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