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M3 > Licensing Requirement > Flashcards

Licensing Requirement Flashcards

1
Q

There’re how many regulated activities under SFA? What are they?

A

9 regulated activities

  1. Dealing in securities
  2. Trading in future contracts
  3. Leveraged foreign exchange trading
  4. Advising on corporate finance
  5. Fund management
  6. Real estate investment trust management
  7. Securities financing
  8. Providing credit rating services
  9. Providing custodial services for securities
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2
Q

If a corporation/person carries on a business in any regulated activity, it needs to hold ____

A

Capital Market Services or a CMS license for particular activity.

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3
Q

Which entites are exempted under the SFA from having to hold the CMS license for any regulated activity, including fund management?

A
  1. Bank (Banking Act)
  2. Merchant Bank (MAS Act)
  3. Finance company (Finance Companies Act)
  4. Company or society (Insurance Act) in respect of fund management for carrying out insurance business
  5. Securities Exchange, Recognised market operator, approved holding company or clearing house regarding a regulated activity that is incidental to its business
  6. Any other person or class of persons who is exempted by MAS regarding regulated activity
  7. Fund Management Comapnies (FMCs) that are
  • exempted from CMS, include those which carry on business only for or on behalf of any of its related corporations
  • qualify for RFMC regime = Serve not more than 30 qualified investors or 15 funds (include close-end funds and CIS), and maximum asset under mgmt ot SGD250 million
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4
Q

A corporation that carries out fund management in Singapore should either be____ or ____

A

1) LFMC: A licensed fund FMC holding a CMS license for fund management

2) RFMC: Registered with MAS as a registered FMC

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5
Q

What are the two types of FMC in Singapore?

A

1) LFMC: A licensed fund FMC holding a CMS license for fund management

2) RFMC: Registered with MAS as a registered FMC

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6
Q

What’re the type of LFMC in Singapore?

A

1) Retail LFMC: Serving all types of investors, including retail investors

2) A/I LFMC (Licensed Accredited / Institutional FMCs) which must serve only accredited or institutional investors, without any limits on the number of clients.

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7
Q

What’s the requirement for RFMCs in Singapore?

A

1) AUM are not more than SGD250 million

2) Serve not more than 30 qualified investors, of which not more than 15 are funds, which include close-end funds and CIS

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8
Q

What are the limitations for RFMC and A/I LFMCs to carry on business in fund management?

A

only with their employees if these employees meet the definition of an accredited investor.

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9
Q

What stipulate the general criteria for licensing or registration of FMCs?

A

The FMC Licensing Guidelines

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10
Q

What are the major components under the FMC Licensing Guidelines?

What’s the requirement under each major component?

A
  1. Directors

Min. # (includes ED but exclude nominee directors) 2/2/2

Min. # of ED (i.e. directors employed full-time in the day-to-day operations of the FMC) 1/1/1

Min. # of years of relevant experience (including managerial experience or experience in a supervisory capacity) 5/5/5

ED to be resident in Singapore (Yes)

  1. CEO

Min. # of years of relevant experience (including managerial experience or experience in a supervisory capacity) 5/5/10

  1. Relevant professionals (includes directors, CEO and representatives)

Min. # 2/2/3

Min # of years of relevant experience (5/5/5)

  1. Representatives.

Min. # of representatives residing in Singapore (may include directors and CEO who are representatives) 2/2/3

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11
Q

Under the FMC Licensing Guidelines, which requirements are differed among RFMC, A/I LFMC, and Retail LFMC?

A
  1. Min. # of years of relevant experience for CEO: 5/5/10
  2. Min. # of relevant professionals (includes directors, CEO, and representatives): 2/2/3
  3. Min. # representatives: 2/2/3
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12
Q

The FMC Licensing Guidelines

A
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13
Q

Appointment of _____ of a LFMC needs to be approved by MAS?

A

CEO or the directors

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14
Q

The MAS grants the approval of CEOs or directors of a LFMC after considering ____ (5 factors)

A
  1. The educational or other qualification, experience or expertise
  2. Fitness and propriety
  3. History of violations
  4. Financial standing and history of the individual
  5. Past performance
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15
Q

The final responsibility for compliance of a FMC rests with ____

A

CEO and board of directors

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16
Q

What kind of framework should FMC have in place?

A

Risk management framework

Internal audit framework

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17
Q

The FMCs must disclose ___ arrangements to all potential and existing customers

A

PII (Professional Indemnity Insurance) arrangements, or the absence of such arrangements

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18
Q

The CMS license of a LFMC lapses if ___

A

if the LFMC is wound up or dissolved

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19
Q

What actions should be taken upon revocation or suspension of a CMS license?

A
  1. The FMC must immediately inform all its representatives through a written notice.
  2. All the representative who are informed of such revocation or suspension must cease to act as representatives of that FMC immediately.
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20
Q

Unless exempted, individuals who wish to conduct fund management or any other type of regulated activity under SFA must be ____ under the _____ Framework

A

an appointed representative, temporary representative, or provisional representative regarding the particular of regulated activity under the RNF (Representative Notification Framework).

