English HKSI Paper 2 Topic 1
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- Answered
- Review
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Question 1 of 545
1. Question
1 pointsQID780:Which of the following demands have to be satisfied by the wide range of financial products and services available in Hong Kong?
I. Meet demands for investmentII. Employment opportunities for locals
III. Employment opportunities for expatriates
IV. Capital and investment protection
Correct
Hong Kong’s status as an international financial centre is reflected in the wide range of financial products and services available in Hong Kong, developed to meet demands for investment, capital and income formation and capital raising, the facilitation of cash and capital flows, capital and investment protection (for example, hedging), safe custody and security, speculation and insurance. The financial markets also provide an avenue for price discovery and liquidity of investments.
Incorrect
Hong Kong’s status as an international financial centre is reflected in the wide range of financial products and services available in Hong Kong, developed to meet demands for investment, capital and income formation and capital raising, the facilitation of cash and capital flows, capital and investment protection (for example, hedging), safe custody and security, speculation and insurance. The financial markets also provide an avenue for price discovery and liquidity of investments.
Hint
Reference Chapter:1.1.1
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Question 2 of 545
2. Question
1 pointsQID1034:Globalisation and advances in technology have enabled investors to
I. Participate in different markets
II. Arbitrage between markets
III. Arbitrage between products
IV. Increase investment returns by diversifyingCorrect
Globalisation and advances in technology have enabled investors to move rapidly from one market to another, arbitraging between markets, products and transactions.
Incorrect
Globalisation and advances in technology have enabled investors to move rapidly from one market to another, arbitraging between markets, products and transactions.
Hint
Reference Chapter:1.1.1
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Question 3 of 545
3. Question
1 pointsQID1:The existence of the financial markets in Hong Kong can satisfy which of the following demands?
I. Meet demands for investment, capitalization and risk management.
II. Meet demands for employment
III. Provide an avenue for price discovery
IV. Provide liquidity for investmentsCorrect
The demands for employment is not a function satisfied by financial market alone, thus is not a primary reason for the existence of the financial markets in Hong Kong.
Incorrect
The demands for employment is not a function satisfied by financial market alone, thus is not a primary reason for the existence of the financial markets in Hong Kong.
Hint
Reference Chapter:1.1.1
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Question 4 of 545
4. Question
1 pointsQID1658:Hong Kong Financial Regulatory Regime is
Correct
Hong Kong Financial Regulatory Regime is able to address new and complex financial products.
Incorrect
Hong Kong Financial Regulatory Regime is able to address new and complex financial products.
Hint
Reference Chapter:1.1.1
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Question 5 of 545
5. Question
1 pointsQID785:The SFC regime adopts which of the following regulatory approaches?
Correct
An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.
Incorrect
An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.
Hint
Reference Chapter:1.1.2
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Question 6 of 545
6. Question
1 pointsQID784:A risk-based regulatory system refers to a system in which:
Correct
An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.
Incorrect
An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.
Hint
Reference Chapter:1.1.2
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Question 7 of 545
7. Question
1 pointsQID783:What approach does the SFC take to regulate market intermediaries?
Correct
An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.
Incorrect
An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.
Hint
Reference Chapter:1.1.2
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Question 8 of 545
8. Question
1 pointsQID787:Which of the following regulatory approach is adopted by the SFC?
Correct
An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.
Incorrect
An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.
Hint
Reference Chapter:1.1.2
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Question 9 of 545
9. Question
1 pointsQID781:The principal regulator of the securities industry in Hong Kong is the
Correct
The SFC was created by law under the Securities and Futures Commission Ordinance (now repealed and subsumed in the SFO). It is independent, meaning that it is not part of the Government machinery of the Civil Service or the ministerial system. Nevertheless, it reports to and is accountable to the Government as described in section 2 above.
Incorrect
The SFC was created by law under the Securities and Futures Commission Ordinance (now repealed and subsumed in the SFO). It is independent, meaning that it is not part of the Government machinery of the Civil Service or the ministerial system. Nevertheless, it reports to and is accountable to the Government as described in section 2 above.
Hint
Reference Chapter:1.1.2
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Question 10 of 545
10. Question
1 pointsQID786:Which of the following regulatory approaches adopted by the SFC is given more regulatory attention towards the areas where the SFC perceives the highest risks to lie?
Correct
An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.
Incorrect
An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.
Hint
Reference Chapter:1.1.2
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Question 11 of 545
11. Question
1 pointsQID8:Which two of the following philosophies and systems of regulations are commonly used by financial regulators in Hong Kong?
I. Merit Based
II. Sanction Based
III. Disclosure Based
IV. Income BasedCorrect
Sanction Based regulations and Income Based regulations do not exist in Hong Kong. Merit Based regulations is to reduce access to unfavourable investment products or projects by investors. The interest of investors are protected by doing so. Disclosure Based regulations require investment products and projects disclose their strengths and weaknesses maximally, so that investors can make an informed decision.
Incorrect
Sanction Based regulations and Income Based regulations do not exist in Hong Kong. Merit Based regulations is to reduce access to unfavourable investment products or projects by investors. The interest of investors are protected by doing so. Disclosure Based regulations require investment products and projects disclose their strengths and weaknesses maximally, so that investors can make an informed decision.
Hint
Reference Chapter:1.1.2
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Question 12 of 545
12. Question
1 pointsQID782:The SFC is a/an _______ in Hong Kong.
Correct
The SFC was created by law under the Securities and Futures Commission Ordinance (now repealed and subsumed in the SFO). It is independent, meaning that it is not part of the
Government machinery of the Civil Service or the ministerial system. Nevertheless, it reports to and is accountable to the Government as described in section 2 above. It is considered the securities and futures market prime regulator.Incorrect
The SFC was created by law under the Securities and Futures Commission Ordinance (now repealed and subsumed in the SFO). It is independent, meaning that it is not part of the
Government machinery of the Civil Service or the ministerial system. Nevertheless, it reports to and is accountable to the Government as described in section 2 above. It is considered the securities and futures market prime regulator.Hint
Reference Chapter:1.1.2
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Question 13 of 545
13. Question
1 pointsQID10:Which system or philosophy of regulations is adopted by the SFC to regulate securities and futures markets?
Correct
SFC adopts a“risk-based”approach towards regulations. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.
Incorrect
SFC adopts a“risk-based”approach towards regulations. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.
Hint
Reference Chapter:1.1.2
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Question 14 of 545
14. Question
1 pointsQID172:Which of the following is an accurate description of Hong Kong’s financial regulatory structure?
Correct
The broad points stated by the Securities Review Committee under Ian Hay Davison were
the need for:
(e) checks and balances on the system, with the exchanges being supervised by a
commission independent of the Government, with the Government only to intervene if
and when the Commission failed to regulate properlyIncorrect
The broad points stated by the Securities Review Committee under Ian Hay Davison were
the need for:
(e) checks and balances on the system, with the exchanges being supervised by a
commission independent of the Government, with the Government only to intervene if
and when the Commission failed to regulate properlyHint
Reference Chapter:1.1.3
-
Question 15 of 545
15. Question
1 pointsQID5:Which of the followings is not a service provider in the asset management industry?
Correct
The definition of asset management is to manage securities and futures portfolio or real estate investment trust for others. Auditors do not manage asset; they merely audit as their primary business. Fund managers manage Collective Investment Schemes; that is managing portfolios of securities and futures or real estate trust for a group of people. Therefore they are service providers in the asset management industry. Stockbrokers buy and sell Collective Investments Schemes on behalf of clients and may also manage securities portfolio for clients. Therefore they are service providers in the asset management industry. Independent Financial Advisers (IFA) provides advice on buying and selling Collective Investment Schemes. Therefore they are service providers of the asset management industry.
Incorrect
The definition of asset management is to manage securities and futures portfolio or real estate investment trust for others. Auditors do not manage asset; they merely audit as their primary business. Fund managers manage Collective Investment Schemes; that is managing portfolios of securities and futures or real estate trust for a group of people. Therefore they are service providers in the asset management industry. Stockbrokers buy and sell Collective Investments Schemes on behalf of clients and may also manage securities portfolio for clients. Therefore they are service providers in the asset management industry. Independent Financial Advisers (IFA) provides advice on buying and selling Collective Investment Schemes. Therefore they are service providers of the asset management industry.
Hint
Reference Chapter:1.1.4
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Question 16 of 545
16. Question
1 pointsQID1500:Which of the following are service providers in the asset management industry?
I. Banks
II. Trustees
III. Custodians
IV. Financial PlannersCorrect
Typical service providers include:
(d) banks; (e.) trustees; (f) custodians; (g) financial plannersIncorrect
Typical service providers include:
(d) banks; (e.) trustees; (f) custodians; (g) financial plannersHint
Reference Chapter:1.1.4
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Question 17 of 545
17. Question
1 pointsQID1499:Which of the following are service providers of the Asset Management Industry in Hong Kong?
I. Fund houses
II. Auditors
III. Fund management companies
IV. StockbrokersCorrect
Typical service providers include:
(a) fund houses; (b) fund management companies; (c.) stockbrokersIncorrect
Typical service providers include:
(a) fund houses; (b) fund management companies; (c.) stockbrokersHint
Reference Chapter:1.1.4
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Question 18 of 545
18. Question
1 pointsQID4:Which of the following is a financial service provided by a financial intermediary?
Correct
Financial Intermediaries must be compensated in a financial transaction to be view as providing financial services. Setting up a tutorial company is not providing financial services to a third party because it is not a financial transaction. Managing assets for free is not a financial service since it is not compensated. Signing a rental agreement on behalf of a bank is not a financial service because rental agreement itself is not a financial instrument. Providing loans to others with interest is a form of financial service since it is a service in exchange for compensation in a financial transaction.
