M5 EMock 003

M5 (5th Edition) Rules And Regulations For Financial Advisory Services (Mock Paper Version 1.
0)
1. Which one of the following types of instruments issued by the Monetary Authority of
Singapore has the force of the law that financial institutions or other specified persons such
as financial advisers’ representatives have to adhere to?
A. Codes.
B. Guidelines.
C. Policy Statements.
D. Subsidiary Legislation.
2. How many tenets are there in a monograph on the “Tenets of Effective Regulation” issued by
the Monetary Authority of Singapore to communicate its approach to develop effective
regulation?
A. 3
B. 6
C. 9
D. 12
3. The Financial Advisers Regulations (FAR) came into effect as a subsidiary legislation to give
effect to the provisions of the Financial Advisers Act. The FAR is prescribed by the
_____________.
A. Singapore Exchange Limited

B. Monetary Authority of Singapore
C. Association of Banks in Singapore
D. Association of Financial Advisers (Singapore)
4. “The sale of functionally similar products, such as Single Premium Investment-linked Policies
and trusts, would be subject to similar rules and standards.”
The above statement is in accordance with the principle of ______ under the Financial
Advisers Act.
A. Consistency
B. Independence
C. Accountability
D. Customers’ Interest
Copyright reserved by Singapore College of Insurance Limited Page 1 of 26

M5 (5th Edition) Rules And Regulations For Financial Advisory Services (Mock Paper Version 1.0)
5. Which one of the following natural persons is considered to be an “accredited investor”

under the Financial Advisers Regulations?
His income in the preceding 12 months is not less than _________________ or its equivalent
in value in a foreign currency.
A. S$100,000
B. S$150,000
C. S$200,000
D. S$300,000
6. Which one of the following corporate persons is an exempt financial adviser?
A. A company licensed under the Insurance Act.

B. An approved trustee under the Securities and Futures Act.
C. A law corporation registered under the Legal Profession Act.
D. An accounting corporation registered under the Accountants Act.
7. Which one of the following is NOT an “excluded financial adviser” under the Financial
Advisers Act?
A. The Public Trustee in exercising its powers under the Public Trustee Act.
B. The Official Assignee in exercising its powers under the Bankruptcy Act.
C. The accountant in exercising its powers in relation to a company under the
Accountants Act.
D. The person in exercising its power in relation to a company as its chief executive
officer under the Companies Act.
8. Which one of the following is NOT a type of financial advisory service regulated by the
Financial Advisers Act?
A. Advising on deposit-taking products.

B. Arranging of any contract of insurance in respect of life policies.
C. Advising on capital market products within the meaning of the Securities & Futures
Act.
D. Arranging on spot foreign exchange contracts other than for the purposes of leveraged
foreign exchange trading.

9. Which one of the following is an “investment product” under the Financial Advisers Act?
A. A fixed deposit.
B. A mortgage loan.
C. A life insurance policy.
D. A general insurance policy.
10. One of the factors in assessing an application for a financial adviser’s licence is “fitness and
propriety”. Which one of the following groups of people is NOT required to satisfy the fit and
proper criteria?
A. The applicant.
B. All its employees and stakeholders.
C. All its directors and chief executive officer.
D. Substantial shareholders and representatives.
11. Which one of the following is CORRECT concerning the renewal of all existing financial
advisers’ licences?
All existing financial advisers’ licences:
A. will no longer have to be renewed

B. are required to be renewed annually
C. are required to be renewed after three years from date of registration
D. are required to be renewed after five years from date of registration
12. The Monetary Authority of Singapore may refuse an application for the grant of a financial
adviser’s licence. Which one of the following is a ground for refusal?
The applicant:
A. is a corporation
B. is a natural person
C. has met the minimum financial requirements
D. has in force a professional indemnity insurance policy
13. The Financial Advisers Act provides for a category of persons to be exempted from holding a
financial adviser’s licence. Which of the following falls under the category of “exempt
persons”?
A. Exempt fund managers who serve up to 30 qualified investors.

B. Exempt fund managers who serve up to 30 accredited investors.
C. Exempt financial advisers who serve up to 30 accredited investors on any occasion.
D. All of the above are exempt persons.

14. Which one of the following persons is NOT allowed to use the term “financial adviser”
indicating that it carries on business as a financial adviser in the name, description or title
under which it carries on business in Singapore?
A. Exempt financial adviser.

