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Free CISI Global Financial Compliance Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the CISI Global Financial Compliance practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1Why can reducing systemic financial failures benefit people who hold no bank shares?

    1. A.Failures can disrupt jobs, income and the wider economy.Correct answer: A
    2. B.Failures transfer market risk entirely to company directors.
    3. C.Failures principally affect the tax treatment of bank dividends.
    4. D.Failures leave borrowers unaffected if they hold no equities.

    Explanation: CISI states: "reduce the risk of market and system failures, including their economic consequences" Regulation addresses economy-wide harm, not only shareholder losses. The alternatives mistake limited share exposure for immunity from employment, credit or income effects.

    Reference: CISI Global Financial Compliance study material — Ch. 1 §1.1, pp. 7–8

  2. 2A firm has opened a new regulated business line. What should its compliance systems cover?

    1. A.Only activities carried out directly by members of the board
    2. B.Managers, employees and representatives acting within that businessCorrect answer: B
    3. C.Only staff who hold formal appointments in the compliance department
    4. D.Only transactions large enough to require reporting to the regulator

    Explanation: CISI states: "A firm needs to establish, implement and maintain adequate policies and procedures sufficient to ensure compliance of the firm (covering its managers, employees, and representatives)" Adequate systems cover the firm and its relevant people, rather than limiting compliance to a specialist department, reporting-size transactions or board activity.

    Reference: CISI Global Financial Compliance study material — Ch. 2 §1.1.1, p. 98

  3. 3Why can checking that funds came from a lawful source be insufficient to identify terrorist financing?

    1. A.Terrorist financing is identified solely by the size of a transfer
    2. B.Legitimately obtained funds may still be used to finance terrorist activityCorrect answer: B
    3. C.Terrorist financing necessarily involves proceeds from a predicate crime
    4. D.Lawful income becomes terrorist property only after it is converted into cash

    Explanation: CISI states: "In terrorist financing, the source of funds may be legitimate" Terrorist financing concerns purpose and destination as well as origin. Criminal origin, cash conversion and a large transfer are not necessary conditions.

    Reference: CISI Global Financial Compliance study material — Ch. 3 §1.1, p. 160

  4. 4Under CISI's professional principles, how should a member handle a matter beyond their competence or qualifications?

    1. A.Treat membership itself as proof of competence in every investment activity
    2. B.Decline unless suitable advice or assistance enables professional performanceCorrect answer: B
    3. C.Accept if the client agrees that professional standards will not apply
    4. D.Accept if the likely fee exceeds the estimated cost of any future complaint

    Explanation: CISI directs members to "decline to act on any matter about which you are not competent or qualified unless" and completes the condition with "you have access to such advice or assistance to carry out the work in a professional manner, taking into account the nature of the individual mandates given by your customers and counterparties." Appropriate assistance must support professional performance for the mandate. Membership, client waiver or fee size alone cannot establish competence.

    Reference: CISI Global Financial Compliance study material — Ch. 4 §1.3.1, pp. 231–232

  5. 5What does corporate governance provide for setting and pursuing a company's objectives?

    1. A.A structure for setting objectives, attaining them and monitoring performanceCorrect answer: A
    2. B.A process confined to publishing the annual financial results
    3. C.A system concerned solely with deciding shareholder dividends
    4. D.A set of daily work instructions that replaces strategic board oversight

    Explanation: CISI states: "Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined." Governance covers direction, attainment and monitoring. Financial reporting and dividends are narrower activities; procedures do not replace strategic oversight.

    Reference: CISI Global Financial Compliance study material — Ch. 5 §1.1, p. 309

  6. 6How does financial regulation normally relate to the overarching legislation?

    1. A.It applies only to conduct omitted from the legislative framework.
    2. B.It supplies detailed rules implementing the legislative framework.Correct answer: B
    3. C.It replaces the legislative framework with voluntary conventions.
    4. D.It consists of judicial sentences imposed after criminal trials.

    Explanation: CISI states: "Regulation – detailed rules that expand on and implement the overarching laws laid down in the legislation." Regulation implements legislation. Voluntary conventions, criminal sentencing and rules confined to legislative omissions each confuse distinct sources or functions.