Incorrect
Financial Intermediaries must be compensated in a financial transaction to be view as providing financial services. Setting up a tutorial company is not providing financial services to a third party because it is not a financial transaction. Managing assets for free is not a financial service since it is not compensated. Signing a rental agreement on behalf of a bank is not a financial service because rental agreement itself is not a financial instrument. Providing loans to others with interest is a form of financial service since it is a service in exchange for compensation in a financial transaction.
Hint
Reference Chapter:1.1.6
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Question 19 of 545
19. Question
1 pointsQID789:Which of the following are major financial services provided in Hong Kong?
I. Trading securities on behalf of clients on the Stock Exchange of Hong Kong (SEHK).
II. Providing margin financing and accommodation on securities trading
III. Acting as an “introducing agent”
IV. Conducting stock borrowing and lending transactions.Correct
All of these services are provided by Hong Kong financial companies.
Incorrect
All of these services are provided by Hong Kong financial companies.
Hint
Reference Chapter:1.1.6
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Question 20 of 545
20. Question
1 pointsQID790:Which of the following is NOT a major financial service provided in Hong Kong?
Correct
This service is not provided by any Hong Kong financial actor.
Incorrect
This service is not provided by any Hong Kong financial actor.
Hint
Reference Chapter:1.1.6
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Question 21 of 545
21. Question
1 pointsQID2674:Which of the following activity is subject to supervision by the financial regulators?
Correct
Providing a loan and charging interest is a financial actitiy that is subjected to supervision by the financial regulators.
Incorrect
Providing a loan and charging interest is a financial actitiy that is subjected to supervision by the financial regulators.
Hint
Reference Chapter:1.1.7
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Question 22 of 545
22. Question
1 pointsQID791:Which of the following are major providers of securities investment and advisory service in Hong Kong?
I. An intermediary trading securities on the Stock Exchange of Hong Kong Limited (SEHK)
II. An intermediary acting on behalf of a foreign intermediary
III. An underwriter
IV. Insurance companiesCorrect
To conclude this initial definition section, the categories of persons conducting Type 1 regulated activity include:
(a) a participant of the SEHK, whether it engages in activities on the SEHK or outside it;
(b) another securities dealer carrying out dealing in securities in Hong Kong;
(c.) a licensed representative of the above;
(d) an AFI registered with the SFC for this activity (and its staff who deal with the public and are on a register maintained by the HKMA as engaged in such activity);
(e.) a portfolio manager who is licensed (as a securities dealer) for Type 1 regulated activity; and
(f) a securities introducing agent (see section 8.13 below).Incorrect
To conclude this initial definition section, the categories of persons conducting Type 1 regulated activity include:
(a) a participant of the SEHK, whether it engages in activities on the SEHK or outside it;
(b) another securities dealer carrying out dealing in securities in Hong Kong;
(c.) a licensed representative of the above;
(d) an AFI registered with the SFC for this activity (and its staff who deal with the public and are on a register maintained by the HKMA as engaged in such activity);
(e.) a portfolio manager who is licensed (as a securities dealer) for Type 1 regulated activity; and
(f) a securities introducing agent (see section 8.13 below).Hint
Reference Chapter:1.1.7
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Question 23 of 545
23. Question
1 pointsQID792:Which of the following individuals/institutions is NOT a provider of securities investment and advisory services in Hong Kong?
Correct
Institutional investors are actors but not providers.
Incorrect
Institutional investors are actors but not providers.
Hint
Reference Chapter:1.1.7
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Question 24 of 545
24. Question
1 pointsQID2718:Which of the following is not a common consequence of inadequate corporate governance standards?
Correct
Common consequences of deficit in corporate governance standards:
I. Insider trading and other forms of market misconduct
II. Misfeasance, fraud, and misconduct by directors, managers, and other staff causing losses to the company or shareholders
IV. The price of the connected transaction deviates from the market price, causing losses to the company and shareholdersIncorrect
Common consequences of deficit in corporate governance standards:
I. Insider trading and other forms of market misconduct
II. Misfeasance, fraud, and misconduct by directors, managers, and other staff causing losses to the company or shareholders
IV. The price of the connected transaction deviates from the market price, causing losses to the company and shareholdersHint
Reference Chapter:1.10.10
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Question 25 of 545
25. Question
1 pointsQID629:Under the SFO, the SFC has which of the following regulatory responsibilities in relation to asset management ?
I. Licensing intermediaries
II. Authorizing MPF Schemes
III. Authorizing CISs
IV. Vetting recognized InvestorsCorrect
The functions of the SFC in relation to asset management are two-pronged:
(a) it authorises CISs, including, for example, unit trusts, managed funds and retirement schemes, and supervises the marketing of these CISs; and
(b) it licenses and supervises intermediaries engaged in asset management (Type 9 regulated activity) as well as others engaged in providing advisory services in the industry (Type 4 and Type 5 regulated activities); if they choose to be licensed as dealing in securities and/or futures contracts (Type 1 and/or Type 2 regulated activities), the respective regulatory regime will be applied to them.
The first of these functions is derived from Part IV, SFO and the second from Part V, SFO.Incorrect
The functions of the SFC in relation to asset management are two-pronged:
(a) it authorises CISs, including, for example, unit trusts, managed funds and retirement schemes, and supervises the marketing of these CISs; and
(b) it licenses and supervises intermediaries engaged in asset management (Type 9 regulated activity) as well as others engaged in providing advisory services in the industry (Type 4 and Type 5 regulated activities); if they choose to be licensed as dealing in securities and/or futures contracts (Type 1 and/or Type 2 regulated activities), the respective regulatory regime will be applied to them.
The first of these functions is derived from Part IV, SFO and the second from Part V, SFO.Hint
Reference Chapter:1.10.11
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Question 26 of 545
26. Question
1 pointsQID350:Which of the following organizations does the SFC need to regulate?
Correct
The functions of the SFC in relation to asset management are two-pronged: One of those functions is to authorise CISs, including, for example, unit trusts, managed funds and retirement
schemes, and supervises the marketing of these CISs.Incorrect
The functions of the SFC in relation to asset management are two-pronged: One of those functions is to authorise CISs, including, for example, unit trusts, managed funds and retirement
schemes, and supervises the marketing of these CISs.Hint
Reference Chapter:1.10.11
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Question 27 of 545
27. Question
1 pointsQID617:Which of the following entities regulates CISs and supervises the persons’ operating and advising activities?
Correct
Powers granted to the SFC include the power to authorise CISs and structured products for offer to the public as well as advertisements and other documents that contain an offer to the public.
Incorrect
Powers granted to the SFC include the power to authorise CISs and structured products for offer to the public as well as advertisements and other documents that contain an offer to the public.
Hint
Reference Chapter:1.10.11
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Question 28 of 545
28. Question
1 pointsQID1243:The SFC performs its regulatory mandate to supervise the industry through which of the following means?
I. Regular inspections, including on-site inspections.
II. Unscheduled inspections, including on-site inspections.
III. Obtaining information from Licensed Corporations (LC)s.
IV. Obtaining information from the Registered Institutions (RI)s.Correct
In furtherance of these aims, the SFC conducts regular inspections of licensed corporations which may be conducted either on-site or via a request for information to be provided. The maintenance of proper documentation is critical in this regard.
Incorrect
In furtherance of these aims, the SFC conducts regular inspections of licensed corporations which may be conducted either on-site or via a request for information to be provided. The maintenance of proper documentation is critical in this regard.
Hint
Reference Chapter:1.10.12
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Question 29 of 545
29. Question
1 pointsQID1508:The Securities and Futures Commission (SFC) uses which of the following general principles in regulating asset management?
I. It recognises overseas jurisdictions with acceptable regimes as domiciles for authorised collective investment schemes (CIS).
II. It recognises supervision by specified inspection regimes overseas of management companies located in the respective jurisdictions as acceptable for its purposes.
III. It employs a consultative process involving the industry before making significant regulatory changes.
IV. It seeks to protect the interests of all investors in authorised CIS in Hong Kong and overseas.Correct
Certain jurisdictions are deemed to have rules governing the operations of CISs which are comparable with those in Hong Kong; schemes domiciled in such jurisdictions are RJSs.
In order to facilitate compliance with applicable legal and regulatory requirements (in Hong Kong and, where applicable, in overseas jurisdictions), there is a growing tendency, particularly among larger asset managers, to adopt a detailed compliance manual which sets out the asset manager’s policies and procedures in relation to matters of regulatory concern.Incorrect
Certain jurisdictions are deemed to have rules governing the operations of CISs which are comparable with those in Hong Kong; schemes domiciled in such jurisdictions are RJSs.
In order to facilitate compliance with applicable legal and regulatory requirements (in Hong Kong and, where applicable, in overseas jurisdictions), there is a growing tendency, particularly among larger asset managers, to adopt a detailed compliance manual which sets out the asset manager’s policies and procedures in relation to matters of regulatory concern.Hint
Reference Chapter:1.10.14
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Question 30 of 545
30. Question
1 pointsQID1244:In order to facilitate compliance with applicable legal and regulatory requirements in Hong Kong and overseas jurisdictions, which of the following measures can intermediaries take for better coordination?
I. Engage a dedicated compliance officer to oversee adherence to the compliance manual.
II. Appoint a director to serve as a Compliance Officer to oversee adherence to the compliance manual.
III. Maintain close contact with the regulators.
IV. Complement the manual with well defined operational procedures and practices.Correct
In order to facilitate compliance with applicable legal and regulatory requirements (in Hong Kong and, where applicable, in overseas jurisdictions), there is a growing tendency to adopt a detailed compliance manual which sets out the securities dealer’s or adviser’s policies and procedures in relation to matters of regulatory concern. In many cases, a dedicated compliance officer is engaged to oversee adherence to the manual, maintain close contact with the regulators and keep abreast of regulatory developments affecting the securities dealer’s or adviser’s business.
