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CeMAP Module 1 FSRE Cheat Sheet

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FRE1 LO1: Financial Services

  • Not published of exam
  • Markets Asset Classes Bank of England Financial Crime

FRE1 LO2: Retail Consumer

  • Not published of exam
  • Consumer Needs Product Functions Risk Liquidity

FRE1 LO3: Legal Concepts

  • Not published of exam
  • Legal Concepts Agency Ownership Trusts

FRE1 LO4: Regulatory Development

  • Not published of exam
  • Regulatory Timeline FSMA Regulators SMCR

FRE1 LO5: FCA and PRA

  • Not published of exam
  • Regulator Roles FCA Handbook Authorisation COBS

FRE2 LO6: Advice Skills

  • Not published of exam
  • Advice Process Fact-Find Suitability Risk Capacity

FRE2 LO7: Client Regulation

  • Not published of exam
  • Consumer Duty AML and Data Complaints Protection Limits

FRE2 LO8: Ethics

  • Not published of exam
  • Ethics Conflicts Professionalism Whistleblowing

Quick Facts

  • Module FSRE, not retired UKFR
  • Units FRE1 plus FRE2
  • Module share 40 marks each; 50% each
  • Each unit 40 marks; 60 minutes
  • Question mix 25 standalone; 3×5 case-linked
  • Pass 70% each; 28/40
  • Study time 50 hours per unit
  • Registration £330; first unit sittings included
  • Resit £120 per unit

Eight Learning Outcomes LO

  • Markets, consumer, law, history, regulators; advice, rules, ethics
  • FRE1: LO1–LO5 FRE2: LO6–LO8

FRE1 vs FRE2 LO

FRE1

  • LO1–LO5
  • Industry, law, regulators

FRE2

  • LO6–LO8
  • Advice, client rules, ethics
  • Pass both units separately

Markets LO

  • Primary market New securities issued
  • Secondary market Existing securities traded
  • Money market Short-term funding instruments
  • Capital market Long-term debt and equity
  • Intermediation Channels savings into lending
  • Maturity transformation Short deposits fund longer loans
  • Bank Rate Monetary-policy benchmark
  • Financial crime Fraud, laundering, market abuse

Asset Classes LO

  • Cash Liquid; inflation erosion risk
  • Bond Debt claim; rate sensitivity
  • Equity Ownership; variable returns
  • Property Physical asset; lower liquidity
  • Commodity Physical raw-material exposure
  • Diversification Spread distinct risk exposures

Consumer Needs LO

  • Protection Transfer financial-loss risk
  • Emergency cash Buffer unexpected expenses
  • Savings Shorter-term capital access
  • Investment Longer-term return objective
  • Retirement income Fund later-life spending
  • Mortgage Finance property purchase
  • Estate planning Arrange asset transfer
  • Product function Meet specific financial need

Joint Tenants vs Tenants in Common LO

Joint tenants

  • Survivorship applies
  • Undivided joint interest

Tenants in common

  • Distinct shares
  • Share passes through estate
  • Survivorship versus separate shares

Legal Concepts LO

  • Sole trader Owner bears business liabilities
  • Limited company Separate legal person
  • Agent Acts within principal's authority
  • Contract (England/Wales) Offer, acceptance, consideration, intention
  • Joint tenants Survivorship applies
  • Tenants in common Distinct shares; will can direct
  • Trustee Holds legal title
  • Beneficiary Holds beneficial interest
  • Power of attorney Authority to act for donor

Regulatory Timeline LO

  • 1986 Act Self-regulation framework
  • FSMA 2000 Core financial regulation statute
  • FSA Former single regulator
  • 2013 split FCA and PRA replace FSA
  • SMCR Senior managers, certification, conduct rules
  • FPC Monitors systemic financial risk

FCA vs PRA LO

FCA

  • Conduct oversight
  • Some prudential supervision

PRA

  • Designated firm prudential oversight
  • Bank of England body
  • FCA also has prudential responsibilities

Regulator and Remedy Picker LO

  • Question concerns market conduct → FCA ( Consumer and market outcomes )
  • Question concerns bank soundness → PRA ( Designated firm prudential supervision )
  • Question concerns investment conduct → COBS ( Check applicable business )
  • Question concerns mortgage conduct → MCOB ( Mortgage-specific rules )
  • Eligible client disputes firm → FOS ( After complaint route )
  • Authorised firm has failed → FSCS ( Check claim eligibility )

Regulator Roles LO

  • FCA Conduct; some firm prudential oversight
  • PRA Prudential supervision of designated firms
  • Bank of England Monetary and financial stability
  • HM Treasury Government financial policy
  • FOS Ombudsman; not a regulator
  • FSCS Compensation scheme; not a regulator
  • FCA Register Check permissions and firm status

FCA Handbook LO

  • PRIN High-level firm principles
  • SYSC Governance and control systems
  • COBS Investment business conduct rules
  • MCOB Mortgage conduct rules
  • CASS Client money and custody
  • DISP Complaints and redress rules
  • FIT Fitness and propriety
  • COCON Individual conduct rules

Advice Flow LO

  • Discover → assess → recommend → explain → review
  • Fact-Find Risk plus capacity Suitable choice Written rationale

