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
-
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
-
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
-
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
-
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
-
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
-
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
-
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
-
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
-
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
-
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
-
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
-
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
-
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
-
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
-
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
-
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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Question 112 of 545
112. Question
1 pointsQID1075:If a variation of the rights of the holders of a class of a shares in a company occurs, shareholders who believe that such variation is against their interests may petition the court to have the variation cancelled. What is the threshold for such a petition to occur?
Correct
There are provisions in the NCO and in Companies (Model Articles) Notice which enable a
company to vary the rights of the holders of a class of shares. However, if a variation is being processed, the holders of at least 10% of the total voting rights of the shares in that class may petition the court to have the variation cancelled if it is against their interests.Incorrect
There are provisions in the NCO and in Companies (Model Articles) Notice which enable a
company to vary the rights of the holders of a class of shares. However, if a variation is being processed, the holders of at least 10% of the total voting rights of the shares in that class may petition the court to have the variation cancelled if it is against their interests.Hint
Reference Chapter:1.3.20
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Question 113 of 545
113. Question
1 pointsQID1076:If a company is functional and can form resolutions through the AGM, the court will generally not interfere in its matters. This practice is based on which of the following principles?
Correct
The court will not generally interfere in internal management matters or where the company can deal with the matter by calling a meeting. This is the principle of majority power.
Incorrect
The court will not generally interfere in internal management matters or where the company can deal with the matter by calling a meeting. This is the principle of majority power.
Hint
Reference Chapter:1.3.22
-
Question 114 of 545
114. Question
1 pointsQID1077:The court will not generally interfere in internal management matters or where the company can deal with the matter by calling a meeting. This is the principle of
Correct
The court will not generally interfere in internal management matters or where the company can deal with the matter by calling a meeting. This is the principle of majority power.
Incorrect
The court will not generally interfere in internal management matters or where the company can deal with the matter by calling a meeting. This is the principle of majority power.
Hint
Reference Chapter:1.3.22
-
Question 115 of 545
115. Question
1 pointsQID1082:Vita Milk, a listed company is undergoing structural reform, which includes a series of share placing and new debt financing arrangements. Sharon Chan is a 1% stakeholder of Vita Milk and she believes such actions are against her rights. She can
I. Apply to court for an order if she considers that the affairs of the company are being conducted in a manner prejudicial to interest of member’s.
II. Solely request the directors to call for a meeting; if the directors will not, she may do so on her own.
III. Rally 100 shareholders or 10% of the holders of the issued shares and request the Financial Secretary to appoint an investigator to look into the company’s affairs
IV. Petition to the commercial crime Bureau of Hong Kong to establish a special unit to investigate such actions.Correct
To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(c.) Dissenting members may appeal to the court to have certain resolutions cancelled.
(e.) 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.
On the other hand,
(d) Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
Sharon cannot call a meeting on her own.Incorrect
To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(c.) Dissenting members may appeal to the court to have certain resolutions cancelled.
(e.) 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.
On the other hand,
(d) Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
Sharon cannot call a meeting on her own.Hint
Reference Chapter:1.3.23
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Question 116 of 545
116. Question
1 pointsQID1078:Which of the following are safeguards provided under the NCO to protect the interest of minority shareholders?
I. The requirement of passing a special resolution for matters of great significance.
II. Court sanctions where the decision of the company will directly affect creditors.
III. Dissenting members may appeal to the court to have certain resolutions cancelled.
IV. A member may petition for a winding upCorrect
To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(a) As seen in section 3.17 above, a special resolution is required for certain matters.
(b) Court sanction is required where the decision of the company will directly affect creditors.
© Dissenting members may appeal to the court to have certain resolutions cancelled.
(g) A member may petition for a winding up.Incorrect
To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(a) As seen in section 3.17 above, a special resolution is required for certain matters.
(b) Court sanction is required where the decision of the company will directly affect creditors.
© Dissenting members may appeal to the court to have certain resolutions cancelled.
(g) A member may petition for a winding up.Hint
Reference Chapter:1.3.23
-
Question 117 of 545
117. Question
1 pointsQID1084:The court, upon recognizing a petition from the minority shareholder of a company, will most likely
Correct
A member may apply to the court for an order if he considers that the affairs of the company are being conducted in a manner prejudicial to the interests of the members generally or of some part of the members.
Incorrect
A member may apply to the court for an order if he considers that the affairs of the company are being conducted in a manner prejudicial to the interests of the members generally or of some part of the members.
Hint
Reference Chapter:1.3.23
-
Question 118 of 545
118. Question
1 pointsQID1080:Mr. Wan is a shareholder of Vita Milk, a company listed on the SEHK. Recently, Vita Milk issued a large number of convertible bonds without legitimate reasons. Mr. Wan believes that he can petition against such actions. Where and to whom should Mr Wan file a petition?
Correct
Dissenting members may appeal to the court to have certain resolutions cancelled.
Incorrect
Dissenting members may appeal to the court to have certain resolutions cancelled.
Hint
Reference Chapter:1.3.23
-
Question 119 of 545
119. Question
1 pointsQID2749:If the rights of the shareholders are changed, under what percentage of voting rights can a petition be filed with the court to cancel the change?
Correct
When the rights of the shareholders are changed, as long as there are more than 10% of the voting rights, a petition can be filed with the court to cancel the change.
Incorrect
When the rights of the shareholders are changed, as long as there are more than 10% of the voting rights, a petition can be filed with the court to cancel the change.
Hint
Reference Chapter:1.3.23
-
Question 120 of 545
120. Question
1 pointsQID1081:Mr. Ko is a major stakeholder of Yellow River Trading Limited and owns 15% of outstanding shares of Yellow River Trading Limited. Yellow River Trading Limited plans to sell its shares to Mr. Wan and a number of high net worth individuals through a shares placement at a discount. Mr. Ko believes these actions are diluting his shares without his consent, what are the possible actions that can be taken by Mr Ko?
I. Appeal to the court to cancel such actions.
II. Petition to start an AGM immediately to stop the placement.
III. Request the financial secretary to appoint an investigator into the company’s affairs
IV. Request a special hearing from the ICAC.Correct
To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(c.) Dissenting members may appeal to the court to have certain resolutions cancelled.
(d) Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
(e.) 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.Incorrect
To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(c.) Dissenting members may appeal to the court to have certain resolutions cancelled.
(d) Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
(e.) 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.Hint
Reference Chapter:1.3.23
-
Question 121 of 545
121. Question
1 pointsQID1083:To ensure there is no abuse of majority power, which of the following safeguards are provided under the NCO to protect the interests of minority shareholders?
I. Dissenting members may appeal to the court to have certain resolutions cancelled.
II. Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
III. 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.
IV. A member may apply to the court for an order if he considers that the affairs of the company are being conducted in a manner prejudicial to the interests of the members generally or of some part of the members.Correct
To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(c.) Dissenting members may appeal to the court to have certain resolutions cancelled.
(d) Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
(e.) 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.
(f) A member may apply to the court for an order if he considers that the affairs of the company are being conducted in a manner prejudicial to the interests of the members generally or of some part of the members.Incorrect
To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(c.) Dissenting members may appeal to the court to have certain resolutions cancelled.
(d) Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
(e.) 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.
(f) A member may apply to the court for an order if he considers that the affairs of the company are being conducted in a manner prejudicial to the interests of the members generally or of some part of the members.Hint
Reference Chapter:1.3.23
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Question 122 of 545
122. Question
1 pointsQID1079:To ensure there is no abuse of majority power, which of the following safeguards are provided under the NCO to protect the interests of minority shareholders?
I. Dissenting members may appeal to the court to have certain resolutions cancelled.
II. Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
III. 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.
IV. A member may petition for a winding up.Correct
To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(c.) Dissenting members may appeal to the court to have certain resolutions cancelled.
(d) Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
(e.) 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.
(g) A member may petition for a winding up.Incorrect
To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(c.) Dissenting members may appeal to the court to have certain resolutions cancelled.
(d) Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
(e.) 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.
(g) A member may petition for a winding up.Hint
Reference Chapter:1.3.23
-
Question 123 of 545
123. Question
1 pointsQID2823:Measures to protect minority shareholders do not include
Correct
Measures to protect minority shareholders include:
1. Members with 5% of the voting rights may request the directors to call a general meeting. If the directors refuse, they can convene a general meeting on their own.
2. 100 members or 10% of the holder of the issued shares can request the Financial Secretary to investigate the company’s affairs
3. Dissenting members can appeal to the court to revoke certain company resolutions
4. Any member may petition the court for the winding-up of the company.
5. If a member believes that their interests are impaired, they can apply to the court for an orderIncorrect
Measures to protect minority shareholders include:
1. Members with 5% of the voting rights may request the directors to call a general meeting. If the directors refuse, they can convene a general meeting on their own.
2. 100 members or 10% of the holder of the issued shares can request the Financial Secretary to investigate the company’s affairs
3. Dissenting members can appeal to the court to revoke certain company resolutions
4. Any member may petition the court for the winding-up of the company.
5. If a member believes that their interests are impaired, they can apply to the court for an orderHint
Reference Chapter:1.3.23
-
Question 124 of 545
124. Question
1 pointsQID1085:The court may NOT intervene to allow an individual to bring an action
Correct
The court may intervene to allow an individual member or members to bring an action:
(a) to enforce some personal rights (a personal action);
(b) where a right has been infringed which affects all or a number of members in a similar way (a joint action); or
(c) on behalf of the company where misconduct has been committed against the company, for example by a director of the company or a third party (a derivative action).Incorrect
The court may intervene to allow an individual member or members to bring an action:
(a) to enforce some personal rights (a personal action);
(b) where a right has been infringed which affects all or a number of members in a similar way (a joint action); or
(c) on behalf of the company where misconduct has been committed against the company, for example by a director of the company or a third party (a derivative action).Hint
Reference Chapter:1.3.24
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Question 125 of 545
125. Question
1 pointsQID1087:Which of the following descriptions is an accurate representation of director under the NCO?
Correct
The NCO merely defines a director as including a person who occupies the position of director, by whatever name he is called. The NCO itself refers very little to directors but there is more about them in Companies (Model Articles) Notice. The NCO says that every company (not being a private company) must have at least two directors (s. 453, NCO) and every private company must have at least one director (s. 454, NCO).
Incorrect
The NCO merely defines a director as including a person who occupies the position of director, by whatever name he is called. The NCO itself refers very little to directors but there is more about them in Companies (Model Articles) Notice. The NCO says that every company (not being a private company) must have at least two directors (s. 453, NCO) and every private company must have at least one director (s. 454, NCO).
Hint
Reference Chapter:1.3.25
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Question 126 of 545
126. Question
1 pointsQID1086:Which of the following descriptions are accurate representations of director under the NCO?
I. A director is a person who occupies the position of director and bears whatever title.
II. Guarantee Companies and Public Companies must have at least two directors.
III. Private Companies must have at least one director.
IV. Directors are appointed by the members acting in general meeting.Correct
The NCO merely defines a director as including a person who occupies the position of director, by whatever name he is called. The NCO itself refers very little to directors but there is more about them in Companies (Model Articles) Notice. The NCO says that every company (not being a private company) must have at least two directors (s. 453, NCO) and every private company must have at least one director (s. 454, NCO). The directors must be appointed by the members acting in general meeting.
Incorrect
The NCO merely defines a director as including a person who occupies the position of director, by whatever name he is called. The NCO itself refers very little to directors but there is more about them in Companies (Model Articles) Notice. The NCO says that every company (not being a private company) must have at least two directors (s. 453, NCO) and every private company must have at least one director (s. 454, NCO). The directors must be appointed by the members acting in general meeting.
Hint
Reference Chapter:1.3.25
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Question 127 of 545
127. Question
1 pointsQID2579:Which of the following is correct based on the NCO regarding director(s) of private companies?
Correct
Every private company is required to have at least one director, and at least one director must be a natural person.
Incorrect
Every private company is required to have at least one director, and at least one director must be a natural person.
Hint
Reference Chapter:1.3.26
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Question 128 of 545
128. Question
1 pointsQID1088:Every private company is required to have at least one director who is
Correct
Every private company (other than one within the same group as a listed company) is required to have at least one director who is a natural person.
Incorrect
Every private company (other than one within the same group as a listed company) is required to have at least one director who is a natural person.
Hint
Reference Chapter:1.3.26
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Question 129 of 545
129. Question
1 pointsQID2686:Under the company ordinance regarding directors of a company, which of the following is true?
Correct
Each private company must have a least one director who is a natural person
Incorrect
Each private company must have a least one director who is a natural person
Hint
Reference Chapter:1.3.26
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Question 130 of 545
130. Question
1 pointsQID1089:Which of the following is an accurate representation of shadow directors?
Correct
Shadow directors are “persons in accordance with whose directions or instructions (excluding advice given in a professional capacity) the directors, or a majority of the directors, of a body corporate are accustomed to act”.
Incorrect
Shadow directors are “persons in accordance with whose directions or instructions (excluding advice given in a professional capacity) the directors, or a majority of the directors, of a body corporate are accustomed to act”.
Hint
Reference Chapter:1.3.27
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Question 131 of 545
131. Question
1 pointsQID147:Which of the following individuals is a shadow director?
Correct
Shadow directors are “persons in accordance with whose directions or instructions (excluding advice given in a professional capacity) the directors, or a majority of the directors, of a body corporate are accustomed to act”.
Incorrect
Shadow directors are “persons in accordance with whose directions or instructions (excluding advice given in a professional capacity) the directors, or a majority of the directors, of a body corporate are accustomed to act”.
Hint
Reference Chapter:1.3.27
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Question 132 of 545
132. Question
1 pointsQID1091:Which of the following are officers of a company under the CO?
I. Managers
II. Company Secretary
III. Major Shareholders
IV. DirectorsCorrect
An officer, according to the NCO, includes a director, manager or company secretary.
Incorrect
An officer, according to the NCO, includes a director, manager or company secretary.
Hint
Reference Chapter:1.3.28
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Question 133 of 545
133. Question
1 pointsQID148:Which of the following actions may result in disqualification as director by court order?
I. Ms. Chung was found to be in persistent default in relation to the New Companies Ordinance or in acting as a liquidator or receiver.
II. Mr. Tse had committed fraud in relation to minor company matters including the preparation of false accounts.
III. Ms. Wang served as a director of an insolvent company last year. The company was liquidated due to poor management of other directors.
IV. Mr. Ng was convicted of an indictable offence for fraud or dishonesty or relating to forming or operating companies.Correct
Persons to be appointed directors must meet the following requirements:
(c) They must not be disqualified by court order; the four principal grounds for such an order being:
(i) conviction of an indictable offence for fraud or dishonesty or relating to forming or operating companies;
(ii) persistent default in relation to the NCO or in acting as a liquidator or receiver;
(iii) fraud in relation to company matters or fraudulent trading; or
(iv) a finding of being unfit during directorship of an insolvent company.
Fraud and the other disqualifications apply to directors and shadow directors (e.g. see section 2.5, Topic 9, which describes disqualification orders made by the MMT preventing persons committing market misconduct from being directors of companies).Incorrect
Persons to be appointed directors must meet the following requirements:
(c) They must not be disqualified by court order; the four principal grounds for such an order being:
(i) conviction of an indictable offence for fraud or dishonesty or relating to forming or operating companies;
(ii) persistent default in relation to the NCO or in acting as a liquidator or receiver;
(iii) fraud in relation to company matters or fraudulent trading; or
(iv) a finding of being unfit during directorship of an insolvent company.
Fraud and the other disqualifications apply to directors and shadow directors (e.g. see section 2.5, Topic 9, which describes disqualification orders made by the MMT preventing persons committing market misconduct from being directors of companies).Hint
Reference Chapter:1.3.29
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Question 134 of 545
134. Question
1 pointsQID149:Which of the following are potential barriers of becoming a director of a company?
I. Anyone aged 21 or below
II. Undischarged bankrupts
III. Persistent default in relation to the NCO
IV. A finding of being unfit during directorship of an insolvent companyCorrect
Persons to be appointed directors must meet the following requirements:
© They must not be disqualified by court order; the four principal grounds for such an order being:
(i) conviction of an indictable offence for fraud or dishonesty or relating to forming or operating companies;
(ii) persistent default in relation to the NCO or in acting as a liquidator or receiver;
(iii) fraud in relation to company matters or fraudulent trading; or
(iv) a finding of being unfit during directorship of an insolvent company.
Fraud and the other disqualifications apply to directors and shadow directors (e.g. see section 2.5, Topic 9, which describes disqualification orders made by the MMT preventing persons committing market misconduct from being directors of companies).Incorrect
Persons to be appointed directors must meet the following requirements:
© They must not be disqualified by court order; the four principal grounds for such an order being:
(i) conviction of an indictable offence for fraud or dishonesty or relating to forming or operating companies;
(ii) persistent default in relation to the NCO or in acting as a liquidator or receiver;
(iii) fraud in relation to company matters or fraudulent trading; or
(iv) a finding of being unfit during directorship of an insolvent company.
Fraud and the other disqualifications apply to directors and shadow directors (e.g. see section 2.5, Topic 9, which describes disqualification orders made by the MMT preventing persons committing market misconduct from being directors of companies).Hint
Reference Chapter:1.3.29
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Question 135 of 545
135. Question
1 pointsQID1094:Which of the following criteria must be met before a person can be appointed as a director?
I. Must be at least 18 years of age.
II. Must not be undischarged bankrupts.
III. Must not be disqualified by court order.
IV. Must not be a shareholder of a liquidated company.Correct
Persons to be appointed directors must meet the following requirements:
(a) They must be at least 18 years of age.
(b) They must not be undischarged bankrupts.
(c.) They must not be disqualified by court order.Incorrect
Persons to be appointed directors must meet the following requirements:
(a) They must be at least 18 years of age.
(b) They must not be undischarged bankrupts.
(c.) They must not be disqualified by court order.Hint
Reference Chapter:1.3.29
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Question 136 of 545
136. Question
1 pointsQID1092:Which of the following persons are not qualified to serve as a director?
I. Persons that are under the age of 18.
II. Persons that are undischarged bankrupts.
III. Persons disqualified by court.
IV. Persons who do not satisfy the statutory net worth requirement.Correct
Persons to be appointed directors must meet the following requirements:
(a) They must be at least 18 years of age.
(b) They must not be undischarged bankrupts.
(c.) They must not be disqualified by court order.Incorrect
Persons to be appointed directors must meet the following requirements:
(a) They must be at least 18 years of age.
(b) They must not be undischarged bankrupts.
(c.) They must not be disqualified by court order.Hint
Reference Chapter:1.3.29
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Question 137 of 545
137. Question
1 pointsQID1090:Vita Milk is a private company engaging in dairy products trading, which of the following individual can act as a director of Vita Milk?
Correct
Persons to be appointed directors must meet the following requirements:
(a) They must be at least 18 years of age.
(b) They must not be undischarged bankrupts.
(c.) They must not be disqualified by court order.
There is Mr. Chan only who satisfies all the conditions above.Incorrect
Persons to be appointed directors must meet the following requirements:
(a) They must be at least 18 years of age.
(b) They must not be undischarged bankrupts.
(c.) They must not be disqualified by court order.
There is Mr. Chan only who satisfies all the conditions above.Hint
Reference Chapter:1.3.29
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Question 138 of 545
138. Question
1 pointsQID1093:Which of the following are principal grounds that a court may disqualify a person from becoming a director?
I. Conviction of an indictable offence for fraud or dishonesty or relating to forming or operating companies
II. Persistent default in relation to the NCO or in acting as a liquidator or receiver
III. Fraud in relation to company matters or fraudulent trading
IV. A finding of being unfit during directorship of an insolvent company.Correct
Persons to be appointed directors must meet the following requirements:
(c.) They must not be disqualified by court order.
(i) conviction of an indictable offence for fraud or dishonesty or relating to forming or operating companies;
(ii) persistent default in relation to the NCO or in acting as a liquidator or receiver;
(iii) fraud in relation to company matters or fraudulent trading; or
(iv) a finding of being unfit during directorship of an insolvent company.
Fraud and the other disqualifications apply to directors and shadow directors (e.g. see section 3.5, Topic 7, which describes disqualification orders made by the Market Misconduct Tribunal (“MMT”) preventing persons committing market misconduct from being directors of companies).Incorrect
Persons to be appointed directors must meet the following requirements:
(c.) They must not be disqualified by court order.
(i) conviction of an indictable offence for fraud or dishonesty or relating to forming or operating companies;
(ii) persistent default in relation to the NCO or in acting as a liquidator or receiver;
(iii) fraud in relation to company matters or fraudulent trading; or
(iv) a finding of being unfit during directorship of an insolvent company.
Fraud and the other disqualifications apply to directors and shadow directors (e.g. see section 3.5, Topic 7, which describes disqualification orders made by the Market Misconduct Tribunal (“MMT”) preventing persons committing market misconduct from being directors of companies).Hint
Reference Chapter:1.3.29
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Question 139 of 545
139. Question
1 pointsQID1095:Which of the following condition does not result in being disqualified by court order and the person is able to act as a director of a company?
Correct
Persons to be appointed directors must meet the following requirements:
(c.) They must not be disqualified by court order.
(i) conviction of an indictable offence for fraud or dishonesty or relating to forming or operating companies;
(ii) persistent default in relation to the NCO or in acting as a liquidator or receiver;
(iii) fraud in relation to company matters or fraudulent trading; or
(iv) a finding of being unfit during directorship of an insolvent company.
Fraud and the other disqualifications apply to directors and shadow directors (e.g. see section 3.5, Topic 7, which describes disqualification orders made by the Market Misconduct Tribunal (“MMT”) preventing persons committing market misconduct from being directors of companies).Incorrect
Persons to be appointed directors must meet the following requirements:
(c.) They must not be disqualified by court order.
(i) conviction of an indictable offence for fraud or dishonesty or relating to forming or operating companies;
(ii) persistent default in relation to the NCO or in acting as a liquidator or receiver;
(iii) fraud in relation to company matters or fraudulent trading; or
(iv) a finding of being unfit during directorship of an insolvent company.
Fraud and the other disqualifications apply to directors and shadow directors (e.g. see section 3.5, Topic 7, which describes disqualification orders made by the Market Misconduct Tribunal (“MMT”) preventing persons committing market misconduct from being directors of companies).Hint
Reference Chapter:1.3.29
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Question 140 of 545
140. Question
1 pointsQID1096:What are the necessary conditions for becoming a director in Hong Kong?
I. Be 18 years old and above.
II. Must not be an undischarged bankrupt.
III. Must not be disqualified by court order.
IV. Be a director of a recently wound up company.Correct
Persons to be appointed directors must meet the following requirements:
(a) They must be at least 18 years of age.
(b) They must not be undischarged bankrupts.
(c.) They must not be disqualified by court order.Incorrect
Persons to be appointed directors must meet the following requirements:
(a) They must be at least 18 years of age.
(b) They must not be undischarged bankrupts.
(c.) They must not be disqualified by court order.Hint
Reference Chapter:1.3.29
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Question 141 of 545
141. Question
1 pointsQID134:Which of the following descriptions about companies are correct?
I. An entity that is independent of its members (shareholder).
II. An entity that can sue.
III. An entity that can be sued.
IV. A company can appoint legal representatives.Correct
A company is a legal entity distinct from its members. It is a legal person and can make contracts, take legal action, sue and be sued, own property and commit crimes and torts. It also has perpetual succession and will only cease to exist if it is dissolved. It can be a limited company, the normal form of most companies, where the liability of its members is limited.
Incorrect
A company is a legal entity distinct from its members. It is a legal person and can make contracts, take legal action, sue and be sued, own property and commit crimes and torts. It also has perpetual succession and will only cease to exist if it is dissolved. It can be a limited company, the normal form of most companies, where the liability of its members is limited.
Hint
Reference Chapter:1.3.3
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Question 142 of 545
142. Question
1 pointsQID1041:Which of the following descriptions of a company is NOT correct under the NCO?
Correct
A company can be a limited company, the normal form of most companies, where the liability of its members is limited.
Incorrect
A company can be a limited company, the normal form of most companies, where the liability of its members is limited.
Hint
Reference Chapter:1.3.3
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Question 143 of 545
143. Question
1 pointsQID1040:Which of the following descriptions about the New Companies Ordinance are correct?
I. A company is a legal entity distinct from its members and is a legal person.
II. The company can make contracts.
III. The company can be sued.
IV. The company can be involved in crime and torts.Correct
A company is a legal entity distinct from its members. It is a legal person and can make contracts, take legal action, sue and be sued, own property and commit crimes and torts.
Incorrect
A company is a legal entity distinct from its members. It is a legal person and can make contracts, take legal action, sue and be sued, own property and commit crimes and torts.
Hint
Reference Chapter:1.3.3
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Question 144 of 545
144. Question
1 pointsQID774:Which of the following descriptions about a limited company is NOT correct?
Correct
A company is a legal entity distinct from its members. It is a legal person and can make contracts, take legal action, sue and be sued, own property and commit crimes and torts. It also has perpetual succession and will only cease to exist if it is dissolved. It can be a limited company, the normal form of most companies, where the liability of its members is limited.
Answer A is not included in this definition.Incorrect
A company is a legal entity distinct from its members. It is a legal person and can make contracts, take legal action, sue and be sued, own property and commit crimes and torts. It also has perpetual succession and will only cease to exist if it is dissolved. It can be a limited company, the normal form of most companies, where the liability of its members is limited.
Answer A is not included in this definition.Hint
Reference Chapter:1.3.3
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Question 145 of 545
145. Question
1 pointsQID884:Members in general meeting may only intervene in the management if the directors are
I. Unwilling to act on behalf of the directorsII. Seeking approval to act beyond their powers
III. Acting in breach of their fiduciary duties
IV. Being removed decided by the members
Correct
Members in general meeting may only intervene in the management if the directors are:
(a) unwilling to act;
(b) seeking approval to act beyond their powers (the members can approve such acts by ordinary resolution); or
(c.) acting in breach of their fiduciary duties (the members may ratify such breaches in general meeting).Incorrect
Members in general meeting may only intervene in the management if the directors are:
(a) unwilling to act;
(b) seeking approval to act beyond their powers (the members can approve such acts by ordinary resolution); or
(c.) acting in breach of their fiduciary duties (the members may ratify such breaches in general meeting).Hint
Reference Chapter:1.3.31
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Question 146 of 545
146. Question
1 pointsQID1098:Shareholders can interfere and override management actions of the directors if:
I. the directors are unwilling to act
II. the directors’ actions result in operating losses
III. The directors are seeking approval to act beyond their powers
IV. The directors are acting in breach of their fiduciary dutiesCorrect
Directors in these circumstances are not bound by resolutions passed by members in a general meeting, nor can the members override future management actions of the directors. Members in general meeting may only intervene in the management if the directors are:
(a) unwilling to act;
(b) seeking approval to act beyond their powers (the members can approve such acts by ordinary resolution); or
(c.) acting in breach of their fiduciary duties (the members may ratify such breaches in general meeting).Incorrect
Directors in these circumstances are not bound by resolutions passed by members in a general meeting, nor can the members override future management actions of the directors. Members in general meeting may only intervene in the management if the directors are:
(a) unwilling to act;
(b) seeking approval to act beyond their powers (the members can approve such acts by ordinary resolution); or
(c.) acting in breach of their fiduciary duties (the members may ratify such breaches in general meeting).Hint
Reference Chapter:1.3.31
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Question 147 of 545
147. Question
1 pointsQID1097:Generally speaking, directors are not bound by resolutions passed by members in a general meeting, nor can the members override future management actions of the directors. Members in general meeting may NOT intervene in the management if:
Correct
Directors in these circumstances are not bound by resolutions passed by members in a general meeting, nor can the members override future management actions of the directors. Members in general meeting may only intervene in the management if the directors are:
(a) unwilling to act;
(b) seeking approval to act beyond their powers (the members can approve such acts by ordinary resolution); or
(c.) acting in breach of their fiduciary duties (the members may ratify such breaches in general meeting).Incorrect
Directors in these circumstances are not bound by resolutions passed by members in a general meeting, nor can the members override future management actions of the directors. Members in general meeting may only intervene in the management if the directors are:
(a) unwilling to act;
(b) seeking approval to act beyond their powers (the members can approve such acts by ordinary resolution); or
(c.) acting in breach of their fiduciary duties (the members may ratify such breaches in general meeting).Hint
Reference Chapter:1.3.31
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Question 148 of 545
148. Question
1 pointsQID1099:Under common law, how should directors act and make decisions?
I. Exercise their power collaboratively by having meetings with a proper quorum, passing resolutions and have to be minuted.
II. Directors can act independently if the articles of association allow the board to delegate its power to its individual directors, to committees and to the managing director.
III. For private companies, a written record of a decision made by the sole director of a private company will prevail.Correct
Under common law, directors should exercise their powers as a group by having meetings (board of directors’ meetings or board meetings) with a proper quorum, passing resolutions that have to be minuted. This can be avoided as usually the company’s articles of association allow the board to delegate its powers to individual directors, to committees and to the managing director. Under s. 483, NCO, a written record of a decision made by the sole director of a private company shall be sufficient evidence of that decision.
Incorrect
Under common law, directors should exercise their powers as a group by having meetings (board of directors’ meetings or board meetings) with a proper quorum, passing resolutions that have to be minuted. This can be avoided as usually the company’s articles of association allow the board to delegate its powers to individual directors, to committees and to the managing director. Under s. 483, NCO, a written record of a decision made by the sole director of a private company shall be sufficient evidence of that decision.
Hint
Reference Chapter:1.3.32
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Question 149 of 545
149. Question
1 pointsQID1102:Under common law, although the directors have a fiduciary relationship with the company, this does not mean they have to:
Correct
The directors have a fiduciary relationship with the company. They must act with the utmost good faith towards their principal, i.e. the company; and:
(a) act bona fide for the benefit of the company;
(b) exercise their powers for their proper purpose; and
(c.) not allow any conflict of interest between their duties as directors and their personal interests.Incorrect
The directors have a fiduciary relationship with the company. They must act with the utmost good faith towards their principal, i.e. the company; and:
(a) act bona fide for the benefit of the company;
(b) exercise their powers for their proper purpose; and
(c.) not allow any conflict of interest between their duties as directors and their personal interests.Hint
Reference Chapter:1.3.33
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Question 150 of 545
150. Question
1 pointsQID1100:There is a fiduciary relationship between the directors of a company and the company itself, the directors should act with the utmost good faith towards their principals, which include which of the followings?
I. Determine appropriate remuneration for its directorship through a resolution.
II. Act bona fide for the benefit of the company;
III. Exercise their powers for their proper purpose; and
IV. Not allow any conflict of interest between their duties as directors and their personal interests.Correct
The directors have a fiduciary relationship with the company. They must act with the utmost good faith towards their principal, i.e. the company; and:
(a) act bona fide for the benefit of the company;
(b) exercise their powers for their proper purpose; and
(c.) not allow any conflict of interest between their duties as directors and their personal interests.Incorrect
The directors have a fiduciary relationship with the company. They must act with the utmost good faith towards their principal, i.e. the company; and:
(a) act bona fide for the benefit of the company;
(b) exercise their powers for their proper purpose; and
(c.) not allow any conflict of interest between their duties as directors and their personal interests.Hint
Reference Chapter:1.3.33
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Question 151 of 545
151. Question
1 pointsQID151:Which of the following are fiduciary duties of the directors?
I. Act bona fide for the benefit of the company
II. Exercise their powers for their proper purpose
III. Not allow any conflict of interest between their duties as directors and their personal interests
IV. Not allow any conflict of interest between their duties as directors and the companies interestsCorrect
The directors have a fiduciary relationship with the company. They must act with the utmost
good faith towards their principal, i.e. the company; and:
(a) act bona fide for the benefit of the company;
(b) exercise their powers for their proper purpose; and
(c) not allow any conflict of interest between their duties as directors and their personal interests.Incorrect
The directors have a fiduciary relationship with the company. They must act with the utmost
good faith towards their principal, i.e. the company; and:
(a) act bona fide for the benefit of the company;
(b) exercise their powers for their proper purpose; and
(c) not allow any conflict of interest between their duties as directors and their personal interests.Hint
Reference Chapter:1.3.33
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Question 152 of 545
152. Question
1 pointsQID1101:Under common law, the directors have a fiduciary relationship with the company and they must:
I. Act with utmost good faith towards the company.
II. Act bona fide for the benefit of the company.
III. Exercise their powers for their proper purpose.
IV. Not allow any conflict of interest between their duties as directors and their personal interests.Correct
The directors have a fiduciary relationship with the company. They must act with the utmost good faith towards their principal, i.e. the company; and:
(a) act bona fide for the benefit of the company;
(b) exercise their powers for their proper purpose; and
(c.) not allow any conflict of interest between their duties as directors and their personal interests.Incorrect
The directors have a fiduciary relationship with the company. They must act with the utmost good faith towards their principal, i.e. the company; and:
(a) act bona fide for the benefit of the company;
(b) exercise their powers for their proper purpose; and
(c.) not allow any conflict of interest between their duties as directors and their personal interests.Hint
Reference Chapter:1.3.33
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Question 153 of 545
153. Question
1 pointsQID1104:The NCO imposes on director’s requirement to exercise reasonable care, skill and diligence. To determine whether a director of the company has breached the duty of care, skill and diligence owed by him to the company, his conduct is compared to the standard that would be exercised by a reasonably diligent person with:
I. The general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the director in relation to the company (objective test)
II. The general knowledge, skill and experience that the director has (subjective test)
III. The general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the director in relation to the company (subjective test)
IV. The general knowledge, skill and experience that the director has (objective test)Correct
To determine whether a director of the company has breached the duty of care, skill and diligence owed by him to the company, his conduct is compared to the standard that would be exercised by a reasonably diligent person with:
(a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the director in relation to the company (objective test); and
(b) the general knowledge, skill and experience that the director has (subjective test).Incorrect
To determine whether a director of the company has breached the duty of care, skill and diligence owed by him to the company, his conduct is compared to the standard that would be exercised by a reasonably diligent person with:
(a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the director in relation to the company (objective test); and
(b) the general knowledge, skill and experience that the director has (subjective test).Hint
Reference Chapter:1.3.34
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Question 154 of 545
154. Question
1 pointsQID152:To determine whether a director is diligent, skilful and accountable to the company, which of the following methods are utilized?
I. Qualifying Exam
II. Objective Test
III. Subjective Test
IV. Continuous Professional AssessmentCorrect
The NCO provisions set out a mixed objective and subjective test in the determination of the standard of directors’ duty of care, skill and diligence. To determine whether a director of the company has breached the duty of care, skill and diligence owed by him to the company, his conduct is compared to the standard that would be exercised by a reasonably diligent person.
Incorrect
The NCO provisions set out a mixed objective and subjective test in the determination of the standard of directors’ duty of care, skill and diligence. To determine whether a director of the company has breached the duty of care, skill and diligence owed by him to the company, his conduct is compared to the standard that would be exercised by a reasonably diligent person.
Hint
Reference Chapter:1.3.34
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Question 155 of 545
155. Question
1 pointsQID1103:A director is expected to perform under the following principles with the exception of
Correct
To determine whether a director of the company has breached the duty of care, skill and diligence owed by him to the company, his conduct is compared to the standard that would be exercised by a reasonably diligent person with:
(a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the director in relation to the company (objective test); and
(b) the general knowledge, skill and experience that the director has (subjective test).Incorrect
To determine whether a director of the company has breached the duty of care, skill and diligence owed by him to the company, his conduct is compared to the standard that would be exercised by a reasonably diligent person with:
(a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the director in relation to the company (objective test); and
(b) the general knowledge, skill and experience that the director has (subjective test).Hint
Reference Chapter:1.3.34
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Question 156 of 545
156. Question
1 pointsQID153:Miss Ko, an employee of Hai Nei Company, who commits an act of market misconduct while handling the company’s business, is being charged. In which of the following situation would Mr. Wan, the director of Hoi Nei Company be liable and accountable?
Correct
Directors are additionally subject to other, more specific duties
imposed upon them by particular statutory provisions. For example, Twelfth Schedule, the CWUMPO provides for a fine and/or imprisonment for a director that authorises the issue of
a prospectus containing an untrue statement. Where a director breaches strict requirements of the NCO, such as failing to prepare financial statements when required to do so, liability
will also arise. It is therefore important that directors understand both the general and the specific responsibilities imposed upon them, and how to properly discharge them, in order to fulfil their roles as directors and to address their exposure to directors’ liabilities.Incorrect
Directors are additionally subject to other, more specific duties
imposed upon them by particular statutory provisions. For example, Twelfth Schedule, the CWUMPO provides for a fine and/or imprisonment for a director that authorises the issue of
a prospectus containing an untrue statement. Where a director breaches strict requirements of the NCO, such as failing to prepare financial statements when required to do so, liability
will also arise. It is therefore important that directors understand both the general and the specific responsibilities imposed upon them, and how to properly discharge them, in order to fulfil their roles as directors and to address their exposure to directors’ liabilities.Hint
Reference Chapter:1.3.35
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Question 157 of 545
157. Question
1 pointsQID1105:According to the NCO which has defined the statutory liabilities of directors, directors may incur liabilities due to:
I. Breaches of fiduciary duties.
II. Failure to give continuous attention to the affairs of the company.
III. Failure to act with due care and skill.
IV. Breaches of statutory duties.Correct
Where a director breaches strict requirements of the NCO,
such as failing to prepare financial statements when required to do so, liability will also arise. It is therefore important that directors understand both the general and the specific
responsibilities imposed upon them, and how to properly discharge them, in order to fulfil their roles as directors and to address their exposure to directors’ liabilities.
Any ratification by a company of conduct by a director in relation to negligence, default, breach of duty or breach of trust in relation to the company must be approved by resolution of the members of the companyIncorrect
Where a director breaches strict requirements of the NCO,
such as failing to prepare financial statements when required to do so, liability will also arise. It is therefore important that directors understand both the general and the specific
responsibilities imposed upon them, and how to properly discharge them, in order to fulfil their roles as directors and to address their exposure to directors’ liabilities.
Any ratification by a company of conduct by a director in relation to negligence, default, breach of duty or breach of trust in relation to the company must be approved by resolution of the members of the companyHint
Reference Chapter:1.3.35&37
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Question 158 of 545
158. Question
1 pointsQID883:What are the possible remedies for a breach of duty by directors?
I. It may obtain an injunction stopping such action.
II. If the directors have not disclosed a personal interest in a contract they have made on behalf of the company, the contract may be cancelled at the option of the company.
III. All directors who have acted in breach of their duties will be jointly and severally liable to the company for damages.
IV. If the directors have wrongfully profited by dealing with the company’s property, the directors must account to the members for such profits.Correct
The company may have the following remedies for a breach of duty by directors:
(a) It may obtain an injunction stopping such action.
(b) If the directors have not disclosed a personal interest in a contract they have made on behalf of the company, the contract may be cancelled at the option of the company, i.e. rescission.
(c.) All directors who have acted in breach of their duties will be jointly and severally liable to the company for damages.
(d) If they have wrongfully profited by dealing with the company’s property, the directors must account to the company for such profits.Incorrect
The company may have the following remedies for a breach of duty by directors:
(a) It may obtain an injunction stopping such action.
(b) If the directors have not disclosed a personal interest in a contract they have made on behalf of the company, the contract may be cancelled at the option of the company, i.e. rescission.
(c.) All directors who have acted in breach of their duties will be jointly and severally liable to the company for damages.
(d) If they have wrongfully profited by dealing with the company’s property, the directors must account to the company for such profits.Hint
Reference Chapter:1.3.36
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Question 159 of 545
159. Question
1 pointsQID159:What are possible reliefs for directors for a breach?
