Financial Conduct Authority (FCA) UK Regulation Sample Exam

According to the FCA Conduct of Business Sourcebook, which method of information storage satisfies the requirement for a durable medium?

1. Paper contracts stored in a safe

2. Oral agreements recorded on tape

3. Email from an investment manager

4. Word documents saved on local drives

The correct answer is: Email from an investment manager

The correct answer for satisfying the requirement for a durable medium, according to the FCA Conduct of Business Sourcebook, is the email from an investment manager. A durable medium is defined as any way of storing information that allows the client to access, retrieve, and review that information in a manner that is accessible and reliable over time. Email serves this purpose effectively because it offers a permanent record of the communication between parties that can be easily retrieved and retained. It ensures that important details regarding the business agreement and terms can be reviewed at any time by both the firm and the client. Additionally, emails can be stored securely and can remain accessible for a considerable period, meeting regulatory requirements for documentation and client communication. In contrast, other methods of information storage such as oral agreements recorded on tape lack the same accessibility and permanence. Tape recordings can be difficult to manage over time and depend heavily on the technology used to play back and maintain them. Paper contracts stored in a safe, while providing security, may lack the immediacy of retrieval and increased risk of physical damage. Word documents saved on local drives might not adequately meet the necessary standards for durability, especially concerning access and retrieval requirements per regulatory standards, as local drives can become corrupted or inaccessible for reasons beyond a business