Financial Conduct Authority (FCA) UK Regulation Sample Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the FCA UK Regulation Exam with our interactive quiz. Utilize flashcards and multiple choice questions with detailed explanations. Master your knowledge and succeed on your test!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

To whom should a portfolio manager provide information regarding an execution policy?

The firm's compliance department
The client
External auditors
Market analysts

The correct answer is: The client

The portfolio manager should provide information regarding an execution policy to the client. This is essential because clients have the right to understand how their investments are managed, including the practices employed in executing trades on their behalf. An execution policy outlines how a firm will handle securities transactions, including how it seeks to obtain the best possible outcome for its clients in terms of execution. Transparency in this area helps to foster trust and ensures that clients are fully informed about the practices that may affect their investment returns. Moreover, providing this information aligns with regulatory expectations that firms act in the best interests of their clients and maintain clear communication regarding key practices and policies. While other stakeholders like the compliance department, external auditors, and market analysts may have interests in the execution policy for governance, compliance, or analytical purposes, it is the client who ultimately requires this information to make informed decisions about their investment strategy and to assess the quality of service being provided.