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WorksheetsM5 (5th Ed) Practice Qns Set C
Total questions: 100
Worksheet time: 50mins
Under section 100(2) of the Financial Advisers Act, a high net worth individual is an individual who is assessed to have the potential to have a minimum of S$1 million of assets within a period of ____ year(s).
1
2
3
4
Under the Notice on Technology Risk Management, "critical system" means a system which:
provides essential services to customers
processes transactions that are time critical
will materially impact the licensee's service to its customers
all of the above
Under FAA-G15, before a client completes the purchase of a life policy via the online direct channel, the financial adviser should alert the client that:
there is a 7-day free-look period
a life policy is not a savings account
the client cannot request the financial adviser to explain the product features
the client can get back the premiums paid if the client terminates the policy early
Under the Notice on the Distribution of Direct Purchase Insurance Products ["DPI"], a financial adviser must only distribute DPI through its:
representatives
online direct channel
customer service officer
all of the above
Under Section 32(1) of the Financial Advisers Act, every licensed financial adviser which receives any insurance moneys shall establish and maintain a separate account with a __________________ for its life insurance broking premiums.
hedge fund
trust company
finance company
A financial adviser which makes a recommendation to a client to switch from one designated investment product to another designated investment product shall comply with the requirements as set out in MAS Notice No: FAA-N16. Which one of the following statements best describes switching?
Achieving the projected investment rate of return.
Changing from one financial adviser representative to another.
Selling an investment because the investment objective is met.
Disposing interest in an investment product to acquire another investment product.
In making a recommendation for a collective investment scheme, the financial adviser shall disclose and explain to the client the fact that his rights may only be enforced through the ____________________.
financial adviser
nominee company
insurance company
Since 28 July 2011, the Monetary Authority of Singapore (MAS) has introduced new requirements for every intermediary to formally assess a retail customer's investment knowledge and experience before selling certain investment products to the customer. For which of the following investments is a Customer Account Review required?
Shares.
Futures.
Business Trusts.
All of the above.
Under Notice No: FAA-N02 on the appointment and use of introducers, an introducer can:
be an individual only
be a corporation only
enter into a written agreement with the insurance agent
enter into a written agreement with the financial adviser
Which one of the following modules in the CMFAS Examinations will apply to a financial adviser representative advising on structured deposits?
5
6
9
9A
Under MAS notice on the prevention of money laundering and countering the financing of terrorism, a financial adviser shall retain all relevant documentation for a period of at least ___________ years following the termination of business relations.
6
7
10
The minimum paid-up capital for a licensed financial adviser to carry out financial advisory services concerning spot foreign exchange contracts is:
S$100,000
S$150,000
S$300,000
S$500,000
For Investment-linked Policies (ILP) sub-funds that have matured, the insurer shall ensure that the audit certificate is completed within ______ months after the maturity of the ILP sub-fund.
3
6
9
12
A financial adviser is NOT allowed to perform simplified customer due diligence (CDD) measures for a/an ____________________.
finance company
insurance company
remittance company
Under Notice No: MAS 302 on product development and pricing, which type of product should an insurer notify the Monetary Authority of Singapore in writing?
Short term Accident & Health Policies.
Term insurance with duration of 3 years.
Term insurance with duration of 5 years.
Increase in the number of dread diseases covered under whole life products.
The CPF LIFE Scheme helps a person in his:
protection needs
retirement needs
investment needs
accumulation needs
When misconduct has been committed for which the financial adviser is required to report to the Monetary Authority of Singapore, the misconduct report shall be submitted not later than ________ days after the discovery of the misconduct.
7
14
21
30
For bond and money market ILP sub-funds, the insurer should pay out the redemption proceeds to the policyholders within _________ business days.
T + 4
T + 5
T + 6
T + 7
Which one of the following is NOT a requirement for a CPF member to participate in the CPFIS?
Must be at least 21 years old.
Must be an undischarged bankrupt.
Has more than S$20,000 in Ordinary Account.
Has more than S$40,000 in Special Account.
Which one of the following is an example of NOT meeting the requirements of honesty, integrity and reputation in the fit and proper test?
Being fined for a traffic offense.
Being a non-university graduate.
Being issued with a prohibition order.
Having less than 3 years of relevant working experience.