Incorrect
In order to facilitate compliance with applicable legal and regulatory requirements (in Hong Kong and, where applicable, in overseas jurisdictions), there is a growing tendency to adopt a detailed compliance manual which sets out the securities dealer’s or adviser’s policies and procedures in relation to matters of regulatory concern. In many cases, a dedicated compliance officer is engaged to oversee adherence to the manual, maintain close contact with the regulators and keep abreast of regulatory developments affecting the securities dealer’s or adviser’s business.
Hint
Reference Chapter:1.10.14
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Question 31 of 545
31. Question
1 pointsQID1238:To promote, encourage and enforce good compliance practices. Senior management of Licensed Corporations (LC)s and Registered Institutions (RI)s must establish:
I. Good line and reporting structures.
II. Well defined functions and responsibilities.
III. Effective communications channels.
IV. Appropriate transparency and disclosure practices.Correct
Senior management must provide the leadership and drive to promote, encourage and enforce, if necessary, good compliance practices. It must establish:
(a) good line and reporting structures;
(b) clearly defined functions and responsibilities;
(c.) effective communications;
(d) appropriate transparency and disclosure practices.Incorrect
Senior management must provide the leadership and drive to promote, encourage and enforce, if necessary, good compliance practices. It must establish:
(a) good line and reporting structures;
(b) clearly defined functions and responsibilities;
(c.) effective communications;
(d) appropriate transparency and disclosure practices.Hint
Reference Chapter:1.10.3
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Question 32 of 545
32. Question
1 pointsQID509:Corporate governance refers to the system of by which companies are directed and controlled and concerns which of the following groups of people?
I. Company management.
II. Board of Directors.
III. Shareholders.
IV. Stakeholders.Correct
Corporate governance has been defined in various ways. It can be seen as primarily concerned with the proper relationship between a company’s management, its board and its shareholders, and possibly also its stakeholders (i.e. groups who have a stake in the healthy existence of a corporation, such as employees, creditors and customers).
Incorrect
Corporate governance has been defined in various ways. It can be seen as primarily concerned with the proper relationship between a company’s management, its board and its shareholders, and possibly also its stakeholders (i.e. groups who have a stake in the healthy existence of a corporation, such as employees, creditors and customers).
Hint
Reference Chapter:1.10.5
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Question 33 of 545
33. Question
1 pointsQID1684:Good Corporate governance are not required to be responsible for the interest of which of the following
Correct
Good Corporate governance are not required to be responsible for the interest of Former Employees.
Incorrect
Good Corporate governance are not required to be responsible for the interest of Former Employees.
Hint
Reference Chapter:1.10.5
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Question 34 of 545
34. Question
1 pointsQID1237:Which of the following descriptions about corporate governance are correct?
I. It can be seen as primarily concerned with the proper relationship between a company’s management, its board and its shareholders, and possibly also its stakeholders.
II. The governance issue is also concerned with the system by which companies are directed and controlled.
III. The activities of intermediaries frequently concern listed corporations. Accordingly, in addition to considering their own regulatory and corporate governance position, intermediaries need to be aware of the wider impact of corporate governance on their clients and the market.
IV. Markets which exhibit a higher degree of good corporate governance are regarded as more competitive in the international arena.Correct
Corporate governance has been defined in various ways. It can be seen as primarily concerned with the proper relationship between a company’s management, its board and its shareholders, and possibly also its stakeholders (i.e. groups who have a stake in the healthy existence of a corporation, such as employees, creditors and customers). The governance issue is therefore also concerned with the system by which companies are directed and controlled.
The activities of intermediaries frequently concern listed corporations. Accordingly, in addition to considering their own regulatory and corporate governance position, intermediaries need to be aware of the wider impact of corporate governance on their clients and the market. It is now generally accepted that investors attach considerable importance to corporate governance when assessing the value of a stock, and that markets which exhibit a higher degree of good corporate governance are regarded as more competitive in the international arena.Incorrect
Corporate governance has been defined in various ways. It can be seen as primarily concerned with the proper relationship between a company’s management, its board and its shareholders, and possibly also its stakeholders (i.e. groups who have a stake in the healthy existence of a corporation, such as employees, creditors and customers). The governance issue is therefore also concerned with the system by which companies are directed and controlled.
The activities of intermediaries frequently concern listed corporations. Accordingly, in addition to considering their own regulatory and corporate governance position, intermediaries need to be aware of the wider impact of corporate governance on their clients and the market. It is now generally accepted that investors attach considerable importance to corporate governance when assessing the value of a stock, and that markets which exhibit a higher degree of good corporate governance are regarded as more competitive in the international arena.Hint
Reference Chapter:1.10.5
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Question 35 of 545
35. Question
1 pointsQID1239:Corporate governance describes which of the following relationship?
Correct
Corporate governance has been defined in various ways. It can be seen as primarily concerned with the proper relationship between a company’s management, its board and its shareholders, and possibly also its stakeholders (i.e. groups who have a stake in the healthy existence of a corporation, such as employees, creditors and customers).
Incorrect
Corporate governance has been defined in various ways. It can be seen as primarily concerned with the proper relationship between a company’s management, its board and its shareholders, and possibly also its stakeholders (i.e. groups who have a stake in the healthy existence of a corporation, such as employees, creditors and customers).
Hint
Reference Chapter:1.10.5
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Question 36 of 545
36. Question
1 pointsQID2441:A good corporate-governance is not related to which of the following people?
Correct
A good corporate-governance is not related to former employees.
Incorrect
A good corporate-governance is not related to former employees.
Hint
Reference Chapter:1.10.5
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Question 37 of 545
37. Question
1 pointsQID508:Which of the following is NOT included the set of core principles of corporate governance?
Correct
The Organisation for Economic Co-operation and Development (“OECD”) has issued a set of core principles of corporate governance practices to include fairness, transparency, accountability and responsibility. Leadership is not one of those principles.
Incorrect
The Organisation for Economic Co-operation and Development (“OECD”) has issued a set of core principles of corporate governance practices to include fairness, transparency, accountability and responsibility. Leadership is not one of those principles.
Hint
Reference Chapter:1.10.5
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Question 38 of 545
38. Question
1 pointsQID1242:A company may improve its corporate governance through the following means with the exception of:
Correct
Having regard to the general concepts set out by the OECD, some of the ways a company may improve its governance are as follows:
(a) installing appropriate checks and balances, such as separating the functions of the chairman and chief executive officer, appointment of independent non-executive directors, establishment of independent audit committees, and setting up committees to control the remuneration and benefits of directors and senior management;
(b) increasing transparency and disclosure to shareholders, stakeholders and the public;
(d) installing strong protective structures for minority shareholders, creditors and other lendersIncorrect
Having regard to the general concepts set out by the OECD, some of the ways a company may improve its governance are as follows:
(a) installing appropriate checks and balances, such as separating the functions of the chairman and chief executive officer, appointment of independent non-executive directors, establishment of independent audit committees, and setting up committees to control the remuneration and benefits of directors and senior management;
(b) increasing transparency and disclosure to shareholders, stakeholders and the public;
(d) installing strong protective structures for minority shareholders, creditors and other lendersHint
Reference Chapter:1.10.9
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Question 39 of 545
39. Question
1 pointsQID1241:The primary objective of good corporate governance is to:
Correct
A key objective of good governance in any corporate business is to avoid management taking improper advantage of its position to benefit itself in preference to the legitimate interests of the company.
Incorrect
A key objective of good governance in any corporate business is to avoid management taking improper advantage of its position to benefit itself in preference to the legitimate interests of the company.
Hint
Reference Chapter:1.10.9
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Question 40 of 545
40. Question
1 pointsQID929:Which of the following are not examples of good corporate governance?
I. Set up remuneration committee to control the remuneration of management.
II. Assign the management to multiple roles to cut cost.
III. Offer high degree of discretionary powers to the management to allow them to enhance efficiency.
IV. Install check and balances to limited the power of the managementCorrect
The essence of corporate governance is to enhance transparency and check and balance. The powers of the management should be limited, therefore, installation of check and balances and limiting the management’s remuneration are good practices.
Incorrect
The essence of corporate governance is to enhance transparency and check and balance. The powers of the management should be limited, therefore, installation of check and balances and limiting the management’s remuneration are good practices.
Hint
Reference Chapter:1.10.9
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Question 41 of 545
41. Question
1 pointsQID2676:Whats the objective of SFC requiring the disclosure of rights?
Correct
Disclosure requiremetns are in place to enhance transperancy
Incorrect
Disclosure requiremetns are in place to enhance transperancy
Hint
Reference Chapter:1.10.9
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Question 42 of 545
42. Question
1 pointsQID1240:Which of the following is NOT a probable measure that can be taken to improve corporate governance?
Correct
It’s not required to protect the interests of the management.
Incorrect
It’s not required to protect the interests of the management.
Hint
Reference Chapter:1.10.9
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Question 43 of 545
43. Question
1 pointsQID2680:Which of the following description does not fit financial regulators in Hong Kong?
Correct
Decisions made by the regulators can be overturned or overruled.
Incorrect
Decisions made by the regulators can be overturned or overruled.
Hint
Reference Chapter:1.10.9
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Question 44 of 545
44. Question
1 pointsQID762:The objectives of segregation of job functions include which of the followings?