B. Licensed financial adviser.
C. Excluded financial adviser.
D. Persons approved by the Monetary Authority of Singapore.
15. The Monetary Authority of Singapore (MAS) launched the Representative Notification
Framework (RNF). Which one of the following statements in respect of the RNF is FALSE?
A. A notice of intent to appoint a representative will have to be lodged with the MAS.
B. A “fit and proper” certification is to be provided to the MAS in respect of the

representative.
C. Onus is on the principals to accept only fit and proper individuals to be their
representatives.
D. The RNF is only applicable to a financial adviser which is exempted from having to
apply for a licence.
16. The Financial Advisers Act provides for ___________ classes of financial advisers’
representatives.
A. 2
B. 3
C. 4
D. 5
17. John’s status as an appointed financial adviser’s representative has been revoked by the
Monetary Authority of Singapore. John may appeal this decision within _________ days to
the Minister, whose decision shall be final.
A. 7
B. 15
C. 21
D. 30

18. Which of the following product information about a designated investment product shall a
licensed financial adviser disclose to a prospective client?
A. Risks arising from the product.

B. Benefits deriving from the product.
C. The relationship existing between the financial adviser and product provider.
D. All of the above information requiring disclosure to the prospective client.
19. Under Regulation 20(3) of the Financial Advisers Regulations, it is stated that no financial adviser
shall withdraw monies from a bank account maintained by it, unless under certain circumstances.
Which one of the following statements regarding the circumstances for withdrawal of monies is
FALSE?
A. The financial adviser shall withdraw the monies if relates to any repayment of monies that
were paid intentionally into the account as insurance monies.
B. The financial adviser shall withdraw the monies if relates to any investment by way of
deposits placed with any bank licensed under the Banking Act (Cap. 19).
C. The financial adviser shall withdraw the monies if relates to any payment to or for an insurer
in respect of amounts due to the insurer under or in relation to a contract of insurance.
D. The financial adviser shall withdraw the monies if relates to any payment to or for a person
entitled to receive payment of the moneys, including itself in so far as it is entitled to receive
payment for itself.
20. Which of the following scenarios would result in the licensed financial adviser (FA) being
liable to the customer concerning recommendations made by the FA under the Financial
Advisers Act?
A. The customer acted on the recommendation of the FA.
B. The customer refrained from acting based on the recommendation of the FA.
C. The FA did not have a reasonable basis to make a recommendation to the customer.
D. All of the above would make the FA liable to the customer in respect of any loss or
damage.

21. Under the Financial Advisers Act, every licensed financial adviser which receives any
insurance moneys shall establish and maintain a separate account with a _____________ for
its life insurance broking premiums.
A. bank
B. trust company
C. finance company
D. reinsurance company
22. The Financial Advisers Regulations provide that no licensed financial adviser shall grant any
unsecured advance, unsecured loan or unsecured credit facility to an officer or an employee
(including a director) or any of its representatives, which in the aggregate and outstanding at
any one time, exceeds __________.
A. S$3,000
B. S$5,000
C. S$7,000
D. S$9,000
23. The Financial Advisers Act provides that the Monetary Authority of Singapore has the power
of authority to issue written directions, such as ______________ which will have legal effect.
A. notices
B. guidelines
C. practice notes
D. policy statements
24. The objective(s) of prohibition orders under the Financial Advisers Act (FAA) is/are to keep
unfit persons from:
A. participating in management positions of the financial adviser
B. engaging in any or all of the financial advisory services regulated under the FAA
C. acting as a director or substantial shareholder of a licensed or exempt financial

adviser
D. doing all of the above

25. The MAS Notice No: FAA-N16 (the Notice) sets out the standards to be maintained by the
financial advisers and their representatives concerning recommendations made on
investment products.
The Notice is applicable for any recommendations made on simple life policies sold as
ancillary products to _______________ for the insurance cover.
A. car loans
B. personal loans
C. credit card balances
D. mortgage reducing term assurance loans
26. A financial adviser that is involved in making recommendations on investment products to

clients shall comply with the requirements as set out in MAS Notice No: FAA-N16 (the Notice).
Which of the following will fall under the requirements as set out in the Notice?
A. Know your client’s investment objectives and financial situation.

