CMFAS - Module 5 (Chapter 1-5)

1) The mission and objectives of the Monetary Authority of Singapore (MAS)

include:-
I. Currency issuance.
II. Sustenance of non-inflationary economic growth.
III. Helping the Singapore Government decide on taxation issues.
IV. Promotion of a sound and progressive financial services sector.
I, II, III & IV
I, II & IV
II & III
III & IV
2) The Monetary Authority of Singapore (MAS) has which of the following
objectives?
I. Conduct of fiscal policy.
II. Conduct of monetary policy.
III. Oversight of the payment systems.
IV. Being a financial agent to the Singapore Government.
II, III & IV
I, II & III
I & IV
II & III
3) Which of the following statements about the Monetary Authority of Singapore
(MAS) is FALSE?
It helps the government in managing its budget deficit from time to time.
It conducts financial stability surveillance.
It manages the official foreign exchange reserves of Singapore.
It serves as a banker to the Singapore Government.
4) The Monetary Authority of Singapore (MAS) is responsible for administering
which of the following Acts?
All of the above.
Insurance Act.
Trust Companies Act
Government Securities Act.
5) Which of the following is/are non-statutory or do / does not have legal effect?
I. Notifications.
II. Codes.
III. Directions.
IV. Regulations.
II only.
I, II & III
IV only.
III only.
6) Which of the following statements about Circulars and Practice Notes is/are
TRUE?
I. Practice notes are meant for guidance of specific institutions or persons on
financial matters.
II. Circulars have legal effect.
III. Circulars are sent to specified persons for their information.
IV. Practice notes provide guidance on reporting procedures.
III & IV
I & II
I & III
IV only.
7) The six tenets for effective regulations include:-
I. Outcome focused.
II. Shared responsibility.
III. Risk minimization.
IV. Impact mitigation.
I & II
III & IV
I, II, III & IV
IV only.
8) The regulatory functions of the Singapore Exchange Limited (SGX) include:-
I. Issuer regulation.
II. Member supervision.
III. Risk management.
IV. Enforcement.
I, II, III & IV
II & IV
I & III
IV only.
9) The main objectives of the Investment Management Association of Singapore
(IMAS) include:-
I. To provide a forum to its members to discuss matters related to the investment
management industry.
II. Promote education of the investing public on investment.
III. To assist its members to make representations to a foreign supervisory
authority related to investment management industry.
IV. Improve fund management expertise in Singapore.
I, II, III & IV
I, III & IV
I & IV
II & III
10) Which of the following statements about principles of the Financial Advisers
Act and the Financial Advisers Rules is/are FALSE?
I. The principle of consistency applies to same products only and does not apply
to similar products.
II. Know Your Client requirement relates to the consistency principles.
III. The Need analysis requirement is part of the Customers' Interest principle.
IV. 'Representative to act for only one principal' is part of the accountability
principle.
I & II
III & IV
I, II, III & IV
IV only.
11) In Singapore, which of the following persons CANNOT ACT as a financial
adviser?
An excluded financial adviser.
A licensed financial adviser.
An exempt financial adviser.
None of the above.
12) Which of the following statements about the definition of Financial Adviser in
the Financial Adviser Act is/are TRUE?
I. It includes Excluded Financial Advisers.
II. It includes a corporation.
III. It includes an individual.
IV. It means a person who carries on the business of providing any financial
advisory services.
II & IV
I only.
I & III
II, III & IV
13) Under the Financial Advisers Act, Exempt Financial Advisers include:-
I. A bank licensed under the Banking Act.
II. A futures exchange in respect of providing financial advisory services which
are incidental to its operations.
III. A securities exchange in respect of providing financial advisory services
which are incidental to its operations.
IV. Any company licensed under the Trust Companies Act.
I, II & III
III & IV
I, II & IV
I & II
14) Which of the following entities are considered Exempt Financial Advisers
under the Financial Advisers Act?
None of the above.
All merchant banks.
Any law corporation.
Any public accountant registered under the Accountants Act.
15) Which of the following entities are NOT considered Excluded Financial
Advisers under the Financial Advisers Act?
A company licensed under the Insurance Act.
Any Joint Law Venture approved under the Legal Profession Act.
Any accounting corporation registered under the Accountants Act.
Any advocate approved under the Legal Professional Act.
16) Definition of an Excluded Financial Adviser under the Financial Advisers Act
DOES NOT include:-
I. A proprietor of a newspaper and holder of a permit under the Newspaper and
Printing Presses Act where the newspaper is distributed to public in Singapore.
II. Any approved trustee under the Securities and Futures Act.
III. Any person who provides credit rating services who issues a report containing
specific recommendations regarding securities.
IV. An Official Assignee while exercising his powers under the Bankruptcy Act.
III only.
I only.
III & IV
I, II, III & IV
17) Excluded Financial Advisers under the Financial Advisers Act include:-
All of the above.
The Public Trustee exercising his powers under the Public Trustee Act.
A person acting in relation to a company as its liquidator.
A person acting in relation to a company as a judicial manager.
18) Types of financial advisory services regulated under the Financial Advisers
Act include:-
I. Advising others through electronic form regarding specified investment
products.
II. Advising others on corporate finance within the meaning of the Securities &
Futures Act.