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21
Q

The individuals can start dealings in regulated activities only after they____

A
  1. Satisfied the entry and examination requirements under SFA
  2. Their names have been entered into the public register of representatives on the MAS website.
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22
Q

The responsibility for ensuring compliance with the registration requirement of individuals rests with ____

A

Both the individuals and the FMC in relation to the individuals working for the FMC.

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23
Q

Temporary representatives are appointed for ____ within _____

A

Temporary representatives are appointed for a total of 6 months within any 24 month period, with each appointment not being more than 3 months.

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24
Q

All representatives who represent ____ are required to fulfil the prescribed minimum entry and examination requirements.

A

CMS license holder or exempt financial institutions

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25
Q

What’s the requirement for an individual being eligible for registration? (4)

A
  1. Minimum 21 years old
  2. Must have an education level of at least 4 GCE O-Level credit passes or

at least 2 GCE O-level credit passes if he has 3 continuous years of working experiences in the past 5 years only applicable to applicants who sat for GCE “O” Level examinations before or in 1980

  1. Must have fulfilled the CMFAS examination requirements
  2. Must be a fit and proper person with respect to honesty, integrity, reputation, competence and capability, and financial soundness
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26
Q

What are the factors of fit and proper? (5)

A

Honesty

Integrity

Reputation

Competence and capability

Financial soundness

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27
Q

Before appointing an inidividual as its representative, the FMC should perform ____ checks on the proposed representative.

A

Due Diligence Checks

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28
Q

What’s the purpose for reference checks with the previous employers, as part of the due diligence?

A

To confirm that the proposed representative has not been dismissed or been asked to resign or whether he has any adverse records.

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29
Q

Which source is for probity searches for verifying the past records of employment and regulatory status of the proposed representative?

A

Public Register of Representatives on MAS website

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30
Q

For Pobity checks on the financial status of the proposed representative, FMC has to obtain report from ____

A

Ministry of Law’s Insolvency and Public Trustee’s Office Online Portal

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31
Q

Checks performed with credit agencies are for ____

A

Bankrutpcy status abroad and the credit status from the Credit Bureau in Singapore

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32
Q

What are the factors to consider whether to register a representative or to revoke its registration when the representative fails to meet the fit and proper criteria? 3

A
  1. The seriousness and causative surrounding circumstances leading to the failure.
  2. The relevance of the failure to his duties.
  3. The time that has passed since the failure.
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33
Q

What’s the relevant information/details required to contian for the public register of representatives? 3

A
  1. His name and the regulated activities that he’s allowed to conduct.
  2. The main companies with which he has worked during the past three years.
  3. Any formal regulatory action taken by MAS against him.
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34
Q

The status of a provisional or temporary representative is only valid ofr up to __ months from the date ___

A

3

His name is entered into the Public Register of Representatives.

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35
Q

An apponted, provisional or temporary representative must inform his ___ about any change in his residential address or other personal particulars within ___ days after ___ .

The ____ is required to inform the MAS about the change within ___ after ___.

A
  1. 7 days after the date of such change.
  2. 14 days after the date of such change.
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36
Q

To make sure that its Representatives fulfil the continuing education requirements:

The LFMC must stisfy MAS that all of its ______ fulfil the fit and proper criteria.

The RFMC must stisfy MAS that all of its ______ fulfil the fit and proper criteria.

A

LFMC: Substantial shareholders, directors and CEO, or equivalent persons.

RFMC: Key officers, substantial shareholders, equivalent persons and persons in control or decision-makers

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37
Q

What are circumstances when acts done totally outside Singapore may not come within the ambit of the SFA?

A
  1. The foreign entity is repsonding to unsolicited enquiries or applications from persons in Singapore.
  2. When the client relocated to Singapore and the foreign entity doesn’t actively solicit new types of business with the client afterwards
  3. The foreign entity purchases the services of, or provide services to, a regulated person.
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38
Q

____ method should be used to identity the ultimate beneficiaries?

A

A look-through

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39
Q

Who’s responsible for compliances of LFMC?

A

LFMC’s CEO and its directors

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40
Q

Under what circumstances where LFMCs are not required to maintain independent custody of managed assets? 3

A
  1. If the assets are not listed or quoted on a securities markets
  2. and are interests in a close-end fund to be used for private equity or venture capital investments,
  3. and is offered only to accredited or institutional investors.
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41
Q

MAS may, if it deems appropritate for ____ or ____, direct the LFMC to terminate the services of a director or executive officer.

A

Investor protection or interest of public

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42
Q

What are the minimum base capital requirements for carrying out different type of fund management service

A
  1. Carrying out fund management in respect of any CIS offered to any investor other than an accredited or institutional investor: SGD 1 million
  2. Carrying out fund management (non-CIS) on behalf of any customer other than an accredited or institutional investor: SGD 500,000
  3. Carrying out fund management other than that described in 1 and 2 above: 250,000
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43
Q

All CMS licence holders, including LFMCs, muts comply with ______ and maintain sufficient financial resources or adjusted net head office funds to meet their _____ requirement.

A

RBC Framework (Risk Based Capital)

Total risk requirement (TTR)

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44
Q

When is the New RBC Framework for LFMCs effective?

A

3 April 2015

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45
Q

If the CMSL is NOT subject to the FULL RBC, ____ risk calculations need to be made?

A

Only operational risk

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46
Q

How to decide whether the full framework will apply or not?