I. Avoid conflict of interest.
II. Avoid the omission of errors.
III. Enhance efficiencies of all departments.
IV. Keeping the management power in check.Correct
Incompatible duties and functions should be segregated, particularly those which, when performed by the same person, may provide opportunities for abuse or result in the overlooking of errors, thereby exposing the intermediary and its clients to risks.
Incorrect
Incompatible duties and functions should be segregated, particularly those which, when performed by the same person, may provide opportunities for abuse or result in the overlooking of errors, thereby exposing the intermediary and its clients to risks.
Hint
Reference Chapter:1.10.9
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Question 45 of 545
45. Question
1 pointsQID971:Good corporate governance should separate the functions of
Correct
Good corporate governance should separate the functions of Chairman and CEO.
Incorrect
Good corporate governance should separate the functions of Chairman and CEO.
Hint
Reference Chapter:1.10.9
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Question 46 of 545
46. Question
1 pointsQID512:Good governance practices can include which of the following ways?
I. Installing appropriate checks and balances on the board of
directors and senior management.
II. Having sufficient transparency and disclosure of important facts and information to stakeholders.
III. Installing strong protective structures for majority shareholder.
IV. Identifying and penalizing corporate wrongdoing.Correct
A key objective of good governance in any corporate business is to avoid management taking improper advantage of its position to benefit itself in preference to the legitimate interests of the company. Having regard to the general concepts set out by the OECD, some of the ways a company may improve its governance are as follows:
(a) installing appropriate checks and balances.
(b) increasing transparency and disclosure to shareholders, stakeholders and the public;
(c) installing strong protective structures for minority shareholders, creditors and other lenders.
(d) identifying and penalising corporate wrongdoing.Incorrect
A key objective of good governance in any corporate business is to avoid management taking improper advantage of its position to benefit itself in preference to the legitimate interests of the company. Having regard to the general concepts set out by the OECD, some of the ways a company may improve its governance are as follows:
(a) installing appropriate checks and balances.
(b) increasing transparency and disclosure to shareholders, stakeholders and the public;
(c) installing strong protective structures for minority shareholders, creditors and other lenders.
(d) identifying and penalising corporate wrongdoing.Hint
Reference Chapter:1.10.9
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Question 47 of 545
47. Question
1 pointsQID511:Which of the following measures reflect effective corporate governance?
I. Installing appropriate checks and balances.
II. Increasing transparency and disclosure to shareholders , stakeholders and the public.
III. Adopting international accounting and auditing standards.
IV. Installing strong protective structures for minority shareholders, creditors and other lenders.Correct
A key objective of good governance in any corporate business is to avoid management taking improper advantage of its position to benefit itself in preference to the legitimate interests of the company. Having regard to the general concepts set out by the OECD, some of the ways a company may improve its governance are as follows:
(a) installing appropriate checks and balances.
(b) increasing transparency and disclosure to shareholders, stakeholders and the public;
(c) adopting international accounting and auditing standards;
(d) installing strong protective structures for minority shareholders, creditors and other lenders.Incorrect
A key objective of good governance in any corporate business is to avoid management taking improper advantage of its position to benefit itself in preference to the legitimate interests of the company. Having regard to the general concepts set out by the OECD, some of the ways a company may improve its governance are as follows:
(a) installing appropriate checks and balances.
(b) increasing transparency and disclosure to shareholders, stakeholders and the public;
(c) adopting international accounting and auditing standards;
(d) installing strong protective structures for minority shareholders, creditors and other lenders.Hint
Reference Chapter:1.10.9
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Question 48 of 545
48. Question
1 pointsQID510:Corporate governance includes which of the following features?
I. The recruitment of experienced executive directors who are realistically rewarded to ensure that the business is run
efficiently.
II. The installation of a well regulated structure incorporating close and detailed top managerial supervision of day-to-day
operations of the business.
III. The recruitment of experienced non-executive directors with the objective of ensuring a good balance between executive
and non-executive directors.
IV. Installation of audit and remuneration committees who will ensure independent audits and fair performance geared reward structures.Correct
A key objective of good governance in any corporate business is to avoid management taking improper advantage of its position to benefit itself in preference to the legitimate interests of the company. Having regard to the general concepts set out by the OECD, some of the ways a company may improve its governance are as follows:
(a) installing appropriate checks and balances, such as separating the functions of Chairman and CEO; appointment of independent non-executive directors; establishment of independent audit committees; setting up committees to control the remuneration and benefits of directors and senior management.Incorrect
A key objective of good governance in any corporate business is to avoid management taking improper advantage of its position to benefit itself in preference to the legitimate interests of the company. Having regard to the general concepts set out by the OECD, some of the ways a company may improve its governance are as follows:
(a) installing appropriate checks and balances, such as separating the functions of Chairman and CEO; appointment of independent non-executive directors; establishment of independent audit committees; setting up committees to control the remuneration and benefits of directors and senior management.Hint
Reference Chapter:1.10.9
-
Question 49 of 545
49. Question
1 pointsQID2757:Which of the following is a concept provided by the Organisation for Economic Co-operation and Development that a company can improve the level of corporate governance?
I. Distinguish between the Chief Executive Officer and the Chairman of the Board
II. Enhance transparency disclosure to shareholders and stakeholders
III. Establish a compensation committee to monitor senior management compensation
IV. Establish a robust protection structure for minority shareholders, creditors or other stakeholdersCorrect
The Organisation for Economic Co-operation and Development offers the concept that companies can improve the level of corporate governance by the following methods:
I. Distinguish between the Chief Executive Officer and the Chairman
II. Enhance transparency disclosure to shareholders and stakeholders
III. Establish a compensation committee to monitor senior management compensation
IV. Establish a strong protection structure for minority shareholders, creditors, or other stakeholders
V. Establish an independent audit committee
VI. Identify business misconduct
VII. Adopt international accounting and auditing standardsIncorrect
The Organisation for Economic Co-operation and Development offers the concept that companies can improve the level of corporate governance by the following methods:
I. Distinguish between the Chief Executive Officer and the Chairman
II. Enhance transparency disclosure to shareholders and stakeholders
III. Establish a compensation committee to monitor senior management compensation
IV. Establish a strong protection structure for minority shareholders, creditors, or other stakeholders
V. Establish an independent audit committee
VI. Identify business misconduct
VII. Adopt international accounting and auditing standardsHint
Reference Chapter:1.10.9
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Question 50 of 545
50. Question
1 pointsQID82:Which of the following correctly describe the power of the SFC?
I. Breaches of the subsidiary legislations of the SFO are not criminal offences
II. Breaches of the subsidiary legislations of the SFO are criminal offences
III. The SFC may refer serious cases to law enforcement agencies such as the Commercial Crimes Bureau (“CCB”) of the Hong Kong Police Force or the Independent Commission Against Corruption (“ICAC”) for investigation and action.
IV. The SFC may also apply to the courts for an injunction to restrain a person from dealing with his assets, or from carrying on all or a part of his business, if the SFC can make a case to show that it is in the public interest to issue such an order.Correct
The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines:
(a) Breaches of the SFO and subsidiary legislation are legal offences and will be investigated by the SFC and enforcement action taken; the SFC may refer serious cases to law enforcement agencies such as the Commercial Crimes Bureau (“CCB”) of the Hong Kong Police Force or the Independent Commission Against Corruption (“ICAC”) for investigation and action.
(b) The SFC may also apply to the courts for an injunction to restrain a person from dealing with his assets, or from carrying on all or a part of his business, if it can make a case to show that it is in the public interest to issue such an order.Incorrect
The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines:
(a) Breaches of the SFO and subsidiary legislation are legal offences and will be investigated by the SFC and enforcement action taken; the SFC may refer serious cases to law enforcement agencies such as the Commercial Crimes Bureau (“CCB”) of the Hong Kong Police Force or the Independent Commission Against Corruption (“ICAC”) for investigation and action.
(b) The SFC may also apply to the courts for an injunction to restrain a person from dealing with his assets, or from carrying on all or a part of his business, if it can make a case to show that it is in the public interest to issue such an order.Hint
Reference Chapter:1.11.
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Question 51 of 545
51. Question
1 pointsQID888:Can the SFC conduct supervisory inspections on the associated entity of an intermediary?
Correct
The SFC can conduct supervisory inspections on an intermediary or an associated entity of an intermediary.
Incorrect
The SFC can conduct supervisory inspections on an intermediary or an associated entity of an intermediary.
Hint
Reference Chapter:1.11.3
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Question 52 of 545
52. Question
1 pointsQID206:These are key provisions of the SFO that give the SFC considerable powers to investigate, among other things, possible breaches of the SFO, misfeasance and activities not in the public interest. The powers that SFC possesses include which of the followings?
I. SFC can only investigate licenced corporation
II. SFC can require an individual to provide evidence to an investigation, regardless of whether the individual is an intermediary or not.
III. SFC may apply to the court to order a person who does not comply with requirements made by the authorised person or investigator under relevant provisions to do so.
IV. SFC may require an individual under investigation to make a statutory declaration that he is unable to provide the evidence for reasons to be stated, if such is the case.Correct
The SFC may authorise an employee (or another person with the consent of the Financial Secretary) to carry out an investigation. The person so authorised may investigate any person. A person under investigation is required to:
(a) provide documents and explanations;
(e.) make a statutory declaration that he is unable to provide the evidence for reasons to be stated, if such is the case.
The SFC may apply to the court to order a person who does not comply with requirements made by the authorised person or investigator under relevant provisions to do so (s. 185, SFO).Incorrect
The SFC may authorise an employee (or another person with the consent of the Financial Secretary) to carry out an investigation. The person so authorised may investigate any person. A person under investigation is required to:
(a) provide documents and explanations;
(e.) make a statutory declaration that he is unable to provide the evidence for reasons to be stated, if such is the case.
