QFA Regulations – Sample Paper 1,2,3,4
QFA REGS EXAM BANK
QFA Regulations Sample Paper 1,2,3 and 4
Questions & Answers
Sample Paper 1
Q1. Which body is the single regulatory authority responsible for the regulation of
financial services firms in Ireland?
A) The Financial Services and Pensions Ombudsman
B) The Central Bank of Ireland
C) The Competition and Consumer Protection Commission
D) The Department of Finance
Answer: B) The Central Bank of Ireland
Rationale: The Central Bank of Ireland (CBI) is Ireland's integrated regulator,
combining central banking and financial regulation functions since 2010, and is
responsible for the authorisation and supervision of financial services firms operating
in the State.
Q2. Under the Central Bank Reform Act 2010, what is the name of the regime that sets
standards of competence, capability and honesty for individuals in controlled
functions?
A) The Consumer Protection Code
B) The Fitness and Probity regime
C) The Minimum Competency Code
D) The Corporate Governance Code
Answer: B) The Fitness and Probity regime
Rationale: The Fitness and Probity regime, introduced under the Central Bank Reform
Act 2010, requires persons performing Controlled Functions (CFs) and Pre-Approval
Controlled Functions (PCFs) to be competent, capable, honest, ethical and financially
sound.
Page 1 of 93
, QFA Regulations – Sample Paper 1,2,3,4
Q3. What is the key difference between a Controlled Function (CF) and a Pre-Approval
Controlled Function (PCF)?
A) There is no difference; the terms are interchangeable
B) A PCF requires prior individual approval from the Central Bank before the person
can act in the role, whereas a CF does not
C) A CF only applies to insurance firms
D) A PCF only applies to credit unions
Answer: B) A PCF requires prior individual approval from the Central Bank before
the person can act in the role, whereas a CF does not
Rationale: PCF roles are the most senior and influential positions (e.g. directors, CEOs)
and individuals must receive prior Central Bank approval before taking up the role,
while CF roles carry significant responsibility but do not require pre-approval, only
ongoing compliance with the standards.
Q4. Which of the following is NOT one of the core Fitness and Probity Standards?
A) Competence and capability
B) Honesty, integrity and fair dealing
C) Financial soundness
D) Minimum educational attainment of a primary degree
Answer: D) Minimum educational attainment of a primary degree
Rationale: The Fitness and Probity Standards require competence and capability,
honesty/integrity/fair dealing, and financial soundness; there is no blanket
requirement for a primary degree, as competence can also be demonstrated through
relevant experience.
Q5. The Central Bank of Ireland's risk-based framework for the supervision of
regulated firms is known as:
A) CAMELS
B) PRISM
C) SREP
D) ICAAP
Answer: B) PRISM
Rationale: PRISM (Probability Risk and Impact SysteM) is the Central Bank's risk-
based supervisory framework, which categorises firms by their potential impact on
financial stability and consumers, and allocates supervisory resources accordingly.
Page 2 of 93
, QFA Regulations – Sample Paper 1,2,3,4
Q6. Under PRISM, firms are categorised by impact. Which category represents the
firms with the greatest potential impact on the financial system?
A) Low impact
B) Medium-low impact
C) Medium-high impact
D) High impact
Answer: D) High impact
Rationale: PRISM classifies firms into High, Medium-High, Medium-Low and Low
impact categories; High impact firms (such as major banks) receive the most intensive
and continuous supervisory engagement due to their systemic importance.
Q7. What legislation established the Central Bank of Ireland as the single integrated
regulator, merging the Financial Regulator with the Central Bank?
A) The Central Bank Act 1942
B) The Central Bank Reform Act 2010
C) The Central Bank (Supervision and Enforcement) Act 2013
D) The Investment Intermediaries Act 1995
Answer: B) The Central Bank Reform Act 2010
Rationale: The Central Bank Reform Act 2010 restructured Irish financial regulation,
abolishing the separate Irish Financial Services Regulatory Authority and establishing
the Central Bank of Ireland as a single fully integrated structure.