A

The value of the average adjusted assets

If the Average Adjusted Assets exceed whether S$10 million or 5 times the total positive financial resources, the FULL RBC applies

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47
Q

LFCM is prohibited from repaying the principal of any preference share, excluding paid-up irredeemable and non-cumulative preference shares, through repurchase or redemption, unless _____

A
  1. notifies MAS 3 months before the proposed date of repurchase or redemptions
  2. If at the date or repurchase or redemption, the sum of financial resources of the LFMC is not less than 120% of the required TRR, or the aggregate indebtedness of the LFMC doesn’t exceeds 600% of its aggregate resources.
  3. If the repurchase or redemption is unlikley to casue the financial resources of the LFMC fall below 120% of the required TRR, or the aggregate indebtedness of the LFMC exceeds 600% of its aggregate resources.
  4. MAS is not in writting prohibits any such repurchase or redemption repayment.
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48
Q

A LFMC incorporated in Singapore must notify MAS if it draws down on a qualifying subordinated loan _____ (When)

A

No later than the date of draw down

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49
Q

Even after maturity of the subordinated loan principal, any repayment is prohibited unless the LFMC notifies MAS ____

A

Minimum 1 business day before the date of repayment

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50
Q

According to the rules of Register of Securities, details of any new acquisition of interest in securities must be recorded _____ (When)

A

within 7 days of the acquisition

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51
Q

What types of Securities LFMCS and their representatives must disclose and record their interests in securities

A

Securities which are listed for quotation, or quoted on an MAS-approved exchange or a recognised market operator

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52
Q

When the place for keeping the register of LFMC’s interest in securities is changed, it must notify MAS _____

A

within 14 days from the date of change of place

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53
Q

Place at which the Register of Interests in Secuirties is Kept?

Individuals

Corporations

A

Individuals: At their principal place of business

Corporations: Any of its places of business

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54
Q

If there’s any change in particulars of a LFMC or if it stops carrying on regulated activity, it must inform the MAS _____

A

within 14 days of the change

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55
Q

If the LFMC ceases to conduct business, in all of the regulated activities for which it is licensed, it must return the license to MAS _____

A

within 14 days

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56
Q

If LFMC is informed by its representative any changes in its representative’s particulars, it must furnish MAS with the particulars of such change _____

If a representative ceases to be its representative, it must furnish the particulars to MAS ____

A

Within 7 days

On the next business day after such cessation

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57
Q

LFMC must immediately file a notice of cessation with MAS if any appointed representative has not yet commenced his job as a representative in at least one of the regulated activities he was appointed to carry out ______

A

Before the end of 6 months from the date his name was entered in the public register, or when he was granted a representative’s license.

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58
Q

Which type of regulated activities require strict Risk Disclosure by LFMC prior to soliciting, entering into agreements with, or opening accounts for potential customers?

A

Manage futures or foreign trading positions

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59
Q

If during an offer for subscription or purchase of securities, a LFMC enters into an underwritting or sub-underwritting agreement, for ____ (how long) it’s restricted for a few regulated activities such as make an offer to sell those securities?

A

90 days after the close of the offer

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60
Q

If during an offer for subscription or purchase of securities, a LFMC enters into an underwritting or sub-underwritting agreement, for 90 days after the close of the offer it’s restricted to make an offer or recommendation, what are the exceptions?

A

Makes an offer or recommendation for:

  1. Securities to accredited or expert or institutional investors
  2. Any government securities to any person
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61
Q

The soft dollars received should be disclosed in LFMC’s ____

A

In the LFMC’s semi-annual and annual reports

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62
Q

What kind of account reports should be provided by a LFMC to its customer?

A
  1. Monthly statement of account to the customers containing details of the transactions, the status and movement of the customer’s asset, and the various charges
  2. Quarterly statement of account containing the assets, future positions, leveraged foreign exchange positions and cash balances
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63
Q

Under what situation the LFMC doesn’t need to provide a monthly account report to its customer?

A

There’s no change in any particulars since the date of the last account statement

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64
Q

The LFMC is not required to provide monthly and quarterly statements to its customers if_____

A

The customer is an accredited investor or a related corporation of LFMC, and:

The customer has been given access to real-time electronic statements

The customer has requested in writting to not receive the monthly statements

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65
Q

All FMCS must appoint an auditor to audit its accounts, and prepare and submit the following documents to MAS _____

A

within 5 months after the end of a financial year

  1. Profit and loss account (P&L account)
  2. Balance sheet
  3. The auditor’s report on the financial statements
  4. Auditor’s certification
  5. Statement relating to the accounts
  6. Statement of assets and liabilities
  7. Statement of financial resources; and total risk requirement + aggregate indebtedness
  8. NEW: Statement relating to the further information of accounts
  9. Quarterly and annual returns
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66
Q

What’s the existing/new requirements on quarterly and annual returns of LFMC to MAS?

