Friday Five Focus on Regulation – 28 June – 5 Questions in 5 Minutes

Friday Five Focus on Regulation – 5 Questions in 5 Minutes Every Friday

What’s this all about?

Each week, we ask questions relating to one of these topics: Investments, Taxation, Pensions, Protection, or Regulation. This week, our Friday Five is relevant to Regulation; this is useful as you prepare for either of the CII’s R01 or CF1 exams. The challenge is for you to answer them in 5 minutes. Answers at the bottom of the page.

Questions

IMPORTANT! These questions relate to examinable tax year 2023/24, examinable by the CII until 31 August 2024. They do not relate to tax year 2024/25 which is only examinable by the CII from 1 September 2024.

1. Apart from the periodic, application and special project fees, what other fees are due from authorised firms?
   1. Financial Ombudsman Service, Financial Services Compensation Scheme and Money and Pensions Service fees.
   2. Financial Ombudsman Service and Financial Services Compensation Scheme fees only.
   3. A tariff and block rate fee calculated at the end of each financial year.
   4. A flat charge of £250 due at the end of each financial year.

2. Why has the Financial Conduct Authority devised rules regarding client assets and client money?
   1. To minimise the risk of clients’ money being used by the firm without agreement.
   2. So the firm can identify the correct level of money for each client.
   3. So the firm can show it has taken the appropriate level of risk with each asset.
   4. To ensure that all cheques are banked within prescribed timescales.

3. What is the maximum compensation the Financial Ombudsman Service can award that is binding on the respondent for complaints about actions or omissions by firms that occurred on or after 1 April 2023?
   1. £170,000
   2. £190,000
   3. £375,000
   4. £415,000

4. What does Principles Based Regulation mean?
   1. Instead of rules to cover every situation, general terms are issued to outline the types of behaviours expected.
   2. The principal of each authorised firm carries the ultimate responsibility for Financial Conduct Authority (FCA) authorisation.
   3. The FCA issues regulations to those responsible for senior management and controlled functions and it is their responsibility to cascade down the firm.
   4. Only the main areas of compliance are supported by regulation.

5. Which of these is an example of a ‘required function’ under the Senior Managers and Certification Regime senior management functions?
   1. Chief executive.
   2. Chief finance.
   3. Compliance oversight.
   4. Head of internal audit.

Answers

1. A – See R01 Study Text, Chp 6
   Grab our taster mock exam paper for CII R01. Click here to download.

2. A – See R01 Study Text, Chp 6
   Grab our taster mock exam paper for CII R01. Click here to download.

3. D – See R01 Study Text, Chp 7
   Grab our taster mock exam paper for CII R01. Click here to download.

4. A – See R01 Study Text, Chp 10
   Grab our taster mock exam paper for CII R01. Click here to download.

5. C – See R01 Study Text, Chp 7
   Grab our taster mock exam paper for CII R01. Click here to download.

How did you find this week’s questions? Did you complete them in 5 minutes? Did you get them all correct? Do you disagree with any?

If you found this quiz useful for your CII exam revision, please do share it with your colleagues.