MODULE 9: FUNDS MANAGEMENT REGULATION

GUIDELINE ON COMPLIANCE FUNCTION FOR FUND MANAGEMENT COMPANIES

What Is Negligence? Definition & Examples
https://www.forbes.com/advisor/legal/personal-injury/negligence/

Sample Questions:

1. Funds that replicate or correspond to an index on permissible investments are commonly known as:
A. Feeder funds
B. Fund-of-funds
C. Hedge funds
D. Tracker funds

2. The minimum share capital of a uni trust management company in Malaysia is:
A. RM 20,000,000.00
B. RM2,000,000.00
C. RM500,000.00
D. RM10,000,000.00

3. The statue that regulate matters relating to the activities, markets and intermediaries in the Malaysian capital market is:
A. Capital markets and Services Act 2007
B. Securities Industry (Central Depositories act) 1991
C. Registration of business act 1956
D. securities Commission Act 1993

4. Which of the following known as FALSE TRADING?
A. Intentionally inducing other persons to subscribed for securities.
B. A trader entering into a transaction of purchase or sale of securities in priority to clients order.
C. A trader selling and then re-purchasing the same shares from the market.
D. Selling shares in the stock market after manipulating their prices

5. Which of the following parties may be held liable for offences committed by a fund management company:
I. Compliance office of the company
II. Directors of the company
III. Licensed representative of the company
IV. Shareholders of the company

A. I, II, III and IV
B. I and II only
C. II, III, and IV only
D. I, II and III only

6. Which of the following funds use financial derivatives and debt to amplify the returns of an underlying index?
A. Real estate investment trust
B. Unit trust funds
C. Leverage exchange-traded fund
D. Inverse exchange-traded fund

7. Under the CMSA 2007, “securities” include all of the following EXCEPT for:
A. Properties
B. Bonds
C. Unit trusts
D. Shares

Topic 1
The Fund Management Industry in Malaysia / Laws and Organisations Regulating the Fund management Industry

8. In Malaysia, fund management companies licensed to carry on the regulated activity of fund management are holders of a Capital Markets Services Licence (CMSL). Fund management activities would thus be permitted to be carried out by the following persons without requiring a CMSL:
I. any corporation whose carrying on of the regulated activity of fund management is solely for the benefit of its related corporation.
II. any public statutory corporation constituted under any written law who carries on the regulated activity dealing in securities or fund management.
III. an insurance company licensed under the Insurance Act 1996 or a takaful operator registered under the Takaful Act 1984 whose carrying on of the regulated activity of fund management is solely incidental and to the management and administration of its insurance or takaful business, as the case may be.
IV. KAF Investment Bank Berhad and Islamic banks, in acting or offering to act as portfolio managers for customers or as investment or co-investment manager of country funds, trust funds, venture capital funds, unit trust funds, or other funds, including the provision of investment advice; and
the acquisition or disposal through a holder of a CMSL who carries on dealing in securities.

A. I, II and III only
B. 1, III and IV only
C. All of the above
D. None of the above

9. Fund management companies are typically engaged in the process of managing investment portfolios in the following ways:
I. the management of portfolios of securities such as shares and bonds, as well as real property, cash and other assets. Such a service may be offered on a discretionary or non-discretionary basis, and may include the function of asset allocation
II. the management of pension funds or other pooled funds such as internal portfolios of insurance companies
III. the management and operation of collective investment schemes such as unit trusts and closed-end funds
IV. risk managed-hedging with derivatives including futures to manage the market risk through a systematic form of management and the provision of investment advice to corporate, institutional, governmental and other clients (including private clients).

A. I, II and III only
B. 1, III and IV only
C. All of the above
D. None of the above

10. The following statements are in regard to the benefits of fund management industry to the Nation. Which of the following statements are not true?
I. it promotes the efficient mobilisation of domestic savings
II. it provides a large and stable source of long-term capital for the privatisation of infrastructure and other projects
III. it reduces the burden of taxation needed to provide retirement and social benefits
IV. it obligates companies to enhance funding efficiency and standards of corporate governance and it develops Kuala Lumpur as a regional fund management centre.

A. I and II only
B. II and III only
C. I, II, III and IV
D. None of the above

11. The Security commission neatly summarises the benefits of a vibrant, developed and dynamic fund management industry to the Malaysia capital market as the following except:
I. it ensures successful launching of new and more sophisticated products
II. it allows development of markets such as the Ringgit bond market
III. it increases domestic institutional participation in the capital market
IV. it accelerates development of the fund management industry and other capital market related services.

