FCA Multiple Choice Questions (2025/2026
Latest Exam Prep) | Complete Study Guide &
Verified Practice Q&A
In respect of the client classification requirements, if a client wishes to change its default
categorisations, for which type of client is the quantitative test applied? - correct
answerRetail Client
If an investment firm provides services to professional clients, What can customer's
expect in relation to the Financial Conduct Authority's (FCA's) treating customers fairly
(TCF) initiative? - correct answerConsumers are provided with products that perform as
firms have advertised/promoted and as the client can expect
The FCA's approach to the prevention of money laundering is described as principles-
based. Which of the following best describes the most appropriate application of this for
a firm? - correct answerFirms' senior management must carry out a risk assessment"
Excerpt From: Chartered Institute for Securities & Investment.
Which of the following is exempt from the requirements to obtain permission and
authorisation to carry on regulated activities under the Regulated Activities Order? -
correct answerThe Bank of England engaging in market-related transactions"
Excerpt From: Chartered Institute for Securities & Investment.
Which of the following is correct in respect of the Bribery Act 2010? - correct answerIt
creates a corporate liability for failing to prevent bribery on behalf of a commercial
organisation.
Which of the following is a Prudential Regulation Authority (PRA) statutory objective? -
correct answerTo promote the financial safety and soundness of firms.
The FCA has rules regarding the recording of voice conversations and electronic
requirements, which were mainly developed for market abuse monitoring. However, the
rules do not apply to all activities undertaken by firms.
Which of the following activities require a firm to comply with the FCA's voice
conversations and electronic conditions? - correct answerA fund manager calling a
broker to place an order on behalf of accounts managed by them.
What is a key role of the Bank of England in terms of the UK economy? - correct
answerIt carries out activities in the money markets to stabilise sterling and sets interest
rates
, You are an HR manager at the London branch of a foreign company. The head office of
your company has decided that it wants to be seen as an ethical enterprise. You have
been asked to create an ethics programme for employees to follow. Which of the
following will be the most effective way of ensuring success of the programme? - correct
answerEnsuring the programme has buy-in from senior management, and that they are
seen to embody the values of the organisation as well as hold themselves to the high
standards expected of all employees
In order to conduct designated investment business in the UK, firms must be authorised
or exempted. Which of the following is required to obtain authorisation to carry on
regulated activities in the UK? - correct answerAn investment firm making two-way
prices in UK and European equities to eligible counterparties. Any investment firm
wishing to operate as a market maker must be authorised and regulated by the FCA
and the PRA.
ANP Bank receives an execution-only order, which has not been solicited, from one of
its clients. The client, the chief executive of SDC plc, wishes to sell 150,000 shares in
his company. ANP Bank acts as the corporate broker for SDC plc. What should ANP
Bank do? - correct answerCarry out the client order but report the transaction to the
FCA as suspicious via a STOR.
It is widely recognised that poor corporate governance in firms was a contributor to the
financial crisis. The FCA's supervisory approach supports effective corporate
governance in regulated firms by: - correct answerusing outcomes-based intensive
supervision to ensure that firms are well managed and have appropriate governance.
the FCA is focused more on governance and risk in firms.
the financial crisis exposed shortcomings in firm's governance and risk management.
the FCA is trying to ensure that good culture and behaviour in firms are being driven by
senior management, and are being reinforced by effective corporate governance and
the role of the boards.
In respect of its Markets in Financial Instruments Directive (MiFID) business, a firm
receives the following payments:
Payment 1 - custodian fees
Payment 2 - management fees for providing legal services in respect of ongoing
investment services
Payment 3 - settlement fees
Which of the following is TRUE? - correct answerIn order for them to be received, they
all must enhance the service to the client
Client A is a retail client who has been sold a personal pension; however, they are also
a member of their employer's pension scheme. Client B was advised to invest in a UK
equity income fund and a European growth fund for long-term investment opportunities.
