FCA Financial Regulation Exam
Questions and All Actual Detailed
Answers 2026-2027 Edition.
In which of the following ways do the powers of the FCA and PRA differ? - Answer Only the
FCA can make rules that are legally binding on firms authorized by itself and those authorized by
the PRA.
A firm makes a personal recommendation in connection with a life policy, where this cover is
required immediately. When must a suitability report be provided? - Answer Immediately
after the contract is concluded.
A firm must provide a client agreement prior to conducting MiFID business for which types of
client? - Answer Professional clients and retail clients only.
If Firm X communicates a financial promotion for non-MiFID business which was produced and
approved by Firm Y, under the financial promotion rules: - Answer Firm X must check the
promotion has not been withdrawn by Firm Y.
What does MiFID stand for? - Answer Markets in Financial Instruments Directive - an EU
directive which amongst other things allows firms authorised in one member state to
provide/offer financial services to customers in another member states, subject to some
restrictions.
For what MINIMUM period must firms retain copies of periodic statements to clients relating to
non-Markets in Financial Instruments Directive (MiFID) business? - Answer 3 years.
An employee of a regulated business received information that made him suspicious that a
breach of the Proceeds of Crime Act had occurred. Why may he have been not guilty under the
"failure to disclose" conditions? - Answer The information was disclosed at a friend's birthday
party.
The FCA's regulatory approach is best described as: - Answer Outcomes Focused.
Firm X wishes to disclose sensitive confidential information to Firm Y as part of a market
sounding. In accordance with its regulatory obligations, Firm X must: - Answer Obtain prior
agreement from Firm Y to accept this inside information.
, Which of the following is one of the six consumer outcomes under the Fair treatment of
Consumers (FTOC) initiative? - Answer Where consumers receive advice, the advice is suitable
and takes account of their circumstances.
A firm received an order from Client X two hours before it received an order from Client Y. The
firm was permitted under the regulations to execute Client Y's order first because: - Answer To
do so was in the interests of Clients X and Y.
Which one of the following measures is most likely to be used by the FCA where a firm no
longer meets its threshold conditions? - Answer Variation of Part 4A permission.
What is the name given to the approval granted by the FCA for a firm to undertake specific
regulated activities? - Answer Part 4A permission.
Which one of the following statutory notices gives the recipient the right to make
representations to the FCA - Answer Warning notice.
The FCA handbook rules state that external reconciliations of client money must take place at
what minimum frequency? - Answer Monthly.
Under the Financial Services Act 2012, who may make a super-complaint? - Answer Certain
consumer bodies.
If a policyholder complains to the Financial Ombudsman Service about an omission by a firm
which took place in November, and was referred to the FOS on 30 April 2023, what is the
Maximum compensation the FOS can award? - Answer £415,000
Where firms provide product information to accepting deposits, this activity is: - Answer
Covered by the Conduct of Business Sourcebook rules.
Cancellation records relating to life policies must be retained for what, if any, minimum period
of time? - Answer Five years.
Although a trade carried out on a regulated venue fell within the definition of a reportable
transaction, the failure of a counterparty to undertake a transaction report was deemed
compliant with the rules. This was because: - Answer The counter-party was non-financial.
What measures would the FCA consider using as disciplinary action? - Answer 1) public
statements of misconduct 2) public censures and 3) financial penalties.
Questions and All Actual Detailed
Answers 2026-2027 Edition.
In which of the following ways do the powers of the FCA and PRA differ? - Answer Only the
FCA can make rules that are legally binding on firms authorized by itself and those authorized by
the PRA.
A firm makes a personal recommendation in connection with a life policy, where this cover is
required immediately. When must a suitability report be provided? - Answer Immediately
after the contract is concluded.
A firm must provide a client agreement prior to conducting MiFID business for which types of
client? - Answer Professional clients and retail clients only.
If Firm X communicates a financial promotion for non-MiFID business which was produced and
approved by Firm Y, under the financial promotion rules: - Answer Firm X must check the
promotion has not been withdrawn by Firm Y.
What does MiFID stand for? - Answer Markets in Financial Instruments Directive - an EU
directive which amongst other things allows firms authorised in one member state to
provide/offer financial services to customers in another member states, subject to some
restrictions.
For what MINIMUM period must firms retain copies of periodic statements to clients relating to
non-Markets in Financial Instruments Directive (MiFID) business? - Answer 3 years.
An employee of a regulated business received information that made him suspicious that a
breach of the Proceeds of Crime Act had occurred. Why may he have been not guilty under the
"failure to disclose" conditions? - Answer The information was disclosed at a friend's birthday
party.
The FCA's regulatory approach is best described as: - Answer Outcomes Focused.
Firm X wishes to disclose sensitive confidential information to Firm Y as part of a market
sounding. In accordance with its regulatory obligations, Firm X must: - Answer Obtain prior
agreement from Firm Y to accept this inside information.
, Which of the following is one of the six consumer outcomes under the Fair treatment of
Consumers (FTOC) initiative? - Answer Where consumers receive advice, the advice is suitable
and takes account of their circumstances.
A firm received an order from Client X two hours before it received an order from Client Y. The
firm was permitted under the regulations to execute Client Y's order first because: - Answer To
do so was in the interests of Clients X and Y.
Which one of the following measures is most likely to be used by the FCA where a firm no
longer meets its threshold conditions? - Answer Variation of Part 4A permission.
What is the name given to the approval granted by the FCA for a firm to undertake specific
regulated activities? - Answer Part 4A permission.
Which one of the following statutory notices gives the recipient the right to make
representations to the FCA - Answer Warning notice.
The FCA handbook rules state that external reconciliations of client money must take place at
what minimum frequency? - Answer Monthly.
Under the Financial Services Act 2012, who may make a super-complaint? - Answer Certain
consumer bodies.
If a policyholder complains to the Financial Ombudsman Service about an omission by a firm
which took place in November, and was referred to the FOS on 30 April 2023, what is the
Maximum compensation the FOS can award? - Answer £415,000
Where firms provide product information to accepting deposits, this activity is: - Answer
Covered by the Conduct of Business Sourcebook rules.
Cancellation records relating to life policies must be retained for what, if any, minimum period
of time? - Answer Five years.
Although a trade carried out on a regulated venue fell within the definition of a reportable
transaction, the failure of a counterparty to undertake a transaction report was deemed
compliant with the rules. This was because: - Answer The counter-party was non-financial.
What measures would the FCA consider using as disciplinary action? - Answer 1) public
statements of misconduct 2) public censures and 3) financial penalties.
