CII R01: Financial Services, Regulation and Ethics Free Sample Paper: Learning Outcome 5 Topic Preview

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Yes, these free practice questions are continuously reviewed and updated to reflect the latest official syllabus changes and regulatory requirements for candidates in the UK.

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These questions preview the practice style available in the course, but they cover only Learning Outcome 5. This is not a full mock exam and the result cannot measure your overall exam readiness.

Q: What does my CII R01: Financial Services, Regulation and Ethics topic-preview score mean?

It reflects only your answers to 15 questions from Learning Outcome 5. Other syllabus areas are not tested here, so the score is not a pass or fail result and should not be used to predict your official exam performance.

Q: Can I retake this free topic preview?

Yes. You can retake these 15 questions, but repeated attempts cover the same topic. The full course unlocks all 500 practice questions and broader mock-exam practice.

Question 1

Which PRA responsibility concerns safety, soundness and insurance policyholders?

Accepted Answer

is responsible for promoting the safety and soundness of systemically important firms, including insurers, and ensuring policyholders are protected in the event of a firm’s failure

Answer

is by promoting the safety and soundness of firms, thereby maintaining and enhancing financial stability in the UK

Answer

is subordinate to its general objective to promote the safety and soundness of the firms that it regulates (and to its insurance objective)

Answer

is to reinforce that firms, and not the regulator, are responsible for ensuring that staff are fit and proper, competent and capable to do their job

Question 2

How does the PRA participate in international prudential regulation?

Accepted Answer

is actively involved in the work of the Financial Stability Board, the Basel Committee on Banking Supervision, the International Association of Insurance supervisors, and the Joint Forum

Answer

is by promoting the safety and soundness of firms, thereby maintaining and enhancing financial stability in the UK

Answer

is responsible for authorising smaller firms such as financial and insurance intermediaries and regulates them for both prudential requirements and conduct of business

Answer

are taken by the PRC – including the governor of the Bank of England, the deputy governor for financial stability, the chief executive officer of the PRA (and deputy governor for prudential regulation), and independent non-executive members

Question 3

Which statement about “FCA enforcement officers” is correct?

Accepted Answer

will check the compliance systems at a firm to ensure their adequacy and they must be given access to all the documents, files and personnel they request

Answer

are subject to financial resources requirements and must maintain enough resources to cover the risks that result from the way in which they conduct their business

Answer

are designed to require those firms caught by them to ensure that their business model has sufficient amounts of liquid capital built in and that the firm will be able to continue to function if certain external stresses are applied

Answer

must be given if there is interactive dialogue between the firm and the customer during the sale, or if debt consolidation is the main purpose of the loan

Question 4

Which statement about “FCA contact centre staff” is correct?

Accepted Answer

should have the expertise to deal with the majority of issues and queries, and these will be passed on to the appropriate supervision area where necessary

Answer

must not deal with retail clients, even under supervision, until they have passed the regulatory module of an approved examination

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is to set out detailed guidance on how staff and representatives of regulated businesses should deal with customers

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will not be undertaken where this materially affects the firm’s internal controls and prevents the FCA from monitoring the firm’s compliance with its regulatory obligations

Question 5

Which statement about “The FCA’s annual report” is correct?

Accepted Answer

will contain an assessment of the extent to which it has met these objectives

Answer

must have a stewardship strategy which outlines how their stewardship activities will deliver the necessary sustainability objectives

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should have the expertise to deal with the majority of issues and queries, and these will be passed on to the appropriate supervision area where necessary

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will then decide whether to report those suspicions to the NCA

Question 6

Which statement about “The FCA’s strategic objective” is correct?

Accepted Answer

is to make sure that markets function well and is required to cooperate appropriately with the Treasury, the Bank of England and other relevant bodies in pursuing this objective

Answer

is to represent the interests of financial market participants, and to provide input to the FCA in order to help it meet its strategic (ensuring that the relevant markets function well) and operational objectives

Answer

are required to ensure that they do not treat ‘trapped’ borrowers (MCOB 11.8), who are unable to borrow on a new mortgage, any less favourably than they would treat other customers with similar characteristics

Answer

will share information with other regulatory bodies such as the PRA, FOS and NCA, as well as with international regulators

Question 7

Which statement about “The FCA (and PRA where applicable)” is correct?

Accepted Answer

is concerned with the adequacy of the financial resources that a firm needs to hold in order to be able to meet its liabilities as they fall due

Answer

are subject to financial resources requirements and must maintain enough resources to cover the risks that result from the way in which they conduct their business

Answer

must have accounting records that allow them to be able to demonstrate their compliance with the financial resources requirements at any time

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is to represent the interests of financial market participants, and to provide input to the FCA in order to help it meet its strategic (ensuring that the relevant markets function well) and operational objectives

Question 8

Which statement about “The PRA’s most significant supervisory decisions” is correct?