    Reference: CISI Global Financial Compliance study material — Ch. 1 §1.2, p. 9

  7. 7A compliance team has adequate headcount but its knowledge of new rules is outdated. What does the BCBS resources principle imply?

    1. A.Transfer interpretation to sales staff because they work closest to clients
    2. B.Replace continuing training with a larger budget for regulatory penalties
    3. C.Maintain professional skills through regular, systematic education and trainingCorrect answer: C
    4. D.Rely on headcount as the measure of resource adequacy until vacancies arise

    Explanation: CISI states: "The professional skills of compliance function staff, especially with respect to keeping up to date with developments in compliance laws, rules and standards, should be maintained through regular and systematic education and training." Resources must be appropriate as well as sufficient. Numbers alone, transferring interpretation to sales or budgeting for sanctions do not address the stated competence gap.

    Reference: CISI Global Financial Compliance study material — Ch. 2 §1.2, p. 101

  8. 8Funds are moved through repeated securities purchases and transfers to obscure their trail after entering the financial system. Which laundering stage is illustrated?

    1. A.Integration
    2. B.Predicate offending
    3. C.LayeringCorrect answer: C
    4. D.Placement

    Explanation: CISI states: "Layering – involves moving the money around in order to make it difficult for the authorities to link the placed funds with the ultimate beneficiary of the money." The transfers obscure links after entry, identifying layering. Placement is entry; integration is apparent legitimacy; the predicate offence generates proceeds.

    Reference: CISI Global Financial Compliance study material — Ch. 3 §1.2, p. 161

  9. 9What should a tied financial agent disclose to prevent clients misunderstanding the scope of their advice?

    1. A.That commission determines which product is most suitable for the client
    2. B.That the client must regard all available products as equally suitable
    3. C.Their tied status and the limited provider range they advise onCorrect answer: C
    4. D.That tied status makes their advice independent across the whole market

    Explanation: CISI requires disclosure of "tied status and that their advice is limited to the range of products and services offered by the product provider they act for, and not the full range of products available from the market." This clarifies the agent's provider-limited range. Tied status does not create whole-market independence; commission does not determine suitability, and products are not equally suitable.

    Reference: CISI Global Financial Compliance study material — p. 239

  10. 10A senior manager delegates a task relevant to their regulatory responsibilities. What accompanies permissible delegation?

    1. A.A transfer of all accountability to the human resources department
    2. B.Reasonable steps to ensure the task is discharged appropriatelyCorrect answer: B
    3. C.Automatic removal of the task from the manager's responsibilities
    4. D.An assumption that a competent delegate needs no further oversight

    Explanation: CISI states: "The delegation of tasks is perfectly permissible, but reasonable steps must be taken to ensure the delegated tasks are discharged appropriately." Delegation needs appropriate oversight. It is not automatic discharge of accountability, unconditional reliance on competence or transfer to HR.

    Reference: CISI Global Financial Compliance study material — Ch. 5 §1.2, p. 311

Exam Review

About CISI Global Financial Compliance

CISI Global Financial Compliance · GB

Key exam facts

Provider
Chartered Institute for Securities & Investment (CISI), the examining and publishing body.
Format
Multiple-choice computer-based examination at test centres; remote invigilation is also available.
Exam questions
Total questions: 100–110; Scored questions: 100; Unscored questions: 0–10; The total includes the scored and unscored questions.
Time limit
2 hours for the 100-question examination; proportionately more time is allowed if additional trial questions are included.
Passing score
70%: Pass 70–100 marks; Fail 0–69 marks. The current pass rate is a separate statistic.
Exam fee
UK exam fee GBP £283 for 1 April 2026–31 March 2027; mandatory workbook £105 separately. A one-off £68 qualification registration fee applies when registering the first qualification. Optional packages and concessions have separate conditions.

