CII R01 CHAPTER 8 ACTUAL EXAM SET 2026
COMPLETE QUESTIONS AND CORRECT
ANSWERS
◉ Financial Services Authority (FSA)
Disbanded. Answer: - In 2013
- Prudential Regulatory Authority (PRA) and Financial Conduct
Authority (FCA) formed
- Reforms clarified responsibilities between:
HM Treasury and Bank of England in the event of a financial crisis,
Chancellor of the Exchequer directs the Bank of England where public
funds are at risk to financial stability.
◉ Financial Policy Committee (FPC). Answer: - Committee within the
Bank of England allows:
1. scrutiny towards emerging risks to the financial system as a whole
2. Powers to take action where it identifies threats.
◉ Prudential Regulation Authority (PRA). Answer: - Works with the
Bank of England but is independent.
- Responsibility for the prudential supervision and
, authorisation of important financial institutions such as banks and firms
- Ensure that individual firms can fail without bringing
down the entire financial system.
- 'judgment based' approach to supervision,
Prudential Regulation Committee (PRC) makes the PRA decisions.
◉ UK regulatory structure. Answer: 1. HM Treasury & Parliament
2. The Bank of England: comprising the (PRA), the
F(FPC), and the (PRC)
3. Financial Conduct Authority (FCA)
◉ Memorandum of Understanding. Answer: 1998 & 2006
...is a document that outlines of an agreement that two or more parties
have reached.
◉ Financial Conduct Authority objectives. Answer: 1. Protection for
consumers
2. Enhance integrity of financial system
3. Promote effective competition
4. Regulates firms not covered by PRA
5. Competition powers, product intervention, power to enforce
disclosure and power to take formal action
COMPLETE QUESTIONS AND CORRECT
ANSWERS
◉ Financial Services Authority (FSA)
Disbanded. Answer: - In 2013
- Prudential Regulatory Authority (PRA) and Financial Conduct
Authority (FCA) formed
- Reforms clarified responsibilities between:
HM Treasury and Bank of England in the event of a financial crisis,
Chancellor of the Exchequer directs the Bank of England where public
funds are at risk to financial stability.
◉ Financial Policy Committee (FPC). Answer: - Committee within the
Bank of England allows:
1. scrutiny towards emerging risks to the financial system as a whole
2. Powers to take action where it identifies threats.
◉ Prudential Regulation Authority (PRA). Answer: - Works with the
Bank of England but is independent.
- Responsibility for the prudential supervision and
, authorisation of important financial institutions such as banks and firms
- Ensure that individual firms can fail without bringing
down the entire financial system.
- 'judgment based' approach to supervision,
Prudential Regulation Committee (PRC) makes the PRA decisions.
◉ UK regulatory structure. Answer: 1. HM Treasury & Parliament
2. The Bank of England: comprising the (PRA), the
F(FPC), and the (PRC)
3. Financial Conduct Authority (FCA)
◉ Memorandum of Understanding. Answer: 1998 & 2006
...is a document that outlines of an agreement that two or more parties
have reached.
◉ Financial Conduct Authority objectives. Answer: 1. Protection for
consumers
2. Enhance integrity of financial system
3. Promote effective competition
4. Regulates firms not covered by PRA
5. Competition powers, product intervention, power to enforce
disclosure and power to take formal action
