn't permitted either.

5. Question 5 of 5

   Which statement about FCA application fees is correct?

   Option A: They're only charged to firms whose application is refusedOption B: They're payable whatever the outcome, and aren't refundableOption C: They're met from public funds through HM TreasuryOption D: They're refunded in full if the application is refused

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   The answer is B: They're payable whatever the outcome, and aren't refundable

   Application fees (from £2,500, simplified in 2022) must be paid whether or not the application succeeds, because the FCA commits resources to every application.

   Why the other options are wrong

   A

   All applicants pay.

   C

   The FCA receives no public funding.

   D

   Fees aren't refunded.

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