Client C is a regulated firm that outsources its back and middle office functions to
Latest Exam Prep) | Complete Study Guide &
Verified Practice Q&A
In respect of the client classification requirements, if a client wishes to change its default
categorisations, for which type of client is the quantitative test applied? - correct
answerRetail Client
If an investment firm provides services to professional clients, What can customer's
expect in relation to the Financial Conduct Authority's (FCA's) treating customers fairly
(TCF) initiative? - correct answerConsumers are provided with products that perform as
firms have advertised/promoted and as the client can expect
The FCA's approach to the prevention of money laundering is described as principles-
based. Which of the following best describes the most appropriate application of this for
a firm? - correct answerFirms' senior management must carry out a risk assessment"
Excerpt From: Chartered Institute for Securities & Investment.
Which of the following is exempt from the requirements to obtain permission and
authorisation to carry on regulated activities under the Regulated Activities Order? -
correct answerThe Bank of England engaging in market-related transactions"
Excerpt From: Chartered Institute for Securities & Investment.
Which of the following is correct in respect of the Bribery Act 2010? - correct answerIt
creates a corporate liability for failing to prevent bribery on behalf of a commercial
organisation.
Which of the following is a Prudential Regulation Authority (PRA) statutory objective? -
correct answerTo promote the financial safety and soundness of firms.
The FCA has rules regarding the recording of voice conversations and electronic
requirements, which were mainly developed for market abuse monitoring. However, the
rules do not apply to all activities undertaken by firms.
Which of the following activities require a firm to comply with the FCA's voice
conversations and electronic conditions? - correct answerA fund manager calling a
broker to place an order on behalf of accounts managed by them.
What is a key role of the Bank of England in terms of the UK economy? - correct
answerIt carries out activities in the money markets to stabilise sterling and sets interest
rates
, You are an HR manager at the London branch of a foreign company. The head office of
your company has decided that it wants to be seen as an ethical enterprise. You have
been asked to create an ethics programme for employees to follow. Which of the
following will be the most effective way of ensuring success of the programme? - correct
answerEnsuring the programme has buy-in from senior management, and that they are
seen to embody the values of the organisation as well as hold themselves to the high
standards expected of all employees
In order to conduct designated investment business in the UK, firms must be authorised
or exempted. Which of the following is required to obtain authorisation to carry on
regulated activities in the UK? - correct answerAn investment firm making two-way
prices in UK and European equities to eligible counterparties. Any investment firm
wishing to operate as a market maker must be authorised and regulated by the FCA
and the PRA.
ANP Bank receives an execution-only order, which has not been solicited, from one of
its clients. The client, the chief executive of SDC plc, wishes to sell 150,000 shares in
his company. ANP Bank acts as the corporate broker for SDC plc. What should ANP
Bank do? - correct answerCarry out the client order but report the transaction to the
FCA as suspicious via a STOR.
It is widely recognised that poor corporate governance in firms was a contributor to the
financial crisis. The FCA's supervisory approach supports effective corporate
governance in regulated firms by: - correct answerusing outcomes-based intensive
supervision to ensure that firms are well managed and have appropriate governance.
the FCA is focused more on governance and risk in firms.
the financial crisis exposed shortcomings in firm's governance and risk management.
the FCA is trying to ensure that good culture and behaviour in firms are being driven by
senior management, and are being reinforced by effective corporate governance and
the role of the boards.
In respect of its Markets in Financial Instruments Directive (MiFID) business, a firm
receives the following payments:
Payment 1 - custodian fees
Payment 2 - management fees for providing legal services in respect of ongoing
investment services
Payment 3 - settlement fees
Which of the following is TRUE? - correct answerIn order for them to be received, they
all must enhance the service to the client
Client A is a retail client who has been sold a personal pension; however, they are also
a member of their employer's pension scheme. Client B was advised to invest in a UK
equity income fund and a European growth fund for long-term investment opportunities.
Client C is a regulated firm that outsources its back and middle office functions to