III. Marketing of any collective investment scheme.
IV. Arranging any contract of insurance in respect of life policies for contracts of
reinsurance.
I & III
I, III & IV
II only.
IV only.
19) Capital markets products include:-
I. Securities.
II. Futures contracts.
III. Arrangements for the purpose of foreign exchange trading.
IV. Contracts for the purpose of leveraged foreign exchange trading.
I, II, III & IV
I only.
II only.
I & II
20) Which of the following products are excluded from the definition of
Investment Products under the Financial Advisers Act (FAA)?
I. Contracts for leveraged foreign exchange trading.
II. General insurance policies.
III. Deposit-taking products.
IV. Loans and mortgages.
II, III & IV
I, II, III & IV
II only.
IV only.
21) The Monetary Authority of Singapore (MAS) takes into account which of the
following factors while assessing an application for a financial adviser's licence?
I. Strength of internal compliance systems.
II. Business plans and projections.
III. Financial soundness of the applicant or its major shareholders.
IV. Management expertise.
I, II, III & IV
22) Which of the following statements about renewal of financial adviser's licence
under the Financial Advisers Act is/are TRUE?
The financial adviser's license normally need not be renewed every year.
23) Grounds for refusal by the Monetary Authority of Singapore to grant financial
adviser's licence include:-
I. If the person is not an individual.
II. If the person is not a corporation.
III. The applicant is convicted of dishonesty outside Singapore.
IV. A receiver has been appointed in respect of a property of the applicant outside
Singapore.
II, III & IV
24) The minimum paid up capital required under the Financial Advisers
Regulations for grant of a financial adviser's licence to an applicant who intends
to provide financial advisory services of issuing analysis or reports concerning
futures contracts is _____.
SGD 300,000 for a Singapore company.
25) A licensed financial adviser, not being a foreign company and which does not
have a preceding financial year, is required to maintain its net asset value at
_____ of the minimum paid up capital at all times.
75%
26) If a licensed financial adviser is in operation for 3 years, he is required to
maintain its net asset value at the prescribed level at all times. For the purpose of
calculation of the minimum level, the 'total expenditure' figure which is
considered EXCLUDES:-
I. Staff bonuses which are guaranteed.
II. Director's share in profits which are guaranteed.
III. Employee's share in profit which is not guaranteed.
IV. Any commission paid by the financial adviser to its representative which is
not directly related to the commission received by the financial adviser.
III only.
27) The clientele restrictions for exempt persons under the Financial Advisers Act
include:-
I. Exempt fund managers who serve up to 30 qualified or accredited investors.
II. Exempt financial advisers who serve up to 30 qualified investors.
III. Exempt financial advisers who serve up to 30 accredited investors.
IV. Exempt leveraged foreign exchange traders who limit their clientele to
accredited investors.
I, III & IV
28) An exempt person is expected to maintain paid up capital that is sufficient __.
To cover the setup cost and at least 6 months of operational expenses.
29) Under the Securities and Futures Act and the Securities and Futures
Regulations, definition of an accredited investor includes:-
I. An individual whose net personal assets exceed SGD 10 million in value or
equivalent in foreign currency.
II. A corporation with net assets exceeding SGD 10 million in value or equivalent
in foreign currency.
III. A trustee of a trust having the value of its property and rights in excess of
SGD 5 million.
IV. An entity (other than a corporation) with net assets exceeding SGD 10 million
in value or equivalent in foreign currency.
II & IV
30) Which of the following entities is NOT included in the definition of an
accredited investor under the Securities and Futures Act and the Securities and
Futures Regulations?
A Limited liability partnership in which each member is an expert investor.
31) The term qualified investor refers to __.
A close-end fund whose units are subject of an offer for purchase made only to accredited
investors.
32) A licensed financial adviser can use the term 'Independent' in respect of
provision of any financial advisory service if ____.
All of the above.
33) Financial institutions intending to appoint a financial adviser representative
are required to __.
Lodge a notice of intent with the Monetary Authority of Singapore (MAS).
34) The Representative Notification Framework (RNF) is applicable to individuals
carrying out financial advisory activities as representatives of:-
I. Licensed financial advisers.
II. Banks.
III. Merchant Banks.
IV. Insurance companies
I, II, III & IV
35) The Representative Notification Framework (RNF) DOES NOT apply to __.
Fund managers who serve no more than 30 qualified investors.
36) An appointed representative can be a representative of more than one
principal only if _____.
The principals are related corporation.
37) Which of the following statements about appointed and provisional
representatives is/are TRUE?
I. Appointed representatives meet the relevant entry requirements.
II. The Provisional Representatives are yet to meet the entry requirements.
III. The Provisional Representatives are given 6 months to pass the relevant
examinations.
IV. The Appointed Representatives have cleared the relevant examination.
I & IV
38) The criteria for an individual to be appointed as a Representative include:-
I. He must be at least 18 years old.
II. He must satisfy the relevant 'fit and proper' criteria.
III. He must have a sound financial background.
IV. He must have at least 5 years experience as an assistant in a financial advisory
services firm.
II only.
39) A person who acts as a Representative of a financial adviser without meeting
the relevant criteria is found guilty under the Financial Advisers Act. On
conviction, he is liable to __.