Topics covered

  • The International Regulatory Environment (20%)

    • Models of regulation
    • understand the objectives and benefits of regulation
    • know the interaction between law and regulation
    • understand the main differences between rule-based and principles-based approaches to financial regulation
    • understand models of self-regulation
    • understand the regulation of faith and ethical-based finance and the attendant regulatory implications
    • understand the purpose of the following:
    • understand how regulation operates in an exchange traded environment
    • understand the key benefits of regulated market structures
    • understand how regulation applies to OTC derivative transactions
    • understand how regulators approach Fintech products
    • The international approach to regulation
    • know the jurisdiction of different types of regulator
    • understand the role of international regulatory organisations
    • know the role that professional bodies play in relation to regulatory requirements
    • understand how international regulatory organisations aid the implementation of regulation in developing countries
    • know the three objectives of securities regulation as defined by IOSCO
    • understand how regulators implement their regulatory objectives
    • understand the different regulatory approaches
    • know IOSCO's principles 1 to 8 relating to the Regulator
    • know regulators’ enforcement powers
    • understand what types of activities and investment products are generally required to be regulated
    • understand the requirements regulation places on firms
    • understand how regulators facilitate and regulate cross border business
    • understand what regulations apply to a firm with international branches and subsidiaries
    • understand the challenge of conducting business whilst meeting the regulatory expectations and approach of multiple regulatory bodies

  • The Compliance Function (24%)

    • International best practice
    • understand the fundamental systems and controls a firm should implement in order to conduct its business in line with international regulatory standards
    • understand BIS principle 6 and the requirement for adequate resources
    • understand the practical applications of a formalised document of compliance policies and procedures
    • understand how an effective compliance function can add value to a business
    • know how to produce and implement an effective compliance programme
    • understand how regulatory requirements should be integrated into operating systems, policies and procedures
    • know the difference between regulations and internal policies and procedures
    • understand the potential regulatory implications of business strategies
    • know how to prepare an effective compliance report for management
    • know what basic information compliance officers should have access to
    • The role of the compliance function within a firm
    • understand the responsibilities and accountabilities of management and staff for compliance with regulations
    • understand how to monitor whether a business is in compliance with regulations and internal policies and procedures
    • understand the risks associated with non-compliance for firms and the financial services industry
    • understand BIS principle 5 relating to the independence of the compliance function and senior management accountability
    • understand the relationship between compliance and other departments including ‘three lines of defence’
    • understand the role compliance has in training and maintaining competence and awareness
    • understand how to monitor an individual's compliance with regulations and internal policies and procedures
    • understand the range of potential outcomes to remedy non- compliance by an individual within a firm
    • understand the role compliance plays in new business development
    • understand the purpose of a compliance monitoring programme
    • understand the key considerations in developing a compliance monitoring programme
    • understand how to conduct an effective compliance monitoring programme
    • Managing regulatory relationships
    • Understand the relationship between the firm and regulator
    • understand how an effective regulatory relationship can be of strategic importance to a firm
    • understand what to do if your firm is the subject of a regulatory or law enforcement visit
    • understand what to do if a regulatory breach occurs
    • know what types of information must be disseminated to whom in the event of a regulatory breach
    • know what information may be disseminated and what should remain confidential if financial crime is suspected or detected
    • know what types of information should remain confidential in the normal course of business

  • Managing the Risk of Financial Crime (20%)

    • Money laundering, terrorist financing and the standards required of firms
    • understand the concepts of money laundering and terrorist financing
    • know the stages of the money laundering process
    • know the role of international agencies in combating money laundering and the financing of terrorism
    • know the role of the Financial Actions Task Force (FATF) in combating money laundering and terrorist financing
    • understand the role of predicate offences in financial crime
    • understand how financial services firms may be utilised for financial crime
    • understand how a firm or its representatives may collude in the propagation of financial crime
    • know the concepts of facilitation of tax evasion and tax avoidance
    • know the concepts of dual criminality, extradition and mutual legal assistance
    • Practical implications
    • understand how external financial crime issues may impact on a firm
    • understand how financial crime may directly impact a firm
    • understand the responsibilities of directors and senior management in relation to anti-money laundering (AML), combating financial crime (CFC) and anti-corruption (AC) initiatives
    • understand the role of the Money Laundering Reporting Officer (or equivalent) in relation to financial crime
    • understand the implications of using a risk-based approach identifying money laundering
    • know the measures firms can adopt to inhibit the likelihood of financial crime
    • know the measures individuals can adopt to inhibit the likelihood of financial crime
    • understand the rationale behind sanctions screening
    • understand the purpose behind screening individuals
    • Policies, procedures and controls required of firms
    • understand the risks to a firm posed by its clients, products and delivery systems
    • understand the controls a firm should have in place to minimise its risk to fraud, money laundering and terrorist financing including a training programme
    • know the criteria for an effective suspicious transaction reporting system