A

Quarterly Returns (Unaudited) - Submit within 14 days

1) Statement of assets & liabilities

2) Statement of financial resources; and total risk requirement + aggregate indebtedness

Annual returns (audited) + Submit within 5 months of financial year end

1) P&L account

2) Balance Sheet

3) Auditor’s report

4) Auditor’s Certification

5) Statement relating to the accounts

6) Statement of assets and liabilities

7) Statement of financial resources; and total risk requirement + aggregate indebtedness

8) NEW: Statement relating to the further information of accounts

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67
Q

Requirements regarding customers’ money and assets received by the LFMC

A

1) Deposit account type

2) Commingling

3) Time to deposit money

4) Other requirements

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68
Q

Different institutions’ eligibility on maintenaning Trust account / Custody Account

A
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69
Q

Which institutions can maintain both trust account and custody account?

A

A bank licensed under the Banking Act (Cap.19)

A merchant bank approved under MAS Act (Cap. 186)

A finance company licensed under the Finance Companies Act (Cap 108)

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70
Q

Which institutions can only maintain a custody account but not a trust account?

A

Depository Agent

An approved trustee for a CIS as defined in Section 289 of the SFA.

Any entity lincensed under the SFA to provide custodial services for securities

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71
Q

LFMCs are prohibited from giving any unsecured advance/loan/credit facility to ____

A

Any of its directors or their connected persons, who are not employees of the LFMC

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72
Q

What’s the maximum aggregate outstanding unsecured loan or credit amount to an employee?

A

Not more than 1 year compensation of the officer or employee

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73
Q

Examples of services which the Outsourcing Guidelines are or not applicable to

A
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74
Q

In order for MAS to conduct direct compulsory transfers and restructuring of an insolvent LFMC, it needs get approval from _____

A

Approval of the responsible Minister

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75
Q

The continuing disclosure by a director or CEO is to be made within ______ days after the CEO ____

A

within 2 business days after the director or the CEO comes to know about the change

76
Q

What’s the information must disclosed by a listed issuer under the SGX-ST Listing Manual?

If the information is ___ (2)

A

If the information is:

1) Required to avoid the establishment of a false market in the issuer’s securities

2) May materially impact the price or value of its securities

77
Q

The listed company is not required to disclose any information if such disclosure would _____

A

The listed company is not required to disclose any information if such disclosure would result in a breach of law.

78
Q

The issuer may temporarily avoid public disclosure if _____ (6 conditions)

A
  1. Reasonable person would not expect a disclosure
  2. The information is kept confidential, and
  3. The information relates to an incomplete proposal or negotiation
  4. The information is composed of matters that are not definite enough to require a disclosure
  5. The information is for internal management purpose
  6. The information is a trade secret
79
Q

Which rule prevents those “in the know” from taking advantage of the resulting changes in market prices?

A

Dissemination of information about illegal transactions

80
Q

Issuers and their officers are advised not to deal in the issuer’s securities during the period commencing ____

A

1) 2 weeks before the announcment of first three quarterly financial statements and 1 month before the announcement of the annual financial statements

2) 1 month before semi-annual or annual financial statements

81
Q

Under the Duty to Report Misconudct, CMS licence holders and their representatives must immediately report to SGX-ST or SGX-DT if they reasonably suspect or know about any _____

A

Attempted market manipulation, false trading or insider trading

82
Q

What’s the requirement on marking sell orders by SGX-ST?

A
  1. Short selling must be reported.
  2. All trading members to obtain confirmation from the relevant market participant to declare whether a sell order is a short sell order before it can be executed.
83
Q

Except in the case of an accredited investor, if a CMS licence holder borrows securities, it’s required to ensure that it provides collateral of up to ____ of the market value of the borrowed securities.

When a CMS lincence holder lends securities, it’s required to obtain collateral up to ___ of the market value of the securities.

A

Provide 100% collateral

Obtain 105% collateral

84
Q

CMS licence holders and registered fund management companies must _______ after the discovery of any suspicious activities & incidents of fraud.

A

Lodge a report with the MAS regarding suspicious activities & incidents of fraud within 5 working days after discovery of any such event.

The suspicious transaction reports must also be filed with the STR Office, Commercial Affairs Department of the Singapore Police Force.

Further, a police report must be lodged for incidents of fraud and a copy of the report should be submitted to the MAS.

85
Q

Suspension or restriction of trading in any or all listed or quoted securities may be restored when any of the circumstances described in Rule 1303 of the SGX-Listing Manual happens:

Takeover situations where ____ issued share capital is with the public, or in the case of insolvency of the issuer

A

Less than 10%

86
Q

If a security is declared as a designated security, SGX may impose the following conditions (4):

A
  1. Making it ncessary for the Trading Mmember to obtain margins from each customer dealing in the designated security
  2. Restricting trading by a Trading Memebr in the designated security if its outstanding contracts in the security are more than 5% or any prescribed percentage of the paid-up capital of the company whose securities are designated.
  3. Prohibit any sale unless the seller either holds the desginated security at the time of the sale with the CDP or can deliver the physical security and executed transfer forms to the Trading member.
  4. SGX-ST may also ask the Trading Member to furnish details by the next business day
87
Q

Bucketing also violates rules regarding _____

A

Witholding of orders

88
Q

In order to avoid cross trades (prohibited), the CMS license holders should enter the order or leg that _____

A

Has the better price than the last traded price, or if there’s no last traded price, the last settlement price

89
Q

John receives an order from a customer Jane for purchase of 1,000 lots of futures contracts of PRQ Limited at SGD15.