A. I and II only
B. II and III only
C. I, II and IV only
D. None of the above

12. Below is the provider of fund management services in Malaysia except:
A. Commercial banks, Investment banks and Insurance companies
B. Stockbrokers and Unit Trust Companies
C. Boutique Fund Management Companies
D. Government Link Companies (GLC)

13. Alpha Asset Management Sdn Bhd is an example of a _________.
A. Stockbrokers Company
B. Unit Trust Management Company
C. Boutique Fund Management Company
D. Foreign Fund Management Company

14. There are two categories of Foreign Fund Management Companies in Malaysia, 70% foreign ownership and 100% foreign ownership. Which of the following companies were established under the Application for Establishment of Foreign Fund Management Companies under the Special Scheme:
I. Nomura Asset Management Malaysia Sdn Bhd
II. BNP Paribas Asset Management Sdn Bhd
III. Aberdeen Asset Management Sdn Bhd
IV. AIGIC (M) Sdn Bhd – American International Assurance Company (Bermuda) Limited

A. I and II only
B. I, II and III only
C. I, II, III and IV
D. None of the above

15. Which of the following companies were established under the Guidelines for the Establishment of Foreign Fund Management Companies and these foreign fund management companies manage funds sourced from outside Malaysia.

I. Nomura Asset Management Malaysia Sdn Bhd
II. Navis Asset Management – Navis Capital Partners Limited
III. Aberdeen Asset Management Sdn Bhd
IV. AIGIC (M) Sdn Bhd – American International Assurance Company (Bermuda) Limited

A, I and II only
B. II and IV only
C, I, II and III only
D. I, II, III and IV

16. A ___________________ is a company that invests in the shares of other companies. Shares acquired are held as passive portfolio investments rather than with the objective of taking control or to take part in the management of the company. In many respects this investment company is similar to a unit trust except that the company’s share capital is fixed or closed.
A. closed-end investment company
B, Open-ended investment company
C. Unit trust company
C. Shariah investment company

17. Open-ended Investment funds is ___________.
A. an investment pools that pay for workers’ retirements. Funds are paid for by either employees, employers, or both. Corporations and all levels of government provide pensions.
B. a charitable funds and foundations represent funds held for various philosophical, educational, religious, medical or other benevolent purposes. Generally, funds are under the control of trustees who may appoint a fund management company to manage the investment portfolio, or to provide advice on the management of the charity’s funds.
C. an investment that uses pooled assets, allowing for ongoing new contributions and withdrawals. As a result, its have a theoretically unlimited number of potential shares outstanding. Most mutual funds and exchange-traded funds are categorized as this type of funds.
D. a type of mutual fund that issues a fixed number of shares through one initial public offering (IPO) to raise capital for its initial investments. Its shares can then be bought and sold on a stock exchange, but no new shares will be created, and no new money will flow into the fund.

18. “custodian”, in relation to a client of a holder of a Capital Markets Services Licence, means–
I. a licensed bank as defined in the Banking and Financial Institutions Act 1989 appointed by the fund manager with the prior written consent of the client;
II. a licensed merchant bank as defined in the Banking and Financial Institutions Act 1989 appointed by a fund manager with the prior written consent of the client;
III. a trust company registered under the Trust Companies Act 1949 [Act 100];
IV. a participating organization and a wholly owned subsidiary of any institution that provides nominee services;

A, I and II only
B. II and IV only
C, I, II and III only
D. I, II, III and IV

19. The are eight main sources of Malaysian law including the Federal Constitution, the 13 Constitutions, the Federal laws made by parliament, the State laws made by State assemblies and the Federal and state subsidiary legislation. The other three main sources of Malaysian laws are:
I. Common law.
II. Principles of English law suitable to local circumstances.
III. UK revenue law
III. Islamic Law, applicable only to Muslims and administered in the Shariah Courts.

A, I and II only
B. II, III and IV only
C, I, II and III only
D. I, II and IV

20. The first objective of securities regulation is to establish a capital market in which investors can have confidence. Therefore, the functions of regulation are as per the following statements EXCEPT::
A. to define the key features of the financial system and the role of the securities market institutions, including the development of new types of market activities
B. to steer market participants towards the adoption of best practices
C. to advance financial stability and monetary stability that will enable the Malaysian economy to thrive sustainability.

