CISI UK Financial Regulations (Regs) Mock Exam
CISI UK FINANCIAL REGULATIONS (REGS) MOCK EXAM INCLUDES
ACCURATE AND VERIFIED QUESTIONS COVERING REGULATORY
FRAMEWORKS IN THE UK FINANCIAL SERVICES INDUSTRY. TOPICS
INCLUDE THE ROLE OF THE FINANCIAL CONDUCT AUTHORITY (FCA),
ANTI-MONEY LAUNDERING (AML), CLIENT ASSET RULES (CASS),
CONDUCT OF BUSINESS AND ETHICAL STANDARDS
What are SMFs - ANSWER-Senior Management Functions. Pre-approved by regulators, certified
as fit and proper by the firm, subject to conduct rules.
How frequently are SMFs certified as fit and proper by the firm under SMCR's certification
regime? - ANSWER-Annually
6 Conduct rules & who they apply to - ANSWER-6 conduct rules apply to all relevant employees.
1. Integrity
2. Due skill, care and diligence
3. Open and cooperative with the FCA, the PRA and other regulators.
4. Regard for customers' interest and fair treatment.
5. Observe proper standards of market conduct.
6. Deliver good outcomes for retail customers
Senior Manager Conduct Rules - ANSWER-Apply to SMFs
4 Rules.
What is the FCA handbook - ANSWER-Sets out rules and guidance for authorised firms.
1|Page
, CISI UK Financial Regulations (Regs) Mock Exam
R E G D UK P C - ANSWER-Rules - binding
Evidential provisions - evidence of compliance with binding rule (not binding)
Guidance - not binding
Directions - binding on those to whom they address
UK legislative material
Statements of principle
Conduct
TPR - ANSWER-The Pensions Regulator for UK work-based pension schemes
PPF - ANSWER-Pensions Protection Fund
- protection for anyone belonging to a defined benefit (final salary pension scheme)
- fund levies charged on all eligible pension schemes
- Compensation covered:
1. by assets of schemes that transfer to PPF
2. recovery of money and assets from insolvent employers of scheme.
3. investment of all income/assets
What is the FCA's Principle for Businesses of market conduct? - ANSWER-A firm must observe
appropriate standards of behaviour (1 Mark)
Which ONE of the FCA's Principles for Businesses specifically requires firms to ensure the
suitability of their advice? - ANSWER-Customers: relationships of trust (1 Mark)
For what MINIMUM period must a MiFID firm retain each version of the record of the
apportionment of senior management responsibilities? - ANSWER-5 years (1 Mark)
2|Page
, CISI UK Financial Regulations (Regs) Mock Exam
The general application of the conduct of business rules (COBS) is modified according to two
factors; the nature of a firm's activities, and which of the following? - ANSWER-Location (1
Mark)
A life office is unhappy with a recent disciplinary decision made by the FCA. To which body is it
most appropriate to submit an appeal? - ANSWER-The Upper Tribunal (1 Mark)
Where a firm launches a new mortgage product solely designed for first time buyers, but
mailshots details to a tranche of retired customers, this is likely to be a direct breach of the
FCA's: - ANSWER-Fair treatment of customers consumer outcomes (1 Mark)
Where a firm is classed as 'non-common platform', the FCA's rules regarding Senior
Management Arrangements, Systems and Controls: - ANSWER-Operate as guidance rather than
as actual rules (1 Mark)
What is the general prohibition? - ANSWER-S19: "No person may carry on a REGULATED
ACTIVITY in the UK, unless he is either AUTHORISED or EXEMPT"
What is a regulated activity? What is this defined in? - ANSWER-Defined in the RAO 2001
(Regulated Activities Order):
- Specified Investments
- Specified Activities
What is the maximum punishment for unauthorised investment business? - ANSWER-1.
Criminal offence: max penalty = 2 yrs and/or unlimited fines
2. Civil remedies: contracts enforceable by injured party but not by offending person.
3|Page
, CISI UK Financial Regulations (Regs) Mock Exam
What is the PRA responsible for? - ANSWER-Prudential regulation, promoting the safety and
soundness of banks and other deposit-taking firms.
What is the FCA responsible for? - ANSWER-Prudential and conduct regulation, authorisation
Who is the PRA accountable to? - ANSWER-The Bank of England
Who is the FCA accountable to? - ANSWER-HM Treasury and Parliament
What are dual-regulated firms and who are they regulated by? - ANSWER-Regulated by FCA &
PRA
Deposit takers, insurers and investment firms
What are solo-regulated firms and who are they regulated by? - ANSWER-FCA
Non-dual-regulated firms i.e. most investment firms
How many times a year does the FPC meet? - ANSWER-4
How many times is the BoE's Financial Stability Report produced and who is responsible for it? -
ANSWER-Semi-annually
FPC (Financial Policy Committee)
FCA's statutory objectives - ANSWER-Strategic: ensure markets function well
Operational:
- Protect consumers
- Integrity
- Competition
4|Page
CISI UK FINANCIAL REGULATIONS (REGS) MOCK EXAM INCLUDES
ACCURATE AND VERIFIED QUESTIONS COVERING REGULATORY
FRAMEWORKS IN THE UK FINANCIAL SERVICES INDUSTRY. TOPICS
INCLUDE THE ROLE OF THE FINANCIAL CONDUCT AUTHORITY (FCA),
ANTI-MONEY LAUNDERING (AML), CLIENT ASSET RULES (CASS),
CONDUCT OF BUSINESS AND ETHICAL STANDARDS
What are SMFs - ANSWER-Senior Management Functions. Pre-approved by regulators, certified
as fit and proper by the firm, subject to conduct rules.
