Premium Flashcards
What’s relationship between IMAS Code and The Securities and Futures Act?
The Securities and Futures Act overrides the IMAS Code.
Bank (licensed under the Banking Act) or Exmpted ones can undertake the management of a portfolio of seucrities for clients (fund management business) if ____
If its is not on discretionary basis
Retail LFMC vs. RFMC
What’s the requirement for an FMC’s principal place of business?
ALL FMCs are required to have a permanent physical office in Singapore
The MAS may revoke the licence of a CMS licence holder if the CMS licence holder fails or ceases to carry on business in ____ the regualted activities for which it was licensed.
ALL.
The license will NOT be revoked if it ceases to carry on business in 2 of the 3 regulated acitivities for which it is licensed.
The Honesty, Integrity and Reputation criteria include checking whether the relevant person has been censured, disciplined, suspended or refused membership or registration by ____
MAS, any other regulatory authority, an operator of a market, trade repository or clearing facility, any professional body or government agency, whether in Singapore or elsewhere.
In order to establish that an LFMC is fit and propert, it should also staisfy MAS that ___ of its ____ (persons) meet the fit and proper criteria.
ALL of its substantial shareholders, directors and CEO, or equivalent persons.
ALL employees are NOT evaluated for fitness and propriety.
In the context of the Effects Doctrine, whether the SFA regulated activity conducted by a foreign entity outside Singapore for Singapore based clients may be considered to HAVE a SUBSTANTIAL EFFECT in Singapore depends on ______
- The number of persons in Singapore to whom the foreign entity offers its services.
- whether the act has an adverse impact on the stability of Singapore financial system.
Steps to judge whether an act will attract the provisions of the SFA (related to overseas market) or not
- If the act is conducted partly in and partly outside Singapore or wholly outside Singapore
1) If the act is conducted partly in and partly outside Singapore, it will attract the provision of the SFA.
- If any act is conducted wholly outside Singapore, then we’ve to think if the act has BOTH a SUBSTANTIAL and REASONABLY FORESEEABLE effect in Singapore (the Effects Doctrine)
1) SUBSTANTIAL: Based on
- The number of persons in Singapore to whom the foreign entity offers its services
- if the act has a significant or adverse impact on the soundness, stability and safety of Singapore financial system
2) FORESEABLE
- if the offer or invitation of services is made to persons in Singapore,
- the advertisement about an offer or invitation of services is directed or targeted at persons in Singapore
- the offer is priced in Singapore dollars
- However, if the foreign entity conducts any regulated activity to services Singapore clients through a REGULATED person or any other Singapore entity, that cat would be caught.
Under what scenarior, a foriegn entity that conducts regulated activity to Singapore clients must be caught/attract the provisions of the SFA, regardless of the Effects Doctrine.
if the foreign entity conducts any regulated activity to services Singapore clients through a REGULATED person or any other Singapore entity, that cat would be caught.
RST Corporation is a CMSL holder in Singapore. RST introduces its Singapore-based clients to HK-based LMN Finance.
LMN acts as an intermediary for RST’s clients for transacting in shares listed on SEHK in HK.
Under what conditions, RST/LMN would be under the ambit of the relevant provisions of the SFA?
LMN will come under the ambit of the relevant provisions of the SFA if the Effects Doctrine is satisfied. Otherwise, it need not have a CMS licence for acting as an intermediary.
The arrangement between RST and LMN is NOT a violation of the SFA
RST is definitely under the ambit of the relevant provisions of the SFA because the investors are based in Singapore.
Under what situation, the extra-territoriality concept does not apply to a foreign entity conducts regulated activity?
The foreign entity is not making any offer to Singapore-based investors or to subscribe to any investment products.
For an entity’s terminals are physcially located in Singapore and the regulated persons gain direct access to the HK exchange, the entity would be considered as ____ and required to ___
Otherwise it would be in ____ the SFA.
Considered as operating a futures market in Singapore.
Would require recognition as a recognised market operator, otherwise it would be in breach the SFA
What are relevant regulaitons/requirements for all FMCs?
