M1B set 2:80 questions

1) A CMS Licensed Holder shall, after the end of its financial year lodge that account
and balance-sheet with the MAS within

a) 1 month
b) 3 months
c) 5 months
d) 6 months

2) Under the SFA, a TR man be representative of more than one CMS Licensed Holder

a) True
b) False

3) A Capital Market Services License Holder in securities dealings shall not appoint a
Representative unless that person has been approve by

a) MAS
b) Securities Industry Council
c) SGX-ST
d) The President of the SGX-ST

4) The CMS Representative’s License will only be granted to

a) A natural person
b) A body corporate
c) A partnership
d) Any of the above

5) Under the SFA, a Capital Market Services Licensed Holder shall keep such books as
will sufficiently explain the transactions and financial position of its business for a
period of not less than

a) 3 years
b) 5 years
c) 6 years
d) 7 years

6) The SFA grants exemptions to the following financial institutions EXCEPT

a) A Bank licensed under the Banking Act

b) A Merchant Bank approved by MAS
c) A person Licensed under the Financial Advisors Act
d) None of the above
7) The SFA is administered by

a) SIC
b) MAS
c) SGX-ST
d) Minister for Finance

8) Upon revocation of a Capital Market Servicers Representative’s license, an appeal

may be made to the

a) MAS
b) High Court
c) Minister for Finance
d) SIC

9) What constitutes a Capital Market Services Licensed Holder

a) A natural person
b) A body corporate
c) A partnership
d) A sole proprietor

10) The Securities and Futures Regulations is administered by

a) Singapore Exchange Securities Trading (SGX-ST)

b) Monetary Authority of Singapore
c) Securities Industry Council
d) Minister for Finance

11) Which of the following is NOT an Exempt Person under the SFA

a) A Bank licensed under the Banking Act

b) A Merchant bank approved by Mas
c) A Company or society registered under the Insurance Act
d) A Company solicitation business in buying and selling of shares

12) Capital Market Services License and Representative’s license issued under the SFA
are valid for a period of three years. However, the license fee is payable on an annual
basis

a) True
b) False

13) The CMS Representative’s License is granted by

a) Securities Industry Council

b) Monetary Authority of Singapore
c) Singapore Exchange Securities Trading (SGX-ST)
d) Minister for Finance
14) A person who holds ______ or more of the voting shares of a Company is deemed a
substantial shareholder of that company

a) 5%
b) 10%
c) 30%
d) 50%

15) Any amendment or addition to the SGX-ST rules shall be subjected to the approval of

a) MAS
b) SGX-ST
c) SIC
d) Minister for Finance

16) The SGX-ST administers all of the following except

a) Listing requirement
b) Corporate Disclosure Policy
c) Code on Takeovers
d) SGX-ST Rules

17) Corporate debentures are allowed to be listed on the SGX-ST

a) True
b) False

18) The appointment of Chief Executive Office and Director of a Capital Market Services
Licensed Holder’s required the prior approval of MAS

a) True
b) False

19) Mary sold 5 lots of ABC shares through John, a TR with AA Member Company. On
due date, Mary deliver the physical shares to John and AA Member Company refused
to accept them. CDP instituted a buy-in. Mary suffer a loss of $1,000 as a result. Who
is responsible for the losses

a) Mary
b) TR John
c) AA Member Company
d) All of the above

20) Which of the following is not contained in the contract note

a) The quantity of shares and the price

b) The brokerage
c) The TR’s name
d) The name of shares purchased
21) A contract purchased from the Ready Market is due on the

a) 3rd calendar day

b) 3rd market day
c) Same day
d) None of the above

22) A customer has a sub-account opened with a Depository Agent, he can sell those
shares that pledged with the Depository Agent through

a) Any Trading Member he had account with

b) Any Trading Member approved by the Depository Agent
c) He need to get the consent of the Depository Agent before he is allow to sell
d) None of the above

23) A client effected an advance payment via a cheque on Friday 4 pm. When should the
Trading Member deposit the cheque to its customer’s trust account

a) Latest by 5pm on the same day

b) Latest by Saturday
c) Latest by the following Monday
d) Any time, but not later than the due date

24) Payment to clients for their sale proceeds of their shares can be in the form of physical
cash, provided that the account department can

a) Obtain the clients’ request in writing

b) Get the approval of the director of the Member Company
c) Obtain verification by the dealer’s representatives
d) None of the above, as cash payment is disallowed

25) A TR has been authorized by his customer to collect statements, contract notes, and
all other information on his behalf. Should the share market turns active, the TR is
allowed to make trading decisions on his behalf

a) True
b) False

26) For a CDP account with no transaction, CDP will only send out

a) Monthly statement
b) Quarterly statement
c) Semi-annual statement
d) Annual statement