At the same time, John also receives a sell order for 100 lost of the same futures contract at the same price from another client James.

There’re no bids or offers for the contract.

The last traded prices is SGD15.75.

Whose order should be entered first?

A

Jame’s sell order should be entered first because the trader who lifts the order (buys) at SGD15 will get a better price than the last traded price (SGD15.75). That is, the last seller bought at a higher (worse) price.

On the other hand, Jane’s buy order (if executed) will be completed by the seller at SGD15, which is worse than the last traded price. The last seller got to sell at a higher price.

90
Q

Any contravention of the provisions of the market conduct rules will result in ____ (4 consequences)

A
  1. Criminal penalties
  2. Civil penalties
  3. Civil liabilities, financial and reputational loss
  4. The suspension or loss of licence
91
Q

What’s the principal regulations Governing CIS?

A

CIS are regulated under the SFA and SFR-CIS.

92
Q

Who’s the regulatory authority for supervision over the offer, management and distribution of CISs in Signapore?

A

MAS

93
Q

What terms cannot be included in the name of CIS?

A

Capital protected and Principal Protected

94
Q

What are the rules/regulations the CIS, its manager and the trustee need to comply with? (3)

A

SFA

SFR-CIS

The Code

95
Q

What’s the requirement on authorized CIS’s fund managers (FMC)?

A

Hold a CMS licence for fund or be exempted from licensing

Should be fit and proper

96
Q

If more than ___ of the CIS’s NAV is sub-managed outside Singapore, the manager must, together with its related corporations, already be managing ____ of ____ funds in Singapore

A

more than 10%

SGD500 million of discretionary funds

97
Q

What’s the requriement of the appointment of trustees of authorised CIS?

A

The trustee has to be independent of the CIS manager.

98
Q

An authorised CIS is required to comply with the core investment guidelines and borrowing limits, based on whether ____

A

it is a non-specialised or a specialised CIS

99
Q

What’s the licensing requirement difference regarding a specialised or non-specialised CIS?

A

Core investment guidelines

Borrowing limits

100
Q

The manager or the trustee of CIS must notify MAS of any breaches of guidelines or limits set out in the Code within ____ days after it becomes aware of the breach.

A

3 business days

101
Q

Under which conditions, the breach of CIS for guidelines or limits set out in the Code doesn’t need to be notified to MAS? (5 scenarios)

A

The breach need not be reported to MAS if it is recitified within 3 months from the date of the breach for following scenarios

  1. Appreciation or depreciation in the value of the CIS’s underlying investments
  2. Redemption of units or payment made from the CIS
  3. Change in the capital of a company
  4. Reduction in the weight of any of the components of the benchmark being tracked by CIS
  5. Downgrade in or cessation of a credit rating
102
Q

The 3-month recitifation period of CIS breach can be extended by ___ if ____

Such extension should be reviewed by ___

A

Extended if the manager has satisfied th trustee that the extension is in the best interests of the participants of the CIS

By the trustee monthly

103
Q

A manager should normally ensure that the units in a CIS are valued on ____

A

Each business day

104
Q

Which types of CIS don’t require daily valuaiton?

A
  1. CISs with do not offer dealing every business day. In such as case, the units must be valued on every regular dealing day, but at least once a month.
  2. Property funds - Annually
105
Q

Any rounding differences must be ___ to the CIS

A

credited

106
Q

If a manager of an authorized CIS comes to know of an error in the calculation of the NAV per unit of the CIS, the manager must notify ___ (whom)

A

Both MAS and the trustee

106
Q

If a valuation error of a CIS is ___ of the NAV per unit of the CIS after the adjustment for the error, the manager must compensate affected participants and the CIS for any resultant losses.

A

0.5% more

Participants need not be compensated if the amount due to any single investor is not above SGD 20

BUT the SCHEME must be compensated if the valuation error is more than 0.5%

107
Q

What kind of reports need to be prepared by the manager of CIS?

Under what scenarios, it’s exempted?

A

Half-yearly financial statements and the audited financial statements for the semi-annual and annual report within 3 months right after the end of the financial year

However, the semi-annual or annual reports need not be prepared, audited and sent if it relates to a period of less than 3 months from the start of the initial launch date,

or

a period ending within 1 month before the maturity date

The manager should also prepare and furnish to the trustee the accounts and reports based on the Code. The accounts and reports should be submitted so that the trustee is able to get them audited and subsequently send to the participants within the prescribed time.

108
Q

What’s the responsiblity of trustee of CIS, i.e. report preparation?

A

Send semi-annual accounts and semi-annual reports within 2 months from the end of the relevant period to the participants of the CIS.

Annual accounts, the auditors’ report of the annual accounts, and annual report within 3 months from the end of financial year of the CIS.

109
Q

If the home financial supervisory authority of an underlying scheme of a CIS imposes or alters any conditions related to its authorisation, MAS should be informed ______

The documentation of the CIS’s _____ must be submitted to MAS ____ it’s revised.

A

within 14 days after the responsible person of the authorised CIS comes to know of the new conditions

risk management process must be submitted to MAS as soon as it is revised.