B. Understand your client’s concerns by conducting a needs analysis.
C. Documentation and record keeping of the recommendations made.
D. All of the above.
27. A client, who is assessed as not possessing the knowledge or experience in the unlisted Specified
Investment Product (SIP), nevertheless chooses to transact in the SIP. Which one of the
following statements is FALSE?
A. To inform the client in writing the outcome of the Customer Knowledge Assessment.
B. To inform the client in writing that it is his responsibility to ensure the suitability of the SIP.
C. To inform the client in writing to confirm his intent to transact the SIP despite the outcome
of the Customer Knowledge Assessment.
D. To inform the client in writing that he is prohibited from transacting in the SIP, unless he
passes the Customer Knowledge Assessment.
28. In making a recommendation on a life policy, a financial adviser does NOT need to provide
his client with a copy of the:
A. Product Summary
B. Policy Illustration
C. Product Highlights Sheet
D. Customer Knowledge Assessment

29. A financial adviser which makes a recommendation to a client to switch from one designated
investment product to another designated investment product shall comply with the
requirements as set out in MAS Notice No: FAA-N16.
Which one of the following statements regarding switching is FALSE?
A. Ensure that the client genuinely benefits from the switch.
B. Ensure that the client makes an informed decision on the switch.
C. Inform the client in writing to seek independent financial advice should he wish to
make the switch.
D. Inform the client in writing of any fees or charges that he would bear if he were to
make the switch.
30. Which one of the following is NOT a principle of general disclosure requirements when
making statements to a prospective client under the Financial Advisers Act?
Statements are to:
A. be made in plain language and in a simple manner

B. be made in accordance with industry best practices
C. contain adequate information for the client to make an informed decision
D. contain jargon and technical terms for the client to ensure clarity of information
31. Under the Financial Advisers Act, concerning general information about a Financial Adviser
(FA), a FA does NOT need to disclose, in writing, to the clients the:
A. FA’s business name, business address and telephone number
B. details of the product providers that the financial adviser recommends to his client
C. details of all appointed and provisional representatives registered in the Public

Register of Representatives
D. types of financial advisory services that it is authorised to provide by the Monetary

Authority of Singapore

32. A financial adviser is required to disclose, in writing, remuneration that it has received under
the Financial Advisers Act. Which of the following need NOT be disclosed?
A. Soft commissions from product providers.

B. Trailer commissions from product providers.
C. Details of all fees payable to be charged to the client.
D. Details of all fees charged for non-financial advisory activities.
33. In making a recommendation for a life insurance policy, a financial adviser shall NOT disclose
to the client:
A. about the Policy Illustration in respect of the life insurance policy
B. the risk factors that may result in the benefits payable to be less than the illustrated
values
C. the terms and conditions for exercising the free look provision under the life
insurance policy
D. that the representative is responsible for the completeness of the information given to
the life insurer
34. Which one of the following statements concerning the description of a dual currency
investment (the product) may be misleading to investors?
This includes labeling the product as:
A. a deposit
B. a structured deposit
C. principal guaranteed in terms of the base currency
D. all of the above
35. Which one of the following statements is TRUE concerning the disclosure of past
performance of a Collective Investment Scheme (CIS) by a Financial Adviser (FA) to the client?
The FA is allowed to:
A. indicate only total returns on a CIS that covers a period of three years
B. present returns on the CIS only if it covers a period of at least one year
C. share that past performance is an accurate indicator of future performance
D. disclose information on past performance in relation to a CIS based on the simulated

results of a hypothetical CIS

36. Which one of the following per Annex 3 (Criteria For The Assessment Of A Customer Account
Review) of Notice No: FAA-N16 On Recommendations On Investment Products for the
assessment of a customer as possessing the knowledge and experience in derivatives is TRUE?
A. Customer holds a doctorate degree in engineering.
B. Customer holds a diploma in business administration.
C. Customer has transacted in derivatives 3 times in the preceding 3 years.
D. Customer has worked for 2 consecutive years in the past 5 years as a trainer in
investment products.
37. A client has three consecutive years of working experience in the past ten years. Which one
of the following will NOT be considered as relevant working experience for assessing whether
the client possesses the knowledge or experience in an unlisted Specified Investment Product?
A. Accountancy.
B. Actuarial Science.
C. Treasury Management.
D. Marketing Management.
38. John is an introducer under the Financial Advisers Act. Which one of the following actions by
John falls under the definition of “introducing activity” in MAS Notice No: FAA-N02?
A. He works full time for the introducee.