A fine not exceeding SGD 25,000 or imprisonment up to 12 months or both.
40) If a licensed financial adviser being a principal allows an individual to act as
his representative when the individual does not meet the relevant criteria for
acting as a representative. On conviction, what penalty is he liable to?
A fine not exceeding SGD 50,000.
41) The criteria for an individual to be an Appointed Representative include ____.
All of the above.
42) What happens if the licence of the principal of an appointed representative
(AR) is suspended?
The AR will cease to be treated as an AR immediately upon such suspension.
43) If an individual ceases to be a representative of a principal, the principal
needs to furnish the particulars of such cessation to the MAS ____.
No later than the next business day.
44) Criteria for being appointed as a provisional representative DO NOT include
__.
Not being previously appointed as an appointed representative.
45) An individual can be a provisional representative for a maximum period of
___ from the date his name is entered in the public register of representatives.
3 months.
46) In case a provisional representative satisfies the examination requirements,
his principal is required to inform the Monetary Authority of Singapore (MAS)
within _____.
3 months.
47) A provisional representative needs to be previously licensed, authorised or
otherwise regulated in relation to a comparable financial advisory service in a
comparable overseas jurisdiction for a minimum period of _____.
12 months and not more than 12 months ago.
48) When there is a change in any particulars of an appointed representative in
any document required to be submitted to the Monetary Authority of Singapore
(MAS), the principal is required to inform the MAS within ____.
14 days of the change.
49) A principal is required to undertake which of the following responsibilities in
relation to its provisional representative?
He must ensure that the representative is accompanied by an authorised person when
meeting a client.
50) Under which of the following circumstances can the Monetary Authority of
Singapore revoke the status of an individual appointed as an appointed
representative?
I. If the representative is an undischarged bankrupt in a country outside
Singapore.
II. Execution against the representative in respect of a judgment debt has been
returned partially unsatisfied.
III. He has been convicted of an offence involving dishonesty outside Singapore.
IV. He had entered into a scheme of arrangement with his creditors in the past,
even if the scheme is not currently in operation.
I, II & III
51) If a principal lodges a misleading document with the Monetary Authority of
Singapore, on conviction he shall be liable be:
fined.
52) In case a person is aggrieved by a suspension of his status as a provisional
representative by the Monetary Authority of Singapore ____
If he appeals, the decision of the appellate authority shall be final.
53) If a licensed financial adviser receives a client's money for a collective
investment scheme, normally the money has to be handed over the provider of the
collective investment scheme ____.
Not later than the next business day following the day of receipt of the money.
54) Withdrawals from the bank account maintained by the financial adviser for
life insurance broking premiums can be made under which of the following
circumstances:-
I. For payment of money to itself if it is entitled to receive the money.
II. For payments due to the insurer in relation to the insurance contract.
III. For making investments in bonds.
IV. For repayment of erroneous deposits made in the account.
I, II & IV
55) In case an investment made by a financial adviser from the money received
from a client on account of premiums for life insurance suffers a loss ____.
The adviser needs to make good the loss by depositing sufficient money into the account.
56) Which of the following statements about interest arising from any payment
due to the insurer under a contract of insurance is/are TRUE?
May not be retained by the financial adviser for his own account after the credit period.
57) Under the Financial Advisers Act, exempt financial advisers are not allowed
to negotiate and place risks of insurance with unlicensed insurers except ____.
All of the above.
58) What is the penalty stipulated for the licensed financial adviser who is
convicted of a contravention of the 'Conflict of Interests' provisions laid down in
the Financial Advisers Act?
Fine not exceeding SGD 25,000, imprisonment for a term not exceeding 12 months, or
both.
59) A licensed financial adviser is required to maintain details of his interests in
securities in the Register of Interests in Securities. Which of the following
statements about this requirement is/are FALSE?
I. Particulars of acquisition of any security need to be entered in the register
within 14 days of such acquisition.
II. Particulars of any change in interest in securities need to be entered in the
register within 7 days from the date of change.
III. The entries in the register need to be maintained for at least 3 years.
IV. A copy of the register is to be kept in Singapore.
I & III
60) A licensed financial adviser is not allowed to grant any unsecured advance to
any of its employee if the aggregate and outstanding amount at any time exceeds
____.
SGD 3,000.
61) In the context of grant of unsecured loan to a director of a licensed financial
adviser, the term director includes which of the following relations of the
director?
I. Father.
II. Step-father.
III. Step-sister.
IV. Step-son.
I, II, III & IV
62) In the context of grant of unsecured credit facility to its employees by a
licensed financial adviser, the term 'market value' in relation to assets which are
securities listed for quotation is determined by which of the following methods?
The last transacted price of the securities on the exchange on the immediately preceding
business day.
63) An 'unsecured advance' includes:-
I. An advance made with security, if the market value of the security is above the
amount of the unsecured advance.
II. A guarantee provided by the licensed financial adviser for any advance being
granted by another party to its officers.
III. Provision of a security by the financial adviser for an advance granted by
another party to its employees.
IV. An undrawn credit facility without security.
II, III & IV
64) A licensed financial advisers which is not a foreign company is required to
obtain prior approval from MAS ____.
All of the above.
65) The directors of a licensed financial adviser can be reappointed immediately
on expiry of the earlier term ____.