All CMS licence holders are requried to ____
RFMC are not subject to ____ but must _____
Base capital, independent annual audit, and fit and proper requirements are relevant for all FMCs.
All CMS licence holders, including LFMCs, are required to comply with the RBC (risk-based classification) framework and maintian sufficient financial resources or adjusted net head office funds to meet their total risk requirement (TRR).
RFMCs are not subject to the RBC framework, although they must maintian a minimum base capital of SGD250k
LFMCs are not required to segregate their managed assets if ____
Assets are NOT listed or quoted on securities markets
Are interests in closed-end fund which is to be used for PE or VC investments
Offered only to accredited and/or institutional investors
A person is considered to have effectice control of a licensed FMC if that person acquires or holds ___ or more of its issued share capital.
20%
A licensed FMC is subject to the FULL RBC Framework only if ____
Its adjusted assets in each quarter of a year exceed the lower of SGD10 million or 5 times its total positive financial resources
Asset Measure at the end of a month =
On balance sheet assets + off balance sheet assets - deductibles
LFMCS incorporated in Singapore must obtain prior written approval from MAS before they can ___ their paid-up ordinary share capital, paid-up irredeemable share capital and non-cumulative preference share capital.
REDUCE.
There’s no general requirement to obtain MAS approval for increase in share capital.
What are submitted by the CMS licence holders to the MAS on an annual basis? (2)
Audited statements
Auditor’s Certification in Form 6
In accordance to the SFA, money and other assets received from customers should be deposited into _____ accounts and invested in _____
Trust and custody accounts in accordance with the SFA
Invested in accordance with the purpose agreed with the customer
A LFCM may ___ its customer’s assets only if it’s for an amount owed by the customer to the LFMC, and the amount not exceed the amount owed.
mortgage, charge or pledge
A LFCM may mortgage, charge or pledgeits customer’s assets only if ____
Only if it’s for an amount owed by the customer to the LFMC, and the amount not exceed the amount owed
What’s only applicable to material outsourcinng, not non-material outsourcing?
Risk Management
Material outsourcing refers to any outsourcing, if disrupted, could significantly impact ____
business operations, reputation or profitability
If a LFMC suspends payments or is about to suspend payments, it’s required to inform MAS ____.
Immediately
CMS License holders should investigate sudden trading activity in dormant accounts because _____
The account might be used to conduct unauthorized tradings by trading representatives
Regarding Late Trading, fund managers must ____
ensure that trades are not accepted after the closing unit price or share price of the CIS has been determined on a particular day
What are some advantages of short selling?
Provides more efficient price formation
Increase market liquidity
Facilitates risk management and hedging activities
Short sale volume ____ the outstanding shor position of a security as it may ____
May not reflect
include trades which have been offset by the buy-in trades
If the Board declares a corner and determines a fair settlement price for cash settlement:
if a seller (buyer) contracted to sell for less than the fair settlement price, he/she must _____
If a seller (buyer) contracted to sell for more than the fair settlement price, the buyer (seller) must
- pay the buyer (seller) the diferrence between the fair settlement price and the contract price.
- the buyer must pay the seller the difference between the contract price and the fair settlement price
If the SGX-ST Board declares a corner on a security, the Board may ____
Impose conditions on delivery by EXTENDING the due date of delivery or declare that contracts be CASH settled (without delivery)
What’s pre-arranged trade?
What’s exception?
What’s the requirement on that?
Trades discussed and arranged outside of the SGX QUEST system’s central order books will be deemed to be pre-arranged trades, which are forbidden.
An Exchange of Underlying for Futures Contracts
A negotiated Large Trade
A request for a quote from designated market maker approved by SGX is NOT considered pre-arrange trades under the SGX-DT Futures Trading Rules
Civil penalty proceedings will ____ if ther’re criminal proceedings commenced on the same set of facts against the defendant.
If the defendant is convicted or acquitted in a criminal trial, proceedings for a civil penalty will ____
If the civil proceedings concluded against a defendant whereby he/she is ordered to pay the civil penalty, criminal proceedings shall ___
will be stayed
will not be commenced
no criminal proceedings shall be commenced
What’s false trading?
