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Free CISI Technology in Investment Management Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the CISI Technology in Investment Management practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1A fund manager needs a specialist to safeguard securities and arrange settlement of purchases and sales. Which participant performs this role?

    1. A.A financial adviser
    2. B.A custodian bankCorrect answer: B
    3. C.A retail investor
    4. D.An asset owner

    Explanation: CISI describes custodians as providing "safe custody services looking after portfolios of shares and bonds on behalf of others". Their core activities include settlement. Advisers recommend investments; investors and asset owners own investments rather than providing this custody service.

    Reference: CISI Technology in Investment Management, Edition 13 — Chapter 1, section 2.9 Custodians

  2. 2Which regulatory objective addresses the risk that failures spread through the financial system?

    1. A.Protecting individual clients from unsuitable investment sales
    2. B.Reducing systemic risks in securities and futures marketsCorrect answer: B
    3. C.Preventing misuse of individual clients’ confidential information
    4. D.Improving the public’s understanding of investment products

    Explanation: CISI states: "reduce systemic risks in the securities and futures industry" Systemic risk concerns propagation through the financial system. Suitability, confidentiality and public understanding address other investor-protection objectives rather than this system-wide failure exposure.

    Reference: CISI Technology in Investment Management, Edition 13 — Chapter 2, section 1.1, purposes and aims of regulation

  3. 3Which trading arrangement executes client orders against an investment firm’s own account without a multilateral matching system?

    1. A.An organised trading facility
    2. B.A regulated investment exchange
    3. C.A systematic internaliserCorrect answer: C
    4. D.A multilateral trading facility

    Explanation: CISI states: "execute client orders on their own account outside a regulated market, MTF or OTF without employing a multilateral matching system" This defines an SI. An MTF or exchange brings together trading interests, and an OTF is a separate venue category.

    Reference: CISI Technology in Investment Management, Edition 13 — Chapter 3, section 2.1 Definitions of Terms

  4. 4A portfolio manager decides what proportion of a client’s portfolio to place in cash, equities, fixed income and property. Which decision is this?

    1. A.Trade confirmation
    2. B.Performance attribution
    3. C.Individual security selection
    4. D.Asset allocationCorrect answer: D

    Explanation: CISI states: "apportion the amount to be invested into the four broad asset classes" Allocation determines the broad asset-class mix; security selection identifies particular investments, attribution explains performance, and confirmation records a trade.

    Reference: CISI Technology in Investment Management, Edition 13 — Chapter Four — The Investment Decision Process — Asset allocation

  5. 5Within standing settlement instructions, what does the cash nostro identify?

    1. A.The agent that makes or accepts cash payments for the trading partyCorrect answer: A
    2. B.The issuer responsible for paying coupons on the underlying bond
    3. C.The exchange that matched the buyer’s and seller’s orders
    4. D.The manager responsible for choosing the portfolio benchmark

    Explanation: CISI states: "Cash nostro – identifies the settlement agent that will accept or make payments" This identifies the cash settlement agent. The stock depot concerns securities delivery; issuers, execution venues and portfolio managers have different roles.

    Reference: CISI Technology in Investment Management, Edition 13 — Chapter 5, section 1.6.2, key to SSI columns

  6. 6Why should a settlement instruction carry a unique reference that the agent echoes in its responses?

    1. A.To replace the security identifier in the settlement instruction
    2. B.To associate status updates automatically with the instructionCorrect answer: B
    3. C.To require all instructions for one trade to use an identical instruction reference
    4. D.To prove settlement is complete as soon as the reference is assigned

    Explanation: CISI states: "facilitates the update of the trade record in ABC’s systems with the latest status of the instruction" The reference correlates status messages with the instruction. It does not identify the security or establish completion, and multiple instructions for one trade may need distinct references.

    Reference: CISI Technology in Investment Management, Edition 13 — Chapter 6, section 1.6.1 Instruction Reference Numbers

  7. 7Which financial-control activity produces profit-and-loss accounts and balance sheets for individual business units?

    1. A.Statutory reporting for the whole legal entity
    2. B.Cash payment of suppliers’ approved invoices
    3. C.Management accounting or product controlCorrect answer: C
    4. D.Tax planning for the group’s legal entities

    Explanation: CISI explains that management accounting/product control "produces the profit and loss (P&L) accounts and balance sheets for individual business units". Statutory reporting is entity-wide; accounts payable pays costs, while tax management addresses tax liabilities.

    Reference: CISI Technology in Investment Management, Edition 13 — Chapter Seven — The Role of the Financial Control Department — Management accounting

  8. 8Which technology role normally reviews SQL performance, database structures and backup/recovery strategies?

