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
Under the Equality Act 2010, which protected characteristic is most commonly relevant to mortgage lending decisions?
Answer: Age
Age is frequently relevant in mortgage lending because lenders set maximum age limits at application and at end of term, requiring compliance with the Equality Act 2010.
What is the role of the Prudential Regulation Authority (PRA) in relation to mortgage lenders?
Answer: The PRA supervises the financial safety and soundness of deposit-taking mortgage lenders
The PRA, part of the Bank of England, supervises banks and building societies to ensure their financial resilience and stability, including in their role as mortgage lenders.
A mortgage firm discovers that one of its advisers has been submitting false income documents. Under which regulation must the firm report this to the National Crime Agency?
Answer: The Proceeds of Crime Act 2002
The Proceeds of Crime Act 2002 requires a Suspicious Activity Report (SAR) to be submitted to the National Crime Agency when mortgage fraud or money laundering is suspected.
What is the FCA's Threshold Condition TC2.1 concerned with in the context of mortgage firm authorisation?
Answer: Legal status — the firm must be a body corporate, partnership, or individual
TC2.1 requires that a firm seeking authorisation must have an appropriate legal status, such as being incorporated as a limited company, a partnership, or a sole trader.
Under MCOB 7, what information must a mortgage lender include in an annual mortgage statement to the borrower?
Answer: Outstanding balance, interest charged, payments made, and any charges applied during the period
MCOB 7 requires annual mortgage statements to include the outstanding balance, interest charged, payments received, and fees or charges applied during the statement period.
Which FCA rule requires mortgage advisers to retain records of their advice and the reasons for recommendations?
Answer: MCOB 4.8 (suitability records)
MCOB 4.8 requires firms to keep a record of the suitability assessment and the reasons for any mortgage recommendation made to a customer.
When the FCA issues a Final Notice imposing a financial penalty on a mortgage firm, where is this notice published?
Answer: On the FCA's public register and website
Final Notices, including financial penalties, are published on the FCA's website to promote transparency and deter future misconduct across the industry.