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Paper III - Long Term Insurance
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Question 1 of 30
1. Question
When is a mandatory offer required to be made?
I. Any person acquires, whether by a series of transactions over a period of time or not, 50% or more of the voting rights of a company
II. Two or more persons are acting in concert who collectively hold less than 30% of the voting rights of a company, and any one or more of them acquire voting rights, and such acquisition has the effect of increasing their collective holding of voting rights to 30% or more of the voting rights of the company
III. Two or more persons are acting in concert, and they collectively hold not less than 30%, but not more than 50%, of the voting rights of a company, and any one or more of them acquire additional voting rights, and such acquisition has the effect of increasing their collective holding of voting rights of the company by more than 2% from the lowest percentage holding of that person in the 12-month period ending on and inclusive of the date of the relevant acquisition
IV. Two or more persons are acting in concert, and they collectively hold not less than 30%, but not more than 50%, of the voting rights of a company, and any one or more of them acquire additional voting rights, and such acquisition has the effect of increasing their collective holding of voting rights of the company by more than 2% from the lowest percentage holding of that person in the 12-month period ending on and inclusive of the date of the relevant acquisitionCorrect
A mandatory offer is required to be made when:
(a) any person acquires, whether by a series of transactions over a period of time or not, 30% or more of the voting rights of a company (see Note below);
(b) two or more persons are acting in concert who collectively hold less than 30% of the voting rights of a company, and any one or more of them acquire voting rights, and such acquisition has the effect of increasing their collective holding of voting rights to 30% or more of the voting rights of the company;
(c) any person holds not less than 30%, but not more than 50%, of the voting rights of a company and that person acquires additional voting rights, and such acquisition has the effect of increasing that person’s holding of voting rights of the company by more than 2% from the lowest percentage holding of that person in the 12-month period ending on and inclusive of the date of the relevant acquisition; or
(d) two or more persons are acting in concert, and they collectively hold not less than 30%, but not more than 50%, of the voting rights of a company, and any one or more of them acquire additional voting rights, and such acquisition has the effect of increasing their collective holding of voting rights of the company by more than 2% from the lowest percentage holding of that person in the 12-month period ending on and inclusive of the date of the relevant acquisition.Incorrect
A mandatory offer is required to be made when:
(a) any person acquires, whether by a series of transactions over a period of time or not, 30% or more of the voting rights of a company (see Note below);
(b) two or more persons are acting in concert who collectively hold less than 30% of the voting rights of a company, and any one or more of them acquire voting rights, and such acquisition has the effect of increasing their collective holding of voting rights to 30% or more of the voting rights of the company;
(c) any person holds not less than 30%, but not more than 50%, of the voting rights of a company and that person acquires additional voting rights, and such acquisition has the effect of increasing that person’s holding of voting rights of the company by more than 2% from the lowest percentage holding of that person in the 12-month period ending on and inclusive of the date of the relevant acquisition; or
(d) two or more persons are acting in concert, and they collectively hold not less than 30%, but not more than 50%, of the voting rights of a company, and any one or more of them acquire additional voting rights, and such acquisition has the effect of increasing their collective holding of voting rights of the company by more than 2% from the lowest percentage holding of that person in the 12-month period ending on and inclusive of the date of the relevant acquisition. -
Question 2 of 30
2. Question
Which of the following describes a standing authority?
I. It is a written notice authorizing the intermediary or associated entity to deal with the assets in ways specified
II. It specifies a period that must not be more than 18 months during which it will be effective (no limit has been specified by the SFC for a client who is a PI).
III. It specifies the way in which it may be revoked
IV. It is a independent action of an intermediary to deal with a clients assetsCorrect
A standing authority is the normal standing instruction from a client to an intermediary or associated entity which enables the intermediary or associated entity to deal with client assets.
(a) It is a written notice authorizing the intermediary or associated entity to deal with the assets in ways
(b) It specifies a period that must not be more than 12 months during which it will be effective (no limit has been specified by the SFC for a client who is a PI)
(c) It specifies the way in which it may beIncorrect
A standing authority is the normal standing instruction from a client to an intermediary or associated entity which enables the intermediary or associated entity to deal with client assets.
