English HKSI Paper 6 Topic 1
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- Answered
- Review
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Question 1 of 673
1. 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 2 of 673
2. Question
1 pointsQID1498:The regulation of the asset management industry needs to cover
I. Products
II. Services
III. Intermediaries
IV. InvestorsCorrect
The regulation of the asset management industry needs to cover not only products and services but also intermediaries and investors.
Incorrect
The regulation of the asset management industry needs to cover not only products and services but also intermediaries and investors.
Hint
Reference Chapter:1.1.10
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Question 3 of 673
3. Question
1 pointsQID625:Which of the following are examples of products of collective investment schemes?
I. Equity Funds
II. Sovereign Fund
III. Money Market Fund
IV. Index FundCorrect
A Sovereign Fund doesn’t meet the established criteria to be considered a CIS.
Incorrect
A Sovereign Fund doesn’t meet the established criteria to be considered a CIS.
Hint
Reference Chapter:1.1.12
-
Question 4 of 673
4. 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:1.1.13
-
Question 5 of 673
5. 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:1.1.13
-
Question 6 of 673
6. 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:1.1.13
-
Question 7 of 673
7. 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:1.1.13
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Question 8 of 673
8. 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:1.1.14
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Question 9 of 673
9. Question
1 pointsQID1501:Which of the following are classified as investors in the asset management industry?
I. Private Banking Clients
II. Retail Clients
III. Institutions
IV. Sovereign statesCorrect
Investors vary from individuals with limited wealth at their disposal to very large institutions handling over hundred millions of Hong Kong dollars, and include:
(a) private banking clients or high net worth individuals; (b) retail clients; and (c.) institutions.Incorrect
Investors vary from individuals with limited wealth at their disposal to very large institutions handling over hundred millions of Hong Kong dollars, and include:
(a) private banking clients or high net worth individuals; (b) retail clients; and (c.) institutions.Hint
Reference Chapter:1.1.15
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Question 10 of 673
10. Question
1 pointsQID1502:Which of the following are correct identification of Investors?
I. High Net Worth Investors
II. Retail Investors
III. Institutional investors
IV. Governmental InvestorsCorrect
Investors vary from individuals with limited wealth at their disposal to very large institutions handling over hundred millions of Hong Kong dollars, and include:
(a) private banking clients or high net worth individuals; (b) retail clients; and (c.) institutions.Incorrect
Investors vary from individuals with limited wealth at their disposal to very large institutions handling over hundred millions of Hong Kong dollars, and include:
(a) private banking clients or high net worth individuals; (b) retail clients; and (c.) institutions.Hint
Reference Chapter:1.1.15
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Question 11 of 673
11. 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:1.1.16
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Question 12 of 673
12. 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:1.1.16
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Question 13 of 673
13. Question
1 pointsQID6:Which of the following is a primary objective of Hong Kong financial regulators?
Correct
Encouraging the development of new products, operating profitable exchanges in Hong Kong and reducing trading hours are all actions. They are action verbs but not objective description. Objectives can only be objective description, therefore, these phrases can never be objectives and primary objective of Hong Kong financial regulators. Objectives are status that financial regulators hope for, enhancing confidence is an objective description that financial regulators hope for.
Incorrect
Encouraging the development of new products, operating profitable exchanges in Hong Kong and reducing trading hours are all actions. They are action verbs but not objective description. Objectives can only be objective description, therefore, these phrases can never be objectives and primary objective of Hong Kong financial regulators. Objectives are status that financial regulators hope for, enhancing confidence is an objective description that financial regulators hope for.
Hint
Reference Chapter:1.1.16
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Question 14 of 673
14. 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:1.1.17
-
Question 15 of 673
15. 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:1.1.19
-
Question 16 of 673
16. 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
-
Question 17 of 673
17. 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:1.1.2
-
Question 18 of 673
18. 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:1.1.2
-
Question 19 of 673
19. 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:1.1.2
-
Question 20 of 673
20. 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:1.1.2
-
Question 21 of 673
21. 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
-
Question 22 of 673
22. 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:1.1.22
-
Question 23 of 673
23. 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:1.1.3
-
Question 24 of 673
24. 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:1.1.3
-
Question 25 of 673
25. 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:1.1.3
-
Question 26 of 673
26. 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:1.1.3
-
Question 27 of 673
27. 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:1.1.3
-
Question 28 of 673
28. 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:1.1.3
-
Question 29 of 673
29. 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:1.1.3
-
Question 30 of 673
30. 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:1.1.3
-
Question 31 of 673
31. 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:1.1.3
-
Question 32 of 673
32. 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:1.1.3
-
Question 33 of 673
33. 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:1.1.3
-
Question 34 of 673
34. 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:1.1.3
-
Question 35 of 673
35. 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:1.1.3
-
Question 36 of 673
36. 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:1.1.3
-
Question 37 of 673
37. 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:1.1.3
-
Question 38 of 673
38. 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:1.1.3
-
Question 39 of 673
39. 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:1.1.3
-
Question 40 of 673
40. 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:1.1.3
-
Question 41 of 673
41. 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:1.1.3
-
Question 42 of 673
42. 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:1.1.3
-
Question 43 of 673
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:1.1.3
-
Question 44 of 673
44. 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:1.1.3
-
Question 45 of 673
45. 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:1.1.3
-
Question 46 of 673
46. 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:1.1.4
-
Question 47 of 673
47. 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:1.1.5
-
Question 48 of 673
48. 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:1.1.5
-
Question 49 of 673
49. 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:1.1.5
-
Question 50 of 673
50. 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:1.1.5
-
Question 51 of 673
51. 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:1.1.7
-
Question 52 of 673
52. 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:1.1.7
-
Question 53 of 673
53. 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:1.1.8
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Question 54 of 673
54. Question
1 pointsQID40:What is the most material difference between the Insurance Authority and other regulators?
Correct
The Insurance Authority has the following major duties and powers:
(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:
(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:1.1.9
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Question 55 of 673
55. 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.
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Question 56 of 673
56. 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:1.10.1
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Question 57 of 673
57. 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:1.10.1
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Question 58 of 673
58. 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:1.10.1
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Question 59 of 673
59. 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:1.10.1
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Question 60 of 673
60. 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:1.10.10
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Question 61 of 673
61. 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:1.10.10
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Question 62 of 673
62. Question
1 pointsQID1509:Asset management companies should carry which of the following functions to facilitate compliance with applicable laws and regulations?
I. Assign designated compliance officers
II. Prepare a set of written compliance procedures, operational procedures and manuals
III. Encourage the use of mobile phones and instant messaging system to enhance workplace communication efficiency
IV. Ban the use of paper-based instructions between departments to minimize human errorsCorrect
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. In many cases, a dedicated compliance officer is appointed who oversees adherence to the manual and also maintains close contact with the regulators and keeps abreast of regulatory developments affecting the asset manager’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, 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. In many cases, a dedicated compliance officer is appointed who oversees adherence to the manual and also maintains close contact with the regulators and keeps abreast of regulatory developments affecting the asset manager’s business.
Hint
Reference Chapter:1.10.10
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Question 63 of 673
63. Question
1 pointsQID1629:VitaSauce is a corporation planning to be listed on the SEHK. VitaSauce has been in losses in the past 3 years, and profited over one billion in the recent year. Yet, there was less than 10 million cash flow in these 3 years. Investment bankers estimated that if VitaSauce is listed, the market value will be over 6 billion. Which of the following quantitative tests is more likely to be applied on VitaSauce?
Correct
The issuer must satisfy at least one of the following quantitative tests: profit test; market capitalisation/revenue/cash flow test; market capitalisation/revenue test.
The issuer must have a market capitalisation of at least HK$4 billion at the time of listing, and revenue of at least HK$500 million for the most recent audited financial year.Incorrect
The issuer must satisfy at least one of the following quantitative tests: profit test; market capitalisation/revenue/cash flow test; market capitalisation/revenue test.
The issuer must have a market capitalisation of at least HK$4 billion at the time of listing, and revenue of at least HK$500 million for the most recent audited financial year.Hint
Reference Chapter:1.10.3
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Question 64 of 673
64. 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:1.10.5
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Question 65 of 673
65. 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:1.10.5
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Question 66 of 673
66. 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:1.10.5
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Question 67 of 673
67. 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:1.10.5
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Question 68 of 673
68. 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:1.10.5
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Question 69 of 673
69. 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:1.10.5
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Question 70 of 673
70. 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:1.10.5
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Question 71 of 673
71. 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:1.10.5
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Question 72 of 673
72. 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:1.10.5
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Question 73 of 673
73. 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:1.10.5
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Question 74 of 673
74. 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:1.10.6
-
Question 75 of 673
75. 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:1.10.7
-
Question 76 of 673
76. 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:1.11.