Risk Tolerance vs Capacity LO

Attitude to risk

  • Willingness to accept uncertainty
  • Psychological preference

Capacity for loss

  • Ability to bear loss
  • Financial constraint
  • Both inform suitability

Advice Process Picker LO

  • Client states product preference → Clarify underlying objective ( Need before product )
  • Personal recommendation planned → Complete Fact-Find ( Record circumstances )
  • Client accepts volatility → Check capacity for loss ( Separate from willingness )
  • Client cannot absorb loss → Reassess recommendation ( Capacity constrains suitability )
  • Product has conflicting incentive → Manage conflict ( Protect client outcome )
  • Client rejects recommendation → Document insistent-client position ( Check firm policy )

Advice Process LO

  • Fact-Find Record client circumstances and goals
  • Attitude to risk Willingness to accept losses
  • Capacity for loss Ability to absorb losses
  • Time horizon When funds are needed
  • Suitability Recommendation fits client circumstances
  • Suitability report Explains personal recommendation
  • Insistent client Seeks transaction against advice
  • Active listening Clarify stated and underlying needs

Advice vs Execution Only LO

Personal recommendation

  • Tailored to client
  • Suitability duty applies

Execution only

  • No personal recommendation
  • Other conduct duties remain
  • Product transaction does not imply advice

Consumer Duty Four LO

  • Product, value, understanding, support
  • Target market Fair price Clear message Useful help

FOS vs FSCS LO

FOS

  • Adjudicates eligible complaints
  • Money cap depends on dates
  • Separate interest/costs awards outside cap

FSCS

  • Protects eligible failed-firm claims
  • Deposit limit per authorisation
  • Complaint remedy versus firm failure

Protection and Complaint Picker LO

  • Complaint reaches firm → Apply DISP process ( Investigate and respond )
  • Final response disputed → Check FOS eligibility ( Referral rules apply )
  • Deposit firm fails → Check FSCS deposits ( £120k eligible limit )
  • Other financial firm fails → Check FSCS category ( Different limits may apply )
  • Act occurred before Apr2019 → Check older-act money cap ( Referral date also matters )
  • Act occurred Apr2019 onward → Check newer-act money cap ( Referral date also matters )

Consumer Duty LO

  • Consumer Principle Deliver good retail outcomes
  • Good faith First cross-cutting rule
  • Foreseeable harm Identify and avoid
  • Financial objectives Enable and support pursuit
  • Products/services Meet target-market needs
  • Price/value Benefits justify total price
  • Understanding Clear timely communications
  • Support Effective help throughout relationship

AML Stages LO

  • Placement → layering → integration
  • Enter system Obscure trail Appear legitimate

Consumer Duty vs TCF LO

Consumer Duty

  • Deliver good retail outcomes
  • Four outcome areas

TCF

  • Treat customers fairly
  • Six fairness outcomes
  • Duty adds outcome-focused obligations

AML and Data LO

  • Placement Introduce criminal proceeds
  • Layering Obscure source through transactions
  • Integration Reintroduce apparently legitimate funds
  • CDD Identify and verify customer
  • EDD Additional checks for higher risk
  • UK GDPR Lawful personal-data processing
  • Data minimisation Collect only necessary data

Complaints and Protection LO

  • Firm complaint Investigate under DISP
  • FOS referral After final response or deadline
  • FOS newer-act money cap £455k; 2026/27 referrals, Apr2019+ acts
  • FOS older-act money cap £205k; 2026/27 referrals, pre-Apr2019 acts
  • FSCS deposit £120k per person/authorised firm
  • Deposit effective 1 December 2025
  • FSCS purpose Protect eligible failed-firm customers
  • FOS referral year 1 Apr2026–31 Mar2027 for these caps
  • Money cap exclusions Award interest; costs plus their interest

Ethics LO

  • Integrity Honest and principled conduct
  • Objectivity Resist biased judgement
  • Confidentiality Protect client information
  • Competence Work within skill limits
  • Conflict Identify, manage, disclose appropriately
  • Whistleblowing Report qualifying wrongdoing
  • Professionalism Ethics beyond rule compliance

Common Traps

Retired assessment

  • Current: FSRE FRE1/FRE2 ≠ Old: UKFR ITFS/UKFS

One-unit pass

  • FRE1 needs 28/40 ≠ FRE2 separately needs 28/40

Pass mark vs pass rate

  • 70% is candidate threshold ≠ Public pass rate unpublished

Regulator shorthand

  • PRA: designated firm prudential ≠ FCA: conduct plus prudential

Deposit vs ombudsman

  • FSCS deposit: £120k ≠ FOS money cap: date-specific

Shared bank authorisation

  • Deposit cap per authorised firm ≠ Multiple brands may share authorisation

Risk dimensions

  • Willingness is attitude ≠ Affordability is capacity

Execution only

  • No personal recommendation ≠ Conduct obligations still apply

Last Minute

  • 1. FSRE replaced retired UKFR
  • 2. FRE1 LO1–5; FRE2 LO6–8
  • 3. Each: 40 marks, 60 minutes
  • 4. Each: 25 standalone plus 15 linked
  • 5. Each unit passes at 28/40
  • 6. FCA: conduct plus some prudential
  • 7. PRA: designated firm prudential
  • 8. COBS: investment; MCOB: mortgage
  • 9. Risk willingness differs from loss capacity
  • 10. Duty: product, value, understanding, support
  • 11. FOS handles eligible complaints
  • 12. FSCS protects eligible failed-firm customers
  • 13. Deposits: £120k/person/authorisation since Dec2025
  • 14. Apr2019+ acts: £455k (2026/27 referrals)
  • 15. Before Apr2019: £205k (2026/27 referrals)

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