I. The company can obtain an injunction, request for cancellation of contract or sue for damages
II. The company can submit the case to the SFC Fiduciary Committee.
III. The directors who are in breach should be accountable to the company for profits and damages.
IV. The directors who are in breach should be accountable to the company for profits and damages in addition to the interest owed.Correct
The company may have the following remedies for a breach of duty by directors:
(a) It may obtain an injunction stopping such action.
(b) If the directors have not disclosed a personal interest in a contract they have made on behalf of the company, the contract may be cancelled at the option of the company, i.e. rescission.
(d) If they have wrongfully profited by dealing with the company’s property, the directors must account to the company for such profits.Incorrect
The company may have the following remedies for a breach of duty by directors:
(a) It may obtain an injunction stopping such action.
(b) If the directors have not disclosed a personal interest in a contract they have made on behalf of the company, the contract may be cancelled at the option of the company, i.e. rescission.
(d) If they have wrongfully profited by dealing with the company’s property, the directors must account to the company for such profits.Hint
Reference Chapter:1.3.36
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Question 160 of 545
160. Question
1 pointsQID886:What are the possible remedies for a breach of duty by directors?
I. It may obtain an injunction stopping such action.
II. If the directors have disclosed a personal interest in a contract they have made on behalf of the company, the contract may be cancelled at the option of the company.
III. All directors who have acted in breach of their duties will be jointly and severally liable to the company for damages.
IV. If the directors have wrongfully profited by dealing with the company’s property, the directors must account to the company for such profits.Correct
The company may have the following remedies for a breach of duty by directors:
(a) It may obtain an injunction stopping such action.
(b) If the directors have not disclosed a personal interest in a contract they have made on behalf of the company, the contract may be cancelled at the option of the company, i.e. rescission.
(c.) All directors who have acted in breach of their duties will be jointly and severally liable to the company for damages.
(d) If they have wrongfully profited by dealing with the company’s property, the directors must account to the company for such profits.Incorrect
The company may have the following remedies for a breach of duty by directors:
(a) It may obtain an injunction stopping such action.
(b) If the directors have not disclosed a personal interest in a contract they have made on behalf of the company, the contract may be cancelled at the option of the company, i.e. rescission.
(c.) All directors who have acted in breach of their duties will be jointly and severally liable to the company for damages.
(d) If they have wrongfully profited by dealing with the company’s property, the directors must account to the company for such profits.Hint
Reference Chapter:1.3.36
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Question 161 of 545
161. Question
1 pointsQID885:Mr. Ko is a shareholder of Yellow River Trading. He believes Mr. David Wan, a director of Yellow River Trading, is breaching his statutory duties in recent electronics trading transactions. What are the actions that Mr Ko can take?
I. Obtain an injunction stopping such action.
II. If Mr. Wan has not disclosed a personal interest in a contract he has made on behalf of the company, the contract may be avoided at the option of the company.
III. All directors who have acted in breach of their duties will be jointly and severally liable to the company for damages.
IV. If they have wrongfully profited by dealing with the company’s property, the directors must account to the company for such profits.Correct
The company may have the following remedies for a breach of duty by directors:
(a) It may obtain an injunction stopping such action.
(b) If the directors have not disclosed a personal interest in a contract they have made on behalf of the company, the contract may be cancelled at the option of the company, i.e. rescission.
(c.) All directors who have acted in breach of their duties will be jointly and severally liable to the company for damages.
(d) If they have wrongfully profited by dealing with the company’s property, the directors must account to the company for such profits.Incorrect
The company may have the following remedies for a breach of duty by directors:
(a) It may obtain an injunction stopping such action.
(b) If the directors have not disclosed a personal interest in a contract they have made on behalf of the company, the contract may be cancelled at the option of the company, i.e. rescission.
(c.) All directors who have acted in breach of their duties will be jointly and severally liable to the company for damages.
(d) If they have wrongfully profited by dealing with the company’s property, the directors must account to the company for such profits.Hint
Reference Chapter:1.3.36
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Question 162 of 545
162. Question
1 pointsQID154:Millionaire Securities has recently been convicted of market misconduct. Millionaire Securities’ director – Mr. Ip, was unaware of the illegal acts and had tried to monitor and regulate the company’s operations to the best of his abilities. Is Mr. Ip guilty under such circumstance?
Correct
The court may give relief to a director or directors if they have, in causing the breach, been shown to have acted honestly and reasonably.
Incorrect
The court may give relief to a director or directors if they have, in causing the breach, been shown to have acted honestly and reasonably.
Hint
Reference Chapter:1.3.38
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Question 163 of 545
163. Question
1 pointsQID1106:If a director (or his connected entity) can reasonably foresee direct or indirect interest in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must:
I. For transaction or arrangements that has been entered, he must declare the nature and extent of that interest to other directors.
II. For transaction or arrangements that has been entered, he must declare the nature and extent of that interest to the members.
III. For transaction or arrangements being proposed, he must declare the nature and extent of that interest to other directors.
IV. For transaction or arrangements being proposed, he must declare the nature and extent of that interest to the members.”Correct
If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must declare to other directors the nature and extent of that interest (if it is material):
(a) as soon as reasonably practicable for a transaction or arrangement that has been entered; or
(b) before the company enters into the transaction or arrangement for a proposed transaction or arrangement.Incorrect
If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must declare to other directors the nature and extent of that interest (if it is material):
(a) as soon as reasonably practicable for a transaction or arrangement that has been entered; or
(b) before the company enters into the transaction or arrangement for a proposed transaction or arrangement.Hint
Reference Chapter:1.3.39
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Question 164 of 545
164. Question
1 pointsQID795:Mr. Ko is a director of a phone book printing company -Kaohsiung Printing. Mr Ko and Mr Wan jointly own British Construction Bank and are both directors of British Construction Bank. Kaohsiung Printing is going to print a lot of phone books and calendars for British Construction Bank as souvenirs for customers. Should Mr. Ko disclose his interest in Kaohsiung Printing to the board of directors of British Construction Bank?
Correct
If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must declare to other directors the nature and extent of that interest (if it is material):
(a) as soon as reasonably practicable for a transaction or arrangement that has been entered; or
(b) before the company enters into the transaction or arrangement for a proposed transaction or arrangement.Incorrect
If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must declare to other directors the nature and extent of that interest (if it is material):
(a) as soon as reasonably practicable for a transaction or arrangement that has been entered; or
(b) before the company enters into the transaction or arrangement for a proposed transaction or arrangement.Hint
Reference Chapter:1.3.39
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Question 165 of 545
165. Question
1 pointsQID155:If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, what actions should he take?
I. Declare the nature and extent of the interest in conflict as soon as reasonably practicable.
II. No declaration is required if the transaction or arrangement was taken place outside of Hong Kong,
III. Declare the nature and extent of that interest before a transaction or arrangement has been entered.
IV. No actions are required if the transaction or arrangement has not yet taken place.Correct
If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must declare to other directors the nature and extent of that interest (if it is material):
(a) as soon as reasonably practicable for a transaction or arrangement that has been entered; or
(b) before the company enters into the transaction or arrangement for a proposed transaction or arrangement.Incorrect
If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must declare to other directors the nature and extent of that interest (if it is material):
(a) as soon as reasonably practicable for a transaction or arrangement that has been entered; or
(b) before the company enters into the transaction or arrangement for a proposed transaction or arrangement.Hint
Reference Chapter:1.3.39
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Question 166 of 545
166. Question
1 pointsQID1108:Yellow River Trading is prepared to acquire a well know local website – Opennoodles.com. The director of Yellow River Trading, Mr. Wan, is the spouse of the owner of Opennoodles.com. Mr. Wan should:
I. Disclose his interest in the general meeting.
II. Take no action because it is his spouse’s interests that are involved in the deal
III. Ensure that the deal is proper, fair and in the interest of Yellow River Trading.
IV. Resign immediately.Correct
If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must declare to other directors the nature and extent of that interest (if it is material):
(a) as soon as reasonably practicable for a transaction or arrangement that has been entered; or
(b) before the company enters into the transaction or arrangement for a proposed transaction or arrangement.Incorrect
If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must declare to other directors the nature and extent of that interest (if it is material):
(a) as soon as reasonably practicable for a transaction or arrangement that has been entered; or
(b) before the company enters into the transaction or arrangement for a proposed transaction or arrangement.Hint
Reference Chapter:1.3.39
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Question 167 of 545
167. Question
1 pointsQID1107:If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must declare the nature and extent of that interest:
I. Before the transaction and arrangement has been made.
II. After the transaction and arrangement has been made.
III. As soon as he can reasonably foresee such conflict of interest.
IV. As soon as the annual audit requires him to do so.Correct
If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must declare to other directors the nature and extent of that interest (if it is material):
(a) as soon as reasonably practicable for a transaction or arrangement that has been entered; or
(b) before the company enters into the transaction or arrangement for a proposed transaction or arrangement.Incorrect
If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must declare to other directors the nature and extent of that interest (if it is material):
(a) as soon as reasonably practicable for a transaction or arrangement that has been entered; or
(b) before the company enters into the transaction or arrangement for a proposed transaction or arrangement.Hint
Reference Chapter:1.3.39
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Question 168 of 545
168. Question
1 pointsQID1605:Mr. Liu is the only shareholder of Vitamilk and the director of Millionaire Financial Investment. Another director of Millionaire Financial Investment suggested to acquire some of Vitamilk real estates at the board of directors meeting. Does Mr. Liu have to declare to other directors the nature and extent of that interest?
Correct
If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must declare to other directors the nature and extent of that interest (if it is material):
(b) before the company enters into the transaction or arrangement for a proposed transaction or arrangement.Incorrect
If a director (or his connected entity) is directly or indirectly interested in a transaction, arrangement or contract, or a proposed transaction, arrangement or contract with the company that is significant in relation to the company’s business, he must declare to other directors the nature and extent of that interest (if it is material):
(b) before the company enters into the transaction or arrangement for a proposed transaction or arrangement.Hint
Reference Chapter:1.3.39
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Question 169 of 545
169. Question
1 pointsQID2812:Which of the following statements about the Companies Ordinance is incorrect?
Correct
There is no minimum authorized share capital requirement for a company.
Incorrect
There is no minimum authorized share capital requirement for a company.
Hint
Reference Chapter:1.3.4
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Question 170 of 545
170. Question
1 pointsQID778:In Hong Kong, registered companies can be classified into which of the following categories?
I. Private Company
II. Public Company
III. Non-Profit Company
IV. Guarantee CompanyCorrect
Under the NCO, a new category of company is added and now every Hong Kong company falls into one of three categories: private companies, public companies and guarantee companies.
Incorrect
Under the NCO, a new category of company is added and now every Hong Kong company falls into one of three categories: private companies, public companies and guarantee companies.
Hint
Reference Chapter:1.3.4
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Question 171 of 545
171. Question
1 pointsQID1074:Under the New Companies Ordinance, which of the following are correct categorization of companies?
I. Private Companies
II. Public Companies
III. Listed Companies
IV. Guarantee CompaniesCorrect
Under the NCO, a new category of company is added and now every Hong Kong company falls into one of 3 categories: private companies, public companies and guarantee companies.
Incorrect
Under the NCO, a new category of company is added and now every Hong Kong company falls into one of 3 categories: private companies, public companies and guarantee companies.
Hint
Reference Chapter:1.3.4
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Question 172 of 545
172. Question
1 pointsQID1111:Which of the following descriptions about directors’ remuneration are correct?
I. If the director is also having administrative roles, he does not need to have a separate service with the company. All directors’ fees should include all of his services.
II. The articles of association have designated the powers of determining such remuneration.
III. The articles of association states that director remuneration should be determined by the members in the general meeting.
IV. Directors remuneration usually covers directors’ fees.Correct
Authority for payment is provided in the company’s articles. The model articles of association in the Companies (Model Articles) Notice provide that the remuneration of directors is determined by the company in general meeting. This usually covers directors’ fees. If a director holds some other position, such as managing director or executive director, he can have a service contract.
Incorrect
Authority for payment is provided in the company’s articles. The model articles of association in the Companies (Model Articles) Notice provide that the remuneration of directors is determined by the company in general meeting. This usually covers directors’ fees. If a director holds some other position, such as managing director or executive director, he can have a service contract.
Hint
Reference Chapter:1.3.40
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Question 173 of 545
173. Question
1 pointsQID158:According to the provision of the model articles of association in the Companies (Model Articles) Notice, how should the remuneration of directors be determined?
Correct
Authority for payment is provided in the company’s articles. The model articles of association in the Companies (Model Articles) Notice provide that the remuneration of directors is determined by the company in general meeting. This usually covers directors’ fees. If a director holds some other position, such as managing director or executive director, he can have a service contract.
Incorrect
Authority for payment is provided in the company’s articles. The model articles of association in the Companies (Model Articles) Notice provide that the remuneration of directors is determined by the company in general meeting. This usually covers directors’ fees. If a director holds some other position, such as managing director or executive director, he can have a service contract.
Hint
Reference Chapter:1.3.40
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Question 174 of 545
174. Question
1 pointsQID157:In general, remuneration of which of the following individuals is determined by the company in general meeting?
Correct
Authority for payment is provided in the company’s articles. The model articles of association in the Companies (Model Articles) Notice provide that the remuneration of directors is determined by the company in general meeting. This usually covers directors’ fees. If a director holds some other position, such as managing director or executive director, he can have a service contract.
Incorrect
Authority for payment is provided in the company’s articles. The model articles of association in the Companies (Model Articles) Notice provide that the remuneration of directors is determined by the company in general meeting. This usually covers directors’ fees. If a director holds some other position, such as managing director or executive director, he can have a service contract.
Hint
Reference Chapter:1.3.40
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Question 175 of 545
175. Question
1 pointsQID156:Which of the following description about director remuneration is correct?
Correct
Authority for payment is provided in the company’s articles. The model articles of association in the Companies (Model Articles) Notice provide that the remuneration of directors is determined by the company in general meeting. This usually covers directors’ fees. If a director holds some other position, such as managing director or executive director, he can have a service contract.
Incorrect
Authority for payment is provided in the company’s articles. The model articles of association in the Companies (Model Articles) Notice provide that the remuneration of directors is determined by the company in general meeting. This usually covers directors’ fees. If a director holds some other position, such as managing director or executive director, he can have a service contract.
Hint
Reference Chapter:1.3.40
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Question 176 of 545
176. Question
1 pointsQID1109:Who determines the directors’ remuneration?
Correct
Authority for payment is provided in the company’s articles. The model articles of association in the Companies (Model Articles) Notice provide that the remuneration of directors is determined by the company in general meeting.
Incorrect
Authority for payment is provided in the company’s articles. The model articles of association in the Companies (Model Articles) Notice provide that the remuneration of directors is determined by the company in general meeting.
Hint
Reference Chapter:1.3.40
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Question 177 of 545
177. Question
1 pointsQID1110:Which of the following are correct descriptions of directors’ remuneration?
I. Authority for payment is provided in the articles
II. If a director holds some other position, such as Managing Director or an executive director, he can have a service contract parallel to his director’s remuneration.
III. The remuneration must include a set of stock options.
IV. The director of a company should treat his directorship as his sole profession.Correct
Authority for payment is provided in the company’s articles. The model articles of association in the Companies (Model Articles) Notice provide that the remuneration of directors is determined by the company in general meeting. This usually covers directors’ fees. If a director holds some other position, such as managing director or executive director, he can have a service contract.
Incorrect
Authority for payment is provided in the company’s articles. The model articles of association in the Companies (Model Articles) Notice provide that the remuneration of directors is determined by the company in general meeting. This usually covers directors’ fees. If a director holds some other position, such as managing director or executive director, he can have a service contract.
Hint
Reference Chapter:1.3.40
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Question 178 of 545
178. Question
1 pointsQID1178:Mr. David Wan and his spouse are investing in real estate under the name of Yangtze River Investment and he is trying to apply for a loan for assignment. Mr. Wan and his spouse are the only directors and shareholders of Yangtze River Investment. Mr. Wan is also a director of a well-known electronics trading company, Yellow River Trading. To apply for the loan, Mr. Wan can:
I. Apply for a personal loan by assigning Yellow River Trading as the Guarantor.
II. Apply for a personal loan by assigning the subsidiaries of Yellow River Trading as the Guarantor.
III. Apply for a loan on behalf of Yangtze River Investment from Yellow River Trading.
IV. Apply for a personal loan using his director remuneration from Yellow River Trading as collateral.Correct
A company cannot directly or indirectly:
(a) make a loan to a director of the company or a body corporate controlled by such a director; or
(b) enter into a guarantee or provide security for such a loan
without the approval of its members.Incorrect
A company cannot directly or indirectly:
(a) make a loan to a director of the company or a body corporate controlled by such a director; or
(b) enter into a guarantee or provide security for such a loan
without the approval of its members.Hint
Reference Chapter:1.3.41
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Question 179 of 545
179. Question
1 pointsQID1112:Which of the following are exceptions to prohibitions on loans to a director?
I. A de minimum threshold of 5% of the net assets of the company before a transaction is subject to the restriction.
II. Expenditure in connection with defending any proceeding or investigation or regulatory action for misconduct provided that the directors has to repay the company if he is found guilty or to have committed the misconduct.
III. Expenses that are incurred by the director in the ordinary course of business.
IV. If the director is the sole owner of the company and he agrees to such arrangements.Correct
There are exceptions, such as the following:
(a) a de minimum threshold of 5% of the net assets of the company before a transaction is subject to the restriction; and
(b) expenditure in connection with defending any proceeding or investigation or regulatory action for misconduct provided that the directors has to repay the company if he is found guilty or to have committed the misconduct.Incorrect
There are exceptions, such as the following:
(a) a de minimum threshold of 5% of the net assets of the company before a transaction is subject to the restriction; and
(b) expenditure in connection with defending any proceeding or investigation or regulatory action for misconduct provided that the directors has to repay the company if he is found guilty or to have committed the misconduct.Hint
Reference Chapter:1.3.44
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Question 180 of 545
180. Question
1 pointsQID161:Under normal circumstances, a company cannot directly or indirectly make a loan or guarantee to a director of its holding company or a body corporate controlled by such a director. However, which of the following are exceptions?
I. Making a loan of value not exceeding 5% of the company’s net assets.
II. The loan is made with the approval of the members of the company.
III. Expenditure on defending any proceeding, or investigation or regulatory action for misconduct of a director if such expenditure has to be repaid by the director to the company when he is convicted in the proceeding or has committed misconduct.
IV. The loan is made with the approval of the SFC.Correct
There are exceptions, such as the following:
(a) making a loan of value not exceeding 5% of the company’s net assets; and
(b) expenditure on defending any proceeding, or investigation or regulatory action for misconduct of a director if such expenditure has to be repaid by the director to the company when he is convicted in the proceeding or has committed the misconduct. Similarly, a company cannot directly or indirectly make a loan or guarantee to a director of its holding company or a body corporate controlled by such a director without the approvals
of its members and the holding companies’ members.Incorrect
There are exceptions, such as the following:
(a) making a loan of value not exceeding 5% of the company’s net assets; and
(b) expenditure on defending any proceeding, or investigation or regulatory action for misconduct of a director if such expenditure has to be repaid by the director to the company when he is convicted in the proceeding or has committed the misconduct. Similarly, a company cannot directly or indirectly make a loan or guarantee to a director of its holding company or a body corporate controlled by such a director without the approvals
of its members and the holding companies’ members.Hint
Reference Chapter:1.3.44
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Question 181 of 545
181. Question
1 pointsQID162:Which of the following entities can appoint investigators to investigate and report on the affairs of a company if the court declares that an investigation should be carried out?
Correct
The Financial Secretary is required to appoint inspectors to investigate and report on the affairs of a company if the court declares that an investigation should be carried out (s. 841, NCO).
Incorrect
The Financial Secretary is required to appoint inspectors to investigate and report on the affairs of a company if the court declares that an investigation should be carried out (s. 841, NCO).
Hint
Reference Chapter:1.3.46
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Question 182 of 545
182. Question
1 pointsQID1113:If the court declares that an investigation on a company’s affairs should be carried out, which of the following organization should appoint inspectors to investigate and report on the company?
Correct
The Financial Secretary is required to appoint inspectors to investigate and report on the affairs of a company if the court declares that an investigation should be carried out (s. 841, NCO).
Incorrect
The Financial Secretary is required to appoint inspectors to investigate and report on the affairs of a company if the court declares that an investigation should be carried out (s. 841, NCO).
Hint
Reference Chapter:1.3.46
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Question 183 of 545
183. Question
1 pointsQID2763:According to the Companies Ordinance, when can the Financial Secretary appoint an inspector to conduct an investigation into a company?
I. The company passes an ordinary resolution
II. The company passes a special resolution
III. Application by more than the nominated number of members
IV. The Financial Secretary considers that the company is involved in fraud or unfairly treating ordinary membersCorrect
Circumstances under which the Financial Secretary may appoint an inspector to conduct an investigation into a company under the Companies Ordinance include:
I. The company passes a special resolution
II. Application by more than the nominated number of members (100 or 10%)
III. The Financial Secretary considers that the company is involved in fraud or unfairly treating ordinary membersIncorrect
Circumstances under which the Financial Secretary may appoint an inspector to conduct an investigation into a company under the Companies Ordinance include:
I. The company passes a special resolution
II. Application by more than the nominated number of members (100 or 10%)
III. The Financial Secretary considers that the company is involved in fraud or unfairly treating ordinary membersHint
Reference Chapter:1.3.47
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Question 184 of 545
184. Question
1 pointsQID1114:The Financial Secretary is required to appoint inspectors under which of the following circumstances?
I. An application is made by the specified number of members.
II. The company passed a special resolution requesting such inspections.
III. He suspects fraud in the operations or formation of the company, or oppressive conduct, or an intent to defraud creditors.
IV. He suspects the persons concerned with the formation or management of the company have been guilty of fraud or other misconduct.Correct
The Financial Secretary may also appoint inspectors if:
(a) an application is made by the specified number of members;
(b) the company passes a special resolution requesting such appointment;
(c.) he suspects fraud in the business or formation of the company, or oppressive conduct, or an intent to defraud creditors; or
(d) he suspects the persons concerned with the formation or management of the company to have been guilty of fraud or other misconduct (ss. 840 to 841, NCO).Incorrect
The Financial Secretary may also appoint inspectors if:
(a) an application is made by the specified number of members;
(b) the company passes a special resolution requesting such appointment;
(c.) he suspects fraud in the business or formation of the company, or oppressive conduct, or an intent to defraud creditors; or
(d) he suspects the persons concerned with the formation or management of the company to have been guilty of fraud or other misconduct (ss. 840 to 841, NCO).Hint
Reference Chapter:1.3.47
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Question 185 of 545
185. Question
1 pointsQID1660:Under which of the following circumstances can the financial secretary investigate a listed issuer?
I. To clarify the ownership of the listed issuer.
II. To clarify the controller of the listed issuer.
III. Under the request of the SEHK
IV. Under the request of a prescribed amount of shareholders.Correct
The financial secretary investigate a listed issuer?
I. To clarify the ownership of the listed issuer.
II. To clarify the controller of the listed issuer.
III. Under the request of a prescribed amount of shareholders.Incorrect
The financial secretary investigate a listed issuer?
I. To clarify the ownership of the listed issuer.
II. To clarify the controller of the listed issuer.
III. Under the request of a prescribed amount of shareholders.Hint
Reference Chapter:1.3.47
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Question 186 of 545
186. Question
1 pointsQID1115:When a company is under investigation, all present and past officers and agents of the company, including bankers, solicitors and auditors, are required to:
I. Produce all books and records that they have (this includes power given to the inspector to enter premises and conduct searches)
II. Attend before the inspector when required and answer questions (on oath if so required by him)
III. Provide information to investigators, but bankers are exempted from providing information other than that relating to the company under inspection.
IV. Provide investigators with all reasonable assistance.Correct
All present and past officers and agents of the company, including bankers, solicitors and auditors, are required to:
(a) produce all books and records that they have (this includes power given to the inspector to enter premises and conduct searches);
(b) attend before the inspector when required and answer questions (on oath if so required by him); and
© otherwise give him all reasonable assistance.Incorrect
All present and past officers and agents of the company, including bankers, solicitors and auditors, are required to:
(a) produce all books and records that they have (this includes power given to the inspector to enter premises and conduct searches);
(b) attend before the inspector when required and answer questions (on oath if so required by him); and
© otherwise give him all reasonable assistance.Hint
Reference Chapter:1.3.48
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Question 187 of 545
187. Question
1 pointsQID136:Which of the following description about private company is correct?
I. Must have more than 50 members
II. May not offer shares to the public
III. restricts the right to transfer its share
IV. is not limited by guaranteeCorrect
A private company is a company that:
(a) restricts the right to transfer its shares; members and continue to be members respectively);
(b) may not have more than 50 members (excluding present and past employees who are members and continue to be members respectively);
© may not offer shares (or debentures) to the public; and
(d) is not limited by guarantee.Incorrect
A private company is a company that:
(a) restricts the right to transfer its shares; members and continue to be members respectively);
(b) may not have more than 50 members (excluding present and past employees who are members and continue to be members respectively);
© may not offer shares (or debentures) to the public; and
(d) is not limited by guarantee.Hint
Reference Chapter:1.3.5
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Question 188 of 545
188. Question
1 pointsQID776:A private company is a company that:
I. Has no restrictions in rights to transfer its shares.
II. May not have more than 50 members.
III. May not offer shares to the public.
IV. Is not limited by guarantee.Correct
A private company is a company that:
(a) restricts the right to transfer its shares;
(b) may not have more than 50 members (excluding present and past employees who are members and continue to be members respectively);
© may not offer shares (or debentures) to the public; and
(d) is not limited by guarantee.Incorrect
A private company is a company that:
(a) restricts the right to transfer its shares;
(b) may not have more than 50 members (excluding present and past employees who are members and continue to be members respectively);
© may not offer shares (or debentures) to the public; and
(d) is not limited by guarantee.Hint
Reference Chapter:1.3.5
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Question 189 of 545
189. Question
1 pointsQID775:Which of the following are characteristics of a private company?
I. Restrictions on the rights to transfer it shares.
II. No more than 50 share holders.
III. May not offer shares to the public.
IV. Can be bought and sold OTC on the market.Correct
A private company is a company that:
(a) restricts the right to transfer its shares;
(b) may not have more than 50 members (excluding present and past employees who are members and continue to be members respectively);
(c.) may not offer shares (or debentures) to the public; and
(d) is not limited by guarantee.Incorrect
A private company is a company that:
(a) restricts the right to transfer its shares;
(b) may not have more than 50 members (excluding present and past employees who are members and continue to be members respectively);
(c.) may not offer shares (or debentures) to the public; and
(d) is not limited by guarantee.Hint
Reference Chapter:1.3.5
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Question 190 of 545
190. Question
1 pointsQID777:Which of the following restrictions about a private company is incorrect?
Correct
A private company is a company that:
(a) restricts the right to transfer its shares;
(b) may not have more than 50 members (excluding present and past employees who are members and continue to be members respectively);
© may not offer shares (or debentures) to the public; and
(d) is not limited by guarantee.
A private company doesn’t have to be guarantee companies.Incorrect
A private company is a company that:
(a) restricts the right to transfer its shares;
(b) may not have more than 50 members (excluding present and past employees who are members and continue to be members respectively);
© may not offer shares (or debentures) to the public; and
(d) is not limited by guarantee.
A private company doesn’t have to be guarantee companies.Hint
Reference Chapter:1.3.5
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Question 191 of 545
191. Question
1 pointsQID1116:Which of the following is a reason of compulsory liquidation?
Correct
A company may be wound up by the court if:
(a) it has by special resolution resolved that it shall be wound up by the court;
(c.) it has no membersIncorrect
A company may be wound up by the court if:
(a) it has by special resolution resolved that it shall be wound up by the court;
(c.) it has no membersHint
Reference Chapter:1.3.50
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Question 192 of 545
192. Question
1 pointsQID1117:Which of the following descriptions about compulsory liquidation is correct?
I. This is a compulsory winding-up ordered by the court.
II. The liquidator is appointed by the court and acts under its control.
III. The liquidator is appointed through a shareholders’ meeting and acts under the control of the directors.
IV. Liquidation is passed by a special resolution.Correct
This is a compulsory winding-up ordered by the court, and the liquidator is appointed by the court and acts under its control.
Incorrect
This is a compulsory winding-up ordered by the court, and the liquidator is appointed by the court and acts under its control.
Hint
Reference Chapter:1.3.50
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Question 193 of 545
193. Question
1 pointsQID2826:Which of the following is less likely to be the main cause of compulsory winding up?
Correct
Unless the company has been out of business for more than a year at all, it is relatively unlikely that a company with a small amount of business remaining will be the primary reason for winding up.
Incorrect
Unless the company has been out of business for more than a year at all, it is relatively unlikely that a company with a small amount of business remaining will be the primary reason for winding up.
Hint
Reference Chapter:1.3.51
-
Question 194 of 545
194. Question
1 pointsQID1118:Which of the following is NOT a possible reason for compulsory liquidation?
Correct
A company may be wound up by the court if:
(e) the event occurs on the occurrence of which the memorandum or articles of association provides that the company is to be dissolved; or
(f) the court is of the opinion that it would be just and equitable to wind up the company. Examples are where:
(ii) the company was formed for a fraudulent purpose; or
(iii) the basis of mutual trust, understanding and confidence on which the company was
formed no longer exists.Incorrect
A company may be wound up by the court if:
(e) the event occurs on the occurrence of which the memorandum or articles of association provides that the company is to be dissolved; or
(f) the court is of the opinion that it would be just and equitable to wind up the company. Examples are where:
(ii) the company was formed for a fraudulent purpose; or
(iii) the basis of mutual trust, understanding and confidence on which the company was
formed no longer exists.Hint
Reference Chapter:1.3.51
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Question 195 of 545
195. Question
1 pointsQID2673:The SFC are not authorised to use its power to
Correct
Only courst can windup companies.
Incorrect
Only courst can windup companies.
Hint
Reference Chapter:1.3.51
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Question 196 of 545
196. Question
1 pointsQID146:According to the New Companies Ordinance, can shareholders/members petition to the court for a winding up of a company?
Correct
To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(f) A member may apply to the court for an order if he considers that the affairs of the company are being conducted in a manner prejudicial to the interests of the members generally or of some part of the members.
(g) A member may petition for a winding up.Incorrect
To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(f) A member may apply to the court for an order if he considers that the affairs of the company are being conducted in a manner prejudicial to the interests of the members generally or of some part of the members.
(g) A member may petition for a winding up.Hint
Reference Chapter:1.3.52
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Question 197 of 545
197. Question
1 pointsQID1119:Petitioners of compulsory liquidation may be:
I. The Official Receiver.
II. The SFC, in lieu of public interest.
III. The Chief Executive.
IV. The Registrar of Companies.Correct
The petitioners may be:
(e) the Registrar of Companies, if the company has breached provisions of the NCO or is being carried on for an unlawful purpose;
(f) the Official Receiver, where there is already a voluntary winding up (s. 179, CWUMPO); and
(g) the SFC, if it appears desirable in the public interest (SFO gives authority to the SFC).Incorrect
The petitioners may be:
(e) the Registrar of Companies, if the company has breached provisions of the NCO or is being carried on for an unlawful purpose;
(f) the Official Receiver, where there is already a voluntary winding up (s. 179, CWUMPO); and
(g) the SFC, if it appears desirable in the public interest (SFO gives authority to the SFC).Hint
Reference Chapter:1.3.52
-
Question 198 of 545
198. Question
1 pointsQID1120:Petitioner(s) of compulsory liquidation may NOT be:
Correct
The petitioners may be:
(a) the company;
(b) a creditor;
(d) the Financial Secretary, if he thinks it desirable in the public interest.Incorrect
The petitioners may be:
(a) the company;
(b) a creditor;
(d) the Financial Secretary, if he thinks it desirable in the public interest.Hint
Reference Chapter:1.3.52
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Question 199 of 545
199. Question
1 pointsQID1121:In the case of a compulsory liquidation, the liquidator should be appointed by:
Correct
The court may appoint a liquidator.
Incorrect
The court may appoint a liquidator.
Hint
Reference Chapter:1.3.53
-
Question 200 of 545
200. Question
1 pointsQID1123:Which of the following can start a Voluntary liquidation?
I. Members
II. Debtors
III. Creditors
IV. DirectorsCorrect
A voluntary winding-up may be started by members or creditors.
Incorrect
A voluntary winding-up may be started by members or creditors.
Hint
Reference Chapter:1.3.54
-
Question 201 of 545
201. Question
1 pointsQID1124:Voluntary liquidation may be started by which of the following?
I. Shareholders
II. Creditors
III. Financial Secretary
IV. The Chief ExecutiveCorrect
A voluntary winding-up may be started by members or creditors.
Incorrect
A voluntary winding-up may be started by members or creditors.
Hint
Reference Chapter:1.3.54
-
Question 202 of 545
202. Question
1 pointsQID165:According the NCO, which of the following entities can start a voluntary liquidation?
I. Directors
II. Creditors
III. Members
IV. Financial SecretaryCorrect
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.
Incorrect
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.
Hint
Reference Chapter:1.3.54
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Question 203 of 545
203. Question
1 pointsQID1122:Voluntary liquidation can be initiated by which of the following parties?
I. Directors
II. Members
III. Creditors
IV. CourtCorrect
A voluntary winding-up may be started by members or creditors.
Incorrect
A voluntary winding-up may be started by members or creditors.
Hint
Reference Chapter:1.3.54
-
Question 204 of 545
204. Question
1 pointsQID1125:Which of the following is/are valid reason(s) for voluntary liquidation?
I. The period of the company’s planned existence as stated in its articles of association comes to an end.
II. A special resolution has been passed to wind up the company.
III. A passing of a resolution that it is advisable to wind up the company, as it cannot continue due to its liabilities.
IV. The directors of a company or, in a case of a company having more than 2 directors, the majority of the directors deliver a winding-up statement under section 228A that the company should be wound up after passing a resolution to that effect at a board meeting.Correct
A voluntary winding-up is started:
(a) when the period fixed for the company’s duration as stated in its articles of association
comes to an end;
(b) by the passing of a special resolution for winding up; or
(c) if the directors of a company or, in the case of a company having more than two directors, the majority of the directors deliver a winding-up statement under s. 228A, CWUMPO that the company should be wound up after passing a resolution to that effect at a board meeting. However, prior to no later than 28 days after the delivery of any winding-up statement to the Registrar of Companies to commence the winding-up, a meeting of the company must have been summoned and a provisional liquidator must have been appointed. In the case of a private company having only one director, the sole director may make the winding-up statement.Incorrect
A voluntary winding-up is started:
(a) when the period fixed for the company’s duration as stated in its articles of association
comes to an end;
(b) by the passing of a special resolution for winding up; or
(c) if the directors of a company or, in the case of a company having more than two directors, the majority of the directors deliver a winding-up statement under s. 228A, CWUMPO that the company should be wound up after passing a resolution to that effect at a board meeting. However, prior to no later than 28 days after the delivery of any winding-up statement to the Registrar of Companies to commence the winding-up, a meeting of the company must have been summoned and a provisional liquidator must have been appointed. In the case of a private company having only one director, the sole director may make the winding-up statement.Hint
Reference Chapter:1.3.55
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Question 205 of 545
205. Question
1 pointsQID1129:If the directors believe that a company can repay its debt and obligations according to the certificate of solvency, within how long should the company repay all its outstanding obligations?
Correct
Members’ voluntary winding up 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:
(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.Incorrect
Members’ voluntary winding up 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:
(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.Hint
Reference Chapter:1.3.56
-
Question 206 of 545
206. Question
1 pointsQID1128:Which of the following are prerequisites to the issuance of Certificate of Solvency?
I. Agreed upon by a simple majority of directors.
II. Directors have made a full inquiry into the affairs of the company.
III. Directors have formed the opinion that the company will be able to pay its debts within 1 month from the commencement of the winding up as specified in the certificate of solvency.
IV. Directors have 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.Correct
Members’ voluntary winding up 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.Incorrect
Members’ voluntary winding up 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.Hint
Reference Chapter:1.3.56
-
Question 207 of 545
207. Question
1 pointsQID2720:The document proving the company’s ability to pay its debts during the member’s (solvent) voluntary winding-up process is?
Correct
The document certifying the company’s ability to pay its debts during the members’ (solvent) voluntary winding-up is a certificate of solvency.
Incorrect
The document certifying the company’s ability to pay its debts during the members’ (solvent) voluntary winding-up is a certificate of solvency.
Hint
Reference Chapter:1.3.56
-
Question 208 of 545
208. Question
1 pointsQID1126:Which of the following are the necessary prerequisites for a member’s voluntary winding-up to be undertaken?
I. The majority of the directors has issued a “certificate of solvency”.
II. The directors have made a full enquiry into the affairs of the company.
III. The directors have 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.
IV. The company has not been able to make a profit, or has not commenced business for the past year.Correct
Members’ voluntary winding up 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.Incorrect
Members’ voluntary winding up 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.Hint
Reference Chapter:1.3.56
-
Question 209 of 545
209. Question
1 pointsQID1127:Voluntary liquidation can take place if the directors of a company or, in the case of a company having more than two directors, the majority of the directors, can issue which of the following documents?
Correct
Members’ voluntary winding up 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”.
Incorrect
Members’ voluntary winding up 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”.
Hint
Reference Chapter:1.3.56
-
Question 210 of 545
210. Question
1 pointsQID166:Which of the following statements about the “certificate of solvency” is correct?
I. It must be issued within the 5 weeks preceding the resolution to winding-up.
II. It must be delivered to the Registrar of Companies for registration.
III. “Certificate of solvency” should form the opinion that the company will be able to pay its debts within 12 months
IV. If the company fails to repay to its creditor after the “certificate of solvency” has been issued, the director of the company will be liable for such shortfall and may face criminal prosecution.Correct
A member’s voluntary winding-up 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:
(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.
The certificate of solvency must be issued within the five weeks preceding the resolution and be delivered to the Registrar of Companies for registration not later than when the copy of the winding-up resolution is delivered, and must include a statement of the company’s assets and liabilities at the latest practicable date.Incorrect
A member’s voluntary winding-up 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:
(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.
The certificate of solvency must be issued within the five weeks preceding the resolution and be delivered to the Registrar of Companies for registration not later than when the copy of the winding-up resolution is delivered, and must include a statement of the company’s assets and liabilities at the latest practicable date.Hint
Reference Chapter:1.3.57
-
Question 211 of 545
211. Question
1 pointsQID1131:The issuance of the “Certificate of Solvency” should be done:
Correct
The certificate of solvency must be issued within the 5 weeks preceding the resolution and be delivered to the Registrar of Companies for registration not later than when the copy of the winding-up resolution is delivered.
Incorrect
The certificate of solvency must be issued within the 5 weeks preceding the resolution and be delivered to the Registrar of Companies for registration not later than when the copy of the winding-up resolution is delivered.
Hint
Reference Chapter:1.3.58
-
Question 212 of 545
212. Question
1 pointsQID1130:The certificate of solvency should be delivered to:
Correct
The certificate of solvency must be issued within the 5 weeks preceding the resolution and be delivered to the Registrar of Companies for registration not later than when the copy of the winding-up resolution is delivered.
Incorrect
The certificate of solvency must be issued within the 5 weeks preceding the resolution and be delivered to the Registrar of Companies for registration not later than when the copy of the winding-up resolution is delivered.
Hint
Reference Chapter:1.3.58
-
Question 213 of 545
213. Question
1 pointsQID1132:The certificate of solvency should be issued within how long preceding the winding-up resolution?
