Regulatory Compliance 101: The MAP S.Platis Trivia Quiz for beginners!

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Regulatory Compliance 101 Quiz

Welcome to the Regulatory Compliance 101 Quiz! This engaging quiz is designed for those who are keen to learn about the regulatory landscape in Cyprus and understand the key aspects of compliance in the financial sector.

Test your knowledge with a variety of questions covering:

Regulatory bodies and frameworks
Anti-money laundering (AML) principles
Investment firm operations and compliance requirements
European Union regulations related to finance

27 Questions7 MinutesCreated by LearningLion25

The Cyprus Securities and Exchange Commission (CySEC) is the primary regulating body in Cyprus, playing a significant role in the supervision, authorisation and monitoring of, inter alia, Cyprus Investment Firms.

True

False

The Central Bank of Cyprus (CBC) is responsible for the supervision of, inter alia (more than one correct answers):

Credit Institutions

Electronic Money Institutions (EMIs)

Alternative Invesment Fund (AIF) Management Companies

All of the above.

A Cyprus Investment Firm (CIF) is able to freely provide investment services, even if it is not licensed by the CySEC.

True

False

The main difference between an EU Regulation and an EU Directive, is that an EU Directive is directly applicable in all EU Member States without the need for any national implementing legislation.

True

False

What constitutes a "High-risk third country" in AML/CTF terms?

Nations with significant weaknesses in their anti-money laundering/counter-terrorist financing systems.

Nations with significant weaknesses in their social, political and financial sectors.

In general terms, Know Your Client (KYC) is a standard in the investment industry that ensures obliged entities can verify a client's identity and financial profile.

True

False

Broadly speaking, which of the following are the major roles within a firm's compliance function?

Identify potential threats of non-compliance and take measures to alleviate them.

Ensure that all corporate processes/ policies/ procedures comply with the relevant law(s).

Manage the ongoing review of materials and communication tools to ensure departments meet compliance requirements.

All of the above.

The three main European Supervisory Authorities (ESAs) in the EU are the European Securities and Markets Authority (ESMA), the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA).

True

False

A person who is appointed as an executive member of the board of a CIF may be appointed as an executive member of another CIF that belongs to the same group; in such cases, the directorships held are to be considered as one single directorship.

True

False

Derivative contracts related to currencies (e.g. EUR/USD, GBP/USD) are considered as financial instruments under MiFID II; currencies per se are not.

True

False

The cost of an application to CySEC for any changes in the composition of a CIF's board of directors may be found in CySEC's Directive DI87-01(A) for the Safeguarding of Financial Instruments and funds belonging to Clients.

True

False

Further to the provisions of the "The prevention and suppression of money laundering and terrorist financing law 2007 – 2021" (as amended), until withdrawal of its operating licence by CySEC, a CIF should continue to maintain fully developed offices and have the required and necessary personnel at place.

True

False

CIFs are required to place clients funds into one or more accounts opened with which of the following entities?

Credit Institution

Central Bank

Qualifying Money Market Fund

All of the above.

The Monthly Prevention Statement must be completed and submitted to the CySEC within 15 days from the end of each month, whereas the Complaints Form must be completed and submitted within 5 days from the end of each month.

True

False

The three stages typically involved in Money Laundering are:

Placement, Withdrawal, Integration

Placement, Layering, Withdrawal

Layering, Integration, Withdrawal

Placement, Layering, Integration

The Law does not provide for any legal defences for persons assisting another for the commission of laundering offences and financing of terrorism offences.

True

False

The Unit for Combating Money Laundering (MOKAS) is the Financial Intelligence Unit (FIU) of Cyprus and it is the national center for receiving, requesting, analyzing and disseminating disclosures of suspicious transactions reports and other relevant information concerning suspected money laundering and terrorist financing.

True

False

By derogation from the provisions of Section 62(1) of the AML/CTF Law, the verification of the identity of the customer and the beneficial owner of a Company may be completed after the establishment of a business relationship if this is necessary so as not to interrupt the normal conduct of business and where there is little risk of money laundering or terrorist financing occurring.

True

False

A person appointed in the position of an Anti-Money Laundering Compliance Officer (AMLCO) should be a holder of the both the AML and Advanced Certificate by CySEC.

True

False

Imagine that a CIF that offers CFDs to its clients, displays the below risk warning on their main webpage: "CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage." Would you consider the aforementioned statement as sufficient risk warning, as per CySEC's requirements under Directive DI87-09?

Yes.

No.

What is the maximum leverage that a CIF can offer on the opening of a position by a retail client?

50:1

30:1

20:1

None of the above.

An automatic stop out (i.e. close-out) will occur when account equity falls below 50% of the margin required for the trades.

True

False

Eligible counterparties and professional clients are offered equal levels of investor protection as retail clients.

True

False

Retail clients who wish to change their categorisation to Elective Professional, may do so by merely stating their intention in writing to the Investment Firm. No further actions are required to be taken on behalf of the Investment Firm upon reception of such a request.

True

False

Retail Clients may be entitled to compensation under the Investor Compensation Fund (ICF) for Clients of Investment Firms, while, Professional Clients are not entitled to compensation under the said fund.

True

False

Regulatory Compliance 101: The MAP S.Platis Trivia Quiz for beginners!

Regulatory Compliance 101 Quiz

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