The SFC may apply to the court to order a person who does not comply with requirements made by the authorised person or investigator under relevant provisions to do so (s. 185, SFO).Hint
Reference Chapter:1.11.3
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Question 53 of 545
53. Question
1 pointsQID1246:Kaohsiung Securities is a licensed corporation, it appears to the SFC that Kaohsiung may be unable to meet the requirements of the FRR. As a result, SFC has started to investigate Kaohsiung Securities, how should Kaohsiung Securities act in satisfying the investigative demands of the SFC?
I. Accept the SFC onsite inspection
II. Provide evidence that it can meet the requirement of the FRR in 5 days.
III. Provide documents and evidence if required by the investigators of the SFC
IV. Instruct the auditor to deal with the SFC on behalf of the companyCorrect
Section 183, SFO requires the person under investigation to:
(a) provide documents and explanations;
(b) attend before the investigator at the time and place the investigator requires in writing and to answer questions;
(d) substantiate his answers, explanations or statements by making a statutory declarationIncorrect
Section 183, SFO requires the person under investigation to:
(a) provide documents and explanations;
(b) attend before the investigator at the time and place the investigator requires in writing and to answer questions;
(d) substantiate his answers, explanations or statements by making a statutory declarationHint
Reference Chapter:1.11.7
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Question 54 of 545
54. Question
1 pointsQID205:The Securities and Futures Commission (SFC), is conducting an investigation on insider trading. Miss Ko, a retail investor, is required to provide information in the course of the investigation. While Miss Ko is not involved in insider trading, is she required to provide information to the SFC?
Correct
There are a number of grounds under which the SFC may carry out an enquiry into a listed company. It has powers to obtain records and documents, explanations and statements on
oath as to why, if such is the case, the information cannot be produced.
The persons who may be subject to the enquiry include:
(e.) any person.Incorrect
There are a number of grounds under which the SFC may carry out an enquiry into a listed company. It has powers to obtain records and documents, explanations and statements on
oath as to why, if such is the case, the information cannot be produced.
The persons who may be subject to the enquiry include:
(e.) any person.Hint
Reference Chapter:1.11.7
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Question 55 of 545
55. Question
1 pointsQID219:Mdm. Liu is a senior citizen. She is a stock investment enthusiast but suffers losses often. The SFC recently conducted an investigation on a company called Sana Seoi Bean Curd and discovered that Mdm. Liu traded the company’s stocks frequently. Thus, the SFC suspected Mdm. Liu of being involved in acts of market misconduct such as the manipulation of the stock market and requested that she participate in the investigation process. Mdm. Liu had neither knowledge, nor intention of manipulating the stock market. As the SFC investigations were going on for a long time, Mdm. Liu wanted to end the meeting earlier and thus deliberately provided false information perfunctorily to the SFC so as to complete the investigation. Had Mdm. Liu committed an offence according to the Securities and Futures Ordinance?
Correct
A person commits an offence if he provides to the SFC (whether in applications or in other circumstances) false or misleading information as to a material particular knowingly or recklessly as to whether it is false or misleading (ss. 383 and 384, SFO).
Incorrect
A person commits an offence if he provides to the SFC (whether in applications or in other circumstances) false or misleading information as to a material particular knowingly or recklessly as to whether it is false or misleading (ss. 383 and 384, SFO).
Hint
Reference Chapter:1.11.8
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Question 56 of 545
56. Question
1 pointsQID207:An employee of the SFC, an authorised person or an investigator may, under which of the following appropriate circumstances, apply to a magistrate for the issue of a warrant?
I. Authorizing specified persons, a police officer and such other persons as may be necessary to assist in the execution of the warrant to enter specified premises, if necessary by force, at any time within 7 days.
II. Requiring any person on the premises to produce any relevant documents.
III. Prohibiting any person to erase or alter or remove any relevant documents.
IV. Authorizing the specified persons to search for, seize and remove any relevant documents.Correct
An employee of the SFC, an authorised person or an investigator may, in appropriate circumstances, apply to a magistrate for the issue of a warrant:
(a) authorising specified persons, a police officer and such other persons as may be necessary to assist in the execution of the warrant to enter specified premises, if necessary by force, at any time within seven days;
(b) requiring any person on the premises to produce any relevant documents;
© prohibiting any person to erase or alter or remove any relevant documents; and
(d) authorising the specified persons to:
(i) search for, seize and remove any relevant documentsIncorrect
An employee of the SFC, an authorised person or an investigator may, in appropriate circumstances, apply to a magistrate for the issue of a warrant:
(a) authorising specified persons, a police officer and such other persons as may be necessary to assist in the execution of the warrant to enter specified premises, if necessary by force, at any time within seven days;
(b) requiring any person on the premises to produce any relevant documents;
© prohibiting any person to erase or alter or remove any relevant documents; and
(d) authorising the specified persons to:
(i) search for, seize and remove any relevant documentsHint
Reference Chapter:1.11.9
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Question 57 of 545
57. Question
1 pointsQID208:The issue of warrant that SFC receives when it applies to the magistrate does NOT include which of the following items of power?
Correct
Six months is the longest period permitted for an order to retain documents established by a regular warrant. Any period beyond that must be requested.
Incorrect
Six months is the longest period permitted for an order to retain documents established by a regular warrant. Any period beyond that must be requested.
Hint
Reference Chapter:1.11.9
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Question 58 of 545
58. Question
1 pointsQID2716:Which of the following may amend what is regulated activity by Gazette?
Correct
The Financial Secretary shall amend by the Gazette what is a regulated activity.
Incorrect
The Financial Secretary shall amend by the Gazette what is a regulated activity.
Hint
Reference Chapter:1.12.
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Question 59 of 545
59. Question
1 pointsQID794:Please rank the importance of the following in descending order
Correct
Ordinances are statutory, rules and guidelines are enforced.
Codes do not have the force of law in Hong Kong but only in other countries.Incorrect
Ordinances are statutory, rules and guidelines are enforced.
Codes do not have the force of law in Hong Kong but only in other countries.Hint
Reference Chapter:1.2.
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Question 60 of 545
60. Question
1 pointsQID221:What are the powers of the Financial Secretary in relation to securities and CISs?
Correct
Powers are given to the Financial Secretary to prescribe, by notice in the Gazette:
(a) new financial products as being (or not being) securities or futures contracts, and new financial arrangements as CISs, thus capturing new products in the regulatory net as appropriate (ss. 392 and 393, SFO)Incorrect
Powers are given to the Financial Secretary to prescribe, by notice in the Gazette:
(a) new financial products as being (or not being) securities or futures contracts, and new financial arrangements as CISs, thus capturing new products in the regulatory net as appropriate (ss. 392 and 393, SFO)Hint
Reference Chapter:1.2.1
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Question 61 of 545
61. Question
1 pointsQID1035:The Securities and Futures Ordinance (SFO) is the principal legislative document governing which markets in Hong Kong?
Correct
The SFO is the principal legislative document governing the securities market in Hong Kong.
Incorrect
The SFO is the principal legislative document governing the securities market in Hong Kong.
Hint
Reference Chapter:1.2.1
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Question 62 of 545
62. Question
1 pointsQID744:Which of the following individuals or entities should adhere to Securities and Futures (Accounts and Audit) Rules?
Correct
The SFC has made the Accounts and Audit Rules specifying the form and contents of financial statements and other documents that licensed corporations and associated entities of intermediaries (both licensed corporations and registered institutions) should prepare and the content of auditors’ reports.
Incorrect
The SFC has made the Accounts and Audit Rules specifying the form and contents of financial statements and other documents that licensed corporations and associated entities of intermediaries (both licensed corporations and registered institutions) should prepare and the content of auditors’ reports.
Hint
Reference Chapter:1.2.1
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Question 63 of 545
63. Question
1 pointsQID1036:Which of the following are the power that the Securities and Futures Ordinance (SFO) empowers the SFC with?
I. The power to introduce subsidiary legislation.
II. The power to issue codes and guidelines.
III. The power to amend the Securities and Futures Ordinance.
IV. The power to revoke the Securities and Futures Ordinance.Correct
Part VII empowers the SFC to make subsidiary legislation (s. 168, SFO) and/or codes (s. 169, SFO).
Incorrect
Part VII empowers the SFC to make subsidiary legislation (s. 168, SFO) and/or codes (s. 169, SFO).
Hint
Reference Chapter:1.2.2
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Question 64 of 545
64. Question
1 pointsQID847:The rules issued by the SFC, such as Client Securities Rules, are
Correct
These are some of the Major Subsidiary Legislation:
1.1 Securities and Futures (Financial Resources) Rules
1.2 Securities and Futures (Client Securities) Rules
1.3 Securities and Futures (Client Money) Rules
1.4 Securities and Futures (Keeping of Records) Rules
1.5 Securities and Futures (Contract Notes, Statements of Account and Receipts) Rules
1.6 Securities and Futures (Accounts and Audit) Rules,
plus many others.Incorrect
These are some of the Major Subsidiary Legislation:
1.1 Securities and Futures (Financial Resources) Rules
1.2 Securities and Futures (Client Securities) Rules
1.3 Securities and Futures (Client Money) Rules
1.4 Securities and Futures (Keeping of Records) Rules
1.5 Securities and Futures (Contract Notes, Statements of Account and Receipts) Rules
1.6 Securities and Futures (Accounts and Audit) Rules,
plus many others.Hint
Reference Chapter:1.2.2
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Question 65 of 545
65. Question
1 pointsQID1037:Failing to follow SFC-issued codes, guidelines and guidance notes may result in which of the following?