110
Q

The Code prohibits the manager of CIS from investing the monies of the CIS in the manager’s own securities or those of any of its related corporations, unless____

The prohibition does not apply to ____

A

the securities are constitutents of the CIS’s reference benchmark constructed by an independent party, and the investments are made in compliance with the Code.

CIS managed by the manager or its related corporations.

111
Q

What kind of fees are allowed / not allowed to pay from the CIS by the manager?

A

Allowed: Payments for the preparation, printing, lodgement and distribution of prospectuses, profile statements or product highlight sheets

Not allowed: media advertisements, mailers, and fact-sheets.

112
Q

Whenever ther are conflicts of interest for the voting rights of the CIS investments, the manager must exercise its voting rights after _____

A

Consultation with the trustee

113
Q

Payment of redemption proceeds of CIS within the specified timelines by different types of CIS Schemes

A
114
Q

What’s the timeline for the payment of redemption proceeds of a property CIS and a Hedge CIS?

A

Property CIS: Within the period allowed under the Code 30

Hedge CIS: In accordance with the prospectus as required under the SFR-CIS31

115
Q

The manager must inform MAS and the participants about any significant change to be made to the CIS ____

A

No later than 1 month before the change is to take effect

116
Q

Increase in fees or charges paid by the CIS that are ___ of the CIS’s NAV, or in any fees or charges payable by the participants, need to be informed to MAS and the participants _____

A

0.1%

No later than 1 month before the change is to take effect.

117
Q

A change in underlying fund into which the CIS feeds substantially, i.e. ___ of the CIS’s NAV need to be informed to MAS and the participants _____

A

30%

No later than 1 month before the change is to take effect.

118
Q

The manager is required to ____ for any modification of the trust deed of a CIS.

A

Obtain an extraordinary resolution of participants of CIS

119
Q

The manager must not charge costs arising from ____ to the CIS.

A

CPF failed trades

120
Q

What kind of “soft monies” are prohibited for CIS manager?

A

Travel, accomodation and entertainment

121
Q

For a Recognised CIS, the manager and its related companies must be managing at least ___ of discretionary funds in Singapore.

However, this particular requirement is not applicable if ____

A

SGD 500 million

If any of the units in the CIS is approved for listing for quotation on a securities exchange and will be traded on the securities exchange.

122
Q

Licensed FMCs or offeroros of an authorised or recognised CIS who want to apply for exemptions from the SFA requirements must do so by ____

A

before lodgement of the prospectus

123
Q

If an application for authorisation of CIS is successful, ___ is required.

A

A trust deed

124
Q

MAS issues the authorization of a CIS when it receives ___

A
  1. It receives a copy of the signed trust deed

or

a faxed copy of the cover page and the last page of the trust deed containing the signatures of the parties to the trust deed.

A hard copy of the signed trust deed must be submitted later

  1. It receives written confirmation from the manager and the trustee or their solicitors that the trust deed is in compliance with the requirements of the SFR-CIS
125
Q

An offeror may also request for an ____ from MAS pending signing of the trust deed

A

in-principal authorisation

126
Q

For CIS which is in the process of obtaining approval in a different jurisdiction, MAS grants ____ after it ____

A

Recognition (not Authorisation) after it receives a copy of the approval letter issued by its home regulator.

An offeror may also request for an in-principal recognition from MAS before submitting the approval letter to MAS.

127
Q

The responsible person of a CIS, i.e. the manager of a unit trust, who intends to wind up the CIS must _____

A

Give minimum 7 days prior written notice to MAS about the proposed winding up

128
Q

The written notice of a meeting regarding winding up a CIS must be given _____

Also an advertisment giving the notice of the meeting should be published _____

A

minimum 21 days before the date of the poposed meeting to the participants.

minimum 21 days before the meeting in 4 or more daily newspapers, with minimum one each being published in English, Malay, Chinese and Tamil

129
Q

The responsible person or the trustee may take the required steps to wind up a CIS if a resolution to wind up is passed by _______

A

A majority of 75% in value of the participants present and voting, either in person or proxy, at the meeting.

130
Q

The trustee of CIS must send the reports upon termination or maturity of CIS to MAS _____

A

within 2 weeks of the termination or maturity date of the CIS.

131
Q

Reports on CIS termination/maturity should be kept by the trustee at its registered office for ____ and made available to _____ (whom)

A

Six years

who was a participant during the period between the end of financial year covered by the last set of annual accounts

and

the termination or maturity date.

132
Q

An offer of units in a Recognised CIS in Singapore must be accompanied by ____

A

either a prospectus or a profile statement

A product highlight sheet also has to be prepared for offers of unlisted CISs and exchange-traded funds if the offer is accompanies by a prospectus.

133
Q

A product highlight sheet of ______ has to be prepared for an offer of units in a Recognised CIS in Singapore?

A

Unlisted CIS

Exchange-traded funds

134
Q

What’s the requirement on prospectus of a recognized CIS? (2)

A
  1. Must be prepared as per the requirements prescribed by the MAS
  2. A copy of the signed prospectus has to be lodged and registered with MAS.
135
Q

If the offeror is the responsible person for the recognized CIS, the copy of the prospectus or profile statement lodged with MAS must be signed by _____

A

signed by every director and every person named as a proposed director of the responsible person.

136
Q

The PHS of a CIS should ______

A

Highlight the key features and risks of the investment product to the investors.