(a) It is a written notice authorizing the intermediary or associated entity to deal with the assets in ways
(b) It specifies a period that must not be more than 12 months during which it will be effective (no limit has been specified by the SFC for a client who is a PI)
(c) It specifies the way in which it may be -
Question 3 of 30
3. Question
Which of the following are exemptions to the definition of LFET in Schedule 5?
I. Exchange transactions under the Money Changers Ordinance (Cap 34)
II. Transactions by an AFI or a central bank
III. Transactions executed on a stock exchange or a futures exchange by or through a person who is licensed for Type 1 and Type 2 regulated activities respectively or wholly incidental to such transactions
IV. Transactions involving the act of trading in LFE contracts on a discretionary basisCorrect
There are a large number of exemptions to the definition of LFET in Schedule 5, SFO. Examples include:
(a) transactions by an AFI or a central bank;
(b) exchange transactions under the Money Changers Ordinance (Cap 34); and
(c) transactions executed on a stock exchange or a futures exchange by or through a person who is licensed for Type 1 and Type 2 regulated activities respectively or wholly incidental to such transactions, etc.Incorrect
There are a large number of exemptions to the definition of LFET in Schedule 5, SFO. Examples include:
(a) transactions by an AFI or a central bank;
(b) exchange transactions under the Money Changers Ordinance (Cap 34); and
(c) transactions executed on a stock exchange or a futures exchange by or through a person who is licensed for Type 1 and Type 2 regulated activities respectively or wholly incidental to such transactions, etc. -
Question 4 of 30
4. Question
Which of the following are features of boiler room activities?
I. The sole use of the telephone, email or facsimile for initial and continuing contacts (with no face-to-face meetings)
II. The investor is told that the investment is being offered to a select group of people for a short time only
III. The investor is intimidated/blackmailed into purchasing/selling securities
IV. The seller is often located overseasCorrect
The features of boiler room activities are:
(a) The sole use of the telephone, email or facsimile for initial and continuing contacts (with no face-to-face meetings)
(b) The investor is told that the investment is being offered to a select group of people for a short time only
(c) The seller is often located overseasIncorrect
The features of boiler room activities are:
(a) The sole use of the telephone, email or facsimile for initial and continuing contacts (with no face-to-face meetings)
(b) The investor is told that the investment is being offered to a select group of people for a short time only
(c) The seller is often located overseas -
Question 5 of 30
5. Question
Which of the following instruments are covered by Securities?
I. Shares, stocks, debentures, loan stocks, funds, bonds or notes
II. Rights, options or interests in the above instruments
III. Certificates of interest or participation in, or warrants to subscribe for or purchase, the above instruments
IV. Interests in CISsCorrect
Securities are defined in Schedule 1, SFO, to cover a wide range of instruments, including:
(a) shares, stocks, debentures, loan stocks, funds, bonds or notes;
(b) rights, options or interests in the above instruments;
(c) certificates of interest or participation in, or warrants to subscribe for or purchase, the above instruments;
(d) interests in CISs;Incorrect
Securities are defined in Schedule 1, SFO, to cover a wide range of instruments, including:
(a) shares, stocks, debentures, loan stocks, funds, bonds or notes;
(b) rights, options or interests in the above instruments;
(c) certificates of interest or participation in, or warrants to subscribe for or purchase, the above instruments;
(d) interests in CISs; -
Question 6 of 30
6. Question
Which of the following should a person do, when he is under investigation?
I. Provide documents and explanations
II. Attend before the investigator and answer questions
III. Give the investigator all reasonable assistance
IV. Support his evidence by making a statutory declarationCorrect
(a) provide documents and explanations;
(b) attend before the investigator and answer questions;
(c) give the investigator all reasonable assistance;
(d) support his evidence by making a statutory declarationIncorrect
(a) provide documents and explanations;
(b) attend before the investigator and answer questions;
(c) give the investigator all reasonable assistance;
(d) support his evidence by making a statutory declaration -
Question 7 of 30
7. Question
Who are involved in listings?