-
Question 77 of 673
77. Question
1 pointsQID1510:Which of the following are requirements in the Code of Conduct for Mandatory Provident Fund (MPF) Intermediaries regarding the manner in which an MPF intermediary should deal with clients?
I. It should discuss the calibre of investment managers using all
available information such as the past performance records of
SFC collective investment schemes (CIS) and MPF schemes
they have managed, as successful past records would assist in
predicting their future performance.
II. An MPF individual intermediary acting for more than one
corporation should disclose for which corporation he is acting
when dealing with a client.
III. When advising a client on the selection of constituent funds, it
should consider, where practicable, the client’s interests, financial situation, risk preference, investment knowledge, experience and objectives.
IV. The intermediary should not receive any cash payments for or on behalf of clients and should ensure that all client payments
are made payable to the management company of the scheme.Correct
A principal intermediary must apply for the approval of either (i) a subsidiary intermediary or (ii) an individual, which will in each case be attached to the principal intermediary for the purpose
of carrying on activities regulated by the MPFSO and be appointed as a responsible officer.
The main performance requirements that MPF intermediaries should meet are that they must:
when advising clients on the selection of constituent funds, consider, where practicable, the client’s interests, financial situation, risk preference, investment knowledge, experience and objectivesIncorrect
A principal intermediary must apply for the approval of either (i) a subsidiary intermediary or (ii) an individual, which will in each case be attached to the principal intermediary for the purpose
of carrying on activities regulated by the MPFSO and be appointed as a responsible officer.
The main performance requirements that MPF intermediaries should meet are that they must:
when advising clients on the selection of constituent funds, consider, where practicable, the client’s interests, financial situation, risk preference, investment knowledge, experience and objectivesHint
Reference Chapter:1.11.
-
Question 78 of 673
78. Question
1 pointsQID1511:Which of the following are some requirements imposed on a corporate trustee by the Mandatory Provident Fund Schemes Authority (MPFA)?
I. It must have paid-up share capital of at least HKD100 million.
II. It must hold net assets of at least HKD150 million.
III. Its directors and Chief Executive must have at least 3 years relevant experience, and the Chief Executive must ordinarily reside in Hong Kong.
IV. Its day-to-day business must be conducted in Hong Kong and its records kept in Hong Kong.Correct
Only authorised financial institutions and registered trust companies that meet the specified
criteria are eligible to act as custodians, provided in each case they have a sufficient presence and control in Hong Kong. The specified criteria are primarily concerned with the financial standing of the entity, such as the amount of paid-up share capital and its net assets.Incorrect
Only authorised financial institutions and registered trust companies that meet the specified
criteria are eligible to act as custodians, provided in each case they have a sufficient presence and control in Hong Kong. The specified criteria are primarily concerned with the financial standing of the entity, such as the amount of paid-up share capital and its net assets.Hint
Reference Chapter:1.11.10
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Question 79 of 673
79. 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:1.11.21
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Question 80 of 673
80. Question
1 pointsQID1618:If there is any infraction in a licensed corporation, which of the following persons is responsible for making a report to the SFC?
Correct
In general, the duties of responsible officers and executive officers who actively participate in, or supervise, the intermediary’s business may include:
(l) reporting to the SFC on discovery of any breaches of The Code of Conduct.Incorrect
In general, the duties of responsible officers and executive officers who actively participate in, or supervise, the intermediary’s business may include:
(l) reporting to the SFC on discovery of any breaches of The Code of Conduct.Hint
Reference Chapter:1.11.37
-
Question 81 of 673
81. Question
1 pointsQID1603:Which of the following products are not being traded on the SEHK?
Correct
Treasury Bill are not being traded on the SEHK
Incorrect
Treasury Bill are not being traded on the SEHK
Hint
Reference Chapter:1.2.
-
Question 82 of 673
82. 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:1.2.1
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Question 83 of 673
83. 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 84 of 673
84. 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:1.2.10
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Question 85 of 673
85. 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:1.2.10
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Question 86 of 673
86. 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:1.2.10
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Question 87 of 673
87. 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:1.2.10
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Question 88 of 673
88. Question
1 pointsQID344:The SFC’s codes and guidelines on asset management are UNLIKELY to be applicable to which of the following activities?
Correct
Margin financing is not an activity directly related with asset management, so regulations and guidelines associated with asset management will not cover those kinds of transactions.
Incorrect
Margin financing is not an activity directly related with asset management, so regulations and guidelines associated with asset management will not cover those kinds of transactions.
Hint
Reference Chapter:1.2.10
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Question 89 of 673
89. Question
1 pointsQID1571:Which of the following activities are not considered as securities or futures contracts management?
I. An accountant managing a portfolio of securities for a group of people.
II. A staff member of a firm managing securities or futures contracts for a subsidiary of his/her company.
III. A staff member of a firm managing securities or futures contracts for a JV of the company’s majority shareholder and the company’s director.
IV. A solicitor withholding a portfolio of securities for clients wholly incidental to his professional capacity.Correct
Option I did not specify that the accountant is working in his professional capacity, therefore should not be exempted.
This is defined as managing a portfolio of securities or futures contracts for another person by a person other than certain excluded persons. Persons specifically excluded from the definition of securities or futures contracts management include the following:
(a) corporations that carry on securities or futures contracts management solely for their
wholly owned subsidiaries, their holding companies which hold all their issued shares,
or other wholly owned subsidiaries of the latter;
€ solicitors, counsel (barristers), professional accountants and trustees who provide securities or futures contracts management services wholly incidental to their professional practices.Incorrect
Option I did not specify that the accountant is working in his professional capacity, therefore should not be exempted.
This is defined as managing a portfolio of securities or futures contracts for another person by a person other than certain excluded persons. Persons specifically excluded from the definition of securities or futures contracts management include the following:
(a) corporations that carry on securities or futures contracts management solely for their
wholly owned subsidiaries, their holding companies which hold all their issued shares,
or other wholly owned subsidiaries of the latter;
€ solicitors, counsel (barristers), professional accountants and trustees who provide securities or futures contracts management services wholly incidental to their professional practices.Hint
Reference Chapter:1.2.10
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Question 90 of 673
90. 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:1.2.10
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Question 91 of 673
91. Question
1 pointsQID1001:Under which of the following circumstances does a Type 2 licenced person or registered person need to acquire a Type 5 licence or registration?
Correct
Provide futures dealing advice to clients and charge separately is not a type 5 regulated activity that is wholly incidental to type 2 regulated activity. Therefore, registration or licence for type 5 regulated activity is required.
Incorrect
Provide futures dealing advice to clients and charge separately is not a type 5 regulated activity that is wholly incidental to type 2 regulated activity. Therefore, registration or licence for type 5 regulated activity is required.
Hint
Reference Chapter:1.2.10
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Question 92 of 673
92. Question
1 pointsQID2599:Which of the following activity is considered as asset management?
I. Accountants manage securities and futures portfolios for their friends and charge “tips”.
II. Trading companies manage securities and futures portfolios for their wholly-owned subsidiaries.
III. Trading companies manage securities and futures portfolios for their 60%-owned subsidiaries.
IV. Licensed corporations provide their customers who engage in securities trading with securities portfolio management wholly incidental to securities trading services.Correct
Accountants manage securities and futures portfolios for their friends and charge “tips”. Since it’s not wholly incidental to professional activities of accountants, it’s not excluded. As for trading companies managing securities and futures portfolios for their 60%-owned subsidiaries, since the subsidiaries are not wholly-owned, it’s not excluded. Since both are not excluded, they are asset management activities.
Incorrect
Accountants manage securities and futures portfolios for their friends and charge “tips”. Since it’s not wholly incidental to professional activities of accountants, it’s not excluded. As for trading companies managing securities and futures portfolios for their 60%-owned subsidiaries, since the subsidiaries are not wholly-owned, it’s not excluded. Since both are not excluded, they are asset management activities.
Hint
Reference Chapter:1.2.10
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Question 93 of 673
93. 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:1.2.11
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Question 94 of 673
94. 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:1.2.11
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Question 95 of 673
95. 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:1.2.12
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Question 96 of 673
96. 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:1.2.12
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Question 97 of 673
97. Question
1 pointsQID2428:According to the Securities and Futures Ordinance, which of the following is not securities?
Correct
According to the Securities and Futures Ordinance, futures options belongs to futures.
Incorrect
According to the Securities and Futures Ordinance, futures options belongs to futures.
Hint
Reference Chapter:1.2.12
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Question 98 of 673
98. 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:1.2.12
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Question 99 of 673
99. 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:1.2.12
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Question 100 of 673
100. 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:1.2.12
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Question 101 of 673
101. 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:1.2.13
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Question 102 of 673
102. 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:1.2.13
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Question 103 of 673
103. Question
1 pointsQID771:Which of the following correctly describe the characteristics of futures contracts?
