CISI Financial Regulations Exam
LATEST VERSION EXAM COMPLETE
QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+
What are the core purposes of the Bank of England? - Answer- Monetary stability
(stable prices, confidence in currency)
Financial stability (stability of UK financial systems)
What is the Financial Policy Committee (FPC) and its role? - Answer- - Part of the BoE.
- Identifies systemic risks and issues directions to PRA/FCA to protect UK financial
system resilience.
- Meets four times a year (issues biannual reports
What are the statutory objectives of the FCA? - Answer- Strategic:
Ensure markets work well.
Operational:
Consumer protection
Integrity of the UK financial system
Promote effective competition
What new secondary objective was introduced for the FCA and PRA in FSMA 2023? -
Answer- Promote international competitiveness and growth of the UK economy
(medium to long-term growth)
What are the objectives of the Prudential Regulation Authority (PRA)? - Answer- PRA
objectives (FSA 2012)
- To promote the safety and soundness of PRA-authorised firms (General objective)
- An objective specific to insurance firms to contribute to the securing of an appropriate
degree of protection for those who are or may become insurance policyholders
(Specific objective)
- Facilitate effective competition (Secondary objective)
What are PRA firms? - Answer- Firms that are systemically important
What are the characteristics of the PRA's approach to regulation and supervision? -
Answer- 1. Judgement based
, 2. Forward looking
3. Focused
What are the general powers of the FCA? - Answer- 1. Grant, vary or withdraw Part 4A
authorisation of firms, approval of individuals, recognition of other bodies
2. Rule-making for the above (if necessary for operational objective)
3. Prosecutes for financial crime
4. Supervision, enforcement, sanctions and disciplinary action
Which additional powers were added to the FCA's general powers under FSA 2012 -
Answer- - Ban misleading promotions, removing it from the market immediately
- Temporary product intervention (ban for up to 12 months) where concern for consumer
protection exist
- To publish a warning notice (after consulting the parties involved) to signal the start of
an formal enforcement process
How is the FCA funded? - Answer- By contributions from firms authorised under FSMA
2000
What are the powers of His Majesty's Treasury (HMT)? - Answer- - Appoint or dismiss
the FCA Board
- Assesses annual reports from the FCA (audited by National Audit Office)
- Can commission independent reviews and investigations of the FCA
- Through parliament, can change the nature of the FCA's role
Who recognizes Investment Exchanges (RIEs)? - Answer- FCA
Who recognizes Clearing Houses (RIEs)? - Answer- BOE
What is the effect of recognition for Investment Exchanges and Clearing Houses? -
Answer- - Removes authorisation requirement (fit and proper for their purpose)
- Can be UK or overseas (ROIEs) and offer services to UK clients
What are Designated Investment Exchanges? - Answer- Designated investment
exchanges (DIEs) are overseas-based exchanges, but they are not regulated or
supervised by the FCA and are not permitted to undertake regulated activities in the UK
What are the 8 principles of good regulation? - Answer- 1. Efficiency and economy
2. Proportionality
3. Sustainable growth
4. Consumer responsibility
5. Senior management responsibility
6. Recognising the difference in business carried on by different
regulated persons
7. Openness and disclosure
8. Transparency
LATEST VERSION EXAM COMPLETE
QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+
What are the core purposes of the Bank of England? - Answer- Monetary stability
(stable prices, confidence in currency)
Financial stability (stability of UK financial systems)
What is the Financial Policy Committee (FPC) and its role? - Answer- - Part of the BoE.
- Identifies systemic risks and issues directions to PRA/FCA to protect UK financial
system resilience.
- Meets four times a year (issues biannual reports
What are the statutory objectives of the FCA? - Answer- Strategic:
Ensure markets work well.
Operational:
Consumer protection
Integrity of the UK financial system
Promote effective competition
What new secondary objective was introduced for the FCA and PRA in FSMA 2023? -
Answer- Promote international competitiveness and growth of the UK economy
(medium to long-term growth)
What are the objectives of the Prudential Regulation Authority (PRA)? - Answer- PRA
objectives (FSA 2012)
- To promote the safety and soundness of PRA-authorised firms (General objective)
- An objective specific to insurance firms to contribute to the securing of an appropriate
degree of protection for those who are or may become insurance policyholders
(Specific objective)
- Facilitate effective competition (Secondary objective)
What are PRA firms? - Answer- Firms that are systemically important
What are the characteristics of the PRA's approach to regulation and supervision? -
Answer- 1. Judgement based
, 2. Forward looking
3. Focused
What are the general powers of the FCA? - Answer- 1. Grant, vary or withdraw Part 4A
authorisation of firms, approval of individuals, recognition of other bodies
2. Rule-making for the above (if necessary for operational objective)
3. Prosecutes for financial crime
4. Supervision, enforcement, sanctions and disciplinary action
Which additional powers were added to the FCA's general powers under FSA 2012 -
Answer- - Ban misleading promotions, removing it from the market immediately
- Temporary product intervention (ban for up to 12 months) where concern for consumer
protection exist
- To publish a warning notice (after consulting the parties involved) to signal the start of
an formal enforcement process
How is the FCA funded? - Answer- By contributions from firms authorised under FSMA
2000
What are the powers of His Majesty's Treasury (HMT)? - Answer- - Appoint or dismiss
the FCA Board
- Assesses annual reports from the FCA (audited by National Audit Office)
- Can commission independent reviews and investigations of the FCA
- Through parliament, can change the nature of the FCA's role
Who recognizes Investment Exchanges (RIEs)? - Answer- FCA
Who recognizes Clearing Houses (RIEs)? - Answer- BOE
What is the effect of recognition for Investment Exchanges and Clearing Houses? -
Answer- - Removes authorisation requirement (fit and proper for their purpose)
- Can be UK or overseas (ROIEs) and offer services to UK clients
What are Designated Investment Exchanges? - Answer- Designated investment
exchanges (DIEs) are overseas-based exchanges, but they are not regulated or
supervised by the FCA and are not permitted to undertake regulated activities in the UK
What are the 8 principles of good regulation? - Answer- 1. Efficiency and economy
2. Proportionality
3. Sustainable growth
4. Consumer responsibility
5. Senior management responsibility
6. Recognising the difference in business carried on by different
regulated persons
7. Openness and disclosure
8. Transparency
