CII R01 Regulatory Bodies and Their Roles 3 — Questions and Answers
Question 1: What is the role of Companies House in the regulatory landscape?
- It regulates company share prices
- It incorporates and dissolves companies, maintains the public register of companies, and holds beneficial ownership information (Correct answer)
- It is the UK's stock exchange
- It provides legal advice to companies
Correct answer: It incorporates and dissolves companies, maintains the public register of companies, and holds beneficial ownership information
Companies House is responsible for incorporating and dissolving companies, examining and storing company information, and making this available to the public. It holds the PSC Register showing beneficial ownership.
Question 2: What is the role of the Prudential Regulation Committee (PRC)?
- An FCA committee
- The governing body of the PRA, responsible for setting its strategy and making key decisions on prudential regulation (Correct answer)
- A committee of the House of Commons
- An advisory committee for insurance companies
Correct answer: The governing body of the PRA, responsible for setting its strategy and making key decisions on prudential regulation
The PRC is the governing committee of the PRA. It is a committee of the Bank of England's Court of Directors and is responsible for the PRA's strategy and key regulatory decisions.
Question 3: How do the FCA and PRA coordinate on dual-regulated firms?
- They operate completely independently with no coordination
- They have a formal Memorandum of Understanding (MoU) and coordination framework for supervising firms regulated by both bodies (Correct answer)
- The FCA always takes precedence
- The PRA handles all matters for dual-regulated firms
Correct answer: They have a formal Memorandum of Understanding (MoU) and coordination framework for supervising firms regulated by both bodies
The FCA and PRA have a Memorandum of Understanding that sets out how they coordinate their supervision of dual-regulated firms. This includes information sharing, joint supervisory assessments, and protocols for enforcement.
Question 4: What is the role of the Treasury Select Committee in financial regulation?
- It directly regulates financial firms
- It scrutinises the work of the FCA, PRA, and other financial regulators on behalf of Parliament (Correct answer)
- It sets the government's economic policy
- It approves all new FCA rules
Correct answer: It scrutinises the work of the FCA, PRA, and other financial regulators on behalf of Parliament
The Treasury Select Committee is a committee of the House of Commons that scrutinises the expenditure, administration, and policies of HM Treasury, the FCA, PRA, Bank of England, and related public bodies.
Question 5: What is the Chartered Insurance Institute (CII) and its role?
- A government insurance regulator
- A professional body for insurance and financial planning professionals that sets educational standards and professional qualifications (Correct answer)
- An insurance company
- A division of the FCA
Correct answer: A professional body for insurance and financial planning professionals that sets educational standards and professional qualifications
The CII is a professional body that provides qualifications, maintains professional standards, and promotes ethical behaviour for insurance, financial planning, and financial services professionals.
Question 6: What is the role of the Financial Services Compensation Scheme (FSCS) as a regulatory body?
- It regulates financial firms directly
- It acts as the UK's compensation scheme of last resort, protecting consumers when authorised firms fail (Correct answer)
- It provides loans to failing financial firms
- It invests in financial markets on behalf of consumers
Correct answer: It acts as the UK's compensation scheme of last resort, protecting consumers when authorised firms fail
The FSCS is an independent body that provides compensation to eligible consumers when FCA-authorised firms fail. It is funded by levies on the financial services industry and is the scheme of last resort.
CII R01 Regulatory Bodies and Their Roles 3
What is the role of Companies House in the regulatory landscape?