I. Futures contracts must be settled at a designated time and at a designated price agreed by both parties in the future.
II. The parties of the futures contracts are obliged to settle the contracts.
III. Futures contracts made under the rules or conventions of a futures market.
IV. The delivery of a futures contract can be delayed if both parties of the contract come to an agreement.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; also
A person deals in futures contracts if he:
(a) makes or offers to make an agreement with another person to enter into, acquire or dispose of a futures contract; and
(b) induces or attempts to induce another person to enter into, acquire or dispose of a futures contract.
In such contracts, 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; also
A person deals in futures contracts if he:
(a) makes or offers to make an agreement with another person to enter into, acquire or dispose of a futures contract; and
(b) induces or attempts to induce another person to enter into, acquire or dispose of a futures contract.
In such contracts, 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:1.2.14
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Question 104 of 673
104. Question
1 pointsQID2378:According to the Securities and Futures Ordinance, a futures contract is that:
I. Futures in Hong Kong has to be settled physically.
II. In Hong Kong, futures contracts refer to contracts established according to rules or practices of futures market.
III. 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.
IV. In Hong Kong, both parties of futures contract can agree to delay the settlement.Correct
According to the Securities and Futures Ordinance, a futures contract is that:
I. can be either cash settlement or
physical delivery
II. In Hong Kong, futures contracts refer to contracts established according to rules or practices of futures market.
III. 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 the Securities and Futures Ordinance, a futures contract is that:
I. can be either cash settlement or
physical delivery
II. In Hong Kong, futures contracts refer to contracts established according to rules or practices of futures market.
III. 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:1.2.14
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Question 105 of 673
105. Question
1 pointsQID1000:According to the SFO, the definition of Futures contracts is
Correct
According to the SFO, the definition of Futures contracts are contracts made under the rules or conventions of a futures market.
Incorrect
According to the SFO, the definition of Futures contracts are contracts made under the rules or conventions of a futures market.
Hint
Reference Chapter:1.2.14
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Question 106 of 673
106. 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:1.2.14
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Question 107 of 673
107. Question
1 pointsQID772:Which of the following correctly describe the characteristics of futures contracts?
I. Futures contract must be settled at a designated time and at a designated price agreed by both parties in the future.
II. The parties trading futures contracts must pay margin to the clearing house (HKCC).
III. Futures contracts of stocks traded on SEHK must be physically settled.
IV. Futures contracts must be traded at the exchange.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.
A person deals in futures contracts if he:
(a) makes or offers to make an agreement with another person to enter into, acquire or dispose of a futures contract; and
(b) induces or attempts to induce another person to enter into, acquire or dispose of a futures contract.
Contracts determine:
(i) 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; or
(ii) 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) a contract or an option on a contract made under the rules or conventions of a futures market.
A person deals in futures contracts if he:
(a) makes or offers to make an agreement with another person to enter into, acquire or dispose of a futures contract; and
(b) induces or attempts to induce another person to enter into, acquire or dispose of a futures contract.
Contracts determine:
(i) 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; or
(ii) 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:1.2.14
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Question 108 of 673
108. Question
1 pointsQID627:How do CISs and asset management relate to each other in the SFO regime?
I. The definition of asset management includes “securities” as a class of assets which may be managed under Type 9 regulated activity. The definition of securities includes CISs.
II. Asset management has no relation with CIS in the SFO regime
III. CISs is the only form of authorised asset management.
IV. CISs is one aspect of asset management activity in Hong KongCorrect
Option II and III are incorrect since CIS are indeed considered an asset management activity by the SFO, but they are not the ONLY form of asset management recognized by the SFO.
Incorrect
Option II and III are incorrect since CIS are indeed considered an asset management activity by the SFO, but they are not the ONLY form of asset management recognized by the SFO.
Hint
Reference Chapter:1.2.15
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Question 109 of 673
109. Question
1 pointsQID622:Which of the following are key elements of a Collective Investment Scheme (CIS)?
I. an arrangement in respect of property under which the management of the property is not subject to the day-to-day control of the scheme’s participants
II. an arrangement in respect of property under which the management of the property is subject to the day-to-day control of the scheme’s participants
III. The purpose of the arrangement is to enable the participants to receive profits, income or other payments or returns from the property or dealings relating to it.
IV. The purpose of the arrangement is to enable the managers of the scheme to receive profits, income or other payments or returns from the property or dealings relating to it.Correct
The key elements of what constitutes a CIS are:
(a) an arrangement in respect of a property under which the management of the property is not subject to the day-to-day control of the scheme’s participants, and either:
(i) the property is managed as a whole by or for the person operating the arrangement; or
(ii) the participants’ contributions and accruing profits or income are pooled; and
(b) the purpose of the arrangement is to enable the participants to receive profits, income or other payments or returns from the property or dealings relating to it.Incorrect
The key elements of what constitutes a CIS are:
(a) an arrangement in respect of a property under which the management of the property is not subject to the day-to-day control of the scheme’s participants, and either:
(i) the property is managed as a whole by or for the person operating the arrangement; or
(ii) the participants’ contributions and accruing profits or income are pooled; and
(b) the purpose of the arrangement is to enable the participants to receive profits, income or other payments or returns from the property or dealings relating to it.Hint
Reference Chapter:1.2.16
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Question 110 of 673
110. Question
1 pointsQID223:Which of the following correctly describes the features of CISs under the SFO?
Correct
The key elements of what constitutes a CIS are:
(a) an arrangement in respect of a property under which the management of the property is not subject to the day-to-day control of the scheme’s participants, and either:
(i) the property is managed as a whole by or for the person operating the arrangement; or
(ii) the participants’ contributions and accruing profits or income are pooled; and
(b) the purpose of the arrangement is to enable the participants to receive profits, income or other payments or returns from the property or dealings relating to it.Incorrect
The key elements of what constitutes a CIS are:
(a) an arrangement in respect of a property under which the management of the property is not subject to the day-to-day control of the scheme’s participants, and either:
(i) the property is managed as a whole by or for the person operating the arrangement; or
(ii) the participants’ contributions and accruing profits or income are pooled; and
(b) the purpose of the arrangement is to enable the participants to receive profits, income or other payments or returns from the property or dealings relating to it.Hint
Reference Chapter:1.2.16
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Question 111 of 673
111. Question
1 pointsQID626:Which of the following is not a major element of a CIS?
Correct
Answer C is not a major element in the definition of a CIS since segregation is a particular subject of the operation and not a broad definition of the CISs as a whole.
Incorrect
Answer C is not a major element in the definition of a CIS since segregation is a particular subject of the operation and not a broad definition of the CISs as a whole.
Hint
Reference Chapter:1.2.17
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Question 112 of 673
112. Question
1 pointsQID621:Which of the following is NOT a characteristic of collective investment schemes?
Correct
The key elements of what constitutes a CIS are:
(a) an arrangement in respect of a property under which the management of the property is not subject to the day-to-day control of the scheme’s participants, and either:
(i) the property is managed as a whole by or for the person operating the arrangement; or
(ii) the participants’ contributions and accruing profits or income are pooled; and
(b) the purpose of the arrangement is to enable the participants to receive profits, income or other payments or returns from the property or dealings relating to it.
They are not in any way the most direct way to invest.Incorrect
The key elements of what constitutes a CIS are:
(a) an arrangement in respect of a property under which the management of the property is not subject to the day-to-day control of the scheme’s participants, and either:
(i) the property is managed as a whole by or for the person operating the arrangement; or
(ii) the participants’ contributions and accruing profits or income are pooled; and
(b) the purpose of the arrangement is to enable the participants to receive profits, income or other payments or returns from the property or dealings relating to it.
They are not in any way the most direct way to invest.Hint
Reference Chapter:1.2.17
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Question 113 of 673
113. Question
1 pointsQID2723:The main elements of a collective investment scheme include
I. The property is primarily managed by the professionals who run the scheme
II. Participant’s contributions and accrued profits or gains are pooled
III. The purpose of the collective investment scheme is to earn profit income or other returns
IV. CIS participants will be involved in major investment decisionsCorrect
The main elements of a collective investment scheme include
I. The property is primarily managed by the professionals who run the scheme
II. Participant’s contributions and accrued profits or gains are pooled
III. The purpose of the collective investment scheme is to earn profit income or other returnsIncorrect
The main elements of a collective investment scheme include
I. The property is primarily managed by the professionals who run the scheme
II. Participant’s contributions and accrued profits or gains are pooled
III. The purpose of the collective investment scheme is to earn profit income or other returnsHint
Reference Chapter:1.2.17
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Question 114 of 673
114. Question
1 pointsQID624:Which of the following is/are major elements of a collective investment scheme?