D. to create disincentives against behaviour that would be detrimental to the market.

21. In managing funds on behalf of investors, a fund management company should be aware of the potential impact of the following laws:
I. the Trustee Act 1949 where the funds represent trust monies
II. the Taxation laws
III. the laws of other jurisdictions, such as the Labuan 10FC
IV. the Companies Act 1965

A, I and II only
B. II and III only
C, II, III and IV only
D. All of the above

22. Under the new set up, the functions of the Registrar of Companies and the Registrar of Businesses in Malaysia are now under the purview of the the Companies Commission of Malaysia (CCM). The CCM will administer and enforce the following legislation except:
A. Trust Companies Act 1949
B. Kootu Funds (Prohibition) Act 1971
C. Registration of Businesses Act 1956
D. Any subsidiary legislation made under the above Acts.

23. The powers of the CCM would therefore include powers previously held by the Registrar of companies which are among others, to:
I. enforce the filing or lodging with the CCM of accounts or other documents
II. register companies by registering the memorandum and articles, and issue certificates of incorporation
III. register prospectuses and/or grant relief from the prospectus requirements of the Companies Act.
IV. take proceedings for any offence against the Companies Act.

A, I and II only
B. II and III only
C, II, III and IV only
D. All of the above

24. Improve the regulatory, fiscal and legal environment for unit trusts is one of the objective of FIMM. Which of the following statements is not true regarding the objective of FIMM?
A. formulate sound and ethical business practices to promote the interest
of the unit trust industry and provide investor protection
B. to provide information, assistance and other services to its member
C. to promote public awareness of the benefits and risks of investing in unit trusts.
D. to promote the asset management industry in Malaysia and to ensure the provision of a high standard of service to investors.

25. The advantages of self-regulation are said to be as follows EXCEPT:
A. self-regulation allows market participants to respond to the real demands of participants
B. self-regulatory organisations are frequently the best source of innovation in market practices and institutions
C. self-regulatory organisations sometimes act like guilds that only promote the vested interests of their members
D. self-regulatory organisations can act quickly and decisively when an anomaly arises in the market.

26. The following statement is NOT TRUE pertaining to the potential disadvantages of self-regulation
A. a self-regulatory body may sacrifice market integrity for short term gain when the interest of members and new clients come into conflict
B. self-regulatory organisations sometimes act like guilds that only promote the vested interests of their members
C. self-regulatory organisations may be anti-competitive.
Consequently, the regulatory structure in Malaysia currently occupies a position somewhere between the extremes of direct government regulation and self-regulation.

D. self-regulatory organisations are frequently the best source of innovation in market practices and institutions

27. The SC holds ultimate responsibility for the fair and effective operation of securities markets. As provided under s.15 of the SCA, it has to ensure securities laws are complied with EXCEPT:
A. to supervise and monitor activities of any exchange holding company, exchange, clearing house and central depository
B. to promote and encourage proper conduct amongst participating organisations, participants, affiliates, depository participants and all licensed or registered persons of an exchange, clearing house and central depository, as the case may be.
C. to suppress illegal, dishonourable and improper practices.
In fulfilling its responsibilities the SC seeks to appoint what it refers to as frontline regulatory organisations.
D. to control the internal investment portfolios of insurance companies by restricting the asset classes within which investments may be made.

28. The SC is financed through Fund. Under the SCA, the fund may be derived from the following EXCEPT:
A. Borrowings
B. Donations
C. Levies imposed upon purchases and sales of securities on Bursa Malaysia Securities Berhad.
D. Interest on the accumulated amount of the Fund

29. Malaysian Association of Asset Managers (MAAM) was formed in November 1996 to promote the development of the fund management industry in Malaysia, and to assist communication between fund management companies, regulators and the investing public. In general, the objectives of the MAAM could be justified as:
I. to promulgate standards of practice for the asset management industry in Malaysia
II. to promote proper conduct among asset managers in Malaysia
III. to promote research, training and education in connection with the asset management industry
IV. to collect and disseminate statistical and other information relating to the asset management industry in Malaysia and elsewhere.

A, I and II only
B. II and III only
C, II, III and IV only
D. All of the above

30. The objects of the MAAM are:
I. to act as the representative body for its members and the asset management industry in Malaysia
II. to promote the asset management industry in Malaysia and to ensure the provision of a high standard of service to investors
III. to make representations to the Government, any regulatory authority or any other person about any matters affecting the asset management industry in Malaysia
IV. to consider, promote, review and make recommendations on legislative or other measures affecting the asset management industry in Malaysia

A. I and II only
B. II and III only
C, II, III and IV only
D. All of the above

Topic 2
The Law of Contract / Negligent Misstatement / Relationship Between Fund Management Company and Client / Conduct of Fund Management Company’s Business.