Q8. The Central Bank (Supervision and Enforcement) Act 2013 strengthened the
Central Bank's powers primarily in which area?
A) Setting interest rates
B) Administrative sanctions, supervision and enforcement, including the ability to
require redress for consumers
C) Issuing currency
D) Managing the National Pension Reserve Fund
Answer: B) Administrative sanctions, supervision and enforcement, including the
ability to require redress for consumers
Rationale: The 2013 Act enhanced the Central Bank's investigative and enforcement
toolkit, including powers to direct firms to provide redress to consumers who have
suffered loss due to regulatory breaches.
Page 3 of 93
, QFA Regulations – Sample Paper 1,2,3,4
Q9. What is the main purpose of the Minimum Competency Code / Minimum
Competency Regulations?
A) To set minimum capital requirements for insurers
B) To ensure that consumers dealing with financial services firms obtain a minimum
acceptable level of competence from those advising or providing information to
them
C) To regulate advertising standards only
D) To set out anti-money laundering procedures
Answer: B) To ensure that consumers dealing with financial services firms obtain a
minimum acceptable level of competence from those advising or providing
information to them
Rationale: The Minimum Competency Code (and the related Minimum Competency
Regulations) sets out the minimum levels of professional knowledge and competence
required of individuals providing advice on, or information about, retail financial
products, protecting consumers by ensuring baseline standards.
Q10. Under the Minimum Competency Code, a person who does not yet hold a
recognised qualification but is being supervised while working towards one is referred
to as:
A) A Qualified Person
B) A New Entrant
C) An Accredited Person
D) A Grandfathered Person
Answer: B) A New Entrant
Rationale: A 'New Entrant' is an individual who has not yet obtained the relevant
recognised qualification and who must work under adequate supervision while
completing the required qualification within the prescribed timeframe.
Page 4 of 93
QFA REGS EXAM BANK
QFA Regulations Sample Paper 1,2,3 and 4
Questions & Answers
Sample Paper 1
Q1. Which body is the single regulatory authority responsible for the regulation of
financial services firms in Ireland?
A) The Financial Services and Pensions Ombudsman
B) The Central Bank of Ireland
C) The Competition and Consumer Protection Commission
D) The Department of Finance
Answer: B) The Central Bank of Ireland
Rationale: The Central Bank of Ireland (CBI) is Ireland's integrated regulator,
combining central banking and financial regulation functions since 2010, and is
responsible for the authorisation and supervision of financial services firms operating
in the State.
Q2. Under the Central Bank Reform Act 2010, what is the name of the regime that sets
standards of competence, capability and honesty for individuals in controlled
functions?
A) The Consumer Protection Code
B) The Fitness and Probity regime
C) The Minimum Competency Code
D) The Corporate Governance Code
Answer: B) The Fitness and Probity regime
Rationale: The Fitness and Probity regime, introduced under the Central Bank Reform
Act 2010, requires persons performing Controlled Functions (CFs) and Pre-Approval
Controlled Functions (PCFs) to be competent, capable, honest, ethical and financially
sound.
Page 1 of 93
, QFA Regulations – Sample Paper 1,2,3,4
Q3. What is the key difference between a Controlled Function (CF) and a Pre-Approval
Controlled Function (PCF)?
A) There is no difference; the terms are interchangeable
B) A PCF requires prior individual approval from the Central Bank before the person
can act in the role, whereas a CF does not
C) A CF only applies to insurance firms
D) A PCF only applies to credit unions
Answer: B) A PCF requires prior individual approval from the Central Bank before
the person can act in the role, whereas a CF does not
Rationale: PCF roles are the most senior and influential positions (e.g. directors, CEOs)
and individuals must receive prior Central Bank approval before taking up the role,
while CF roles carry significant responsibility but do not require pre-approval, only
ongoing compliance with the standards.