Without approval of the Monetary Authority of Singapore (MAS).
66) The Monetary Authority of Singapore may direct removal of any officer of a
licensed financial adviser if ____.
All of the above.
67) The Monetary Authority of Singapore (MAS) prohibits an exempt financial
adviser from employing any person as a financial adviser. What is the penalty if
the exempt financial advisor contravenes this direction of the MAS?
Fine not exceeding SGD 50,000.
68) An 'officer' in relation to an unincorporated association (other than a
partnership) means:-
I. Its Director.
II. Its Secretary.
III. Its President.
IV. A person purporting to act as its Secretary.
II, III & IV
69) An officer of a licensed financial adviser who fails to take all reasonable steps
to ensure compliance with any provision of the Financial Advisers Act is liable on
conviction to __.
Fine not exceeding SGD 100,000, or imprisonment for a term not exceeding two years, or
both.
70) If an auditor of an exempt financial adviser wilfully destroys an entry in any
statement of the business, on conviction he shall be liable to _____.
Fine not exceeding SGD 100,000, or imprisonment for a term not exceeding two years, or
both.
71) An intermediary assesses that a customer does not possess the relevant
knowledge and experience for allowing his account for trading in a specific
derivative product. However, the customer insists on trading in the product. What
should the intermediary do?
I. Inform the Monetary Authority of Singapore about this.
II. Inform the customer that he does not possess the required knowledge to trade
in the product.
III. Provide 'execution only' service to the client.
IV. Put a lower trading limit for such trading.
II & IV
72) Notice on Recommendations on Investment Products (FAA-N16) applies to:-
I. Licensed financial advisers.
II. Unlicensed financial advisers.
III. Representative of exempt financial advisers.
IV. Exempt financial advisers.
I, III & IV
73) Requirements of the Notice on Recommendations on Investment Products
(FAA-N16) DO NOT apply in relation to recommendations regarding which of the
following?
I. Policies to cover outstanding personal loans.
II. Policies that cover car loans.
III. Mortgage reducing term assurance plans.
IV. In transactions where only subjective information is provided with respect to
an Excluded Investment Product.
I & II
74) While making recommendations for any Specified Investment Product (SIP) to
its customer, a licensed financial adviser is required to consider which of the
following factors?
I. Customer's knowledge and experience in the SIP.
II. Customer's investment objectives.
III. Customer's financial situation and needs.
IV. His own financial standing.
I, II & III
75) The 'Know Your Client' requirement in the Financial Advisers Act requires
that the financial adviser should collect information about:-
I. The source and amount of client's regular income.
II. The employment status of the client.
III. The life policies of the client.
IV. If the amount to be invested is a substantial portion of the client's assets.
I, II, III & IV
76) In the context of an unlisted Specified Investment Product (SIP), if a client
does not disclose his educational qualifications, investment experience or work
experience to a financial adviser, he shall ____.
Consider that the client does not possess knowledge or experience in the unlisted SIP.
77) In case a financial adviser assesses that a client possesses the knowledge and
experience in an unlisted Specified Investment Product (SIP) ____.
He will still have to offer to provide advice to the client on the suitability of the product.
78) If a client specifically states that he does not require any advice from the
financial adviser regarding an unlisted Specified Investment Product (SIP), the
financial adviser:-
I. Shall document the decision of the client.
II. Shall highlight in writing that the suitability of the SIP is the client's
responsibility.
III. Communicate in writing that the adviser still remains liable for a civil claim
with respect to any loss suffered by the client.
IV. Obtain a confirmation from the client that he wants to proceed without advice.
I, II & IV
79) A client is assessed by a financial adviser not to possess the knowledge and
skills for an unlisted Specified Investment Product, but the client still intends to
transact in the product. Transaction can be allowed in the stock if a senior
management staff who is directly involved in the particular sales transaction ____.
None of the above.
80) Which of the following documents are required to be furnished when making
product recommendations related to life policy?
All of the above.
81) In determining whether a switch from one product (original product) to the
another product (replacement product) is detrimental for a client or not, the
financial adviser will consider which of the following factors?
I. The penalty involved in termination of the original product.
II. Transaction costs involved, without commensurate benefits.
III. Potential of the replacement product to outperform the markets.
IV. Suitability of the replacement product for the client.
I, II & IV
82) A person who contravenes a requirement specified in a written direction by
the Monetary Authority of Singapore (MAS) shall be liable on conviction for
_____.
A fine not exceeding SGD 25,000.
83) The general standards which financial advisers are required to meet in all
product information disclosures and information given to clients include:
I. Clarity of information.
II. Adequacy of information.
III. Unbiased opinion.
IV. Correctness of predictions.
I, II & III
84) A representative of a financial adviser is required to disclose which of the
following information to the client about himself?
I. Types of financial advisory services he is authorised to provide under the
Financial Advisers Act.
II. Types of investment products in respect of which he is authorised to provide
advisory services.
III. His annual income during the past 3 years.
IV. Annual income of his spouse during the past 3 years.
I & II
85) A financial adviser is required to disclose which of the following types of
remuneration received by him in respect of an investment product being
recommended?
