7/1/25, 12:05 AM CISI UK Financial Regulation
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)
Prudential regulation, promoting the safety and
What is the PRA responsible
for? soundness of banks and other deposit-taking
firms.
1. promote safety and soundness of PRA authorised firms
2. contribute to the securing of an appropriate degree
Statutory objectives of PRA
of protection for those who are/ may become
(3)
insurance policyholders
3. facilitate effective competition
What is the FCA responsible Prudential and conduct regulation, authorisation
for?
Who is the PRA accountable unit of B of E, to Parliament
to?
Who is the FCA accountable HM Treasury & Parliament
to?
What are dual-regulated firms - Deposittakers, insurers and investment firms
and who are they regulated - regulated by FCA & PRA?
by?
What are solo-regulated - Non-dual-regulated firms i.e. most investment firms
firms (1) and who are they - FCA
regulated by? (1)
How many times a year 4
does the FPC meet?
How many times is the Semi-annually
BoE's Financial Stability FPC (Financial Policy Committee)
Report produced and
who is responsible for
it?
1. Strategic: ensure markets
function well Operational:
FCA objectives (4) 2. Protect consumers
3. Integrity
4. Competition
/ 1/47
,7/1/25, 12:01 AM CISI UK Regulation |
1. Promote the safety and soundness of PRA-
authorised firms (prevent instability/ failure)
PRA objectives (3) 2. secure appropriate protection for those that may become
policy holders
3. facilitate effective competition
Empowers regulator to:
1. Grant authorisation (permission) of firms, approval of
FSMA's rule making individuals and recognition of other bodies
powers? (general powers 2. Rule-making of above
3. Supervision, enforcement, sanctions & disciplinary work
of FCA)
4. Prosecute for financial crimes
1. appoint/ dismiss FCA board
2. assess annual reports from FCA
HMT (His Majesty's Treasury)
3. can comission independent reviews and investigations of FCA
Powers (4)
4. through parliament, can change the nature of the FCA's role
Recgonised Investment Recgonised by FCA, exempt persons, can be UK or
Exchanges & Clearing overseas and offers services to UK clients
Houses
well regulated overseas exchanges, no direct access to
Designated Investment
Exchanges UK clients, excluded from UK activity e.g. NYSE
can carry on certain activities without FCA authorisation,
Designated Professional
incidental to main service
Bodies (DPBs)
e.g. lawyers
1. Apply to regulated activity in the UK regarding:
- Consumer credit
- Deposit taking (retail)
- Insurance (not reinsurance)
What do Consumer Duty rules
- Investments (not professional)
apply to and which
- Mortgages (regulated)
principles do they replace?
2. Replace Principles 6 & 7
When does FTOC apply? Where a firm is out of scope of customer duty requirements.
Development of principle 6 - firm must act
What is FTOC? honestly, fairly, professionally in accordance with
best interest of its clients (the clients best
interests rule'). 6 consumer outcomes.
Where will you find Senior In the Senior Management Arrangements, Systems and
Management Arrangements? Controls (SYSC) sections of the FCA handbook
2/4
7
,7/1/25, 12:01 AM CISI UK Regulation |
- misconduct by senior manager's (SM) firm
Examples of senior managers
(where SM responsible for management and of firm's
breaching prescribed
misconduct & SM didn't take steps to avoid
responsibility
misconduct)
UK company law stating that existing shareholders
Pre-emption Rights
must be offered new share issuances first
if:
- articles of association allow it
Provisions relating to
- special resolution is passed
reduction of share capital
(75% acceptance) & unique
condition for plcs only:
- courts approve the action
1. extinguishing the liability on partly paid shares
Creditors can object to
2. return of capital which is surplus to company's needs
reduction of company's
3. reducing the liability on partly paid shares
capital (3 examples)
Financial Assistance section PLCs must not assist financially in the purchase of shares in itself
of Companies Law
3/4
7
, 7/1/25, 12:01 AM CISI UK Regulation |
Who can request Shareholders
investigations by inspectors? (they have right to ask Department for Business and Trade to
appoint inspector)
plcs: 21
Notice of meetings for AGM
calendar days
ltd: 14
calendar days
Notice of meetings for GM 14 calendar days
% of voting shareholders 5%
that oblige company to
call GM?
Resolutions (voting ordinary resolutions e.g. approving dividends need >50%
decisions) by special resolutions e.g. waive rights issues, share buybacks need
at least 75%
shareholders
What does S793 refer to? PLC can require any investor to disclose an interest,
(shareholder rights) failure to do so can lead to removal of voting/
division rights
1. obtain and require documentation (interviews)
Inspectors investigating
2. search premises (warrants)
companies powers (3)
3. Pass on info to Secretary of State
company constitution (filing legal docs with companies house):
Requirements to become a - memorandum (basic info)
PLC - articles (detailed info)
Proportion of voting rights majority in number and 75% in value must approve
needed to consent to
Scheme of reconstruction
under the Companies Act
(Part 26)
Under what circumstances 1. offer to people known to company e.g. employees or family
could private companies members
2. if firm intends to become PLC within 6 months of share issuance
have public offers of shares
date
- Directors taking responsibility for firm's arrangements
What is the goal of SYSC? - Amplify principle 3 (management and control)
- Common platform of organisational systems and controls
- Sound governance: clear organisational structure
- Senior personnel - must receive frequent (at
General requirements under
least annual) reports on compliance/internal
SYSC 4
4/4
7
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)
Prudential regulation, promoting the safety and
What is the PRA responsible
for? soundness of banks and other deposit-taking
firms.
