R01 Global regulation, the EU and Brexit: free practice questions

1. Question 1 of 5

   Which of the following was one of the three original objectives of the EU's Financial Services Action Plan (FSAP)?

   Option A: To create a single EU wholesale marketOption B: To create a single EU currency for financial firmsOption C: To set a single rate of tax on investment returnsOption D: To replace national regulators with one EU regulator

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   The answer is A: To create a single EU wholesale market

   The FSAP aimed to create a single EU wholesale market, achieve open and secure retail markets, and create state-of-the-art prudential rules and supervision.

   Why the other options are wrong

   B

   The FSAP wasn't about introducing a currency.

   C

   Harmonising tax rates wasn't one of the FSAP's objectives.

   D

   National regulators continued; the FSAP aimed at common rules, not one regulator.

2. Question 2 of 5

   What was meant by onshoring after the UK left the EU?

   Option A: Moving financial firms' head offices from the EU back to the UKOption B: Transferring UK regulators' remaining powers to the EU authoritiesOption C: Amending EU legislation and requirements so they work for the UK aloneOption D: Requiring EU firms to obtain a UK passport before dealing with UK clients

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   The answer is C: Amending EU legislation and requirements so they work for the UK alone

   Onshoring amended EU law and regulatory requirements, including directly applicable regulations kept by the European Union (Withdrawal) Act 2018, so they work for the UK alone.

   Why the other options are wrong

   A

   Onshoring is about legislation, not where firms are based.

   B

   Onshoring brought rules into UK law; it didn't hand powers to EU authorities.

   D

   There's no UK passport; passporting rights were lost on leaving the EU.

3. Question 3 of 5

   What was the first clear sign of the UK diverging from EU financial regulation?

   Option A: The UK leaving the Financial Stability BoardOption B: The replacement of the FCA by a new UK regulatorOption C: The introduction of the Consumer Duty in 2023Option D: The loss of passporting rights for UK firms

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   The answer is D: The loss of passporting rights for UK firms

   The first evidence of divergence was the loss of passporting, which had let UK firms do business in EU Member States without being directly regulated there.

   Why the other options are wrong

   A

   The UK remains engaged with global bodies such as the FSB.

   B

   The FCA still exists and regulates UK firms.

   C

   The Consumer Duty is a UK initiative but wasn't the first sign of divergence.

4. Question 4 of 5

   Which Government department is responsible for the regulation of the UK financial services market?

   Option A: The Department for Work and PensionsOption B: The Department for Business and TradeOption C: HM Revenue & CustomsOption D: HM Treasury

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   The answer is D: HM Treasury

   HM Treasury, under the direct authority of the Chancellor of the Exchequer, is responsible for regulating the financial services market.

   Why the other options are wrong

   A

   The DWP deals with benefits and State pensions.

   B

   The Department for Business and Trade isn't responsible for financial services regulation.

   C

   HMRC collects taxes; it doesn't regulate the financial services market.

5. Question 5 of 5

   Which firms are dual-regulated in the UK?

   Option A: Every authorised firm, including small financial advice firmsOption B: Banks, building societies, insurers and major investment firmsOption C: Only mortgage brokers, consumer credit firms and payment firmsOption D: Only firms whose head offices are based outside the UK

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   The answer is B: Banks, building societies, insurers and major investment firms

   Banks, building societies, insurers and major investment firms have prudential supervision from the PRA and conduct supervision from the FCA. All other firms are solo-regulated by the FCA.

   Why the other options are wrong

   A

   Smaller firms such as advisers are solo-regulated by the FCA.

   C

   Mortgage brokers and consumer credit firms are solo-regulated by the FCA.

   D

   Dual regulation depends on the type of firm, not where it's based.

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