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CeMAP·FSRE · Module 1: Financial Services, Regulation and Ethics·UnitFSRE · Unit 01Access: Free tier

FRE1: Industry, Regulation and Key Parties

FRE1 is the first unit of CeMAP Module 1, covering the structure of UK financial markets, the role of government and taxation, legal principles underpinning financial advice, and the regulatory framework including the FCA and PRA. This unit has 50 multiple-choice questions in the exam and is available to practise completely free on GoCeMAP.

Questions
675
Topics
8
Access
Free

What’s in it.

8 topics
  • Topic 01

    Structure of UK Financial Markets

    69 questions
  • Topic 02

    Role of Government and Taxation

    81 questions
  • Topic 03

    Legal Principles Underpinning Financial Advice

    85 questions
  • Topic 04

    Development of UK Financial Regulation

    75 questions
  • Topic 05

    Responsibilities of the PRA

    76 questions
  • Topic 06

    Role and Powers of the FCA

    90 questions
  • Topic 07

    Overview of Key Financial Products

    118 questions
  • Topic 08

    The Role of Financial Institutions

    81 questions

Sample questions

3 of many

A few questions from this unit, with the answer and a full explanation. The complete bank is available when you start practising.

  1. A compliance officer is reviewing how FSMA 2023 affects their firm's regulatory obligations previously derived from EU Directives. Which statement BEST describes the regulatory position?

    • Firms can choose whether to follow the original EU rules or new UK alternatives
    • The FCA and PRA can now replace EU-derived rules with bespoke UK requirements, so firms must monitor regulatory developments closely
      Correct answer
    • Firms must comply with both UK and EU rules until a mutual recognition agreement is reached
    • EU-derived regulations were automatically repealed when FSMA 2023 came into force
    Explanation

    FSMA 2023 gave the FCA and PRA powers to repeal, replace, or modify retained EU law with rules tailored to UK markets. This means firms must actively monitor regulatory developments as EU-derived rules may be replaced by new UK requirements over time, rather than remaining static or being immediately repealed.

  2. What does G-SIB stand for in the context of PRA capital requirements?

    • Global Standard Interest Benchmark
    • Global Systemically Important Bank
      Correct answer
    • General Statutory Investment Buffer
    • General Solvency Improvement Buffer
    Explanation

    G-SIB stands for Global Systemically Important Bank. The G-SIB buffer is an additional capital requirement imposed on banks whose failure would pose a significant risk to the global financial system.

  3. A PRA-regulated bank is preparing its ICAAP (Internal Capital Adequacy Assessment Process). Which PRA Rulebook module provides the detailed banking-specific prudential requirements it must apply?

    • CONC (Consumer Credit Sourcebook) governs ICAAP for banks because their largest risk exposures arise from consumer credit
    • BIPRU (Banking: Prudential Sourcebook) contains the detailed prudential requirements for banks and building societies, including capital calculations for credit, market, and operational risks
      Correct answer
    • INSPRU (Insurance: Prudential Sourcebook) applies to PRA-regulated deposit-takers including banks
    • The Bank of England's Monetary Policy Framework document, not the PRA Rulebook, governs ICAAP requirements
    Explanation

    BIPRU is the sector-specific PRA Rulebook module for banks and building societies, covering the detailed rules for calculating capital requirements for credit risk, market risk, and operational risk under the Basel framework. The ICAAP is a bank's own internal assessment of its capital adequacy, which must be conducted in accordance with BIPRU requirements. GENPRU sets out the general framework, but BIPRU provides the specific detail for banks. INSPRU is the equivalent module for insurers.

Frequently asked questions

3 questions
How many questions are in the FRE1 exam?

The FRE1 exam consists of 50 multiple-choice questions. You need to score 70% (35 out of 50) to pass.

Is FRE1 free to practise on GoCeMAP?

Yes, all FRE1 practice questions on GoCeMAP are completely free, with no credit card or subscription required.

What is the pass mark for FRE1?

You need to achieve 70% to pass FRE1, which means getting at least 35 out of 50 questions correct.