137
Q

The soft copy of the prospectus and profile statmeent of a CIS is posted on _____ for ____

A

OPERA website of MAS for public comment

138
Q

Typically, MAS registers the prospectus or profile statement of CIS between ______

A

the 7th and 21th day, both days inclusive, from the date of lodgement

139
Q

The prospectus and profile statement of a CIS are valid for ______ from _____

A

12 months from the respective dates of registration of the prospectus or profile statement by MAS

140
Q

An interim stop order can be in force for a period of _____

A

14 days from which its is served.

141
Q

The offeror must distribute all monies to the applicants within ____ from the date of the stop order if the contibutions have not been invested as per the CIS

A

7 days

142
Q

An offeror is not required to issue a prospectus for an offer of units in a CIS if it is exempted from doing so.

List of Prospectus Exemptions (5)

A
  1. The offer is made on a private placement basis to up to 50 persons within any 12 month period
  2. Little or no consideration is to be given for the issue or the sale of the units.
  3. The total amount raised by the CIS over any 12 month period is up to SGD 5 million.
  4. The offer is made to institutional investors and
  5. The offer is made to accredited investors and certain other persons.
143
Q

Before a CIS can be sold to a retail customer, the licensed representative must _____

A

carry our CKA

144
Q

CKA on potential retail customers are not applicable to ____ (what kind of investment products)

A

CIS’s that are exluded investment products

145
Q

A positive CKA result is valid for ____

A

1 year

146
Q

Under CPFIS, CPF memebrs can use monies from their ____ accounts for making investments in certain investment products.

A

CPF Ordinary and or Special Accounts

147
Q

CISs and FMAs included under the CPFIS must be managed as per _____ (which rule/regulation)

A

the CPF Investment Guidelines or CPFIG

148
Q

What are the general criteria for FMCs to be included under the CPFIS? (7 requirements)

A
  1. Licensing Status
  2. Minimum track record
  3. Minimum amount of funds managed in Singapore
  4. Fund managers
  5. Sound financial position
  6. Good regulatory compliance record
  7. Member of IMAS
149
Q

If a recognised CIS (foreign funds) wants to be included into the CPFIS, its representative must also be _____ (identity)

A

Corporation

150
Q

What’s the application process for inclusion of applicant as a FMC under CPFIS? (3 steps)

A

First Stage of Review: The CPF Board reviews the application with MAS.

Second Stage Review: The CPF Board appoints an investment consultant for performing due diligence on the applicant.

Third, FMCs are required to sign an indemnity deed with the CPF Board.

151
Q

What’s the purpose of First Stage of Review in applciation process for inclusion of applicant as a FMC under CPFIS?

A

To assess the sutiability of the applicant based on the existing FMC criteria.

152
Q

What’s the base of Second Stage of Review in applciation process for inclusion of applicant as a FMC under CPFIS?

A

Based on the track record and quality of investment management of the applicant

153
Q

The FMCs under the CPFIS are expected to manage ____ on their own.

A

authorised CISs

154
Q

The FMC under CPFIS has ___ options to manage authorised CISs on their own.

A

Three

Option A1: where the fund is wholly managed in Singapore.

The FMC must manage min. SGD 500 million worth of discretionary funds in Singapore.

Option A2: where the fund invests partially or fully in CISs which are not included under the CPFIS.

The FMC must manage min. SGD 1 billion worth of discretionary funds globally.

Option A3: where the fund is partially or wholly sub-managed in Singapore or abroad.

The FMC must manage min. SGD 1 billion worth of discretionary funds globally.

155
Q

The application for admission to CPFIS by a recognised CIS must include the proposed compliance procedures, and a confirmaiton that min. ___ of the value of the fund will be invested as per the CPFIG.

A

95%

156
Q

What are the general criteria for all funds being included under the CPFIS? (4)

A
  1. Be in the top 25 percentile of funds in their global peer group.
  2. Have a Total Expense Ratio (TER) of not more than the median of existing CPFIS funds in its risk category.
  3. Have sales charges not more than 3%
  4. Preferbaly have a track record of 3 years.
157
Q

What’s the application process for FMCs to manage FMAs?

A

FMCS need not submit a seperate application to manage FMAs.

They need to write to the CPF Board along with a copy of their standard investment management agreement and forms for managing FMAs min. 2 weekes before they start offering FMA services to the CPF memebrs.

158
Q

In relation to CPF interest rate message, interest rates on all CPF account monies is currently subject to _____

A

a minimum rate of 2.5% p.a.

159
Q

FMCs may make an allowance in the prospectus for the fund the invest up to ___ of its deposited property in markets not stated in the prospectus.

A

5%

160
Q

Whenever requested by the CPF Board, FMCs must send the disclosure reports to the CPF Board within ______

A

1 week of such request

161
Q

FMC must make basic analytical data to the investment consultant once ____ for _____

A

Once every half-year for review of propriety of the CPFIS risk classification of the funds

162
Q

FMC must make basic analytical data to the FTC, so that the performance and risk monitoring report can be made available to the CPF memebrs at least _____

A

once every quarter

163
Q

The FMC may invest up to __ of the value of the fund in investment which fall outside the MAS Guidelines and/or the CPFIG.

