R01 COBS, ICOBS and MCOB: free practice questions

1. Question 1 of 5

   What does COBS incorporate and introduce?

   Option A: The Data Protection Act rules and the ICO's enforcement powersOption B: The Basel Accords and the tiers of regulatory capitalOption C: The Consumer Credit Act rules and a ban on all adviser feesOption D: The MiFID requirements and a more principles-based regime

   Show answer

   The answer is D: The MiFID requirements and a more principles-based regime

   COBS incorporates MiFID requirements and introduces a more principles-based regime. It mainly covers investments and has limited application to deposits and pure protection.

   Why the other options are wrong

   A

   Data protection is outside the FCA Handbook.

   B

   Basel and capital rules sit in the prudential sourcebooks.

   C

   Consumer credit sits in CONC and the CCA.

2. Question 2 of 5

   For how long must records of benefits given to an intermediary be kept?

   Option A: At least five yearsOption B: At least one yearOption C: At least ten yearsOption D: At least three years

   Show answer

   The answer is A: At least five years

   Records of any benefits given to an intermediary must be kept for at least five years.

   Why the other options are wrong

   B

   One year is too short.

   C

   Ten years is longer than required.

   D

   Three years is too short.

3. Question 3 of 5

   What are the cancellation periods under ICOBS?

   Option A: 30 days for all productsOption B: 14 days for general insurance; 30 days for pure protection and PPIOption C: 7 days for all productsOption D: 30 days for general insurance; 14 days for pure protection and PPI

   Show answer

   The answer is B: 14 days for general insurance; 30 days for pure protection and PPI

   General insurance has a 14-day cancellation period; pure protection contracts and PPI have 30 days.

   Why the other options are wrong

   A

   General insurance has 14 days, not 30.

   C

   Seven days isn't the ICOBS period.

   D

   This reverses the periods.

4. Question 4 of 5

   Which of these is a condition for a regulated mortgage contract?

   Option A: The borrower must be a limited company or partnershipOption B: The loan must be for more than £25,000 and secured on land in the UKOption C: At least 40% of the property is used as a home by the borrower or familyOption D: The property must be outside the UK, with credit from a UK lender

   Show answer

   The answer is C: At least 40% of the property is used as a home by the borrower or family

   A regulated mortgage contract involves credit to an individual or trustees, secured on UK land, where at least 40% of the property is used as a dwelling by the borrower or a related person.

   Why the other options are wrong

   A

   Lending to a company isn't regulated.

   B

   There's no minimum loan size.

   D

   The land must be in the UK.

5. Question 5 of 5

   Which of these is a requirement of the full sale and rent back regime?

   Option A: Non-advised sales, to keep costs down for distressed sellersOption B: A fixed tenancy of at least five years and a 14-day cooling-offOption C: Cold calling is permitted as long as the homeowner consentsOption D: A tenancy of at least six months, renewable at the firm's option

   Show answer

   The answer is B: A fixed tenancy of at least five years and a 14-day cooling-off

   The SRB rules require a fixed-term tenancy of at least five years, affordability and suitability checks (no non-advised sales), a 14-day cooling-off period, a ban on cold calling and an independent valuation.

   Why the other options are wrong

   A

   Non-advised sales aren't allowed.

   C

   Cold calling is banned.

   D

   Six months was the old norm; the rules require at least five years.

R0 Exam Prep is an independent revision tool. It is not produced, endorsed by or affiliated with the Chartered Insurance Institute (CII). Questions and explanations are original. Use it alongside the official study text. About R0 Exam Prep