27) Who can inspect the Register of interest in Securities of a TR dealing in securities

a) Internal audit department of the Trading Member

 b) Monetary Authority of Singapore
c) Singapore Exchange Securities Trading Limited
d) All of the above

28) Mr Money has been buying and selling shares for 5 years. He feels that he knows
enough about the market, and asked his friends and relatives to buy and sell shares
through him. He expects to be paid some commission for the transactions. Which
license must he obtain

a) Capital Market Services License

b) Capital Market Services Representative’s License in Securities Dealing
c) Exempt Person License
d) Exempt Person’s Representative License

29) A TR does not need to register his interest in securities if he purchases shares with
his/her CPF funds

a) True
b) False

30) Kelly works as an accountant for E&R Trading Member. When her good friend, Sally
joined P&O Trading Member as a TR, Kelly intent to open an account with P&O
Trading Member

a) E&R Trading Member’s approval is needed before the account can be opened
b) Kelly need to seeks approval from a Director of E&R Member Company
c) Kelly is not allowed to open a trading account with P&O Member Company
d) Kelly can open trading account with P&O Trading Company

31) All payment to customers by Trading Member must be crossed. Un-crossing of a

cheque by Trading Member requires

a) Written request by payee customer

b) Approved by a senior management staff independent of sales and dealing of the
Trading Member
c) Both a & b
d) No, un-crossing of cheque is not allowed

32) TR John received a call from his wife, Mary to buy 10 lots of XYZ shares at $1.31 for
her own account, before he could key in the order, a client Eric call to buy 20 lots of
XYZ shares at the same price, TR John should

a) Key in Mary’s order first follow by Eric’s order because Mary call first and this is
known as time priority
b) Key in Eric’s order first follow by Mary’s order because Eric’s order is 10 lots
bigger and this is known as volume priority
c) Key in Mary’s order first follow by Eric’s order because Mary is the wife of John
and this is known as priority to spouse
 d) Key in Eric’s order first follow by Mary’s order because Eric’s is client and this is
known as priority to customer’s orders

33) A TR shell not trade for client unless he first inform his client that he is acting in the
transaction as agent and not as principal

a) True
b) False

34) The time of execution of trade done of a security is incorporated in the contract note

a) True
b) False

35) Trading Member and their Representative shall keep and maintain records of the date
and time of receipt of each other, only when the order has been executed

a) True
b) False

36) A TR of the Trading Member must not execute an order for an account which belong
to the employee of the same Trading Member unless the order is authorized in writing
by

a) A Senior Management staff in charge of the approval function

b) Two Board Members of the Trading Member
c) Any senior management staff of the Trading Member
d) No written approval is required for Trading Member employee’s trading activities

37) If buyer pays before due date, the Trading Member will pay the seller

a) Before due date

b) Against delivery
c) On the due dated
d) On the day after the due date

38) TR John applied an IPO shares on 5th March. He received a confirmation note from
CDP of his successful allotment and that the IPO shares were credited into his CDP
account on 7th March. John sold the shares on 10th March. When must John record his
acquisition in his register of interest in securities

a) 5th March
b) 7th March
c) 10th March
d) None of the above

39) Mary is cash rich and she asks her Remiser John for Advice on how to invest her
funds. John advised her; in his personal capacity a complete portfolio of shares that he
 believes are good investments. Mary agreed and went ahead with John’s
recommendation. John has breach the SGX-ST rules

a) True
b) False

40) Under the SFA, “Officer” in relation to a body corporate means

I. A Director
II. A Management Committee Member
III. A Secretary
IV. A Substantial Shareholder
a) I and II
b) I, II and IV
c) I, II and III
d) I, II, III and IV

41) The penalties of insider trading under the SFA

a) Fine and/or imprisonment

b) Fine and/or reprimand
c) Fine and/or censure
d) None of the above

42) Rules and offences pertaining to insider trading are covered only under the SFA

a) True
b) False

43) The Research department of AA Member Company, upon reviewing of both

fundamental and technical analysis, recommended their clients to buy P&P shares in
their monthly circular despite the fact that AA Member Company stock account is
holding 300,000 of the shares

a) The circular should state that AA Company is holding P&P shares

b) The circular should indicate that AA Member Company is holding 300,000 of
P&P shares
c) All TR of AA Member Company should inform their clients that the company is
holding P&P shares
d) None of the above