I. Administrative Personnel
II. Compliance Advisers
III.Independent financial advisers (“IFAs”)
IV. Reporting accountantsCorrect
Persons involved in listings:
These include the issuer and its directors, authorised representatives, sponsors, compliance advisers, independent financial advisers (“IFAs”), promoters and reporting accountants.Incorrect
Persons involved in listings:
These include the issuer and its directors, authorised representatives, sponsors, compliance advisers, independent financial advisers (“IFAs”), promoters and reporting accountants. -
Question 8 of 30
8. Question
What are the aspects being administered and enforced by the Registrar of the Companies?
I. Dissolution Ordinance
II. Limited Partnerships Ordinance
III. Registered Trustees Incorporation Ordinance
IV. Money Lenders OrdinanceCorrect
The Registrar of Companies administers and enforces certain aspects of the:
(a) CO;
(b) Limited Partnerships Ordinance;
(c) Trustee Ordinance;
(d) Registered Trustees Incorporation Ordinance;
(e) Money Lenders OrdinanceIncorrect
The Registrar of Companies administers and enforces certain aspects of the:
(a) CO;
(b) Limited Partnerships Ordinance;
(c) Trustee Ordinance;
(d) Registered Trustees Incorporation Ordinance;
(e) Money Lenders Ordinance -
Question 9 of 30
9. Question
What are being included during an annual general meeting?
I. The consideration of the annual accounts
II. The reduction of share capital
III. The election of directors to replace retiring ones
IV. The appointment of auditorsCorrect
The business of an annual general meeting includes the consideration of the annual accounts, the declaration of dividends, the election of directors to replace retiring ones, and the appointment of auditors.
Incorrect
The business of an annual general meeting includes the consideration of the annual accounts, the declaration of dividends, the election of directors to replace retiring ones, and the appointment of auditors.
-
Question 10 of 30
10. Question
Who may receive or hold in Hong Kong client assets of an intermediary?
I. The intermediary
II. An associated entity of the intermediary
III. The fund manager
IV. Any AFICorrect
No person may receive or hold in Hong Kong client assets of an intermediary unless the person is:
(a) the intermediary;
(b) an associated entity of the intermediary; or
(c) an excluded person (see Note below).
Note: An excluded person includes any AFI, another intermediary with whom client securities collateral is deposited under financial accommodation arrangements, any company or overseas company approved by the SFC, and any person specified under rules made by the SFC with whom designated trust accounts or client accounts are to be maintained.Incorrect
No person may receive or hold in Hong Kong client assets of an intermediary unless the person is:
(a) the intermediary;
(b) an associated entity of the intermediary; or
(c) an excluded person (see Note below).
Note: An excluded person includes any AFI, another intermediary with whom client securities collateral is deposited under financial accommodation arrangements, any company or overseas company approved by the SFC, and any person specified under rules made by the SFC with whom designated trust accounts or client accounts are to be maintained. -
Question 11 of 30
11. Question
Which of the following activities on the Internet applied by the GNIR?
I. Securities dealing, commodity futures trading, leveraged foreign exchange trading and related advisory businesses
II. The provision of trade-matching facilities on the Internet
III. The issuing of advertisements or other documents relating to securities, investment arrangements and investment advisory services
IV. The making of offers of securities and investment arrangements by way of an electronic prospectusCorrect
The GNIR applies to the following activities on the Internet:
(a) securities dealing, commodity futures trading, leveraged foreign exchange trading and related advisory businesses;
(b) the issuing of advertisements or other documents relating to securities, investment arrangements and investment advisory services; and
(c) the making of offers of securities and investment arrangements by way of an electronic prospectus.Incorrect
The GNIR applies to the following activities on the Internet:
(a) securities dealing, commodity futures trading, leveraged foreign exchange trading and related advisory businesses;
(b) the issuing of advertisements or other documents relating to securities, investment arrangements and investment advisory services; and
(c) the making of offers of securities and investment arrangements by way of an electronic prospectus. -
Question 12 of 30
12. Question
Which of the following data protection principles must be compiled by data users?