Correct
The certificate of solvency must be issued within the 5 weeks preceding the resolution and be delivered to the Registrar of Companies for registration not later than when the copy of the winding-up resolution is delivered.
Incorrect
The certificate of solvency must be issued within the 5 weeks preceding the resolution and be delivered to the Registrar of Companies for registration not later than when the copy of the winding-up resolution is delivered.
Hint
Reference Chapter:1.3.58
-
Question 214 of 545
214. Question
1 pointsQID164:Which of the following individuals cannot petition for a court winding-up?
Correct
The petitioners may be:
(a) the company;
(b) a creditor;
(c) a contributory (i.e. every person liable to contribute to the assets of a company in the event of its being wound up);
(d) the Financial Secretary, if he thinks it desirable in the public interest;
€ the Registrar of Companies, if the company has breached provisions of the NCO or is being carried on for an unlawful purpose;
(f) the Official Receiver, where there is already a voluntary winding up (s. 179, CWUMPO); and
(g) the SFC, if it appears desirable in the public interest (SFO gives authority to the SFC).Incorrect
The petitioners may be:
(a) the company;
(b) a creditor;
(c) a contributory (i.e. every person liable to contribute to the assets of a company in the event of its being wound up);
(d) the Financial Secretary, if he thinks it desirable in the public interest;
€ the Registrar of Companies, if the company has breached provisions of the NCO or is being carried on for an unlawful purpose;
(f) the Official Receiver, where there is already a voluntary winding up (s. 179, CWUMPO); and
(g) the SFC, if it appears desirable in the public interest (SFO gives authority to the SFC).Hint
Reference Chapter:1.3.59
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Question 215 of 545
215. Question
1 pointsQID1136:Which one of the following are accurate representations of creditors’ voluntary winding up?
I. Creditors’ voluntary winding up may be a result of failure in compulsory liquidation.
II. The company arranges a meeting of the creditors to be summoned for the day when the resolution to wind up is proposed or for the next day.
III. Advertisements will have to be run in the Gazette and newspapers.
IV. A statement of assets and liabilities, 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.Correct
Where a resolution for voluntary winding-up has been proposed, the company must arrange a meeting of the creditors to be held within 14 days thereafter subject to a minimum notice period of 7 days. Advertisements must be run in the Gazette and newspapers. A statement of the position of the company’s affairs will be presented to the meeting, at which a liquidator and a committee of inspection will be appointed to supervise the process.
Incorrect
Where a resolution for voluntary winding-up has been proposed, the company must arrange a meeting of the creditors to be held within 14 days thereafter subject to a minimum notice period of 7 days. Advertisements must be run in the Gazette and newspapers. A statement of the position of the company’s affairs 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:1.3.59
-
Question 216 of 545
216. Question
1 pointsQID1135:If the creditors decide to summon a meeting for the day when the resolution to wind up is proposed or for the next day, what kind of documents will be presented to the meeting?
I. Articles of Association
II. A statement of the position of the company’s affairs
III. List of Proof of Debt provided by Creditors
IV. Balance Sheet of the companyCorrect
Where a resolution for voluntary winding-up has been proposed, the company must arrange a meeting of the creditors to be held within 14 days thereafter subject to a minimum notice period of 7 days. Advertisements must be run in the Gazette and newspapers. A statement of the position of the company’s affairs will be presented to the meeting, at which a liquidator and a committee of inspection will be appointed to supervise the process.
Incorrect
Where a resolution for voluntary winding-up has been proposed, the company must arrange a meeting of the creditors to be held within 14 days thereafter subject to a minimum notice period of 7 days. Advertisements must be run in the Gazette and newspapers. A statement of the position of the company’s affairs 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:1.3.59
-
Question 217 of 545
217. Question
1 pointsQID1134:If the creditors decide to summon a meeting for the day when the resolution to wind up is proposed or for the next day, the company must arrange advertisements to be run in the Gazette and newspapers. This form of liquidation is likely to be:
Correct
Where a resolution for voluntary winding-up has been proposed, the company must arrange a meeting of the creditors to be held within 14 days thereafter subject to a minimum notice period of 7 days. Advertisements must be run in the Gazette and newspapers. A statement of the position of the company’s affairs will be presented to the meeting, at which a liquidator and a committee of inspection will be appointed to supervise the process.
Incorrect
Where a resolution for voluntary winding-up has been proposed, the company must arrange a meeting of the creditors to be held within 14 days thereafter subject to a minimum notice period of 7 days. Advertisements must be run in the Gazette and newspapers. A statement of the position of the company’s affairs 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:1.3.59
-
Question 218 of 545
218. Question
1 pointsQID1133:The liquidator and committee of inspection of a creditors’ voluntary winding up may be appointed by:
Correct
Where a resolution for voluntary winding-up has been proposed, the company must arrange a meeting of the creditors to be held within 14 days thereafter subject to a minimum notice period of 7 days. Advertisements must be run in the Gazette and newspapers. A statement of the position of the company’s affairs will be presented to the meeting, at which a liquidator and a committee of inspection will be appointed to supervise the process.
Incorrect
Where a resolution for voluntary winding-up has been proposed, the company must arrange a meeting of the creditors to be held within 14 days thereafter subject to a minimum notice period of 7 days. Advertisements must be run in the Gazette and newspapers. A statement of the position of the company’s affairs 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:1.3.59
-
Question 219 of 545
219. Question
1 pointsQID167:If a members’ voluntary winding-up is not applicable or practical, a creditors’ voluntary winding-up will take place. Which of the following entities will monitor such winding-up?
Correct
Committee of inspection will be appointed to supervise the process.
Incorrect
Committee of inspection will be appointed to supervise the process.
Hint
Reference Chapter:1.3.59
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Question 220 of 545
220. Question
1 pointsQID135:Which of the following statements correctly describe public company under the new company ordinance?
I. It is a company that is not a private company.
II. It is a company that is not a guarantee company.
III. It must have more than 50 members.
IV. It restricts the right to transfer its shares.Correct
A public company is one that is not a private company, i.e. does not meet the requirements for a private company stated above, and is not a guarantee company. It also has more than 50 members, contrary to a private company.
Incorrect
A public company is one that is not a private company, i.e. does not meet the requirements for a private company stated above, and is not a guarantee company. It also has more than 50 members, contrary to a private company.
Hint
Reference Chapter:1.3.6
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Question 221 of 545
221. Question
1 pointsQID1051:Which of the following descriptions about a public company is correct?
Correct
A public company is one that is not a private company, i.e. does not meet the requirements for a private company stated above, and is not a guarantee company.
Incorrect
A public company is one that is not a private company, i.e. does not meet the requirements for a private company stated above, and is not a guarantee company.
Hint
Reference Chapter:1.3.6
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Question 222 of 545
222. Question
1 pointsQID1052:A public company is one that:
I. Is not a private company.
II. Is not a guarantee company.
III. Must be a listed company.
IV. May not be a listed company.Correct
A public company is one that is not a private company, i.e. does not meet the requirements for a private company stated above, and is not a guarantee company.
Incorrect
A public company is one that is not a private company, i.e. does not meet the requirements for a private company stated above, and is not a guarantee company.
Hint
Reference Chapter:1.3.6
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Question 223 of 545
223. Question
1 pointsQID130:Which of the following is not a contract?
Correct
A contract is an agreement between two or more persons creating obligations that are enforceable or otherwise recognisable under law, for example:
(a) the purchase or sale of a security or futures contract;
(b) the acceptance by an investor of an initial public offer of securities made by an issuer;
© an undertaking to manage a mutual fund; and
(d) the purchase of a leveraged foreign exchange contract.
Case D doesn’t comply with these requirements.Incorrect
A contract is an agreement between two or more persons creating obligations that are enforceable or otherwise recognisable under law, for example:
(a) the purchase or sale of a security or futures contract;
(b) the acceptance by an investor of an initial public offer of securities made by an issuer;
© an undertaking to manage a mutual fund; and
(d) the purchase of a leveraged foreign exchange contract.
Case D doesn’t comply with these requirements.Hint
Reference Chapter:1.3.60
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Question 224 of 545
224. Question
1 pointsQID1137:Which of the following is not an example of making a contract?
Correct
A contract is an agreement between two or more persons creating obligations that are enforceable or otherwise recognisable under law, for example:
(a) the purchase or sale of a security or futures contract;
(b) the acceptance by an investor of an initial public offer of securities made by an issuer;
(c.) an undertaking to manage a mutual fund.Incorrect
A contract is an agreement between two or more persons creating obligations that are enforceable or otherwise recognisable under law, for example:
(a) the purchase or sale of a security or futures contract;
(b) the acceptance by an investor of an initial public offer of securities made by an issuer;
(c.) an undertaking to manage a mutual fund.Hint
Reference Chapter:1.3.60
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Question 225 of 545
225. Question
1 pointsQID1139:Which of the following conditions will make the contract void?
I. One party was forced into a contract under pressure.
II. A contract has illegal elements.
III. One or both parties are underage or mentally ill.
IV. The contract would result in financial damages to one party.Correct
The elements of a legally binding contract are the following:
(d) the parties must have legal capacity, i.e. they must be at least 18 years of age and have no mental impairment; thus, if a securities dealer enters into a contract with a minor, the dealer may be at risk if the minor disclaims his commitments
(e) a contract may be unenforceable if it has an illegal element, and thus an intermediary may face legal risk; and
(f) the parties must have given their consent to the contract without any form of pressure; if a party was forced to enter into the contract under pressure, the contract will be void.Incorrect
The elements of a legally binding contract are the following:
(d) the parties must have legal capacity, i.e. they must be at least 18 years of age and have no mental impairment; thus, if a securities dealer enters into a contract with a minor, the dealer may be at risk if the minor disclaims his commitments
(e) a contract may be unenforceable if it has an illegal element, and thus an intermediary may face legal risk; and
(f) the parties must have given their consent to the contract without any form of pressure; if a party was forced to enter into the contract under pressure, the contract will be void.Hint
Reference Chapter:1.3.61
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Question 226 of 545
226. Question
1 pointsQID1138:Which of the following is NOT an element of a legal contract?
Correct
The elements of a legally binding contract are the following:
(a) an intention to create legal obligations;
(c.) there is valuable consideration, which can include an agreement not to sue under the contract; a contract under deed does not need consideration;
(d) the parties must have legal capacity, i.e. they must be at least 18 years of age and have no mental impairment; thus, if a securities dealer enters into a contract with a minor, the dealer may be at risk if the minor disclaims his commitmentsIncorrect
The elements of a legally binding contract are the following:
(a) an intention to create legal obligations;
(c.) there is valuable consideration, which can include an agreement not to sue under the contract; a contract under deed does not need consideration;
(d) the parties must have legal capacity, i.e. they must be at least 18 years of age and have no mental impairment; thus, if a securities dealer enters into a contract with a minor, the dealer may be at risk if the minor disclaims his commitmentsHint
Reference Chapter:1.3.61
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Question 227 of 545
227. Question
1 pointsQID1140:Which of the following descriptions about contracts are correct?
I. Can be expressly agreed or implied.
II. Contracts must be a form of warranty.
III. A warranty is a term of a contract which is of considerable importance such that a breach of a condition might lead to repudiation by the innocent party or a claim for damage.
IV. There can be conditions precedent (which must be met) or conditions subsequent which, if they fail, may lead to repudiation of the contract.Correct
The terms of the contract are important:
(a) They can be expressly agreed or implied (the terms may be implied by court or by common law).
(b) They can be conditions or warranties; a condition is a term of a contract which is of considerable importance such that a breach of a condition might lead to repudiation by the innocent party or a claim for damages; a warranty is a term of lesser importance such that a breach of a warranty may only lead to a claim for damages by an injured party.
(c.) There can be conditions precedent (which must be met) or conditions subsequent which, if they fail, may lead to repudiation of the contract.Incorrect
The terms of the contract are important:
(a) They can be expressly agreed or implied (the terms may be implied by court or by common law).
(b) They can be conditions or warranties; a condition is a term of a contract which is of considerable importance such that a breach of a condition might lead to repudiation by the innocent party or a claim for damages; a warranty is a term of lesser importance such that a breach of a warranty may only lead to a claim for damages by an injured party.
(c.) There can be conditions precedent (which must be met) or conditions subsequent which, if they fail, may lead to repudiation of the contract.Hint
Reference Chapter:1.3.62
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Question 228 of 545
228. Question
1 pointsQID1141:Which of the following descriptions about agency laws is correct?
Correct
Agency is a fiduciary relationship (see section 3.66 below) created by express or implied contract or by law, in which one party, the agent, may act on behalf of another, the principal, and bind the principal by those of his words or actions that are within the scope of his agency.
Incorrect
Agency is a fiduciary relationship (see section 3.66 below) created by express or implied contract or by law, in which one party, the agent, may act on behalf of another, the principal, and bind the principal by those of his words or actions that are within the scope of his agency.
Hint
Reference Chapter:1.3.63
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Question 229 of 545
229. Question
1 pointsQID1142:Agency laws can be applied to which of the following cases?
I. A stock broker and his client.
II. A trustee and a beneficiary.
III. An auditor and a company.
IV. Solicitors and his clients.Correct
The law of agency has an important impact on financial services. For example, a stockbroker can be an agent for his client, and an account executive may be considered the agent of his employer.
Incorrect
The law of agency has an important impact on financial services. For example, a stockbroker can be an agent for his client, and an account executive may be considered the agent of his employer.
Hint
Reference Chapter:1.3.64
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Question 230 of 545
230. Question
1 pointsQID907:Is the principal liable for the acts of wrongdoing of his/her/its agent?
Correct
The principal liable for the acts of wrongdoing of his/her/its agent.
Incorrect
The principal liable for the acts of wrongdoing of his/her/its agent.
Hint
Reference Chapter:1.3.65
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Question 231 of 545
231. Question
1 pointsQID1143:Which of the following statements correctly describes fiduciary relationships?
I. A fiduciary relationship must be either business or monetary interest to both parties.
II. A fiduciary is a person who should be serviced with duties of good faith, trust, confidence, honesty and care by another person.
III. All fiduciary relationships are agencies.
IV. All agencies are fiduciary relationships.Correct
A fiduciary is a person who owes another person duties of good faith, trust, confidence, honesty and care. A fiduciary relationship is one in which one person has a duty to act for the benefit of the other on matters within the scope of their relationship. Examples of fiduciary relationships are those of stockbroker and client, principal and agent, solicitor and client, and trustee and beneficiary.
Incorrect
A fiduciary is a person who owes another person duties of good faith, trust, confidence, honesty and care. A fiduciary relationship is one in which one person has a duty to act for the benefit of the other on matters within the scope of their relationship. Examples of fiduciary relationships are those of stockbroker and client, principal and agent, solicitor and client, and trustee and beneficiary.
Hint
Reference Chapter:1.3.66
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Question 232 of 545
232. Question
1 pointsQID2578:Which of the following best explains the basis of fiduciary relationship between a stockbroker and a client who signed a client agreement?
Correct
A fiduciary relationship means when the fiduciary, here this means the stockbroker, has a duty to act for the best benefit of the other person, meaning the client in this case. The written agreement is only a record of the relationship.
Incorrect
A fiduciary relationship means when the fiduciary, here this means the stockbroker, has a duty to act for the best benefit of the other person, meaning the client in this case. The written agreement is only a record of the relationship.
Hint
Reference Chapter:1.3.66
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Question 233 of 545
233. Question
1 pointsQID129:Which of the following branches of law is intended to provide remedies for individuals or businesses that have suffered loss as a result of the actions of another person?
Correct
Civil law is intended to provide remedies for individuals or businesses that have suffered loss as a result of the actions of another person. Unlike criminal law, civil law is not primarily intended to punish the wrongdoer
Incorrect
Civil law is intended to provide remedies for individuals or businesses that have suffered loss as a result of the actions of another person. Unlike criminal law, civil law is not primarily intended to punish the wrongdoer
Hint
Reference Chapter:1.3.67
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Question 234 of 545
234. Question
1 pointsQID1659:Which of the followings is an example of tort?
Correct
A tort are losses that incur without a contractual relationship in place. The careless mistake is not a part of the contract and thus is a tort.
Incorrect
A tort are losses that incur without a contractual relationship in place. The careless mistake is not a part of the contract and thus is a tort.
Hint
Reference Chapter:1.3.67
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Question 235 of 545
235. Question
1 pointsQID1144:Which of the following descriptions about law of tort are correct?
I. Law of tort is used in civil law cases.
II. Law of tort are based on ancient roman laws.
III. When parties who have no contractual relationship are in a situation where one party suffers loss or damage as a result of the act of the other, a wrong or tort may have occurred and under civil law a liability may have arisen.
IV. The tort of negligence is a tort committed as a result of a failure to observe the standard of care expected under the law in a particular case.Correct
When parties who have no contractual relationship are in a situation where one party suffers loss or damage as a result of the act of the other, a wrong or tort may have occurred, and under civil law a liability may have arisen. There are various branches of the law of tort, of which the tort of negligence has the most direct application to securities and futures business. The tort of negligence is one committed as a result of a failure to observe the standard of care expected under law in a particular case.
Incorrect
When parties who have no contractual relationship are in a situation where one party suffers loss or damage as a result of the act of the other, a wrong or tort may have occurred, and under civil law a liability may have arisen. There are various branches of the law of tort, of which the tort of negligence has the most direct application to securities and futures business. The tort of negligence is one committed as a result of a failure to observe the standard of care expected under law in a particular case.
Hint
Reference Chapter:1.3.67
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Question 236 of 545
236. Question
1 pointsQID128:According to the Securities & Futures Ordinance and other regulation governing the securities industry,
Correct
Civil law is intended to provide remedies for individuals or businesses that have suffered loss as a result of the actions of another person. Unlike criminal law, civil law is not primarily intended to punish the wrongdoer.
Incorrect
Civil law is intended to provide remedies for individuals or businesses that have suffered loss as a result of the actions of another person. Unlike criminal law, civil law is not primarily intended to punish the wrongdoer.
Hint
Reference Chapter:1.3.67
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Question 237 of 545
237. Question
1 pointsQID127:Which of the following descriptions about civil law and criminal law is correct?
Correct
Unlike criminal law, civil law is not
primarily intended to punish the wrongdoer. The injured party, the plaintiff, brings the action for damages, compensation, redress or other remedy, such as the special equitable ones mentioned earlier, against the person causing the injury, who is the defendant. The court order or award is made if the plaintiff can prove his claim on “the balance of probabilities”. This is a standard of proof that is much less stringent than the level of “beyond reasonable
doubt” required in a criminal case. The case is brought in a civil court in the name of the plaintiff against the defendant.Incorrect
Unlike criminal law, civil law is not
primarily intended to punish the wrongdoer. The injured party, the plaintiff, brings the action for damages, compensation, redress or other remedy, such as the special equitable ones mentioned earlier, against the person causing the injury, who is the defendant. The court order or award is made if the plaintiff can prove his claim on “the balance of probabilities”. This is a standard of proof that is much less stringent than the level of “beyond reasonable
doubt” required in a criminal case. The case is brought in a civil court in the name of the plaintiff against the defendant.Hint
Reference Chapter:1.3.67
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Question 238 of 545
238. Question
1 pointsQID1145:Which of the following statements correctly describe the employment laws?
I. An employer must provide his employee with remuneration, indemnity for expenses, losses and liabilities incurred while performing his duties.
II. An employee must demonstrate skills and competence, faithful service, obedience and confidentiality.
III. A director service is considered as an employment relationship by the company ordinance.
IV. If the two parties fail to observe these basic elements in the relationship, there can be a breach of the law as well as of the contractual relationship between them.Correct
Under common law, an employer must provide his employee with remuneration, indemnity for expenses, losses and liabilities incurred while performing his duties, and a safe working
environment.
Also, under common law, an employee must demonstrate skills and competence, faithful service, obedience and confidentiality.
If the two parties fail to observe these basic elements in the relationship, there can be a breach of the law as well as of the contractual relationship between them.Incorrect
Under common law, an employer must provide his employee with remuneration, indemnity for expenses, losses and liabilities incurred while performing his duties, and a safe working
environment.
Also, under common law, an employee must demonstrate skills and competence, faithful service, obedience and confidentiality.
If the two parties fail to observe these basic elements in the relationship, there can be a breach of the law as well as of the contractual relationship between them.Hint
Reference Chapter:1.3.69&70&71
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Question 239 of 545
239. Question
1 pointsQID1043:Which of the following is a correct description of a guarantee company?
Correct
A guarantee company is one that:
(a) does not have a share capital; and
(b) the liability of its members is limited by the company’s articles to the amount that the members undertake to contribute to the assets of the company in the event of its being wound up.Incorrect
A guarantee company is one that:
(a) does not have a share capital; and
(b) the liability of its members is limited by the company’s articles to the amount that the members undertake to contribute to the assets of the company in the event of its being wound up.Hint
Reference Chapter:1.3.7
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Question 240 of 545
240. Question
1 pointsQID1044:A guarantee company is one that:
I. does not have a share capital.
II. is not a private company.
III. the liability of its members is limited by the company’s articles to the amount that the members undertake to contribute to the assets of the company in the event of its being wound up.
IV. does not have a director.Correct
A guarantee company is one that:
(a) does not have a share capital; and
(b) the liability of its members is limited by the company’s articles to the amount that the members undertake to contribute to the assets of the company in the event of its being wound up.Incorrect
A guarantee company is one that:
(a) does not have a share capital; and
(b) the liability of its members is limited by the company’s articles to the amount that the members undertake to contribute to the assets of the company in the event of its being wound up.Hint
Reference Chapter:1.3.7
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Question 241 of 545
241. Question
1 pointsQID501:Which of the follow ordinance/codes/rules protect the privacy of individuals in relation to their personal data?
Correct
The Personal Data (Privacy) Ordinance (“PDPO”) was established to protect the privacy of individuals in relation to personal data.
Incorrect
The Personal Data (Privacy) Ordinance (“PDPO”) was established to protect the privacy of individuals in relation to personal data.
Hint
Reference Chapter:1.3.72
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Question 242 of 545
242. Question
1 pointsQID2394:People who enforce the Privacy Ordinance are:
Correct
People who enforce the Privacy Ordinance are the Privacy Commissioner for Personal Data.
Incorrect
People who enforce the Privacy Ordinance are the Privacy Commissioner for Personal Data.
Hint
Reference Chapter:1.3.72
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Question 243 of 545
243. Question
1 pointsQID502:According to the Personal Data (Privacy) Ordinance, personal data refers to:
Correct
“Personal data” means any data relating directly or indirectly to a living individual, from which it is practicable for the identity of the individual to be directly or indirectly ascertained (and are in a form in which access or processing is practicable).
Incorrect
“Personal data” means any data relating directly or indirectly to a living individual, from which it is practicable for the identity of the individual to be directly or indirectly ascertained (and are in a form in which access or processing is practicable).
Hint
Reference Chapter:1.3.72
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Question 244 of 545
244. Question
1 pointsQID805:Which of the following are classified as personal data under the PDPO?
I. Data relating directly to a living individual, from which it is practicable for the identity of the individual to be directly ascertained.
II. Data relating indirectly to a living individual, from which it is practicable for the identity of the individual to be directly ascertained.
III. Data relating directly to a living individual, from which it is practicable for the identity of the individual to be indirectly ascertained.
IV. Data relating indirectly to a living individual, from which it is practicable for the identity of the individual to be indirectly ascertained.Correct
“Personal data” means any data relating directly or indirectly to a living individual, from which it is practicable for the identity of the individual to be directly or indirectly ascertained (and are in a form in which access or processing is practicable).
Incorrect
“Personal data” means any data relating directly or indirectly to a living individual, from which it is practicable for the identity of the individual to be directly or indirectly ascertained (and are in a form in which access or processing is practicable).
Hint
Reference Chapter:1.3.72
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Question 245 of 545
245. Question
1 pointsQID808:The PDPO is applicable to which of the following individuals?
I. The user of personal data
II. The collector of personal data
III. The holder of personal data
IV. The processor of personal dataCorrect
The Personal Data (Privacy) Ordinance (“PDPO”) was established to protect the privacy of individuals in relation to personal data. It applies to any data user who, in relation to personal data, means a person who alone or jointly, or in common with other persons, controls the collection, holding, processing or use of the data.
Incorrect
The Personal Data (Privacy) Ordinance (“PDPO”) was established to protect the privacy of individuals in relation to personal data. It applies to any data user who, in relation to personal data, means a person who alone or jointly, or in common with other persons, controls the collection, holding, processing or use of the data.
Hint
Reference Chapter:1.3.72
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Question 246 of 545
246. Question
1 pointsQID1147:Which of the following is responsible for the enforcement of Personal Data (Privacy) Ordinance?
Correct
The Privacy Commissioner for Personal Data is an independent public officer appointed to enforce and promote compliance with the PDPO.
Incorrect
The Privacy Commissioner for Personal Data is an independent public officer appointed to enforce and promote compliance with the PDPO.
Hint
Reference Chapter:1.3.72
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Question 247 of 545
247. Question
1 pointsQID1146:Under the Personal Data (Privacy) Ordinance, the subject is entitled to which of the following rights?
I. The subject shall be notified about the purpose of collection of personal data.
II. The subject’s personal data should not, without the consent of the data subject, be used for any purpose other than that for which it was collected or a directly related purpose
III. The data subject shall be entitled to ascertain whether data of which he is the subject are held, request and receive access to his personal data within a reasonable time at a reasonable fee and in an intelligible form, and to request corrections to the data and to be given reasons for any refusals in relation to the above and to object.
IV. The subject’s personal data shall not be collected unless lawfully and fairly collected for a lawful purpose directly related to a function or activity of the data user, the collection is necessary for or directly related to that purpose and the data is not excessive for the purpose.Correct
(a) Principle 1 – purpose and manner of collection of personal data
(i) Personal data shall not be collected unless for a lawful purpose directly related to a function or activity of the data user, and unless the collection is necessary for or directly related to that purpose and the data is not excessive for the purpose.
(ii) Where the data is collected from the data subject, he should be informed, at the prescribed times, of the purpose for which the data is to be used, the classes of persons to whom the data may be transferred and of his rights to access and to request the correction of the data.
(c) Principle 3 – use of personal data
Personal data should not, without the consent of the data subject, be used for a new purpose.
(f) Principle 6 – access to personal data
A data subject shall be entitled to ascertain whether data of which he is the subject is held, request and receive access to his personal data within a reasonable time at a reasonable fee and in an intelligible form, and to request corrections to the data, and to be given reasons for any refusals in relation to the above and to object to the Privacy Commissioner for Personal Data.Incorrect
(a) Principle 1 – purpose and manner of collection of personal data
(i) Personal data shall not be collected unless for a lawful purpose directly related to a function or activity of the data user, and unless the collection is necessary for or directly related to that purpose and the data is not excessive for the purpose.
(ii) Where the data is collected from the data subject, he should be informed, at the prescribed times, of the purpose for which the data is to be used, the classes of persons to whom the data may be transferred and of his rights to access and to request the correction of the data.
(c) Principle 3 – use of personal data
Personal data should not, without the consent of the data subject, be used for a new purpose.
(f) Principle 6 – access to personal data
A data subject shall be entitled to ascertain whether data of which he is the subject is held, request and receive access to his personal data within a reasonable time at a reasonable fee and in an intelligible form, and to request corrections to the data, and to be given reasons for any refusals in relation to the above and to object to the Privacy Commissioner for Personal Data.Hint
Reference Chapter:1.3.73
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Question 248 of 545
248. Question
1 pointsQID2838:The data protection principles set out in the Personal Data (Privacy) Ordinance (PDPO) do not include
Correct
The data protection principles set out in the PDPO include:
I. Purpose and manner of collection of personal data
II. Accuracy of Personal Data and Retention Period
III. Use of Personal Data
IV. Security of personal data
V. Information to be available in general
VI. Access to personal dataIncorrect
The data protection principles set out in the PDPO include:
I. Purpose and manner of collection of personal data
II. Accuracy of Personal Data and Retention Period
III. Use of Personal Data
IV. Security of personal data
V. Information to be available in general
VI. Access to personal dataHint
Reference Chapter:1.3.73
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Question 249 of 545
249. Question
1 pointsQID2827:Registration and Electoral Office lost a notebook computer containing voters’ information. This is more likely to violate
Correct
The data protection principles set out in the PDPO include:
I. Purpose and manner of collection of personal data
II. Accuracy of Personal Data and Retention Period
III. Use of Personal Data
IV. Security of personal data
V. Information to be available in general
VI. Access to personal dataIncorrect
The data protection principles set out in the PDPO include:
I. Purpose and manner of collection of personal data
II. Accuracy of Personal Data and Retention Period
III. Use of Personal Data
IV. Security of personal data
V. Information to be available in general
VI. Access to personal dataHint
Reference Chapter:1.3.73
-
Question 250 of 545
250. Question
1 pointsQID2748:The data protection principles set out in the Personal Data (Privacy) Ordinance (PDPO) do not include
Correct
The data protection principles set out in the PDPO include:
I. Purpose and manner of collection of personal data
II. Accuracy and duration of retention
III. Use of Personal Data
IV. Security of personal data
V. Information to be available in general
VI. Access to personal dataIncorrect
The data protection principles set out in the PDPO include:
I. Purpose and manner of collection of personal data
II. Accuracy and duration of retention
III. Use of Personal Data
IV. Security of personal data
V. Information to be available in general
VI. Access to personal dataHint
Reference Chapter:1.3.73
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Question 251 of 545
251. Question
1 pointsQID2395:Which of the following statement is incorrect regarding the Privacy Ordinance?
Correct
Securities companies have the responsibilities to provide clients with copies of their personal information, but not necessarily for free. The SFC can have access to the personal information of anyone in the period of investigation. The Stock Exchange of Hong Kong Limited has the right to ask for information with regard to senior management and part of shareholders from listed issuers. For these are reasonable uses. Clients can ask the company to delete their personal information, though it’s another issue that whether there are capabilities to continue to provide services.
Incorrect
Securities companies have the responsibilities to provide clients with copies of their personal information, but not necessarily for free. The SFC can have access to the personal information of anyone in the period of investigation. The Stock Exchange of Hong Kong Limited has the right to ask for information with regard to senior management and part of shareholders from listed issuers. For these are reasonable uses. Clients can ask the company to delete their personal information, though it’s another issue that whether there are capabilities to continue to provide services.
Hint
Reference Chapter:1.3.73
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Question 252 of 545
252. Question
1 pointsQID1149:The data protection principles include:
I. information to be generally available to the public.
II. use of personal data.
III. purpose and manner of collection of personal data.
IV. accuracy and duration of retention of personal data.Correct
Principle 1 – purpose and manner of collection of personal data
Principle 2 – accuracy and duration of retention of personal data
Principle 3 – use of personal data
Principle 5 is “information to be generally available”, but not ” information to be generally available to the public”.Incorrect
Principle 1 – purpose and manner of collection of personal data
Principle 2 – accuracy and duration of retention of personal data
Principle 3 – use of personal data
Principle 5 is “information to be generally available”, but not ” information to be generally available to the public”.Hint
Reference Chapter:1.3.73
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Question 253 of 545
253. Question
1 pointsQID1148:Which of the following is NOT a data protection principle according to the PDPO?
Correct
Principle 1 – purpose and manner of collection of personal data
Principle 2 – accuracy and duration of retention of personal data
Principle 5 – information to be generally availableIncorrect
Principle 1 – purpose and manner of collection of personal data
Principle 2 – accuracy and duration of retention of personal data
Principle 5 – information to be generally availableHint
Reference Chapter:1.3.73
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Question 254 of 545
254. Question
1 pointsQID504:What of the following is not a principle of the PDPO?
Correct
Option C, Functionality, is not a principle stated in the Schedule 1 of the PDPO.
Incorrect
Option C, Functionality, is not a principle stated in the Schedule 1 of the PDPO.
Hint
Reference Chapter:1.3.73
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Question 255 of 545
255. Question
1 pointsQID505:British Construction Bank is an authorised financial institution. Amid the downfall of the Hong Kong banking sector, it has decided to promote its personal loan service by acquiring a list of clients and contacts from its wholly owned subsidiary British Construction Securities, a licensed corporation. Should British Construction Securities provide such information to British Construction Bank?
Correct
Where the data is collected from the data subject, he should be informed, at the prescribed times, of the purpose for which the data is to be used, the classes of persons to whom the data may be transferred and of his rights to access and to request the correction of the data. Also, personal data should not, without the consent of the data subject, be used for a new purpose.
Incorrect
Where the data is collected from the data subject, he should be informed, at the prescribed times, of the purpose for which the data is to be used, the classes of persons to whom the data may be transferred and of his rights to access and to request the correction of the data. Also, personal data should not, without the consent of the data subject, be used for a new purpose.
Hint
Reference Chapter:1.3.73
-
Question 256 of 545
256. Question
1 pointsQID503:Which of the following is NOT one of the 6 principles set in the
Personal Data (Privacy) Ordinance?Correct
Option C, Manner of saving personal data, is not a principle stated in the Schedule 1 of the PDPO.
Incorrect
Option C, Manner of saving personal data, is not a principle stated in the Schedule 1 of the PDPO.
Hint
Reference Chapter:1.3.73
-
Question 257 of 545
257. Question
1 pointsQID1045:A listed company is one that:
Correct
A listed company is one that has any of its shares listed on a recognized stock market.
Incorrect
A listed company is one that has any of its shares listed on a recognized stock market.
Hint
Reference Chapter:1.3.8
-
Question 258 of 545
258. Question
1 pointsQID1047:Which of the following descriptions about the articles of association under the NCO is correct?
I. The articles of association of a company is considered to be the single constitutional document of the company and form an agreement between the company and its members.
II. The articles of association of a company is considered to be the single constitutional document of the company and form an agreement among its members.
III. The articles of association prescribe regulations for the internal management and operation of the company.
IV. The articles of association are subsidiary to the memorandum of association.Correct
The articles of association of a company is considered to be the single constitutional document of the company and form an agreement between the company and its members. The articles of association prescribe regulations for the internal management and operation of the company.
Incorrect
The articles of association of a company is considered to be the single constitutional document of the company and form an agreement between the company and its members. The articles of association prescribe regulations for the internal management and operation of the company.
Hint
Reference Chapter:1.3.9
-
Question 259 of 545
259. Question
1 pointsQID1049:The articles of association of a company is:
Correct
The articles of association of a company is considered to be the single constitutional document of the company and form an agreement between the company and its members. The articles of association prescribe regulations for the internal management and operation of the company.
Incorrect
The articles of association of a company is considered to be the single constitutional document of the company and form an agreement between the company and its members. The articles of association prescribe regulations for the internal management and operation of the company.
Hint
Reference Chapter:1.3.9
-
Question 260 of 545
260. Question
1 pointsQID1046:Which one of the following descriptions about the articles of association under the NCO is correct?
Correct
The articles of association of a company is considered to be the single constitutional document of the company and form an agreement between the company and its members.
Incorrect
The articles of association of a company is considered to be the single constitutional document of the company and form an agreement between the company and its members.
Hint
Reference Chapter:1.3.9
-
Question 261 of 545
261. Question
1 pointsQID1150:The SFC was created by law under the:
Correct
The SFC was created by law under the Securities and Futures Commission Ordinance (now repealed and subsumed in the SFO).
Incorrect
The SFC was created by law under the Securities and Futures Commission Ordinance (now repealed and subsumed in the SFO).
Hint
Reference Chapter:1.4.1
-
Question 262 of 545
262. Question
1 pointsQID72:Which of the following Committees, tribunals and panels manages the administration of Codes on Takeovers and Mergers and Share Buy-backs?
Correct
Corporate Finance Division:
(a) administers The Codes on Takeovers and Mergers and Share Buy-backs and regulates takeovers, mergers and share buy-backs of applicable companiesIncorrect
Corporate Finance Division:
(a) administers The Codes on Takeovers and Mergers and Share Buy-backs and regulates takeovers, mergers and share buy-backs of applicable companiesHint
Reference Chapter:1.4.1
-
Question 263 of 545
263. Question
1 pointsQID2832:Which of the following is not a financial regulator in Hong Kong?
Correct
The Securities Commission option is wrong, the correct name is Securities and Futures Commission.
Incorrect
The Securities Commission option is wrong, the correct name is Securities and Futures Commission.
Hint
Reference Chapter:1.4.1
-
Question 264 of 545
264. Question
1 pointsQID2738:The Securities and Futures Commission (SFC) is a/an
Correct
The SFC is an independent statutory body, not a government department.
Incorrect
The SFC is an independent statutory body, not a government department.
Hint
Reference Chapter:1.4.1
-
Question 265 of 545
265. Question
1 pointsQID11:Under what circumstance can the Government intervene in the securities market in Hong Kong?
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 properly.Incorrect
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 properly.Hint
Reference Chapter:1.4.1
-
Question 266 of 545
266. Question
1 pointsQID1151:Which of the following descriptions correctly describes the status of the SFC?
Correct
The SFC 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.Incorrect
The SFC 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.Hint
Reference Chapter:1.4.1
-
Question 267 of 545
267. Question
1 pointsQID732:Which of the following descriptions about the SFC is correct?
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.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.Hint
Reference Chapter:1.4.1
-
Question 268 of 545
268. Question
1 pointsQID57:The SFC﹕
I. Reports to the government
II. Was formed under the Securities and Futures Ordinance
III. Is not responsible for licensing of intermediaries
IV. Is a part of the governmentCorrect
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:1.4.1
-
Question 269 of 545
269. Question
1 pointsQID969:Does the Advisory Committee of the SFC have any executive powers?
Correct
The Advisory Committee of the SFC has no executive powers, it only advise the SFC on policy matters concerning its regulatory objectives and functions.
Incorrect
The Advisory Committee of the SFC has no executive powers, it only advise the SFC on policy matters concerning its regulatory objectives and functions.
Hint
Reference Chapter:1.4.10
-
Question 270 of 545
270. Question
1 pointsQID1161:What are the statuses regarding the Advisory Committee of the SFC?
I. It has no executive powers.
II. It does not police the SFC.
III. It is chaired by the financial secretary.
IV. Its members are appointed by the chief executive of the HKSAR.Correct
The Advisory Committee is responsible for advising the SFC on policy matters concerning its regulatory objectives and functions. It has no executive powers and does not police the SFC in any way. It is chaired by the SFC Chairman, and comprises the CEO and not more than two other executive directors appointed by the Chairman, and between 8 and 12 other members appointed by the Chief Executive of the Hong Kong Special Administrative Region (“Hong Kong SAR”) in consultation with the Chairman of the SFC.
Incorrect
The Advisory Committee is responsible for advising the SFC on policy matters concerning its regulatory objectives and functions. It has no executive powers and does not police the SFC in any way. It is chaired by the SFC Chairman, and comprises the CEO and not more than two other executive directors appointed by the Chairman, and between 8 and 12 other members appointed by the Chief Executive of the Hong Kong Special Administrative Region (“Hong Kong SAR”) in consultation with the Chairman of the SFC.
Hint
Reference Chapter:1.4.10
-
Question 271 of 545
271. Question
1 pointsQID1162:The Advisory Committee is responsible for which of the following matters?
Correct
The Advisory Committee is responsible for advising the SFC on policy matters concerning its regulatory objectives and functions. It has no executive powers and does not police the SFC in any way.
Incorrect
The Advisory Committee is responsible for advising the SFC on policy matters concerning its regulatory objectives and functions. It has no executive powers and does not police the SFC in any way.
Hint
Reference Chapter:1.4.10
-
Question 272 of 545
272. Question
1 pointsQID64:Which of the following committee, tribunal or panel is not independent of the Securities and Futures Commission?