44) By virtue of SFA, an ‘officer’ of a corporation does not include

a) The liquidator of the corporation

b) The receiver of a related company
c) The deputy manager of the corporation
d) None of the above
45) Financial Controller of ABC Company, John, knew that his Company is negotiating a
takeover of XYZ Company, but an agreement in principle has not been reached. He
intended to deal indirectly through a friend, David. As John and David were having a
discussion to map out the strategy in a restaurant, a waiter overheard the conversation.
Subsequently, both John and David bought XYZ Company shares using David’s
account with a stock broking company. Later, based on his wife’s advice, John
managed to withdraw his participation. Under these circumstances, who is guilty of
contravening the SFA

a) John
b) David
c) John and David
d) John, David and the waiter

46) Mr A, who is an accountant of a public listed company, obtained price-sensitive

information by virtue of his position. He communicated the information to his wife
and advised her to trade. However, no transaction was made, as his wife is totally not
interested in stock market activities. Under these circumstances, have Mr A and his
contravened SFA

a) Yes, Mr A contravened the SFA

b) Yes, Mrs A contravened the SFA
c) Yes, both Mr and Mrs A contravened the SFA
d) No, both Mr and Mrs A did not contravened the SFA

47) Conviction also gives rise to civil liabilities. Insider contravening person shall be
liable to pay compensation to any person, who in a transaction entered with person
convicted, suffered loss by reason of the difference in price at which securities would
likely to fetch in such transaction had the contravention not taken place

a) True
b) False

48) If a CMS Licensed Holder fails to inform a client that he is acting as the principal, the
client

a) May rescind the contract within 30 days after the contract date
b) May rescind the contract within 30 days after receipt of the contract note
c) May rescind the contract within 14 days after receipt of the contract
d) Not do anything

49) Under the SFA, a reference to Securities is a reference to securities which are

a) Quoted on a recognized stock exchange

b) Quoted on a recognized trading system provider
c) Listed on a recognized stock exchange
d) All of the above
50) When a Holder of a Capital Market Services License to deal in securities enters into a
transaction of sales or purchase of securities as a principal with a person who is not a
holder of a Capital Market Services License to deal in securities shall state in the
contract note that the holder is acting in the transaction as principal and not as agent

a) True
b) False

51) When a Capital Market Services Licensed Holder requires a buying client to pay a
deposit before transaction, the amount collected should be deposited into a trust
account

a) Immediately upon receipt

b) Not later than the business day immediately following the day of receipt
c) When the client’s order is executed and a contract note is issued
d) By the next business day following the due date of the contract

52) Which of the following is/are market conduct offence/s under the SFA
I. Insider Trading
II. False Trading
III. Over Trading
a) I only
b) I & II only
c) II & III only
d) All of the above

53) Should employee of CMS Licensed Holder suspects or has reasonable grounds to
suspect that a customer has engaged in drug trafficking of criminal conduct, the
employee should

a) Do nothing
b) Report to MAS immediately
c) Promptly report to relevant office or unit within the organization who, in turn,
must immediately report the detail to STRO
d) Report to the relevant office or unit within the organization who, in turn, must
promptly evaluate whether there are reasonable grounds for such belief and must
then immediately report the case to STRO

54) Which one of the following is NOT found in the Guidelines on Prevention of Money
Laundering

a) To prepare and maintain proper documentation on its customers and transactions

b) To train all staff and representatives to be fully aware of their responsibilities in
combating money laundering
c) To identify its customers and, if necessary, to ascertain the identity of any
beneficial owners other than the customers
d) None of the above
55) In suspecting money laundering activities, a TR needs only to disclosed his suspicion
but is not required to verify the information

a) True
b) False

56) Which of the following best describe Integration, a stage involved in money
laundering

a) The separation of benefits of drug trafficking conduct from their source

b) The physical disposal of benefits of drug trafficking or criminal conduct
c) The financial transactions designed to disguise the audit trail
d) The provision of apparent legitimacy to benefits of drug trafficking of criminal
conduct

57) Personnel who deal directly with customer are the first point of contact with potential
money launderers. Therefore CMS Licensed Holders should train only these
personnel in their organization to identify suspicious transactions

a) True
b) False

58) The Notice issued by MAS serves as a guideline on “Prevention of Money

Laundering” which relates to

I. Customer identification
II. Record keeping
III. Suspicious Transactions
IV. Compliance and training
a) I, II and III
b) II, III and IV
c) I, III and IV
d) All of the above

59) A higher level of instruction covering all aspects of money laundering procedure
should be provided to Supervisors and Managers of CMS Licensed Holders. This will
include

I. Procedures relating to service of product and restraint orders

II. Internal reporting procedures
III. Offences and penalties arising from the Act
IV. Requirement for verification of identity and the retention of records
a) II, III and IV
b) I, II and IV
c) I, II and III
d) All of the above