I. Reflect adversely on the fitness and properness of licensed or registered persons to continue to be so licensed or registered.
II. Imprisonment.
III. Civil consequences.
IV. A higher tax bracket.Correct
The SFO also empowers the SFC to issue codes, guidelines and guidance notes. These do not have the force of law and do not override the provisions of any applicable law. However, a
failure to follow the spirit of the codes, guidelines and guidance notes may reflect adversely on the fitness and properness of licensed or registered persons to continue to be so licensed or
registered.Incorrect
The SFO also empowers the SFC to issue codes, guidelines and guidance notes. These do not have the force of law and do not override the provisions of any applicable law. However, a
failure to follow the spirit of the codes, guidelines and guidance notes may reflect adversely on the fitness and properness of licensed or registered persons to continue to be so licensed or
registered.Hint
Reference Chapter:1.2.3
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Question 66 of 545
66. Question
1 pointsQID773:The SFC-issued codes, guidelines and guidance notes
Correct
Codes and guidelines do not have the force of law and are not legally enforceable. However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.
Incorrect
Codes and guidelines do not have the force of law and are not legally enforceable. However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.
Hint
Reference Chapter:1.2.3
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Question 67 of 545
67. Question
1 pointsQID420:Which of the following codes specifies conduct requirements for SFC licensees involved in the discretionary management of CISs, and supplements the SFC’s codes and requirements for all licensees?
Correct
The FMCC applies to intermediaries conducting discretionary management of CISs (whether or not the CISs are authorised by the SFC) and their representatives (“Fund Managers”).
Incorrect
The FMCC applies to intermediaries conducting discretionary management of CISs (whether or not the CISs are authorised by the SFC) and their representatives (“Fund Managers”).
Hint
Reference Chapter:1.2.3
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Question 68 of 545
68. Question
1 pointsQID1038:The SFC-issued codes, guidelines and guidance notes are generally only subject to
Correct
Part XVI gathers together a number of provisions of common application as well as regulatory powers. It includes miscellaneous provisions that do not fit elsewhere and additional ones which relate to the increase in civil law applications.
Incorrect
Part XVI gathers together a number of provisions of common application as well as regulatory powers. It includes miscellaneous provisions that do not fit elsewhere and additional ones which relate to the increase in civil law applications.
Hint
Reference Chapter:1.2.3
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Question 69 of 545
69. Question
1 pointsQID415:Codes and guidelines issued by the SFC which apply to licensed or registered persons in the Asset Management Industries includes
I. The Conduct Guidelines of Intermediaries
II. The Code of Conduct
III. The Internal Control Guidelines (ICG)
IV. The Prevention of Money Laundering and Terrorist Financing Guidance Note (“MLGN”)Correct
Option I included in the question is not a real code, the other three do exist and apply to asset managers.
Incorrect
Option I included in the question is not a real code, the other three do exist and apply to asset managers.
Hint
Reference Chapter:1.2.3
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Question 70 of 545
70. Question
1 pointsQID83:Which of the following correctly describes the status of SFC’s code of conducts and guidelines?
Correct
The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines:
(d) Codes and guidelines do not have the force of law and are not legally enforceable.
However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.Incorrect
The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines:
(d) Codes and guidelines do not have the force of law and are not legally enforceable.
However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.Hint
Reference Chapter:1.2.3
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Question 71 of 545
71. Question
1 pointsQID85:What is the legal status of codes and guidelines issued by the SFC?
I. Codes of conduct are subsidiary legislation and have the force of law.
II. Guidelines are subsidiary legislation and have the force of law.
III. Codes of conduct do not have the force of law, a breach does not by itself render a person liable to any judicial or other proceedings.
IV. Guidelines do not have the force of law, a breach does not by itself render a person liable to any judicial or other proceedings.Correct
The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines: (d) Codes and guidelines do not have the force of law and are not legally enforceable.
However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.Incorrect
The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines: (d) Codes and guidelines do not have the force of law and are not legally enforceable.
However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.Hint
Reference Chapter:1.2.3
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Question 72 of 545
72. Question
1 pointsQID179:The principal ordinance applicable to the asset management industry is the
Correct
The principal ordinances applicable to the asset management industry are the SFO, the Mandatory Provident Fund Schemes Ordinance (“MPFSO”), the Occupational Retirement
Schemes Ordinance (“ORSO”), the Insurance Ordinance and, to a lesser extent, the Banking Ordinance, the Employment Ordinance, the Inland Revenue Ordinance and the Trustee
Ordinance.Incorrect
The principal ordinances applicable to the asset management industry are the SFO, the Mandatory Provident Fund Schemes Ordinance (“MPFSO”), the Occupational Retirement
Schemes Ordinance (“ORSO”), the Insurance Ordinance and, to a lesser extent, the Banking Ordinance, the Employment Ordinance, the Inland Revenue Ordinance and the Trustee
Ordinance.Hint
Reference Chapter:1.2.3
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Question 73 of 545
73. Question
1 pointsQID22:Which of the following are duties of the HKMA?
I. Protect the interest of insurance policies holder
II. Maintain currency stability
III. Enhance the efficiency and integrity of the financial system
IV. Ensure the safety and stability of the banking systemCorrect
The HKMA is required to maintain currency stability, ensure the safety and stability of the banking system, and promote the efficiency, integrity and development of the financial system.
Incorrect
The HKMA is required to maintain currency stability, ensure the safety and stability of the banking system, and promote the efficiency, integrity and development of the financial system.
Hint
Reference Chapter:1.2.3
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Question 74 of 545
74. Question
1 pointsQID190:The SFO has provided powers for the SFC to make detailed rules relating to which of the following?
I. Financial Resources
II. Handling of client money and other client assets
III. The keeping of accounts and records
IV. Auditing mattersCorrect
The SFO grants the SFC powers to make detailed
rules relating to:
(a) their financial resources;
(b) the handling of client money and other client assets;
© the keeping of accounts and records; and
(d) auditing matters.Incorrect
The SFO grants the SFC powers to make detailed
rules relating to:
(a) their financial resources;
(b) the handling of client money and other client assets;
© the keeping of accounts and records; and
(d) auditing matters.Hint
Reference Chapter:1.2.3
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Question 75 of 545
75. Question
1 pointsQID87:Under the provisions of the Securities and Futures Ordinance (SFO), which of the following statements relating to rules and codes of conduct are correct?
I. Failure by a licensed person to comply with a material provision of a code of conduct will of itself make the person liable to judicial proceedings.
II. A code of conduct violation shall be admissible as evidence in court proceedings.
III. The Securities and Futures Commission (SFC) is empowered under the SFO to make rules or codes of conduct.
IV. A breach of a provision in a code of conduct by a licensed person may cast doubts on his fitness and properness to hold the licence.Correct
The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines:
(c) Persons prejudiced by the perpetration of market misconduct may take civil action against the wrongdoer through the courts to obtain redress. The SFO has provisions for the findings of the Market Misconduct Tribunal to be admissible in evidence in private civil actions.
(d) Codes and guidelines do not have the force of law and are not legally enforceable. However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.Incorrect
The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines:
(c) Persons prejudiced by the perpetration of market misconduct may take civil action against the wrongdoer through the courts to obtain redress. The SFO has provisions for the findings of the Market Misconduct Tribunal to be admissible in evidence in private civil actions.
(d) Codes and guidelines do not have the force of law and are not legally enforceable. However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.Hint
Reference Chapter:1.2.3
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Question 76 of 545
76. Question
1 pointsQID163:According to the NCO, which of the following methods of liquidation is accepted?
I. Compulsory Liquidation
II. Members’ Voluntary Winding-Up
III. Creditors’ Voluntary Winding-Up
IV. Director Compulsory LiquidationCorrect
These are the three ways for a liquidation to happen, according to the NCO:
1. A compulsory winding-up ordered by the court, and the liquidator is appointed by the court and acts under its control. A voluntary winding-up may be started by members or creditors. There are fewer formalities than with a compulsory liquidation and this route is far more popular.
2. Members’ voluntary winding-up (s. 233, CWUMPO)
This may be undertaken if the directors or, in the case of a company having more than two directors, the majority of the directors issue a “certificate of solvency” to the effect that they
have:
(a) made a full enquiry into the affairs of the company; and
(b) formed the opinion that the company will be able to pay its debts within 12 months from the commencement of the winding-up as specified in the certificate of solvency.
3. Creditors’ voluntary winding-up (ss. 241 to 243, CWUMPO)
The company shall arrange a meeting of the creditors to be summoned for the day when the resolution to wind up is proposed or for the next day. Advertisements must be run in the
Gazette and newspapers. A statement of the position of the company’s affairs, and a list of creditors and amounts due, will be presented to the meeting, at which a liquidator and a committee of inspection will be appointed to supervise the process.Incorrect
These are the three ways for a liquidation to happen, according to the NCO:
1. A compulsory winding-up ordered by the court, and the liquidator is appointed by the court and acts under its control. A voluntary winding-up may be started by members or creditors. There are fewer formalities than with a compulsory liquidation and this route is far more popular.
2. Members’ voluntary winding-up (s. 233, CWUMPO)
This may be undertaken if the directors or, in the case of a company having more than two directors, the majority of the directors issue a “certificate of solvency” to the effect that they
have:
(a) made a full enquiry into the affairs of the company; and
(b) formed the opinion that the company will be able to pay its debts within 12 months from the commencement of the winding-up as specified in the certificate of solvency.
3. Creditors’ voluntary winding-up (ss. 241 to 243, CWUMPO)
The company shall arrange a meeting of the creditors to be summoned for the day when the resolution to wind up is proposed or for the next day. Advertisements must be run in the
Gazette and newspapers. A statement of the position of the company’s affairs, and a list of creditors and amounts due, will be presented to the meeting, at which a liquidator and a committee of inspection will be appointed to supervise the process.Hint
Reference Chapter:1.3.
