CMFAS RES 2B Derivatives Dealing Practices & Skills question: previous conflict-of-interest disclosure

CMFAS RES 2BDerivatives Dealing Practices & Skills

When deciding whether a previous conflict-of-interest disclosure still suffices, FAA-G08 as summarised in the RES 2B study guide directs the dealer to consider which of the following? (a) Whether there has been a long lapse between the current recommendation and the previous disclosure. (b) Whether the client is likely to assume the previous disclosure no longer applies to the current recommendation. (c) Whether, if in doubt, it is safer not to disclose so as to avoid alarming the client. (d) Whether the previous disclosure is still up-to-date, accurate and comprehensive.

A (a), (b), (c) and (d)
B (a) and (b)
C (a), (b) and (d)
D (b), (c) and (d)

Show the answer and explanation

Answer: C. (a), (b) and (d)

RES 2B 6.4.3: consider the lapse of time, whether the client would assume the disclosure no longer applies, and whether it remains up-to-date, accurate and comprehensive. If ever in doubt the dealer should not hesitate to disclose, so (c) is the opposite of the rule. Takeaway: when in doubt, disclose again.

Common mistake

Statement (c) inverts the rule: doubt means disclose.

Practise more RES 2B Derivatives Dealing Practices & Skills questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practising →

Study note: Derivatives Dealing Practices & Skills CMFAS RES 2Bpractice questions & mock exams

Related CMFAS RES 2B questions

Which statements about executing a trading strategy under RES 2B 6.4.5 are CORRECT?Mr Pereira works for a listed commodity trading group whose staff policy bars him from dealing in derivatives on the commodities his employer trades. He also tells his dealer he wants no exposure to any market that restricts the repatriation of funds. The dealer proposes a strategy that includes a swap on one of those commodities, observing that the employer is unlikely to find out. Which statement is CORRECT?A representative at a CMS licence holder proposes a strategy for a retail client that

Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.

Start practising →

Original study material mapped to the public CMFAS RES 2B syllabus. Unofficial, not endorsed by MAS or IBF. Verify figures and rules against current guidance before relying on them.