60) TR John’s business is very bad and he is in deep financial difficulties. His friend Eric
came to know about it and offer to help. TR John is aware that Eric is involve in drug
 dealing, however, the reward offer by Eric is so good that TR John agreed and
assisted Eric in the arrangement for setting up various accounts with a few financial
institutions. TR John is guilty under the Act and the punishment for his involvement
is

a) A fine not exceeding S$10,000

b) A fine not exceeding S$200,000
c) A fine not exceeding S$30,000 and/or imprisonment not exceeding 3 years
d) A fine not exceeding S$200,000 and/or imprisonment not exceeding 7 years

61) When a TR or an officer of a CMS licensed holder detected a suspicious money

laundering activity, he/she should inform

a) The SGX immediately

b) The MAS immediately
c) The police immediately
d) The designated compliance unit of the CMS license holder

62) In the statutory requirement under the Money Laundering Act, a CMS licensed
Holder should retain financial transaction document relating to opening of account for
a period of

a) Six Years
b) Sixteen Years
c) Six Years from date of opening of account
d) Six Years after date of closing of account

63) Mr Greed is a TR licensed under the SFA. He suspected his client Mr Rich to be
involved in money laundry activities after Mr Rich had requested him to churn his
trading account where the transactions to not make economic sense. Mr Greed did not
report his suspicion to his compliance officer as Mr Rich is a good client and the
commissions from his transactions form the bulk of Mr Greed brokerage income. The
penalty for failing to report such suspicion is

a) Fine not exceeding $10,000

b) Imprisonment term not exceeding 2 years
c) Fine not exceeding $10,000 or imprisonment term not exceeding 2 years
d) Fine not exceeding $10,000 or imprisonment term not exceeding 2 years or both

64) Under the SFA, it is an offence for licensee to tip-off a person whose account is under
investigation by the STRO. This offence is punishable by

a) A fine not exceeding S$10,000

b) A fine not exceeding S$200,000
c) A fine not exceeding S$30,000 and/or imprisonment not exceeding 3 years
d) A fine not exceeding S$200,000 and/or imprisonment not exceeding 7 years
65) TR John received information that his custom Charlie is involved in drug trafficking
activities. He suspect that Charlie may be using part of proceed from his drug
trafficking activities to speculate in the stock market. TR John should

a) Do nothing
b) Informed Charlie of his suspicious
c) Stop trading for Charlie so as not to get into trouble
d) Informed his compliance department of his suspicions

66) Who is not eligible to participate under the CPF Investment Scheme

a) Member that is below 21 years old

b) Member who reach 55 years and older
c) A self-employ person
d) A person who holds a license as a Representative in securities trading

67) CPF member who are allowed to participate under the CPFIS can use their CPF funds
to apply IPO shares

a) True
b) False

68) For CPF member to participate in CPFIS, he should open a CPF investment account
with

a) Any Bank licensed under the Banking Act

b) CPFIS agent Bank
c) SGX-ST clearing member
d) All of the above

69) Funds available for CPF investment is updated monthly

a) True
b) False

70) When using CPFIS to apply for IPS, you can apply for the

a) Fixed portion
b) Tender portion
c) Fixed and tender portion
d) Make a manual application

71) Who is responsible for sending out statements of CPF investment account to the
respective account holders

a) The CPF Board

b) Central Depositary Pte Ltd
c) The Agent Banks
d) The Member Companies
72) From whom do you receive your CPF profit and loss investment statement

a) Central Depository Pte Ltd

b) Your TR
c) Agent Bank
d) The member company

73) Under the CPF Investment Scheme, members are allowed to invest in which of the
following investment

I. Gold
II. Annuity Policies
III. Singapore Government Bonds
IV. Unlisted loan stock of Singapore incorporated company
a) I and III only
b) II and IV only
c) I, II and III only
d) II, III and IV only

74) Under the Central Provident Fund Investment Scheme, member may use their CPF
monies to invest in the Singapore Government Bond

a) True
b) False

75) All CPFIS shares transaction are on a delivery basis, no contra trades is allowed

a) True
b) False

76) Under the CPF investment scheme, member can invest in Gold through

a) Deposit Banks
b) Brokers
c) Agents Banks
d) Gold Dealers

77) There is no guaranteed rate of return on the investments made with CPFIS investment
accounts

a) True
b) False
78) Before using CPF fund to investment, client needs to check the ‘available investment
fund’ from

a) MAS
b) SGX-ST
c) Agent Bank
d) CPF Board

79) Mr A bought 1000 shares of ABC. On due date, he realized that he has forgotten to
inform his TR that he intends to use his CPF funds to settle the payment. What should
he do

a) Use cash to settle the payment

b) Pay for the shares and thereafter, obtain reimbursement from CPF
c) Sell the shares immediately
d) No, he cannot sell the share

80) When will CPF Agent Banks send out the yearly profit and loss statement

a) March
b) June
c) September
d) December