1. promote safety and soundness of PRA authorised firms
2. contribute to the securing of an appropriate degree
Statutory objectives of PRA
of protection for those who are/ may become
(3)
insurance policyholders
3. facilitate effective competition
What is the FCA responsible Prudential and conduct regulation, authorisation
for?
Who is the PRA accountable unit of B of E, to Parliament
to?
Who is the FCA accountable HM Treasury & Parliament
to?
What are dual-regulated firms - Deposittakers, insurers and investment firms
and who are they regulated - regulated by FCA & PRA?
by?
What are solo-regulated - Non-dual-regulated firms i.e. most investment firms
firms (1) and who are they - FCA
regulated by? (1)
How many times a year 4
does the FPC meet?
How many times is the Semi-annually
BoE's Financial Stability FPC (Financial Policy Committee)
Report produced and
who is responsible for
it?
1. Strategic: ensure markets
function well Operational:
FCA objectives (4) 2. Protect consumers
3. Integrity
4. Competition
/ 1/47
,7/1/25, 12:01 AM CISI UK Regulation |
1. Promote the safety and soundness of PRA-
authorised firms (prevent instability/ failure)
PRA objectives (3) 2. secure appropriate protection for those that may become
policy holders
3. facilitate effective competition
Empowers regulator to:
1. Grant authorisation (permission) of firms, approval of
FSMA's rule making individuals and recognition of other bodies
powers? (general powers 2. Rule-making of above
3. Supervision, enforcement, sanctions & disciplinary work
of FCA)
4. Prosecute for financial crimes
1. appoint/ dismiss FCA board
2. assess annual reports from FCA
HMT (His Majesty's Treasury)
3. can comission independent reviews and investigations of FCA
Powers (4)
4. through parliament, can change the nature of the FCA's role
Recgonised Investment Recgonised by FCA, exempt persons, can be UK or
Exchanges & Clearing overseas and offers services to UK clients
Houses
well regulated overseas exchanges, no direct access to
Designated Investment
Exchanges UK clients, excluded from UK activity e.g. NYSE
can carry on certain activities without FCA authorisation,
Designated Professional
incidental to main service
Bodies (DPBs)
e.g. lawyers
1. Apply to regulated activity in the UK regarding:
- Consumer credit
- Deposit taking (retail)
- Insurance (not reinsurance)
What do Consumer Duty rules
- Investments (not professional)
apply to and which
- Mortgages (regulated)
principles do they replace?
2. Replace Principles 6 & 7
When does FTOC apply? Where a firm is out of scope of customer duty requirements.
Development of principle 6 - firm must act
What is FTOC? honestly, fairly, professionally in accordance with
best interest of its clients (the clients best
interests rule'). 6 consumer outcomes.
Where will you find Senior In the Senior Management Arrangements, Systems and
Management Arrangements? Controls (SYSC) sections of the FCA handbook
2/4
7
,7/1/25, 12:01 AM CISI UK Regulation |
- misconduct by senior manager's (SM) firm
Examples of senior managers
(where SM responsible for management and of firm's
breaching prescribed
misconduct & SM didn't take steps to avoid
responsibility
misconduct)
UK company law stating that existing shareholders
Pre-emption Rights
must be offered new share issuances first
if:
- articles of association allow it
Provisions relating to
- special resolution is passed
reduction of share capital
(75% acceptance) & unique
condition for plcs only:
- courts approve the action
1. extinguishing the liability on partly paid shares
Creditors can object to
2. return of capital which is surplus to company's needs
reduction of company's
3. reducing the liability on partly paid shares
capital (3 examples)
Financial Assistance section PLCs must not assist financially in the purchase of shares in itself
of Companies Law
3/4
7
, 7/1/25, 12:01 AM CISI UK Regulation |
Who can request Shareholders
investigations by inspectors? (they have right to ask Department for Business and Trade to
appoint inspector)
plcs: 21
Notice of meetings for AGM
calendar days
ltd: 14
calendar days
Notice of meetings for GM 14 calendar days
% of voting shareholders 5%
that oblige company to
call GM?
Resolutions (voting ordinary resolutions e.g. approving dividends need >50%
decisions) by special resolutions e.g. waive rights issues, share buybacks need
at least 75%
shareholders
What does S793 refer to? PLC can require any investor to disclose an interest,
(shareholder rights) failure to do so can lead to removal of voting/
division rights
1. obtain and require documentation (interviews)
Inspectors investigating
2. search premises (warrants)
companies powers (3)
3. Pass on info to Secretary of State
company constitution (filing legal docs with companies house):
Requirements to become a - memorandum (basic info)
PLC - articles (detailed info)
Proportion of voting rights majority in number and 75% in value must approve
needed to consent to
Scheme of reconstruction
under the Companies Act
(Part 26)
Under what circumstances 1. offer to people known to company e.g. employees or family
could private companies members
2. if firm intends to become PLC within 6 months of share issuance
have public offers of shares
date
- Directors taking responsibility for firm's arrangements
What is the goal of SYSC? - Amplify principle 3 (management and control)
- Common platform of organisational systems and controls
- Sound governance: clear organisational structure
- Senior personnel - must receive frequent (at
General requirements under
least annual) reports on compliance/internal
SYSC 4
4/4
7