Q4. Which of the following is NOT one of the core Fitness and Probity Standards?
A) Competence and capability
B) Honesty, integrity and fair dealing
C) Financial soundness
D) Minimum educational attainment of a primary degree
Answer: D) Minimum educational attainment of a primary degree
Rationale: The Fitness and Probity Standards require competence and capability,
honesty/integrity/fair dealing, and financial soundness; there is no blanket
requirement for a primary degree, as competence can also be demonstrated through
relevant experience.
Q5. The Central Bank of Ireland's risk-based framework for the supervision of
regulated firms is known as:
A) CAMELS
B) PRISM
C) SREP
D) ICAAP
Answer: B) PRISM
Rationale: PRISM (Probability Risk and Impact SysteM) is the Central Bank's risk-
based supervisory framework, which categorises firms by their potential impact on
financial stability and consumers, and allocates supervisory resources accordingly.
Page 2 of 93
, QFA Regulations – Sample Paper 1,2,3,4
Q6. Under PRISM, firms are categorised by impact. Which category represents the
firms with the greatest potential impact on the financial system?
A) Low impact
B) Medium-low impact
C) Medium-high impact
D) High impact
Answer: D) High impact
Rationale: PRISM classifies firms into High, Medium-High, Medium-Low and Low
impact categories; High impact firms (such as major banks) receive the most intensive
and continuous supervisory engagement due to their systemic importance.
Q7. What legislation established the Central Bank of Ireland as the single integrated
regulator, merging the Financial Regulator with the Central Bank?
A) The Central Bank Act 1942
B) The Central Bank Reform Act 2010
C) The Central Bank (Supervision and Enforcement) Act 2013
D) The Investment Intermediaries Act 1995
Answer: B) The Central Bank Reform Act 2010
Rationale: The Central Bank Reform Act 2010 restructured Irish financial regulation,
abolishing the separate Irish Financial Services Regulatory Authority and establishing
the Central Bank of Ireland as a single fully integrated structure.
Q8. The Central Bank (Supervision and Enforcement) Act 2013 strengthened the
Central Bank's powers primarily in which area?
A) Setting interest rates
B) Administrative sanctions, supervision and enforcement, including the ability to
require redress for consumers
C) Issuing currency
D) Managing the National Pension Reserve Fund
Answer: B) Administrative sanctions, supervision and enforcement, including the
ability to require redress for consumers
Rationale: The 2013 Act enhanced the Central Bank's investigative and enforcement
toolkit, including powers to direct firms to provide redress to consumers who have
suffered loss due to regulatory breaches.
Page 3 of 93
, QFA Regulations – Sample Paper 1,2,3,4
Q9. What is the main purpose of the Minimum Competency Code / Minimum
Competency Regulations?
A) To set minimum capital requirements for insurers
B) To ensure that consumers dealing with financial services firms obtain a minimum
acceptable level of competence from those advising or providing information to
them
C) To regulate advertising standards only
D) To set out anti-money laundering procedures
Answer: B) To ensure that consumers dealing with financial services firms obtain a
minimum acceptable level of competence from those advising or providing
information to them
Rationale: The Minimum Competency Code (and the related Minimum Competency
Regulations) sets out the minimum levels of professional knowledge and competence
required of individuals providing advice on, or information about, retail financial
products, protecting consumers by ensuring baseline standards.
Q10. Under the Minimum Competency Code, a person who does not yet hold a
recognised qualification but is being supervised while working towards one is referred
to as:
A) A Qualified Person
B) A New Entrant
C) An Accredited Person
D) A Grandfathered Person
Answer: B) A New Entrant
Rationale: A 'New Entrant' is an individual who has not yet obtained the relevant
recognised qualification and who must work under adequate supervision while
completing the required qualification within the prescribed timeframe.
Page 4 of 93
