CISI UK Financial Regulation
CISI UKFR element

The Financial Services and Markets Act 2000 and Financial Services Act 2012 questions for the CISI UKFR exam

FSMA 2000, regulated and prohibited activities, authorisation, and the FCA's powers.

Practise this in a free mock

This is the law that makes the whole system work. FSMA 2000 created the framework of authorisation and permission, and the Financial Services Act 2012 reshaped the regulators after the financial crisis. Questions test whether you can tell a regulated activity from an unregulated one, know what the general prohibition means in practice, and understand the powers the FCA can actually use.

What fsma and the fs act covers in the UKFR exam

  • The general prohibition under section 19 — no regulated activity without authorisation or exemption
  • Regulated activities and the Regulated Activities Order: the activities and the investments they apply to
  • Exclusions and exemptions, and the enforceability of agreements made by an unauthorised business
  • Authorisation, Part 4A permission and the perimeter of regulation
  • Approved persons, senior managers and the performance of regulated activities
  • The FCA's supervisory toolkit: information gathering, investigations, and its disciplinary and enforcement powers

Where candidates lose marks

Mixing up the general prohibition (doing regulated business without authorisation) with the financial-promotion restriction (communicating an invitation to engage in it). They are separate offences.

Forgetting that a specified activity must also involve a specified investment to be regulated — one without the other usually falls outside the perimeter.

Assuming an agreement made in breach is simply void. FSMA makes such agreements generally unenforceable against the customer, which is not the same thing.

Worked examples

Real questions from our bank, with the reasoning. No sign-in needed.

Sample question 1

Who remains responsible for regulatory compliance if an SMF temporarily delegates duties under the 12-week rule?

  1. AThe approved SMF holderCorrect
  2. BThe temporary cover manager
  3. CThe FCA
  4. DThe HR department
  5. EThe board secretary

Why: The approved SMF holder remains accountable for regulatory compliance even if duties are delegated temporarily under the 12-week rule.

Sample question 2

Which of the following best describes the relationship between an exempt appointed representative and their principal?

  1. AThe principal is liable for all regulated activities the AR performsCorrect
  2. BThe representative supervises the principal's own compliance
  3. CThe principal and representative share liability equally
  4. DThe FCA supervises both of them separately and directly
  5. EThe representative is immune from any FCA enforcement

Why: The principal is fully liable for all regulated activities conducted by its appointed representative.

Test yourself on fsma and the fs act

The free mock draws on every element — 75 questions in 90 minutes, marked against the 70% pass mark, with an explanation for every answer and a per-element breakdown at the end.

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The other four elements

The Regulatory Environment
The FCA, the PRA and the Bank of England, their objectives and the regulatory infrastructure.
Associated Legislation and Regulation
Money laundering, insider dealing, market abuse, and the Data Protection Act 2018.
FCA Conduct of Business (COBS) and Client Assets (CASS)
Client categorisation, suitability, financial promotions, and client money and custody.
Complaints and Redress
The DISP rules, the Financial Ombudsman Service and the Financial Services Compensation Scheme.
Read the complete CISI UKFR guide

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