Correct
The SFC has established various regulatory committees to which it has delegated some of its functions, e.g.:
(b) Takeovers Appeal Committee – hears appeals against the disciplinary rulings of the Takeovers and Mergers Panel at the request of an aggrieved party for the sole purpose of determining whether any sanction imposed by the Panel is unfair or excessive.Incorrect
The SFC has established various regulatory committees to which it has delegated some of its functions, e.g.:
(b) Takeovers Appeal Committee – hears appeals against the disciplinary rulings of the Takeovers and Mergers Panel at the request of an aggrieved party for the sole purpose of determining whether any sanction imposed by the Panel is unfair or excessive.Hint
Reference Chapter:1.4.11
-
Question 273 of 545
273. Question
1 pointsQID1164:Which regulatory committee’s function is described in the following statement:
“Responsible for the Codes on Takeovers and Mergers and Share Buy-backs. Much of the administration of this code is in practice exercised by the SFC staff, acting as the Takeovers Executive.”Correct
Takeovers and Mergers Panel – is responsible for The Codes on Takeovers and Mergers and Share Buy-backs. Much of the administration of this code is in practice exercised by the SFC staff, acting as the Takeovers Executive.
Incorrect
Takeovers and Mergers Panel – is responsible for The Codes on Takeovers and Mergers and Share Buy-backs. Much of the administration of this code is in practice exercised by the SFC staff, acting as the Takeovers Executive.
Hint
Reference Chapter:1.4.11
-
Question 274 of 545
274. Question
1 pointsQID65:Which of the following is not a function of the Academic and
Accreditation Advisory Committee of the SFC?Correct
Academic and Accreditation Advisory Committee – approves industry-based courses and examinations for meeting the licensing competence requirements, and recognises providers of training for the purposes of the continuous professional training
requirements.Incorrect
Academic and Accreditation Advisory Committee – approves industry-based courses and examinations for meeting the licensing competence requirements, and recognises providers of training for the purposes of the continuous professional training
requirements.Hint
Reference Chapter:1.4.11
-
Question 275 of 545
275. Question
1 pointsQID66:Which of the following committee, tribunal or panel is a part of the SFC?
Correct
The SFC has established various regulatory committees to which it has delegated some of its functions, e.g.:
(b) Takeovers Appeal Committee – hears appeals against the disciplinary rulings of the Takeovers and Mergers Panel at the request of an aggrieved party for the sole purpose of determining whether any sanction imposed by the Panel is unfair or excessive.Incorrect
The SFC has established various regulatory committees to which it has delegated some of its functions, e.g.:
(b) Takeovers Appeal Committee – hears appeals against the disciplinary rulings of the Takeovers and Mergers Panel at the request of an aggrieved party for the sole purpose of determining whether any sanction imposed by the Panel is unfair or excessive.Hint
Reference Chapter:1.4.11
-
Question 276 of 545
276. Question
1 pointsQID803:Which of the following regulatory committees is in charge of hearing “appeals against the disciplinary rulings of the Takeovers and Mergers Panel at the request of an aggrieved party for the sole purpose of determining whether any sanction imposed by the Panel is unfair or excessive”?
Correct
Takeovers Appeal Committee – hears appeals against the disciplinary rulings of the Takeovers and Mergers Panel at the request of an aggrieved party for the sole purpose of determining whether any sanction imposed by the Panel is unfair or excessive.
Incorrect
Takeovers Appeal Committee – hears appeals against the disciplinary rulings of the Takeovers and Mergers Panel at the request of an aggrieved party for the sole purpose of determining whether any sanction imposed by the Panel is unfair or excessive.
Hint
Reference Chapter:1.4.11
-
Question 277 of 545
277. Question
1 pointsQID67:Which of the following committee is not independent of the Securities and Futures Commission?
Correct
The SFC has established various regulatory committees to which it has delegated some of its functions, e.g.:
(e) Academic and Accreditation Advisory Committee – approves industry-based courses and examinations for meeting the licensing competence requirements, and recognises providers of training for the purposes of the continuous professional training requirements.Incorrect
The SFC has established various regulatory committees to which it has delegated some of its functions, e.g.:
(e) Academic and Accreditation Advisory Committee – approves industry-based courses and examinations for meeting the licensing competence requirements, and recognises providers of training for the purposes of the continuous professional training requirements.Hint
Reference Chapter:1.4.11
-
Question 278 of 545
278. Question
1 pointsQID74:Which department/division/panel/tribunal is responsible for the administration of Codes on Takeovers and Mergers and Share Buy- backs?
Correct
Corporate Finance Division:
(a) administers The Codes on Takeovers and Mergers and Share Buy-backs and regulates takeovers, mergers and share buy-backs of applicable companies.Incorrect
Corporate Finance Division:
(a) administers The Codes on Takeovers and Mergers and Share Buy-backs and regulates takeovers, mergers and share buy-backs of applicable companies.Hint
Reference Chapter:1.4.11
-
Question 279 of 545
279. Question
1 pointsQID68:Which of the following is not a Committee, tribunal and panel under the SFC?
Correct
This committee doesn’t exist.
Incorrect
This committee doesn’t exist.
Hint
Reference Chapter:1.4.11
-
Question 280 of 545
280. Question
1 pointsQID1168:Which of the following regulatory committees is in charge of giving advice on “matters relating to the SFC Handbook for Unit Trusts and Mutual Funds, Investment-Linked Assurance Schemes and Unlisted Structured Investment Products”?
Correct
Products Advisory Committee – advises on matters relating to the SFC Handbook for Unit Trusts and Mutual Funds, Investment-Linked Assurance Schemes and Unlisted Structured Investment Products, the SFC Code on MPF Products and the Code on Pooled Retirement Funds, including overall market environment, industry practices and novel product features.
Incorrect
Products Advisory Committee – advises on matters relating to the SFC Handbook for Unit Trusts and Mutual Funds, Investment-Linked Assurance Schemes and Unlisted Structured Investment Products, the SFC Code on MPF Products and the Code on Pooled Retirement Funds, including overall market environment, industry practices and novel product features.
Hint
Reference Chapter:1.4.11
-
Question 281 of 545
281. Question
1 pointsQID1165:Which of the following regulatory committees is in charge of approving “industry-based courses and examinations for meeting the licensing competence requirements, and recognising providers of training for the purposes of the CPT requirements”?
Correct
Academic and Accreditation Advisory Committee – approves industry-based courses and examinations for meeting the licensing competence requirements, and recognises providers of training for the purposes of the CPT requirements.
Incorrect
Academic and Accreditation Advisory Committee – approves industry-based courses and examinations for meeting the licensing competence requirements, and recognises providers of training for the purposes of the CPT requirements.
Hint
Reference Chapter:1.4.11
-
Question 282 of 545
282. Question
1 pointsQID1163:Which of the following regulatory committees is in charge of the “administering the Investor Compensation Fund and regulating its procedures in accordance with SFO”?
Correct
Investor Compensation Fund Committee – administers the Investor Compensation Fund and regulates its procedures in accordance with Part XII of the SFO.
Incorrect
Investor Compensation Fund Committee – administers the Investor Compensation Fund and regulates its procedures in accordance with Part XII of the SFO.
Hint
Reference Chapter:1.4.11
-
Question 283 of 545
283. Question
1 pointsQID1166:Which of the following regulatory committees is in charge of hearing and determining “disciplinary matters relating to share registrars in the first instance”?
Correct
Share Registrars’ Disciplinary Committee – hears and determines disciplinary matters relating to share registrars in the first instance.
Incorrect
Share Registrars’ Disciplinary Committee – hears and determines disciplinary matters relating to share registrars in the first instance.
Hint
Reference Chapter:1.4.11
-
Question 284 of 545
284. Question
1 pointsQID1167:Which regulatory committee is responsible for the Codes on Takeovers and Mergers and Share Buy-backs?
Correct
Takeovers and Mergers Panel – is responsible for The Codes on Takeovers and Mergers and Share Buy-backs. Much of the administration of this code is in practice exercised by the SFC staff, acting as the Takeovers Executive.
Incorrect
Takeovers and Mergers Panel – is responsible for The Codes on Takeovers and Mergers and Share Buy-backs. Much of the administration of this code is in practice exercised by the SFC staff, acting as the Takeovers Executive.
Hint
Reference Chapter:1.4.11
-
Question 285 of 545
285. Question
1 pointsQID1172:An independent statutory body with full-time members headed by a judge appointed by the Chief Executive of the Hong Kong SAR to hear appeals against the decisions made by the SFC relating to the licensing or registration of intermediaries and certain other matters” describes which of the following regulatory organizations?
Correct
Securities and Futures Appeals Tribunal (“SFAT”) – established by the SFO as an independent statutory body. Chaired by a High Court judge, the SFAT comprises current and former judges appointed by the Chief Executive of the HKSAR and two other members drawn from a panel appointed by the Financial Secretary under delegated authority. The function of the SFAT is to hear appeals against the decisions made by the SFC relating to the licensing or registration of intermediaries and certain other matters.
Incorrect
Securities and Futures Appeals Tribunal (“SFAT”) – established by the SFO as an independent statutory body. Chaired by a High Court judge, the SFAT comprises current and former judges appointed by the Chief Executive of the HKSAR and two other members drawn from a panel appointed by the Financial Secretary under delegated authority. The function of the SFAT is to hear appeals against the decisions made by the SFC relating to the licensing or registration of intermediaries and certain other matters.
Hint
Reference Chapter:1.4.12
-
Question 286 of 545
286. Question
1 pointsQID69:Which of the following tribunals and panels are independent of the Securities and Futures Commission (SFC)?
I. Takeovers and Mergers Panel
II. Takeover Appeals Committee
III. Securities and Futures Appeals Tribunal
IV. Market Misconduct TribunalCorrect
The following tribunals and panels are independent of the SFC:
(a) Securities and Futures Appeals Tribunal (“SFAT”) – established by the SFO as an independent statutory body. Chaired by a High Court judge, the SFAT comprises current and former judges appointed by the Chief Executive of the HKSAR and two other members drawn from a panel appointed by the Financial Secretary under delegated authority. The function of the SFAT is to hear appeals against the decisions made by the SFC relating to the licensing or registration of intermediaries and certain other mattersIncorrect
The following tribunals and panels are independent of the SFC:
(a) Securities and Futures Appeals Tribunal (“SFAT”) – established by the SFO as an independent statutory body. Chaired by a High Court judge, the SFAT comprises current and former judges appointed by the Chief Executive of the HKSAR and two other members drawn from a panel appointed by the Financial Secretary under delegated authority. The function of the SFAT is to hear appeals against the decisions made by the SFC relating to the licensing or registration of intermediaries and certain other mattersHint
Reference Chapter:1.4.12
-
Question 287 of 545
287. Question
1 pointsQID1170:SFC’s Process Review Panel is:
Correct
Process Review Panel – an independent body appointed by the Chief Executive of the Hong Kong SAR to review and monitor the operational processes of the SFC. It reports to the Financial Secretary and recommends improvements to the SFC.
Incorrect
Process Review Panel – an independent body appointed by the Chief Executive of the Hong Kong SAR to review and monitor the operational processes of the SFC. It reports to the Financial Secretary and recommends improvements to the SFC.
Hint
Reference Chapter:1.4.12
-
Question 288 of 545
288. Question
1 pointsQID1169:Mr. Wan would like to be licensed as a stock broker but was rejected by the SFC. Where can he file an appeal?
Correct
Securities and Futures Appeals Tribunal (“SFAT”) –established by the SFO as an independent statutory body. Chaired by a High Court judge, the SFAT comprises current and former judges appointed by the Chief Executive of the HKSAR and two other members drawn from a panel appointed by the Financial Secretary under delegated authority. The function of the SFAT is to hear appeals against the decisions made by the
SFC relating to the licensing or registration of intermediaries and certain other matters.Incorrect
Securities and Futures Appeals Tribunal (“SFAT”) –established by the SFO as an independent statutory body. Chaired by a High Court judge, the SFAT comprises current and former judges appointed by the Chief Executive of the HKSAR and two other members drawn from a panel appointed by the Financial Secretary under delegated authority. The function of the SFAT is to hear appeals against the decisions made by the
SFC relating to the licensing or registration of intermediaries and certain other matters.Hint
Reference Chapter:1.4.12
-
Question 289 of 545
289. Question
1 pointsQID1171:Which of the following organizations is NOT independent of the SFC?
Correct
The following tribunals and panels are independent of the SFC:
(a) Securities and Futures Appeals Tribunal (“SFAT”)
(b) Leveraged Foreign Exchange Trading Arbitration Panel
(c.) Process Review PanelIncorrect
The following tribunals and panels are independent of the SFC:
(a) Securities and Futures Appeals Tribunal (“SFAT”)
(b) Leveraged Foreign Exchange Trading Arbitration Panel
(c.) Process Review PanelHint
Reference Chapter:1.4.12
-
Question 290 of 545
290. Question
1 pointsQID70:Which of the following description about the Securities and Futures Appeals Tribunal is correct?
Correct
The function of the SFAT is to hear appeals against the decisions made by the SFC relating to the licensing or registration of intermediaries and certain other matters.
Incorrect
The function of the SFAT is to hear appeals against the decisions made by the SFC relating to the licensing or registration of intermediaries and certain other matters.
Hint
Reference Chapter:1.4.12
-
Question 291 of 545
291. Question
1 pointsQID2760:Which of the following committees is independent of the SFC?
Correct
The Leveraged Foreign Exchange Trading Arbitration Panel is independent of the SFC.
Incorrect
The Leveraged Foreign Exchange Trading Arbitration Panel is independent of the SFC.
Hint
Reference Chapter:1.4.12
-
Question 292 of 545
292. Question
1 pointsQID71:In the regulatory framework of Hong Kong, is the power of SFC undisputed and uncontested?
Correct
Process Review Panel – an independent body appointed by the Chief Executive of the HKSAR to review and monitor the operational processes of the SFC. It reports to the Financial Secretary and recommends improvements to the SFC.
Incorrect
Process Review Panel – an independent body appointed by the Chief Executive of the HKSAR to review and monitor the operational processes of the SFC. It reports to the Financial Secretary and recommends improvements to the SFC.
Hint
Reference Chapter:1.4.12
-
Question 293 of 545
293. Question
1 pointsQID1173:What are the major duties of the Corporate Finance Division?
I. regulates takeovers and mergers of public companies and share repurchases.
II. administers securities and company legislation applicable to listed and unlisted companies.
III. supervises the listing-related activities of the SEHK.
IV. reviews and recommends changes to the listing rules.Correct
Corporate Finance Division:
(a) administers The Codes on Takeovers and Mergers and Share Buy-backs to afford fair treatment of shareholders and to provide an orderly framework for takeovers and share buy-backs transactions in Hong Kong;
(b) supervises the listing-related activities of the SEHK;
(c.) reviews and recommends changes to the Rules Governing the Listing of Securities on the SEHK (“Listing Rules”);
(d) reviews and authorizes prospectuses and marketing materials for unlisted shares or debentures.Incorrect
Corporate Finance Division:
(a) administers The Codes on Takeovers and Mergers and Share Buy-backs to afford fair treatment of shareholders and to provide an orderly framework for takeovers and share buy-backs transactions in Hong Kong;
(b) supervises the listing-related activities of the SEHK;
(c.) reviews and recommends changes to the Rules Governing the Listing of Securities on the SEHK (“Listing Rules”);
(d) reviews and authorizes prospectuses and marketing materials for unlisted shares or debentures.Hint
Reference Chapter:1.4.13
-
Question 294 of 545
294. Question
1 pointsQID73:Which of the following are functions of the Corporate Finance Division of the SFC?
I. Administer the Codes on Takeovers and Mergers and Share Buy-backs and regulates takeovers, mergers and share buy- backs of applicable companies
II. Provide advice on corporate restructuring to listed company in
Hong Kong
III. Supervise the listing-related activities of The Stock Exchange
of Hong Kong Limited (“SEHK”)
IV. Provide advice on takeover activities to minority shareholdersCorrect
Corporate Finance Division:
(a) administers The Codes on Takeovers and Mergers and Share Buy-backs and regulates takeovers, mergers and share buy-backs of applicable companies;
(b) supervises the listing-related activities of The Stock Exchange of Hong Kong Limited (“SEHK”).Incorrect
Corporate Finance Division:
(a) administers The Codes on Takeovers and Mergers and Share Buy-backs and regulates takeovers, mergers and share buy-backs of applicable companies;
(b) supervises the listing-related activities of The Stock Exchange of Hong Kong Limited (“SEHK”).Hint
Reference Chapter:1.4.13
-
Question 295 of 545
295. Question
1 pointsQID2846:Which department of the SFC is responsible for monitoring transactions in the stock market?
Correct
The Enforcement Division is responsible for monitoring stock market transactions. The Supervision of Markets Division mainly monitors and regulates the exchange itself, not the transactions that take place in the market.
Incorrect
The Enforcement Division is responsible for monitoring stock market transactions. The Supervision of Markets Division mainly monitors and regulates the exchange itself, not the transactions that take place in the market.
Hint
Reference Chapter:1.4.13
-
Question 296 of 545
296. Question
1 pointsQID2834:Which department of the SFC is responsible for monitoring listed companies’ announcements and identifying misconduct or non-compliance?
Correct
The SFC’s Corporate Finance Division monitors listed companies’ announcements and identifies misconduct or non-compliance by listed companies.
Incorrect
The SFC’s Corporate Finance Division monitors listed companies’ announcements and identifies misconduct or non-compliance by listed companies.
Hint
Reference Chapter:1.4.13
-
Question 297 of 545
297. Question
1 pointsQID1503:The SFC commonly face challenges when carrying out the regulatory mandate given to it by the SFO with regard to the Asset Management Business. What are the reasons?
I. The investors investing in investment Schemes are not in Hong Kong
II. Custodians and trustees in collective investment schemes are not in Hong Kong
III. The management of investment schemes is not located in Hong Kong
IV. The operation of the Investment Scheme is not in Hong KongCorrect
As the persons involved in the management, operation and holding of the assets under management are often not located in Hong Kong, this poses certain issues for the SFC in carrying out the regulatory mandate given to it by the SFO.
Incorrect
As the persons involved in the management, operation and holding of the assets under management are often not located in Hong Kong, this poses certain issues for the SFC in carrying out the regulatory mandate given to it by the SFO.
Hint
Reference Chapter:1.4.14
-
Question 298 of 545
298. Question
1 pointsQID1174:Which of the following is NOT a duty of the Enforcement Division?
Correct
Enforcement Division:
(b) monitors the trading of Hong Kong’s stock and derivative markets and inquires into irregularities;
(d) inspects the books and records of listed companies if impropriety is suspected, which may involve directors, officers or substantial shareholders etc.;
(e) reports suspected market misconduct to the Financial Secretary.Incorrect
Enforcement Division:
(b) monitors the trading of Hong Kong’s stock and derivative markets and inquires into irregularities;
(d) inspects the books and records of listed companies if impropriety is suspected, which may involve directors, officers or substantial shareholders etc.;
(e) reports suspected market misconduct to the Financial Secretary.Hint
Reference Chapter:1.4.14
-
Question 299 of 545
299. Question
1 pointsQID1504:Which department/division deals with the authorization of CISs including the granting of waivers from the CUTMF?
Correct
The IP Division is of particular relevance to the asset management industry, as it regulates and approves investment products offered to the public and monitors disclosures and ongoing compliance of authorised investment products. It is also responsible for developing regulatory platforms to facilitate market growth and product innovation.
Incorrect
The IP Division is of particular relevance to the asset management industry, as it regulates and approves investment products offered to the public and monitors disclosures and ongoing compliance of authorised investment products. It is also responsible for developing regulatory platforms to facilitate market growth and product innovation.
Hint
Reference Chapter:1.4.15
-
Question 300 of 545
300. Question
1 pointsQID75:Which department/division of the SFC deals with the authorization of CISs?
Correct
Investment Products Division:
(b) regulates and approves investment products that are offered to the public and subject to the SFO.Incorrect
Investment Products Division:
(b) regulates and approves investment products that are offered to the public and subject to the SFO.Hint
Reference Chapter:1.4.15
-
Question 301 of 545
301. Question
1 pointsQID76:Which of the following division of the SFC authorizes CIS?
Correct
Investment Products Division:
(b) regulates and approves investment products that are offered to the public and subject to the SFO.Incorrect
Investment Products Division:
(b) regulates and approves investment products that are offered to the public and subject to the SFO.Hint
Reference Chapter:1.4.15
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Question 302 of 545
302. Question
1 pointsQID1175:Which of the following departments of the SFC regulates exchanges and clearing houses?
Correct
Supervision of Markets Division:
(a) supervises the conduct, operation and internal systems of the exchanges and clearing houses.Incorrect
Supervision of Markets Division:
(a) supervises the conduct, operation and internal systems of the exchanges and clearing houses.Hint
Reference Chapter:1.4.16
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Question 303 of 545
303. Question
1 pointsQID1492:“While the SFC has firm principles of regulation on which it operates, it seeks to maintain an open dialogue with the industry to achieve an appropriate degree of flexibility within the boundaries of those principles.” is describing which principle of the SFC?
Correct
The SFC seeks to work in partnership with the industry it regulates, encouraging a two-way dialogue that fosters a forum for an exchange of views and that encourages a strong regulator/regulate relationship.
Incorrect
The SFC seeks to work in partnership with the industry it regulates, encouraging a two-way dialogue that fosters a forum for an exchange of views and that encourages a strong regulator/regulate relationship.
Hint
Reference Chapter:1.4.16
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Question 304 of 545
304. Question
1 pointsQID1176:Which of the following are duties of the SFC’s Licensing Department:
I. Licenses corporations and individuals seeking to conduct business in Hong Kong in the regulated activities for which a licence is required under the SFO.
II. Issues codes and guidelines concerning the competence and suitability of corporations and individuals to remain licensed.
III. Deals with issues relating to the continuing suitability of licensed corporations and individuals to be licensed.
IV. Monitors licensees by means of annual returns.Correct
Licensing Department:
(a) licenses corporations and individuals seeking to conduct RAs as defined under the SFO;
(b) issues codes and guidelines concerning the competence and suitability of corporations and individuals to remain licensed;
(c) monitors the on-going compliance of licensing requirements by licensees, substantial shareholders of listed corporations and directors of licensed corporations and substantial shareholdersIncorrect
Licensing Department:
(a) licenses corporations and individuals seeking to conduct RAs as defined under the SFO;
(b) issues codes and guidelines concerning the competence and suitability of corporations and individuals to remain licensed;
(c) monitors the on-going compliance of licensing requirements by licensees, substantial shareholders of listed corporations and directors of licensed corporations and substantial shareholdersHint
Reference Chapter:1.4.18
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Question 305 of 545
305. Question
1 pointsQID78:Which department/division of the SFC licenses asset management corporation and their staff and approves responsible officers?
Correct
Licensing Department:
(a) licenses corporations and individuals seeking to conduct business in Hong Kong in the regulated activities for which a licence is required under the SFO.Incorrect
Licensing Department:
(a) licenses corporations and individuals seeking to conduct business in Hong Kong in the regulated activities for which a licence is required under the SFO.Hint
Reference Chapter:1.4.18
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Question 306 of 545
306. Question
1 pointsQID77:The SFC and the various codes it has issued place importance on the responsibility of which of the following entities to set
appropriate standards of conduct?Correct
Licensing Department:
(b) issues codes and guidelines concerning the competence and suitability of corporations and individuals to remain licensed.Incorrect
Licensing Department:
(b) issues codes and guidelines concerning the competence and suitability of corporations and individuals to remain licensed.Hint
Reference Chapter:1.4.18
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Question 307 of 545
307. Question
1 pointsQID1177:SFC’s Intermediaries Supervision Department is responsible for:
Correct
Intermediaries Supervision Department:
(a) supervises the business conduct of licensed corporations and individual licensees on an ongoing basis, by conducting on-site inspection and off-site monitoring.Incorrect
Intermediaries Supervision Department:
(a) supervises the business conduct of licensed corporations and individual licensees on an ongoing basis, by conducting on-site inspection and off-site monitoring.Hint
Reference Chapter:1.4.19
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Question 308 of 545
308. Question
1 pointsQID79:Which department/division of the SFC supervises licensed corporations and individual licensees on an ongoing basis?
Correct
Intermediaries Supervision Department:
(a) supervises the business conduct of licensed corporations and individual licensees on an ongoing basis, by conducting on-site inspection and off-site monitoring; and
(b) monitors the financial integrity of licensed corporations.Incorrect
Intermediaries Supervision Department:
(a) supervises the business conduct of licensed corporations and individual licensees on an ongoing basis, by conducting on-site inspection and off-site monitoring; and
(b) monitors the financial integrity of licensed corporations.Hint
Reference Chapter:1.4.19
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Question 309 of 545
309. Question
1 pointsQID61:Which of the following is a regulatory objective of the SFC?
Correct
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(d) minimise crime and misconduct in the market.Incorrect
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(d) minimise crime and misconduct in the market.Hint
Reference Chapter:1.4.2
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Question 310 of 545
310. Question
1 pointsQID60:The regulator objectives of the SFC includes:
I. Consumer rights protection
II. Minimize crime and misconduct within the securities and futures industry.
III. Promote public’s understanding of the securities and futures industry.
IV. Provide advice on the enforcement of economic policies to the governmentCorrect
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(b) promote public’s understanding of the industry including its operation and functioning;
(d) minimise crime and misconduct in the market.Incorrect
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(b) promote public’s understanding of the industry including its operation and functioning;
(d) minimise crime and misconduct in the market.Hint
Reference Chapter:1.4.2
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Question 311 of 545
311. Question
1 pointsQID171:The objectives of the SFO are to provide a regulatory framework with which of the following characteristics?
I. Promotes a fair, orderly and transparent market.
II. Is flexible enough to cope with new products and other innovations, and further advances in technological infrastructure.
III. Is administered by a regulator with sufficient powers and discretion whose operations are transparent and who is accountable to the stakeholders through a system of adequate checks and balance.
IV. Is a system that can satisfy PRC mainland legal standards, being compatible with PRC mainland laws and practices and meet local needs.Correct
The objectives of the SFO are to provide a regulatory framework which:
(a) promotes a fair, orderly and transparent market;
(b) is flexible enough to cope with new products and other innovations, and further advances in technological infrastructure;
(c) is administered by a regulator with sufficient powers and discretion whose operations are transparent and who is accountable to the stakeholders through a system of adequate
checks and balances.Incorrect
The objectives of the SFO are to provide a regulatory framework which:
(a) promotes a fair, orderly and transparent market;
(b) is flexible enough to cope with new products and other innovations, and further advances in technological infrastructure;
(c) is administered by a regulator with sufficient powers and discretion whose operations are transparent and who is accountable to the stakeholders through a system of adequate
checks and balances.Hint
Reference Chapter:1.4.2
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Question 312 of 545
312. Question
1 pointsQID779:Which of the following is NOT a regulatory objective of the SFC?
Correct
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(a) maintain and promote the fairness, efficiency, competitiveness, transparency and orderliness of the market;
(b) promote public’s understanding of the industry including its operation and functioning;
© provide protection to the investing public;
(d) minimise crime and misconduct in the market;
€ reduce systemic risks in the industry; and
(f) assist the Financial Secretary in maintaining the financial stability of Hong Kong by taking appropriate steps in relation to the industry.
Providing protection for major shareholders is not one of these objectives.Incorrect
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(a) maintain and promote the fairness, efficiency, competitiveness, transparency and orderliness of the market;
(b) promote public’s understanding of the industry including its operation and functioning;
© provide protection to the investing public;
(d) minimise crime and misconduct in the market;
€ reduce systemic risks in the industry; and
(f) assist the Financial Secretary in maintaining the financial stability of Hong Kong by taking appropriate steps in relation to the industry.
Providing protection for major shareholders is not one of these objectives.Hint
Reference Chapter:1.4.2
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Question 313 of 545
313. Question
1 pointsQID742:Which of the following is the objective of creating the SFO?
Correct
The objectives of the SFO are to provide a regulatory framework which:
(a) promotes a fair, orderly and transparent market;
(b) is flexible enough to cope with new products and other innovations, and further advances in technological infrastructure;
(c) is administered by a regulator with sufficient powers and discretion whose operations are transparent and who is accountable to the stakeholders through a system of adequate
checks and balances; and
(d) is on a par with international standards and compatible with international practices, but tailored to meet local needs and circumstances.Incorrect
The objectives of the SFO are to provide a regulatory framework which:
(a) promotes a fair, orderly and transparent market;
(b) is flexible enough to cope with new products and other innovations, and further advances in technological infrastructure;
(c) is administered by a regulator with sufficient powers and discretion whose operations are transparent and who is accountable to the stakeholders through a system of adequate
checks and balances; and
(d) is on a par with international standards and compatible with international practices, but tailored to meet local needs and circumstances.Hint
Reference Chapter:1.4.2
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Question 314 of 545
314. Question
1 pointsQID1153:Under section 4 of the SFO, the regulatory objectives of the SFC does NOT include:
Correct
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(a) maintain and promote the fairness, efficiency, competitiveness, transparency and orderliness of the industry;
(b) promote understanding by the public of financial services including the operation and functioning of the industry;
(e.) reduce systemic risks in the industry.Incorrect
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(a) maintain and promote the fairness, efficiency, competitiveness, transparency and orderliness of the industry;
(b) promote understanding by the public of financial services including the operation and functioning of the industry;
(e.) reduce systemic risks in the industry.Hint
Reference Chapter:1.4.2
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Question 315 of 545
315. Question
1 pointsQID1152:Which of the followings are the regulatory objectives of the SFC?
I. To promote understanding by the public of financial services including the operation and functioning of the securities and futures industry.
II. To provide protection to the investing public.
III. To minimise crime and misconduct in the industry.
IV. To reduce market systemic risks in the industry.Correct
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(b) promote understanding by the public of financial services including the operation and functioning of the industry;
(c.) provide protection to the investing public;
(d) minimize crime and misconduct in the industry.Incorrect
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(b) promote understanding by the public of financial services including the operation and functioning of the industry;
(c.) provide protection to the investing public;
(d) minimize crime and misconduct in the industry.Hint
Reference Chapter:1.4.2
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Question 316 of 545
316. Question
1 pointsQID1496: Which of the following is not a general principle that reflects the SFC’s approach to regulating asset management?
Correct
The SFC’s operations are subject to both internal control processes and, externally, judicial review and the scrutiny of the Process Review Panel, a panel established by the Government. The decisions of the SFC are also subject to an appeal process.
As regards the SFC’s treatment of breaches, the SFC has indicated that it will adopt a pragmatic approach and take all relevant factors into account, for example, the size of the business or the use of any management and supervisory measures to compensate for the apparent failure to meet any specified requirement.
The SFC has adopted the following as a statement of its mission: “To strengthen and protect the integrity and soundness of the Hong Kong securities and futures markets for the benefit of investors and the industry”.Incorrect
The SFC’s operations are subject to both internal control processes and, externally, judicial review and the scrutiny of the Process Review Panel, a panel established by the Government. The decisions of the SFC are also subject to an appeal process.
As regards the SFC’s treatment of breaches, the SFC has indicated that it will adopt a pragmatic approach and take all relevant factors into account, for example, the size of the business or the use of any management and supervisory measures to compensate for the apparent failure to meet any specified requirement.
The SFC has adopted the following as a statement of its mission: “To strengthen and protect the integrity and soundness of the Hong Kong securities and futures markets for the benefit of investors and the industry”.Hint
Reference Chapter:1.4.2
-
Question 317 of 545
317. Question
1 pointsQID2724:Which of the following is not an objective of the Securities and Futures Ordinance?
Correct
Objectives of the SFO:
I. Promoting fair, orderly and transparent markets
II. Build an advanced technological infrastructure that is flexible enough to accommodate new products and other new services
III. Regulators are highly transparent and accountable to stakeholders through a mechanism of checks and balancesPromoting cooperation among financial regulators around the world is not the goal of the SFO.
Incorrect
Objectives of the SFO:
I. Promoting fair, orderly and transparent markets
II. Build an advanced technological infrastructure that is flexible enough to accommodate new products and other new services
III. Regulators are highly transparent and accountable to stakeholders through a mechanism of checks and balancesPromoting cooperation among financial regulators around the world is not the goal of the SFO.
Hint
Reference Chapter:1.4.2
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Question 318 of 545
318. Question
1 pointsQID908:Which of the following is one of the objectives of the SFO
Correct
SFO treats all investors fairly and equally. Regulators should be transparent and its power should be in check.
Incorrect
SFO treats all investors fairly and equally. Regulators should be transparent and its power should be in check.
Hint
Reference Chapter:1.4.2
-
Question 319 of 545
319. Question
1 pointsQID1154:Which of the following is NOT a regulatory objective of the SFC?
Correct
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(b) promote understanding by the public of financial services including the operation and functioning of the industry;
(c.) provide protection to the investing public;
(d) minimize crime and misconduct in the industry.Incorrect
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(b) promote understanding by the public of financial services including the operation and functioning of the industry;
(c.) provide protection to the investing public;
(d) minimize crime and misconduct in the industry.Hint
Reference Chapter:1.4.2
-
Question 320 of 545
320. Question
1 pointsQID1493:Which of the following are the principles guiding the SFC’s work?
I. Pragmatism
II. Protection of Directors and Senior Management
III. Fair and consistent application of the law and rules
IV. Efficiency of operation,Correct
The SFC’s operations are subject to both internal control processes and, externally, judicial review and the scrutiny of the Process Review Panel, a panel established by the Government. The decisions of the SFC are also subject to an appeal process.
As regards the SFC’s treatment of breaches, the SFC has indicated that it will adopt a pragmatic approach and take all relevant factors into account, for example, the size of the business or the use of any management and supervisory measures to compensate for the apparent failure to meet any specified requirement.
The SFC has adopted the following as a statement of its mission: “To strengthen and protect the integrity and soundness of the Hong Kong securities and futures markets for the benefit of investors and the industry”.Incorrect
The SFC’s operations are subject to both internal control processes and, externally, judicial review and the scrutiny of the Process Review Panel, a panel established by the Government. The decisions of the SFC are also subject to an appeal process.
As regards the SFC’s treatment of breaches, the SFC has indicated that it will adopt a pragmatic approach and take all relevant factors into account, for example, the size of the business or the use of any management and supervisory measures to compensate for the apparent failure to meet any specified requirement.
The SFC has adopted the following as a statement of its mission: “To strengthen and protect the integrity and soundness of the Hong Kong securities and futures markets for the benefit of investors and the industry”.Hint
Reference Chapter:1.4.2
-
Question 321 of 545
321. Question
1 pointsQID58:Which of the following is a regulatory objective of the SFC?
I. Provide protection to the investing public
II. Reduce non-systematic risk in the industry
III. Assist the Financial Secretary in maintaining the financial stability of Hong Kong by taking appropriate steps in relation to the industry.
IV. Assist the HKMA in maintaining the stability of currency in
Hong KongCorrect
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(c) provide protection to the investing public;
(f) assist the Financial Secretary in maintaining the financial stability of Hong Kong by taking appropriate steps in relation to the industry.Incorrect
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(c) provide protection to the investing public;
(f) assist the Financial Secretary in maintaining the financial stability of Hong Kong by taking appropriate steps in relation to the industry.Hint
Reference Chapter:1.4.2
-
Question 322 of 545
322. Question
1 pointsQID59:Under the SFO, which of the following are objectives of the SFO
I. Promote understanding by the public of financial services including the operation and functioning of the industry.
II. Ensure the regulatory standards are identical to international standards.
III. Check and approve new financial products.
IV. Minimize crime and misconduct within the industry.Correct
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(b) promote public’s understanding of the industry including its operation and functioning;
(d) minimise crime and misconduct in the marketIncorrect
The objectives of the SFC in relation to the securities and futures industry, as stated in s. 4, SFO, are to:
(b) promote public’s understanding of the industry including its operation and functioning;
(d) minimise crime and misconduct in the marketHint
Reference Chapter:1.4.2
-
Question 323 of 545
323. Question
1 pointsQID2803:The objectives of the SFO are to provide a regulatory framework with which of the following characteristics?
I. Promotes a fair, orderly and transparent market.
II. Is flexible enough to cope with new products and other innovations, and further advances in technological infrastructure.
III. Is administered by a regulator with sufficient powers and discretion whose operations are transparent and directly under the government.
IV. Is a system that can satisfy PRC mainland legal standards, being compatible with PRC mainland laws and practices and meet local needs.Correct
The objectives of the SFO are to provide a regulatory framework which:
(a) promotes a fair, orderly and transparent market;
(b) is flexible enough to cope with new products and other innovations, and further advances in technological infrastructure;
(c) is administered by a regulator with sufficient powers and discretion whose operations are transparent and who is accountable to the stakeholders through a system of adequate
checks and balances.Incorrect
The objectives of the SFO are to provide a regulatory framework which:
(a) promotes a fair, orderly and transparent market;
(b) is flexible enough to cope with new products and other innovations, and further advances in technological infrastructure;
(c) is administered by a regulator with sufficient powers and discretion whose operations are transparent and who is accountable to the stakeholders through a system of adequate
checks and balances.Hint
Reference Chapter:1.4.2
-
Question 324 of 545
324. Question
1 pointsQID2816:Which of the following is not a function of the SFC?
Correct
Enforcement of the Listing Rules is the job of the SEHK.
Incorrect
Enforcement of the Listing Rules is the job of the SEHK.
Hint
Reference Chapter:1.4.3
-
Question 325 of 545
325. Question
1 pointsQID2721:The main functions of the SFC include:
I. Empowering self-regulatory bodies and professional bodies to form committees
II. Regulating and monitoring intermediaries who engage in regulated activities
III. Supervising and monitoring exchanges, clearing houses and exchange controllers
IV. Promoting investor education and encouraging investors to understand investment products and make informed decisions
Correct
Authorizing self-regulatory bodies and professional bodies to set up committees is not the main function of the SFC.
Incorrect
Authorizing self-regulatory bodies and professional bodies to set up committees is not the main function of the SFC.
Hint
Reference Chapter:1.4.3
-
Question 326 of 545
326. Question
1 pointsQID62:The major functions of the SFC include﹕
I. Supervise all of the activities conducted by Registered Institution
II. Promote, encourage and enforce the proper conduct, competence and integrity of persons carrying on regulated activities
III. Promote, encourage and enforce internal control and risk management systems by persons carrying on regulated activities, including registered institutions in the case of any regulated activities they conduct.
IV. Maintain market liquidity in the securities and futures markets.Correct
The functions and powers of the SFC are wide and are set out in s. 5, SFO. The principal functions are to:
(c) promote, encourage and enforce the proper conduct, competence and integrity of persons carrying on regulated activities;
(g) promote, encourage and enforce internal control and risk management systems by persons carrying on regulated activities, including registered institutions in the case of any regulated activities they conduct.Incorrect
The functions and powers of the SFC are wide and are set out in s. 5, SFO. The principal functions are to:
(c) promote, encourage and enforce the proper conduct, competence and integrity of persons carrying on regulated activities;
(g) promote, encourage and enforce internal control and risk management systems by persons carrying on regulated activities, including registered institutions in the case of any regulated activities they conduct.Hint
Reference Chapter:1.4.3
-
Question 327 of 545
327. Question
1 pointsQID63:Which of the following are functions and duties of the SFC?