  • Ethics, Integrity and Fairness (19%)

    • Ethics
    • understand how ethical principles relate to the financial services industry
    • understand the impact of the following when applying an ethical approach within an organisational or team environment
    • understand the advantage of ethical behaviours and decision- making over rule-based compliance
    • understand the importance of senior management leadership in developing and maintaining ethical standards
    • know how training programmes can be used to promote ethical decision making
    • Market Integrity
    • understand the benefits of a fair and orderly market
    • understand the implications of false and misleading statements, behaviours and practices
    • understand what type of information may be deemed to be price sensitive non-public information
    • understand how individuals may legally possess price-sensitive non-public information
    • know what activities can constitute "insider dealing"
    • understand how systems and controls can minimise exposure to strategies and behaviours that might impair market integrity
    • Understand the importance of whistleblowing for market integrity.
    • Fair Conduct
    • understand expected compliant standards of behaviour for firms and individuals
    • understand how the concept of fairness impacts on financial services firms
    • understand legal concepts and considerations relevant to financial advice
    • understand the role senior management play in maintaining fair conduct
    • Client Outcomes
    • understand how associated but non-transactional activities impact on the firm
    • understand the factors to consider prior to entering into a transaction
    • understand factors that should be considered at the point of sale
    • understand post-sale factors that may impact on the firm
    • Environmental, Social and Governance (ESG)
    • know what is meant by Environmental, Social and Governance (ESG)
    • know the main international ESG initiatives
    • understand the importance of initiatives on

  • Governance, Risk Management and Compliance (17%)

    • Corporate governance
    • understand the objectives of corporate governance
    • understand the importance of senior management leadership, accountability and personal responsibility
    • understand the role of the compliance function in implementing and monitoring corporate governance standards
    • know the main corporate governance structures
    • understand the impact of business and or management structures on the effective management of the compliance function
    • understand how auditing contributes to prudential corporate governance, accounting and reporting requirements
    • know the purpose and key elements of due diligence
    • understand how an effective training programme can contribute to good corporate governance
    • understand the factors behind the formulation of the BIS Principles for enhancing corporate governance
    • know the BIS Principles for enhancing corporate governance
    • Key risk types, their application and impact on the compliance function
    • understand the difference between risk and uncertainty
    • know the key external sources of business risk and their potential impact
    • know the key internal sources of business risk and their potential impact
    • know the components and practical application of an effective risk management process
    • understand how the impact of risks on a firm’s business activities are assessed and managed including operational resilience
    • understand the key aims of the risk management function, the risk committee and their relationship with the Compliance department
    • know the BIS definition of "compliance risk"
    • know who BIS deem responsible for the management of compliance risk
    • know what measures BIS state should be undertaken to manage compliance risk
    • understand how technology can be utilised to enhance compliance risk assessment
    • understand how technological changes impact regulatory risk

How to prepare

Work through the topics, read the explanation after each answer, and revisit the areas where you miss questions. Use the official outline and reference materials below to guide your study.

These independent practice questions are not actual exam items and do not guarantee a passing result.

Frequently asked questions

What is the exam format?

Multiple-choice computer-based examination at test centres; remote invigilation is also available.

How many questions are on the exam?

Total questions: 100–110; Scored questions: 100; Unscored questions: 0–10; The total includes the scored and unscored questions.

How long is the exam?

2 hours for the 100-question examination; proportionately more time is allowed if additional trial questions are included.

What is the passing score?

70%: Pass 70–100 marks; Fail 0–69 marks. The current pass rate is a separate statistic.

How much does the exam cost?

UK exam fee GBP £283 for 1 April 2026–31 March 2027; mandatory workbook £105 separately. A one-off £68 qualification registration fee applies when registering the first qualification. Optional packages and concessions have separate conditions.

Official sources and references

Confirm current exam arrangements with the exam provider.