I. Investors (Participants) can manage investments directly.
II. Only employees can take part
III. Investors (Participants) and the operator of the arrangement belong to the same group of the companies.
IV. Investors (Participants)s’ contributions and accruing profits or income are pooled.Correct
The key elements of what constitutes a CIS are:
(a) an arrangement in respect of a property under which the management of the property is not subject to the day-to-day control of the scheme’s participants, and either:
(i) the participants’ contributions and accruing profits or income are pooled.Incorrect
The key elements of what constitutes a CIS are:
(a) an arrangement in respect of a property under which the management of the property is not subject to the day-to-day control of the scheme’s participants, and either:
(i) the participants’ contributions and accruing profits or income are pooled.Hint
Reference Chapter:1.2.17
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Question 115 of 673
115. 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:1.2.18
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Question 116 of 673
116. Question
1 pointsQID616:Which of the following entities grants authorised status to a CIS?
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:1.2.18
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Question 117 of 673
117. Question
1 pointsQID619:Exclusions from the definition of CISs involve:
I. Arrangements where the participants and the operator of the arrangement belong to the same group of companies
II. Franchise arrangements
III. Arrangements where an auditor acting in his professional capacity holds money from clients during the course of his work
IV. Arrangements where a solicitor acting in his professional capacity holds money from clients during the course of his workCorrect
Exclusions from the definition of a CIS include:
(a) arrangements where the participants and the operator of the arrangement belong to the same group of companies;
(b) franchise arrangements; and
(c.)arrangements where a solicitor acting in his professional capacity holds money from clients during the course of his work.Incorrect
Exclusions from the definition of a CIS include:
(a) arrangements where the participants and the operator of the arrangement belong to the same group of companies;
(b) franchise arrangements; and
(c.)arrangements where a solicitor acting in his professional capacity holds money from clients during the course of his work.Hint
Reference Chapter:1.2.19
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Question 118 of 673
118. Question
1 pointsQID41:Which of the following are not broad activities of the SFC in respect of the regulation of CIS?
I. Authorizing CISs
II. Monitoring and supervising the intermediaries involved with CISs
III. Directly managing CIS
IV. Vetting Insurance Intermediaries who sell and market Investment Linked Insurance SchemesCorrect
There are only two circumstances in which a CIS may be offered or marketed to the public in Hong Kong: it must be either (i) structured as a company which is listed on the SEHK, or
(ii) authorised by the SFC. Notwithstanding the above, 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. Authorisation of these has been delegated by the SFC to the Products Advisory Committee. The Insurance Authority is represented on this committee, as insurance companies wishing to promote these schemes will need to be authorised under the Insurance Ordinance.Incorrect
There are only two circumstances in which a CIS may be offered or marketed to the public in Hong Kong: it must be either (i) structured as a company which is listed on the SEHK, or
(ii) authorised by the SFC. Notwithstanding the above, 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. Authorisation of these has been delegated by the SFC to the Products Advisory Committee. The Insurance Authority is represented on this committee, as insurance companies wishing to promote these schemes will need to be authorised under the Insurance Ordinance.Hint
Reference Chapter:1.2.2
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Question 119 of 673
119. 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:1.2.2
-
Question 120 of 673
120. 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:1.2.2
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Question 121 of 673
121. Question
1 pointsQID612:Which of the following entities authorizes CIS?
Correct
The powers assigned 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
The powers assigned 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:1.2.2
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Question 122 of 673
122. Question
1 pointsQID614:With regards to the asset management industry, duties of the SFC include which of the following?
I. Licensing Intermediaries
II. Authorizing Collective Investment Schemes.
III. Monitoring the conduct of intermediaries
IV. Avoiding investor’s participation in high risk Collectives Investment SchemesCorrect
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:1.2.2
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Question 123 of 673
123. Question
1 pointsQID107:Which of the following products is approved by the Securities and Futures Commission (SFC)?
Correct
The functions of the SFC in relation to asset management are two-pronged:
(a) it authorises CISs, for example, unit trusts, managed funds and retirement schemes, and supervises the marketing of these CISsIncorrect
The functions of the SFC in relation to asset management are two-pronged:
(a) it authorises CISs, for example, unit trusts, managed funds and retirement schemes, and supervises the marketing of these CISsHint
Reference Chapter:1.2.20
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Question 124 of 673
124. Question
1 pointsQID630:Why is the authorised status important to a CIS?
I. Without authorization, the CIS will not be able to licence representative and cannot operate in Hong Kong.
II. Authorization is a core requirement of being able to offer a CIS to the public in Hong Kong.
III. Authorization is a perquisite of being able to offer a CIS to professional investors in Hong Kong
IV. Without authorization, a CIS cannot conduct any regulated activities in Hong Kong.Correct
There are only two circumstances in which a CIS may be offered or marketed to the public in Hong Kong: it must be either (i) structured as a company which is listed on the SEHK, or (ii) authorised by the SFC. The authorisation route is by far the most common approach taken.
Incorrect
There are only two circumstances in which a CIS may be offered or marketed to the public in Hong Kong: it must be either (i) structured as a company which is listed on the SEHK, or (ii) authorised by the SFC. The authorisation route is by far the most common approach taken.
Hint
Reference Chapter:1.2.20
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Question 125 of 673
125. 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:1.2.20
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Question 126 of 673
126. Question
1 pointsQID628:The biggest difference between authorised investment schemes and unauthorised collective investment schemes is
Correct
There are only two circumstances in which a CIS may be offered or marketed to the public in Hong Kong: it must be either (i) structured as a company which is listed on the SEHK, or (ii) authorised by the SFC. The authorisation route is by far the most common approach taken. So unauthorised CISs cannot be sold to the Hong Kong public.
Incorrect
There are only two circumstances in which a CIS may be offered or marketed to the public in Hong Kong: it must be either (i) structured as a company which is listed on the SEHK, or (ii) authorised by the SFC. The authorisation route is by far the most common approach taken. So unauthorised CISs cannot be sold to the Hong Kong public.
Hint
Reference Chapter:1.2.20
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Question 127 of 673
127. Question
1 pointsQID631:What are the sanctions that the SFC can impose on CISs?
I. Authorize CISs
II. Refuse to authorize
III. Withdraw CIS authorization
IV. Ban CIS from re-authorizationCorrect
The SFC may grant authorisation subject to “any other conditions it considers appropriate”. The SFC is also given the power to refuse to authorise applications and to withdraw authorisations.
Incorrect
The SFC may grant authorisation subject to “any other conditions it considers appropriate”. The SFC is also given the power to refuse to authorise applications and to withdraw authorisations.
Hint
Reference Chapter:1.2.23
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Question 128 of 673
128. Question
1 pointsQID633:With regards to authorizing a CIS, which of the following statements are true?
I. The SFC may grant authorization subject to “any other conditions it considers appropriate.”
II. The SFC is also given the power to refuse to authorize applications and to withdraw authorizations once given.
III. The SFO requires that there must be an individual approved by the SFC to receive notices and decisions served by the SFC relating to the CIS.
IV. If the CIS is approved by recognized overseas securities regulator, authorization of a CIS is on a voluntary basisCorrect
First, the SFC may grant authorisation subject to “any other conditions it considers appropriate”. The SFC is also given the power to refuse to authorise applications and to withdraw authorisations. Second, the SFO requires that there must be an individual approved by the SFC to receive notices and decisions served by the SFC relating to an authorised CIS.
Incorrect
First, the SFC may grant authorisation subject to “any other conditions it considers appropriate”. The SFC is also given the power to refuse to authorise applications and to withdraw authorisations. Second, the SFO requires that there must be an individual approved by the SFC to receive notices and decisions served by the SFC relating to an authorised CIS.
Hint
Reference Chapter:1.2.23
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Question 129 of 673
129. Question
1 pointsQID632:When the SFC authorizes a CIS, it requires the nomination of
Correct
The SFO requires that there must be an individual approved by the SFC to receive notices and decisions served by the SFC relating to an authorised CIS. Contact details relating to that person must be provided to the SFC. The SFC has powers to approve the contact person or to withdraw the approval.
Incorrect
The SFO requires that there must be an individual approved by the SFC to receive notices and decisions served by the SFC relating to an authorised CIS. Contact details relating to that person must be provided to the SFC. The SFC has powers to approve the contact person or to withdraw the approval.
Hint
Reference Chapter:1.2.24
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Question 130 of 673
130. Question
1 pointsQID1607:Mr. Liu, who is a financial journalist, often encourages retail investors to trade stocks on the newspaper, in which the comments are unfounded and often mislead the public. Is there any wrongdoing in this case?
Correct
Broadcasters like financial journalists and columnists who give investment advice to the public for references on subscription do not conduct the regulated activity of advising on securities. Thus, they are exempted from requiring a licence.
