Friday Five Focus on Regulation – 5 Questions in 5 Minutes – 31 Oct 2025

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 2025/26, examinable by the CII until 31 August 2026.

1. The purpose of the cooling-off period under consumer credit legislation is to allow the
   1. borrower sufficient time to change their mind and withdraw from a loan agreement if required.
   2. lender sufficient time to consider all material facts before making an offer to the borrower.
   3. intermediary sufficient time to complete their research before presenting their recommendations to the client.
   4. borrower to gather all requested documentation and to complete all required paperwork.

2. In relation to the Financial Conduct Authority’s handbook, it is true to say that
   1. regulated firms can decide which rules they will apply.
   2. rules are entirely binding on regulated firms.
   3. rules are for guidance only on how regulated firms should operate.
   4. it covers complaints handling and compensation only.

3. Corporate culture within an organisation is often reflected in a company’s
   1. report and accounts.
   2. headed paper.
   3. individual job descriptions.
   4. values statements and ethics codes.

4. Historically, UK banks and building societies were developed from the consumer need to
   1. receive a return on short term deposits.
   2. make a profit for shareholders using savings to make long term investment.
   3. have a safe but accessible place to keep their money.
   4. turn short-term savings into longer term lending.

5. Within the suitability report it is recommended that the reasons why a product provider has been selected are documented. What would you NOT expect to find here?
   1. Quality of service offered by the provider.
   2. Commission levels offered by the provider.
   3. Financial strength of the provider.
   4. Provider’s history.

Answers

1. A; See R01 Study Text, Chp 6; Rationale: The Consumer Credit Act 1974 imposed regulations that a cooling-off period should apply to all loans covered under the Act. The cooling-off period is for the benefit of the borrower to allow them time to change their mind and withdraw from the loan agreement if required.
2. B; See R01 Study Text, Chp 6; Rationale: The FCA handbook sets out the rules and regulations for regulated firms. The rules are entirely binding on all regulated firms. The handbook does cover complaints handling and compensation but not that alone.
3. D; See R01 Study Text, Chp 11; Rationale: Value statements are high-level ethical attributes a firm would expect its people to adhere to. Ethics codes set out the ethical commitments of the company (these usually sit beneath the value statement). These values and codes often reflect the corporate culture of a firm and filter down through the company in every aspect of their business rather than relating to very specific area of a firm’s business, such as in answer a), b) and c).
4. C; See R01 Study Text, Chp 1; Rationale: Banks and building societies were developed for investors as a place to keep their money safe and easily accessible. Both organisations provide investors with a return on short-term deposits; however, this is not essentially why these organisations were developed. Banks have shareholders and therefore aim to make enough profit to pay dividends. Building societies are mutual companies owned by their members. Any profit they make is returned to members in the form of better interest on savings or lower interest on loans.
5. B; See R01 Study Text, Chp 9; Rationale: The section of the suitability report which outlines why a specific provider has been chosen should include details such as quality of service of the provider, their history and financial strength. Commission levels cannot be used as a reason why a product has been selected.

Grab the resources you need!

If you’re preparing for the CII R01 exam, our R01 E-Mocks offer full exam-standard practice to help you test your understanding of regulation, ethics, and the financial services environment. You can access them online and even try a free taster first to see how they can support your revision.

Know someone else studying for R01? Share this quiz with them and help make their revision a little easier.