Someone intended to create a false or misleading appearance of the price of a security, i.e. someone intends to maintain the price of share.
Is Publishing a forecast about expected rise in profits an offence under SFA?
No. Even if it induces investment
Diseemination of info about illegal transactions is an offence under Section 202 of the SFA if either of 2 conditions is satisfied ___
- If the person spreading the info or his associate has entered into or purpoted to enter into that transaction
- if the person or his associate received, directly or indirectly, any consideration or benefit for the dissemination
A fund manager applying for authorisation or recognition of an umbrella fund with 12 sub-funds must:
Submit 12 separate forms
The offer of units in CIS will not be subject to authorisation or recognition requirements under the SFA.
The offer is not required to be accompanied by a prospectus that is registered with MAS.
If what?
If the offer is made to an institutional investor
The list of institutional investors in Singapore is a closed list and includes ____ (5)
licensed banks, merchant banks, finance companies, the Government and a CIS
Which of the following information is NOT Required in the semi-annual report of a CIS?
A. The top 10 holdings at market value of the CIS
B. Changes to the managerial staff
C. Amount of related party transactions for the CIS
D. Material contingent liabilities of the CIS
B
The annual report for an authorised CIS for the financial year ending 31 December 2006 due to be sent to participants on ____ does not need to be prepared, audited and sent if ____
31 March 2007 (within 3 months)
The termination or maturity date of the CIS is on or before 30 April 2007.
Best Execution means executing clients’ orders ____
at the best available terms
What’s required to submitted to the CPF Board by the fund manager under the CPFIS? (3)
Annual external auditor’s report on the fund
Annual external auditor’s report on operations relating to unit holdings and FMAs of CPF members
Returns to confirm continuing compliance with addmision criteria by the FMCs
Notification confirming there’s no brach of the CPFIG ____ required to be submitted to the CPF Board by the fund manager under the CPFIS
NOT
If FMCs included under the CPFIS are offering CPFIS-SA products, they must ______ in order to receive and submit payments electronically and adop _______ for submission data through _____
If FMCs are offering CPFIS-OA products, they must adopt ______ for processing transactions through ____
If FMCs included under the CPFIS are offering CPFIS-SA products, they must link up electronically with the CPF Board in order to receive and submit payments electronically and adop the established standard operational procedures for submission of data through CPF Generic Data Exchange Centre.
the established standard operational procedures for processing transactions through the CPF agent banks
Overstaing output tax or understating input tax are errors that may _____ the tax liability of the person. Therefore, these are ___ predicate ML offences.
INCREASE
NOT
A person wilfully claims refund that is more than what is rightfully due to him is ____
an ML predicate offence
CMS licence holders shall report any suspicious transactions to _____ as well as extend a copy of the report to the ____
Commercial Affairs Department (CAD) of the Singapore Police Force
MAS
What’s a way for fund managers to verify identity for account openings by post?
Arrange a f2f interview meeting with the customer at his convenience.
What are the examples of breach of the IMAS Code of Ethics & Standards of Professional Conduct? (3)
What’s exmpted in Appendix A?
- Failure to disclose personal transactions
- Breach of fiduciary duties
- Not enforcing procedures for monitoring
- A delay in filing a report is not a breach of the IMAS Code of Ethcis & Standards of Professional Conduct.
According to Appendix A, all transactions with third parties must be carried out ____ (3 standards)
- at arm’s length
- in accordance with the client’s instructions
- shall at all times be consistent with best execution standards
(Appendix A) Members should ensure that client reporting should comply with applicable legal and regulatory requirements as well as the requirements under ____
The investment management agreement
Prospectus
Trust deed
Under the IMAS Code of Ethics & Standards of Professional Conduct, while reviewing brokers, ____ need to be considered.
The ability to execute orders promptly
Credit standing
Research capabilities
Commission structure
Payments made using counterfeit notes ____ evoke suspicion.
Should