B. He performs a needs analysis for a client.
C. He conducts the Customer Knowledge Assessment for a client.
D. He provides factual information on investment products to a client.
39. MAS Notice No: FAA-N10 provides for “prohibited representations” by exempt persons under
the Financial Advisers Act. This includes an exempt person representing himself as being:
A. licensed by the Monetary Authority of Singapore

B. registered by the Monetary Authority of Singapore
C. supervised by the Monetary Authority of Singapore
D. all of the above

40. Jack wishes to be appointed as a provisional representative of a financial adviser in

Singapore. Which one of the following entry requirements is CORRECT?
A. Be at least 18 years old.

B. Holds at least three GCE ‘O’ level passes.
C. Passes all the relevant CMFAS examinations within three months.
D. Possesses at least two years of working experience in the financial services industry.
41. Which one of the following modules in the CMFAS Examinations will NOT apply to an
individual who wishes to advise on and/or arrange life policies, including Investment-linked
policies?
A. 5
B. 6
C. 9
D. 9A
42. Upon discovery of any suspicious activities and incidents of fraud, the financial adviser shall
lodge a report with the ______________.
A. Ministry of Finance
B. Association of Financial Advisers
C. Monetary Authority of Singapore
D. Suspicious Transactions Reporting Office
43. A financial adviser discovered a hacking of its critical system which disrupted services to
customers. It should give notice of the disruption to the Monetary Authority of Singapore no
later than _______ from the discovery of the incident.
A. 1 hour
B. 3 hours
C. 5 hours
D. 7 hours

44. Which type of misconduct committed by a Financial Adviser’s Representative (FAR) need NOT
be reported to the Monetary Authority of Singapore?
A. Failure to meet continuing education requirements.
B. Failure to satisfy the “Guidelines On Fit And Proper Criteria”.
C. Failure to disclose all material information relating to any designated investment

product recommended by the FAR.
D. Failure to give due consideration to a client’s investment objectives, financial

situation or particular needs relating to any designated investment product
recommended by the FAR.
45. Under MAS Notice No: FAA-N14 (on Reporting of Misconduct of Representatives by Financial
Advisers), a financial adviser is required to submit an annual report to the MAS, even though
there is no misconduct committed by its representatives not later than ______ days after 31
December of that calendar year.
A. 7
B. 14
C. 21
D. 30
46. The MAS Notice No: FAA-N15 (the Notice) on the cancellation period for unlisted debentures
applies to specified persons when they sell, whether directly or indirectly, an unlisted
debenture to a client.
The Notice shall apply to:
A. exempt financial advisers

B. holders of a financial adviser’s licence
C. persons who are exempted under Regulation 29 of the FAR
D. all of the above persons

47. A financial adviser is required to perform customer due diligence (CDD) measures on its
customer in accordance with MAS Notice No: FAA-N06 (the Notice). Under the Notice, a
financial adviser is NOT required to perform CDD measures when it:
A. establishes business relations with a customer

B. markets its products or services to a prospective customer
C. has doubts about the veracity of the information previously obtained from the
customer
D. has suspicions about the customer’s business activities, even though due diligence
measures are dispensed with
48. A financial adviser shall perform customer due diligence measures in accordance with MAS
Notice No: FAA-N06 (the Notice), when the financial adviser establishes business relations
with any customer.
“Customer” under this Notice does NOT refer to a:
A. company
B. partnership
C. body corporate
D. venture capitalist
49. A financial adviser is required to inquire whether there exists a beneficial owner in relation to
a customer. Which one of the following customers requires an inquiry into its beneficial
owner?
A. A public listed company in Singapore.

B. A holder of a money changer’s licence.
C. A financial institution supervised by the MAS.
D. An insurer incorporated under the Insurance Act.

50. A financial adviser is required to monitor, on an ongoing basis, its business relations with its
customers. Which one of the following is NOT required of the financial adviser?
A. Review the adequacy of customer identification information and to update it

accordingly.
B. Observe and scrutinise business or transactions of customers for consistency with its
business and risk profile.
C. Pay attention to and inquire into the background and purpose of complex or unusual
patterns of transactions of customers.
D. Conduct regular visits and face-to-face verification of business relations or

transactions with customers on an ongoing basis.
51. A financial adviser may perform simplified customer due diligence (CDD) measures, as it
considers adequate, to effectively identify and verify the identity of the customer. However,
no financial adviser shall perform simplified CDD measures for a/an:
A. merchant bank
B. finance company
C. insurance company
D. remittance company
52. Which one of the following is CORRECT if a financial adviser is unable to complete customer
due diligence (CDD) measures for the purpose of preventing money laundering and
countering the financing of terrorism?
A. Continue the business relationship.

