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UK Financial Regulation Flashcards

7 cards from real CEMAP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 UK Financial Regulation flashcards as text

  1. Under MCOB, what is the maximum period a mortgage illustration (ESIS) remains valid?

    Answer: There is no set expiry period

    The FCA's MCOB rules do not prescribe a fixed validity period for the ESIS; firms set their own validity terms, but must keep it current and accurate.

  2. Which FCA principle requires firms to pay due regard to the interests of their customers and treat them fairly?

    Answer: Principle 6

    Principle 6 of the FCA's Principles for Businesses states that a firm must pay due regard to the interests of its customers and treat them fairly (TCF).

  3. A regulated mortgage contract must be secured on which type of property to fall within FCA regulation?

    Answer: UK residential property where at least 40% will be used as a dwelling

    A regulated mortgage contract requires the loan to be secured on a property in the UK where at least 40% will be used as or in connection with a dwelling.

  4. Which piece of UK legislation created the framework for data protection rights currently enforced by the ICO?

    Answer: Data Protection Act 2018

    The Data Protection Act 2018 implemented the GDPR into UK law and governs how personal data is handled, enforced by the Information Commissioner's Office.

  5. Under the Senior Managers and Certification Regime (SM&CR), who bears primary responsibility for ensuring a firm's activities comply with FCA rules?

    Answer: Senior managers within their area of responsibility

    SM&CR assigns accountability to senior managers for the areas they control, requiring them to take reasonable steps to ensure compliance within their remit.

  6. What does the FCA's 'Consumer Duty' primarily require mortgage firms to demonstrate?

    Answer: That they deliver good outcomes for retail customers

    Consumer Duty, effective July 2023, requires firms to deliver good outcomes for retail customers across four key areas: products, price, consumer understanding, and support.

  7. Which regulatory body is responsible for setting the UK's base interest rate, which directly influences mortgage pricing?

    Answer: The Bank of England's Monetary Policy Committee

    The Bank of England's Monetary Policy Committee (MPC) sets the base rate, which influences the cost of borrowing and therefore mortgage interest rates.