I. Supervise the securities and futures markets in Hong Kong
II. Regulate the securities and futures industries
III. Provide professional assistance to the government
IV. Supervise all settlement banks in Hong KongCorrect
The functions and powers of the SFC are wide and are set out in s. 5, SFO. The principal functions are to:
(b) supervise, monitor and regulate the activities of:
(i) recognised exchange, clearing houses, exchange controllers and investor compensation companies or persons carrying on regulated activities; and
(ii) registered institutions that are regulated or to be regulated by the SFC under any relevant provisions.Incorrect
The functions and powers of the SFC are wide and are set out in s. 5, SFO. The principal functions are to:
(b) supervise, monitor and regulate the activities of:
(i) recognised exchange, clearing houses, exchange controllers and investor compensation companies or persons carrying on regulated activities; and
(ii) registered institutions that are regulated or to be regulated by the SFC under any relevant provisions.Hint
Reference Chapter:1.4.3
-
Question 328 of 545
328. Question
1 pointsQID1158:Who is responsible for the supervision of registered institutions?
Correct
HKMA is the frontline regulator of registered institutions.
Incorrect
HKMA is the frontline regulator of registered institutions.
Hint
Reference Chapter:1.4.3
-
Question 329 of 545
329. Question
1 pointsQID1157:Which of the following are powers that the SFC may delegate to others?
I. Promote, encourage and enforce the proper conduct, competence and integrity of persons carrying on regulated activities.
II. Maintain and promote confidence in the securities and futures industry.
III. Cooperate with and provide assistance to other regulators.
IV. Suppress illegal, dishonourable and improper practices in the securities and futures industry.Correct
The functions and powers of the SFC are wide and are set out in s. 5, SFO. The principal functions are to:
(c) promote, encourage and enforce the proper conduct, competence and integrity of persons carrying on RAs;
(d) maintain and promote confidence in the securities and futures industry;
(e.) cooperate with and provide assistance to other regulators;
(h) suppress illegal, dishonourable and improper practices in the securities and futures industry.Incorrect
The functions and powers of the SFC are wide and are set out in s. 5, SFO. The principal functions are to:
(c) promote, encourage and enforce the proper conduct, competence and integrity of persons carrying on RAs;
(d) maintain and promote confidence in the securities and futures industry;
(e.) cooperate with and provide assistance to other regulators;
(h) suppress illegal, dishonourable and improper practices in the securities and futures industry.Hint
Reference Chapter:1.4.3
-
Question 330 of 545
330. Question
1 pointsQID1155:Which of the following are the main functions of the SFC?
I. Responsible for front-line supervision.
II. Responsible for regulating the discipline of the exchanges.
III. Oversees other securities intermediaries.
IV. Monitor a variety of approved products.Correct
The functions and powers of the SFC are wide and are set out in s. 5, SFO. The principal functions are to:
(b) supervise, monitor and regulate the activities of:
(i) recognized exchange, recognized clearing houses, recognized exchange controllers and recognized investor compensation companies or persons carrying on RAs; and
(ii) registered institutions that are regulated or to be regulated by the SFC under any relevant provisions.Incorrect
The functions and powers of the SFC are wide and are set out in s. 5, SFO. The principal functions are to:
(b) supervise, monitor and regulate the activities of:
(i) recognized exchange, recognized clearing houses, recognized exchange controllers and recognized investor compensation companies or persons carrying on RAs; and
(ii) registered institutions that are regulated or to be regulated by the SFC under any relevant provisions.Hint
Reference Chapter:1.4.3
-
Question 331 of 545
331. Question
1 pointsQID1156:The SFC supervises which of the following institutions?
I. Registered Institutions.
II. Licensed corporation.
III. Recognized exchanges.
IV. Recognized clearing houses.Correct
The functions and powers of the SFC are wide and are set out in s. 5, SFO. The principal functions are to:
(b) supervise, monitor and regulate the activities of:
(i) recognized exchange, recognized clearing houses, recognized exchange controllers and recognized investor compensation companies or persons carrying on RAs; and
(ii) registered institutions that are regulated or to be regulated by the SFC under any relevant provisions.
Registered institutions are regulated collaborate by the SFC and the HKMA.Incorrect
The functions and powers of the SFC are wide and are set out in s. 5, SFO. The principal functions are to:
(b) supervise, monitor and regulate the activities of:
(i) recognized exchange, recognized clearing houses, recognized exchange controllers and recognized investor compensation companies or persons carrying on RAs; and
(ii) registered institutions that are regulated or to be regulated by the SFC under any relevant provisions.
Registered institutions are regulated collaborate by the SFC and the HKMA.Hint
Reference Chapter:1.4.3
-
Question 332 of 545
332. Question
1 pointsQID1159:Which of the following are general duties of the SFC as stated in the SFO?
I. Help maintain Hong Kong’s position as an international financial centre
II. Facilitate innovation in financial products
III. Avoid competition between intermediaries
IV. Act in a transparent mannerCorrect
The SFC has general duties as stated in s. 6, SFO to:
(a) help maintain Hong Kong’s position as an international financial centre;
(b) facilitate innovation in financial products;
(d) act in a transparent manner.Incorrect
The SFC has general duties as stated in s. 6, SFO to:
(a) help maintain Hong Kong’s position as an international financial centre;
(b) facilitate innovation in financial products;
(d) act in a transparent manner.Hint
Reference Chapter:1.4.6
-
Question 333 of 545
333. Question
1 pointsQID211:The powers granted to the SFC under Part X enable the SFC to intervene in the way a licensed corporation conducts its business. The powers include
I. Powers that protect the interests of investors of licensed
corporations and minority shareholders of listed corporations and also have the effect of protecting those of trade and other creditors
II. Powers to be used where it is in the interests of the investing public or the public interest
III. Powers to be used where the licensed corporation has contravened the specified provisions of the SFO
IV. Powers to be sued when the investors has conducted market misconduct behaviourCorrect
The powers granted to the SFC under Part X enable the SFC to intervene in the way a licensed corporation conducts its business. The powers are designed:
(a) to protect the interests of investors of licensed corporations and minority shareholders of listed corporations and also have the effect of protecting those of trade and other creditors;
(b) to be used where it is in the interests of the investing public or the public interest; and
© to be used where the licensed corporation has:
(ii) contravened the specified provisions of the SFO.Incorrect
The powers granted to the SFC under Part X enable the SFC to intervene in the way a licensed corporation conducts its business. The powers are designed:
(a) to protect the interests of investors of licensed corporations and minority shareholders of listed corporations and also have the effect of protecting those of trade and other creditors;
(b) to be used where it is in the interests of the investing public or the public interest; and
© to be used where the licensed corporation has:
(ii) contravened the specified provisions of the SFO.Hint
Reference Chapter:1.4.7
-
Question 334 of 545
334. Question
1 pointsQID802:Which of the following are powers that the SFC may NOT delegate to others?
I. Making subsidiary legislations.
II. Establishing committees.
III. Suspending exchange companies.
IV. Intervene in the business operation of registered institutions.Correct
In addition, the SFO provides that it may not delegate certain functions of the SFC to others. They are detailed in Schedule 2, Part 2, SFO. They include powers:
(a) to make subsidiary legislation;
(b) to establish committees under s. 8, SFO;
(c.) to suspend exchange companies;
(d) to appoint external investigators; and
(e.) to intervene in the business operations of licensed corporations.Incorrect
In addition, the SFO provides that it may not delegate certain functions of the SFC to others. They are detailed in Schedule 2, Part 2, SFO. They include powers:
(a) to make subsidiary legislation;
(b) to establish committees under s. 8, SFO;
(c.) to suspend exchange companies;
(d) to appoint external investigators; and
(e.) to intervene in the business operations of licensed corporations.Hint
Reference Chapter:1.4.7
-
Question 335 of 545
335. Question
1 pointsQID18:Which of the following are the duties and power of the Financial Secretary?
I. Attend all SFC meetings and committees
II. Appoint the chairman of the SFC
III. The Financial Secretary can require the SFC to provide him with information on the principles, practices and policy it is applying in order to meet its objectives and perform its functions.
IV. The Executive Director of the SFC report to the Financial Secretary directly.Correct
The Financial Secretary can require the SFC to provide him with information on the principles, practices and policy it is applying in order to meet its objectives and perform its functions.
Incorrect
The Financial Secretary can require the SFC to provide him with information on the principles, practices and policy it is applying in order to meet its objectives and perform its functions.
Hint
Reference Chapter:1.4.8
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Question 336 of 545
336. Question
1 pointsQID17:Which of the following entities can require the SFC to provide him with information on the principles, practices and policy it is applying in order to meet its objectives and perform its functions?
Correct
The Financial Secretary can require the SFC to provide him with information on the principles, practices and policy it is applying in order to meet its objectives and perform its functions.
Incorrect
The Financial Secretary can require the SFC to provide him with information on the principles, practices and policy it is applying in order to meet its objectives and perform its functions.
Hint
Reference Chapter:1.4.8
-
Question 337 of 545
337. Question
1 pointsQID15:Which of the following statements regarding the Chief Executive of Hong Kong SAR are correct?
I. The Chief Executive of the Hong Kong SAR appoints the Chairman, Deputy Chairman of the SFC.
II. The Chief Executive of the Hong Kong SAR may give written instructions to the SFC on how to meet its objectives
III. The Chief Executive of HKSAR is also the chairman of the Exchange Fund and responsible for the operations of the Exchange Fund.
IV. The SFC should report all financial matters to the Chief Executive of the HKSARCorrect
The Chief Executive of the HKSAR appoints the Chairman, Deputy Chairman (optional), the Chief Executive Officer (“CEO”) and directors (both executive and non-executive) of
the SFC. He may remove any member of the Commission and also determines their terms and conditions of office (Schedule 2, SFO). The Chief Executive of the HKSAR may give written directions to the SFC regarding how it should seek to meet its objectives and how it should perform its functions (s. 11, SFO).Incorrect
The Chief Executive of the HKSAR appoints the Chairman, Deputy Chairman (optional), the Chief Executive Officer (“CEO”) and directors (both executive and non-executive) of
the SFC. He may remove any member of the Commission and also determines their terms and conditions of office (Schedule 2, SFO). The Chief Executive of the HKSAR may give written directions to the SFC regarding how it should seek to meet its objectives and how it should perform its functions (s. 11, SFO).Hint
Reference Chapter:1.4.8
-
Question 338 of 545
338. Question
1 pointsQID13:Which of the entities is responsible for the appointment of the board of directors of the SFC?
Correct
The Chief Executive of the HKSAR appoints the Chairman, Deputy Chairman (optional), the Chief Executive Officer (“CEO”) and directors (both executive and non-executive) of
the SFC. He may remove any member of the Commission and also determines their terms and conditions of office (Schedule 2, SFO).Incorrect
The Chief Executive of the HKSAR appoints the Chairman, Deputy Chairman (optional), the Chief Executive Officer (“CEO”) and directors (both executive and non-executive) of
the SFC. He may remove any member of the Commission and also determines their terms and conditions of office (Schedule 2, SFO).Hint
Reference Chapter:1.4.8
-
Question 339 of 545
339. Question
1 pointsQID1160:Which of the following are operating divisions of the SFC?
I. Corporate Finance Division
II. Enforcement Division
III. Investment Product Division
IV. Market and Intermediaries DivisionCorrect
Each of the 5 executive directors other than the CEO supervises an operating division. The divisions are Corporate Finance; Enforcement; Investment Products; Supervision of Markets
and Intermediaries.Incorrect
Each of the 5 executive directors other than the CEO supervises an operating division. The divisions are Corporate Finance; Enforcement; Investment Products; Supervision of Markets
and Intermediaries.Hint
Reference Chapter:1.4.9
-
Question 340 of 545
340. Question
1 pointsQID1179:Which of the following entities is responsible for maintaining the safety and stability of the banking system?
Correct
The HKMA is required to maintain currency stability, ensure the safety and stability of the banking system.
Incorrect
The HKMA is required to maintain currency stability, ensure the safety and stability of the banking system.
Hint
Reference Chapter:1.5.1
-
Question 341 of 545
341. Question
1 pointsQID903:Which of the following are not common objectives of financial regulators in Hong Kong?
I. Promote intervention to enhance international and local market confidence.
II. Provide investment advice to retail investors
III. Encourage the installation of a sound technical infrastructure for the functioning of the financial markets
IV. Ensure that the legal framework of financial regulation is certain, adequate and fairly enforcedCorrect
Frequent Intervention is not an objective of financial regulators in Hong Kong. Providing Investment advice is not a job that regulators will do, it’s the job of intermediaries.
Incorrect
Frequent Intervention is not an objective of financial regulators in Hong Kong. Providing Investment advice is not a job that regulators will do, it’s the job of intermediaries.
Hint
Reference Chapter:1.5.1
-
Question 342 of 545
342. Question
1 pointsQID1191:Insurance agents should register with which of the following organizations?
Correct
Insurance Agents should apply for a licence with the Insurance Authority.
Incorrect
Insurance Agents should apply for a licence with the Insurance Authority.
Hint
Reference Chapter:1.5.10
-
Question 343 of 545
343. Question
1 pointsQID1190:The Insurance Authority is responsible for:
I. Authorizing and regulating Insurance Companies (Insurer).
II. Regulating Insurance Agents.
III. Regulating Insurance Brokers.
IV. Handling complaints of insurance products.Correct
The Insurance Authority is responsible for:
I. Authorizing and regulating Insurance Companies (Insurer).
II. Regulating Insurance Agents.
III. Regulating Insurance Brokers.
IV. Handling complaints of insurance products.Incorrect
The Insurance Authority is responsible for:
I. Authorizing and regulating Insurance Companies (Insurer).
II. Regulating Insurance Agents.
III. Regulating Insurance Brokers.
IV. Handling complaints of insurance products.Hint
Reference Chapter:1.5.10
-
Question 344 of 545
344. Question
1 pointsQID1193:The Insurance Authority is responsible for prudential supervision of the insurance industry, it seeks to
I. ensure the financial stability of the industry
II. promote a high level efficiency in the administration of the industry
III. encourage the professionalism of the fund managers participating in insurance-related business, the insurance agents and brokers
IV. achieve the best balance between its overall supervision and the maximum effective self-regulation of the industry through
self-regulatory organizationsCorrect
The Insurance Authority has the following major duties and powers:
(a) the authorization and regulation of insurers;
(b) the regulation of insurance agents, who must be appointed by an insurer and registered with the Insurance Agents Registration Board, established by The Hong Kong Federation of Insurers. The agents are not directly authorised or supervised by the Insurance Authority. Supervision is by the appointing insurers, who are required to comply with the Code of Practice for the Administration of Insurance Agents issued by The Hong Kong Federation of Insurers and approved by the Insurance Authority;
(c) the regulation of insurance brokers, who may obtain authorization from the Insurance Authority or from one of two bodies approved by the Insurance Authority, the Hong Kong
Confederation of Insurance Brokers and the Professional Insurance Brokers Association. These bodies are charged with the responsibility of ensuring that their members comply with the statutory requirements and that the interests of policy holders are properly protected; they also handle complaints; and
(d) the promotion of self-regulation by the industry and the maintenance of close contact with the industry through a consultative process.Incorrect
The Insurance Authority has the following major duties and powers:
(a) the authorization and regulation of insurers;
(b) the regulation of insurance agents, who must be appointed by an insurer and registered with the Insurance Agents Registration Board, established by The Hong Kong Federation of Insurers. The agents are not directly authorised or supervised by the Insurance Authority. Supervision is by the appointing insurers, who are required to comply with the Code of Practice for the Administration of Insurance Agents issued by The Hong Kong Federation of Insurers and approved by the Insurance Authority;
(c) the regulation of insurance brokers, who may obtain authorization from the Insurance Authority or from one of two bodies approved by the Insurance Authority, the Hong Kong
Confederation of Insurance Brokers and the Professional Insurance Brokers Association. These bodies are charged with the responsibility of ensuring that their members comply with the statutory requirements and that the interests of policy holders are properly protected; they also handle complaints; and
(d) the promotion of self-regulation by the industry and the maintenance of close contact with the industry through a consultative process.Hint
Reference Chapter:1.5.10
-
Question 345 of 545
345. Question
1 pointsQID36:Insurance Brokers should register with which of the following institutions?
Correct
Insurance Brokers should apply for a licence with the Insurance Authority.
Incorrect
Insurance Brokers should apply for a licence with the Insurance Authority.
Hint
Reference Chapter:1.5.10
-
Question 346 of 545
346. Question
1 pointsQID38:Which of the following entities should Insurance Agent register with?
Correct
Insurance Agents should apply for a licence with the Insurance Authority.
Incorrect
Insurance Agents should apply for a licence with the Insurance Authority.
Hint
Reference Chapter:1.5.10
-
Question 347 of 545
347. Question
1 pointsQID1192:Insurance brokers should register with which of the following organizations?
Correct
Insurance Brokers should apply for a licence with the Insurance Authority.
Incorrect
Insurance Brokers should apply for a licence with the Insurance Authority.
Hint
Reference Chapter:1.5.10
-
Question 348 of 545
348. Question
1 pointsQID1497:Which of the following is not a general principles followed by the
MPFA?Correct
It is not an obligation on the MPFA’s part to ensure that the schemes are operated to maximise the capital or income growth specified in the objectives of the schemes, or to advise on, or ensure, the employers’ and scheme members’ choice of the best schemes/funds to achieve their objectives.
Incorrect
It is not an obligation on the MPFA’s part to ensure that the schemes are operated to maximise the capital or income growth specified in the objectives of the schemes, or to advise on, or ensure, the employers’ and scheme members’ choice of the best schemes/funds to achieve their objectives.
Hint
Reference Chapter:1.5.11
-
Question 349 of 545
349. Question
1 pointsQID1505:Which of the following duties are performed by the Mandatory Provident Fund Authority (MPFA)?
I. Registering MPF Schemes
II. Approving Pooled Investment Funds.
III. Overseeing and making rules and guidelines for the administration and management of registered schemes and pooled investment funds
IV. Ongoing monitoring of compliance by MPF products with the Mandatory Provident Fund Schemes Ordinance (“MPFSO”)Correct
The functions of the MPFA include:
– registering MPF schemes
– the registration procedures of MPF schemes and approval processes of constituent funds and approved pooled investment
funds;
– ongoing monitoring of compliance of MPF products with the MPFSOIncorrect
The functions of the MPFA include:
– registering MPF schemes
– the registration procedures of MPF schemes and approval processes of constituent funds and approved pooled investment
funds;
– ongoing monitoring of compliance of MPF products with the MPFSOHint
Reference Chapter:1.5.11
-
Question 350 of 545
350. Question
1 pointsQID46:Which of the following activities is Mandatory Provident Fund Schemes Authority (“MPFA”) responsible for ?
Correct
The MPFA has responsibility for: (f) approving trustees and regulating the affairs and activities of such approved trustees.
Incorrect
The MPFA has responsibility for: (f) approving trustees and regulating the affairs and activities of such approved trustees.
Hint
Reference Chapter:1.5.11
-
Question 351 of 545
351. Question
1 pointsQID48:Which of the following activities is Mandatory Provident Fund Schemes Authority (“MPFA”) responsible for ?
Correct
The MPFA has responsibility for: (f) approving MPF trustees and regulating the affairs and activities of such approved trustees.
Incorrect
The MPFA has responsibility for: (f) approving MPF trustees and regulating the affairs and activities of such approved trustees.
Hint
Reference Chapter:1.5.11
-
Question 352 of 545
352. Question
1 pointsQID47:Which of the following are duties and functions of the Mandatory
Provident Fund Schemes Authority (MPFA) in MPF Schemes?
I. Registering MPF schemes
II. Approving Pooled Investment Schemes
III. Approving trustees and regulating the affairs and activities of such approved trustees
IV. Dealing with complaints about MPF products and approved trustees, and referring them to the SFC and other regulators for action where necessaryCorrect
The MPFA has responsibility for: (a) registering mandatory provident fund (“MPF”) schemes; (b) approving pooled investment funds; (f) approving trustees and regulating the affairs and activities of such approved trustees; (g) dealing with complaints about MPF products and approved trustees, and referring them to the SFC and other regulators for action where necessary.
Incorrect
The MPFA has responsibility for: (a) registering mandatory provident fund (“MPF”) schemes; (b) approving pooled investment funds; (f) approving trustees and regulating the affairs and activities of such approved trustees; (g) dealing with complaints about MPF products and approved trustees, and referring them to the SFC and other regulators for action where necessary.
Hint
Reference Chapter:1.5.11
-
Question 353 of 545
353. Question
1 pointsQID1495:The Mandatory Provident Fund Schemes Authority (MPFA) does NOT have which ONE of the following objectives?
Correct
It is not an obligation on the MPFA’s part to ensure that the schemes are operated to maximise the capital or income growth specified in the objectives of the schemes.
Incorrect
It is not an obligation on the MPFA’s part to ensure that the schemes are operated to maximise the capital or income growth specified in the objectives of the schemes.
Hint
Reference Chapter:1.5.11
-
Question 354 of 545
354. Question
1 pointsQID45:Which of the following are primary functions of the MPFA?
I. Approving fund managers of the investment products of MPF Schemes
II. Regulating supervise and monitoring MPF Schemes
III. Monitoring compliance with the MPFSO
IV. Authorizing the offer documents and marketing materials of the investment products of the MPF prior to their issue or publicationCorrect
The MPFA has responsibility for: (d) ongoing monitoring of compliance by MPF products with the Mandatory Provident
Fund Schemes Ordinance (“MPFSO”); (e) investigating alleged breaches of the provisions of the MPFSO;Incorrect
The MPFA has responsibility for: (d) ongoing monitoring of compliance by MPF products with the Mandatory Provident
Fund Schemes Ordinance (“MPFSO”); (e) investigating alleged breaches of the provisions of the MPFSO;Hint
Reference Chapter:1.5.11
-
Question 355 of 545
355. Question
1 pointsQID2774:Which organisation authorises the advertisement of MPF scheme products?
Correct
Advertisements for MPF scheme products are authorised by the SFC.
Incorrect
Advertisements for MPF scheme products are authorised by the SFC.
Hint
Reference Chapter:1.5.11
-
Question 356 of 545
356. Question
1 pointsQID1194:The major linkages between the spheres of activity of the Insurance Authority and the SFC are:
I. The authorization of general insurance schemes.
II. The authorization of independent retirement funds.
III. The authorization of investment-linked assurance schemes.
IV. The authorization of pooled retirement funds.Correct
There are two classes of funds authorised by the SFC which do
have certain linkage with the Insurance Authority: investment-linked assurance schemes and pooled retirement funds, both of which are marketed by the insurance industry. Authorization of these has been delegated by the SFC to the Committee on Investment-Linked Assurance Schemes and Pooled Retirement Funds. The Insurance Authority is represented on this committee, as insurance companies wishing to promote these schemes will need to be authorised under the Insurance Companies Ordinance.Incorrect
There are two classes of funds authorised by the SFC which do
have certain linkage with the Insurance Authority: investment-linked assurance schemes and pooled retirement funds, both of which are marketed by the insurance industry. Authorization of these has been delegated by the SFC to the Committee on Investment-Linked Assurance Schemes and Pooled Retirement Funds. The Insurance Authority is represented on this committee, as insurance companies wishing to promote these schemes will need to be authorised under the Insurance Companies Ordinance.Hint
Reference Chapter:1.5.12
-
Question 357 of 545
357. Question
1 pointsQID1211:Which of the following descriptions about Committee on Investment-Linked Assurance Schemes and Pooled Retirement Funds are true?
I. The IA is represented on this committee
II. The committee authorizes Investment-Linked Assurance
Schemes and Pooled Retirement FundsIII. The SFC delegates the authorization of Investment-Linked Assurance Schemes and Pooled Retirement Funds to the committee
IV. Insurance companies wishing to promote these schemes will need to be authorised by the SFC.
Correct
There are two classes of funds authorised by the SFC which do
have certain linkage with the Insurance Authority: investment-linked assurance schemes and pooled retirement funds, both of which are marketed by the insurance industry. Authorization of these has been delegated by the SFC to the Committee on Investment-Linked Assurance Schemes and Pooled Retirement Funds. The Insurance Authority is represented on this committee, as insurance companies wishing to promote these schemes will need to be authorised under the Insurance Companies Ordinance.Incorrect
There are two classes of funds authorised by the SFC which do
have certain linkage with the Insurance Authority: investment-linked assurance schemes and pooled retirement funds, both of which are marketed by the insurance industry. Authorization of these has been delegated by the SFC to the Committee on Investment-Linked Assurance Schemes and Pooled Retirement Funds. The Insurance Authority is represented on this committee, as insurance companies wishing to promote these schemes will need to be authorised under the Insurance Companies Ordinance.Hint
Reference Chapter:1.5.12
-
Question 358 of 545
358. Question
1 pointsQID1196:The Mandatory Provident Fund Schemes Authority is responsible for:
I. registering provident fund schemes.
II. approving unit trust funds.
III. overseeing and making rules and guidelines for the administration and management of registered schemes and pooled investment funds.
IV. ongoing monitoring of MPF products’ compliance with the Mandatory Provident Fund Schemes Ordinance.Correct
The MPFA has responsibility for:
(a) registering MPF schemes;
(c.) overseeing and making rules and guidelines for the administration and management of registered schemes and pooled investment funds;
(d) ongoing monitoring of compliance by MPF products with the Mandatory Provident Fund Schemes Ordinance (“MPFSO”).Incorrect
The MPFA has responsibility for:
(a) registering MPF schemes;
(c.) overseeing and making rules and guidelines for the administration and management of registered schemes and pooled investment funds;
(d) ongoing monitoring of compliance by MPF products with the Mandatory Provident Fund Schemes Ordinance (“MPFSO”).Hint
Reference Chapter:1.5.13
-
Question 359 of 545
359. Question
1 pointsQID1198:The Mandatory Provident Fund Schemes Authority (MPFA) is responsible for which of the following matters relating to Mandatory Provident Fund (MPF) products?
I. Authorisation of the offering documents for the products.
II. Licensing of investment managers of MPF products.
III. Overall administration of MPF schemes.
IV. Registration of employer-sponsored MPF schemes.Correct
The MPFA has responsibility for:
(a) registering MPF schemes;
(d) ongoing monitoring of compliance by MPF products with the Mandatory Provident Fund Schemes Ordinance (“MPFSO”);
(e) investigating alleged breaches of the provisions of the MPFSO;
(g) dealing with complaints about MPF products and approved trustees, and referring them to the SFC and other regulators for action where necessary.Incorrect
The MPFA has responsibility for:
(a) registering MPF schemes;
(d) ongoing monitoring of compliance by MPF products with the Mandatory Provident Fund Schemes Ordinance (“MPFSO”);
(e) investigating alleged breaches of the provisions of the MPFSO;
(g) dealing with complaints about MPF products and approved trustees, and referring them to the SFC and other regulators for action where necessary.Hint
Reference Chapter:1.5.13
-
Question 360 of 545
360. Question
1 pointsQID44:The Mandatory Provident Fund Authority (MPFA) was established under the
Correct
The MPFA is the primary regulator for the MPF system under the MPFSO, and is responsible for the overall management and administration of the MPF system, including the registration and regulation of the various schemes established under the ordinance.
Incorrect
The MPFA is the primary regulator for the MPF system under the MPFSO, and is responsible for the overall management and administration of the MPF system, including the registration and regulation of the various schemes established under the ordinance.
Hint
Reference Chapter:1.5.13
-
Question 361 of 545
361. Question
1 pointsQID1543:Which of the following are specialized funds available in Hong Kong and can be approved by the SFC?
I. Equity funds
II. Umbrella funds
III. Money market funds
IV. Hedge fundsCorrect
The CUTMF lists a number of so-called specialised schemes in Chapter 8, CUTMF, which are added to whenever a market need is identified. Such specialised schemes include the following, which are reviewed below:
(a) hedge funds;
(c.) money market/cash management fundsIncorrect
The CUTMF lists a number of so-called specialised schemes in Chapter 8, CUTMF, which are added to whenever a market need is identified. Such specialised schemes include the following, which are reviewed below:
(a) hedge funds;
(c.) money market/cash management fundsHint
Reference Chapter:1.5.13
-
Question 362 of 545
362. Question
1 pointsQID1544:Which of the following is not a specialized fund available in Hong Kong and can be approved by the SFC?
Correct
The CUTMF lists a number of so-called specialised schemes in Chapter 8, CUTMF, which are added to whenever a market need is identified. Such specialised schemes include the following, which are reviewed below:
(a) hedge funds;
(c.) money market/cash management fundsIncorrect
The CUTMF lists a number of so-called specialised schemes in Chapter 8, CUTMF, which are added to whenever a market need is identified. Such specialised schemes include the following, which are reviewed below:
(a) hedge funds;
(c.) money market/cash management fundsHint
Reference Chapter:1.5.13
-
Question 363 of 545
363. Question
1 pointsQID1199:Mr. Ko is an investment manager; he wishes to manage a fund under the Kaohsiung Bank Group’s MPF schemes. He needs to be licensed by which of the following?
Correct
Certain responsibilities of the MPFA interlink with the particular responsibilities of the SFC:
(b) registering and approving investment managers and continued monitoring of their conduct in the investment management of MPF products.Incorrect
Certain responsibilities of the MPFA interlink with the particular responsibilities of the SFC:
(b) registering and approving investment managers and continued monitoring of their conduct in the investment management of MPF products.Hint
Reference Chapter:1.5.14
-
Question 364 of 545
364. Question
1 pointsQID1573:MPF Intermediaries are regulated by?
Correct
The SFC, HKMA, MPFA and IA all regulate and supervise intermediaries operating within their respective jurisdictions, and there is considerable overlap in the regulatory regime for intermediaries engaged in the asset management industry.
Incorrect
The SFC, HKMA, MPFA and IA all regulate and supervise intermediaries operating within their respective jurisdictions, and there is considerable overlap in the regulatory regime for intermediaries engaged in the asset management industry.
Hint
Reference Chapter:1.5.14
-
Question 365 of 545
365. Question
1 pointsQID1201:Which of the following responsibilities between the SFC and the MPF schemes are interlinked?
I. Vetting and authorising MPF products and related marketing materials.
II. Registering and approving investment managers.
III. Investigating alleged breaches of the provisions of the SFC Code on MPF Products and any relevant ordinances, and taking enforcement action.
IV. Regulate the sales process of sales representatives selling MPF schemes.Correct
Certain responsibilities of the MPFA interlink with the particular responsibilities of the SFC:
(a) vetting and authorizing MPF products and related marketing materials in accordance with the provisions of the SFC Code on MPF Products and the relevant ordinances (including the SFO);
(b) registering and approving investment managers and continued monitoring of their conduct in the investment management of MPF products;
(d) investigating alleged breaches of the provisions of the SFC Code on MPF Products and any relevant ordinances, and taking enforcement action.Incorrect
Certain responsibilities of the MPFA interlink with the particular responsibilities of the SFC:
(a) vetting and authorizing MPF products and related marketing materials in accordance with the provisions of the SFC Code on MPF Products and the relevant ordinances (including the SFO);
(b) registering and approving investment managers and continued monitoring of their conduct in the investment management of MPF products;
(d) investigating alleged breaches of the provisions of the SFC Code on MPF Products and any relevant ordinances, and taking enforcement action.Hint
Reference Chapter:1.5.14
-
Question 366 of 545
366. Question
1 pointsQID1200:Which of the following are SFC’s duties towards the MPF Schemes?
I. Vetting and authorising MPF products and related marketing materials in accordance with the provisions of the SFC Code on MPF Products and the relevant ordinances (including the SFO).
II. Registering and approving investment managers and continued monitoring of their conduct in the investment management of MPF products.
III. Investigating alleged breaches of the provisions of the SFC Code on MPF Products and any relevant ordinances, and taking enforcement action.
IV. Supervising the selling process of the sales representatives selling MPF schemes.Correct
Certain responsibilities of the MPFA interlink with the particular responsibilities of the SFC:
(a) vetting and authorizing MPF products and related marketing materials in accordance with the provisions of the SFC Code on MPF Products and the relevant ordinances (including the SFO);
(b) registering and approving investment managers and continued monitoring of their conduct in the investment management of MPF products;
(d) investigating alleged breaches of the provisions of the SFC Code on MPF Products and any relevant ordinances, and taking enforcement action.Incorrect
Certain responsibilities of the MPFA interlink with the particular responsibilities of the SFC:
(a) vetting and authorizing MPF products and related marketing materials in accordance with the provisions of the SFC Code on MPF Products and the relevant ordinances (including the SFO);
(b) registering and approving investment managers and continued monitoring of their conduct in the investment management of MPF products;
(d) investigating alleged breaches of the provisions of the SFC Code on MPF Products and any relevant ordinances, and taking enforcement action.Hint
Reference Chapter:1.5.14
-
Question 367 of 545
367. Question
1 pointsQID1195:Which of the following institutions is responsible for authorizing Investment-Linked Assurance Schemes and Pooled Retirement Funds?
Correct
Authorization of Insurance Authority: investment-linked assurance schemes and pooled retirement funds has been delegated by the SFC to the Committee on Investment-Linked Assurance Schemes and Pooled Retirement Funds.
Incorrect
Authorization of Insurance Authority: investment-linked assurance schemes and pooled retirement funds has been delegated by the SFC to the Committee on Investment-Linked Assurance Schemes and Pooled Retirement Funds.
Hint
Reference Chapter:1.5.14
-
Question 368 of 545
368. Question
1 pointsQID49:Which of the following statements is incorrect?
Correct
Certain responsibilities of the MPFA interlink with the particular responsibilities of the SFC, which are: (a) vetting and authorising MPF products and related marketing materials in accordance
with the provisions of the SFC Code on MPF Products and the relevant ordinances (including the SFO). This means the IA doesn’t regulate MPF products at all.Incorrect
Certain responsibilities of the MPFA interlink with the particular responsibilities of the SFC, which are: (a) vetting and authorising MPF products and related marketing materials in accordance
with the provisions of the SFC Code on MPF Products and the relevant ordinances (including the SFO). This means the IA doesn’t regulate MPF products at all.Hint
Reference Chapter:1.5.14
-
Question 369 of 545
369. Question
1 pointsQID50:Which of the following spheres of the MPF schemes has linkage with the SFC?
I. The SFC vets and authorizes investment products of MPF Schemes.
II. The SFC vets and authorizes marketing materials of investment products of MPF Schemes.
III. The SFC authorizes Pooled Investment Funds.
IV. The SFC approves trustees of MPF Schemes and regulates the affairs and activities of such approved trusteesCorrect
Certain responsibilities of the MPFA interlink with the particular responsibilities of the SFC, which are:
(a) vetting and authorising MPF products and related marketing materials in accordance with the provisions of the SFC Code on MPF Products and the relevant ordinances (including the SFO).Incorrect
Certain responsibilities of the MPFA interlink with the particular responsibilities of the SFC, which are:
(a) vetting and authorising MPF products and related marketing materials in accordance with the provisions of the SFC Code on MPF Products and the relevant ordinances (including the SFO).Hint
Reference Chapter:1.5.14
-
Question 370 of 545
370. Question
1 pointsQID51:Which of the following matters is the Securities and Futures Commission (SFC) responsible for relating to Mandatory Provident Fund (MPF) products?
I. Authorisation of the offering documents for the investment products of MPF Schemes.
II. Licensing of investment managers of investment products of MPF Schemes.
III. Regulate, supervise and monitor MPF Schemes
IV. Registration of employer sponsored MPF schemes for employers.Correct
Certain responsibilities of the MPFA interlink with the particular responsibilities of the SFC, which are:
(a) vetting and authorising MPF products and related marketing materials in accordance with the provisions of the SFC Code on MPF Products and the relevant ordinances (including the SFO);
(b) registering and approving investment managers and continued monitoring of their conduct in the investment management of MPF productsIncorrect
Certain responsibilities of the MPFA interlink with the particular responsibilities of the SFC, which are:
(a) vetting and authorising MPF products and related marketing materials in accordance with the provisions of the SFC Code on MPF Products and the relevant ordinances (including the SFO);
(b) registering and approving investment managers and continued monitoring of their conduct in the investment management of MPF productsHint
Reference Chapter:1.5.14
-
Question 371 of 545
371. Question
1 pointsQID52:Which of the following institution is responsible for investigation into breaches of the SFC Code on MPF Products?
Correct
SFC is reposible for investigating alleged breaches of the provisions of the SFC Code on MPF Products and any relevant ordinances, and taking enforcement action
Incorrect
SFC is reposible for investigating alleged breaches of the provisions of the SFC Code on MPF Products and any relevant ordinances, and taking enforcement action
Hint
Reference Chapter:1.5.14
-
Question 372 of 545
372. Question
1 pointsQID1182:The British Construction bank is a licensed bank under the HKMA and plans to provide securities trading services for its clients, it should:
Correct
Under the SFO and the Banking Ordinance, AFIs, which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-RA.
Incorrect
Under the SFO and the Banking Ordinance, AFIs, which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-RA.
Hint
Reference Chapter:1.5.3
-
Question 373 of 545
373. Question
1 pointsQID21:Which of the following entities is responsible for maintaining the currency stability and the stability of the banking system in Hong Kong?
Correct
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:1.5.3
-
Question 374 of 545
374. Question
1 pointsQID23:British Construction Bank is an AFI regulated by the HKMA. If it plans to conduct Type 9 Regulated Activity (Asset Management) in the near future, how should it proceed?
Correct
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity.
Incorrect
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity.
Hint
Reference Chapter:1.5.3
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Question 375 of 545
375. Question
1 pointsQID26:British Construction Bank is an authorised financial institution. Amid the downfall of the Hong Kong banking sector, it would like to sell fund products of other companies to clients to generate revenue. Where should British Construction Bank apply for a license?
Correct
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity. As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out
on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.Incorrect
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity. As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out
on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.Hint
Reference Chapter:1.5.3
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Question 376 of 545
376. Question
1 pointsQID1180:Which of the following organizations are supervised, monitored and regulated by the HKMA?
I. The Banking Authority
II. Registered Institutions
III. Licensed Corporation
IV. Authorised Financial InstitutionsCorrect
Under the SFO and the Banking Ordinance, AFIs, which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-RA.
Incorrect
Under the SFO and the Banking Ordinance, AFIs, which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-RA.
Hint
Reference Chapter:1.5.3
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Question 377 of 545
377. Question
1 pointsQID28:Which entity is the frontline regulator of registered institution that conducts regulated activity as defined by the SFO?
Correct
As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out on-site inspections.
Incorrect
As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out on-site inspections.
Hint
Reference Chapter:1.5.3
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Question 378 of 545
378. Question
1 pointsQID29:Which of the following descriptions about Authorised Financial
Institutions (AFI) are true?
I. All Registered Institutions are banks.
II. If the AFIs are conducting the regulated activities as defined by the SFO, the AFIs should register with the SFC.
III. SFC is responsible for licensing AFIs for all businesses
IV. The HKMA may refer cases of suspected malpractice by registered institutions in respect of the SFC-regulated activities to the SFCCorrect
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity. The HKMA may refer cases of suspected malpractice by registered institutions in respect of the SFC-regulated activities to the SFC, which may directly review those institutions.
Incorrect
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity. The HKMA may refer cases of suspected malpractice by registered institutions in respect of the SFC-regulated activities to the SFC, which may directly review those institutions.
Hint
Reference Chapter:1.5.3
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Question 379 of 545
379. Question
1 pointsQID30:Which of the following is the regulator of Registered Institutions?
Correct
As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out
on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.Incorrect
As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out
on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.Hint
Reference Chapter:1.5.3
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Question 380 of 545
380. Question
1 pointsQID31:Which of the following is the regulator of Authorised Financial
Institutions?Correct
As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.
Incorrect
As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.
