The aim of the examination is to ensure candidates have an understanding of the regulations and legislation that underpin the financial markets and the conduct of investment business.

On completion of the unit, candidates will:

• be familiar with the regulatory environment in which the UK securities industry operates;
• know the relevance of the Financial Services and Markets Act 2000 and associated legislation and regulations;
• understand FSA’s Conduct of Business Rules and;
• know the complaints and redress procedures.

The Chartered Institute for Securities & Investment's alternative regulatory unit known as Principles of Financial Regulation (PFR) is specifically aimed at candidates working in the wholesale financial services sector.

PFR should be more attractive to the large wholesale investment firms who put staff through the CISI Certificates programme and should also appeal to IAQ candidates. PFR will have equivalent status to the existing Regulatory exams and is of similar structure (50 multiple-choice examinations, 1hour). It will share some learning objectives with the existing regulatory syllabus but will require the candidate to demonstrate a broad and contextualised understanding of financial regulation with less focus on the 'retail detail'.

The sections on the Conduct of Business rules, in particular, will be reduced. The Principles of Financial Regulation exam should be seen as an alternative at this stage and not a replacement for the existing regulatory exams.

Equal regulatory recognition

The Financial Services Skills Council has decided that candidates choosing this alternative regulatory paper within either the IAQ or Certificate Programmes will have exactly the same regulatory status in all cases as those taking the existing regulatory exams. Both the IAQ and the Certificates Programme are on the FSSC list of Appropriate Examinations. In addition to this, candidates needing a UK regulatory top-up for overseas examinations (such as NASD's series 7) can now take PFR.

The new Principles of Financial Regulation structure

To gain the CISI Level 3 Certificate in Investments candidates are required to pass 2 units:

Either Unit 1 FSA Financial Regulation or Unit 6 Principles of Financial Regulation and;
One of the technical exams (Units 2 – 5)

To gain the IAQ qualification candidates are required to pass three units. However, candidates requiring an Appropriate Examination are required to pass:

Unit 1 Introduction to Securities and Investments,
Either Unit 2 FSA Financial Regulation or Unit 7 Principles of Financial Regulation and;
One technical module appropriate to their area of work

Please note that candidates CANNOT use Unit 2 FSA Financial Regulation AND Unit 7 Principles of Financial Regulation, as two of their chosen units towards completing the IAQ qualification. Only one of the regulatory units will count towards achieving the overall IAQ qualification.

source : CISI website