Incorrect
Broadcasters like financial journalists and columnists who give investment advice to the public for references on subscription do not conduct the regulated activity of advising on securities. Thus, they are exempted from requiring a licence.
Hint
Reference Chapter:1.2.28
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Question 131 of 673
131. Question
1 pointsQID988:Kanon Financial has recently issued a Collective Investment Scheme, it has assigned Kaohsiung Securities – a licensed corporation to be the distributor. If the CIS is not authorised by the SFC, can Kaohsiung Securities issue advertisements for it?
Correct
A licensed corporation can issue an advertisement for an unauthorised CIS as long as its states that its not available to the public in Hong Kong.
Incorrect
A licensed corporation can issue an advertisement for an unauthorised CIS as long as its states that its not available to the public in Hong Kong.
Hint
Reference Chapter:1.2.31
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Question 132 of 673
132. Question
1 pointsQID177:Advertisements, invitations and documents which contain an invitation to the public in respect of certain matters may only be issued if they are authorised by which of the following agencies?
Correct
There are four core aspects to Part IV:
(d) Section 105, SFO empowers the SFC to authorise the issue of (and to impose conditions on) advertisements and other documents that contain an offer to the public.Incorrect
There are four core aspects to Part IV:
(d) Section 105, SFO empowers the SFC to authorise the issue of (and to impose conditions on) advertisements and other documents that contain an offer to the public.Hint
Reference Chapter:1.2.31
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Question 133 of 673
133. Question
1 pointsQID2753:Which of the following statements about invitation documents to the public is true?
Correct
Invitation documents issued to the public require the approval of the SFC. Invitation documents issued only to professional investors do not require SFC’s approval.
Incorrect
Invitation documents issued to the public require the approval of the SFC. Invitation documents issued only to professional investors do not require SFC’s approval.
Hint
Reference Chapter:1.2.31
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Question 134 of 673
134. Question
1 pointsQID1574:Issuing advertisement to the public about authorised CIS is a
Correct
Advertisements, invitations and documents which contain an invitation to the public (“Advertisements”) in respect of certain matters may only be issued if they are authorised by the SFC, or come under an appropriate exemption. A breach of this provision is an offence.
These provisions are set out in s. 103(1), SFO.Incorrect
Advertisements, invitations and documents which contain an invitation to the public (“Advertisements”) in respect of certain matters may only be issued if they are authorised by the SFC, or come under an appropriate exemption. A breach of this provision is an offence.
These provisions are set out in s. 103(1), SFO.Hint
Reference Chapter:1.2.31
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Question 135 of 673
135. Question
1 pointsQID637:What are the possible consequences to advertise invitations to the public to deal in CISs without the SFC approval or exemption?
Correct
Advertisements, invitations and documents which contain an invitation to the public (“Advertisements”) in respect of certain matters may only be issued if they are authorised by the SFC, or come under an appropriate exemption. A breach of this provision is an offence.
Incorrect
Advertisements, invitations and documents which contain an invitation to the public (“Advertisements”) in respect of certain matters may only be issued if they are authorised by the SFC, or come under an appropriate exemption. A breach of this provision is an offence.
Hint
Reference Chapter:1.2.31
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Question 136 of 673
136. Question
1 pointsQID1572:Issuing an advertisement under which of the following circumstances is illegal?
Correct
Advertisements, invitations and documents which contain an invitation to the public (“Advertisements”) in respect of certain matters may only be issued if they are authorised by the SFC, or come under an appropriate exemption. A breach of this provision is an offence.
Incorrect
Advertisements, invitations and documents which contain an invitation to the public (“Advertisements”) in respect of certain matters may only be issued if they are authorised by the SFC, or come under an appropriate exemption. A breach of this provision is an offence.
Hint
Reference Chapter:1.2.31
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Question 137 of 673
137. Question
1 pointsQID615:With regards to Asset Management businesses, the SFO is
concerned with
I. Inviting the public to enter into or offer to enter into an
agreement to acquire, dispose of, subscribe for or underwrite
securities, or a regulated investment agreement
II. Inviting the public to acquire an interest in or participate in, or
offer to acquire an interest in or participate in, a CIS.
III. Inviting professional investors to enter into or offer to enter
into an agreement to acquire, dispose of, subscribe for or
underwrite securities, or a regulated investment agreement
IV. Inviting professional investors to acquire an interest in or
participate in, or offer to acquire an interest in or participate
in, a CIS.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:1.2.31
-
Question 138 of 673
138. Question
1 pointsQID636:Advertisements, invitations and documents which contain an invitation to the public “Advertisements”) in respect of certain matters may only be issued if they are authorised by the SFC, or fall within an available exemption. A breach of this provision is an
Correct
Advertisements, invitations and documents which contain an invitation to the public (“Advertisements”) in respect of certain matters may only be issued if they are authorised by
the SFC, or come under an appropriate exemption. A breach of this provision is an offence.Incorrect
Advertisements, invitations and documents which contain an invitation to the public (“Advertisements”) in respect of certain matters may only be issued if they are authorised by
the SFC, or come under an appropriate exemption. A breach of this provision is an offence.Hint
Reference Chapter:1.2.31
-
Question 139 of 673
139. Question
1 pointsQID2654:Investment Advertisements issued for the public are required to have
Correct
Investment Advertisements issued for the public are required to have 1 Individual that is approved by the SFC to receive SFC notices and decisions relating to the advertisments in question and that the SFC has been notified of the person’s contact information.
Incorrect
Investment Advertisements issued for the public are required to have 1 Individual that is approved by the SFC to receive SFC notices and decisions relating to the advertisments in question and that the SFC has been notified of the person’s contact information.
Hint
Reference Chapter:1.2.33
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Question 140 of 673
140. Question
1 pointsQID641:Which of the following are exempted by the SFO to be classified as advertisement of CIS?
I. Prospectuses complying with the Companies Ordinance
II. Listing documents and certain other offer documents in relation to securities the listing of which on The Stock Exchange of Hong Kong Limited (“SEHK”) has been approved by HKEX
III. Advertisements, invitations and documents issued by certain licensed corporations (if in respect of securities they must hold a Type 1, 4 or 6 licence, and if in respect of futures contracts, they must hold a Type 2 or 5 licence)
IV. Advertisement etc. in respect of securities or interests in CISs intended to be disposed of only to PIs.Correct
There are several exemptions provided for in s. 103, SFO, which permit the issue of certain documents and the acts of special groups, including the following:
(a) prospectuses complying with the Companies (Winding Up and Miscellaneous Provisions) Ordinance;
(b) listing documents and certain other offer documents in relation to securities traded on a recognised stock market;
(c.) Advertisements issued by certain licensed corporations (see section 3.18 below for an example);
(d) Advertisements in respect of securities or interests in CISs intended to be disposed of only to professional investors.Incorrect
There are several exemptions provided for in s. 103, SFO, which permit the issue of certain documents and the acts of special groups, including the following:
(a) prospectuses complying with the Companies (Winding Up and Miscellaneous Provisions) Ordinance;
(b) listing documents and certain other offer documents in relation to securities traded on a recognised stock market;
(c.) Advertisements issued by certain licensed corporations (see section 3.18 below for an example);
(d) Advertisements in respect of securities or interests in CISs intended to be disposed of only to professional investors.Hint
Reference Chapter:1.2.34
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Question 141 of 673
141. Question
1 pointsQID640:Which of the following are exempted from the requirement to comply with the SFO requirements in Asset Management Advertising?
I. Publishers of newspapers
II. Live Broadcasters
III. Lawyers who promote CISs to his clients
IV. Accounts who promote CIS to his clientsCorrect
There are several exemptions provided for in s. 103, SFO, which permit the issue of certain documents and the acts of special groups, including the following:
– sellers or publishers of newspapers and other publications containing such advertisements; and
– conduits or live broadcasters issuing such prohibited material in the ordinary course of their business.Incorrect
There are several exemptions provided for in s. 103, SFO, which permit the issue of certain documents and the acts of special groups, including the following:
– sellers or publishers of newspapers and other publications containing such advertisements; and
– conduits or live broadcasters issuing such prohibited material in the ordinary course of their business.Hint
Reference Chapter:1.2.34
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Question 142 of 673
142. Question
1 pointsQID644:Advertisements are also subject to the provisions of the SFO concerning misrepresentation, which provide
Correct
Advertisements are also subject to the provisions of the SFO concerning misrepresentation, which provide for both civil remedies and criminal sanctions.
Incorrect
Advertisements are also subject to the provisions of the SFO concerning misrepresentation, which provide for both civil remedies and criminal sanctions.
Hint
Reference Chapter:1.2.36
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Question 143 of 673
143. Question
1 pointsQID646:A person to make any fraudulent or reckless misrepresentation for the purpose of inducing another person to investing in a CIS may result in
Correct
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 deal with securities, structured products or CISs.