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Question 77 of 545
77. Question
1 pointsQID137:Model articles of private companies and public companies consist of which of the followings?
I. Capital
II. Members
III. Officers
IV. Miscellaneous provisionCorrect
Model articles of association for private companies, public companies and guarantee companies are provided in the Companies (Model Articles) Notice. Model articles of private companies and public companies consist broadly of four parts including matters relating to:
(a) officers, including powers, duties, appointments and disqualifications of directors, appointments and removal of company secretaries;
(b) members, including meetings and voting procedures;
© capital, such as share capital, rights and dealings with shares and dividends; and
(d) miscellaneous provisions such as communications to and by the company and administrative arrangements.Incorrect
Model articles of association for private companies, public companies and guarantee companies are provided in the Companies (Model Articles) Notice. Model articles of private companies and public companies consist broadly of four parts including matters relating to:
(a) officers, including powers, duties, appointments and disqualifications of directors, appointments and removal of company secretaries;
(b) members, including meetings and voting procedures;
© capital, such as share capital, rights and dealings with shares and dividends; and
(d) miscellaneous provisions such as communications to and by the company and administrative arrangements.Hint
Reference Chapter:1.3.10
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Question 78 of 545
78. Question
1 pointsQID1042:Which of the following are included and defined in the articles of association?
I. Members, including meeting and procedures
II. Officers, including powers, duties, appointments and disqualifications of directors, appointment of managing directors and company secretaries
III. Capital, such as dividends, reserves, accounts and audit.
IV. Miscellaneous provisions such as communications to and by the company and administrative arrangements.Correct
Model articles of association for private companies, public companies and guarantee companies are provided in the Companies (Model Articles) Notice. Model articles of private companies and public companies consist broadly of four parts including matters relating to:
(a) officers, including powers, duties, appointments and disqualifications of directors, appointments and removal of company secretaries;
(b) members, including meetings and voting procedures;
© capital, such as share capital, rights and dealings with shares and dividends; and
(d) miscellaneous provisions such as communications to and by the company and administrative arrangements.Incorrect
Model articles of association for private companies, public companies and guarantee companies are provided in the Companies (Model Articles) Notice. Model articles of private companies and public companies consist broadly of four parts including matters relating to:
(a) officers, including powers, duties, appointments and disqualifications of directors, appointments and removal of company secretaries;
(b) members, including meetings and voting procedures;
© capital, such as share capital, rights and dealings with shares and dividends; and
(d) miscellaneous provisions such as communications to and by the company and administrative arrangements.Hint
Reference Chapter:1.3.10
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Question 79 of 545
79. Question
1 pointsQID2849:Which of the following statements about the directors of a company is correct?
I. Except as restricted by the company’s articles of association, company regulations or special resolutions, the directors may exercise all the powers of the company.
II. If the directors are unwilling to act, members may intervene in management matters at a general meeting.
III. Members may limit the powers of directors by resolution at a general meeting.
IV. Directors should hold a meeting (board meeting) before making a decision, and exercise their power only after the resolution is passed at the meeting.Correct
Members cannot pass a resolution at a general meeting to limit the powers of a director unless the director is unwilling to act or the director is in breach of fiduciary duty.
Incorrect
Members cannot pass a resolution at a general meeting to limit the powers of a director unless the director is unwilling to act or the director is in breach of fiduciary duty.
Hint
Reference Chapter:1.3.10
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Question 80 of 545
80. Question
1 pointsQID1050:According to the new regulations of the New Company Ordinance (NCO), which of the following is NOT included in the articles of association?
Correct
Model articles of association for private companies, public companies and guarantee companies are provided in the Companies (Model Articles) Notice. Model articles of private
companies and public companies consist broadly of four parts including matters relating to:
(a) officers, including powers, duties, appointments and disqualifications of directors, appointments and removal of company secretaries;
(b) members, including meetings and voting procedures;
© capital, such as share capital, rights and dealings with shares and dividends; and
(d) miscellaneous provisions such as communications to and by the company and administrative arrangements.Incorrect
Model articles of association for private companies, public companies and guarantee companies are provided in the Companies (Model Articles) Notice. Model articles of private
companies and public companies consist broadly of four parts including matters relating to:
(a) officers, including powers, duties, appointments and disqualifications of directors, appointments and removal of company secretaries;
(b) members, including meetings and voting procedures;
© capital, such as share capital, rights and dealings with shares and dividends; and
(d) miscellaneous provisions such as communications to and by the company and administrative arrangements.Hint
Reference Chapter:1.3.10
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Question 81 of 545
81. Question
1 pointsQID1048:General meetings of shareholders are very important as
Correct
Company meetings of shareholders are very important as they provide the only opportunity for shareholders to exercise any control over the affairs of the company or take part in its operations.
Incorrect
Company meetings of shareholders are very important as they provide the only opportunity for shareholders to exercise any control over the affairs of the company or take part in its operations.
Hint
Reference Chapter:1.3.11
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Question 82 of 545
82. Question
1 pointsQID2422:Which of the following can call a meeting other than the annual general meetings?
I. Shareholders
II. Directors
III. Creditors
IV. CourtCorrect
Which of the following can call a meeting other than the annual general meetings?
I. Shareholders
II. Directors
III. CourtIncorrect
Which of the following can call a meeting other than the annual general meetings?
I. Shareholders
II. Directors
III. CourtHint
Reference Chapter:1.3.13
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Question 83 of 545
83. Question
1 pointsQID1054:Company meetings can be requested by which of the following
I. Directors
II. The court
III. Shareholders
IV. LiquidatorCorrect
Other general meetings may be requested by directors, shareholders and the court.
Incorrect
Other general meetings may be requested by directors, shareholders and the court.
Hint
Reference Chapter:1.3.13
-
Question 84 of 545
84. Question
1 pointsQID1057:The AGM includes the presentation and approval of which of the following?
I. Annual accounts and audit reports
II. Declaration of dividends
III. Assignment of Directors
IV. Assignment 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.
Hint
Reference Chapter:1.3.14
-
Question 85 of 545
85. Question
1 pointsQID1055:Subsequent AGMs after the first AGM should be held within how many month-intervals thereafter?
Correct
A company is required to hold its first AGM within 18 months after its incorporation. Subsequent AGMs must be held every calendar year and the interval between AGMs should not be more than 15 months.
Incorrect
A company is required to hold its first AGM within 18 months after its incorporation. Subsequent AGMs must be held every calendar year and the interval between AGMs should not be more than 15 months.
Hint
Reference Chapter:1.3.14
-
Question 86 of 545
86. Question
1 pointsQID1056:Which of the following may cast votes in company AGM that passes ordinary resolution and special resolutions?
Correct
A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy).
Incorrect
A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy).
Hint
Reference Chapter:1.3.14
-
Question 87 of 545
87. Question
1 pointsQID1058:The first AGM should be held within how many months of incorporation?
Correct
A company is required to hold its first AGM within 18 months after its incorporation. Subsequent AGMs must be held every calendar year and the interval between AGMs should not be more than 15 months.
Incorrect
A company is required to hold its first AGM within 18 months after its incorporation. Subsequent AGMs must be held every calendar year and the interval between AGMs should not be more than 15 months.
Hint
Reference Chapter:1.3.14
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Question 88 of 545
88. Question
1 pointsQID1053:Companies are required to held an annual general meeting of shareholders, unless
Correct
A company is required by the NCO to hold an annual general meeting of shareholders (s. 610, NCO). Companies are permitted to dispense with the requirement to hold annual general meetings by passing a written resolution or a resolution at a general meeting with unanimous shareholders’ consent.
Incorrect
A company is required by the NCO to hold an annual general meeting of shareholders (s. 610, NCO). Companies are permitted to dispense with the requirement to hold annual general meetings by passing a written resolution or a resolution at a general meeting with unanimous shareholders’ consent.
Hint
Reference Chapter:1.3.14
-
Question 89 of 545
89. Question
1 pointsQID1059:What should an auditor do if he/she believes that there is something seriously wrong with a company’s financial position?
Correct
The usual audit report does not give much opportunity for questions as it is normally in a standard format stating that the accounts present a “true and fair view” of the company’s financial position, unless something is seriously wrong, when the auditors will include a qualification in the report.
Incorrect
The usual audit report does not give much opportunity for questions as it is normally in a standard format stating that the accounts present a “true and fair view” of the company’s financial position, unless something is seriously wrong, when the auditors will include a qualification in the report.
Hint
Reference Chapter:1.3.14
-
Question 90 of 545
90. Question
1 pointsQID1061:Which of the following matters are passed by ordinary resolutions?
I. Dismissal of an auditor before his term of office expires.
II. Dismissal of a director before his term of office expires.
III. Dismissal of an auditor when his term of office expires.
IV. Dismissal of a director when his term of office expires.Correct
Under s. 548, NCO, resolutions may be passed by circularisation and signed by all members except for:
(a) the removal of auditors before the expiration of their term of office; or
(b) the removal of a director before his term expires.Incorrect
Under s. 548, NCO, resolutions may be passed by circularisation and signed by all members except for:
(a) the removal of auditors before the expiration of their term of office; or
(b) the removal of a director before his term expires.Hint
Reference Chapter:1.3.15
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Question 91 of 545
91. Question
1 pointsQID1604:Which of the following resolutions cannot be passed by circularisation and signed by all members?
I. The removal of a director before his term expires
II. Reduction of share capital
III. Alteration of objects and articles of association
IV. Issuance of additional stocksCorrect
Under s. 548, NCO, resolutions may be passed by circularisation and signed by all members except for:
(b) the removal of a director before his term expires.