A financial adviser carrying out due diligence checks on the fitness and propriety of its representatives is NOT required to conduct probity checks on their:
identity
marital status
financial status
past employment records
Under the law, who are required to contribute a certain percentage of their monthly income to the CPF?
Employers only.
Employees only.
Both employers and employees.
Foreigners on Employment Pass.
A failure of an insurer to comply with the standards set out under the guidelines in Notice No: MAS 302 on product development and pricing may be taken into account by the Monetary Authority of Singapore in considering whether to:
approve a new product
revoke the approval for a product
issue directions for the withdrawal of a product
take any one of the above actions
Under guideline FAA-G13 on addressing conflicts of interest arising from issuing or promulgating research analyses or research reports, an analyst should:
trade during the "black-out" period
trade in the investment products in advance of the issuance of the research reports
trade for himself in a manner that is contrary to his outstanding research recommendations
be remunerated in a way to avoid any bias in his research analyses and recommendations
Which one of the following is a front-end procedure to monitor the switching of designated investment products under the Financial Advisers Act?
Tracking the volume of switching transactions.
Identifying any unusual trends in switching transactions.
Declaring in writing that the client has been advised of the switching transactions.
Implementing procedures and controls to identify any unusual trends in switching.
Michelle intends to sell away her 5 year old HDB flat to purchase a condominium 10 years from today. She should do:
estate planning
protection planning
retirement planning
accumulation planning
For a customer below 55 years old, which one of the CPF accounts has the greatest monthly CPF contribution?
Special Account.
Ordinary Account.
Medisave Account.
Retirement Account.
The mission of the Monetary Authority of Singapore is to:
act as the central bank of Singapore
manage the official foreign reserves of Singapore
develop Singapore as an international financial centre
sustain non-inflationary economic growth and promote a sound and progressive financial services sector
Under the Guidelines on conduct of business for execution-related advice, the Monetary Authority of Singapore adopts a _______________ approach to safeguard the interests of clients.
rule-based
principle-based
descriptive-based
prescriptive-based
Where a client does not want to accept the recommendation of the financial adviser and chooses to transact in another investment product which is not recommended, the financial adviser should:
report to MAS
stop the transaction
file a Suspicious Transaction Report
proceed with the client's request and document the decision of the client
General insurance policies are excluded from the definition of investment products under the Financial Advisers Act because they:
are consumption-based
relate more to liability management
do not have any investment element
are at the low end of the risk spectrum
Insurer should compensate affected policy owners when a valuation error represents _________________ or more of the investment-linked policy sub-fund's NAV per unit.
0.5%
1.5%
2.5%
5.0%
The CMFAS Examination requirements under Notice No: FAA-N13 is NOT applicable to:
shares
futures contracts
structured deposits
life insurance policies
The process of money laundering includes ____________________.
layering
integration
placement
all of the above
Which of the following is FALSE? Exempt persons are:
allowed to issue research analyses on life policies
exempted from the requirement to hold a FA licence
allowed to giving advice in Singapore through publications
all of the above
The manager of a collective investment scheme should pay out the redemption proceeds to the scheme's participants within ____________ business days.
T + 4
T + 5
T + 6
T + 7
Which one of the following is NOT a key change under the revised Code on Collective Investment Schemes issued by the Monetary Authority of Singapore on 1 October 2011?
Introducing principles on the naming of funds.
Introducing a list of permissible investments for funds.
Allowing the sending of fund reports to customers by electronic means.
Introducing the concept of weighted portfolio maturities for money market funds.
Which one of the following corporations is considered to be an "accredited investor" under the Financial Advisers Regulations? A corporation with net assets exceeding S$ ________ million in value (or its equivalent in a foreign currency), as determined by the most recent audited balance-sheet of the corporation.
2
5
7
10
Section 84(1) of the Financial Advisers Act stipulates that any officer of a licensed financial adviser who fails to take all reasonable steps to secure compliance with any provision of the Financial Advisers Act shall be guilty of an offence and shall be liable on conviction to a fine not exceeding _________________ or an imprisonment for a term not exceeding two years or both.
S$100,000
S$150,000
S$300,000
S$500,000
Section 23G of the Financial Advisers Act (FAA) states that, unless otherwise approved by the Monetary Authority of Singapore in writing, no appointed representative shall at any one time be a representative of more than ______________ principal(s).
1
2
3
5
Which one of the following persons is NOT allowed to use the term "Financial Adviser"?