Incorrect
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 deal with securities, structured products or CISs.
Hint
Reference Chapter:1.2.37
-
Question 144 of 673
144. Question
1 pointsQID645:What are the possible consequences to make fraudulent/reckless misrepresentations to induce a person to deal in securities and CISs?
Correct
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 deal with securities, structured products or CISs.
Incorrect
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 deal with securities, structured products or CISs.
Hint
Reference Chapter:1.2.37
-
Question 145 of 673
145. Question
1 pointsQID91:Which of the following entities may grant injunctions?
Correct
The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines:
(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:
(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:1.2.38
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Question 146 of 673
146. Question
1 pointsQID647:Which of the following conditions does the SFO provide for civil liability for compensatory damages?
I. Fraudulent Misrepresentation
II. Reckless Misrepresentation
III. Unintended Misrepresentation
IV. Negligent MisrepresentationCorrect
The civil remedies for misrepresentation are established under s. 108, SFO, which is similar to s. 107, SFO but in addition, covers negligent misrepresentation.
Incorrect
The civil remedies for misrepresentation are established under s. 108, SFO, which is similar to s. 107, SFO but in addition, covers negligent misrepresentation.
Hint
Reference Chapter:1.2.38
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Question 147 of 673
147. Question
1 pointsQID648:Mr Ko was induced by Yellow River Investment Limited Advertisement to invest in a CIS managed by Yellow River Investment. However, Mr Ko later discovered that the profit has been overstated. Upon investigation, it appeared that it was a misprint by the printer who printed advertisements for Yellow River Investment. Which type of misrepresentation is that?
Correct
A negligent misrepresentation is any statement which, at the time it is made, is false, misleading or deceptive, and is made without reasonable care having been taken to ensure its accuracy.
Incorrect
A negligent misrepresentation is any statement which, at the time it is made, is false, misleading or deceptive, and is made without reasonable care having been taken to ensure its accuracy.
Hint
Reference Chapter:1.2.39
-
Question 148 of 673
148. Question
1 pointsQID649:Mr Ko was induced by Yellow River Investment Limited
Advertisement to invest in a CIS managed by Yellow River
Investment. However, Mr Ko later discovered that the profit has been overstated. Upon investigation, it appeared that it was a misprint by the printer who printed advertisements for Yellow River Investment.
Who is responsible for the damages payable to Mr Ko?
I. Yellow River Investment Limited
II. The Directors of Yellow River Investment
III. Accounting staff of Yellow River Investment
IV. All staff of Yellow River InvestmentCorrect
This is a case of negligent misrepresentation, in which the data was released without reasonable care having been taken to ensure its accuracy. In this case, the liability to civil remedies is extended to every director of the company which has made a misrepresentation, except to the extent it is proved that a director did not authorise the making of that misrepresentation.
Incorrect
This is a case of negligent misrepresentation, in which the data was released without reasonable care having been taken to ensure its accuracy. In this case, the liability to civil remedies is extended to every director of the company which has made a misrepresentation, except to the extent it is proved that a director did not authorise the making of that misrepresentation.
Hint
Reference Chapter:1.2.39
-
Question 149 of 673
149. 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:1.2.4
-
Question 150 of 673
150. 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:1.2.4
-
Question 151 of 673
151. 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:1.2.4
-
Question 152 of 673
152. 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:1.2.4
-
Question 153 of 673
153. 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:1.2.4
-
Question 154 of 673
154. 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:1.2.40
-
Question 155 of 673
155. 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:1.2.40
-
Question 156 of 673
156. Question
1 pointsQID2403:Open-Ended Fund Company is
Correct
Open-Ended Fund Company is a type of CIS.
Incorrect
Open-Ended Fund Company is a type of CIS.
Hint
Reference Chapter:1.2.40
-
Question 157 of 673
157. Question
1 pointsQID652:Which of the following ordinances, codes of conduct and guidelines are specifically concerned with asset management, CIS and MPF products?
I. Fund Manager Code of Conduct (FMCC)
II. Code on Unit Trusts and Mutual Funds (CUTMF)
III. The SFC Code on MPF Product
IV. Securities and Futures Ordinance (SFO)Correct
All of these Codes and Guidelines regulate and establish the boundaries and standards of conduct for professionals and corporations conducting asset management activities.
Incorrect
All of these Codes and Guidelines regulate and establish the boundaries and standards of conduct for professionals and corporations conducting asset management activities.
Hint
Reference Chapter:1.2.40
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Question 158 of 673
158. Question
1 pointsQID2423:Which of the following statement is correct regarding open-ended fund companies?
Correct
Open-ended fund companies are not a kind of special unit trust, but of limited liability and their share capital is changeable. Only public open-ended fund companies can issue to the public after they are approved by the SFC. Open-ended fund companies are monitored by the SFC.
Incorrect
Open-ended fund companies are not a kind of special unit trust, but of limited liability and their share capital is changeable. Only public open-ended fund companies can issue to the public after they are approved by the SFC. Open-ended fund companies are monitored by the SFC.
Hint
Reference Chapter:1.2.41
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Question 159 of 673
159. Question
1 pointsQID2642:Can overseas corporate funds re-domicile to Hong Kong as an OFC?
Correct
Overseas corporate funds can re-domicile to Hong Kong as an OFC if they are able to meet all the requirements applicable to a newly established OFC.
Incorrect
Overseas corporate funds can re-domicile to Hong Kong as an OFC if they are able to meet all the requirements applicable to a newly established OFC.
Hint
Reference Chapter:1.2.41
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Question 160 of 673
160. 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:1.2.42
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Question 161 of 673
161. Question
1 pointsQID123:Which of the following descriptions about subsidiary legislations are correct?
I. Subsidiary legislations are enacted by the Chief Executive of Hong Kong after consulting the advice of the Legco
II. Subsidiary legislations are some laws made by a process of delegation from LegCo to other bodies.
III. Subsidiary legislations do not possess the force of law and are not enforceable.
IV. Subsidiary legislations possess the force of law and are enforceable.Correct
The laws passed by the Legislative Council of the Hong Kong Special Administrative Region (“LegCo”) are called ordinances. They are enacted by the Chief Executive of the
Hong Kong Special Administrative Region (“HKSAR”) with the advice of LegCo. Some laws are made by a process of delegation from LegCo to other bodies, such delegation usually being done under an ordinance. For example, the Securities and Futures Commission (“SFC”) has extensive powers to make rules under the Securities and Futures Ordinance (“SFO”). This process is, in the case of the SFC, generally required to be completed by a process of tabling in LegCo, which gives LegCo an opportunity to review the subsidiary legislation before it becomes law.Incorrect
The laws passed by the Legislative Council of the Hong Kong Special Administrative Region (“LegCo”) are called ordinances. They are enacted by the Chief Executive of the
Hong Kong Special Administrative Region (“HKSAR”) with the advice of LegCo. Some laws are made by a process of delegation from LegCo to other bodies, such delegation usually being done under an ordinance. For example, the Securities and Futures Commission (“SFC”) has extensive powers to make rules under the Securities and Futures Ordinance (“SFO”). This process is, in the case of the SFC, generally required to be completed by a process of tabling in LegCo, which gives LegCo an opportunity to review the subsidiary legislation before it becomes law.Hint
Reference Chapter:1.2.43
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Question 162 of 673
162. Question
1 pointsQID204:How does the court take into account the codes and guidelines issued by the SFC?
Correct
A failure on the part of an intermediary or its representative to comply with a code of conduct is not a breach of law and does not by itself constitute an offence under the law.
However, it should be noted that breaches of codes of conduct may be taken into account in two important respects:
(b) a court hearing legal proceedings under the SFO shall consider the provisions of the codes if the court considers it relevant to the determination of any question arising in
the proceedings. This gives the codes a degree of legal recognition.Incorrect
A failure on the part of an intermediary or its representative to comply with a code of conduct is not a breach of law and does not by itself constitute an offence under the law.
However, it should be noted that breaches of codes of conduct may be taken into account in two important respects:
(b) a court hearing legal proceedings under the SFO shall consider the provisions of the codes if the court considers it relevant to the determination of any question arising in
the proceedings. This gives the codes a degree of legal recognition.Hint
Reference Chapter:1.2.43
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Question 163 of 673
163. 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:1.2.43
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Question 164 of 673
164. 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:1.2.43
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Question 165 of 673
165. Question
1 pointsQID819:If an intermediary has been convicted of violation of the SFO. How can the SFC sanction such intermediary?