I. Purpose and manner of collection of personal data
II. Use of personal data
III. Security of personal data
IV. Non-accessible personal dataCorrect
Data users must comply the data protection principles:
(a) Purpose and manner of collection of personal data
(b) Use of personal data
(c) Security of personal dataIncorrect
Data users must comply the data protection principles:
(a) Purpose and manner of collection of personal data
(b) Use of personal data
(c) Security of personal data -
Question 13 of 30
13. Question
Which of the following is not allowed by the Client Securities Rules on the use of the standing authority by the intermediary or its associated entity?
I. The withdrawal of client securities to sell or settle a sale order on his behalf
II. To make any such transfer to any officer or employee of these entities unless that officer or employee is the client
III. To deal with the client securities or securities collateral in any manner that is unconscionable
IV. The disposal or initiation of the disposal of client securities and securities collateral, in settlement of a liability of the client to the intermediary, associated entity or a third personCorrect
The Client Securities Rules do not allow the use of the standing authority by the intermediary or its associated entity to:
(a) transfer client securities or securities collateral to an account of the intermediary, its associated entity or any entity which has a controlling entity relationship with the intermediary or is linked to the associated entity by a controlling entity relationship unless that account is one mentioned in section 3.9 above; or
(b) make any such transfer to any officer or employee of these entities unless that officer or employee is the client; or
(c) deal with the client securities or securities collateral in any manner that is unconscionable. (For clarification, “unconscionable” is something contrary to a sense of justice, decency or reasonableness.)Incorrect
The Client Securities Rules do not allow the use of the standing authority by the intermediary or its associated entity to:
(a) transfer client securities or securities collateral to an account of the intermediary, its associated entity or any entity which has a controlling entity relationship with the intermediary or is linked to the associated entity by a controlling entity relationship unless that account is one mentioned in section 3.9 above; or
(b) make any such transfer to any officer or employee of these entities unless that officer or employee is the client; or
(c) deal with the client securities or securities collateral in any manner that is unconscionable. (For clarification, “unconscionable” is something contrary to a sense of justice, decency or reasonableness.) -
Question 14 of 30
14. Question
What are the requirements in relation to the receipt of soft dollars?
I. Transaction execution must be consistent with best execution standards
II. Brokerage rates are not in excess of customary full-service brokerage rates
III. The client has consented in writing to the receipt of the goods or services; this may be provided for in the client agreement or other investment management agreement
IV. Brokerage rates are not in excess of customary full-service ratesCorrect
2.40 The requirements in relation to the receipt of soft dollars are:
(a) transaction execution must be consistent with best execution standards;
(b) brokerage rates are not in excess of customary full-service brokerage rates;
(c) the client has consented in writing to the receipt of the goods or services; this may be provided for in the client agreement or other investment management agreementIncorrect
2.40 The requirements in relation to the receipt of soft dollars are:
(a) transaction execution must be consistent with best execution standards;
(b) brokerage rates are not in excess of customary full-service brokerage rates;
(c) the client has consented in writing to the receipt of the goods or services; this may be provided for in the client agreement or other investment management agreement -
Question 15 of 30
15. Question
Which of the following are the services available at the Hong Kong financial market?
I. Venture capital
II. Investment and portfolio management
III. Transferable interests in companies
IV. Investment bankingCorrect
Services include:
(a) venture capital
(b) investment and portfolio management
(c) investment bankingIncorrect
Services include:
(a) venture capital
(b) investment and portfolio management
(c) investment banking -
Question 16 of 30
16. Question
How to enhance the quality of the markets?