The law of Contract
1. Offer and acceptance, Consideration, Intention to create legal consideration, and Certainty are among the essential elements of a Contract. What are the other essential elements of the Contract?
I. Capacity to contract
II. Genuine consent
III. Lawfulness of object
IV. Required formalities

A. I and II only
B. II and III only
C, II, III and IV only
D. All of the above

2. An offer or a proposal has certain characteristics such as it can be made to a particular person or to the general public and the proposal must be communicated. An offer can also be terminated by:
I. An acceptance, in which case it becomes an agreement.
II. A rejection, in which case it ceases to exist.
III. Being offset by a counter proposal (which amounts to rejection of the original offer) Of course, the parties can continue their negotiations with subsequent proposals.
IV. Being withdrawn prior to acceptance, in which case generally the withdrawal will only be effective when it comes to the notice of the person to whom the proposal was made.

A. I and II only
B. II and III only
C, II, III and IV only
D. All of the above

Note:
An offer can also be terminated/revoked by:
(a) A lapse due to the death of one of the parties before acceptance.
(b) A lapse because it was not accepted within a specified time (i.e. the proposal stipulated a time within which it had to be accepted) or generally within a reasonable time.

3. Consideration is a part of the essential elements of Contract. The Contracts Act 1950 provides the following exceptions to the general rule concerning consideration:
I. An agreement made on account of natural love and affection between parties standing in near relation to each other.
II. An agreement to compensate for a past voluntary act.
III. An agreement to compensate a person who did an act which the promisor was legally compelled to do.
IV. An agreement to pay a statute-barred debt.

A. I and II only
B. II and III only
C, II, III and IV only
D. All of the above

4. To be valid, consideration must comply with the following requirements:
I. It must be given in exchange for a promise
II. It must have some value
III. It need not be adequate
IV. It must be given by someone, even if not given by the person to whom the promise was made.

A. I and II only
B. II and III only
C, II, III and IV only
D. All of the above

5. In the law of Contract is misrepresentation (Section 18 of Contracts Act 1950) is a part of genuine consent issues. Genuine consent is said to be free when it is not caused by:
I. coercion, as defined in s.15
II. undue influence, as defined in s.16
III. fraud, as defined in s.17
IV. mistake, subject to ss.21, 22 and 23 5.

A. I and II only
B. II and III only
C, II, III and IV only
D. All of the above

6. “The consideration or object of an agreement is lawful unless it is forbidden by law and _______.
I. It is of such nature that, if permitted, it would defeat any law
II. It is fraudulent
III. It involves or implies injury to the person or property of another
(IV. The court regards it as immoral or opposed to public policy.”

A. I and II only
B. II and III only
C, II, III and IV only
D. All of the above

7. When there is a breach of contract, the party not in default may claim one or more of the following remedies:
I. Rescission of contract
II. Damages
III. Specific performance
IV. Injunction

A. I and II only
B. II and III only
C, II, III and IV only
D. All of the above

Negligent Misstatement

1. Type of composition for damages:
I. General damages
II. Special damages
III. Nominal damages
IV. Punitive damages

A. I and II only
B. II and III only
C, II, III and IV only
D. All of the above

2. “These damages refer to a small sum of money awarded to a plaintiff to commemorate the fact the plaintiff won their civil case in court. These damages are awarded when a plaintiff proves that their legal rights have been violated but does not demonstrate they are actually entitled to receive monetary compensation. Simply put, it is a trivial sum of money awarded to a plaintiff…”
The above statement is the definition for:
A. General damages
B. Special damages
C. Nominal damages
D. Punitive damages

3. Punitive damages _________
A. are refer to things like pain and suffering and emotional distress, which is not very easy to put a price on.
B. are refer to an amount that is claimed because of a breach or wrongful act of another where such an amount can be quantified.
C. are awarded if one party breaches a term of the agreement. However, damages will be calculated based on the innocent party’s actual loss.
D. are damages that are awarded in personal injury lawsuits in addition to compensatory damages. They can be awarded by courts and juries.

4. Liability in tort for negligent misstatement can arise only in the following circumstances:

I. Where one person owes a duty to another person to exercise care based on the known or apparent skill and competence of the maker of the statement, or the fact that the maker of the statement intends it to operate as a direct inducement to act, i.e. that the maker intends the recipient to rely on the statement.

II. The duty of care has been breached, i.e. the maker of the misstatement has been negligent.

III. If the statement was not made as an inducement to act, whether it was reasonable for the recipient, nevertheless, to rely on it.