I. Revoke or suspend approval as a responsible officer
II. Fines
III. Reprimand, publicly or privately
IV. Jail sentenceCorrect
Section 194, SFO provides that if a “regulated person” is guilty of “misconduct”, or is not a fit and proper person, the SFC may:
(a) in the case of a licensed corporation or representative, revoke or suspend the licence in respect of all or part of the licensed regulated activity;
(b) in the case of a responsible officer (see section 1.3 of Topic 4 for the definition of this term), revoke or suspend approval as a responsible officer;
(c) publicly or privately reprimand the regulated person;
(d) prohibit the regulated person from applying for a licence, registration, approval as a responsible officer or entry in the HKMA register, or to act as an executive officer; and
(e) separately or in addition order the regulated person to pay a penalty up to the greater of HK$10 million or three times any profit gained or loss avoided as a result of his misconduct.Incorrect
Section 194, SFO provides that if a “regulated person” is guilty of “misconduct”, or is not a fit and proper person, the SFC may:
(a) in the case of a licensed corporation or representative, revoke or suspend the licence in respect of all or part of the licensed regulated activity;
(b) in the case of a responsible officer (see section 1.3 of Topic 4 for the definition of this term), revoke or suspend approval as a responsible officer;
(c) publicly or privately reprimand the regulated person;
(d) prohibit the regulated person from applying for a licence, registration, approval as a responsible officer or entry in the HKMA register, or to act as an executive officer; and
(e) separately or in addition order the regulated person to pay a penalty up to the greater of HK$10 million or three times any profit gained or loss avoided as a result of his misconduct.Hint
Reference Chapter:1.2.43
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Question 166 of 673
166. Question
1 pointsQID635:American Industrial and Commercial High Risk Investment Fund is a licensed corporation that engages in Type 9 regulated activity as defined by the Securities and Futures Commission and manages a collective investment scheme (CIS). It has advertised itself on a number of newspaper for the past few weeks and described itself as an authorised CIS. Later on, the management of American Industrial and Commercial High Risk Investment Fund discovered that American Industrial and Commercial High Risk Investment Fund was not authorised. The case is a violation of?
Correct
Advertisements, invitations and documents which contain an invitation to the public (“Advertisements”) in respect of certain matters may only be issued if they are authorised by the SFC, or come under an appropriate exemption. A breach of this provision is an offence.
Incorrect
Advertisements, invitations and documents which contain an invitation to the public (“Advertisements”) in respect of certain matters may only be issued if they are authorised by the SFC, or come under an appropriate exemption. A breach of this provision is an offence.
Hint
Reference Chapter:1.2.43
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Question 167 of 673
167. Question
1 pointsQID86:Which of the following correctly describes the legal status of the Securities and Futures Commission’s codes 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:1.2.43
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Question 168 of 673
168. 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:1.2.43
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Question 169 of 673
169. 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:1.2.43
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Question 170 of 673
170. 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:1.2.43
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Question 171 of 673
171. Question
1 pointsQID1330:What is the legal status of the code of conduct issued by the SFC?
Correct
A failure on the part of an intermediary or its representative to comply with the Code of Conduct is not a breach of law and does not by itself constitute an offence under the law.
Incorrect
A failure on the part of an intermediary or its representative to comply with the Code of Conduct is not a breach of law and does not by itself constitute an offence under the law.
Hint
Reference Chapter:1.2.43
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Question 172 of 673
172. 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:1.2.43
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Question 173 of 673
173. 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:1.2.46
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Question 174 of 673
174. 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:1.2.5
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Question 175 of 673
175. 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:1.2.5
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Question 176 of 673
176. 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:1.2.5
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Question 177 of 673
177. Question
1 pointsQID116:Which of the following products can the SFO scope of Asset Management Business be applicable to ?
Correct
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. These functions are 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. These functions are derived from Part IV, SFO and the second from Part V, SFO.Hint
Reference Chapter:1.2.5
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Question 178 of 673
178. 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:1.2.6
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Question 179 of 673
179. 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:1.2.6
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Question 180 of 673
180. 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:1.2.6
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Question 181 of 673
181. 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:1.2.6
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Question 182 of 673
182. 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:1.2.7
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Question 183 of 673
183. 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:1.2.7
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Question 184 of 673
184. 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:1.2.7
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Question 185 of 673
185. 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:1.2.7
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Question 186 of 673
186. 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:1.2.7
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Question 187 of 673
187. 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:1.2.7
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Question 188 of 673
188. 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:1.2.7
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Question 189 of 673
189. 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:1.2.7
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Question 190 of 673
190. 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:1.2.7
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Question 191 of 673
191. 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:1.2.7
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Question 192 of 673
192. 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:1.2.7
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Question 193 of 673
193. 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:1.2.7
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Question 194 of 673
194. 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:1.2.7
-
Question 195 of 673
195. 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:1.2.7
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Question 196 of 673
196. 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:1.2.7
-
Question 197 of 673
197. 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:1.2.7
-
Question 198 of 673
198. 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:1.2.7
-
Question 199 of 673
199. 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:1.2.7
-
Question 200 of 673
200. 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:1.2.7
-
Question 201 of 673
201. 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:1.2.7
-
Question 202 of 673
202. Question
1 pointsQID2379:Which of the following activity belongs to asset management?
I. discretionary management of securities portfolios
II. discretionary management of futures portfolios
III. discretionary management of portfolios of only foreign futures or securities
IV. discretionary management of portfolios of only local real estate propertiesCorrect
Discretionary management of securities or futures portfolios belong to asset management, no matter it composes of foreign futures or securities or not. Real estate properties are not securities or futures. Therefore, discretionary management of this kind of portfolios is not asset management activity. Only specific real estate investment schemes approved by the SFC belongs to the era of asset management.
Incorrect
Discretionary management of securities or futures portfolios belong to asset management, no matter it composes of foreign futures or securities or not. Real estate properties are not securities or futures. Therefore, discretionary management of this kind of portfolios is not asset management activity. Only specific real estate investment schemes approved by the SFC belongs to the era of asset management.
Hint
Reference Chapter:1.2.8
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Question 203 of 673
203. Question
1 pointsQID1226:The definition of Asset Management under the SFO are?
I. Managing a portfolio of securities or futures contracts for another person
II. Managing a CIS that is managed for another person where
the property managed under the scheme consists primarily of immovable property
III. Managing a portfolio of securities or futures contracts for oneself
IV. Managing a CIS that is managed for oneself where the property managed under the scheme consists primarily of immovable propertyCorrect
Under Schedule 5, SFO, “asset management” means:
(a) real estate investment scheme management; or
(b) securities or futures contracts management.
“Real estate investment scheme management”, in relation to a person, means providing a service of operating a CIS for another person by the person.Incorrect
Under Schedule 5, SFO, “asset management” means:
(a) real estate investment scheme management; or
(b) securities or futures contracts management.
“Real estate investment scheme management”, in relation to a person, means providing a service of operating a CIS for another person by the person.Hint
Reference Chapter:1.2.8
-
Question 204 of 673
204. Question
1 pointsQID342:Asset management as defined in the SFO can include
I. Ownership of listed issuers
II. Real estate investment scheme management
III. Private companies management
IV. Securities or futures contracts management.Correct
Under Schedule 5, SFO, “asset management” means:
(a) real estate investment scheme management; or
(b) securities or futures contracts management.Incorrect
Under Schedule 5, SFO, “asset management” means:
(a) real estate investment scheme management; or
(b) securities or futures contracts management.Hint
Reference Chapter:1.2.8
-
Question 205 of 673
205. Question
1 pointsQID343:Which of the following are regarded as “assets” in “asset management” as defined by the SFO?
I. Securities Contract on a Portfolio basis
II. Securities Contract
III. Futures Contracts on a Portfolio basis
IV. Futures ContractCorrect
Under Schedule 5, SFO, “asset management” means: managing someone else’s securities or futures contracts. This means the securities and futures being held are the “assets” being managed.
Incorrect
Under Schedule 5, SFO, “asset management” means: managing someone else’s securities or futures contracts. This means the securities and futures being held are the “assets” being managed.
Hint
Reference Chapter:1.2.8
-
Question 206 of 673
206. Question
1 pointsQID349:Under the Securities and Futures Ordinance (SFO), which of the following persons will NOT be deemed to be engaged in the regulated activity of asset management if they provide asset management services wholly incidental to the specified activities?
I. A licensed corporation engaged in securities margin financing.
II. An authorised financial institution registered to deal in futures contracts.
III. A person licensed to deal in securities.
IV. An individual entered on the Hong Kong Monetary Authority (HKMA)’s register of persons as engaged in dealing in securities.Correct
Asset Management Activities wholly incidental to Type 1,2,4,5 Activities do not require a separate licence.
Incorrect
Asset Management Activities wholly incidental to Type 1,2,4,5 Activities do not require a separate licence.
Hint
Reference Chapter:1.2.9
-
Question 207 of 673
207. Question
1 pointsQID345:Which of the following persons are excluded from the definition of “securities or futures management”?
