Friday Five Focus on Regulation – 5 Questions in 5 Minutes – 9 Jan 2026

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. What is required in order for a firm to qualify for exempt status?
   1. It must be contracted to an authorised person responsible for their activities.
   2. A firm would gain exempt status if it merely acted as an introducer.
   3. The firm must be comprised entirely of appointed representatives.
   4. The firm must be a specialist firm selling protection and savings products.

2. An employee has raised a concern with their employer that a colleague has behaved in a way that could be considered to be serious misconduct. In light of this, the employer must
   1. publicly acknowledge the whistleblower’s actions.
   2. arrange a meeting between the two employees and Compliance.
   3. protect the whistleblower.
   4. ensure all staff are aware of what has happened and who reported it.

3. The purpose behind a firm’s ethics code is to
   1. set out the firm’s ethical commitment in high level terms.
   2. detail the investment process for ethical investment.
   3. specify the rules of conduct the firm expects from all advisers.
   4. visually demonstrate to staff the commitment via internal promotions.

4. A key principle under the FCA’s supervision strategy is
   1. having a focus on business inputs.
   2. being forward looking.
   3. confidentiality of all information collected.
   4. applying equal resources to all the risks identified.

5. Ethics is at the forefront of which of the following two Financial Conduct Authority’s Principles for Businesses?
   1. Market conduct and conflicts of interest.
   2. Conflicts of interest and customers’ interests.
   3. Financial prudence and clients’ assets.
   4. Integrity and customer’s interests.

Answers

1. A; See R01 Study Text, Chp 7; Rationale: A firm can qualify for exempt status if it is contracted to an authorised person who takes full responsibility for all their regulated activities. An appointed representative is a ‘firm’ that has such a contract with an authorised person. An introducer is excluded from regulation but is not deemed to have ‘exempt status’. Firms selling protection and savings products would need authorisation and would not be exempt.
2. C; See R01 Study Text, Chp 6; Rationale: Whistle-blowing is covered under SYSC 18 of the FCA Handbook. This states that employers must protect employees who ‘blow the whistle’.
3. A; See R01 Study Text, Chp 11; Rationale: The ethics codes set out the high-level ethical commitments of the company, as well as realistic and practical standards for how business should be conducted. Ethical codes do not refer to and should not be confused with ethical investments. Statements c) and d) are also incorrect in relation to ethical codes
4. B; See R01 Study Text, Chp 5; Rationale: Key supervision principles include a focus on outcomes (rather than inputs), being forward looking, being evidence led with resources applied proportionately to bigger risks to markets and consumers and being transparent and working in an integrated way with other regulators.
5. D; See R01 Study Text, Chp 11; Rationale: Ethics is evident across many of the principles. It is at the forefront of principles 1 (Integrity) and 6 (Customer Interests), and a key part of principles 7 (Communications with Clients), 8 (Conflicts of Interest), 9 (Customers – relationships of trust) and 12 (Consumer Duty). It is fair to say that ethics is reflected in every one of the principles, even principle 4 (Financial Prudence) and principle 11 (Relations with Regulators).

Grab the resources you need!

If this week’s regulation questions highlighted areas to revisit, practising with exam-standard questions can really help consolidate your understanding. Our R01 E-Mocks mirror the format of the real exam – try our free taster to experience the question style first-hand.

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