How frequently are SMFs certified as fit and proper by the firm under SMCR's certification
regime? - ANSWER-Annually
6 Conduct rules & who they apply to - ANSWER-6 conduct rules apply to all relevant employees.
1. Integrity
2. Due skill, care and diligence
3. Open and cooperative with the FCA, the PRA and other regulators.
4. Regard for customers' interest and fair treatment.
5. Observe proper standards of market conduct.
6. Deliver good outcomes for retail customers
Senior Manager Conduct Rules - ANSWER-Apply to SMFs
4 Rules.
What is the FCA handbook - ANSWER-Sets out rules and guidance for authorised firms.
1|Page
, CISI UK Financial Regulations (Regs) Mock Exam
R E G D UK P C - ANSWER-Rules - binding
Evidential provisions - evidence of compliance with binding rule (not binding)
Guidance - not binding
Directions - binding on those to whom they address
UK legislative material
Statements of principle
Conduct
TPR - ANSWER-The Pensions Regulator for UK work-based pension schemes
PPF - ANSWER-Pensions Protection Fund
- protection for anyone belonging to a defined benefit (final salary pension scheme)
- fund levies charged on all eligible pension schemes
- Compensation covered:
1. by assets of schemes that transfer to PPF
2. recovery of money and assets from insolvent employers of scheme.
3. investment of all income/assets
What is the FCA's Principle for Businesses of market conduct? - ANSWER-A firm must observe
appropriate standards of behaviour (1 Mark)
Which ONE of the FCA's Principles for Businesses specifically requires firms to ensure the
suitability of their advice? - ANSWER-Customers: relationships of trust (1 Mark)
For what MINIMUM period must a MiFID firm retain each version of the record of the
apportionment of senior management responsibilities? - ANSWER-5 years (1 Mark)
2|Page
, CISI UK Financial Regulations (Regs) Mock Exam
The general application of the conduct of business rules (COBS) is modified according to two
factors; the nature of a firm's activities, and which of the following? - ANSWER-Location (1
Mark)
A life office is unhappy with a recent disciplinary decision made by the FCA. To which body is it
most appropriate to submit an appeal? - ANSWER-The Upper Tribunal (1 Mark)
Where a firm launches a new mortgage product solely designed for first time buyers, but
mailshots details to a tranche of retired customers, this is likely to be a direct breach of the
FCA's: - ANSWER-Fair treatment of customers consumer outcomes (1 Mark)
Where a firm is classed as 'non-common platform', the FCA's rules regarding Senior
Management Arrangements, Systems and Controls: - ANSWER-Operate as guidance rather than
as actual rules (1 Mark)
What is the general prohibition? - ANSWER-S19: "No person may carry on a REGULATED
ACTIVITY in the UK, unless he is either AUTHORISED or EXEMPT"
What is a regulated activity? What is this defined in? - ANSWER-Defined in the RAO 2001
(Regulated Activities Order):
- Specified Investments
- Specified Activities
What is the maximum punishment for unauthorised investment business? - ANSWER-1.
Criminal offence: max penalty = 2 yrs and/or unlimited fines
2. Civil remedies: contracts enforceable by injured party but not by offending person.
3|Page
, CISI UK Financial Regulations (Regs) Mock Exam
What is the PRA responsible for? - ANSWER-Prudential regulation, promoting the safety and
soundness of banks and other deposit-taking firms.
What is the FCA responsible for? - ANSWER-Prudential and conduct regulation, authorisation
Who is the PRA accountable to? - ANSWER-The Bank of England
Who is the FCA accountable to? - ANSWER-HM Treasury and Parliament
What are dual-regulated firms and who are they regulated by? - ANSWER-Regulated by FCA &
PRA
Deposit takers, insurers and investment firms
What are solo-regulated firms and who are they regulated by? - ANSWER-FCA
Non-dual-regulated firms i.e. most investment firms
How many times a year does the FPC meet? - ANSWER-4
How many times is the BoE's Financial Stability Report produced and who is responsible for it? -
ANSWER-Semi-annually
FPC (Financial Policy Committee)
FCA's statutory objectives - ANSWER-Strategic: ensure markets function well
Operational:
- Protect consumers
- Integrity
- Competition
4|Page