A

5%

164
Q

What’s the deviations requirement from the CPFIG?

Authorized CIS: Min _ % of NAV is invested as per the ____ at all times. The ___ deviation is allowed only in relation to the ____

Recognized CIS: Min _ % of NAV is invested as per the ____ at all times.

A

The FMC may invest up to 5% of the value of the fund in investment which fall outside the MAS Guidelines and/or the CPFIG.

Authorized CIS: Min. 95% of NAV is invested as per the CPFIG at all times. The 5% deviation is allowed only in relation to the CPFIG.

Recognized CIS: Min. 95% of NAV is invested as per the MAS Guidelines and the CPFIG at all times.

Recognized CIS invests partially in a different scheme: The 5% deviation applies as per the following:

1) The total sum of the Fund’s pro-rated share of the deviating investments by the underlying CIS and the deviating investments of the Fund, shall not exceed 5% of the NAV of the Fund.

2) Pro-rated share = Dollar value of investments of the Fund in the underlying CIS x (Dollar value of deviating investments of the underlying CIS / Total dollar value of the underlying CIS)

165
Q

If the 5% deviation limits on investment are exceeded under “certain conditions”, the FMC must sell enough securities or units to ensure that the fund reverts to compliance with the 5% limit within _____

A

3 months

166
Q

A FMC must inform the CPF Board of any deviation limit breach of the CPFIG by the Funds under its management within ____ of the breach.

A

14 calendar days

167
Q

If the trustee allows extension of the deadline for rectification of the breach of CPFIG limit deviation, the FMC must ensure that the trustee informs the CPF Board ______

A

within 7 calendar days of its agreement to the extension

The FMC may also provide evidence of the trustee’s agreement to the extension within 7 calendar days, and must inform the CPF Board within 7 calendar days of the rectification of the breach.

168
Q

If a FMC is not able to rectify the 5% deviation limit breach within the prescribed timeline and is not able or does not obtain an extension from the trustee, he must:

A
  1. Report such breach to the CPF Board within 14 calendar days of the occurence of the breach.
  2. Stop accpeting subscriptions for the fund from the CPFIS-OA and CPFIS-SA immediately and seek to exclude the Fund from the CPFIS.
  3. Provide, within 3 months from the breach
169
Q

Issuers must furnish investors with a PHS for offers of ___ (types of products)

A
  1. Debentures in the form of debentures or units if debentures issued pursuant to a securitization transaction
  2. Unlisted CIS
  3. Exchange-traded funds where the offer is made in or accompanied by a prospectus
170
Q

The PHS must be submitted to MAS at the time of ____

A

Lodging the prospectus with MAS

171
Q

All institutions are required to comply with a Production Order issued under the CDSA by the High Court _____

A

within 7 days from the order date or the period stipulated in the Order

172
Q

CMS licence holders should obtain adequate information from clients at the time of onboarding to ascertain their ____

A

Source of funds

Wealth

Reputaiton

173
Q

CMS licence holders must report suspicious transactions to the _____ and submit a copy of the report to ____

A

Commerical Affairs Department (CAD) of the Singapore Police Force

MAS

174
Q

Upon suspicion, an investigation should be carried out by _____, and a STR should be filed _____ (time)

A

Compliance and Management

within 15 days of suspicion

175
Q

For fraud cases, the CMS license holder or CMI must ___

A

Lodge a police report and submit a copy of the report to MAS

176
Q

The STR report filed with the CAD of the Singapore Police with a copy to MAS must include which information?

A

Investigation Report and anlaysis as to why an STR is to be filed.

177
Q

What is the given timeframe for CMS licence holders in the lodgement of annual accounts with the MAS each financial year?

A

Within 5 months

178
Q

The register of securities should be easily accessible and retained for at least:

A

5 years after the date of each specific entry

179
Q

What particulars of the securities are contained in the register of securities? (4)

A

Trade date

Unit price

Security name

Broker name

180
Q

The FMC is expected to review and follow up its appointed representatives’ continuing education needs on ____ basis.

A

Annual

181
Q

A LFMC may hold monies held on trust in the account of customers in the form of __________ (investment products / security types)

It many not hold monies held on trust in the account of customers in _____

A
  1. Singapore Government Securities, any debt instruments issued by the government of the country where the LFMC notmally conducts its business, and any other securities or instruments that MAS may determine.
  2. Options on currencies traded in Singapore
  3. Stocks of blue chip companies in Singapore
182
Q

What should be submitted by LFMC to the MAS on a quarterly basis?

A

Statement of Financial Resources

Total Risk Requirement

Aggregate Indebtedness

183
Q

What’s the required timeframe for the reporting of breaches by the manager and trustee of authorised CIS?

A

3 business days when they aware of the breach

184
Q

An authorised CIS included in the CPFIS is required to submit the Annual External Auditor’s report on the fund to the CPF Board within ___

A

3 months from close of the financial year of the fund

185
Q

If the rating of financial institution with which the CIS has a fixed deposit falls below the required level, the Trustee of the Fund Management Company may allow for extension of the period for withdrawal of the fixed depost provided ____

A
  1. The fixed deposit is not rolled over or renewed
  2. or put at substantial risk
  3. any extension is subject to monthly review by the trustee

M3 (5 decks)

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