IV. The person has suffered loss or damage as a result of relying on the misstatement.

A. I and II only
B. II and III only
C, II, III and IV only
D. All of the above

5. The Capital Markets and Services Act 2007 (CMSA) contains a number of provisions which cover liability for misstatement:
I. s.177 prohibits the making of a statement or dissemination of information that is false or misleading
II. s.178 prohibits a person from improperly inducing another person to deal in Securities
III. s.179(c) prohibits a person from making untrue statements or omitting to state a material fact for a purchase or sale of securities
IV. s.199 imposes civil liability on a person who contravenes s.177, 178 or 179

A. I and II only
B. II and III only
C, II, III and IV only
D. All of the above

Relationship Between a Fund Management Company and Its Client
1. The following statements are pertaining to the relationship between a fund management company and its client. Which of the following statements are TRUE.
I. The fund management company acts as the agent of the client.
II. The Investment Management Agreement between the fund management company and a client is a contract.

III. The fund management company’s actions in managing a client’s portfolio must not be negligent.

IV. The fund management company may hold monies or property on behalf of its client.

A. I and II only
B. II and III only
C, II, III and IV only
D. All of the above

2. The fund management company owes certain duties to its client in its role as a fiduciary. The fiduciary duties of a fund management company are also relevant to the relationship. Other than fiduciary duties and statutory law requirements, the relationship between a fund management company and its client is also involved a number of areas of laws such as:
I. The general Law governing the relationship between principal and agent.
II. The basic principles of contract law.
III. The law of negligent misstatement in Negligent Misstatement.
IV. The law of trusts on the element of the fund management company and client relationship.

A. I, II and III only
B. I, II and IV only
C. All of the above
D. None of the above

3. The laws governing the relationship between a fund management company and its client include:
I. Principal and Agent
II. Investment Management Agreement
III. Fiduciary Duties of a Fund Management Company
IV. Trust Laws

A. I, II and III only

B. I, II and IV only
C. I, II, III and IV
D. None of the above

4. The principal areas covered by MAAM’s Code of Conduct are:
I. Compliance with laws and regulations
II. Risk management and Management of conflict of interests
III. Safeguarding clients’ interests
IV. Duty to exercise due care and skill

A. I, II and III only

B. I, II and IV only
C. I, II, III and IV
D. None of the above

5. “It is the practice whereby the seller sells securities which, at the date of the agreement for sale, it does not own but intends to acquire before the delivery date. The seller that engages in this practice is relying on the market price of the securities falling between the date of the sale contract and the date for delivery under that contract, thus providing a profit. Naturally, it is more prevalent in a bear market where the odds of such a decline in price are considerably better than in a bull market.”
The above practice is referred to:
A. Short selling
B. Market manipulation
C. Inside trading
B. False trading

6. The following statements are TRUE related to False or Misleading Statements in Relation to Securities. A person must not make a statement or disseminate information that:

I. is false or misleading in a material particular

II. is likely to induce the subscription, sale or purchase of securities by other persons, or is likely to have the effect of raising or lowering, maintaining or stabilising the market price of securities

III. when he or she makes or disseminates it, the person does not care whether the statement or information is true or false

Iv. when he or she makes or disseminates it, the person knows or ought reasonably to know that it is false or misleading.

A. I, II and III only

B. I, II and IV only
C. I, II, III and IV
D. None of the above

7. The following statements are TRUE related to Fraudulently Inducing Persons to Deal in Securities. It is an offence to induce or to attempt to induce another person to deal in securities by:
I. making or publishing any statement, promise or forecast that the maker knows to be misleading, false or deceptive
II. dishonestly concealing material facts
III. recklessly making or publishing (dishonestly or otherwise) any statement, promise or forecast that is misleading, false or deceptive
IV. recording or storing in, or by means of any mechanical, electronic or other device, information that they know to be false or misleading in a material particular.

A. I, II and III only

B. I, II and IV only
C. I, II, III and IV
D. None of the above

8. In addition to the provisions of the CMSA, the Bursa Malaysia Securities Berhad’s Corporate Disclosure Guide on insider trading states that insiders should not trade on the basis of material information which is not known to the investing public. The rationale for prohibiting insider trading includes the following:
I. fairness in the marketplace, equal access to information to all market participants
II. market integrity
III. fiduciary duty of company officers to the company and its shareholders
Iv. prevention of injury to the company, its shareholders and investors.

A. I, II and III only

B. I, II and IV only
C. I, II, III and IV
D. None of the above

9. A fund of funds is _____________
A. a portfolio of stocks or bonds designed to mimic the composition and performance of a financial market index.