Hint
Reference Chapter:1.5.3
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Question 381 of 545
381. Question
1 pointsQID32:Which of the following descriptions are correct?
I. All banks in Hong Kong are supervised by the SFC.
II. Some of the activities conducted by registered institutions are regulated by the SFO.
III. A memorandum of understanding (“MOU”) has been signed between the SFC and the HKMA to minimize regulatory overlaps.
IV. The Insurance Authority is the major regulator of the insurance industry in Hong Kong.Correct
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity. Clearly, the HKMA and the SFC must work closely together in relation to any SFC-regulated activities that are carried out by registered institutions. To this end, a memorandum of understanding (“MOU”) has been signed between the two regulators, setting out their roles and responsibilities so as to minimise overlaps under the regulatory regime. The Insurance Authority is the major regulator of the insurance industry in Hong Kong.
Incorrect
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity. Clearly, the HKMA and the SFC must work closely together in relation to any SFC-regulated activities that are carried out by registered institutions. To this end, a memorandum of understanding (“MOU”) has been signed between the two regulators, setting out their roles and responsibilities so as to minimise overlaps under the regulatory regime. The Insurance Authority is the major regulator of the insurance industry in Hong Kong.
Hint
Reference Chapter:1.5.3
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Question 382 of 545
382. Question
1 pointsQID809:What is the difference between Licensed Corporations and Registered Institutions?
Correct
Registered institutions are regulated by the HKMA. They have to be registered with the SFC if they wish to carry out SFC regulated activities but the front line regulator will be the HKMA.
Incorrect
Registered institutions are regulated by the HKMA. They have to be registered with the SFC if they wish to carry out SFC regulated activities but the front line regulator will be the HKMA.
Hint
Reference Chapter:1.5.3
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Question 383 of 545
383. Question
1 pointsQID1181:What are the two regulatory authorities primarily involved in regulating the asset management industry
I. SFC
II. HKMA
III. SEHK
IV. HKEXCorrect
Under the SFO and the Banking Ordinance, AFIs, which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-RA.
Incorrect
Under the SFO and the Banking Ordinance, AFIs, which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-RA.
Hint
Reference Chapter:1.5.3
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Question 384 of 545
384. Question
1 pointsQID114:Which of the following two intermediaries are regulated and licensed/registered by the SFC?
I. Independent Financial Advisor
II. Investment Bank
III. Trustee
IV. Insurance AgentCorrect
The provisions of the SFO have different applications to the following different classes of person:
(b) “registered institution”, which refers to authorised financial institutions (“AFIs”) directly supervised by the Hong Kong Monetary Authority (“HKMA”) and registered with the SFC.Incorrect
The provisions of the SFO have different applications to the following different classes of person:
(b) “registered institution”, which refers to authorised financial institutions (“AFIs”) directly supervised by the Hong Kong Monetary Authority (“HKMA”) and registered with the SFC.Hint
Reference Chapter:1.5.3
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Question 385 of 545
385. Question
1 pointsQID1184:British Construction Bank is and AFI regulated by the HKMA, if it plans to conduct Type 9 Regulated Activity in the near future, how should it proceed?
Correct
Under the SFO and the Banking Ordinance, AFIs, which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-RA.
Incorrect
Under the SFO and the Banking Ordinance, AFIs, which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-RA.
Hint
Reference Chapter:1.5.3
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Question 386 of 545
386. Question
1 pointsQID1185:Which entity is the frontline regulator(s) of registered institutions that conducts regulated activities?
Correct
The frontline regulator of AFIs is the HKMA.
Incorrect
The frontline regulator of AFIs is the HKMA.
Hint
Reference Chapter:1.5.3
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Question 387 of 545
387. Question
1 pointsQID1183:If an authorised financial institution would like to conduct regulated actives under the SFO, which organization should it register with?
Correct
Under the SFO and the Banking Ordinance, AFIs, which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-RA.
Incorrect
Under the SFO and the Banking Ordinance, AFIs, which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-RA.
Hint
Reference Chapter:1.5.3
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Question 388 of 545
388. Question
1 pointsQID1494:What is the primary function of Registered Institution in the Asset Management Business?
Correct
Many AFIs participate in the fund management industry as distributors of CISs products. Accordingly, the HKMA, in its capacity as the banking regulatory authority, is concerned with the asset management industry insofar as it affects AFIs engaged in the regulated activity of asset management, i.e. registered institutions.
Incorrect
Many AFIs participate in the fund management industry as distributors of CISs products. Accordingly, the HKMA, in its capacity as the banking regulatory authority, is concerned with the asset management industry insofar as it affects AFIs engaged in the regulated activity of asset management, i.e. registered institutions.
Hint
Reference Chapter:1.5.3
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Question 389 of 545
389. Question
1 pointsQID341:A person engaging in any activity regulated by the SFO, which includes asset management, will need to be licensed by the
Correct
Any person that wish to conduct a regulated activity must be licensed by the SFC.
Incorrect
Any person that wish to conduct a regulated activity must be licensed by the SFC.
Hint
Reference Chapter:1.5.3
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Question 390 of 545
390. Question
1 pointsQID24:If an AFI plans to conduct regulated activities as defined by the SFO, which of the following entities should it register with ?
Correct
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity.
Incorrect
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity.
Hint
Reference Chapter:1.5.3
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Question 391 of 545
391. Question
1 pointsQID33:British Construction Bank is an AFI regulated by the HKMA. Which of the following entities is responsible for supervising the regulated activities it conducts under the SFO?
Correct
The HKMA and the SFC must work closely together in relation to any SFC-regulated activities that are carried out by registered
institutions. To this end, a memorandum of understanding (“MOU”) has been signed between the two regulators, setting out their roles and responsibilities so as to minimise overlaps under the regulatory regime.Incorrect
The HKMA and the SFC must work closely together in relation to any SFC-regulated activities that are carried out by registered
institutions. To this end, a memorandum of understanding (“MOU”) has been signed between the two regulators, setting out their roles and responsibilities so as to minimise overlaps under the regulatory regime.Hint
Reference Chapter:1.5.3
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Question 392 of 545
392. Question
1 pointsQID2471:Which institution should banks apply for a license or register if they want to engage in futures trading business?
Correct
Banks should register from the SFC rather than applying for a license if they want to engage in futures trading business. Futures trading is a Type 2 regulated activity.
Incorrect
Banks should register from the SFC rather than applying for a license if they want to engage in futures trading business. Futures trading is a Type 2 regulated activity.
Hint
Reference Chapter:1.5.3
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Question 393 of 545
393. Question
1 pointsQID1186:The HKMA may refer cases of suspected malpractices by registered institutions in respect of the SFC-regulated activities to the:
Correct
The HKMA may refer cases of suspected malpractice by registered institutions in respect of the SFC-RAs to the SFC, which may directly review those institutions.
Incorrect
The HKMA may refer cases of suspected malpractice by registered institutions in respect of the SFC-RAs to the SFC, which may directly review those institutions.
Hint
Reference Chapter:1.5.4
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Question 394 of 545
394. Question
1 pointsQID55:Which of the following ordinances are administered and enforced by the Registrar of Companies?
I. Bankruptcy Ordinance
II. Money Lenders Ordinance
III. Securities and Futures Ordinance
IV. Trustee OrdinanceCorrect
The Registrar of Companies administers and enforces certain aspects of the:
(d) Trustee Ordinance.
(f) Money Lenders Ordinance.Incorrect
The Registrar of Companies administers and enforces certain aspects of the:
(d) Trustee Ordinance.
(f) Money Lenders Ordinance.Hint
Reference Chapter:1.5.5
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Question 395 of 545
395. Question
1 pointsQID1187:The Registrar of Companies administers and enforces which of the following?
I. the Companies Ordinance(‘CO’)
II. the Limited Partnerships Ordinance
III. the Trustee Ordinance
IV. the Registered Trustees Incorporation OrdinanceCorrect
The Registrar of Companies administers and enforces certain aspects of the:
(a) NCO;
(c.) Limited Partnerships Ordinance;
(d) Trustee Ordinance;
(e.) Registered Trustees Incorporation Ordinance.Incorrect
The Registrar of Companies administers and enforces certain aspects of the:
(a) NCO;
(c.) Limited Partnerships Ordinance;
(d) Trustee Ordinance;
(e.) Registered Trustees Incorporation Ordinance.Hint
Reference Chapter:1.5.5
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Question 396 of 545
396. Question
1 pointsQID2805:Which of the following is the responsibility of the Companies Registry?
I. Keep and make available companies’ returns for public inspection
II. Strike off companies that fail to file returns or do not carry on business
III. Directly supervise companies
IV. Recover returns from companies that fail to file on timeCorrect
The Companies Registry is responsible
I. Keep and make the company’s returns for public inspection
II. Strike off companies for failure to file returns or not carry on business
III. Recover returns from companies that fail to file on timeThe Companies Registry does not directly regulate companies.
Incorrect
The Companies Registry is responsible
I. Keep and make the company’s returns for public inspection
II. Strike off companies for failure to file returns or not carry on business
III. Recover returns from companies that fail to file on timeThe Companies Registry does not directly regulate companies.
Hint
Reference Chapter:1.5.7
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Question 397 of 545
397. Question
1 pointsQID1188:Which of the following organizations cooperate closely with the SFC on issues of common interest?
I. HKMA
II. Companies Registry
III. Inland Revenue Department
IV. Hong Kong Exchanges and ClearingCorrect
The SFC will not cooperate with Inland Revenue Department.
Incorrect
The SFC will not cooperate with Inland Revenue Department.
Hint
Reference Chapter:1.5.8
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Question 398 of 545
398. Question
1 pointsQID56:The Registrar of Companies﹕
I. Has no direct links with the SFC in regulatory areas
II. Maintains and makes available for public inspection financial and other returns, charges registered by companies
III. Does not manage companies directly
IV. Enforces some aspects of the Companies OrdinanceCorrect
The Registrar of Companies administers and enforces certain aspects of the:
(a) NCO;
(b) Companies (Winding Up and Miscellaneous Provisions) Ordinance
There are no direct links between the SFC and the Companies Registry in regulatory areas, although the two agencies maintain an active liaison on issues of common interest.
The Companies Registry maintains and makes available for public inspection financial and other returns, charges registered by companies and so on.
The Registrar of Companies does not directly regulate companies, limited partnerships, trustees or money lenders; such functions are assumed by different bodies.Incorrect
The Registrar of Companies administers and enforces certain aspects of the:
(a) NCO;
(b) Companies (Winding Up and Miscellaneous Provisions) Ordinance
There are no direct links between the SFC and the Companies Registry in regulatory areas, although the two agencies maintain an active liaison on issues of common interest.
The Companies Registry maintains and makes available for public inspection financial and other returns, charges registered by companies and so on.
The Registrar of Companies does not directly regulate companies, limited partnerships, trustees or money lenders; such functions are assumed by different bodies.Hint
Reference Chapter:1.5.8
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Question 399 of 545
399. Question
1 pointsQID1189:Which of the following institutions’ principal functions are to ensure that the interests of policy holders are protected and to promote the general stability of the insurance industry in Hong Kong?
Correct
The principal functions of the Insurance Authority are to ensure that the interests of policy holders are protected and to promote the general stability of the insurance industry in Hong Kong.
Incorrect
The principal functions of the Insurance Authority are to ensure that the interests of policy holders are protected and to promote the general stability of the insurance industry in Hong Kong.
Hint
Reference Chapter:1.5.9
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Question 400 of 545
400. Question
1 pointsQID35:Which of the following is responsible for authorizing and supervising Insurance Companies?
Correct
The Insurance Authority is concerned with the regulation of insurance companies and insurance intermediaries.
Incorrect
The Insurance Authority is concerned with the regulation of insurance companies and insurance intermediaries.
Hint
Reference Chapter:1.5.9
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Question 401 of 545
401. Question
1 pointsQID92:Which of the following description about the HKEX is correct?
I. The HKEX is a listed company on the SEHK.
II. The HKEX is an exchange controller recognized by the SFC
III. The SEHK, HKFE and the three associated clearing houses are subsidiaries of the HKEX.
IV. The HKEX is responsible for front-line prudential and conduct regulation of market participants.Correct
HKEX is a listed company on the SEHK. On 6 March 2000, the SEHK, HKFE and the three associated clearing houses – Hong Kong Securities Clearing Company Limited, The SEHK
Options Clearing House Limited and HKFE Clearing Corporation Limited – became wholly owned subsidiaries of HKEX. HKEX is an exchange controller recognised by the SFC under s. 59, SFO.Incorrect
HKEX is a listed company on the SEHK. On 6 March 2000, the SEHK, HKFE and the three associated clearing houses – Hong Kong Securities Clearing Company Limited, The SEHK
Options Clearing House Limited and HKFE Clearing Corporation Limited – became wholly owned subsidiaries of HKEX. HKEX is an exchange controller recognised by the SFC under s. 59, SFO.Hint
Reference Chapter:1.6.
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Question 402 of 545
402. Question
1 pointsQID1202:Which of the following is NOT a clearing house under the HKEX?
Correct
HKEX is a listed company on the SEHK. On 6 March 2000, the SEHK, HKFE and the three associated clearing houses Hong Kong Securities Clearing Company Limited, The SEHK Options Clearing House Limited and HKFE Clearing Corporation Limited became wholly owned subsidiaries of HKEX.
Incorrect
HKEX is a listed company on the SEHK. On 6 March 2000, the SEHK, HKFE and the three associated clearing houses Hong Kong Securities Clearing Company Limited, The SEHK Options Clearing House Limited and HKFE Clearing Corporation Limited became wholly owned subsidiaries of HKEX.
Hint
Reference Chapter:1.6.1
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Question 403 of 545
403. Question
1 pointsQID102:Which of the following clearing houses are currently in operation in Hong Kong?
I. Hong Kong Securities Clearing Company Limited.
II. The SEHK Options Clearing House Limited.
III. HKFE Clearing Corporation Limited.
IV. Hong Kong Options Clearing Limited.Correct
On 6 March 2000, the SEHK, HKFE and the three
associated clearing houses – Hong Kong Securities Clearing Company Limited, The SEHK Options Clearing House Limited and HKFE Clearing Corporation Limited – became wholly owned subsidiaries of HKEX.Incorrect
On 6 March 2000, the SEHK, HKFE and the three
associated clearing houses – Hong Kong Securities Clearing Company Limited, The SEHK Options Clearing House Limited and HKFE Clearing Corporation Limited – became wholly owned subsidiaries of HKEX.Hint
Reference Chapter:1.6.1
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Question 404 of 545
404. Question
1 pointsQID100:Which of the following securities and futures exchanges are currently in Hong Kong?
I. Stock Exchange of Hong Kong.
II. Hong Kong Futures Exchange Limited.
III. Hong Kong Options Exchange.
IV. Hong Kong Bonds Exchange.Correct
The SEHK and HKFE are recognised under s. 19, SFO as exchange companies that may operate a stock market and a futures market in Hong Kong respectively.
Incorrect
The SEHK and HKFE are recognised under s. 19, SFO as exchange companies that may operate a stock market and a futures market in Hong Kong respectively.
Hint
Reference Chapter:1.6.1
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Question 405 of 545
405. Question
1 pointsQID1204:Which of the following organizations are recognized clearing houses under the SFO?
I. Hong Kong Securities Clearing Company Limited
II. The SEHK Options Clearing House Limited
III. HKFE Clearing Corporation Limited
IV. The HKEXCorrect
On 6 March 2000, the SEHK, HKFE and the three associated clearing houses Hong Kong Securities Clearing Company Limited, The SEHK Options Clearing House Limited and HKFE Clearing Corporation Limited became wholly owned subsidiaries of HKEX.
Incorrect
On 6 March 2000, the SEHK, HKFE and the three associated clearing houses Hong Kong Securities Clearing Company Limited, The SEHK Options Clearing House Limited and HKFE Clearing Corporation Limited became wholly owned subsidiaries of HKEX.
Hint
Reference Chapter:1.6.1
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Question 406 of 545
406. Question
1 pointsQID1203:How many securities exchanges are there in Hong Kong?
Correct
Only the SEHK is the securities exchange. HKFE is a futures exchange, not securities exchange.
Incorrect
Only the SEHK is the securities exchange. HKFE is a futures exchange, not securities exchange.
Hint
Reference Chapter:1.6.1
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Question 407 of 545
407. Question
1 pointsQID514:Which of the following agencies are the 3 major clearing houses in Hong Kong?
I. Hong Kong Securities Clearing Company Limited (HKSCC).
II. The SEHK Options Clearing House Limited (SEOCH).
III. HKFE Clearing Corporation Limited (HKCC).
IV. Hong Kong OTC Clear Limited.Correct
Upon merger and demutualisation, the two exchanges and three
clearing houses (HKSCC, SEOCH and HKCC) became the wholly owned subsidiaries of HKEX and “participantship” of the exchanges and clearing houses was introduced. They became the three major clearing houses in Hong Kong.Incorrect
Upon merger and demutualisation, the two exchanges and three
clearing houses (HKSCC, SEOCH and HKCC) became the wholly owned subsidiaries of HKEX and “participantship” of the exchanges and clearing houses was introduced. They became the three major clearing houses in Hong Kong.Hint
Reference Chapter:1.6.1
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Question 408 of 545
408. Question
1 pointsQID2353:Hong Kong Exchange is
Correct
Hong Kong Exchange is the exchange designated by Hong Kong and the controller of clearing company. The subsidiary of Hong Kong Exchange includes The Stock Exchange of Hong Kong Limited, which is responsible for the trading and clearing of securities and futures contract.
Incorrect
Hong Kong Exchange is the exchange designated by Hong Kong and the controller of clearing company. The subsidiary of Hong Kong Exchange includes The Stock Exchange of Hong Kong Limited, which is responsible for the trading and clearing of securities and futures contract.
Hint
Reference Chapter:1.6.1
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Question 409 of 545
409. Question
1 pointsQID1206:Which of the following are recognized exchanges under the SFO?
I. HKEX
II. SEHK
III. FEHK
IV. HKSCCCorrect
HKEX is an exchange controller recognized by the SFC under s. 59, SFO. The SEHK and HKFE are recognized under s. 19, SFO as exchange companies that may operate a stock market and a futures market in Hong Kong respectively.
Incorrect
HKEX is an exchange controller recognized by the SFC under s. 59, SFO. The SEHK and HKFE are recognized under s. 19, SFO as exchange companies that may operate a stock market and a futures market in Hong Kong respectively.
Hint
Reference Chapter:1.6.2
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Question 410 of 545
410. Question
1 pointsQID99:Which of the following is an exchange controller in Hong Kong?
Correct
HKEX is an exchange controller recognised by the SFC under s. 59, SFO.
Incorrect
HKEX is an exchange controller recognised by the SFC under s. 59, SFO.
Hint
Reference Chapter:1.6.2
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Question 411 of 545
411. Question
1 pointsQID1205:Which of the following is a recognized exchange controller under the SFO?
Correct
Hong Kong Securities Clearing Company Limited, The SEHK
Options Clearing House Limited and HKFE Clearing Corporation Limited obtain their recognition under s. 37, SFO. A recognized exchange controller may control a recognized
exchange company or clearing house.Incorrect
Hong Kong Securities Clearing Company Limited, The SEHK
Options Clearing House Limited and HKFE Clearing Corporation Limited obtain their recognition under s. 37, SFO. A recognized exchange controller may control a recognized
exchange company or clearing house.Hint
Reference Chapter:1.6.2
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Question 412 of 545
412. Question
1 pointsQID101:Which of the following is an exchange controller?
Correct
HKEX is an exchange controller recognised by the SFC under s. 59, SFO.
Incorrect
HKEX is an exchange controller recognised by the SFC under s. 59, SFO.
Hint
Reference Chapter:1.6.2
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Question 413 of 545
413. Question
1 pointsQID2761:Which of the following statements about the SFC is correct?
Correct
The SFC is responsible for the regulation of all securities and futures activities, including the regulatory activities carried out by banks. It is also responsible for regulating the exchange controller.
Incorrect
The SFC is responsible for the regulation of all securities and futures activities, including the regulatory activities carried out by banks. It is also responsible for regulating the exchange controller.
Hint
Reference Chapter:1.6.2
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Question 414 of 545
414. Question
1 pointsQID905:Which of the following correctly describes the HKEX?
Correct
HKEX is not the venue for buying and selling Hong Kong stocks. HKEX is an exchange controller. HKEX’s subsidiary SEHK is the venue for buying and selling Hong Kong stocks. The SFC is responsible for licensing and registration of intermediaries. Stamp duty is a source of income of the government of the HKSAR.
Incorrect
HKEX is not the venue for buying and selling Hong Kong stocks. HKEX is an exchange controller. HKEX’s subsidiary SEHK is the venue for buying and selling Hong Kong stocks. The SFC is responsible for licensing and registration of intermediaries. Stamp duty is a source of income of the government of the HKSAR.
Hint
Reference Chapter:1.6.2
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Question 415 of 545
415. Question
1 pointsQID733:The HKEX is responsible for regulating which of the following entities and matters?
I. Listed Companies
II. SEHK
III. HKFE
IV. Investors who participate in securities trading.Correct
HKEX is responsible for ensuring an orderly and fair market in securities and futures contracts traded on or through the SEHK and HKFE, respectively. HKEX is required to ensure that risks are managed prudently, to act in the interests of the public, having
particular regard to the interests of the investing public, and to ensure that where such interests conflict with any other interests the former shall prevail. The SEHK is also responsible for administering the Listing Rules.Incorrect
HKEX is responsible for ensuring an orderly and fair market in securities and futures contracts traded on or through the SEHK and HKFE, respectively. HKEX is required to ensure that risks are managed prudently, to act in the interests of the public, having
particular regard to the interests of the investing public, and to ensure that where such interests conflict with any other interests the former shall prevail. The SEHK is also responsible for administering the Listing Rules.Hint
Reference Chapter:1.6.3
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Question 416 of 545
416. Question
1 pointsQID1207:The duties of the HKEX, as the exchange controller, include which of the following?
I. Ensuring an orderly and fair market in securities and futures contracts traded on or through the SEHK and HKFE.
II. Ensuring that risks are managed prudently, to act in the interests of the public, having particular regard to the interests of the investing public.
III. Being responsible for front-line prudential and regulation of market participants.
IV. Not being responsible for front-line prudential and regulation of market participants.Correct
HKEX is responsible for ensuring an orderly and fair market in securities and futures contracts traded on or through the SEHK and HKFE, respectively. HKEX is required to ensure that risks are managed prudently, to act in the interests of the public, having particular regard to the interests of the investing public, and to ensure that where such interests conflict with any other interests the former shall prevail.
Incorrect
HKEX is responsible for ensuring an orderly and fair market in securities and futures contracts traded on or through the SEHK and HKFE, respectively. HKEX is required to ensure that risks are managed prudently, to act in the interests of the public, having particular regard to the interests of the investing public, and to ensure that where such interests conflict with any other interests the former shall prevail.
Hint
Reference Chapter:1.6.3
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Question 417 of 545
417. Question
1 pointsQID108:Which of the following groups of people may directly use the facilities of the Hong Kong Futures Exchange (HKFE)?
I. Professional investors.
II. Institutional investors.
III. Person licensed by or registered with the SFC.
IV. Foreign futures dealer.Correct
Only the SFC’s licensed or registered persons may have access to the trading systems and facilities of HKFE, whether directly or indirectly, in order to carry out the Type 2 regulated activity of dealing in futures contracts.
Incorrect
Only the SFC’s licensed or registered persons may have access to the trading systems and facilities of HKFE, whether directly or indirectly, in order to carry out the Type 2 regulated activity of dealing in futures contracts.
Hint
Reference Chapter:1.6.3
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Question 418 of 545
418. Question
1 pointsQID1208:How is the board of HKEX formed?
Correct
The board of HKEX is a mix of directors appointed by the Government (the majority) and those elected by the shareholders; the board elects the Chairman and appoints the Chief Executive. The Chairman of HKEX must be approved by the Chief Executive of the Hong Kong SAR, while the Chief Executive of HKEX has to be approved by the SFC.
Incorrect
The board of HKEX is a mix of directors appointed by the Government (the majority) and those elected by the shareholders; the board elects the Chairman and appoints the Chief Executive. The Chairman of HKEX must be approved by the Chief Executive of the Hong Kong SAR, while the Chief Executive of HKEX has to be approved by the SFC.
Hint
Reference Chapter:1.6.4
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Question 419 of 545
419. Question
1 pointsQID104:Which of the following entity is responsible for monitoring the exchanges and clearing houses in Hong Kong?
Correct
The SFC supervises and monitors the activities of HKEX, the exchange companies and the clearing houses, approves their rules and amendments to the rules, approves the fees they charge, and administers and enforces the applicable legislation. It also carries out regular reviews of these activities.
Incorrect
The SFC supervises and monitors the activities of HKEX, the exchange companies and the clearing houses, approves their rules and amendments to the rules, approves the fees they charge, and administers and enforces the applicable legislation. It also carries out regular reviews of these activities.
Hint
Reference Chapter:1.6.5
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Question 420 of 545
420. Question
1 pointsQID1209:Which of the following organizations is responsible for front line conduct of market participants in the securities and futures business?
Correct
Except in relation to the management of business risk, and the enforcement of their own listing, trading, clearing and settlement rules, HKEX, the exchanges and the clearing houses are not responsible for front-line prudential and conduct regulation of market participants, which is carried out by the SFC.
Incorrect
Except in relation to the management of business risk, and the enforcement of their own listing, trading, clearing and settlement rules, HKEX, the exchanges and the clearing houses are not responsible for front-line prudential and conduct regulation of market participants, which is carried out by the SFC.
Hint
Reference Chapter:1.6.6
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Question 421 of 545
421. Question
1 pointsQID788:Which of the following regulators in Hong Kong assumes responsibility for front-line regulation and discipline of participants of the securities and futures industry?
Correct
Except in relation to the management of business risk, and the enforcement of their own listing, trading, clearing and settlement rules, HKEX, the exchanges and the clearing houses are not responsible for front-line prudential and conduct regulation of market participants, which is carried out by the SFC.
Incorrect
Except in relation to the management of business risk, and the enforcement of their own listing, trading, clearing and settlement rules, HKEX, the exchanges and the clearing houses are not responsible for front-line prudential and conduct regulation of market participants, which is carried out by the SFC.
Hint
Reference Chapter:1.6.6
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Question 422 of 545
422. Question
1 pointsQID515:The SEHK is responsible for regulating which of the following individuals/institutions?
Correct
The SEHK, provides for trading in securities on two boards, the
Main Board and Growth Enterprise Market. All companies listed or pursuing a listing on those exchanges will be regulated by the SEHK.Incorrect
The SEHK, provides for trading in securities on two boards, the
Main Board and Growth Enterprise Market. All companies listed or pursuing a listing on those exchanges will be regulated by the SEHK.Hint
Reference Chapter:1.6.6
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Question 423 of 545
423. Question
1 pointsQID105:Which of the following organization is responsible for front-line prudential and conduct regulation of market participants?
Correct
Except in relation to the management of business risk, and the enforcement of their own listing, trading, clearing and settlement rules, HKEX, the exchanges and the clearing houses are not responsible for front-line prudential and conduct regulation of market participants, which is carried out by the SFC.
Incorrect
Except in relation to the management of business risk, and the enforcement of their own listing, trading, clearing and settlement rules, HKEX, the exchanges and the clearing houses are not responsible for front-line prudential and conduct regulation of market participants, which is carried out by the SFC.
Hint
Reference Chapter:1.6.6
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Question 424 of 545
424. Question
1 pointsQID1490:Which of the following is not a principle guiding the SFC’s work?
Correct
The SFC seeks to work in partnership with the industry it regulates, encouraging a two-way dialogue that fosters a forum for an exchange of views and that encourages a strong regulator/regulate relationship.
In seeking the right balance, the SFC consults both industry practitioners and the public on proposed regulatory developments.
Rather than implement detailed standards, the SFC focuses on a higher-level articulation of what the SFC expects registered and licensed persons to do. This allows standards to be maintained for a variety of scenarios in a fast-changing marketplace, and enables businesses to decide how best to secure compliance with regulations having regard to their particular business context.Incorrect
The SFC seeks to work in partnership with the industry it regulates, encouraging a two-way dialogue that fosters a forum for an exchange of views and that encourages a strong regulator/regulate relationship.
In seeking the right balance, the SFC consults both industry practitioners and the public on proposed regulatory developments.
Rather than implement detailed standards, the SFC focuses on a higher-level articulation of what the SFC expects registered and licensed persons to do. This allows standards to be maintained for a variety of scenarios in a fast-changing marketplace, and enables businesses to decide how best to secure compliance with regulations having regard to their particular business context.Hint
Reference Chapter:1.6.6
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Question 425 of 545
425. Question
1 pointsQID106:Which of the following entity is responsible for the management of business risk, and the enforcement of their listing, trading, clearing and settlement rules?
Correct
Except in relation to the management of business risk, and the enforcement of their own listing, trading, clearing and settlement rules, HKEX, the exchanges and the clearing houses are not responsible for front-line prudential and conduct regulation of market participants, which is carried out by the SFC.
Incorrect
Except in relation to the management of business risk, and the enforcement of their own listing, trading, clearing and settlement rules, HKEX, the exchanges and the clearing houses are not responsible for front-line prudential and conduct regulation of market participants, which is carried out by the SFC.
Hint
Reference Chapter:1.6.6
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Question 426 of 545
426. Question
1 pointsQID909:Which of the following individuals are more likely to be affected by the Licensing and registration part of the SFO?
I. Licensed Corporation
II. AFIs that is preparing to conduct regulated activities in the near future
III. Executive officers of a Registered Institution
IV. Professional InvestorsCorrect
Professional Investors do not need to be licensed. AFIs will need to be registered in order to conduct regulated activities.
Incorrect
Professional Investors do not need to be licensed. AFIs will need to be registered in order to conduct regulated activities.
Hint
Reference Chapter:1.7.
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Question 427 of 545
427. Question
1 pointsQID2361:In the Securities and Futures Ordinance (SFO), chapters related to licensing and registration may apply to?
I. Staffs of licensed corporations
II. Staffs of registered agents
III. Banks conducting regulated activities
IV. Professional investorsCorrect
In the Securities and Futures Ordinance (SFO), chapters related to licensing and registration may apply to?
I. Licensed corporations
II. staffs of licensed corporations
III. Banks conducting regulated activities (registered institutions)
IV. Staffs of banks conducting regulated activities (registered institutions)Incorrect
In the Securities and Futures Ordinance (SFO), chapters related to licensing and registration may apply to?
I. Licensed corporations
II. staffs of licensed corporations
III. Banks conducting regulated activities (registered institutions)
IV. Staffs of banks conducting regulated activities (registered institutions)Hint
Reference Chapter:1.7.
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Question 428 of 545
428. Question
1 pointsQID188:Which of the following description about the single licence regime is correct?
Correct
Although there are ten types of regulated activity, the SFC will grant to a person only one licence (or registration) which will enable the holder to undertake one or more of the ten regulated activities. This is normally referred to as the “single licence regime”.
Incorrect
Although there are ten types of regulated activity, the SFC will grant to a person only one licence (or registration) which will enable the holder to undertake one or more of the ten regulated activities. This is normally referred to as the “single licence regime”.
Hint
Reference Chapter:1.7.1
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Question 429 of 545
429. Question
1 pointsQID186:Which of the following descriptions about the single license regime is correct?
Correct
Although there are ten types of regulated activity, the SFC will grant to a person only one licence (or registration) which will enable the holder to undertake one or more of the ten regulated activities. This is normally referred to as the “single licence regime”.
Incorrect
Although there are ten types of regulated activity, the SFC will grant to a person only one licence (or registration) which will enable the holder to undertake one or more of the ten regulated activities. This is normally referred to as the “single licence regime”.
Hint
Reference Chapter:1.7.1
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Question 430 of 545
430. Question
1 pointsQID1570:Do AFI’s who are trying to conduct regulated activities need to be licensed or registered?
Correct
The position is slightly different for AFIs (such as banks) which are also regulated by the HKMA. Where an AFI wishes to engage in one or more regulated activities, it needs to be registered with the SFC.
Incorrect
The position is slightly different for AFIs (such as banks) which are also regulated by the HKMA. Where an AFI wishes to engage in one or more regulated activities, it needs to be registered with the SFC.
Hint
Reference Chapter:1.7.1
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Question 431 of 545
431. Question
1 pointsQID233:Individuals engaged in asset management require
Correct
Part V, SFO provides for the implementation of the licensing regime, including:
(h) requiring an individual engaging in a regulated activity for a licensed corporation (as his principal) to be licensed (licensed representative). A licensed representative will usually be accredited to one principal, but the SFC may approve his accreditation to more than one licensed corporation within the same group of companies.Incorrect
Part V, SFO provides for the implementation of the licensing regime, including:
(h) requiring an individual engaging in a regulated activity for a licensed corporation (as his principal) to be licensed (licensed representative). A licensed representative will usually be accredited to one principal, but the SFC may approve his accreditation to more than one licensed corporation within the same group of companies.Hint
Reference Chapter:1.7.1
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Question 432 of 545
432. Question
1 pointsQID1212:The system that covers the ten specified types of regulated activities and the licensing of corporations (“licensed corporations”) to conduct one or more regulated activities subject to any conditions the SFC may wish to impose is known as the:
Correct
The setting up of a single licensing system to cover the ten specified types of RA (see section 7.4 below) and the licensing of corporations (“licensed corporations”) to conduct one or more RAs subject to any conditions the SFC may wish to impose.
Incorrect
The setting up of a single licensing system to cover the ten specified types of RA (see section 7.4 below) and the licensing of corporations (“licensed corporations”) to conduct one or more RAs subject to any conditions the SFC may wish to impose.
Hint
Reference Chapter:1.7.1
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Question 433 of 545
433. Question
1 pointsQID1210:Part V of the SFO provides for the implementation of which of the following licensing regime?
Correct
Part V, SFO provides for the implementation of the licensing regime, including:
(a) the setting up of a single licensing system to cover the ten specified types of RA (see section 7.4 below) and the licensing of corporations (“licensed corporations”) to conduct one or more RAs subject to any conditions the SFC may wish to impose.Incorrect
Part V, SFO provides for the implementation of the licensing regime, including:
(a) the setting up of a single licensing system to cover the ten specified types of RA (see section 7.4 below) and the licensing of corporations (“licensed corporations”) to conduct one or more RAs subject to any conditions the SFC may wish to impose.Hint
Reference Chapter:1.7.1
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Question 434 of 545
434. Question
1 pointsQID187:Although there are ten types of regulated activity, the SFC will grant to a person only one licence (or registration) which will enable the holder to undertake one or more of the ten regulated activities. This is normally referred to as the
Correct
Although there are ten types of regulated activity, the SFC will grant to a person only one licence (or registration) which will enable the holder to undertake one or more of the ten regulated activities. This is normally referred to as the “single licence regime”.
Incorrect
Although there are ten types of regulated activity, the SFC will grant to a person only one licence (or registration) which will enable the holder to undertake one or more of the ten regulated activities. This is normally referred to as the “single licence regime”.
Hint
Reference Chapter:1.7.1
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Question 435 of 545
435. Question
1 pointsQID242: A licensed corporation must have
Correct
The definition of responsible officer as given here is not stated in the SFO (see Note 1 below) but has been provided by the SFC:
(b) every licensed corporation must have, for each regulated activity for which it is licensed, at least two responsible officers approved by the SFC as such; and at least one of them shall be an executive director of the licensed corporation.Incorrect
The definition of responsible officer as given here is not stated in the SFO (see Note 1 below) but has been provided by the SFC:
(b) every licensed corporation must have, for each regulated activity for which it is licensed, at least two responsible officers approved by the SFC as such; and at least one of them shall be an executive director of the licensed corporation.Hint
Reference Chapter:1.7.10
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Question 436 of 545
436. Question
1 pointsQID237:A licensed corporation or registered institution should have
I. at least 2 RO and 1 Executive Director as RO
II. at all times there must be at least 1 executive officer available to supervise the business of the regulated activity
III. at least 1 RO, including 1 an Executive Director as RO
IV. at all times there must be at least 2 executive officer available to supervise the business of the regulated activityCorrect
The definition of responsible officer as given here is not stated in the SFO (see Note 1 below) but has been provided by the SFC:
(b) every licensed corporation must have, for each regulated activity for which it is licensed, at least two responsible officers approved by the SFC as such; and at least one of them shall be an executive director of the licensed corporation.Incorrect
The definition of responsible officer as given here is not stated in the SFO (see Note 1 below) but has been provided by the SFC:
(b) every licensed corporation must have, for each regulated activity for which it is licensed, at least two responsible officers approved by the SFC as such; and at least one of them shall be an executive director of the licensed corporation.Hint
Reference Chapter:1.7.10
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Question 437 of 545
437. Question
1 pointsQID236:Which of the following descriptions about the responsible officer of a licensed corporation are CORRECT?
I. Every executive director of a licensed corporation must be
approved by the SFC as a responsible officer.
II. Every licensed corporation must have, for each of the regulated activity for which it is licensed, at least two responsible officers approved by the SFC as such; and at least one of them shall be an executive director of the licensed corporation.
III. Any licensed corporation must carry out various regulated activities according to the license it was issued with; at least one person must be approved by the SFC as a responsible officer for the regulated activity the licensed corporation was issued a license to carry out, and at least one responsible officer must be established as the executive director of the licensed corporation.
IV. If a licensed corporation is licensed to carry out a number of various types of regulated activities, the responsible officer for each activity may not overlap.Correct
A responsible officer is a licensed representative who
(i) actively participates in or supervises a regulated activity,
(ii) is nominated by the licensed corporation as a responsible officer, and
(iii) is approved by the SFC as a responsible officer.
The definition of responsible officer as given here is not stated in the SFO (see Note 1 below) but has been provided by the SFC:
(b) every licensed corporation must have, for each regulated activity for which it is licensed, at least two responsible officers approved by the SFC as such; and at least one of them shall be an executive director of the licensed corporation.Incorrect
A responsible officer is a licensed representative who
(i) actively participates in or supervises a regulated activity,
(ii) is nominated by the licensed corporation as a responsible officer, and
(iii) is approved by the SFC as a responsible officer.
The definition of responsible officer as given here is not stated in the SFO (see Note 1 below) but has been provided by the SFC:
(b) every licensed corporation must have, for each regulated activity for which it is licensed, at least two responsible officers approved by the SFC as such; and at least one of them shall be an executive director of the licensed corporation.Hint
Reference Chapter:1.7.10
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Question 438 of 545
438. Question
1 pointsQID1003:Which of the following descriptions about RO is correct?
Correct
Licensed corporations should have at least 1 responsible officer at all times to perform the regulated function.
Incorrect
Licensed corporations should have at least 1 responsible officer at all times to perform the regulated function.
Hint
Reference Chapter:1.7.10
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Question 439 of 545
439. Question
1 pointsQID239:Under the Securities and Futures Ordinance (SFO), which of the following conditions apply to responsible officers of a licensed corporation?
I. Every responsible officer other than a designated compliance officer must be an executive director.
II. There must be at least two responsible officers for every regulated activity engaged in by a licensed corporation.
III. There must be at least one responsible officer present at all times to supervise the regulated activity of a licensed corporation.