A licensed financial adviser.
An exempt financial adviser.
An excluded financial adviser.
A person approved by the Monetary Authority of Singapore.
Explaining the sales advisory process to your client is done at which stage of the sales advisory process?
Gather data, including goals.
Analyse and evaluate financial status.
Develop and present recommendations.
Establish and define client-representative relationship.
Which one of the following is an exempt Financial Adviser?
Securities exchange.
News service provider.
Accounting services provider.
Advising on corporate finance.
Trustworthiness is under which criteria of the fit and proper test?
Financial soundness.
Competence and capability.
Honesty, integrity and reputation.
All of the above.
Provisional representatives are given a grace period of __________ month(s) to pass the requisite exams.
1
2
3
6
Which one of the following best describes the Financial Advisers Regulations (FAR)?
It has no legal effect.
It is a primary legislation.
It is a subsidiary legislation.
It set out the best practice standards that govern the conduct of specified institutions or persons.
A client refuses to disclose information requested by his dealer, but he wants his dealer to execute a trade for him. Which one of the following actions by the dealer is NOT correct?
Proceed with the client's request and record his decision.
Warn the client that he is responsible for product suitability.
Highlight to the client the trading risks without performing a needs analysis.
Decline the client's request for execution because it contravenes the trading rules.
Section 58(1) of the Financial Advisers Act provides that the Monetary Authority of Singapore may issue written _________________ to a licensed financial adviser to comply with such requirements.
orders
directions
standards
guidelines
Which one of the following modules in the CMFAS Examinations will apply to an individual who wishes to advise on and/or arrange life policies, including Investment-linked policies?
6
7
8
9
Which one of the following is a "politically exposed person" under MAS Notice No: FAA-N06 on the prevention of money laundering and countering the financing of terrorism?
Senior civil servants.
Senior judicial officials.
Senior political leaders.
All of the above.
In making a recommendation on a life policy, a financial adviser will need to provide his client with a copy of the:
Policy Illustration
Product Summary
Product Highlights Sheet
All of the above
For the appointment of a provisional representative of a financial adviser in Singapore, which one of the following entry requirements is CORRECT?
Be at least 18 years old.
Be at least 21 years old.
Be a tax resident for 1 year.
Be a tax resident for 3 years.
Which one of the following is an "unlisted Specified Investment Product" under the Financial Advisers Act?
Futures.
Units in a business trust.
Investment-Linked Life Insurance Policies.
Derivatives issued by a corporation in respect of its own shares.
Which of the following factors does Monetary Authority of Singapore take into consideration in assessing an application for a financial adviser's licence?
Business plans and projections.
Strength of internal compliance systems.
Fitness and propriety of all of its directors and chief executive officer.
All of the above.
Which of the following product information about a designated investment product shall a licensed financial adviser disclose to a prospective client?
Risks arising from the product.
Benefits deriving from the product.
The fees and charges the client will have to pay.
All of the above.
Who is responsible for charting the corporate policy and strategy to deliver fair dealing outcomes to customers?
Board of Directors.
Chief Marketing Officer.
Chief Executive Officer.
Accounting and Finance Department.
Which one of the following is an "execution activity" as defined in Section 2(1) of the Securities & Futures Act?
Marketing of unit trusts.
Issuing research reports.
Trading in futures contracts.
Arranging life insurance policies.
Under Notice No: FAA-N06, as part of the identification of customers, a financial adviser is required to obtain each customer's:
marital status
financial status
unique identification number
All of the above
For the purpose of the Customer Knowledge Assessment, a financial adviser shall NOT take into consideration information on a client's:
financial status
work experience
investment experience
educational qualifications
Under MAS Notice No: FAA-N06, a financial adviser shall promptly submit reports on suspicious transactions to the Suspicious Transaction Reporting Office (STRO). The STRO refers to the:
Financial Action Task Force.
Monetary Authority of Singapore.
AML/CFT compliance department of the financial adviser.
Commercial Affairs Department of the Singapore Police Force.
Who is allowed to act as an introducer for a financial adviser?
A corporation doing introducing as its full time activity.
An individual doing introducing as his full time occupation.
An individual not doing introducing as his full time occupation.
All of the above
Which one of the following is in accordance with the principle of Customers' Interest under the Financial Advisers Act?
