CII R01 EXAMS SCRIPT UPDATED QUESTIONS AND
ANSWERS GRADED A+
✔✔Principles of good regulation - ✔✔1. Efficiency and economy
2. proportionality
3. sustainable growth
4. consumer responsibility
5. senior managers responsibility
6. openness and disclosure
✔✔Prudential Regulatory Authority objectives - ✔✔1. Responsible regulation big firms
and banks
2. Accountable to parliament
3. Promote competition in markets
4. promote safety of firms
✔✔Financial Policy Committee (FPC) - ✔✔Responsible for contributing to the BoE
financial stability objective by:
1. identifying and monitoring systemic threats to financial stability
2: taking action to reduce or remove those threat and support
✔✔Bank of England - ✔✔To maintain:
Monetary stability = Stable prices and confidence in the currency.
Financial Stability = financial markets, management of risk and arrangement of
payments
Through financial operations (lending)
Financial Policy Committee and PRA
✔✔Treasury responsibilities - ✔✔1. Financial services policy
2. Oversight of taxation
3. Ensuring sustainable economic growth
✔✔Competition and Markets Authority (CMA) - ✔✔1. Investigate mergers which could
restrict competition.
2. Undertake market studies and investigations where there is competition and
consumer problems.
✔✔Pensions regulator - ✔✔1. Regulates uk work based schemes
2. Aims to protect the employee and improve their understanding.
3. Reduce need for compensation from PPF
4. Maximise employer compliance
5. Any appeals must be made within 28 days to the tribunal
, ✔✔Pensions protection fund (PPF) - ✔✔- Used when employer has insufficient assets
to meet liabilities to members.
- If the member is already drawing benefits they can get 100% compensation and a 2%
rise inline with inflation.
- If not it's 90% subject to an annual cap.
-Funded by levies based on schemes, admin costs, risks and the fraud compensation
levy
✔✔Information Commissioners Office (ICO) - ✔✔Independent UK authority
Supervise data protection act 1998
Upholds information rights in the public interest, promoting openness by public bodies
and data privacy for individuals.
✔✔EU General Data Protection Regulation - ✔✔GDPR 2018
- Applies to controllers and processers
-Must be processed lawfully, fairly and transparently
collected for explicit purposes
only relevant data collected
accurate and up to date
processed securely and not for longer than needed
✔✔EU Regulations - ✔✔...is a legal act that applies directly to EU countries.
- Become law in all member states
- no amendments can be made
✔✔EU Directive - ✔✔is a legislative act that sets out all goals that EU countries must
achieve.
- up to the member states to devise their own laws to meet it
- transposed into UK law then amended
✔✔EU decisions - ✔✔- EU laws relating to specific cases
- Addressed to specific parties and are fully binding
✔✔Markets in Financial Instruments Directive (MiFID) - ✔✔MFID 2007 and MFID 2018
EU regulation that increases the transparency and standardizes the regulatory
disclosures required for firms operating in the European Union.
Applies to firms that provide services to clients
in relation to shares, bonds, units in a collective investment, derivatives and other
financial
instrument transactions.
ANSWERS GRADED A+
✔✔Principles of good regulation - ✔✔1. Efficiency and economy
2. proportionality
3. sustainable growth
4. consumer responsibility
5. senior managers responsibility
6. openness and disclosure
✔✔Prudential Regulatory Authority objectives - ✔✔1. Responsible regulation big firms
and banks
2. Accountable to parliament
3. Promote competition in markets
4. promote safety of firms
✔✔Financial Policy Committee (FPC) - ✔✔Responsible for contributing to the BoE
financial stability objective by:
1. identifying and monitoring systemic threats to financial stability
2: taking action to reduce or remove those threat and support
✔✔Bank of England - ✔✔To maintain:
Monetary stability = Stable prices and confidence in the currency.
Financial Stability = financial markets, management of risk and arrangement of
payments
Through financial operations (lending)
Financial Policy Committee and PRA
✔✔Treasury responsibilities - ✔✔1. Financial services policy
2. Oversight of taxation
3. Ensuring sustainable economic growth
✔✔Competition and Markets Authority (CMA) - ✔✔1. Investigate mergers which could
restrict competition.
2. Undertake market studies and investigations where there is competition and
consumer problems.
✔✔Pensions regulator - ✔✔1. Regulates uk work based schemes
2. Aims to protect the employee and improve their understanding.
3. Reduce need for compensation from PPF
4. Maximise employer compliance
5. Any appeals must be made within 28 days to the tribunal
, ✔✔Pensions protection fund (PPF) - ✔✔- Used when employer has insufficient assets
to meet liabilities to members.
- If the member is already drawing benefits they can get 100% compensation and a 2%
rise inline with inflation.
- If not it's 90% subject to an annual cap.
-Funded by levies based on schemes, admin costs, risks and the fraud compensation
levy
✔✔Information Commissioners Office (ICO) - ✔✔Independent UK authority
Supervise data protection act 1998
Upholds information rights in the public interest, promoting openness by public bodies
and data privacy for individuals.
✔✔EU General Data Protection Regulation - ✔✔GDPR 2018
- Applies to controllers and processers
-Must be processed lawfully, fairly and transparently
collected for explicit purposes
only relevant data collected
accurate and up to date
processed securely and not for longer than needed
✔✔EU Regulations - ✔✔...is a legal act that applies directly to EU countries.
- Become law in all member states
- no amendments can be made
✔✔EU Directive - ✔✔is a legislative act that sets out all goals that EU countries must
achieve.
- up to the member states to devise their own laws to meet it
- transposed into UK law then amended
✔✔EU decisions - ✔✔- EU laws relating to specific cases
- Addressed to specific parties and are fully binding
✔✔Markets in Financial Instruments Directive (MiFID) - ✔✔MFID 2007 and MFID 2018
EU regulation that increases the transparency and standardizes the regulatory
disclosures required for firms operating in the European Union.
Applies to firms that provide services to clients
in relation to shares, bonds, units in a collective investment, derivatives and other
financial
instrument transactions.