I. Trailer commission.
II. Soft commission.
III. Fees.
IV. Description of unquantifiable benefits in respect of the investment product.
I, II, III & IV
86) In case a financial adviser is recommending a life policy to a client, he is
required to disclose __.
Distribution costs.
87) Which of the following information is required to be disclosed by a financial
adviser regarding designated investment products?
I. Investment strategy of the product.
II. Business address of the product provider.
III. Whether the product is for protection, savings or investment.
IV. Commitment required from the client.
I, II, III & IV
88) In the context of the intended client profile for a designated investment
product, the financial adviser is required to disclose which of the following
information?
I. Intended investment horizon.
II. Ease of conversion into cash.
III. Financial standing of the client.
IV. Expected level of risk tolerance.
I, II & IV
89) In respect of a life policy, a financial adviser is required to disclose and
explain __.
All of the above.
90) Which of the following information is required to be disclosed by a financial
adviser regarding an investment-linked policy?
The fact that single pricing scheme does not take into account subscription fees.
91) Regarding illustration of past and future performance of designated
investment products by financial advisers, which of the following statements
is/are FALSE?
The financial adviser is required to refer to the benefits illustration in case of a collective
investment scheme.
92) The relevant notice on dual currency investments (FAA-N11) DOES NOT
apply to licensed financial advisers who advise which of the following types of
investors?
I. Accredited investors.
II. Expert investors.
III. Institutional investors.
IV. Sophisticated investors.
I, II & III
93) Exempt financial advisers who advise certain type of clients are exempt from
following the provisions in the notice on dual currency investments (FAA-N11).
The type of these clients include?
I. An individual outside Singapore partly dependent on a citizen of Singapore.
II. An individual outside Singapore who is not a permanent resident of Singapore.
III. An individual outside Singapore who is not a citizen of Singapore.
IV. A person outside Singapore having no commercial or physical presence in
Singapore.
II, III & IV
94) While describing or referring to a dual currency investment product, a
financial adviser cannot use which of the following terms?
I. Returns.
II. Deposit.
III. Yield.
IV. Structured deposit.
II & IV
95) The information required to be disclosed by a financial adviser in respect of
dual currency investment include(s):-
I. Potential benefits of such investments.
II. Nature of dual currency investments.
III. Impact of interest rate movements.
IV. Mechanics of dual currency investments.
I, II & IV
96) The information required to be disclosed by a financial adviser in respect of
dual currency investment includes ____.
All of the above.
97) A prospectus, not being one for a trust investing in specified real estate and
real estate assets, must NOT:-
I. Contain any prediction as to the likely performance of the scheme.
II. Include a forecast in relation to the stock market.
III. Use the word 'expected' or similar words or description in relation to the rate
of return for the scheme.
IV. Include a forecast in relation to the economy.
I & III
98) The prospectus of a trust investing in real estate specified by the Monetary
Authority of Singapore may include a projection in relation to the scheme
provided that:-
I. The forecasted yields in percentage terms are on a quarterly basis.
II. It highlights that percentage yields are calculated based on the existing unit
price.
III. The assumptions underlying the forecast are reasonable.
IV. The assumptions underlying the forecast are clearly stated.
III & IV
99) The forecast in the prospectus of a trust which invests in real estate or real
estate assets should be accompanied by a declaration by the auditor of the scheme
that the forecast is ____.
All of the above.
100) If the return on a collective investment scheme is guaranteed, the return is to
be presented on _____.
Average annual compounded basis.
101) If a financial adviser discloses information on the past performance of a
collective investment scheme, the return can be calculated _____.
On an offer-to-bid basis.
102) Disclosures relate to the past performance of a collective investment scheme
shall present the returns on a scheme in relation to a period not less than __.
One year.
103) In the context of disclosures related to past performance of a collective
investment scheme, the last day of period to which the return on a scheme relates
should not be ____.
Earlier than 3 months prior to the disclosure.
104) In case a collective investment scheme (CIS) invests in another CIS (the
underlying fund), the past performance of the underlying fund needs to be
disclosed if _____.
The underlying fund has a track record of at least one year.
105) If a financial adviser discloses any comparison of the past performance of a
Collective Investment Scheme (CIS) with another CIS or an index:-
I. The other CIS should have similar investment objectives.
II. The other CIS should have similar investment focus.
III. The comparison with another CIS has to be on a bid-to-bid basis.
IV. Comparison with the index cannot be on an bid-to-bid basis.
I & II
106) Regarding comparison of past performance of a collective investment scheme
with that of other forms of investment, which of the following statements is/are
FALSE?
The comparison can be made on an bid-to-bid basis.
107) Meaning of an 'Excluded Investment Product' includes:-
I. Stocks issued by a body unincorporate.
II. Shares issued by a corporation being an investment scheme.
III. An option proposed to be issued by a body unincorporate in respect of its own
shares.
IV. A unit in a business trust.
I, III & IV
108) A collective investment scheme is considered an 'Excluded Investment
Product' if _____.
It is a trust.
109) A debenture is an 'Excluded Investment Product' if ____.
It is issue by a company.
110) Which of the following is NOT an 'Excluded Investment Product'?
I. An investment linked life insurance policy.
II. Shares issued by a corporate which are quoted in a securities market operated
by an approved exchange.
III. A unit in a collective investment scheme quoted in a securities market not
operated by an approved exchange.