IV. The designated compliance officer must be a responsible officer.Correct
The definition of responsible officer as given here is not stated in the SFO (see Note 1 below) but has been provided by the SFC:
(b) every licensed corporation must have, for each regulated activity for which it is licensed, at least two responsible officers approved by the SFC as such; and at least one of them shall be an executive director of the licensed corporation.Incorrect
The definition of responsible officer as given here is not stated in the SFO (see Note 1 below) but has been provided by the SFC:
(b) every licensed corporation must have, for each regulated activity for which it is licensed, at least two responsible officers approved by the SFC as such; and at least one of them shall be an executive director of the licensed corporation.Hint
Reference Chapter:1.7.10
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Question 440 of 545
440. Question
1 pointsQID2677:With regards to responsible officers of a licensed corporation, which of the following is correct?
Correct
Responsible Officers of a Lincened Corporation may or may not be directors. Its not required that only INED can become a responsible officer of a Licenced Corporation. Only Registered Institutions are required to employ Executive Officers. Each Licenced Corporation must have at least two Responsible Officers.
Incorrect
Responsible Officers of a Lincened Corporation may or may not be directors. Its not required that only INED can become a responsible officer of a Licenced Corporation. Only Registered Institutions are required to employ Executive Officers. Each Licenced Corporation must have at least two Responsible Officers.
Hint
Reference Chapter:1.7.10
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Question 441 of 545
441. Question
1 pointsQID1221:Which of the following restrictions about responsible officers are correct?
I. A licensed corporation should appoint not less than two responsible officers.
II. At least one of the responsible officers should be the executive director of the licensed corporation.
III. All executive directors should be responsible officers.
IV. For each regulated activity, at least one responsible officer available at all times to supervise the business of the regulated activity for which it is licensed, and who is based in Hong Kong (s. 118(1)(a)(ii), SFO).Correct
Each licensed corporation is required to:
(a) appoint not less than two responsible officers, at least one of whom must be an executive director (see Note 1 below) (s. 125, SFO);
(b) ensure that every individual executive director of the licensed corporation is approved as a responsible officer (s. 125, SFO); and
(c.) ensure that it has, for each RA, at least one responsible officer available at all times to supervise the business of the RA for which it is licensed, and who is based in Hong Kong (s. 118(1)(a)(ii), SFO) (see Note 2 below).Incorrect
Each licensed corporation is required to:
(a) appoint not less than two responsible officers, at least one of whom must be an executive director (see Note 1 below) (s. 125, SFO);
(b) ensure that every individual executive director of the licensed corporation is approved as a responsible officer (s. 125, SFO); and
(c.) ensure that it has, for each RA, at least one responsible officer available at all times to supervise the business of the RA for which it is licensed, and who is based in Hong Kong (s. 118(1)(a)(ii), SFO) (see Note 2 below).Hint
Reference Chapter:1.7.10
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Question 442 of 545
442. Question
1 pointsQID238:Which of the following descriptions about a registered institution’s
executive office are is/are CORRECT?
I. A registered institution shall appoint at least 2 executive
officers in respect of each type of regulated activity, and there must be at least 1 executive officer available to supervise the business of the regulated activity at all times.
II. A registered institution shall appoint at least 1 executive officer in respect of each type of regulated activity, and there must be at least 1 executive officer available to supervise the business of the regulated activity at all times.
III. All executive officers of a registered institution must be the directors of the registered institution and must be approved by the SFC as responsible officers.
IV. If a registered institution is licensed to carry out many types of regulated activities, the executive officer for each regulated activity must not overlap.Correct
There must be at least two executive officers appointed by a registered institution in respect of each type of regulated activity, and at all times there must be at least one executive officer available to supervise the business of the regulated activity.
Incorrect
There must be at least two executive officers appointed by a registered institution in respect of each type of regulated activity, and at all times there must be at least one executive officer available to supervise the business of the regulated activity.
Hint
Reference Chapter:1.7.13
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Question 443 of 545
443. Question
1 pointsQID1222:How many executive officers should a registered institution have to monitor its regulated activities?
Correct
At all times, there must be at least one executive officer available to supervise the RA concerned.
Incorrect
At all times, there must be at least one executive officer available to supervise the RA concerned.
Hint
Reference Chapter:1.7.13
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Question 444 of 545
444. Question
1 pointsQID241:Why do licensed corporations need to determine the identity of substantial shareholder?
Correct
The status of substantial shareholder has special relevance to the application of the licensing regime. A person may not become or continue to be a substantial shareholder of a licensed corporation without first being approved by the SFC as such (s. 131 and s. 6, Schedule 1, SFO).
Incorrect
The status of substantial shareholder has special relevance to the application of the licensing regime. A person may not become or continue to be a substantial shareholder of a licensed corporation without first being approved by the SFC as such (s. 131 and s. 6, Schedule 1, SFO).
Hint
Reference Chapter:1.7.14
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Question 445 of 545
445. Question
1 pointsQID240:A substantial shareholder of a licensed corporation needs to be approved by the
Correct
The status of substantial shareholder has special relevance to the application of the licensing regime. A person may not become or continue to be a substantial shareholder of a licensed corporation without first being approved by the SFC as such (s. 131 and s. 6, Schedule 1, SFO).
Incorrect
The status of substantial shareholder has special relevance to the application of the licensing regime. A person may not become or continue to be a substantial shareholder of a licensed corporation without first being approved by the SFC as such (s. 131 and s. 6, Schedule 1, SFO).
Hint
Reference Chapter:1.7.14
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Question 446 of 545
446. Question
1 pointsQID1004:Black Flower Oil has acquired 15% of shares of a licenced corporation, Millionaire Securities, in the past month. Until now, Black Flower Oil and Millionaire Securities have made no notification to the SFC about such acquisition. Is there anything wrong?
Correct
One must be approved by the SFC prior to becoming a substantial shareholder of a licenced corporation. Otherwise, it is against the SFO. Anyone with 10% of more of shares in a Licenced Corporation will be considered as a substantial shareholder.
Incorrect
One must be approved by the SFC prior to becoming a substantial shareholder of a licenced corporation. Otherwise, it is against the SFO. Anyone with 10% of more of shares in a Licenced Corporation will be considered as a substantial shareholder.
Hint
Reference Chapter:1.7.15
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Question 447 of 545
447. Question
1 pointsQID2783:Mr. Ko owns 45% of the voting rights of Kaohsiung Enterprises. Recently Mr. Ko intends to increase his holding of shares of Kaohsiung Enterprises by 10% while Kaohsiung Enterprise holds 15% shares of Kaohsiung Securities, a licensed corporation. Should Mr. Ko obtain SFC’s approval before increasing his Kaohsiung shares holdings?
Correct
Since Kaohsiung Enterprises controls more than 10% of Kaohsiung Securities, Kaohsiung Enterprises is the substantial shareholder of Kaohsiung Securities. Mr. Ko controls more than 35% shares of Kaohsiung Enterprises, so he indirectly becomes a substantial shareholder of Kaohsiung Securities.
SFC’s approval is only required if a non-substantial shareholder becomes a substantial shareholder. As Mr. Ko has been a substantial shareholder of Kaohsiung Securities, there is no need for the approval of the SFC.
Incorrect
Since Kaohsiung Enterprises controls more than 10% of Kaohsiung Securities, Kaohsiung Enterprises is the substantial shareholder of Kaohsiung Securities. Mr. Ko controls more than 35% shares of Kaohsiung Enterprises, so he indirectly becomes a substantial shareholder of Kaohsiung Securities.
SFC’s approval is only required if a non-substantial shareholder becomes a substantial shareholder. As Mr. Ko has been a substantial shareholder of Kaohsiung Securities, there is no need for the approval of the SFC.
Hint
Reference Chapter:1.7.15
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Question 448 of 545
448. Question
1 pointsQID243:Which of the following is/are substantial shareholders of, Millionaire Securities, a licensed corporation?
I. Mr. Ip, who has a 10% stake of Millionaire Securities.
II. Ms. Chan, who has 20% of the voting power of Millionaire
Securities.
III. Mr. Mok, who was granted the authority to manage the investments of his seriously-ill spouse, Ms. Eu. Ms. Eu has a
30% stake of Millionaire Securities.
IV. Ms. Lau, who inherited her family business, Black Flower Oil. She has a 35% stake of Black Flower Oil and the company holds a 10% stake of Millionaire Securities.Correct
A substantial shareholder of a corporation is formally defined in s. 6, Schedule 1, SFO. In simple terms for the purposes of this manual, it may be taken to refer to a person who alone or together with his associates:
(a) has an interest of more than 10% of the total number of issued shares of the corporation;
(b) directly or indirectly has more than 10% of the voting power of the corporation at a general meeting; or
(c) is able to exercise 35% or more of the voting power of another corporation at a general meeting which in turn has more than 10% of the voting power of the corporation at a general meeting.
All of the individuals mentioned in this question comply with one or more of the criteria set for someone to become a substantial shareholder.Incorrect
A substantial shareholder of a corporation is formally defined in s. 6, Schedule 1, SFO. In simple terms for the purposes of this manual, it may be taken to refer to a person who alone or together with his associates:
(a) has an interest of more than 10% of the total number of issued shares of the corporation;
(b) directly or indirectly has more than 10% of the voting power of the corporation at a general meeting; or
(c) is able to exercise 35% or more of the voting power of another corporation at a general meeting which in turn has more than 10% of the voting power of the corporation at a general meeting.
All of the individuals mentioned in this question comply with one or more of the criteria set for someone to become a substantial shareholder.Hint
Reference Chapter:1.7.15
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Question 449 of 545
449. Question
1 pointsQID2664:Miss Mok is a shareholder of a licensed corporation. Since the licesed corporation is buying back its shares, Miss Mok holdings in the company has increased to over 10% which in turn makes her a substantial shareholder. Miss Mok is only aware of this after two weeks, what can she do?
Correct
She should notify the SFC in writing within 3 days of becoming aware of such incident.
Incorrect
She should notify the SFC in writing within 3 days of becoming aware of such incident.
Hint
Reference Chapter:1.7.18
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Question 450 of 545
450. Question
1 pointsQID1268:Which of the following intermediaries are subjected to client securities rules?
I. Licensed Corporations
II. Registered Institutions
III. Overseas Licensed Corporation
IV. Overseas Registered InstitutionsCorrect
Only corporations may become intermediaries. A corporation that obtains a licence will be regarded as a “licensed corporation” unless it is an AFI, in which case it will be regarded as a “registered institution”. Together they are referred to as “intermediaries”.
Incorrect
Only corporations may become intermediaries. A corporation that obtains a licence will be regarded as a “licensed corporation” unless it is an AFI, in which case it will be regarded as a “registered institution”. Together they are referred to as “intermediaries”.
Hint
Reference Chapter:1.7.2
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Question 451 of 545
451. Question
1 pointsQID2682:If a solicitor is conducting a Type 4 acitivity, should he/she apply for a licence?
Correct
As long as its wholly incidental to his/her professional capacity, solicitors are not require to apply for a licence for conducting Type 4,5,6,9 activities.
Incorrect
As long as its wholly incidental to his/her professional capacity, solicitors are not require to apply for a licence for conducting Type 4,5,6,9 activities.
Hint
Reference Chapter:1.7.21
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Question 452 of 545
452. Question
1 pointsQID799:Trust companies can be exempted from licensing if they conduct which of the following regulated activities wholly incidental to their trustee duties?
I. Dealing in securities
II. Advising on securities
III. Advising on futures contracts
IV. Asset managementCorrect
There are certain persons some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
– trust companies conducting Type 4, Type 5, Type 6 and Type 9 regulated activities wholly incidental to the discharge of their trustee duties.Incorrect
There are certain persons some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
– trust companies conducting Type 4, Type 5, Type 6 and Type 9 regulated activities wholly incidental to the discharge of their trustee duties.Hint
Reference Chapter:1.7.21
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Question 453 of 545
453. Question
1 pointsQID2735:In addition to buying and selling securities for clients, Monopoly Securities also provides discretionary account management services and securities margin financing services for clients’ securities accounts. Monopoly Securities can meet regulatory requirements through which of the following combinations of licenses?
I. Type 1 RA Licence
II. Type 9 RA Licence
III. Type 1 RA Licence + Type 9 RA Licence
IV. Type 1 RA Licence + Type 8 RA Licence + Type 9 RA Licence
Correct
As securities discretionary management services and securities margin financing services are wholly incidental to securities trading services. Therefore, Monopoly Securities does not need to have a license for type 9 regulated activities (asset management) and type 8 regulated activities (securities margin financing). But it’s perfectly okay to have them as well.
However, a licensed corporation holding a Type 9 regulated activity license only is not permitted to conduct securities trading activities, so this is a wrong answer.
Incorrect
As securities discretionary management services and securities margin financing services are wholly incidental to securities trading services. Therefore, Monopoly Securities does not need to have a license for type 9 regulated activities (asset management) and type 8 regulated activities (securities margin financing). But it’s perfectly okay to have them as well.
However, a licensed corporation holding a Type 9 regulated activity license only is not permitted to conduct securities trading activities, so this is a wrong answer.
Hint
Reference Chapter:1.7.21
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Question 454 of 545
454. Question
1 pointsQID244:According to the exemption provisions of the SFO, Professional Accountants can conduct regulated activates under which of the following circumstances?
Correct
There are certain persons, some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(a) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions (see section 1.9 below).Incorrect
There are certain persons, some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(a) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions (see section 1.9 below).Hint
Reference Chapter:1.7.21
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Question 455 of 545
455. Question
1 pointsQID2362:Kaohsiung Securities holds type 1 license which can conduct regulated activities wholly incidental to type 1 activities including:
I. Type 4 – advising on securities
II. Type 5 – advising on futures contract
III. Type 6 – advising on institutional financing
IV. Type 9 – providing asset management servicesCorrect
Kaohsiung Securities holds type 1 license which can conduct regulated activities wholly incidental to type 1 activities including:
I. Type 4 – advising on securities
II. Type 6 – advising on institutional financing
III. Type 8 – providing securities margin financing
IV. Type 9 – providing asset management servicesIncorrect
Kaohsiung Securities holds type 1 license which can conduct regulated activities wholly incidental to type 1 activities including:
I. Type 4 – advising on securities
II. Type 6 – advising on institutional financing
III. Type 8 – providing securities margin financing
IV. Type 9 – providing asset management servicesHint
Reference Chapter:1.7.21
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Question 456 of 545
456. Question
1 pointsQID2472:Which of the following institution has to apply for an additional license or registration with respect to the Type 2 regulated activity?
Correct
Institutions which provide their fully owned subsidiaries with futures trading advice don’t need any license.
For institutions holding a license for Type 9 regulated activities to engage in futures trading as a result of discretionary investment for their clients, they don’t need any additional license or registration as well since futures trading activities is fully accompanied by discretionary activities.
For institutions holding a license for Type 1 regulated activities to trade an ETF which is listed on the SEHK and only trades futures on behalf of their clients, since the target traded is listed ETFs rather than futures, naturally, there is no need to obtain a license or registration with respect to Type 2 regulated activities.
For institutions holding a license for Type 1 regulated activities to engage in futures trading as a result of discretionary investment for their clients, they need an additional license or registration since futures trading activities is not fully accompanied by Type 1 regulated activities.Incorrect
Institutions which provide their fully owned subsidiaries with futures trading advice don’t need any license.
For institutions holding a license for Type 9 regulated activities to engage in futures trading as a result of discretionary investment for their clients, they don’t need any additional license or registration as well since futures trading activities is fully accompanied by discretionary activities.
For institutions holding a license for Type 1 regulated activities to trade an ETF which is listed on the SEHK and only trades futures on behalf of their clients, since the target traded is listed ETFs rather than futures, naturally, there is no need to obtain a license or registration with respect to Type 2 regulated activities.
For institutions holding a license for Type 1 regulated activities to engage in futures trading as a result of discretionary investment for their clients, they need an additional license or registration since futures trading activities is not fully accompanied by Type 1 regulated activities.Hint
Reference Chapter:1.7.21
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Question 457 of 545
457. Question
1 pointsQID2473:Kaohsiung Securities holds a license for Type 2 regulated activities. In which of the following condition should they obtain a license for Type 5 regulated activities when delivering advice?
Correct
Providing advice regarding futures trading with friends and charging a fee independently proves that it’s not solely associated with Type 2 regulated activities. Therefore, it is needed to obtain an additional license for Type 5 regulated activities.
Incorrect
Providing advice regarding futures trading with friends and charging a fee independently proves that it’s not solely associated with Type 2 regulated activities. Therefore, it is needed to obtain an additional license for Type 5 regulated activities.
Hint
Reference Chapter:1.7.21
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Question 458 of 545
458. Question
1 pointsQID1216:Kaohsiung Trust Company is not required to obtain a license to carry out regulated activities for which of the following?
Correct
Such persons will not need licensing in respect of those activities. They include: trust companies conducting Type 4, Type 5, Type 6 or Type 9 Ras wholly incidental to the discharge of their trustee duties. Real estate are not securities and futures and not regulated by the SFO>
Incorrect
Such persons will not need licensing in respect of those activities. They include: trust companies conducting Type 4, Type 5, Type 6 or Type 9 Ras wholly incidental to the discharge of their trustee duties. Real estate are not securities and futures and not regulated by the SFO>
Hint
Reference Chapter:1.7.21
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Question 459 of 545
459. Question
1 pointsQID329:Mr Wan wishes to set up a company. The company will help Mr Wan’s friend, Mr Ko who resides in Japan to deal in foreign securities. The company will charge a symbolic commission. Should the company apply for a licence with the SFC?
Correct
Dealing in securities for the purposes of the SFC licensing regime will include dealing in securities traded on the SEHK and other securities, where the activity is conducted in Hong Kong.
Incorrect
Dealing in securities for the purposes of the SFC licensing regime will include dealing in securities traded on the SEHK and other securities, where the activity is conducted in Hong Kong.
Hint
Reference Chapter:1.7.21
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Question 460 of 545
460. Question
1 pointsQID1575:Do trust companies that act as trustee for CIS need to apply for license?
Correct
When acting strictly in their core capacity as mentioned (e.g. a custodian taking custody of fund assets, or a lawyer advising on fund structure), Other intermediaries involved in the asset management industry include trustees, custodians and professionals such as lawyers, accountants and investment advisers are not engaging in any activity regulated by the SFO.
Incorrect
When acting strictly in their core capacity as mentioned (e.g. a custodian taking custody of fund assets, or a lawyer advising on fund structure), Other intermediaries involved in the asset management industry include trustees, custodians and professionals such as lawyers, accountants and investment advisers are not engaging in any activity regulated by the SFO.
Hint
Reference Chapter:1.7.21
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Question 461 of 545
461. Question
1 pointsQID913:Under which of the circumstances is additional licenses not required?
Correct
The key words here is “wholly incidental”, you won’t get any exemption if it is not wholly incidental.
Incorrect
The key words here is “wholly incidental”, you won’t get any exemption if it is not wholly incidental.
Hint
Reference Chapter:1.7.21
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Question 462 of 545
462. Question
1 pointsQID1223:In terms of Type 4 regulated activities, which of the following persons may NOT be exempted and must apply for a license or register to carry out regulated activities?
Correct
There are certain persons some of whose activities might otherwise fit the descriptions of Ras listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the
definitions of RAs given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(a) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 or Type 9 Ras that are wholly incidental to their professions;
(d) persons licensed or registered to conduct Type 1 RA who carry out Type 4, Type 6 or Type 9 Ras solely for the purposes of their Type 1 RA (the “wholly incidental” exemption).Incorrect
There are certain persons some of whose activities might otherwise fit the descriptions of Ras listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the
definitions of RAs given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(a) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 or Type 9 Ras that are wholly incidental to their professions;
(d) persons licensed or registered to conduct Type 1 RA who carry out Type 4, Type 6 or Type 9 Ras solely for the purposes of their Type 1 RA (the “wholly incidental” exemption).Hint
Reference Chapter:1.7.21
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Question 463 of 545
463. Question
1 pointsQID851:Which of the following activities are exempted from licensing for Type 2 licence?
Correct
For example, given that Lee is employed by ABC restaurant, and ABC restaurant hoped to enter into a future contract with a licensed corporation, as a hedge against the risk of rise in price of soybeans. Lee, on behalf of his employer ABC restaurant, signed the contract, in which both the beneficiary and the executor of the contract are ABC restaurant. In this situation, Lee is not a financial intermediary; hence, he needs not be licensed.
Incorrect
For example, given that Lee is employed by ABC restaurant, and ABC restaurant hoped to enter into a future contract with a licensed corporation, as a hedge against the risk of rise in price of soybeans. Lee, on behalf of his employer ABC restaurant, signed the contract, in which both the beneficiary and the executor of the contract are ABC restaurant. In this situation, Lee is not a financial intermediary; hence, he needs not be licensed.
Hint
Reference Chapter:1.7.21
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Question 464 of 545
464. Question
1 pointsQID353:Mr Wan is a registered representative of type 1 regulated activity of British Construction Bank, a registered institution. Mr Wan is constantly looking out for the portfolios of his retired customers and advises them on stock trading and other asset management activities, these activities are wholly incidental to his type 1 activity. In this case, should Mr Wan apply for a registration or license for the type 9 activities he conducts?
Correct
Part V SFO allows licensed persons conducting some regulated activities to conduct certain others, e.g. a Type 1 licence or registration covers Type 4, Type 6 and Type 9 regulated
activities as well if the conducting of those activities is wholly incidental to the conducting of the Type 1 regulated activity.Incorrect
Part V SFO allows licensed persons conducting some regulated activities to conduct certain others, e.g. a Type 1 licence or registration covers Type 4, Type 6 and Type 9 regulated
activities as well if the conducting of those activities is wholly incidental to the conducting of the Type 1 regulated activity.Hint
Reference Chapter:1.7.21
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Question 465 of 545
465. Question
1 pointsQID746:A type 1 license will also enable the licensee to conduct which of the following categories?
I. Type 4 activity wholly incidental to Type 1
II. Type 5 activity wholly incidental to Type 1
III. Type 6 activity wholly incidental to Type 1
IV. Type 9 activity wholly incidental to Type 1Correct
Regulated activities 4, 6 or 9 will be permitted if wholly incidental to Type 1.
Incorrect
Regulated activities 4, 6 or 9 will be permitted if wholly incidental to Type 1.
Hint
Reference Chapter:1.7.21
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Question 466 of 545
466. Question
1 pointsQID1608:Kaohsiung Securities trades Hong Kong stocks for clients. It carries a type 1 licence and is also an exchange participant. It recently wishes to providing financing to clients for their purchase of stocks in return for clients’ stocks as collaterals, does it need an extra licence?
Correct
There are certain persons some of whose activities might otherwise fit the descriptions of Ras listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of RAs given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(e.) persons licensed or registered to conduct Type 1 RA who may provide financial accommodation (Type 8 RA) to facilitate acquisitions or holdings of securities by those persons for clientsIncorrect
There are certain persons some of whose activities might otherwise fit the descriptions of Ras listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of RAs given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(e.) persons licensed or registered to conduct Type 1 RA who may provide financial accommodation (Type 8 RA) to facilitate acquisitions or holdings of securities by those persons for clientsHint
Reference Chapter:1.7.21
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Question 467 of 545
467. Question
1 pointsQID230:British Construction Bank is an authorised financial institution. Amid the downfall of the Hong Kong banking sector, it would like start an asset management business and sell CIS fund products it manages to clients to generate revenue. Which type license of regulated activity should British Construction Bank apply for to conduct such activities?
Correct
Part V, SFO provides for the implementation of the licensing regime, including:
(b) the ten distinct types of regulated activity (see Schedule 5, SFO). In this case the bank should apply to a Type 9 license for asset management.Incorrect
Part V, SFO provides for the implementation of the licensing regime, including:
(b) the ten distinct types of regulated activity (see Schedule 5, SFO). In this case the bank should apply to a Type 9 license for asset management.Hint
Reference Chapter:1.7.21
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Question 468 of 545
468. Question
1 pointsQID246:Company A is a wholly own subsidiary of British Construction Bank and Company B is a wholly own subsidiary of Company A. Under which of the following condition company B has to register for a separate licence for regulated activities?
Correct
There are certain persons some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(d) corporations carrying out Type 4, Type 5, Type 6 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company.
In this case, Type 1 regulated activities are not excluded, so a license must be obtained for such dealings.Incorrect
There are certain persons some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(d) corporations carrying out Type 4, Type 5, Type 6 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company.
In this case, Type 1 regulated activities are not excluded, so a license must be obtained for such dealings.Hint
Reference Chapter:1.7.21
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Question 469 of 545
469. Question
1 pointsQID2681:Which of the following description is correct regarding temporary licence?
Correct
Temporary Licence can last at most 3 months, its applicable to companies and individuals operating outside of Hong Kong. The validity of a Temporary Licence cannot surpass 6 months within 24 months. It will not be granted to companies operating in Hong Kong.
Incorrect
Temporary Licence can last at most 3 months, its applicable to companies and individuals operating outside of Hong Kong. The validity of a Temporary Licence cannot surpass 6 months within 24 months. It will not be granted to companies operating in Hong Kong.
Hint
Reference Chapter:1.7.22
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Question 470 of 545
470. Question
1 pointsQID2582:Which of the following company can apply for a temporary licence?
Correct
The SFC has the right to grant a temporary license for a period not exceeding three months to a company who is based outside Hong Kong and the total period allowed should not exceed 6 months within 24 months.
Incorrect
The SFC has the right to grant a temporary license for a period not exceeding three months to a company who is based outside Hong Kong and the total period allowed should not exceed 6 months within 24 months.
Hint
Reference Chapter:1.7.22
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Question 471 of 545
471. Question
1 pointsQID1664:British Construction Securities is a foreign company, it has to conduct a series of securities transactions for clients in Hong Kong. These transactions will happen in a course of 2 months, these activities are all Type 1 activities. Should British Construction Securities apply for a license or registration in Hong Kong.
Correct
It should apply for a temporary licence since the activities last less than 3 months.
Incorrect
It should apply for a temporary licence since the activities last less than 3 months.
Hint
Reference Chapter:1.7.22
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Question 472 of 545
472. Question
1 pointsQID1224:A company can apply for a temporary licence under the SFO if they can satisfy which of the following conditions?
I. A company that principally carries on its business overseas.
II. A company that conducts certain specified SFC regulated activities (including Type 1 and Type 4 regulated activities) in Hong Kong.
III. A company that conducts certain specified SFC regulated activities (including Type 2 and Type 5 regulated activities) in Hong Kong.
IV. The total period for which temporary licences can be held by the same person may not exceed six months over a 24-month period.Correct
The SFC may grant a temporary licence for a period not exceeding three months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to conduct one or more than one RA (other than Type 3, Type 7, Type 8 and Type 9 Ras) in Hong Kong. Representatives of licensed and temporarily licensed corporations may be given temporary licences for a period not exceeding three months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed six months over a 24-month period.
Incorrect
The SFC may grant a temporary licence for a period not exceeding three months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to conduct one or more than one RA (other than Type 3, Type 7, Type 8 and Type 9 Ras) in Hong Kong. Representatives of licensed and temporarily licensed corporations may be given temporary licences for a period not exceeding three months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed six months over a 24-month period.
Hint
Reference Chapter:1.7.22
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Question 473 of 545
473. Question
1 pointsQID173:Kaohsiung Finance is the subsidiary of an overseas bank and operates mainly overseas. Recently, the company was appointed by Vita Milk, a listed company in Hong Kong, to provide advice on corporate finance activities such as takeovers and mergers. What is the most appropriate manner for Kaohsiung Finance to deal with the matter?
Correct
The SFC may grant a temporary licence for a period not exceeding three months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to
conduct one or more than one regulated activity (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong. Representatives of licensed and temporary licensed corporations may be given temporary licences for a period not exceeding three months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed six months over a 24-month period.Incorrect
The SFC may grant a temporary licence for a period not exceeding three months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to
conduct one or more than one regulated activity (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong. Representatives of licensed and temporary licensed corporations may be given temporary licences for a period not exceeding three months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed six months over a 24-month period.Hint
Reference Chapter:1.7.22
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Question 474 of 545
474. Question
1 pointsQID247:British Construction Securities is a securities broker of the UK. It wishes to conduct a series of bond dealing in Hong Kong on behalf of a client for a period of less than 3 months. Should British Construction Securities register or apply for a licence?
Correct
The SFC may grant a temporary licence for a period not exceeding three months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to
conduct one or more than one regulated activity (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong.Incorrect
The SFC may grant a temporary licence for a period not exceeding three months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to
conduct one or more than one regulated activity (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong.Hint
Reference Chapter:1.7.22
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Question 475 of 545
475. Question
1 pointsQID999:Mr Liu has advertised himself in multiple newspapers in Hong Kong. He claimed to be a futures contracts expert and can assist clients in dealing with foreign futures contracts. As a matter of fact, Mr Liu was not licenced by or registered with the SFC. Had he done anything wrong?
Correct
To advertise oneself as operating a regulated activity is the same as operating a regulated activity. Conducting a regulated activity without licence or registration is against the SFO.
Incorrect
To advertise oneself as operating a regulated activity is the same as operating a regulated activity. Conducting a regulated activity without licence or registration is against the SFO.
Hint
Reference Chapter:1.7.24
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Question 476 of 545
476. Question
1 pointsQID299:British Construction Bank is an authorised financial institution. Amid the downfall of the Hong Kong banking sector, it has recently took part as manager in a few collective investment schemes. British Construction Bank did not register with the SFC, what are the probable consequences for such arrangements?
I. Daily Fines
II. Fines
III. Disbandment of the funds being managed
IV. ImprisonmentCorrect
In terms of dealing with CISs, under s. 107, SFO, it is a criminal offence punishable by fine and/or imprisonment for a person to make any fraudulent or reckless misrepresentation for the purpose of inducing another person to:
(a) enter into or offer to enter into (i) an agreement to acquire, dispose of, subscribe for or underwrite securities, or (ii) a regulated investment agreement or an agreement to
acquire, dispose of, subscribe for or underwrite any other structured product; or
(b) acquire an interest in or participate in, or offer to acquire an interest in or participate in, a CIS.
See s. 107, SFO for definitions of fraudulent and reckless misrepresentation and also section 3.24 below.Incorrect
In terms of dealing with CISs, under s. 107, SFO, it is a criminal offence punishable by fine and/or imprisonment for a person to make any fraudulent or reckless misrepresentation for the purpose of inducing another person to:
(a) enter into or offer to enter into (i) an agreement to acquire, dispose of, subscribe for or underwrite securities, or (ii) a regulated investment agreement or an agreement to
acquire, dispose of, subscribe for or underwrite any other structured product; or
(b) acquire an interest in or participate in, or offer to acquire an interest in or participate in, a CIS.
See s. 107, SFO for definitions of fraudulent and reckless misrepresentation and also section 3.24 below.Hint
Reference Chapter:1.7.3
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Question 477 of 545
477. Question
1 pointsQID231:Conducting asset management activities without holding a valid SFC licence is a?
Correct
Market misconduct may result in proceedings before the MMT or a criminal action before the courts, and/or a civil action for compensation undertaken by a person who has suffered pecuniary loss as a result of the market misconduct.
Incorrect
Market misconduct may result in proceedings before the MMT or a criminal action before the courts, and/or a civil action for compensation undertaken by a person who has suffered pecuniary loss as a result of the market misconduct.
Hint
Reference Chapter:1.7.3
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Question 478 of 545
478. Question
1 pointsQID1214:Asset management of CISs is which type of regulated activity as listed in Schedule 5, SFO?
Correct
Type 9: asset management
Incorrect
Type 9: asset management
Hint
Reference Chapter:1.7.4
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Question 479 of 545
479. Question
1 pointsQID331:Which of the following descriptions of futures are CORRECT, as defined in the Securities and Futures Ordinance (SFO)?
I. Future contracts are agreements made between the buyer and seller.
II. Future contracts are made based on the future prices of securities.
III. One party agrees to deliver to the other party at an agreed future time an agreed property, or an agreed quantity of property, at an agreed price.
IV. The traded products of futures contracts are not securities.Correct
According to Schedule 1, SFO, a futures contract means:
(a) a contract or an option on a contract made under the rules or conventions of a futures market.
(b) That one party agrees to deliver to the other party at an agreed future time an agreed property, or an agreed quantity of a property, at an agreed price.Incorrect
According to Schedule 1, SFO, a futures contract means:
(a) a contract or an option on a contract made under the rules or conventions of a futures market.
(b) That one party agrees to deliver to the other party at an agreed future time an agreed property, or an agreed quantity of a property, at an agreed price.Hint
Reference Chapter:1.7.4
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Question 480 of 545
480. Question
1 pointsQID1213:Which of the following are regulated activities under the SFO?
I. Type 7: Providing ATS
II. Type 8: SMF
III. Type 9: futures portfolio management
IV. Type 10: providing credit rating servicesCorrect
Type 7: providing ATS;
Type 8: SMF;
Type 9: asset management; and
Type 10: providing credit rating services.Incorrect
Type 7: providing ATS;
Type 8: SMF;
Type 9: asset management; and
Type 10: providing credit rating services.Hint
Reference Chapter:1.7.4
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Question 481 of 545
481. Question
1 pointsQID332:According to the Securities and Futures Ordinance, which of the following definitions of a futures contract?
I. One party agrees to deliver to the other party at an agreed
future time an agreed property, or an agreed quantity of a property, at an agreed price.
II. The buyer agrees to deliver to the seller at an agreed future time an agreed quantity of a property, at an agreed price. The
buyer reserves the right not to carry out the contract and the seller must act in compliance to the wishes of the buyer.
III. The parties will make an adjustment between them at an agreed future time according to whether at that time an agreed property is worth more or less, or an index or other factors stands at a higher or lower level, than a value or level agreed at the time of making of the contract.
IV. The parties will make an adjustment between them at an agreed future time according to the agreed value of the agreed property at the time of making the contract; there should be no increase or decrease.Correct
According to Schedule 1, SFO, a futures contract means:
(a) That one party agrees to deliver to the other party at an agreed future time an agreed property, or an agreed quantity of a property, at an agreed price and;
(b) That the parties will make an adjustment between them at an agreed future time according to whether at that time an agreed property is worth more or less, or an index or other factor stands at a higher or lower level, than a value or level agreed at the time of making of the contract.Incorrect
According to Schedule 1, SFO, a futures contract means:
(a) That one party agrees to deliver to the other party at an agreed future time an agreed property, or an agreed quantity of a property, at an agreed price and;
(b) That the parties will make an adjustment between them at an agreed future time according to whether at that time an agreed property is worth more or less, or an index or other factor stands at a higher or lower level, than a value or level agreed at the time of making of the contract.Hint
Reference Chapter:1.7.4
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Question 482 of 545
482. Question
1 pointsQID333:Which of the following activities is not a case of Type 2 or Type 5 Activities?
Correct
Any activities that are not conducted on behalf of others cannot be a regulated activity.
Incorrect
Any activities that are not conducted on behalf of others cannot be a regulated activity.
Hint
Reference Chapter:1.7.4
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Question 483 of 545
483. Question
1 pointsQID1215:Which of the following is NOT a regulated activity under the SFO?
Correct
Type 3 is leveraged foreign exchange trading.
Incorrect
Type 3 is leveraged foreign exchange trading.
Hint
Reference Chapter:1.7.4
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Question 484 of 545
484. Question
1 pointsQID181:Which of the followings is not a regulated activities as defined by the SFO?
Correct
There are ten distinct types of regulated activity (see Schedule 5, SFO):
Type 9: asset management. The correct number for this activity is 9.Incorrect
There are ten distinct types of regulated activity (see Schedule 5, SFO):
Type 9: asset management. The correct number for this activity is 9.Hint
Reference Chapter:1.7.4
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Question 485 of 545
485. Question
1 pointsQID183:Registration or licensing is required for which of the following activities in accordance with the Securities and Futures Ordinance (SFO)?
Correct
Part V specifies that any person who carries on or holds himself out as carrying on the business of a “regulated activity” commits an offence unless that person is appropriately licensed by or registered with the SFC, or that person/activity fits within an applicable exemption.
There are ten distinct types of regulated activity (see Schedule 5, SFO):
Type 7: providing automated trading services.Incorrect
Part V specifies that any person who carries on or holds himself out as carrying on the business of a “regulated activity” commits an offence unless that person is appropriately licensed by or registered with the SFC, or that person/activity fits within an applicable exemption.
There are ten distinct types of regulated activity (see Schedule 5, SFO):
Type 7: providing automated trading services.Hint
Reference Chapter:1.7.4
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Question 486 of 545
486. Question
1 pointsQID180:“Asset Management” is a type of which of the following regulated activity?
Correct
There are ten distinct types of regulated activity (see Schedule 5, SFO):
Type 9: asset management.Incorrect
There are ten distinct types of regulated activity (see Schedule 5, SFO):
Type 9: asset management.Hint
Reference Chapter:1.7.4
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Question 487 of 545
487. Question
1 pointsQID1218:Which of the following personnel or organizations should be licensed or registered when they are conducting regulated activities classified by the SFO?
I. Frontline staff of the intermediary
II. Responsible officers/ Executive officers of the intermediary
III. The major shareholders of the intermediary
IV. The intermediaryCorrect
All references to registration will generally apply to this category as the term “licensing” will be used for all businesses and persons directly supervised by the SFC.
Incorrect
All references to registration will generally apply to this category as the term “licensing” will be used for all businesses and persons directly supervised by the SFC.
Hint
Reference Chapter:1.7.6
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Question 488 of 545
488. Question
1 pointsQID189:According to the SFO, an intermediary could mean
I. A Registered Institution
II. A Licensed Corporation
III. A Trust Company
IV. An Authorised Financial InstitutionCorrect
Only corporations may become intermediaries. A corporation that obtains a licence will be regarded as a “licensed corporation” unless it is an AFI, in which case it will be regarded as a “registered institution”. Together they are referred to as “intermediaries”. The distinction between the licensing of corporations and the registration of AFIs is reviewed in further detail in section 1 of Topic 4.
Incorrect
Only corporations may become intermediaries. A corporation that obtains a licence will be regarded as a “licensed corporation” unless it is an AFI, in which case it will be regarded as a “registered institution”. Together they are referred to as “intermediaries”. The distinction between the licensing of corporations and the registration of AFIs is reviewed in further detail in section 1 of Topic 4.
Hint
Reference Chapter:1.7.6
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Question 489 of 545
489. Question
1 pointsQID226:Which of the following entities will require registration or licencing when conducting regulated activities as defined by the SFO?
I. Registered Institution
II. Licensed Corporation
III. Authorised Financial Institutions
IV. Trust CompaniesCorrect
Part V, SFO provides for the implementation of the licensing regime, including:
(a.) the setting up of a single licensing system to cover the ten specified types of regulated activity (see section 6.2 of Topic 3, and section 8 below) and the licensing of corporations (“licensed corporations”) to conduct one or more regulated activities subject to any conditions the SFC may wish to impose.
(c.) the registration of authorised financial institutions (“AFIs”) to engage in one or more of the ten types of regulated activity (“registered institutions”) (see section 1.7 below);
however, an AFI carrying out Type 3 or Type 8 regulated activity is exempted from the registration requirement.Incorrect
Part V, SFO provides for the implementation of the licensing regime, including:
(a.) the setting up of a single licensing system to cover the ten specified types of regulated activity (see section 6.2 of Topic 3, and section 8 below) and the licensing of corporations (“licensed corporations”) to conduct one or more regulated activities subject to any conditions the SFC may wish to impose.
(c.) the registration of authorised financial institutions (“AFIs”) to engage in one or more of the ten types of regulated activity (“registered institutions”) (see section 1.7 below);
however, an AFI carrying out Type 3 or Type 8 regulated activity is exempted from the registration requirement.Hint
Reference Chapter:1.7.6
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Question 490 of 545
490. Question
1 pointsQID176:Which of the following institutions is required to become a “registered institution”?