B. an investment vehicle that invests in mutual funds, exchange-traded funds or even hedge funds. When you invest in a fund of funds, you get an entire diversified investment portfolio at once, featuring broad exposure to many different asset classes with less risk involved.
C. an investment fund that various investors pool their money into, which then feeds into a master fund used to invest. It is a type of investment fund that hedge fund investors put their money into, which then feeds into a master fund.
D, a pool of money that is invested in stocks and other assets. These funds are generally more aggressive, riskier, and more exclusive than mutual funds. Their managers have freer rein to invest in a wide variety of assets and to use bolder strategies in pursuit of higher profits, and are rewarded with much higher fees than mutual funds charge.

10. This fund is an index fund that tracks a broad market index or a segment thereof, designed to offer investors exposure to an entire index at a low cost. These funds seek to replicate the holdings and performance of a designated index, constructed as ETFs or alternative investments to meet the fund’s tracking objective.
The above statement is referred to:
A. Tracker fund
B. Fund of funds
C. Feeder funds
D. Hedge fund

Guidelines on Islamic Capital Market Products and Services
1. An Islamic fund management company and a registered corporation undertaking Islamic venture capital or private equity activity must follow the Guidelines on Islamic Capital Market Products and Services. These guidelines also apply to:
I. a person who is a Shariah adviser or intending to apply to be registered as a Shariah adviser.
II. a fund management company that carries on an Islamic fund management business under an Islamic ‘window’.
III. an issuer seeking to make available, issue or offer an Islamic capital market product.
IV. a recognized market operator seeking to facilitate the making available, issuance or offering of an Islamic capital market product through its platform.

A. I, II and III only

B. I, II and IV only
C. I, II, III and IV
D. None of the above

2(a). Guidelines on Islamic Capital Market Products and Service must be read together with the relevant provisions in the securities laws and the relevant guidelines issued by the SC including.
I. Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework (LOLA Guidelines)
II. Guidelines on Issuance of Corporate Bonds and Sukuk to Retail Investors
III. Guidelines on Unit Trust Funds
IV. Guidelines on Listed Real Estate Investment Trusts

2(b). Guidelines on Islamic Capital Market Products and Service must be read together with the relevant provisions in the securities laws and the relevant guidelines issued by the SC including.
I. Guidelines on Real Estate Investment Trusts
II. Guidelines on Exchange-traded Funds
III. Business Trusts Guidelines
IV. Guidelines on Private Retirement Schemes

A. I, II and III only

B. I, II and IV only
C. I, II, III and IV
D. None of the above

3. Guidelines on Islamic Capital Market Products and Service shall supersede and replace the following:
I. Guidelines for Shariah Advisers
II. Guidelines on Islamic Fund Management

III. Licensing Handbook; and Guidelines on Compliance Function for Fund Management Companies.
IV. Guidelines on Recognized Markets; Guidelines on the Registration of Venture Capital and Private Equity Corporations and Management corporations; and Guidelines on the Registration and Conduct of Capital Market Services Providers;

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

4. Under an Islamic Capital Market Products and Services, the Islamic fund management company must appoint one of the Shariah advisers approved/ registered by SC. The related Independent shariah advisor must also:
I. Not an undischarged bankrupt
II. Not convicted for any offence
III. Of good repute & character
IV. Possess necessary qualifications & expertise esp. in fiqh & muamalah & Islamic jurisprudence with minimum 3 years experience/exposure in Islamic finance.

5. Under the continues obligation chapter of Islamic Capital Market Products and Services guidelines, and in the case where the Shariah adviser is a corporation, the corporation must ensure that only its Shariah officer may provide Shariah advice and also requires —

I. its directors, senior management and Shariah officer remain fit and proper at all times

II. its Shariah officer attends at least three SIDC’s CPE-approved courses on capital market annually before the anniversary date of their registration
III. it informs the SC within 10 business days from the date when the Shariah officer is no longer employed by the corporation

IV. it takes the necessary steps to recruit a new Shariah officer within three months from the date of vacancy, unless otherwise approved by the SC

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

6. Under the provisions of notification of the Guidelines on Islamic Capital Market Products and Services, individual Shariah adviser and corporation Shariah adviser must provide written notification to the SC within 10 business days from the occurrence of any of the following events:
I. the related individual, he/she is no longer fit and proper

II. its directors, senior management or Shariah officer are no longer fit and proper
III. there is a change of its directors, senior management or Shariah officer
IV. any other material changes

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

7. In carrying out his roles and responsibilities, the Shariah adviser must —
I. act honestly and uphold the principles of Shariah
II. take all reasonable steps to ensure fair treatment in discharging his duties
III. carry out any other duties or responsibilities as may be specified by the SC relating to Shariah matters.
IV. act to blame his/her team members if something goes wrong with the capital markets.