I. Encouraging the development of new products and services
II. Helping to improve the quality and skills of financial market professionals
III. Helping to create a knowledgeable investing public by means of investor education programmes
IV. Market participants to be represented on the exchanges and clearing housesCorrect
They can enhance the quality of the markets they regulate by:
(a) encouraging the development of new products and services;
(b) helping to improve the quality and skills of financial market professionals; and
(c) helping to create a knowledgeable investing public by means of investor education programmes.Incorrect
They can enhance the quality of the markets they regulate by:
(a) encouraging the development of new products and services;
(b) helping to improve the quality and skills of financial market professionals; and
(c) helping to create a knowledgeable investing public by means of investor education programmes. -
Question 17 of 30
17. Question
The GAML specifies the need for awareness and vigilance and the setting up of a system to report suspicious transactions. It requires licensed corporations to:
I. Issue statements of policies and procedures to staff reflecting the provisions of the GAML
II. The opening of multiple accounts with the same beneficial owners or controlling parties which are unusual
III. Regularly review their anti-money laundering policies and procedures by their compliance and audit function
IV. Appoint a money laundering reporting officer as a central reference point for reporting suspicious transactionsCorrect
The GAML specifies the need for awareness and vigilance and the setting up of a system to report suspicious transactions. It requires licensed corporations to:
(a) issue statements of policies and procedures to staff reflecting the provisions of the GAML;
(b) ensure that staff understand the GAML and maintain their awareness and vigilance;
(c) regularly review their anti-money laundering policies and procedures by their compliance and audit function; and
(d) appoint a money laundering reporting officer as a central reference point for reporting suspicious transactions.Incorrect
The GAML specifies the need for awareness and vigilance and the setting up of a system to report suspicious transactions. It requires licensed corporations to:
(a) issue statements of policies and procedures to staff reflecting the provisions of the GAML;
(b) ensure that staff understand the GAML and maintain their awareness and vigilance;
(c) regularly review their anti-money laundering policies and procedures by their compliance and audit function; and
(d) appoint a money laundering reporting officer as a central reference point for reporting suspicious transactions. -
Question 18 of 30
18. Question
Which of the following correctly describe customer risk?
I. Number of sales
II. Background or profile of the customer (e.g. a politically exposed person)
III. Unduly complex ownership structure without good reason
IV. Nature, scope and location of the customer’s business that generate the funds/assets, having regard to sensitive or high-risk activitiesCorrect
Customer risk
(a) background or profile of the customer (e.g. a politically exposed person);
(b) unduly complex ownership structure without good reason;
(c) nature, scope and location of the customer’s business that generate the funds/assets, having regard to sensitive or high-risk activitiesIncorrect
Customer risk
(a) background or profile of the customer (e.g. a politically exposed person);
(b) unduly complex ownership structure without good reason;
(c) nature, scope and location of the customer’s business that generate the funds/assets, having regard to sensitive or high-risk activities -
Question 19 of 30
19. Question
Which of the following is covered by the Securities that are defined in Schedule 1, SFO?
I. Interests in CISs
II. Interests, rights or property, whether in the form of instruments or otherwise, commonly known as securities
III. Interests, rights or property which are prescribed by the Financial Secretary under s. 392, SFO as securities
IV. Structured products that do not fall within (a) to (f) above but are the subject of an offer to the public which is authorized or required to be authorized under s. 105(1)Correct
Securities are defined in Schedule 1, SFO, to cover a wide range of instruments, including:
(a) interests in CISs
(b) interests, rights or property, whether in the form of instruments or otherwise, commonly known as securities
(c) interests, rights or property which are prescribed by the Financial Secretary under s. 392, SFO as securities
(d) structured products that do not fall within (a) to (f) above but are the subject of an offer to the public which is authorized or required to be authorized under s. 105(1),Incorrect
Securities are defined in Schedule 1, SFO, to cover a wide range of instruments, including:
(a) interests in CISs
(b) interests, rights or property, whether in the form of instruments or otherwise, commonly known as securities
(c) interests, rights or property which are prescribed by the Financial Secretary under s. 392, SFO as securities
(d) structured products that do not fall within (a) to (f) above but are the subject of an offer to the public which is authorized or required to be authorized under s. 105(1), -
Question 20 of 30
20. Question
The SFC may approve a licensed corporation as an approved introducing agent if t it only conducts which of the following business?