Having a reasonable basis for recommendations made.
Having same rules and standards for the same investment product regardless of distribution channels.
Having a higher level person who would be accountable for the professional and ethical conduct of a representative of the financial adviser.
All of the above.
An applicant for a financial adviser's licence must have in force a standalone non-hybrid Professional Indemnity Insurance policy under which the limit of indemnity covered should be an amount of not less than ____________________.
S$150,000
S$300,000
S$500,000
S$1,000,000
The insurer shall appoint an external auditor to carry out an audit on the internal control and processes of the Investment-linked Policy sub-funds. The period under review of an audit by way of the above method shall be for a period of NOT less than ________ months.
3
6
9
12
Under Section 57(1)(h) of the FAA, where the Monetary Authority of Singapore is of the view that any officer of a licensed financial adviser does not measure up to the fit and proper criterion, it may direct the company to:
jail the officer
fine the officer
remove such an officer from his office
take any of the above actions
A client, who is assessed as not possessing the knowledge or experience in the unlisted Specified Investment Product (SIP), nevertheless chooses to transact in the SIP. Which one of the following statements is TRUE?
To inform the client in writing:
the outcome of the Customer Knowledge Assessment
that it is his responsibility to ensure the suitability of the SIP
to confirm his intent to transact the SIP despite the outcome of the Customer Knowledge Assessment
all of the above
Which one of the following is NOT a prerequisite by Monetary Authority of Singapore for exempt persons?
Have at least one resident CEO
Meeting the fit and proper criteria
Have at least two executive directors who exercise management oversight of its operations.
Employing a minimum of two professionals, each with at least five years of relevant working experience.
Under the Guidelines on Fair Dealing, one of the outcomes is for customers to have confidence that they deal with financial institutions where fair dealing is central to the corporate culture. Which one of the following is a way to achieve this outcome?
Providing relevant information.
Handling complaints independently and effectively.
Aligning remuneration structures with customers’ interest.
Aligning organisational policies and practices to the fair dealing outcomes.
The circumstances where a customer presents or may present a higher risk for money laundering or terrorism financing include:
where a customer is a licensed financial adviser
where a customer is from a country known to have adequate AML/CFT measures
where a customer is from a country which the FATF has called for countermeasures
all of the above
What is the minimum subscription requirement for Fund-Of-Hedge-Funds?
S$20,000
S$50,000
S$100,000
S$150,000
Under Notice No: MAS 307 on Investment-linked Policies, the insurer shall send the Statement to Policyholders within ______ days after each policy anniversary.
7
14
21
30
In assessing an application for a financial adviser's licence, the Monetary Authority of Singapore takes into consideration whether:
the Executive Directors are Singapore citizens
the CEO of the applicant is a resident in Singapore
the applicant employs at least one-full time appointed representative
all of the above
Which one of the following CANNOT be classified as a High Net Worth Individual? An individual with:
annual income of S$500,000
total net personal assets exceeding S$3 million
a minimum of S$1 million life insurance coverage
all of the above
Which one of the following is a FALSE statement about the Dependants’ Protection Scheme?
It is a term insurance.
It is a compulsory plan.
It is administered by Great Eastern Life
The benefit will be paid out if the insured CPF member passes away or becomes permanently incapacitated.
Which of the following is a method to measure and monitor achievement of the fair dealing outcomes?
Monitoring complaints trends.
Conducting customer surveys.
Conducting mystery shopping exercises.
All of the above.
Which one of the following is a way to quantify Retirement Needs?
Expense method.
Needs approach method
Multiple approach method
Debt servicing ratio method.
Which one of the following circumstances of Supplementary Retirement Scheme (SRS) withdrawals will incur a penalty of 5%?
Death.
Bankruptcy.
Medical grounds.
Full withdrawal of the SRS balance by a foreigner who has maintained his SRS account for at least five years from the date of his first contribution.
The Guidelines on Structured Deposits (Guideline No: FAA-G09) applies to advice given to:
retail investors
accredited investors
institutional investors
all of the above
How many stages are there in the sales advisory process?
5
6
7
8
A financial adviser is required to perform customer due diligence (CDD) measures on its customer in accordance with MAS Notice No: FAA-N06 (the Notice). Under the Notice, a financial adviser is required to perform CDD measures when it:
establishes business relations with a customer
has doubts about the veracity of the information previously obtained from the customer
has suspicions about the customer’s business activities, even though due diligence measures are dispensed with
all of the above
For which case is the financial adviser is expected to lodge a police report and submit to the MAS a copy of the police report?
