What the regulators are actually for, and what they can do about it. This area is about statutory objectives, the tools of supervision, and the enforcement powers that back them up. Questions often give you a scenario and ask which power applies.
What regulator powers covers in the R01 exam
- The FCA's strategic objective and three operational objectives
- The PRA's general and insurance objectives
- Supervision: proactive, event-driven and thematic work
- Enforcement — fines, public censure, bans, restitution and withdrawal of permission
- Information-gathering, skilled persons (s.166) reports and intervention powers
- Accountability of the regulators to Parliament and the Treasury
Where candidates lose marks
Confusing the FCA's single strategic objective with its three operational objectives.
Assuming the regulator must prosecute — much enforcement is civil and administrative.
Forgetting that the regulators can act against individuals, not just firms.
Worked example questions
Real R01-style questions from our bank, with the correct answer and the reasoning. No sign-in needed.
Which FCA principle requires a firm to pay due regard to the interests of its customers and treat them fairly?
- APrinciple 8
- BPrinciple 2
- CPrinciple 7
- DPrinciple 4
- EPrinciple 6Correct
Why: Principle 6 requires firms to pay due regard to the interests of customers and treat them fairly, ensuring trust in the retail financial market.
Which PRA Fundamental Rule requires firms to manage risks effectively with appropriate strategies and processes?
- AFundamental Rule 4
- BFundamental Rule 6
- CFundamental Rule 5Correct
- DFundamental Rule 1
- EFundamental Rule 2
Why: Fundamental Rule 5 requires firms to maintain sound risk strategies and risk management systems suitable for their activities.
Which PRA Fundamental Rule requires firms to disclose to regulators anything they would reasonably expect notice of?
- AFundamental Rule 3
- BFundamental Rule 8
- CFundamental Rule 4
- DFundamental Rule 2
- EFundamental Rule 7Correct
Why: Fundamental Rule 7 requires firms to deal openly and cooperatively with regulators, including prompt disclosure of relevant information.
Free, exam-style R01 questions across the syllabus, with an explanation for every answer and a per-topic breakdown at the end. The full 100-question mocks come with Pro.
Start free practiceRegulator powers — questions answered
What are the FCA's objectives?
The FCA has one strategic objective — ensuring markets work well — and three operational objectives: consumer protection, market integrity and promoting effective competition in consumers' interests. R01 often tests which objective applies to a given situation.
What enforcement powers does the FCA have?
The FCA can impose fines, issue public censures, ban individuals, require restitution to customers, and withdraw a firm's permission or an individual's approval. Crucially, it can act against both firms and the individuals who run them.
The other R01 syllabus areas
Independent study material, not affiliated with or endorsed by the Chartered Insurance Institute. Always check the official CII website for the current R01 syllabus, format and fees. The CII sets a nominal pass mark of 65% and adjusts it per sitting.