    1. A.Business analyst
    2. B.Solution architect
    3. C.Test analyst
    4. D.Database administratorCorrect answer: D

    Explanation: CISI states: "review SQL (Structured Query Language, see section 1.2.4) performance and tuning" Database administration covers SQL tuning, structures and recovery. Business analysts document needs, architects design solutions, and test analysts verify software.

    Reference: CISI Technology in Investment Management, Edition 13 — Chapter 8, section 1.1.2 Technology Organisational Strategy, DBAs

  9. 9Several technology projects compete for limited staff and funding. What benefit does a structured project-planning framework provide?

    1. A.It approves projects in arrival order rather than by business impact.
    2. B.It allocates identical staffing to projects regardless of their demands.
    3. C.It helps focus resources on the most important or urgent change projects.Correct answer: C
    4. D.It reserves available resources for the most recently proposed project.

    Explanation: CISI states: "focus on the most important and/or urgent change projects" Planning and control allow business importance/urgency to guide scarce resources. Arrival order, equal allocation or recency alone does not assess those priorities.

    Reference: CISI Technology in Investment Management, Edition 13 — Chapter Nine — Introduction — project resource management

  10. 10A packaged application has a low purchase price but expensive annual support and maintenance. What should the buy-versus-build cost comparison include?

    1. A.Only the initial purchase price shown in the vendor’s quotation
    2. B.Both delivery-to-production costs and ongoing operating expensesCorrect answer: B
    3. C.Only the salaries already paid to the firm’s internal developers
    4. D.Only the cost of hardware needed on the first installation day

    Explanation: CISI states: "the cost of delivering the solution to production and the ongoing expenses" A whole-life comparison includes continuing support and maintenance as well as delivery. Each single-cost view omits relevant expenses.

    Reference: CISI Technology in Investment Management, Edition 13 — Chapter Ten — Making the Buy or Build Decision

Exam Review

About CISI Technology in Investment Management

CISI Technology in Investment Management · GB

Key exam facts

Provider
Chartered Institute for Securities & Investment (CISI), examination owner and awarding body.
Format
Computer-based multiple-choice examination, available on demand at test centres or by remote invigilation.
Exam questions
Total questions: 50–55; Scored questions: 50; Unscored questions: 0–5; The total includes the scored and unscored questions.
Time limit
60 minutes for the standard 50 questions; proportionately more time is provided for additional trial questions.
Passing score
70% (35 of 50 marks). Pass: 35–45; pass with merit: 46–50; fail: 0–34.
Exam fee
UK exam fee GBP 155, applicable 1 April 2026–31 March 2027. Mandatory workbook GBP 105 separately; a one-off GBP 68 qualification registration fee applies when registering a first qualification. Saver package GBP 275 includes exam, workbook and Revision Express; concessionary rates may apply.

Topics covered

  • Technology in Investment Management (8%)

    • know the role of the following participants within the financial services Sector retail banks and building societies investment banks asset owners fund managers wealth managers platforms financial advisers robo advisors custodians third party administrators (TPAs)
    • know the elements of a secondary market equity trade
    • know the elements of a secondary market bond trade
    • understand the importance of automation
    • understand the criticality of data management: accuracy timeliness security

  • The Regulatory Framework (12%)

    • understand the regulatory framework
    • know the function of UK and European regulators in the financial services sector Markets in Financial Instruments Directive II (MiFID II)
    • know the significance of European Data Protection Regulation (GDPR and similar data protection regimes in other jurisdictions): principles non-compliance
    • understand how firms are using technology to comply with regulation
    • know the major technology implications of the following rules: FCA specific regulation including Client Asset Sourcebook (CASS), Conduct of Business Sourcebook (COB), Senior Management Arrangements, Systems and Controls (SYSC) Senior Managers & Certification Regime (SM&CR) Approved Person’s Regime (APER) Markets in Financial Instruments Directive II (MiFID II) Basel II & III Foreign Account Tax Compliance Act (FATCA) Dodd Frank European Market Infrastructure Regulation (EMIR) Central Securities Depositories Regulation (CSDR) Know Your Customer (KYC)

  • Technology and the Functional Flow of Financial Instruments (6%)

    • understand the function and connectivity of investment exchanges, multilateral trading facilities, organised trading facilities, systematic internalisers and fund platforms: classification economic functions order handling systems connectivity
    • understand the function and connectivity of central counterparty services:
    • know the function and connectivity of Trade Repositories
    • understand the functionality of external real time information sources pre-trade price and liquidity discovery analytics post-trade information dissemination transaction reporting / publication

  • The Role of Technology in Trade Capture (8%)

    • understand the investment decision support process
    • understand the implications of Environmental, Social and Governance (ESG) investing
    • understand the technology support requirements of order placing and filling including: order entry (agency, principal and 3rd party orders) pre-trade compliance, including mandates best execution Treating Customers Fairly transaction capture client connectivity including Direct Market Access communication via electronic media pooling, allocation and aggregation of a single order across two or more investors/funds dealing systems charges, fees and expenses
    • understand the purpose and consequences of algorithmic trading
    • understand the features of investor self-servicing
    • understand the basic technology characteristics of risk mitigation for the following trade capture functions: risk management transaction capture best execution