Correct
The provisions of the SFO have different applications to the following different classes of person:
(b) “registered institution”, which refers to authorised financial institutions (“AFIs”) directly supervised by the Hong Kong Monetary Authority (“HKMA”) and registered with the SFC.Incorrect
The provisions of the SFO have different applications to the following different classes of person:
(b) “registered institution”, which refers to authorised financial institutions (“AFIs”) directly supervised by the Hong Kong Monetary Authority (“HKMA”) and registered with the SFC.Hint
Reference Chapter:1.7.6
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Question 491 of 545
491. Question
1 pointsQID25:British Construction Bank is an authorised financial institution (AFI). Due to the rapid development of the securities markets, the company plans to provide securities trading services to its customer. How should the company proceed?
Correct
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as
registered institutions if they wish to carry out an SFC-regulated activity. As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.Incorrect
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as
registered institutions if they wish to carry out an SFC-regulated activity. As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.Hint
Reference Chapter:1.7.6
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Question 492 of 545
492. Question
1 pointsQID27:Which of the following descriptions about intermediaries are correct?
I. Licensed Corporations are licensed by and supervised by the SFC.
II. Authorised Financial Institutions must register with the SFC in order to conduct regulated activities.
III. Registered Institutions need to comply with some of the codes and guidelines issued by the SFC.
IV. Registered Institutions need to be registered with the company registry.Correct
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity. As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out
on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.Incorrect
Under the SFO and the Banking Ordinance, authorised financial institutions (“AFIs”), which are regulated by the HKMA and include banks, have to be registered with the SFC as registered institutions if they wish to carry out an SFC-regulated activity. As the frontline regulator of AFIs is the HKMA, the latter takes the leading role in vetting applications for such registration and in supervising their SFC-regulated activities, including carrying out
on-site inspections. The HKMA applies all SFC criteria, such as the “fit and proper” criteria, in supervising AFIs registered with the SFC.Hint
Reference Chapter:1.7.6
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Question 493 of 545
493. Question
1 pointsQID1217:Are registered institutions required to comply with the SFC’s regulatory criteria, including Fitness and Properness and Business Conduct?
Correct
AFIs (including banks) are jointly regulated by the
HKMA and the SFC, with the HKMA being the front-line regulator that will apply all SFC regulatory criteria, including fitness and properness and business conduct, other than capital
adequacy, the handling of client money and the audit requirements in supervising them.Incorrect
AFIs (including banks) are jointly regulated by the
HKMA and the SFC, with the HKMA being the front-line regulator that will apply all SFC regulatory criteria, including fitness and properness and business conduct, other than capital
adequacy, the handling of client money and the audit requirements in supervising them.Hint
Reference Chapter:1.7.6 and 1.9.21
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Question 494 of 545
494. Question
1 pointsQID224:Yellow River Investment Limited is a company which conducts type 9 Regulated activity as defined by the SFO, which of the following entities should be licensed by the SFC?
I. Yellow River Investment Limited
II. The Executive Directors of Yellow River Trading
III. Staff that conducts type 9 activity
IV. All Staff of Yellow River Investment LimitedCorrect
Assets management is type 9 regulated activity; therefore, carrying out this kind of activity requires a licence. An Executive Director of a company must be a responsible officer, and responsible officer needs to be licensed; therefore, the Executive Directors of Yellow River Trading must carry a licence.
Incorrect
Assets management is type 9 regulated activity; therefore, carrying out this kind of activity requires a licence. An Executive Director of a company must be a responsible officer, and responsible officer needs to be licensed; therefore, the Executive Directors of Yellow River Trading must carry a licence.
Hint
Reference Chapter:1.7.7
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Question 495 of 545
495. Question
1 pointsQID248:Mr Ko has been an INED of a licensed corporation -Kaohsiung Securities for a long time. Recently, Mr Ko has ceased to become an INED of Kaohsiung. When should he or Kaohsiung report the event to the SFC?
Correct
If a licensed representative ceases to be employed with his accredited licensed corporation, both the representative and the corporation must notify the SFC within seven business days
after the cessation.Incorrect
If a licensed representative ceases to be employed with his accredited licensed corporation, both the representative and the corporation must notify the SFC within seven business days
after the cessation.Hint
Reference Chapter:1.7.8
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Question 496 of 545
496. Question
1 pointsQID2769:If the licensed representative’s employment is terminated, within how many business days should the licensed corporation notify the SFC?
Correct
If the licensed representative ceases to be employed, the licensed corporation shall notify the SFC within 7 business days.
Incorrect
If the licensed representative ceases to be employed, the licensed corporation shall notify the SFC within 7 business days.
Hint
Reference Chapter:1.7.8
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Question 497 of 545
497. Question
1 pointsQID234:If a licensed representative ceased to be employed with his accredited licensed corporation, which of the following statements CORRECTLY describes the transfer of representative’s accreditation?
I. Both the representative and the corporation must notify the
SFC within 7 days after the cessation.
II. The licensed representative is allowed to transfer his accreditation to another licensed corporation within 180 days upon cessation.
III. If the licensed representative fails to transfer his accreditation to another licensed corporation after 180 days, his license is deemed to have been revoked upon cessation.
IV. The licensed representative may appeal against the termination
of his appointment and have his license restored.Correct
If a licensed representative ceases to be employed with his accredited licensed corporation, both the representative and the corporation must notify the SFC within seven business days
after the cessation. The licensed representative is allowed 180 days for transfer of his accreditation to another licensed corporation, failing which his licence is deemed to have
been revoked upon such cessation.Incorrect
If a licensed representative ceases to be employed with his accredited licensed corporation, both the representative and the corporation must notify the SFC within seven business days
after the cessation. The licensed representative is allowed 180 days for transfer of his accreditation to another licensed corporation, failing which his licence is deemed to have
been revoked upon such cessation.Hint
Reference Chapter:1.7.8
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Question 498 of 545
498. Question
1 pointsQID2770:If a licensed representative ceases to be employed, within how many days can the licensed representative be transferred to another licensed corporation?
Correct
If the licensed representative’s employment is terminated, the licensed representative may transfer to another licensed corporation within 180 days.
Incorrect
If the licensed representative’s employment is terminated, the licensed representative may transfer to another licensed corporation within 180 days.
Hint
Reference Chapter:1.7.8
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Question 499 of 545
499. Question
1 pointsQID229:If a registered representative wishes to become a responsible officer, it should
I. Obtain nomination from the SFC to become a RO
II. Obtain nomination from his principal to become an RO
III. Obtain approval of the SFC to become an RO
IV. Obtain approval of his principal to become an ROCorrect
A responsible officer is a licensed representative who
(ii) is nominated by the licensed corporation as a responsible officer, and
(iii) is approved by the SFC as a responsible officer.Incorrect
A responsible officer is a licensed representative who
(ii) is nominated by the licensed corporation as a responsible officer, and
(iii) is approved by the SFC as a responsible officer.Hint
Reference Chapter:1.7.9
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Question 500 of 545
500. Question
1 pointsQID1219:A responsible officer is a licensed representative; his duties include:
I. being nominated by the licensed corporation as a responsible officer.
II. being approved by the SFC as a responsible officer.
III. being approved by the HKMA as a responsible officer.
IV. actively participating in or supervising a regulated activity.Correct
A responsible officer is a licensed representative who:
(a) actively participates in or supervises a RA;
(b) is nominated by the licensed corporation as a responsible officer; and
(c.) is approved by the SFC as a responsible officer.Incorrect
A responsible officer is a licensed representative who:
(a) actively participates in or supervises a RA;
(b) is nominated by the licensed corporation as a responsible officer; and
(c.) is approved by the SFC as a responsible officer.Hint
Reference Chapter:1.7.9
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Question 501 of 545
501. Question
1 pointsQID1220:A responsible officer of regulated activities carried out by a licensed corporation needs to be:
I. nominated by the licensed corporation.
II. approved by the SFC.
III. approved by the HKMA.
IV. approved by the HKEX.Correct
A responsible officer is a licensed representative who:
(a) actively participates in or supervises a RA;
(b) is nominated by the licensed corporation as a responsible officer; and
(c.) is approved by the SFC as a responsible officer.Incorrect
A responsible officer is a licensed representative who:
(a) actively participates in or supervises a RA;
(b) is nominated by the licensed corporation as a responsible officer; and
(c.) is approved by the SFC as a responsible officer.Hint
Reference Chapter:1.7.9
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Question 502 of 545
502. Question
1 pointsQID3:The SFO is applicable to the primary business of which of the following individuals?
I. Fund Managers
II. Money Lenders
III. The Hong Kong Mortgage Corporation
IV. Professional Options TraderCorrect
The SFO is no applicable to money lenders. Despite the fact that money lending is an integral part of the financial markets, money lending itself is not related to securities and futures. Therefore, the SFO is not applicable to money lenders. The primary business of The Hong Kong Mortgage Corporation is administering the mortgage insurance program which by itself is not related to securities and futures. Therefore, the SFO is not applicable to The Hong Kong Mortgage Corporation.
Incorrect
The SFO is no applicable to money lenders. Despite the fact that money lending is an integral part of the financial markets, money lending itself is not related to securities and futures. Therefore, the SFO is not applicable to money lenders. The primary business of The Hong Kong Mortgage Corporation is administering the mortgage insurance program which by itself is not related to securities and futures. Therefore, the SFO is not applicable to The Hong Kong Mortgage Corporation.
Hint
Reference Chapter:1.8.1
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Question 503 of 545
503. Question
1 pointsQID658:Which of the following entities fulfil the SFC’s basic eligibility criteria
for trustees and custodians of authorised CISs?
I. Licensed Corporation licensed by the SFC
II. Institutional Investors
III. Qualified bank
IV. Trust CompanyCorrect
A trustee/custodian must be:
(a) a bank licensed under s. 16, Banking Ordinance;
(b) a trust company which is the subsidiary of such a bank;
(c) a trust company registered under Part VIII, Trustee Ordinance; or
(d) a banking institution or trust company incorporated outside Hong Kong which is acceptable to the SFC.Incorrect
A trustee/custodian must be:
(a) a bank licensed under s. 16, Banking Ordinance;
(b) a trust company which is the subsidiary of such a bank;
(c) a trust company registered under Part VIII, Trustee Ordinance; or
(d) a banking institution or trust company incorporated outside Hong Kong which is acceptable to the SFC.Hint
Reference Chapter:1.8.10
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Question 504 of 545
504. Question
1 pointsQID656:What is the relationship between the SFC and trustees/custodians of authorised funds?
Correct
Trustees/custodians are unusual in the SFC’s regulatory regime as their activities are not “regulated activities” under the SFO, and they are not therefore required to be licensed by or registered with the SFC. However, the SFC does exercise a degree of regulatory oversight through requirements placed on the users of trustees/custodians, such as authorised CISs: for a CIS to obtain authorisation, it must have a trustee/custodian which is acceptable to the SFC.
Incorrect
Trustees/custodians are unusual in the SFC’s regulatory regime as their activities are not “regulated activities” under the SFO, and they are not therefore required to be licensed by or registered with the SFC. However, the SFC does exercise a degree of regulatory oversight through requirements placed on the users of trustees/custodians, such as authorised CISs: for a CIS to obtain authorisation, it must have a trustee/custodian which is acceptable to the SFC.
Hint
Reference Chapter:1.8.10
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Question 505 of 545
505. Question
1 pointsQID1225:Which of the following persons or institutions are very likely to be licensed or registered to carry out Type 1 regulated activity?
I. Exchange Participants.
II. Registered Institutions.
III. A brokerage firm in Hong Kong.
IV. A securities introducing agent.Correct
To conclude this initial definition section, the categories of persons conducting Type 1 RA
include:
(a) a participant of the SEHK, whether it engages in activities on the SEHK or outside it;
(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 RA; and
(f) a securities introducing agent.Incorrect
To conclude this initial definition section, the categories of persons conducting Type 1 RA
include:
(a) a participant of the SEHK, whether it engages in activities on the SEHK or outside it;
(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 RA; and
(f) a securities introducing agent.Hint
Reference Chapter:1.8.12
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Question 506 of 545
506. Question
1 pointsQID806:In terms of Type 1 regulated activity (namely securities trading), persons licensed or registered may include which of the following individuals and institutions?
I. Stock exchange participants, whether it engages in activities on the SEHK or outside it.
II. An AFI registered with the SFC for this activity.
III. A portfolio manager who is licensed (as a securities dealer) for Type 1 regulated activity.
IV. A securities introducing agent.Correct
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.Incorrect
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.Hint
Reference Chapter:1.8.12
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Question 507 of 545
507. Question
1 pointsQID810:M.D. Yu is a seasoned and successful investor. She always brags about her investment track record to her friends. Her friends have provided M.D. Yu with “Tea Money” (Cash for sundry expenses) and have asked M.D. Yu to refer her stock broker to them, allowing them to replicate M.D. Yu’s success. If M.D. Yu agrees to this practice, should M.D. Yu apply for a licence for these activities?
Correct
M.D. Yu should apply for a Type 1 License to conduct activities as a securities introducing agent.
Incorrect
M.D. Yu should apply for a Type 1 License to conduct activities as a securities introducing agent.
Hint
Reference Chapter:1.8.16
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Question 508 of 545
508. Question
1 pointsQID2377:Which of the following activity is required to register for Type 1 license?
Correct
Providing advice for clients on real estate investment and buying insurance are not regulated activities. Introducing clients to open an account at securities company, and earning money belongs to introducing agents, which is required to register for Type 1 licence. Providing advice for clients on suggestions to trade futures, and earning money belongs to Type 5 activities.
Incorrect
Providing advice for clients on real estate investment and buying insurance are not regulated activities. Introducing clients to open an account at securities company, and earning money belongs to introducing agents, which is required to register for Type 1 licence. Providing advice for clients on suggestions to trade futures, and earning money belongs to Type 5 activities.
Hint
Reference Chapter:1.8.16
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Question 509 of 545
509. Question
1 pointsQID232:If an Authorised Financial Institution wishes to conduct regulated activities as defined by the SFO, which of the following entities should oversee its operation?
Correct
AFIs (including banks) that are authorised and regulated by the HKMA and conduct the SFC regulated activities must be registered with the SFC as “Registered Institutions”, such status having been set up as a special category because of the special features of AFIs. They are jointly regulated by the HKMA and the SFC, with the HKMA being the front-line regulator that will apply all SFC regulatory criteria, including fitness and properness and business conduct, other than capital adequacy, the handling of client money and the audit requirements in supervising them.
Incorrect
AFIs (including banks) that are authorised and regulated by the HKMA and conduct the SFC regulated activities must be registered with the SFC as “Registered Institutions”, such status having been set up as a special category because of the special features of AFIs. They are jointly regulated by the HKMA and the SFC, with the HKMA being the front-line regulator that will apply all SFC regulatory criteria, including fitness and properness and business conduct, other than capital adequacy, the handling of client money and the audit requirements in supervising them.
Hint
Reference Chapter:1.8.2
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Question 510 of 545
510. Question
1 pointsQID228:If an AFI wishes to conduct regulated activities as defined by the SFO, which of the following entities should it approach for it to be licensed or registered?
Correct
AFIs (including banks) that are authorised and regulated by the HKMA and conduct the SFC regulated activities must be registered with the SFC as “Registered Institutions”, such status having been set up as a special category because of the special features of AFIs.
Incorrect
AFIs (including banks) that are authorised and regulated by the HKMA and conduct the SFC regulated activities must be registered with the SFC as “Registered Institutions”, such status having been set up as a special category because of the special features of AFIs.
Hint
Reference Chapter:1.8.2
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Question 511 of 545
511. Question
1 pointsQID222:Which of the following agencies or individuals may prescribe, by notice in the Gazette, new financial products as being (or not being) securities or futures contracts?
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:1.8.3
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Question 512 of 545
512. Question
1 pointsQID347:Which of the following types of interests in Collective Investment
Schemes (CISs) are not considered as securities?
I. A registered Mandatory Provident Fund scheme under the MPFSO or its constituent fund.
II. An occupational retirement scheme under the ORSO
III. A contract of insurance in relation to any class of insurance business under the Insurance Companies Ordinance.
IV. Real estate investments management as stipulated in the Securities and Futures Ordinance.Correct
The definition of asset management speaking of managing
“securities”, is specifically includes interests in any CIS; but does not include any interest in a CIS that is:
(a) a registered Mandatory Provident Fund scheme under the MPFSO or its constituent fund;
(b) an occupational retirement scheme under the ORSO; or
© a contract of insurance in relation to any class of insurance business under the Insurance Ordinance.Incorrect
The definition of asset management speaking of managing
“securities”, is specifically includes interests in any CIS; but does not include any interest in a CIS that is:
(a) a registered Mandatory Provident Fund scheme under the MPFSO or its constituent fund;
(b) an occupational retirement scheme under the ORSO; or
© a contract of insurance in relation to any class of insurance business under the Insurance Ordinance.Hint
Reference Chapter:1.8.3
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Question 513 of 545
513. Question
1 pointsQID325:Which of the following are not examples of securities?
I. Shares in a private company
II. Shares in a public company
III. Interests in CISs that are either registered mandatory
provident fund schemes under MPFSO, occupational
retirement schemes under ORSO
IV. Contracts of insurance in relation to any class of insurance
business under the Insurance Companies Ordinance (“ICO”).Correct
Securities are defined in Schedule 1, SFO, to cover a wide range of instruments. Options I, III and IV are not covered by this definition.
Incorrect
Securities are defined in Schedule 1, SFO, to cover a wide range of instruments. Options I, III and IV are not covered by this definition.
Hint
Reference Chapter:1.8.3
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Question 514 of 545
514. Question
1 pointsQID1227:Which of the following entities can prescribe other arrangements on security by notice under s. 393 SFO?
Correct
Interests, rights or property which are prescribed by the Financial Secretary under s. 392, SFO as securities.
Incorrect
Interests, rights or property which are prescribed by the Financial Secretary under s. 392, SFO as securities.
Hint
Reference Chapter:1.8.3
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Question 515 of 545
515. Question
1 pointsQID328:According to the Securities and Futures Ordinance, the definitions of securities include which of the following?
I. Stock options.
II. Stock futures.
III. All structured products.
IV. Interests in Collective Investment Schemes (CISs).Correct
Securities are defined in Schedule 1, SFO, to cover a wide range of instruments, including:
(a) shares, stocks, debentures, loan stocks, funds, bonds or notes;
(d) interests in CISs.Incorrect
Securities are defined in Schedule 1, SFO, to cover a wide range of instruments, including:
(a) shares, stocks, debentures, loan stocks, funds, bonds or notes;
(d) interests in CISs.Hint
Reference Chapter:1.8.3
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Question 516 of 545
516. Question
1 pointsQID326:Which of the following are defined as Securities under s. 392, SFO as securities?
I. CISs
II. Bonds
III. Stocks
IV. Other interests prescribed by the Financial SecretaryCorrect
Securities are defined in Schedule 1, SFO, to cover a wide range of instruments, including:
(a) shares, stocks, debentures, loan stocks, funds, bonds or notes;
(d) interests in CISs;
(f) interests, rights or property which are prescribed by the Financial Secretary under s. 392, SFO as securities.Incorrect
Securities are defined in Schedule 1, SFO, to cover a wide range of instruments, including:
(a) shares, stocks, debentures, loan stocks, funds, bonds or notes;
(d) interests in CISs;
(f) interests, rights or property which are prescribed by the Financial Secretary under s. 392, SFO as securities.Hint
Reference Chapter:1.8.3
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Question 517 of 545
517. Question
1 pointsQID327:The definition of “securities” is extensive and includes
I. Shares, Bonds, Debentures
II. Interests, rights in collective investment schemes
III. Ownership of investment linked Insurance schemes
IV. Interest in any CISsCorrect
Securities are defined in Schedule 1, SFO, to cover a wide range of instruments. Option III (Investment linked Insurance Scheme) is not covered by this definition.
Incorrect
Securities are defined in Schedule 1, SFO, to cover a wide range of instruments. Option III (Investment linked Insurance Scheme) is not covered by this definition.
Hint
Reference Chapter:1.8.3
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Question 518 of 545
518. Question
1 pointsQID970:Which of the following are examples of security?
I. Listed Stocks
II. Equity Warrants
III. Derivative Warrants
IV. BondsCorrect
A security is a tradable financial asset. The term commonly refers to any form of financial instrument including stocks, bonds and warrants.
Incorrect
A security is a tradable financial asset. The term commonly refers to any form of financial instrument including stocks, bonds and warrants.
Hint
Reference Chapter:1.8.3
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Question 519 of 545
519. Question
1 pointsQID220:Which of the following individuals may prescribe other arrangements to the CIS apart from the SFO?
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:1.8.3
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Question 520 of 545
520. Question
1 pointsQID2689:To solicit others into buying securities is a?
Correct
To solicit others into buying securities is considered as Dealing in Securities. Dealing in Securities is a Type 1 Regulated Activity.
Incorrect
To solicit others into buying securities is considered as Dealing in Securities. Dealing in Securities is a Type 1 Regulated Activity.
Hint
Reference Chapter:1.8.9
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Question 521 of 545
521. Question
1 pointsQID1512:Which of the following activities relating to the marketing of Mandatory Provident Fund (MPF) schemes would trigger the licensing requirement for Type 4 regulated activity (advising on securities)?
I. Comparing advantages and disadvantage of investing in different underlying products and investments.
II. Commenting on the performance, merits and demerits of specific securities relating to MPF products.
III. Advising on the structure of an MPF scheme in relation to the long term objectives of a potential participant.
IV. Giving generic advice on a constituent fund of an MPF scheme that does not include detailed advice on underlying
investments.Correct
The issue of an advertisement, invitation or document authorised by the SFC under the provisions of the SFO will not constitute a regulated activity for the purposes of the MPFSO. However, where such an advertisement, invitation or document is issued but is not authorised by the SFO, an offence under the SFO is committed that is punishable by imprisonment and/or a fine whether or not the person in question is a registered MPF intermediary.
Incorrect
The issue of an advertisement, invitation or document authorised by the SFC under the provisions of the SFO will not constitute a regulated activity for the purposes of the MPFSO. However, where such an advertisement, invitation or document is issued but is not authorised by the SFO, an offence under the SFO is committed that is punishable by imprisonment and/or a fine whether or not the person in question is a registered MPF intermediary.
Hint
Reference Chapter:1.8.9
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Question 522 of 545
522. Question
1 pointsQID2687:In order to become a Type 1 representative, which of the following incident will not impact an individuals fit and properness?
Correct
Fit and properness do not take into account a person’s age. It only consideres academic records, financial standing, character and experience. Courts disallowing the invidual to practice law and criminal record are evidence of poor character.
Incorrect
Fit and properness do not take into account a person’s age. It only consideres academic records, financial standing, character and experience. Courts disallowing the invidual to practice law and criminal record are evidence of poor character.
Hint
Reference Chapter:1.9.
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Question 523 of 545
523. Question
1 pointsQID1665:SFC will not considered which of the following traits of an applicant’s when assessing the fit and properness of the applicant?
Correct
SFC will not considered an applicant’s profitability while assessing its fit and properness.
Incorrect
SFC will not considered an applicant’s profitability while assessing its fit and properness.
Hint
Reference Chapter:1.9.1
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Question 524 of 545
524. Question
1 pointsQID1005:In considering the licence application or registration of Type 2 applicants, the SFC will consider which of the following?
I. The academic qualification of the applicants
II. The applicants’ character
III. The applicant’s experience in the industry
IV. The applicants’ financial statusCorrect
The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the Fit and Proper Guidelines. These relate to:
(a) financial status or solvency;
(b) educational or other qualifications or experience (having regard to the nature of the functions to be performed);
© ability to carry on the regulated activity competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Incorrect
The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the Fit and Proper Guidelines. These relate to:
(a) financial status or solvency;
(b) educational or other qualifications or experience (having regard to the nature of the functions to be performed);
© ability to carry on the regulated activity competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Hint
Reference Chapter:1.9.1
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Question 525 of 545
525. Question
1 pointsQID250:The fit and proper guidelines will judge a persons fit and properness by his/her,
I. financial status or solvency
II. historic investment profitability
III. academic attainment and competencies
IV. reputation and integrityCorrect
The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the Fit and Proper Guidelines. These relate to:
(a) financial status or solvency;
(b) educational or other qualifications or experience;
© ability to carry on the regulated activity competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Incorrect
The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the Fit and Proper Guidelines. These relate to:
(a) financial status or solvency;
(b) educational or other qualifications or experience;
© ability to carry on the regulated activity competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Hint
Reference Chapter:1.9.1
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Question 526 of 545
526. Question
1 pointsQID225:Registered Institutions should ensure that their employees who conduct regulated activities are
Correct
The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the Fit and Proper Guidelines.
Incorrect
The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the Fit and Proper Guidelines.
Hint
Reference Chapter:1.9.1
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Question 527 of 545
527. Question
1 pointsQID252:Mr Wan would like to become a licenced representative and conduct securities dealing business. He has already acquired a pass in the Paper 1, Paper 7 and Paper 8 of the Licencing Exam. Which of the following experience of Mr Wan may not have an adverse effect
Correct
Option 1, 3 and 4 will adversely affect Mr. Wan to become a licensed representative given the following:
The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the
Fit and Proper Guidelines. These relate to:
(a) financial status or solvency;
(b) educational or other qualifications or experience;
© ability to carry on the regulated activity competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Incorrect
Option 1, 3 and 4 will adversely affect Mr. Wan to become a licensed representative given the following:
The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the
Fit and Proper Guidelines. These relate to:
(a) financial status or solvency;
(b) educational or other qualifications or experience;
© ability to carry on the regulated activity competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Hint
Reference Chapter:1.9.1
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Question 528 of 545
528. Question
1 pointsQID249:The fit and proper criteria for SFC licensing of corporations and individuals include matters relating to
I. Financial status or solvency
II. Competence
III. Capability
IV. Character.Correct
The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the Fit and Proper Guidelines. These relate to:
(a) financial status or solvency;
(b) educational or other qualifications or experience;
© ability to carry on the regulated activity competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Incorrect
The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the Fit and Proper Guidelines. These relate to:
(a) financial status or solvency;
(b) educational or other qualifications or experience;
© ability to carry on the regulated activity competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Hint
Reference Chapter:1.9.1
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Question 529 of 545
529. Question
1 pointsQID2819:The fit and proper guidelines are less considered when processing applications for licences or registrations
Correct
Factors to be considered in the Fit and Proper Guidelines:
1. The applicant’s financial situation
2. Whether the applicant has the ability to carry out the regulated activity competently and fairly
3. The character of the applicant
4. Applicant’s academic qualificationsHowever, applicants do not necessarily need a bachelor’s degree or above to meet the requirements, so it is the best out of the 4 options.
Incorrect
Factors to be considered in the Fit and Proper Guidelines:
1. The applicant’s financial situation
2. Whether the applicant has the ability to carry out the regulated activity competently and fairly
3. The character of the applicant
4. Applicant’s academic qualificationsHowever, applicants do not necessarily need a bachelor’s degree or above to meet the requirements, so it is the best out of the 4 options.
Hint
Reference Chapter:1.9.1
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Question 530 of 545
530. Question
1 pointsQID1230:Which of the following are categories of the fitness and properness requirements set by the SFO?
I. Net worth
II. Educational or other qualifications or experience
III. Ability to carry on the regulated activity competently, honestly and fairly
IV. Reputation, character, reliability and financial integrityCorrect
Both corporate (including officers e.g. directors, managers etc.) and individual applicants for licences or registration have to satisfy fitness and properness requirements. There are four main categories of these fit and proper requirements (s. 129, SFO):
(a) financial status or solvency;
(b) educational or other qualifications or experience (having regard to the nature of the functions to be performed);
(c.) ability to carry on the RA competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Incorrect
Both corporate (including officers e.g. directors, managers etc.) and individual applicants for licences or registration have to satisfy fitness and properness requirements. There are four main categories of these fit and proper requirements (s. 129, SFO):
(a) financial status or solvency;
(b) educational or other qualifications or experience (having regard to the nature of the functions to be performed);
(c.) ability to carry on the RA competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Hint
Reference Chapter:1.9.1
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Question 531 of 545
531. Question
1 pointsQID1229:Applicants for licences or registration have to satisfy fitness and properness requirements. The main categories of the fit and proper requirements as stated in the SFO include:
I. the net worth and financial status of the applicant.
II. The educational or other qualifications or experience (having regard to the nature of the functions to be performed).
III. The ability to carry on the regulated activity competently, honestly and fairly.
IV. The reputation, character, reliability and financial integrity.Correct
Both corporate (including officers e.g. directors, managers etc.) and individual applicants for licences or registration have to satisfy fitness and properness requirements. There are four main categories of these fit and proper requirements (s. 129, SFO):
(a) financial status or solvency;
(b) educational or other qualifications or experience (having regard to the nature of the functions to be performed);
(c.) ability to carry on the RA competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Incorrect
Both corporate (including officers e.g. directors, managers etc.) and individual applicants for licences or registration have to satisfy fitness and properness requirements. There are four main categories of these fit and proper requirements (s. 129, SFO):
(a) financial status or solvency;
(b) educational or other qualifications or experience (having regard to the nature of the functions to be performed);
(c.) ability to carry on the RA competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Hint
Reference Chapter:1.9.1
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Question 532 of 545
532. Question
1 pointsQID861:The SFC will not take which of the following into consideration when measuring an applicants’ competence and integrity?
Correct
An individual applicant should meet age requirements (i.e. 18 years for representatives or equivalents) and competence qualifications as listed in the Fit and Proper Guidelines and amplified in the Guidelines on Competence. The competence tests involve experience and educational qualifications. They don’t include investment track records.
Incorrect
An individual applicant should meet age requirements (i.e. 18 years for representatives or equivalents) and competence qualifications as listed in the Fit and Proper Guidelines and amplified in the Guidelines on Competence. The competence tests involve experience and educational qualifications. They don’t include investment track records.
Hint
Reference Chapter:1.9.1
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Question 533 of 545
533. Question
1 pointsQID251:The fit and proper guidelines will judge a person’s fitness and properness by his/her,
I. financial status or solvency
II. Historic investment performance
III. Educational or other qualifications or experience, ability to carry on the regulated activity competently, honestly and fairly; and
IV. Reputation, character, reliability and financial integrityCorrect
The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the Fit and Proper Guidelines. These relate to:
(a) financial status or solvency;
(b) educational or other qualifications or experience;
© ability to carry on the regulated activity competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Incorrect
The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the Fit and Proper Guidelines. These relate to:
(a) financial status or solvency;
(b) educational or other qualifications or experience;
© ability to carry on the regulated activity competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.Hint
Reference Chapter:1.9.1
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Question 534 of 545
534. Question
1 pointsQID1235:The Guidelines on CPT set out the SFC’s requirements that the conduct and arrangements of CPT programmes are responsibilities of which of the following organizations or persons?
Correct
The Guidelines on CPT set out the SFC’s requirements that, among other things,:
(a) corporations should conduct or arrange CPT programmes best suited for their staff to enhance their industry knowledge, skills and professionalismIncorrect
The Guidelines on CPT set out the SFC’s requirements that, among other things,:
(a) corporations should conduct or arrange CPT programmes best suited for their staff to enhance their industry knowledge, skills and professionalismHint
Reference Chapter:1.9.15
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Question 535 of 545
535. Question
1 pointsQID256:In which of the following cases can the required number of training hours for Continuous Professional Training (CPT) Guidelines be met?
I. When attending CPT for similar “competence groups”; those who carry on more than one regulated activity are credited with CPT hours for all regulated activities within the same competence group.
II. CPT may be achieved through attending courses, workshops, lectures and seminars; distance-learning; self-study with submission of assignments to recognized institutions; research; publications; speeches and so on.
III. The hours that exceed the prescribed number of hours for CPT can be used to fulfil the requirements for the next year; with no more than 5 hours as the limit.
IV. If the licensee has not engaged in related activities in the year, there is no need to meet the licensing requirements.Correct
The SFC has introduced the concept of licensees falling into
different “competence groups”, enabling those who carry on more than one regulated activity to be credited with CPT hours for all regulated activities within the same competence group. CPT may also be achieved through attending courses, workshops, lectures and seminars; distance learning; self-study with submission of assignments to recognised institutions; research; publications; speeches and so on.Incorrect
The SFC has introduced the concept of licensees falling into
different “competence groups”, enabling those who carry on more than one regulated activity to be credited with CPT hours for all regulated activities within the same competence group. CPT may also be achieved through attending courses, workshops, lectures and seminars; distance learning; self-study with submission of assignments to recognised institutions; research; publications; speeches and so on.Hint
Reference Chapter:1.9.16
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Question 536 of 545
536. Question
1 pointsQID257:Mr Ko is a licensed representative of a licensed corporation -Kaohsiung Securities and conduct type 9 activities as a representative. According to the CPT requirement of the SFC, what kind of requirements should Mr Ko satisfy to be fit and proper?
Correct
The SFC expects every individual licensee to undertake a minimum of 5 CPT hours every calendar year for each regulated activity, with proportional hours for those who obtained their licences during the year.
Incorrect
The SFC expects every individual licensee to undertake a minimum of 5 CPT hours every calendar year for each regulated activity, with proportional hours for those who obtained their licences during the year.
Hint
Reference Chapter:1.9.16
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Question 537 of 545
537. Question
1 pointsQID1236:The SFC requires every individual licensee to undertake a minimum of how many CPT hours?
Correct
The SFC requires every individual licensee to undertake a minimum of five CPT hours every calendar year for each RA, with proportional hours for those who obtained their licences
during the year.Incorrect
The SFC requires every individual licensee to undertake a minimum of five CPT hours every calendar year for each RA, with proportional hours for those who obtained their licences
during the year.Hint
Reference Chapter:1.9.16
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Question 538 of 545
538. Question
1 pointsQID1577:Which of the following form of activity is not a prescribed method of attaining CPT hours under the Guidelines on Continuous Professional Training?
Correct
CPT may be achieved through attending courses, workshops, lectures and seminars; distance learning; self-study with submission of assignments to recognised institutions; research; publications; speeches and so on.
Incorrect
CPT may be achieved through attending courses, workshops, lectures and seminars; distance learning; self-study with submission of assignments to recognised institutions; research; publications; speeches and so on.
Hint
Reference Chapter:1.9.17
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Question 539 of 545
539. Question
1 pointsQID1666:Which of the following are not an acceptable method of CPT?
Correct
Reading Financial Publications is not an acceptable form of acquiring CPT hours.
Incorrect
Reading Financial Publications is not an acceptable form of acquiring CPT hours.
Hint
Reference Chapter:1.9.17
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Question 540 of 545
540. Question
1 pointsQID1231:An individual applicant should meet age requirements (i.e. 18 years for representatives or equivalents) and competence qualifications as listed in the Fit and Proper Guidelines and amplified in the Guidelines on Competence. The competence tests include which of the following?
I. A relevant person’s experience.
II. A relevant person’s educational qualifications.
III. A relevant person’s past performance in the industry.
IV. A relevant person has not breached any codes or guidelines promulgated by the SFC or other regulators.Correct
An individual applicant should meet age requirements (i.e. 18 years for representatives or equivalents) and competence qualifications as listed in the Fit and Proper Guidelines and amplified in the Guidelines on Competence. The competence tests involve experience and educational qualifications.
Incorrect
An individual applicant should meet age requirements (i.e. 18 years for representatives or equivalents) and competence qualifications as listed in the Fit and Proper Guidelines and amplified in the Guidelines on Competence. The competence tests involve experience and educational qualifications.
Hint
Reference Chapter:1.9.4&5
-
Question 541 of 545
541. Question
1 pointsQID1232:Which of the following are part of the competence and capability tests of the SFC and HKMA?
I. Experience.
II. Educational qualifications.
III. Performance in the Industry.
IV. An undischarged or recently discharged bankrupt, be currently involved in bankruptcy or similar proceedings or have failed to meet any judgment debt.Correct
The competence tests involve experience and educational qualifications.
Incorrect
The competence tests involve experience and educational qualifications.
Hint
Reference Chapter:1.9.5
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Question 542 of 545
542. Question
1 pointsQID2367:Mr. Wan got fined because of a public fight in Singapore last month. Mr. Wan is registering for a license now. He didn’t report this crime to avoid the hassle. Is there any wrong doing with Mr. Wan?
Correct
Mr. Wan, provided false information with the SFC, this obviously violates the Securities and Futures Ordinance. Except for light traffic offences, all offences should be reported when registering a license.
Incorrect
Mr. Wan, provided false information with the SFC, this obviously violates the Securities and Futures Ordinance. Except for light traffic offences, all offences should be reported when registering a license.
Hint
Reference Chapter:1.9.6
-
Question 543 of 545
543. Question
1 pointsQID1233:Which of the following criteria does the SFC NOT taken into account of when considering an applicant’s character and integrity?
Correct
An individual applicant should satisfy the SFC (or the HKMA as appropriate) that he:
(b) has not breached any codes or guidelines promulgated by the SFC or other regulators;
(c) has not been subject to disciplinary action by professional associations;
(d) has not been disqualified by the court from acting as a director, as detailed in the Fit and Proper Guidelines; and
(e) has not been a director or substantial shareholder of, or been involved in managing, an insolvent corporation.Incorrect
An individual applicant should satisfy the SFC (or the HKMA as appropriate) that he:
(b) has not breached any codes or guidelines promulgated by the SFC or other regulators;
(c) has not been subject to disciplinary action by professional associations;
(d) has not been disqualified by the court from acting as a director, as detailed in the Fit and Proper Guidelines; and
(e) has not been a director or substantial shareholder of, or been involved in managing, an insolvent corporation.Hint
Reference Chapter:1.9.6
-
Question 544 of 545
544. Question
1 pointsQID1234:Which of the following descriptions about an intermediary’s ability to comply with the capital requirements are accurate?
I. Registered institutions should comply with HKMA’s capital adequacy requirements.
II. Licensed corporation should comply with SFC’s FRR.
III. Licensed corporation should comply with HKMA’s capital adequacy requirements.
IV. Registered Institutions should comply with SFC’s FRR.Correct
An intermediary should:
(a) be able to comply with the capital requirements: for licensed corporations the FRR, and for registered institutions the HKMA’s capital adequacy requirements.Incorrect
An intermediary should:
(a) be able to comply with the capital requirements: for licensed corporations the FRR, and for registered institutions the HKMA’s capital adequacy requirements.Hint
Reference Chapter:1.9.7
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Question 545 of 545
545. Question
1 pointsQID2583:Which of the following will the SFC consider in the case of licensing a Type 1 representative?
i. Industry experience and/or educational level
ii. Must have 3 years of work experience in a Type 1 intermediary
iii. Whether or not he/she has been the management of an insolvent corporation
iv. Investment experienceCorrect
Normally, passes in the subjects of [Chinese subject and Mathematics] or [English subject and Mathematics] in the High School Examination is the minimum educational level requirement for become a licensed representative, may or may not with the aid of a certain years of work experience in the industry. Also, if one has been the management of an insolvent corporation recently, it may hold him/her back from obtaining the license. However, you do not need the experience of participating in a type 1 firm as a staff member nor the experience in investment.
Incorrect
Normally, passes in the subjects of [Chinese subject and Mathematics] or [English subject and Mathematics] in the High School Examination is the minimum educational level requirement for become a licensed representative, may or may not with the aid of a certain years of work experience in the industry. Also, if one has been the management of an insolvent corporation recently, it may hold him/her back from obtaining the license. However, you do not need the experience of participating in a type 1 firm as a staff member nor the experience in investment.
Hint
Reference Chapter:1.9.8
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