I. Receiving from a client offers for dealings in securities and passing on the offers in the name of the client to an exchange participant, or another licensed dealer
II. Lends money for SMF direct to investors (Type 8 licence); the use of this vehicle is diminishing after the SFC tightened the requirements on SMF
III. Introducing a client who wishes to trade in securities to an exchange participant, or another licensed dealer
IV. Does not handle client assets and incurs no legal liability in respect of the introduced business except for its own negligence, wilful default or fraudCorrect
The SFC may approve a licensed corporation as an approved introducing agent if it can satisfy the SFC that it only conducts the business of:
(a) receiving from a client offers for dealings in securities and passing on the offers in the name of the client to an exchange participant, or another licensed dealer; or
(b) introducing a client who wishes to trade in securities to an exchange participant, or another licensed dealer; and
(c) does not handle client assets and incurs no legal liability in respect of the introduced business except for its own negligence, wilful default or fraudIncorrect
The SFC may approve a licensed corporation as an approved introducing agent if it can satisfy the SFC that it only conducts the business of:
(a) receiving from a client offers for dealings in securities and passing on the offers in the name of the client to an exchange participant, or another licensed dealer; or
(b) introducing a client who wishes to trade in securities to an exchange participant, or another licensed dealer; and
(c) does not handle client assets and incurs no legal liability in respect of the introduced business except for its own negligence, wilful default or fraud -
Question 21 of 30
21. Question
What are the requirements of an individual that will be nominated as the approved person for the purpose of being served by the SFC with notices and decision in connection with the SIP in order to fulfill the application for authorization of an unlisted SIP?
I. A director of the issuer, or a director of any guarantor, or the responsible officer or, where applicable, an executive officer of a product arranger
II. Licensed or registered in respect of Type 1 (dealing in securities) or Type 4 (advising on securities) regulated activity
III. Ordinarily resident in Hong Kong
IV. Subject to winding-up or having entered into any arrangement or composition with its creditorsCorrect
An application for authorization of an unlisted SIP must have an individual nominated as the approved person for the purpose of being served by the SFC with notices and decisions in connection with the SIP. Such individual must be:
(a) a director of the issuer, or a director of any guarantor, or the responsible officer or, where applicable, an executive officer of a product arranger;
(b) licensed or registered in respect of Type 1 (dealing in securities) or Type 4 (advising on securities) regulated activity; and
(c) ordinarily resident in Hong Kong.Incorrect
An application for authorization of an unlisted SIP must have an individual nominated as the approved person for the purpose of being served by the SFC with notices and decisions in connection with the SIP. Such individual must be:
(a) a director of the issuer, or a director of any guarantor, or the responsible officer or, where applicable, an executive officer of a product arranger;
(b) licensed or registered in respect of Type 1 (dealing in securities) or Type 4 (advising on securities) regulated activity; and
(c) ordinarily resident in Hong Kong. -
Question 22 of 30
22. Question
Which of the following is NOT the definition of a CIS?
I. Franchise arrangements
II. Arrangements where a solicitor acting in his professional capacity holds money from clients during the course of his work
III. Arrangements where the participants and the operator of the arrangement belong to the same group of companies
IV. An arrangement in respect of a property under which the management of the property is not subject to the day-to-day control of the scheme’s participantsCorrect
3.4 Exclusions from the definition of a CIS include:
(a) arrangements where the participants and the operator of the arrangement belong to the same group of companies;
(b) franchise arrangements; and
(c) arrangements where a solicitor acting in his professional capacity holds money from clients during the course of his work.Incorrect
3.4 Exclusions from the definition of a CIS include:
(a) arrangements where the participants and the operator of the arrangement belong to the same group of companies;
(b) franchise arrangements; and
(c) arrangements where a solicitor acting in his professional capacity holds money from clients during the course of his work. -
Question 23 of 30
23. Question
Which of the following conditions allows the SEHK to suspend listing/dealings?