IV. A contract where a party agrees to exchange currency at an agree rate with
another party, where such exchange is effected at a futures date.
I, III & IV
111) A client can be assessed as possessing the knowledge and experience in an
unlisted Specified Investment Product if he holds a diploma in __.
All of the above.
112) A financial adviser can consider a client to possess knowledge and
experience in an unlisted Specified Investment Product if the client has:-
I. Passed the Chartered Financial Analyst examination.
II. A diploma in economics.
III. A diploma in computational finance and insurance.
IV. A diploma in actuarial science.
I, II, III & IV
113) A client is considered to possess knowledge an experience in the relevant
unlisted Specified Investment Product (SIP) if _____.
He has transacted in collective investment schemes at least 6 times in preceding 3 years.
114) A client can be considered to possess knowledge and experience in Specified
Investment Product (SIP) if he has the required work experience in:-
I. Providing legal advice related to sale of investment products.
II. Accountancy.
III. Providing legal advice related to treasury risk management.
IV. Actuarial science.
I, II, III & IV
115) The minimum period of relevant work experience required by a client to be
considered as possessing knowledge and experience in Specified Investment
Product (SIP) is _____.
3 consecutive years work experience in the preceding 10 years.
116) Even if a client is assessed to not possess the knowledge and experience in
Specified Investment Product (SIP), he can be deemed to possess the knowledge
and experience if _____.
None of the above.
117) A financial adviser should NOT appoint a person as an introducer if the
introducer is __.
An individual, but introducing is his full-time occupation.
118) In engaging an introducer, a financial adviser is required to comply with
which of the following requirements?
I. The adviser should have a written agreement with the introducer.
II. The adviser should ensure that the introducer does not get involved in
providing any financial advisory service to the client, other than that required for
introducing.
III. The introducer should disclose the remuneration receive by him from the
financial adviser to the client.
IV. The adviser should ensure that the introducer receives only the required
amount of money from the clients for execution of the relevant transactions.
I, II & III
119) The Capital Markets and Financial Advisory Services Examination
requirements apply to individuals who wish to provide which of the following
types of advisory services? Providing advise:-
I. In electronic form for securities.
II. In print form for collective investment schemes.
III. On corporate finance within the meaning of the Securities and Futures Act.
IV. Through publications for futures contracts.
I, II & IV
120) The Capital Markets and Financial Advisory Services Examination
requirements apply to individuals who intend to provide advisory services:-
I. Related to arrangements for foreign exchange trading.
II. Life policies.
III. Marketing of collective investment schemes.
IV. Arranging a contract of reinsurance in respect of life policies.
I, II & III
121) The Capital Markets and Financial Advisory Services Examination
requirements DO NOT apply to individuals intending to provide which of the
following advisory services?
I. Those related to contracts for leveraged foreign exchange trading.
II. Those related to structured deposits.
III. Advising on corporate finance within the meaning of the Securities and
Futures Act.
IV. Issuance of printed research reports related to futures contracts.
II & IV
122) In which of the following cases the Capital Markets and Financial Advisory
Services Examination requirements DO NOT apply to individuals intending to
provide advisory services?
Promulgation of research analysis for collective investment schemes in electronic form.
123) The Monetary Authority of Singapore (MAS) notice 117 issued under the
Insurance Act DOES NOT apply to policies where accident and death benefits are
paid out:-
I. Only on death of the insured by accident.
II. On injury and disability of the spouse of the insured due to accident.
III. On total disability of the spouse of the insured due to accident.
IV. Only on permanent disability of the insured due to accident.
I & IV
124) Any person who holds himself out to be an appointed representative of a
financial adviser must possess which of the following qualifications?
Any one of the above or equivalent.
125) One of the criteria for exemption of a representative from passing Modules
6, 7, 8 & 9 of the CMFAS is that there should be no break in service of more than
_____ between his last working experience as a representative and his principal's
lodgement of the required documents with the MAS
Six months.
126) Individuals with which of the following qualifications will not be required to
pass Modules 6A of the CMFAS examination?
I. A degree in financial engineering.
II. A diploma in finance.
III. A diploma in computational finance.
IV. Chartered Financial Institute (CFA) by ICFAI, India.
I only.
127) Individuals meeting which of the following criteria are NOT required to meet
the CMFAS examination requirements? Those who provide financial advisory
services:-
I. Only in respect of capital market products to sophisticated investors.
II. Only to institutional investors.
III. Only to a related corporation of the financial adviser whom the representative
represents.
IV. Only to expert investors for collective investment schemes.
II & III
128) Individuals meeting which of the following criteria are exempted from
meeting the CMFAS examination requirements? Any individual providing
financial advisory services only _____
All of the above.
129) An individual who passes the Module 5 of the CMFAS Examination is
required to retake and pass the Module 5 if he does not commence providing any
financial advisory services with a financial advisor within _____ years from the
date of passing of the module.
3 years.
130) A financial adviser is required to report which of the following misconduct
by its representative?
I. Commission of fraud.
II. Commission of dishonesty.
III. Commission of an offence involving criminal breach of trust.
IV. Commission of an offence involving forgery.
I, II, III & IV
131) In case a financial adviser suspects that its representative has committed an
offence involving cheating, what action should he take?