An act involving dishonesty.
An act involving misrepresentation.
Failure to satisfy the guidelines on fit and proper criteria.
All of the above
Which one of the following is a type of disciplinary action that a financial adviser may take against its representatives in respect of misconduct committed?
Fine.
Demotion.
Formal warning.
All of the above.
Which one of the following statements on the Revised Code on Collective Investment Schemes (the Code) under Section 321 of the Securities and Futures Act is TRUE?
The Code is statutory in nature
issued by the Monetary Authority of Singapore
to enhance safeguards for accredited investors
all of the above
Which one of the following instruments issued by the Monetary Authority of Singapore has legal effect?
Codes.
Circulars.
Directions.
Guidelines.
In order for a financial adviser to have reasonable basis for any recommendation made, the financial adviser shall take reasonable steps to collect and document the following information from the client:
risk tolerance of the client
employment status of the client
current investment portfolio of the client
all of the above
Calculate the Net Asset Value (NAV) of the fund, based on the information given below.
Price per unit = S$1.45
Number of units outstanding = 100 million
Performance fee = 10%
S$69 million.
S$100 million.
S$131 million.
S$145 million.
Banks in Singapore have to follow guidelines issued by ____________?
LIA
GIA
ABS
IMAS
A financial adviser means a person who carries on the business of providing financial advisory services. The 'person' mentioned above refers to:
an individual
a corporation
either a corporation or an individual
none of the above
Information in the product highlight sheet shall be in a font size of at least ______.
9-points Times New Roman
10-points Times New Roman
11-points Times New Roman
12-points Times New Roman
The manager of a collective investment scheme shall inform existing participants of any significant changes made to the scheme no later than ______ before the change is to take effect.
14 days
1 month
3 months
6 months
For a financial institution to act as a guarantor for a capital guaranteed fund, what is the minimum long-term credit rating?
A
AA
AAA
BBB
What is the balance scorecard grade for a representative with one Category 1 infraction for that quarter?
Grade B
Grade C
Grade D
Grade E
ABC Global Equity Fund adopts the fulcrum fee arrangement for calculating its performance fees. The benchmark is the MSCI World Index return. At the end of year 4, ABC Global Equity Fund return 5% and the benchmark return is 4%. Calculate the fulcrum fee based on the information given:
NAV per unit = 1.07
HWM = 1.03
Base fee = 2%
Performance fee = 10%
1.90%
2.10%
2.14%
2.54%
Notice No: FAA-N03 sets out the standards to be maintained with respect to the information disclosed to clients. Notice No: FAA-N03 is NOT applicable to:
exempt financial advisers
licensed financial advisers
excluded financial advisers
representatives of financial advisers
MAS Notice No: 302 on Product Development and Pricing is issued pursuant to the ___________ Act
Insurance
Financial Advisers
Monetary Authority
Securities & Futures
Which of the following is a benefit of conducting needs analysis?
It helps to discover the client’s needs
It enables you to establish a long-term relationship with your client
It enables more time to spend on the client’s situation than on the product
All of the above
The Monetary Authority of Singapore considers that a financial adviser can use the word “independent” if it:
has restriction on the investment products it can recommend
does not receive commission which tend to influence its advice
operates with a conflict of interest because of its association with product providers
all of the above
Under the Balanced Scorecard Framework, when the number of cases and the percentage of cases results in two different grades, the Financial Adviser shall:
conduct another audit
assign the better of the two balanced scorecard grades
assign the average of the two balanced scorecard grades
interview the supervisor to determine the balanced scorecard grade
MAS Notice No:FAA-N15 on cancellation period for unlisted debentures does NOT apply to:
exempt financial advisers
purchases of unlisted debentures where the client is an individual
unlisted debentures which are exempt from prospectus requirements under the SFA
all of the above
Michael wants to be the Chief Executive Officer of a licensed financial adviser. One of the following requirements that he needs to fulfil is:
having a minimum of S$1 million of assets
having a minimum of ten years’ relevant working experience
performing in a relevant managerial capacity for at least five years
meeting the fit and proper criteria as set out in MAS Guideline No: FSG-G01