B. Complete the CDD measures as soon as reasonably practicable.
C. File a suspicious transaction report regardless of circumstances.
D. Consider if circumstances are suspicious, so as to warrant the filing of a suspicious
transaction report.
53. Which one of the following is NOT a “politically exposed person” under MAS Notice No: FAA-
N06 on the prevention of money laundering and countering the financing of terrorism?
A. Senior Civil Servants.

B. Senior Judicial Officers.
C. Senior Political Leaders.
D. Senior Religious Leaders.

54. Under MAS Notice No: FAA-N06 on the prevention of money laundering and countering the
financing of terrorism, a financial adviser shall retain all relevant documentation for a period
of at least ________ years following the termination of business relation for customer
identification information.
A. three
B. five
C. seven
D. nine
55. As part of the identification of customers, a financial adviser is required to obtain each
customer’s:
A. nationality
B. date of birth
C. unique identification number
D. all of the above
56. Which one of the following is a CORRECT statement in respect of the development and
pricing of life insurance products and Investment-linked Policy sub-funds under Notice No:
MAS 302 (the Notice)?
A. Approval from MAS is required for the launch of any short-term accident and health
policies.
B. Approval from MAS is required for the launch of any term policies having a duration
of five years or less.
C. Contravention of any mandatory requirements of the Notice shall be an offence and

shall attract penalty under the Financial Advisers Act.
D. The Board of Directors needs to approve the policies and procedures in respect of
the development and pricing of life insurance products and Investment-linked Policy
sub-funds.
57. Part II of the Guidelines in Notice No: MAS 302 on product development and pricing provide
that an insurer should notify the MAS in writing of any product launched that does not
require the approval of the MAS within _______ working days after the official launch date of
the product.
A. 3
B. 5
C. 7
D. 14

58. A failure of an insurer to comply with the Guidelines in Notice No: MAS 302 on product
development and pricing may be taken into account by the MAS in considering whether to:
A. approve a new product

B. revoke the approval for a product
C. issue directions for the withdrawal of a product
D. take any one of the above actions
59. Under MAS Notice No: 307, before launching any Investment-linked Policy (ILP) sub-fund,
which one of the following is NOT part of the documentation to be submitted by the insurer?
A. Fund Factsheet.
B. Product Summary.
C. Policy Illustration.
D. Product Highlights Sheet.
60. MAS Notice No: 307 on Investment-linked Policies is issued pursuant to the _________ Act.
A. Insurance
B. Financial Advisers
C. Monetary Authority
D. Securities & Futures
61. Which of the following statements in connection with distribution of Direct Purchase
Insurance is TRUE? It is distributed by ____________.
A. facsimile
B. telephone
C. the internet
D. text messages
62. With regards to the MAS Notice on Cyber Hygiene [Notice No: FAA-N21], which one of the
persons is a member of the senior management?
A. Chief Security Officer.

B. Chief Executive Officer.
C. Chief Administrative Officer.
D. Chief Information Technology Officer.

63. In accordance with MAS Notice No: 307 on the Product Highlights Sheet of an Investment-
linked Policy sub-fund, the insurer shall NOT use:
A. appropriate explanations of technical jargon

B. appropriate disclaimers in clear and legible language
C. references to links to online copies of disclosure documents
D. charts, flowcharts and tables to explain structures or payoffs
64. An appointed representative of a financial adviser is required to satisfy minimum entry

requirements. Which one of the following is NOT correct in respect of the requirements?
A. Satisfy the age criterion of 18 years.

B. Satisfy any other criteria as stipulated by the MAS.
C. Examination criteria as set out in MAS Notice No: FAA-N13.
D. Fit and proper criteria as set out in MAS Guideline No: FSG-G01.
65. John wants to be the Chief Executive Officer of a licensed financial adviser. One of the
following requirements that he does NOT need to fulfil is:
A. having the relevant academic and professional qualifications

B. having a minimum of seven years’ relevant working experience
C. performing in a relevant managerial capacity for at least three years
D. meeting the fit and proper criteria as set out in MAS Guideline No: FSG-G01
66. The minimum paid-up capital for a financial adviser to carry out financial advisory services
for arranging of contracts of insurance in respect of life policies, other than contracts of
reinsurance is:
A. S$100,000
B. S$150,000
C. S$300,000
D. S$500,000
67. A factor which is NOT used in the assessment of honesty, integrity and reputation of a
relevant person to be employed by a financial adviser is that he has been:
A. refused a fidelity bond in Singapore

