Financial Conduct Authority (FCA) UK Regulation Sample Exam

Who is responsible for ensuring the completeness and accuracy of information when a MiFID firm relies on a third party?

1. The client

2. The third party firm only

3. The MiFID firm only

4. Both firms jointly

The correct answer is: The third party firm only

The correct choice emphasizes that the third party firm is responsible for ensuring the completeness and accuracy of the information provided when a MiFID (Markets in Financial Instruments Directive) firm relies on it. This aligns with the principle that when a firm engages a third party, the latter must ensure that it delivers complete and accurate data to avoid any misrepresentation or errors that could affect the decision-making processes of clients or the MiFID firm. In the context of the regulatory environment, it’s crucial to recognize that third parties are often specialists in their areas, handling specific aspects of financial services. Therefore, they must maintain rigorous standards to ensure the reliability of the information they provide. This accountability is part of the overall regulatory requirements designed to protect investors and maintain market integrity. While one might consider that the MiFID firm also has responsibilities regarding the information it receives, the question specifically focuses on the completeness and accuracy attributed to the reliance on the third party, making it clear that the primary accountability lies with them in this context.