I. It considers that the issuer is no longer suitable for listing.
II. It considers that the issuer does not have a sufficient level of operations or sufficient assets to warrant a continued listing
III. It considers that there are insufficient shares in the hands of government institutions
IV. An issuer fails in a material matter to comply with the listing RulesCorrect
The SEHK may also suspend dealings where:
(a) an issuer fails in a material matter to comply with the Listing Rules;
(b) it considers that there are insufficient shares in the hands of the public;
(c) it considers that the issuer does not have a sufficient level of operations or sufficient assets to warrant a continued listing; or(d) it considers that the issuer is no longer suitable for listing.
Incorrect
The SEHK may also suspend dealings where:
(a) an issuer fails in a material matter to comply with the Listing Rules;
(b) it considers that there are insufficient shares in the hands of the public;
(c) it considers that the issuer does not have a sufficient level of operations or sufficient assets to warrant a continued listing; or(d) it considers that the issuer is no longer suitable for listing.
-
Question 24 of 30
24. Question
Which of the following are the sanctions that can be imposed by the SEHK on a listed issuer?(MBLR 2A.09)
I. Reporting the conduct to the SFC or other regulatory body
II. Issuing a public statement involving criticism, or issuing a public censure
III. Issuing a private reprimand
IV. Issuing a fineCorrect
The sanctions which the SEHK may impose include (MBLR 2A.09):
(a) issuing a private reprimand;
(b) issuing a public statement involving criticism, or issuing a public censure;
(c) reporting the conduct to the SFC or other regulatory body; and
(d) banning a professional adviser from representing a listed issuer or appearing before the Listing Division or the Listing Committee, etc.Incorrect
The sanctions which the SEHK may impose include (MBLR 2A.09):
(a) issuing a private reprimand;
(b) issuing a public statement involving criticism, or issuing a public censure;
(c) reporting the conduct to the SFC or other regulatory body; and
(d) banning a professional adviser from representing a listed issuer or appearing before the Listing Division or the Listing Committee, etc. -
Question 25 of 30
25. Question
Which of the following describes a standing authority?
I. It is a written notice authorizing the intermediary or associated entity to deal with the assets in ways specified
II. It specifies a period that must not be more than 18 months during which it will be effective (no limit has been specified by the SFC for a client who is a PI).
III. It specifies the way in which it may be revoked
IV. It is a independent action of an intermediary to deal with a clients assetsCorrect
A standing authority is the normal standing instruction from a client to an intermediary or associated entity which enables the intermediary or associated entity to deal with client assets.
(a) It is a written notice authorizing the intermediary or associated entity to deal with the assets in ways
(b) It specifies a period that must not be more than 12 months during which it will be effective (no limit has been specified by the SFC for a client who is a PI)
(c) It specifies the way in which it may beIncorrect
A standing authority is the normal standing instruction from a client to an intermediary or associated entity which enables the intermediary or associated entity to deal with client assets.
(a) It is a written notice authorizing the intermediary or associated entity to deal with the assets in ways
(b) It specifies a period that must not be more than 12 months during which it will be effective (no limit has been specified by the SFC for a client who is a PI)
(c) It specifies the way in which it may be -
Question 26 of 30
26. Question
When do the The Client Money Rules not apply to client money of a licensed corporation?
I. When it is received or held outside Hong Kong by the licensed corporation or its associated entity while it remains outside Hong Kong
II. When it has at any time been received or held in Hong Kong by the licensed corporation or its associated entity, once that money has been transferred outside Hong Kong in accordance with the Client Money Rules
III. When it is held in a bank account by the client in his own name
IV. When it is held by a trusted advisor of the clientCorrect
The Client Money Rules do not apply to client money of a licensed corporation that:
(a) is received or held outside Hong Kong by the licensed corporation or its associated entity while it remains outside Hong Kong;
(b) has at any time been received or held in Hong Kong by the licensed corporation or its associated entity, once that money has been transferred outside Hong Kong in accordance with the Client Money Rules; or
(c) is held in a bank account by the client in his own name.Incorrect
The Client Money Rules do not apply to client money of a licensed corporation that:
(a) is received or held outside Hong Kong by the licensed corporation or its associated entity while it remains outside Hong Kong;
(b) has at any time been received or held in Hong Kong by the licensed corporation or its associated entity, once that money has been transferred outside Hong Kong in accordance with the Client Money Rules; or
(c) is held in a bank account by the client in his own name. -
Question 27 of 30
27. Question
Which of the following may be the petitioners?