B. served with divorce proceedings for infidelity in Singapore
C. issued with a prohibition order by the Monetary Authority of Singapore
D. a subject of complaint relating to activities regulated by the Monetary Authority of
Singapore

68. A factor used to determine whether a corporation is financially sound under MAS Guideline
No: FSG-G01 is that the corporation is having:
A. some cash-flow problems

B. problems securing new customers
C. problems in paying some of its creditors
D. a winding-up petition against it in Singapore
69. A financial adviser is expected to determine the fitness and propriety of a proposed
representative by having him:
A. conduct a yearly self-assessment of competency and capability to be a fit and proper

person
B. maintain adequate documentation evidencing all certification that he is a fit and

proper person
C. submit a written declaration that he has passed all the relevant examinations to be a
fit and proper person
D. be subjected to independent checks by its financial adviser, to ensure that he

satisfies the fit and proper requirements
70. A financial adviser carrying out due diligence checks on the fitness and propriety of its
representatives is NOT required to conduct probity checks on their:
A. identity
B. marital status
C. financial status
D. past employment records
71. Which one of the following is a standard in relation to the “due care and diligence” of a
financial adviser in conducting business with its customers?
A. Proper supervision of its representatives.

B. Adequate procedures for complaints handling.
C. Disclosure of information about the financial adviser.
D. Due compliance with applicable laws, rules and regulations.

72. Under the MAS Guideline No: FAA-G13 (conflicts of interest arising from issuing or
promulgating research analysis or research reports), a financial institution should maintain
proper records and supporting documents of its analysts' research recommendations for a
period of not less than ____ years from the date of publication of the research
recommendation.
A. 3
B. 4
C. 5
D. 6
73. The "ACMF Framework" refers to the ___________________.
A. ASIAN Capital Market Professional Mobility Framework

B. ASEAN Capital Market Professional Mobility Framework
C. ASIAN Credit & Marketing Professional Mobility Framework
D. ASEAN Credit & Marketing Professional Mobility Framework
74. The licensing of digital advisers operating in the financial industry of Singapore covers
________ products.
A. capital market
B. deposit taking
C. general insurance
D. mortgage financing
75. The Monetary Authority of Singapore adopts a ___________ approach in dealing with the
conduct of business for execution-related advice under Guideline No: FAA-G08.
A. facilitative
B. principle-based
C. descriptive-based
D. prescriptive-based

76. Financial institutions today have various marketing and distribution arrangements such as
roadshows and tie-ups with retailers to market their products and services to customers. Which
one of the following has the responsibility to set the right tone in conducting such marketing
cum distribution arrangements and activities in public places in a responsible and professional
manner?
A. Sales and marketing.

B. Distribution and tie-ups.
C. Board and senior management.
D. Internal control and compliance.
77. When making recommendations on structured deposits, a financial adviser is required to

convey a warning message to a customer. Which one of the following message is CORRECT?
A structured deposit:
A. has a fixed rate of return

B. has an investment element
C. is like a traditional deposit
D. is a well-structured product
78. Which one of the following is a front-end procedure to facilitate the monitoring of switching
of designated investment products under the Financial Advisers Act?
A. Tracking the volume of switching transactions.
B. Identifying any unusual trends in switching transactions.
C. Declaring in writing that the client has been advised of the switching transactions.
D. Implementing procedures to ensure that each switching transaction is reviewed for

appropriateness.
79. Which one of the following practices promotes customer confidence in financial institutions
where fair dealing is central to their corporate culture?
A. Whistle-blowers to report any misconduct.

B. Timely performance in meeting sales targets.
C. Encouraging customer to switch investment products.
D. Persons taking deposits to also cross sell investment products.

80. A client refuses to disclose information requested by his dealer, but he wants his dealer to
execute a trade for him. Which one of the following actions by the dealer is NOT correct?
A. Proceed with the client’s request and record his decision.