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

8. The SC may suspend or withdraw the registration of a Shariah adviser if it is necessary for the protection of investors or in the public interest or if any term or condition imposed by the SC has not been complied with. For the purposes, events or circumstances involving a Shariah adviser that may jeopardise the protection of investors or which is not in the public interest includes, but is not limited to, the following:
I. The Shariah adviser is no longer fit and proper;
II. The Shariah adviser fails to remedy any breach or non-compliance as directed by the SC;
III. The Shariah adviser engages in any misleading or deceptive acts, and make or attempt to make any false or misleading statement including falsifying or submitting any falsified documents
IV. The Shariah adviser acts in a manner that would actually or potentially bring the capital market into disrepute

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

9. Under employees competency and assistance to Shariah advisors, a fund management company must—

I. ensure, at all times, that it has adequate employees with necessary qualification, expertise and experience for its Islamic fund management business

II. provide adequate and sufficient training, whether internal or otherwise, for all its employees and licensed representatives so that they acquire the necessary knowledge for its Islamic fund management business

III. have at least one compliance officer who is well versed on Islamic fund management business and have adequate Shariah knowledge on Islamic finance and capital market; and

IV. ensure that the compliance officer attend two courses on Islamic finance or Islamic capital market on annual basis.

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

10. Under Shariah-compliant investment, fund management company must ensure that its Islamic fund management business is limited to Shariah-compliant investments. In the case of—
I. investment in securities listed on Bursa Securities, a fund management company must invest only in securities that are classified as Shariah-compliant securities by the SAC
II. investment in securities traded on an exchange outside Malaysia, a fund management company must invest only in securities endorsed by the Shariah adviser
III. investment in unlisted securities, a fund management company is encouraged to follow the SAC’s methodology in determining the Shariah status of the unlisted securities or any other methodologies as advised by the Shariah adviser.

A. I and II only
B. III and IV only
C. I, II, III Only
D. None of the above

11. In addition to the roles and responsibilities set out in Chapter 6 of the Guidelines on Islamic Capital Market Products and Services, the Shariah adviser must also issue a Shariah pronouncement where the signing procedures must comply with the requirements specified by the SAC. The Shariah pronouncement must include, amongst others, the following:

I. Basis and rationale of the pronouncement, detail Shariah reasoning or justification for the structure and mechanism of the ringgit-denominated sukuk

II. Confirmation that the utilisation of proceed are for Shariah-compliant purposes

III. The applicable Shariah rulings, principles and concepts used in the ringgit denominated sukuk

IV. The relevant Shariah matters relating to the documentation of the ringgit denominated sukuk.

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

12. Under sukuk musharakah and sukuk mudharabah, the parties who may provide guarantee and the amount that may be guaranteed are limited to the following by third party, companies with common shareholders with the issuer or associate company2 of the issuer—

I. the capital and profit amount arising from the contracts under the Shariah principles of musharakah and mudharabah
II. the payment of any amount due and payable to the sukukholders upon dissolution of musharakah and mudharabah arrangement

III. ta`widh, fees and expenses imposed on the sukuk

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

13. Under sukuk wakalah bi al-istithmar, the parties who may provide guarantee and the amount that may be guaranteed are limited to the following, by third party, companies with common shareholders with the issuer or associate company of the issuer—

I. the nominal amount of the sukuk, profit or rental arising from contracts under the Shariah principles of bai` bithaman ajil, murabahah, istisna` and ijarah

II. the capital and profit amount arising from contracts under the Shariah principles of musharakah, mudharabah and wakalah
III. the payment of any amount due and payable to the sukukholders upon dissolution of wakalah arrangement
IV. ta`widh, fees and expenses imposed on the sukuk

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

14. The name of a ringgit-denominated sukuk must not be misleading and must be based on the following:

I. Where the sukuk are structured using a single Shariah principle, the sukuk must be named according to that Shariah principle. For example, sukuk that are structured under the musharakah principle must be named sukuk musharakah.

II. Where the sukuk are structured using multiple Shariah principles, the sukuk may be named according to the name of the issuer or obligor (where applicable).

III. Where the sukuk are structured using multiple Shariah principles, the sukuk may be named sukuk istithmar (investment).

IV. Where the sukuk are structured using multiple Shariah principles, the sukuk may be named based on any other names according to the principles endorsed by the SAC from time to time.