I. The Registrar of Companies, if the company has breached provisions of the CO or is being carried on for an unlawful purpose
II. The Official Receiver, where there is already a voluntary winding up (s. 179, CO)
III. The SFC, if it appears desirable in the public interest (SFO gives authority to the SFC)
IV. The courtCorrect
The petitioners may be:
(a) the Registrar of Companies, if the company has breached provisions of the CO or is being carried on for an unlawful purpose;
(b) the Official Receiver, where there is already a voluntary winding up (s. 179, CO); and
(c) the SFC, if it appears desirable in the public interest (SFO gives authority to the SFC).Incorrect
The petitioners may be:
(a) the Registrar of Companies, if the company has breached provisions of the CO or is being carried on for an unlawful purpose;
(b) the Official Receiver, where there is already a voluntary winding up (s. 179, CO); and
(c) the SFC, if it appears desirable in the public interest (SFO gives authority to the SFC). -
Question 28 of 30
28. Question
What are the financial products available in Hong Kong financial markets?
I. Warrants
II. Convertibles
III. Venture capital
IV. SharesCorrect
The financial products include:
(a) transferable interests in companies such as shares;
(b) warrants
(c) convertiblesIncorrect
The financial products include:
(a) transferable interests in companies such as shares;
(b) warrants
(c) convertibles -
Question 29 of 30
29. Question
Which of the following is NOT the definition of a CIS?
I. Franchise arrangements
II. Arrangements where a solicitor acting in his professional capacity holds money from clients during the course of his work
III. Arrangements where the participants and the operator of the arrangement belong to the same group of companies
IV. An arrangement in respect of a property under which the management of the property is not subject to the day-to-day control of the scheme’s participantsCorrect
Exclusions from the definition of a CIS include:
(a) arrangements where the participants and the operator of the arrangement belong to the same group of companies;
(b) franchise arrangements; and
(c) arrangements where a solicitor acting in his professional capacity holds money from clients during the course of his work.Incorrect
Exclusions from the definition of a CIS include:
(a) arrangements where the participants and the operator of the arrangement belong to the same group of companies;
(b) franchise arrangements; and
(c) arrangements where a solicitor acting in his professional capacity holds money from clients during the course of his work. -
Question 30 of 30
30. Question
The SFC may approve a licensed corporation as an approved introducing agent if t it only conducts which of the following business?
I. Receiving from a client offers for dealings in securities and passing on the offers in the name of the client to an exchange participant, or another licensed dealer
II. Lends money for SMF direct to investors (Type 8 licence); the use of this vehicle is diminishing after the SFC tightened the requirements on SMF
III. Introducing a client who wishes to trade in securities to an exchange participant, or another licensed dealer
IV. Does not handle client assets and incurs no legal liability in respect of the introduced business except for its own negligence, wilful default or fraudCorrect
The SFC may approve a licensed corporation as an approved introducing agent if it can satisfy the SFC that it only conducts the business of:
(a) receiving from a client offers for dealings in securities and passing on the offers in the name of the client to an exchange participant, or another licensed dealer; or
(b) introducing a client who wishes to trade in securities to an exchange participant, or another licensed dealer; and
(c) does not handle client assets and incurs no legal liability in respect of the introduced business except for its own negligence, wilful default or fraudIncorrect
The SFC may approve a licensed corporation as an approved introducing agent if it can satisfy the SFC that it only conducts the business of:
(a) receiving from a client offers for dealings in securities and passing on the offers in the name of the client to an exchange participant, or another licensed dealer; or
(b) introducing a client who wishes to trade in securities to an exchange participant, or another licensed dealer; and
(c) does not handle client assets and incurs no legal liability in respect of the introduced business except for its own negligence, wilful default or fraud
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