A special resolution is one passed by at least 75% of members at a general meeting (voting in
person or, where proxies are allowed, by proxy), of which not less than 21 days’ notice
specifying the intention to pass the resolution has been given. Examples of matters which need
special resolutions are:
(a) reduction of share capital;
(c.) alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).The issuance of new shares are passed by the board of directors.
Incorrect
Under s. 548, NCO, resolutions may be passed by circularisation and signed by all members except for:
(b) the removal of a director before his term expires.
A special resolution is one passed by at least 75% of members at a general meeting (voting in
person or, where proxies are allowed, by proxy), of which not less than 21 days’ notice
specifying the intention to pass the resolution has been given. Examples of matters which need
special resolutions are:
(a) reduction of share capital;
(c.) alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).The issuance of new shares are passed by the board of directors.
Hint
Reference Chapter:1.3.15
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Question 92 of 545
92. Question
1 pointsQID1062:Which of the following descriptions about resolutions is correct?
Correct
Under s. 548, NCO, resolutions may be passed by circularisation and signed by all members.
Incorrect
Under s. 548, NCO, resolutions may be passed by circularisation and signed by all members.
Hint
Reference Chapter:1.3.15
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Question 93 of 545
93. Question
1 pointsQID1060:If the shareholder are not happy with the performance of the directors, how can they replace the directors?
Correct
Under s. 548, NCO, resolutions may be passed by circularisation and signed by all members except for:
(b) the removal of a director before his term expires.Incorrect
Under s. 548, NCO, resolutions may be passed by circularisation and signed by all members except for:
(b) the removal of a director before his term expires.Hint
Reference Chapter:1.3.15
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Question 94 of 545
94. Question
1 pointsQID145:The majority of resolutions can be passed by which of the following methods?
Correct
Under s.548, NCO, resolutions may be passed by circulation and signed by all members.
Incorrect
Under s.548, NCO, resolutions may be passed by circulation and signed by all members.
Hint
Reference Chapter:1.3.15
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Question 95 of 545
95. Question
1 pointsQID2790:How long the notice period should be for a special resolution?
Correct
Special resolutions should have a 14-day notice period.
Incorrect
Special resolutions should have a 14-day notice period.
Hint
Reference Chapter:1.3.17
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Question 96 of 545
96. Question
1 pointsQID140:Which of the following statements about special resolutions passed by the company are correct?
I. A special resolution is a resolution that is passed by at least 50% of members at a general meeting.
II. A special resolution is a resolution that is passed by at least 75% of members at a general meeting.
III. Not less than 14 days’ notice specifying the intention to pass the resolution has been given to members.
IV. Not less than 21 days’ notice specifying the intention to pass the resolution has been given to members.Correct
A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy), of which not less than 14 days’ notice
specifying the intention to pass the resolution has been given.Incorrect
A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy), of which not less than 14 days’ notice
specifying the intention to pass the resolution has been given.Hint
Reference Chapter:1.3.17
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Question 97 of 545
97. Question
1 pointsQID1066:Which of the following shall be passed under a special resolution?
I. Reduction of share capital
II. Winding up of the company voluntarily or by court
III. Alteration of objects, articles or conditions in the articles of association.
IV. Assignment and removal of DirectorsCorrect
Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
(c) alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).Incorrect
Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
(c) alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).Hint
Reference Chapter:1.3.17
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Question 98 of 545
98. Question
1 pointsQID1069:Which of the following matters need to be passed through special resolutions?
I. Reduction of share capital
II. Winding up of the company
III. Deletion, alteration, and addition to the company’s articles of association
IV. Replacement of directors and/or auditorsCorrect
Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
(c) alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).Incorrect
Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
(c) alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).Hint
Reference Chapter:1.3.17
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Question 99 of 545
99. Question
1 pointsQID1064:Which of the following matters are passed under special resolutions?
I. Reduction of share capital
II. Winding up of the company voluntarily or by court
III. Alteration of objects in articles of association
IV. Disposal of company assetsCorrect
Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
(c) alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).Incorrect
Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
(c) alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).Hint
Reference Chapter:1.3.17
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Question 100 of 545
100. Question
1 pointsQID1063:What is the passing rate of a special resolution?
Correct
A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy).
Incorrect
A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy).
Hint
Reference Chapter:1.3.17
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Question 101 of 545
101. Question
1 pointsQID1065:A special resolution requires how many days’ notice specifying the intention to pass the resolution to been given?
Correct
A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy), of which not less than 14 days’ notice specifying the intention to pass the resolution has been given.
Incorrect
A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy), of which not less than 14 days’ notice specifying the intention to pass the resolution has been given.
Hint
Reference Chapter:1.3.17
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Question 102 of 545
102. Question
1 pointsQID141:Which of the following are required to pass a special resolution?
I. Reduction of share capital
II. Voluntary liquidation
III. Determining and declaring dividends and profits
IV. Alteration of objects and articles of associationCorrect
Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
© alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in
the articles of association (for existing companies).Incorrect
Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
© alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in
the articles of association (for existing companies).Hint
Reference Chapter:1.3.17
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Question 103 of 545
103. Question
1 pointsQID1068:Which of the following descriptions about a special resolution is correct?
I. It may be passed by circularisation and signed by all members
II. It must be passed by at least 75% of members.
III. A notice period of not less than 14 days’ must be given.
IV. A printed copy of a special resolution must be lodged with the Registrar of Companies within 15 days of it being passed.Correct
A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy), of which not less than 14 days’ notice specifying the intention to pass the resolution has been given. Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
© alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).
A copy of a special resolution must be lodged with the Registrar of Companies within 15 days of it being passed.Incorrect
A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy), of which not less than 14 days’ notice specifying the intention to pass the resolution has been given. Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
© alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).
A copy of a special resolution must be lodged with the Registrar of Companies within 15 days of it being passed.Hint
Reference Chapter:1.3.17
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Question 104 of 545
104. Question
1 pointsQID1067:A printed copy of a special resolution must be lodged with the Company Registrar within how many days after being passed?
Correct
A copy of a special resolution must be lodged with the Registrar of Companies within 15 days of it being passed.
Incorrect
A copy of a special resolution must be lodged with the Registrar of Companies within 15 days of it being passed.
Hint
Reference Chapter:1.3.17
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Question 105 of 545
105. Question
1 pointsQID144:Special Resolutions are passed by which of the following individuals or entities?
Correct
A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy), of which not less than 14 days’ notice
specifying the intention to pass the resolution has been given.Incorrect
A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy), of which not less than 14 days’ notice
specifying the intention to pass the resolution has been given.Hint
Reference Chapter:1.3.17
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Question 106 of 545
106. Question
1 pointsQID2839:Which of the following can be done by ordinary resolution?
Correct
Removal of auditors and directors can be done by ordinary resolution.
Reduction of share capital, liquidation, amendment of articles of association all require special resolutions.
Incorrect
Removal of auditors and directors can be done by ordinary resolution.
Reduction of share capital, liquidation, amendment of articles of association all require special resolutions.
Hint
Reference Chapter:1.3.18
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Question 107 of 545
107. Question
1 pointsQID1071:An ordinary resolution is a resolution which may be passed by what percentage of voting at a meeting of members?
Correct
An ordinary resolution is a resolution which may be passed by a simple majority of those present and voting at a meeting of members. Notice must be given.
Incorrect
An ordinary resolution is a resolution which may be passed by a simple majority of those present and voting at a meeting of members. Notice must be given.
Hint
Reference Chapter:1.3.18
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Question 108 of 545
108. Question
1 pointsQID1070:What is the passing rate of an ordinary resolution?
Correct
An ordinary resolution is a resolution which may be passed by a simple majority of those present and voting at a meeting of members. Notice must be given.
Incorrect
An ordinary resolution is a resolution which may be passed by a simple majority of those present and voting at a meeting of members. Notice must be given.
Hint
Reference Chapter:1.3.18
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Question 109 of 545
109. Question
1 pointsQID1073:Which of the following are NOT powers exercisable by members in the general meeting?
Correct
These include:
(a) changes to articles of association and company name;
© issue of shares at a discount;
(d) alteration of capital including reduction.Incorrect
These include:
(a) changes to articles of association and company name;
© issue of shares at a discount;
(d) alteration of capital including reduction.Hint
Reference Chapter:1.3.19
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Question 110 of 545
110. Question
1 pointsQID1072:Which of the following are powers exercisable by members in general meeting?
I. Removal of directors
II. Disposal of assets
III. Approval of payments for loss of office
IV. Approval of payments for profit of officeCorrect
These include:
(h) removal of directors;
(i) disposal of company assets;
(j) approval of payments for loss of officeIncorrect
These include:
(h) removal of directors;
(i) disposal of company assets;
(j) approval of payments for loss of officeHint
Reference Chapter:1.3.19
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Question 111 of 545
111. Question
1 pointsQID1039:What are the major features of the New Companies Ordinance?
I. The NCO permits the formation of a company by one or more persons (s. 67, NCO).
II. The NCO provides that one member constitutes a quorum for a meeting of a company having only one member.
III. The NCO permits the formation of a company by one or more companies.
IV. The NCO permits the permits the formation of a company by two or more persons (s. 67, NCO).Correct
The NCO permits the formation of a company by one or more persons (s. 67, NCO). The NCO also provides that one member
constitutes a quorum for a meeting of a company having only one member.Incorrect
The NCO permits the formation of a company by one or more persons (s. 67, NCO). The NCO also provides that one member
constitutes a quorum for a meeting of a company having only one member.Hint
Reference Chapter:1.3.2
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Qu