B. Warn the client that he is responsible for product suitability.
C. Highlight to the client the trading risks without performing a needs analysis.
D. Decline the client’s request for execution because it contravenes the trading rules.
81. Financial institutions are expected to have competent representatives as part of the delivery
of fair dealing outcomes under Guideline No: FAA-G11. Which one of the following promotes
competency of representatives in giving quality advice and appropriate recommendations to
customers?
The financial institution aligns the remuneration structure with:
A. product quotas
B. customer’s interest
C. differentiated fees and commissions
D. the complexity of the investment products
82. Financial institutions are expected to provide customers with clear and relevant information
to enable them to make informed decisions, to deliver fair dealing outcomes to customers
under the GuidelineNo: FAA-G11.
Information should be given _______________ the advisory and sales process.
A. before
B. during
C. after
D. for all the above stages of
83. Which one of the following statements concerning a financial institution’s handling of
customer complaints for the delivery of fair dealing outcomes to customers under the
Guideline No: FAA-G11 is CORRECT?
Customer complaints are:
A. handled by the head of compliance

B. dealt with by the Board of Directors
C. potential indicators of areas for improvement
D. referred to the Monetary Authority of Singapore

84. How many safeguards are there in MAS Guideline No: FSG-G02 regarding the standards of
conduct for marketing and distribution activities by financial institutions?
A. 6
B. 12
C. 18
D. 24
85. The Monetary Authority of Singapore (MAS) assesses whether financial institutions promote
fair dealing practices to be fit and proper to conduct regulated activities. Which one of the
following is NOT a method of assessment used by the MAS?
A. Inspections and visits to financial institutions.
B. Customer surveys and mystery shopping exercises.
C. Interviews with the Board and Senior Management.
D. Surprise audits and checks for compliance with Guideline No: FAA-G11 to deliver fair
dealing outcomes to customers.
86. Under Section 321 of the Securities and Futures Act, which one of the following statements
concerning the Revised Code on Collective Investment Schemes (the Code) is FALSE?
A. The Code is statutory in nature.
B. The Code is to enhance safeguards for retail investors.
C. The Code is issued by the Monetary Authority of Singapore.
D. The Code sets out the best practices on management, operation and the marketing of
Collective Investment Schemes.
87. Under the Code on Collective Investment Schemes, the manager upon receipt of a redemption
request on day T by a participant, should pay out the redemption proceeds to the participant
within ________ business days.
A. T+4
B. T+5
C. T+6
D. T+7

88. Under the revised Code on Collective Investment Schemes, the manager is expected to notify
the Monetary Authority of Singapore and existing participants of a scheme NOT later than
________ month(s) before any significant change is to take effect.
A. one
B. two
C. three
D. four
89. The global exposure of a Collective Investment Scheme to financial derivatives should NOT
exceed _____ per cent of the scheme’s Net Asset Value at all times.
A. 10
B. 30
C. 50
D. 100
90. Bonds with ________________ shall NOT be recognised as collateral that can be tendered to
a Collective Investment Scheme.
A. Aaa rating by Moody’s

B. embedded financial derivatives
C. AAA rating by Standards & Poor’s
D. a guarantee from a government agency
91. Which one of the following statements about mandatory CPF contributions covering
Singapore citizens and permanent residents is CORRECT?
A. Employees do not need to make CPF contributions.

B. Employees’ bonuses are exempted from CPF contributions.
C. The self-employed persons are required to contribute only to their Medisave
accounts.
D. Employers are required to make CPF contributions to persons registered as self-
employed.
92. The CPF Retirement Account:
A. can be used to buy a residential property

B. is used to participate in the CPF LIFE scheme
C. is formed when the CPF member reaches his retirement age
D. combines funds from the CPF Ordinary Account and Medisave Account

93. Which one of the following insurance schemes under the CPF provides monthly payouts to
the insured for a limited period in the event of severe disability?
A. ElderShield.
B. MediShield Life.
C. Home Protection Scheme.
D. Private Medical Insurance Scheme.
94. Adeline, a financial adviser representative, is describing the use of CPF funds for property
ownership in Singapore to a client.
Which one of the following statements made by Adeline is CORRECT?
A. “CPF savings cannot be used to purchase multiple properties.”

B. “CPF Special Account savings can also be used to buy a residential property.”
C. “A CPF member who intends to apply for a HDB loan must exhaust all savings in his
CPF Ordinary Account before the loan is granted.”
D. “A CPF member must have at least S$20,000 in his CPF Ordinary Account before he is
allowed to purchase a property with his CPF funds.”
95. Under the CPF Investment Scheme, CPF members are NOT allowed to invest their CPF funds
in ________________.
A. gold
B. government bonds
C. exchange traded funds
D. Whole Life Insurance policies
96. A financial adviser representative conducts needs analysis for his client to:
A. help him discover the client’s needs

B. allow him to analyse the client’s situation and needs
C. sell the products to the client based on his needs and objectives
D. achieve all of the above outcomes

97. Which one of the following is NOT a step in conducting needs analysis for a client?
A. Ask the client for referrals.

B. Review with the client periodically.
C. Develop and present recommendations.
D. Establish and define client-representative relationship.
98. Which one of the following concerns raised by a client during the needs analysis falls under
protection needs?
A. Budgeting for a five-room HDB flat.

