Not sure which regulator does what? You are not alone. The UK’s mortgage market has three key bodies: the Prudential Regulation Authority (PRA), the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme (FSCS). Each has a distinct role in keeping the industry safe, fair and reliable.
For CeMAP 1 candidates, understanding these bodies is essential. You will face questions on their powers, their scope and how they protect consumers. Clear knowledge will boost your confidence and help you tackle exam scenarios with ease.
This article explains each regulator, highlights exam-relevant points and offers simple comparisons. By the end, you will know who does what—and why it matters. Use the Tutor Tips and download our CeMAP Made Easy Revision Guide Sample for even more support.
Why Mortgage Regulation Matters for CeMAP 1
Mortgage regulation underpins consumer trust and market stability. Unit 1 of CeMAP covers these rules in detail. You must know which body sets lending standards, which handles complaints and which steps in if a firm fails. This knowledge helps you advise clients correctly and answer exam questions precisely.
Prudential Regulation Authority (PRA)
Overview & Main Responsibilities
The PRA sits within the Bank of England. It oversees the safety and soundness of banks, building societies and insurers. Its goal is to ensure firms hold enough capital and control their risks. For mortgage lenders, this means setting rules on lending limits, capital ratios and stress testing.
The PRA:
- Supervises prudential standards.
- Reviews firms’ risk models.
- Enforces capital requirements.
Firms must report regularly to the PRA. Failure to comply can lead to fines or restrictions.
Key CeMAP 1 Facts
- Sets capital and liquidity rules for banks.
- Applies to lenders, not individual mortgage advisers.
- Works with the FCA on dual-regulated firms.
Tutor Tip:
Remember that the PRA’s main focus is prudential safety, not consumer conduct.
Financial Ombudsman Service (FOS)
What FOS Does
The FOS resolves disputes between consumers and financial firms. It answers complaints about mortgage advice, execution and service. Consumers can bring cases free of charge within six years of the event or three years from knowledge of loss.
Key features:
- Independent and impartial.
- Awards up to £350,000 per case.
- Binding on firms if the consumer accepts.
Firms must follow FOS decisions or face enforcement action by the FCA.
Quick Facts
- FOS handles both advice and service complaints.
- Compensation cap of £350,000 for mortgage cases.
- No fee for the consumer.
Tutor Tip:
Learn the complaint stages—logger, investigator, adjudicator, ombudsman.
Financial Services Compensation Scheme (FSCS)
Role & Compensation Limits
If a regulated firm fails, the FSCS protects customers’ money. It covers deposits, insurance claims and mortgage advice failures. For advice and arranging, it pays up to £85,000 per person, per firm. For lending, it may cover outstanding mortgage balances.
The FSCS is funded by levies on authorised firms. It acts as the backstop when protections under PRA or FCA fail.
Quick Facts
- Covers advice and arranging failures up to £85,000.
- Funded by authorised firms’ levies.
- Applies per person, per firm.
Tutor Tip:
Remember the £85k cap for advice and arranging, and the different treatment for lending.
Financial Services Compensation Scheme (FSCS)
Body
Main Function
Who it Covers
Limits/Scope
Exam Relevance
PRA
Prudential supervision
Banks, building societies, insurers
N/A
Capital and risk management
FOS
Dispute resolution
Consumers of all regulated firms
Up to £350,000 per case
Complaint handling scenarios
FSCS
Compensation on firm failure
Consumers of failed firms
Up to £85,000 per person, firm
Compensation calculations
How to Memorise Regulator Roles for Your CeMAP Exam
Use flashcards to test names, functions and limits. Create a simple mnemonic like PFS: Prudential (PRA), Formal complaints (FOS), Safety net (FSCS). Mind-maps help visual learners. Colour-code each regulator on your revision notes.
For deeper practice, work through past exam scenarios and tag the regulator involved. This active recall method embeds the distinctions firmly in your mind.
Tutor Tip:
Highlight key figures—£350k for FOS, £85k for FSCS—on a single page for quick review.
Frequently Asked Questions
What’s the difference between the PRA and the FCA?
The PRA focuses on the financial soundness of firms. The FCA focuses on conduct and consumer protection. Many firms fall under both regulators.
Can an FOS decision be overturned?
Rarely. Only a court can overturn an FOS award via judicial review. If the consumer accepts, the decision is binding on the firm.
How long does an FSCS payout take?
Typically six to eight weeks after a claim is accepted. Delays can occur if documentation is missing.
Who pays for FSCS compensation?
Levies collected from authorised financial firms fund the FSCS.
Conclusion
Understanding the PRA, FOS and FSCS is vital for CeMAP 1 success. The PRA secures firms’ stability, the FOS handles complaints, and the FSCS protects customers if a firm fails. Keep their roles and limits clear in your revision.
Ready to refine your knowledge?
- Review and Download our Free Sample Resources for extra tips and practice questions.
- Watch our CeMAP Study Hub Tour on how we can guide and support your studies.
- Enrol on our CeMAP Self Study courses for expert tuition and topic support.
All resources will help you approach your exam with confidence—and secure your qualification.