All of the above.
132) Which of the following is NOT a misconduct of the representative which
should be reported by a financial adviser to the Monetary Authority of Singapore
(MAS)?
A serious breach of the financial adviser's internal policy leading to a warning being
issued by the financial adviser to the representative.
133) If a representative of a financial adviser fails to meet the continuing
education requirements _____.
The financial adviser need not report the matter to the MAS.
134) If in any particular year there is no misconduct to report by the financial
adviser in respect of its representatives, the financial adviser _____.
Is required to submit a declaration in the prescribed form to that effect to the Monetary
Authority of Singapore (MAS) within 14 days after 31 December of that year.
135) The notice on cancellation period for Unlisted Debentures (FAA-N15)
applies to:-
I. Those holding the financial adviser's licence.
II. Exempt financial advisers.
III. Representatives of financial advisers.
IV. Excluded financial advisers.
I, II & III
136) The notice on cancellation period for Unlisted Debentures (FAA-N15) DOES
NOT apply to which of the following?
I. Purchase of unlisted debentures by a corporation.
II. Purchase of unlisted debentures by an individual.
III. Unlisted debentures having tenures greater than three months.
IV. Unlisted debentures which are exempt from prospectus requirements under the
Securities and Futures Act.
I & IV
137) In the context of sale of Unlisted Debentures, a relevant person is required to
disclose and explain to the client:-
I. The time frame for the client to reconsider his purchase.
II. The terms of exercising the right to cancel the purchase.
III. The procedure for exercising his right to cancel the purchase.
IV. That the risk in any fall in value of the unlisted debenture during the
cancellation period is to be borne by the issuer.
I, II & III
138) In the report of misconduct of a representative submitted to the Monetary
Authority of Singapore, the financial adviser is required, where possible, to
include which of the following information?
I. Circumstances under which the misconduct was discovered.
II. The number of clients impacted.
III. The amounts involved in percentage terms with respect to the investment.
IV. Whether the individual was cooperative during the investigation.
I, II & IV
139) If a financial adviser submits a false and misleading document to the MAS,:
he will be fined upon conviction.
140) In the context of minimum entry requirements for an appointed
representative, a full GCE A Level certificate includes:
At least passes in 3 Higher 2 and 2 Higher 1 subjects.
141) Which of the following statements about Structured Continuing Professional
Development (CPD) training is CORRECT?
Structured CPD may include eLearning courses which have clear learning objectives and
outcomes.
142) Ken is an appointed representative who provides financial advisory service
in relation to Marketing of a collective investment scheme. What is the pro-rated
minimum number of training hours in Rules and Regulations required by Ken if he
was appointed for 273 days as an appointed representative of his principal in the
calendar year?
6 hours
143) Ben is an appointed representative and completes 2 hours of structured CPD
training on Medishield Life Scheme content required under the relevant MAS
notice in the calendar year 2016. In this context, which of the following
statements is/are CORRECT?
Ben may treat the 2 hours of that structured CPD training as Equivalent CPD hours for
the same calendar year.
144) In the Notice on Requirements for the Remuneration Framework for
Representatives and Supervisors (Balanced Scorecard Framework) and
Independent Sales Audit Unit (FAA-N20), the term infraction means the failure by
the representative to meet:
any of the non-sales key performance indicators.
145) Under Notice FAA-N20, the term Selected Representative refers to a
representative who has been assigned a balanced scorecard grade ___ under the
balanced scorecard
framework consecutively for ___ calendar quarters immediately preceding the
measurement quarter.
B or worse, 2
146) In the Notice FAA-N20, the term Post-transaction in the case of a life policy
refers to the period of time after the policy is issued, the policy takes effect, or
the cover has commenced, whichever is:
Latest
147) What does Specified Variable Income in relation to a representative mean?
The proportion of variable income of the representative measured against the non-sales
key performance indicators.
148) In relation to a supervisor, specified variable income means:
The proportion of variable income of the supervisor measured against the performance of
his representatives under the balanced scorecard framework.
149) In the case of a life policy, the term Transaction DOES NOT include:
Purchase leg of a switch of funds for an investment-linked policy which is free of charge.
150) In relation to a representative, the term variable income refers to the amount
of remuneration payable to the representative which varies and depends upon:
I. The value of investment products in relation to which financial advisory
services are provided by the representative to clients.
II. The number of transactions relating to any investment product entered into by
clients to whom the representative provided any financial advisory service.
III. The total amount of consideration paid by clients to whom the representative
provided any financial advisory service for investment products.
IV. The total amount of premiums paid under life policies paid by clients to whom
the representative provided any financial advisory service.
I, II, III & IV
151) The Independent Sales Audit (ISA) Unit of a financial adviser CANNOT
comprise of a person who:
Indirectly manages the conduct and performance of a class of representatives of the
financial adviser.
152) Which of the following statements in relation to the ISA Unit of the
Financial Adviser is CORRECT?
None of the above
153) The ISA Unit is required to submit reports on its audit of the quality of
financial advisory services provided in every calendar quarter by the
representatives of the financial adviser. The reports must be submitted by the end
of ____ calendar quarters immediately subsequent to the measurement quarter.
Two
154) The ISA Unit's reports on its audit
of the quality of financial advisory services provided by the representatives of the
financial adviser can be submitted to which of the following persons/entities?