Accepted Answer

are taken by the PRC – including the governor of the Bank of England, the deputy governor for financial stability, the chief executive officer of the PRA (and deputy governor for prudential regulation), and independent non-executive members

Answer

is in charge of micro-prudential and macro-prudential regulation on top of its existing responsibilities for monetary policy

Answer

is set out in a Memorandum of Understanding between the Bank and the FCA

Answer

can only carry out the activities permitted by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA)

Question 9

Which statement about “The PRA’s requirement to facilitate competition” is correct?

Accepted Answer

is subordinate to its general objective to promote the safety and soundness of the firms that it regulates (and to its insurance objective)

Answer

is by promoting the safety and soundness of firms, thereby maintaining and enhancing financial stability in the UK

Answer

is responsible for promoting the safety and soundness of systemically important firms, including insurers, and ensuring policyholders are protected in the event of a firm’s failure

Answer

is responsible for authorising smaller firms such as financial and insurance intermediaries and regulates them for both prudential requirements and conduct of business

Question 10

Which statement about “The FAR” is correct?

Accepted Answer

is the surplus assets held by a life office over the value of its liabilities expressed as a percentage of its total assets

Answer

is able to commission value-for-money reviews of its operations which are important controls over its efficiency and economy. 2

Answer

is not part of a claim unless declared prior to the liquidation of a life office

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may be prohibited under UK and international sanctions from engaging in investment activities or have their assets frozen

Question 11

Which statement about “The FPC” is correct?

Accepted Answer

is required to respond to the Treasury’s recommendations, setting out to what extent it agrees with the remit and what action it intends to take in response

Answer

must take responsibility for what they do with personal data and how they comply with the other principles

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is to make sure that markets function well and is required to cooperate appropriately with the Treasury, the Bank of England and other relevant bodies in pursuing this objective

Answer

are also required to produce a sustainability entity report at a firm level which may intersect with the TCFD disclosure requirements in ESG 2

Question 12

Which statement about “The Bank of England” is correct?

Accepted Answer

is in charge of micro-prudential and macro-prudential regulation on top of its existing responsibilities for monetary policy

Answer

are taken by the PRC – including the governor of the Bank of England, the deputy governor for financial stability, the chief executive officer of the PRA (and deputy governor for prudential regulation), and independent non-executive members

Answer

is provided by the Joint Money Laundering Steering Group (JMLSG) which is made up of leading Trade Associations in the industry under the chairmanship of the Bank of England

Answer

can only carry out the activities permitted by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA)

Question 13

Which statement about “The firm’s compliance officer” is correct?

Accepted Answer

is primarily responsible for all aspects of FSMA compliance and should be a director or senior manager who in turn reports to the firm’s governing body

Answer

is to support the board in raising the Consumer Duty regularly and in all relevant discussions, challenging the firm's governing body on how it is embedding the Duty at all levels

Answer

can cover for a Senior Manager for up to twelve weeks over twelve months without approval where the absence is temporary or reasonably unforeseen

Answer

must ensure that all of its individuals carrying out senior management functions (SMFs) (or controlled functions in non-SM&CR firms) are approved

Question 14

Which statement about “Competition powers” is correct?

Accepted Answer

is ‘to promote effective competition in the interests of consumers’

Answer

is subordinate to its general objective to promote the safety and soundness of the firms that it regulates (and to its insurance objective)

Answer

may be made by anyone directly affected by its actions or inaction – that is, regulated firms, individual employees of firms, listed companies, consumers etc

Answer

may be commercial interests and businesses often rely on this basis

Question 15

Which statement about “Disciplinary action” is correct?

Accepted Answer

can be publicised to encourage other firms or individuals not to make the same mistakes

Answer

must appoint an MLRO (SMF17) who is required to make reports to NCA where they know, suspect or have reasonable grounds for knowing or suspecting that a person is engaged in money laundering or terrorist financing

Answer

should focus minds, drive up standards, and make firms easier to run and supervise

Answer

can issue civil proceedings in the High Court against firms and individuals, including those who are not members of the regulated community

CII R01: Financial Services, Regulation and Ethics Free Sample Paper & Practice Questions

Which PRA responsibility concerns safety, soundness and insurance policyholders?

CII R01: Financial Services, Regulation and Ethics

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CII R01: Financial Services, Regulation and Ethics Free Sample Paper & Practice Questions

Which PRA responsibility concerns safety, soundness and insurance policyholders?

CII R01: Financial Services, Regulation and Ethics

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