Chapter 3 - Global Regulation

Question 1

What US regulatory body is responsible for overseeing the derivatives market?

Answer 1

CFTC

Question 2

Of the following US federal statutes, which one provides registration and regulation of persons and entities who are engaged in providing advice to others?
A) Securities Act 1933
B) Securities Exchange 1934
C) Investment Advisers Act 1940
D) Investment Company Act 1940

Answer 2

Investment Advisers Act 1940

Question 3

In the US a firm manages a HF with $50 million in AUM and operates in a state that does not require the registration of investment advisers. Is national registration still required, and who is the firm’s regulator.

Answer 3

Yes, the SEC

Question 4

What is the difference between and IPO and an ICO?

Answer 4

IPO sells shares of a company, ICO sells ownership of an asset as tracked through a coin or digital token.

Question 5

Each EU country has its own scheme for regulation and compliance. Therefore, an alt manager must comply with the individual regulatory bodies in each country. Under what circumstance would there be an exception to this?

Answer 5

If they are subject to a single regulatory scheme where the manager is domiciled in an EU member state.

Question 6

What are the major differences between UCITS and AIFs in Europe?

Answer 6

1. UCITS generally for retail with smaller investment amounts
2. UCITS are restricted to safe and liquid assets
3. UCITS limit leverage

Question 7

Name the two methods available to fund managers to engage in the marketing of AIFs by AIFMs

Answer 7

1. Use passport under AIFMD

2. Marketing in a specific EU member country in accordance with that country’s private placement regime

Question 8

What is entailed within asset stripping rules and how long do the rules apply after acquiring control of a non-listed company?

Answer 8

Prevent AIF from making controlling PE investment, having non listed company take a loan and then distributing loan proceeds to themselves. Rules are in effect for two years.

Question 9

Describe the duties of the SFO and SFC in Hong Kong?

Answer 9

SFO is principle regulator in Hong Kong, SFC oversees SFO

Question 10

Describe the role of the FSS in South Korea?

Answer 10

FSS is responsible for inspection of financial institutions as well as enforcement of relevant regulations

Question 11

Under which three situations would a fund managers not be required to obtain a capital markets services license in Singapore?

Answer 11

1. Fund manager in Singapore on behalf of not more than 30 qualified investors, of which 15 may be funds or limited partnerships
2. Total value of the assets managed does not exceed a specific amount set out in the regulations
3. Is registered with the Monetary Authority of Singapore as a registered fund management company