Financial Conduct Authority (FCA) UK Regulation Sample Exam

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What is the maximum number of days a client has to cancel her investment in an authorized UK unit trust without incurring charges?

7 days
14 days
30 days
60 days

The correct answer is: 14 days

The maximum period a client has to cancel her investment in an authorized UK unit trust without incurring charges is 14 days. This period is established under the Financial Conduct Authority (FCA) regulations which aim to protect investors by providing them with a 'cooling-off' period. During this time, clients can assess their investment decisions and choose to withdraw without facing penalties or fees. This consumer protection measure is essential as it allows investors to reconsider their choices after making a commitment, thereby enhancing transparency and confidence in the investment process. The other durations mentioned—7 days, 30 days, and 60 days—do not align with the established regulatory framework. A 7-day period would be too brief for adequate reflection, while longer periods such as 30 and 60 days do not conform to the specific regulations set by the FCA regarding unit trusts. Thus, the 14-day window is the appropriate timeframe for cancellation without charge.