  • The Role of Technology in the Pre-Settlement Phase (10%)

    • understand the technology alignment to pre-settlement phase key risk indicators including: reference data standing settlement instructions client and counterparty agreements
    • understand the technology implications of the trade agreement process
    • understand the role of matching engines
    • understand the technology requirements for reporting to regulators: wholesale v retail
    • understand the technology requirements for reporting to customers: wholesale v retail

  • The Role of Technology in the Settlement and Post-Settlement Phases (10%)

    • understand the technology requirements for transaction settlement instructions
    • understand the purposes of stock lending and repos, their technology implications and the importance of asset segregation
    • understand the technology requirements for cash funding (positioning)
    • understand the function of technology within the settlement process: trade capture systems operations systems financial control systems
    • know the function of the following standards: SWIFT FIX FpML XBRL
    • understand the function of technology within reconciliation procedures including: reconciliation requirements and record keeping ensuring cash and stock movements are recorded journal movements corporate actions (including dividends, bonus issues and rights issues)
    • understand the technology implications of post-trade compliance

  • The Impact of Technology on Financial Control (10%)

    • know the role of the financial control function
    • understand the relationship between trade capture, settlement operations and the financial control function
    • know the purpose of the general ledger
    • know the components of a general ledger account
    • know how account selection parameters are maintained
    • know the purpose of the stock record

  • Technology Management (16%)

    • know the typical roles and responsibilities within the technology department
    • Know the importance of ensuring technology strategy matches the corporate strategy
    • know the typical building blocks of a technology infrastructure
    • understand the roles and uses of relational databases, distributed systems and real-time messaging
    • understand the technology governance relating to: measuring technology performance managing change benefits realisation
    • understand the importance of cyber security
    • understand the concept of management and support of applications
    • understand the function of service (help) desks and follow-the-sun model
    • know the purpose of service level agreements (SLAs) and key performance indicators (internal and external)
    • understand prioritisation levels and the responsibilities of support teams
    • understand the technology implications of disaster recovery (DR) and business continuity planning (BCP): planning risk assessment priorities for processing and operations recovery strategies data collection written plan testing criteria and procedures
    • understand the technology implications of operational resilience
    • understand the importance of change control procedures
    • understand the nature and management of technology risk
    • understand the challenges of separate systems

  • Managing Business Change (12%)

    • understand the purpose and benefits of project planning and control
    • understand the importance of project governance
    • understand the key stages of a software development life cycle (SDLC) including: project planning feasibility study systems analysis requirements definition systems design code generation development integration and testing acceptance, installation, deployment maintenance
    • understand the different software development methodologies including: waterfall methodologies Iterative / incremental methodologies other methodologies
    • know the following different methodologies used in technology delivery: PRINCE II PMI ISO
    • understand the need for testing and its importance to quality assurance including: testing strategies test stages techniques cycles test reporting
    • know the impact of disruptive innovation and FinTech initiatives: cloud computing big data cryptocurrencies blockchain / distributed ledger technology artificial intelligence machine learning open finance

  • Technology Services Procurement (8%)

    • understand the buy v build decision and implications and varieties of open source software
    • know the advantages and disadvantages of outsourcing
    • know the advantages and disadvantages of insourcing
    • know the advantages and disadvantages of offshoring, near- shoring, best-shoring
    • understand the vendor relationship including: the vendor selection process vendor assessment task order / work order / contract negotiation and finalisation effective vendor management and oversight exit planning
    • understand the technology implications and risks for outsourced and vendor arrangements

How to prepare

Work through the topics, read the explanation after each answer, and revisit the areas where you miss questions. Use the official outline and reference materials below to guide your study.

These independent practice questions are not actual exam items and do not guarantee a passing result.

Frequently asked questions

What is the exam format?

Computer-based multiple-choice examination, available on demand at test centres or by remote invigilation.

How many questions are on the exam?

Total questions: 50–55; Scored questions: 50; Unscored questions: 0–5; The total includes the scored and unscored questions.

How long is the exam?

60 minutes for the standard 50 questions; proportionately more time is provided for additional trial questions.

What is the passing score?

70% (35 of 50 marks). Pass: 35–45; pass with merit: 46–50; fail: 0–34.

How much does the exam cost?

UK exam fee GBP 155, applicable 1 April 2026–31 March 2027. Mandatory workbook GBP 105 separately; a one-off GBP 68 qualification registration fee applies when registering a first qualification. Saver package GBP 275 includes exam, workbook and Revision Express; concessionary rates may apply.

Official sources and references

Confirm current exam arrangements with the exam provider.