B. Accumulating sufficient funds for retirement.
C. Meeting financial obligations upon premature death.
D. Generating a minimum annual return of 7% on an investment portfolio.
99. As a rule of thumb, how many years are added to the life expectancy of parents to arrive at
the number of years needed to support them?
A. 4
B. 6
C. 8
D. 10
100. During the fact-find process, finding out the client’s employment details does NOT help the
financial adviser representative to:
A. identify the client’s monthly financial obligations

B. analyse whether the client needs a Medical Expense Insurance policy
C. determine whether the client should take up an income protection plan
D. assess the client’s ability to commit to a medium to long-term investment product

Answers to Mock Paper
1 D 26 D 51 D 76 C
2 B 27 D 52 D 77 B
3 B 28 D 53 D 78 C
4 A 29 C 54 B 79 A
5 D 30 D 55 D 80 D
6 A 31 C 56 D 81 B
7 D 32 D 57 C 82 D
8 A 33 D 58 D 83 C
9 C 34 D 59 A 84 B
10 B 35 B 60 A 85 D
11 A 36 B 61 C 86 A
12 B 37 D 62 B 87 D
13 D 38 D 63 B 88 A
14 C 39 D 64 A 89 D
15 D 40 C 65 B 90 B
16 A 41 B 66 B 91 C
17 D 42 C 67 B 92 B
18 D 43 A 68 D 93 A
19 A 44 A 69 D 94 C
20 D 45 B 70 B 95 D
21 A 46 D 71 A 96 D
22 A 47 B 72 C 97 A
23 A 48 D 73 B 98 C
24 D 49 B 74 A 99 C
25 D 50 D 75 B 100 A

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M5 (5th Edition) Rules And Regulations For Financial Advisory Services (Mock Paper Version 1.

A. Singapore Exchange Limited

Copyright reserved by Singapore College of Insurance Limited Page 1 of 26

5. Which one of the following natural persons is considered to be an “accredited investor”

6. Which one of the following corporate persons is an exempt financial adviser?

A. A company licensed under the Insurance Act.

A. Advising on deposit-taking products.

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All existing financial advisers’ licences:

A. will no longer have to be renewed

A. Exempt fund managers who serve up to 30 qualified investors.

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A. Exempt financial adviser.

B. A “fit and proper” certification is to be provided to the MAS in respect of the

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A. Risks arising from the product.

A. The customer acted on the recommendation of the FA.

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A. participating in management positions of the financial adviser

C. acting as a director or substantial shareholder of a licensed or exempt financial

D. doing all of the above

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26. A financial adviser that is involved in making recommendations on investment products to

A. Know your client’s investment objectives and financial situation.

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Which one of the following statements regarding switching is FALSE?

A. Ensure that the client genuinely benefits from the switch.

B. Ensure that the client makes an informed decision on the switch.

A. be made in plain language and in a simple manner

A. FA’s business name, business address and telephone number

C. details of all appointed and provisional representatives registered in the Public

D. types of financial advisory services that it is authorised to provide by the Monetary

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A. Soft commissions from product providers.

A. about the Policy Illustration in respect of the life insurance policy

This includes labeling the product as:

The FA is allowed to:

C. share that past performance is an accurate indicator of future performance

D. disclose information on past performance in relation to a CIS based on the simulated

Copyright reserved by Singapore College of Insurance Limited Page 9 of 26

A. Customer holds a doctorate degree in engineering.

B. Customer holds a diploma in business administration.

C. Customer has transacted in derivatives 3 times in the preceding 3 years.

A. He works full time for the introducee.

A. licensed by the Monetary Authority of Singapore

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40. Jack wishes to be appointed as a provisional representative of a financial adviser in

A. Be at least 18 years old.

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A. Failure to meet continuing education requirements.

B. Failure to satisfy the “Guidelines On Fit And Proper Criteria”.

C. Failure to disclose all material information relating to any designated investment

D. Failure to give due consideration to a client’s investment objectives, financial

The Notice shall apply to:

A. exempt financial advisers

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A. establishes business relations with a customer

“Customer” under this Notice does NOT refer to a:

A. A public listed company in Singapore.

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