I. corporations that carry on securities or futures contracts management solely for their wholly owned subsidiaries, their holding companies which hold all their issued shares, or other wholly owned subsidiaries of the latter
II. persons licensed to deal in securities and/or futures contracts
(i.e. licensed for Type 1 and/or Type 2 regulated activity), who carry out securities or futures contracts management as an activity wholly incidental to the licensed activity
III. Solicitors, counsel (barristers), professional accountants and trustees who provide securities or futures contracts management services wholly incidental to their professional practices.
IV. Auditors and professionals who provide securities or futures contracts management services.Correct
Part V, SFO provides for the implementation of the licensing regime, including:
(a) allowing 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;
(b) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions and also;
(c.) 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.Incorrect
Part V, SFO provides for the implementation of the licensing regime, including:
(a) allowing 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;
(b) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions and also;
(c.) 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.Hint
Reference Chapter:1.2.9
-
Question 208 of 673
208. Question
1 pointsQID346:Which of the following are not examples of asset management?
I. corporations that carry out securities or futures contracts management solely for their wholly owned subsidiaries, their holding companies which hold all their issued shares, or other wholly owned subsidiaries of the latter
II. corporations that carry out securities or futures contracts management solely for professional investors or sovereign funds with extensive investment experience
III. persons licensed to deal in securities and/or futures contracts (i.e. licensed for Type 1 and/or Type 2 regulated activity), who carry out securities or futures contracts management as an activity wholly incidental to the licensed activity
IV. Solicitors, counsel (barristers), professional accountants and
trustees who provide securities or futures contracts
management services wholly incidental to their professional
practices.Correct
Part V, SFO provides for the implementation of the licensing regime, including:
(a) allowing 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;
(b) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions and also;
(c.) 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.Incorrect
Part V, SFO provides for the implementation of the licensing regime, including:
(a) allowing 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;
(b) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions and also;
(c.) 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.Hint
Reference Chapter:1.2.9
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Question 209 of 673
209. 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:1.3.
-
Question 210 of 673
210. 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:1.3.1
-
Question 211 of 673
211. 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:1.3.1
-
Question 212 of 673
212. 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:1.3.1
-
Question 213 of 673
213. 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:1.3.1
-
Question 214 of 673
214. 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:1.3.11
-
Question 215 of 673
215. 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:1.3.11
-
Question 216 of 673
216. 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:1.3.12
-
Question 217 of 673
217. 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:1.3.12
-
Question 218 of 673
218. 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:1.3.12
-
Question 219 of 673
219. Question
1 pointsQID1363:How many exchanges and clearing houses are there in Hong Kong?
Correct
There are currently two exchanges and four clearing houses in Hong Kong.
Incorrect
There are currently two exchanges and four clearing houses in Hong Kong.
Hint
Reference Chapter:1.3.14
-
Question 220 of 673
220. 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:1.3.14
-
Question 221 of 673
221. 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:1.3.14
-
Question 222 of 673
222. 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:1.3.14
-
Question 223 of 673
223. Question
1 pointsQID1628:The Central Clearing and Settlement System (“CCASS”) is
Correct
The Central Clearing and Settlement System (“CCASS”) is operated by HKSCC for clearing and settlement of securities transactions on the SEHK.
Incorrect
The Central Clearing and Settlement System (“CCASS”) is operated by HKSCC for clearing and settlement of securities transactions on the SEHK.
Hint
Reference Chapter:1.3.14
-
Question 224 of 673
224. 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:1.3.14
-
Question 225 of 673
225. 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:1.3.14
-
Question 226 of 673
226. 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:1.3.14
-
Question 227 of 673
227. 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:1.3.14
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Question 228 of 673
228. 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:1.3.14
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Question 229 of 673
229. 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:1.3.14
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Question 230 of 673
230. 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:1.3.14
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Question 231 of 673
231. 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:1.3.14
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Question 232 of 673
232. Question
1 pointsQID1627:In Hong Kong, the one who clears the options business of the SEHK is
Correct
The SEHK Options Clearing House Limited (“SEOCH”), a wholly owned subsidiary of the SEHK, which clears the options business of the SEHK
Incorrect
The SEHK Options Clearing House Limited (“SEOCH”), a wholly owned subsidiary of the SEHK, which clears the options business of the SEHK
Hint
Reference Chapter:1.3.14
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Question 233 of 673
233. 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:1.3.14
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Question 234 of 673
234. Question
1 pointsQID2751:Which of the following descriptions about the HKEX is incorrect?
Correct
HKEX is not responsible for front-line prudential regulation of market participants. Such task is the responsibility of the SFC.
Incorrect
HKEX is not responsible for front-line prudential regulation of market participants. Such task is the responsibility of the SFC.
Hint
Reference Chapter:1.3.14
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Question 235 of 673
235. 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:1.3.14
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Question 236 of 673
236. Question
1 pointsQID1643:Kaohsiung Futures should notify the HKFE in the occurrence of which of the following incidents?
I. The staff of Kaohsiung Futures has materially breached any laws.
II. The staff of Kaohsiung Futures has violated the rules, codes and guidelines issued by the SFC.
III. Kaohsiung Futures is failing to meet its liabilities and is about to wind-up.
IV. The directors of Kaohsiung Futures has committed an offence under the anti bribery ordinance.Correct
(g) notify HKFE in writing immediately if any one or more of the following occurs:
(i) the discovery of its non-compliance with any of the HKFE Rules, the SFO and its subsidiary legislation, and the conditions imposed on it by HKFE;
(ii) the passing of any resolution, the initiation of any proceedings which may result in the appointment of a receiver (or equivalent) or the winding-up (or equivalent) of an HKFE Participant or any of its shareholders, or the making of any receiving order or arrangement or composition with creditors;
(iv) its becoming aware of any breach of the HKFE Rules or of the SFO and its subsidiary legislation by any other HKFE ParticipantIncorrect
(g) notify HKFE in writing immediately if any one or more of the following occurs:
(i) the discovery of its non-compliance with any of the HKFE Rules, the SFO and its subsidiary legislation, and the conditions imposed on it by HKFE;
(ii) the passing of any resolution, the initiation of any proceedings which may result in the appointment of a receiver (or equivalent) or the winding-up (or equivalent) of an HKFE Participant or any of its shareholders, or the making of any receiving order or arrangement or composition with creditors;
(iv) its becoming aware of any breach of the HKFE Rules or of the SFO and its subsidiary legislation by any other HKFE ParticipantHint
Reference Chapter:1.3.14
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Question 237 of 673
237. 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:1.3.14
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Question 238 of 673
238. 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:1.3.14
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Question 239 of 673
239. Question
1 pointsQID1197:Which of the following are functions and structures of the Mandatory Provident Fund Schemes Authority (MPFA)?
I. It has a chairman.
II. It has a majority of non-executive directors.
III. It approves trustees of MPF schemes and regulates them.
IV. It grants MPF exemptions to Occupational Retirement Schemes (ORSO schemes).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:1.3.16
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Question 240 of 673
240. 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:1.3.16
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Question 241 of 673
241. 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:1.3.16
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Question 242 of 673
242. Question
1 pointsQID2508:The regulator of the trustee of an MPF Scheme is?
Correct
The regulator of the trustee of an MPF Scheme is MPFA.
Incorrect
The regulator of the trustee of an MPF Scheme is MPFA.
Hint
Reference Chapter:1.3.16
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Question 243 of 673
243. 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:1.3.16
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Question 244 of 673
244. 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:1.3.16
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Question 245 of 673
245. Question
1 pointsQID39:Which of the following are duties and functions of the office of
Insurance Authority?
I. Maintain a product registry of all insurance products online
II. Regulate and supervise insurance intermediaries directly
III. The promotion of self-regulation by the industry
IV. Since all insurance products are not approved by the SFC, therefore, there are no linkages between the spheres of activity of the Insurance Authority and the SFCCorrect
The Insurance Authority directly supervises the insurance industry.
Incorrect
The Insurance Authority directly supervises the insurance industry.
Hint
Reference Chapter:1.3.21
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Question 246 of 673
246. 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:1.3.21
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Question 247 of 673
247. Question
1 pointsQID34:The Insurance Authority (IA) directly regulates:
I. Insurers (insurance companies)
II. Auditors of insurers
III. Insurance agents
IV. Insurance related investment productsCorrect
The Insurance Authority (IA) directly regulates:
I. Insurers (insurance companies)
II. Insurance agents
III. Insurance related investment productsIncorrect
The Insurance Authority (IA) directly regulates:
I. Insurers (insurance companies)
II. Insurance agents
III. Insurance related investment productsHint
Reference Chapter:1.3.21
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Question 248 of 673
248. 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:1.3.22
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Question 249 of 673
249. 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:1.3.22
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Question 250 of 673
250. 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