The board and chief executive officer of the financial adviser.
155) Which of the following entities reviews and assesses the findings of mystery
shopping exercises regarding the performance of a financial adviser's
representatives against the non-sales KPIs?
The Financial adviser.
156) Which of the following entities classifies the infractions committed by the
representative of a Financial adviser?
The ISA unit.
157) ____ assigns the balanced scorecard grade to the representative under the
Representatives?? Grading Table.
The Financial adviser.
158) If a financial adviser remunerates his representative for provision of
financial advisory services by variable income only, it must measure only ____ of
the variable income provided or to be provided to the representative in the
calendar quarter against the non-sales KPIs.
60%
159) If a financial adviser remunerates his representative for provision of
financial advisory services by a fixed salary and a variable income component, it
must measure what percentage of the variable income provided or to be provided
to the representative in the calendar quarter against the non-sales KPIs?
100%
160) For a new representative who has provided financial advisory service for 2
months, a financial adviser must use which of the following methods for
determining the population for sampling of transactions?
Actual transaction count method.
161) For transactions executed in the calendar quarter of 1 April to 30 June 2016,
the ISA Unit should carry out and complete the post-transaction checks on every
sampled transaction latest by:
End of September 2016
162) For a selected representative, in the first round of post-transaction checks,
the ISA Unit must sample a minimum of ____ of the population for sampling.
10%
163) Robin is a Selected Representative, and in the first round of post-transaction
checks, the ISA Unit has discovered that he has committed two category 1
infractions. In this context, which of the following statements is CORRECT?
The ISA unit must conduct a second round of post-transaction checks by sampling a
minimum of an additional 10% of the population for sampling.
164) Alice is a representative who only provides financial advisory services
regarding rollovers of a dual currency investment. During the first round of post-
transaction checks, the ISA unit has found that Alice has committed one category
2 infraction. In this context, which of the following statements is/are
INCORRECT?
All of the above.
165) Ron is selected representative and the ISA unit discovered in the second
round of post-transaction checks that he has committed several category 2
infractions. What is the minimum additional sampling required in the 3rd round of
post-transaction checks in relation to Ron?
20% of the population.
166) A financial adviser conducts a mystery shopping exercise in respect of one
of its representatives in August 2016 and completes the review and assessment of
the mystery shopping findings in October 2016. It is found that the representative
has committed two category 1 infractions in August 2016. In this context, which
of the following statements is CORRECT?
The infraction must be factored into the representative's performance under the balanced
scorecard framework in the calendar quarter of October 2016 to December 2016.
167) Which of the following statements regarding classification of infractions
committed by representatives is INCORRECT?
Category 2 infractions refer to minor administrative oversights in relation to a sampled
transaction which do not affect client??s interest or impinge on the fitness and propriety
of the representative.
168) An ISA Unit must classify an infraction as Category 1 infraction if it
determines that in relation to the quality of the financial advisory services
provided by the representative to the client, the infraction:
I. Has a material impact on the interests of the client.
II. Impinges on the fitness and propriety of the representative.
III. Is a minor lapse, such as an unintended and non-material clerical mistake,
discovered during sampling.
IV. Is a minor administrative oversight such as not filling in the name of the
dependants during a fact-find exercise.
I & II
169) In the Representatives?? Grading Table under the Balanced Scorecard
framework, if the percentage of cases with Category 2 infractions in a calendar
quarter is 5%, the number of Category 2 infractions is two, and there is no
Category 1 infraction, what grade should be assigned to the relevant
representative?
B
170) In the Representatives?? Grading Table under the Balanced Scorecard
framework, the number of category 2 infractions committed by a representative in
a calendar quarter is four, which is 20% of the cases sampled for the quarter. If
there is no Category 1 infraction, what grade should be assigned to the
representative?
D
171) John has committed only category 2 infractions during a calendar quarter. It
was determined that John committed total three category 2 infractions out of
fifteen cases sampled for the calendar quarter. What percentage of specified
variable income will John be entitled to for a calendar quarter as per the
Representative's Grading Table under the Balanced Scorecard Framework?
50% to less than 75%
172) Mary, a representative, has been providing financial advisory services
continuously for the past 4 years. How will the ISA unit determine the population
for sampling for conducting post-transaction checks?
By the Historical average transaction count method based on the quarterly average
transaction count of Mary over the past 12 months immediately preceding the
measurement quarter.
173) Joseph, a representative is found to have one case with Category 1 infraction
arising from a
substantiated complaint and four cases with Category 2 infraction arising from
post-transaction checks. If his specified variable income in the measurement
quarter is $30,000, what will be the maximum possible value of the apportionment
to cases with infractions arising from post-transaction checks (income Y)?
$18,000
174) The specified variable income of a supervisor from representative X is
$10,000 and that from representative Y is $20,000 in the calendar quarter of July
to September 2016. Representative X is entitled to 50% of his specified variable
income and representative Y is entitled to 100% of his specified variable income
in the calendar quarter. What is the percentage of total specified variable income
that the supervisor is entitled to in the calendar quarter?
83.33%
175) A financial adviser must keep records of every assessment and determination
made under the
balanced scorecard framework for a period of not less than ____ years.
5