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

15. An ijarah mawsufah fi zimmah is a lease contract where the asset will be delivered in the future. The contract must state the following:

I. The rate of lease rental

II. The nature of the leased asset

III. The lease period

IV. The method of lease payment.

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

16. An ijarah mawsufah fi zimmah is a lease contract where the asset will be delivered in the future. The contract must state the following:

I. The rate of lease rental

II. The nature of the leased asset

III. The lease period

IV. The method of lease payment.

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

17. In addition to the roles and responsibilities set out in Chapter 6 of these Guidelines, the Shariah adviser must also issue a Shariah pronouncement where the signing procedures must comply with the requirements specified by the SAC. The Shariah pronouncement must include, amongst others, the following:

I. Basis and rationale of the pronouncement, detail Shariah reasoning or justification for the structure and mechanism of the Islamic structured product issue;

II. Confirmation that the utilisation of proceed are for Shariah-compliant purposes

III. The applicable Shariah rulings, principles and concepts used in the Islamic structured product issue

IV. The relevant Shariah matters relating to the documentation of the Islamic structured product issue.

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

18. Prior to an Islamic REIT reaching the end of the 10th financial year post listing or establishment, whichever applicable, the Islamic REIT may acquire real estate provided that the percentage of the Shariah Non-Compliant Rental after such acquisition is ____________

A. less than the 5% Threshold

B. less than the 10% Threshold
C. less than the 20% Threshold
D. less than the 50% Threshold

19. Prior to an Islamic REIT reaching the end of the 10th financial year post listing or establishment, whichever applicable, the Islamic REIT may acquire real estate provided that the Islamic REIT reduces the percentage of the Shariah Non- Compliant Rental to _____________ by the end of the 10th financial year.
A. less than the 5% Threshold
B. less than the 10% Threshold
C. less than the 20% Threshold
D. less than the 50% Threshold

20(a). The Shariah adviser of an Islamic business trust may employ the following criteria in determining the Shariah-compliant status of the business trust whereby the core business of the business trust is not in the following Shariah noncompliant activities:

I. Financial services based on riba’ (interest)

II. Gambling and gaming
III. Manufacture or sale of non-halal products or related products
IV. Conventional insurance;

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

20(b). The Shariah adviser of an Islamic business trust may employ the following criteria in determining the Shariah-compliant status of the business trust whereby the core business of the business trust is not in the following Shariah noncompliant activities:

I. Entertainment activities that are non-permissible according to Shariah

II. Manufacture or sale of tobacco-based products or related products

III. Stockbroking or share trading in Shariah non-compliant securities

Vi. Other activities deemed non-compliant according to Shariah principles as determined by the SAC Shariah advice

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

21. If the Islamic business trust comprises both Shariah-compliant and Shariah noncompliant activities, the contribution of Shariah non-compliant activities to the total revenue and profit before tax of the Islamic business trust must be less than the business activity benchmarks (5%) as follows:

I. conventional banking and lending

II. conventional insurance

III. gambling

IV. liquor and liquor-related activities

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

22. The 20% benchmark is used to assess the level of mixed contributions from the activities that are generally permissible according to Shariah and have an element of maslahah (public interest), but there are other elements that may affect the Shariah status of these activities. Activities that fall under this category include but not limited to—

A. share trading; and stockbroking business;

B. rental received from Shariah non-compliant activities
C. dividends from Shariah non-compliant investments

D. other activities deemed non-compliant according to Shariah principles as determined by the SAC.

23. A person is considered to be fit and proper if the person—

I. has not been convicted, whether within or outside Malaysia, of an offence involving fraud or dishonesty, or violence or the conviction of which involved a finding that he acted fraudulently or dishonestly

II. has not been convicted, whether within or outside Malaysia, of an offence under securities laws or any laws relating to capital market

III. has not been issued, whether within or outside Malaysia, with any compounds or subject to any administrative action taken by a regulator or law enforcement agency for any offence involving bribery, fraud, dishonesty, mismanagement of a company or violence

IV. has no pending investigations or criminal charge against him in any court of law, whether within or outside Malaysia, for an offence involving bribery, fraud, dishonesty, mismanagement of a company or violence

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

25. A person is considered to be fit and proper if the person has not had any civil enforcement action filed against him in any court of law by any regulator or law enforcement agency, whether within or outside Malaysia and he/she is not an undischarged bankrupt or is in the course of being wound up or otherwise dissolved, as the case may be, whether within or outside Malaysia and-

I. has no execution against him in respect of a judgment debt, whether within or outside Malaysia

II. has not, whether within or outside Malaysia, entered into a compromise or scheme of arrangement with its creditors, being a compromise or scheme of arrangement that is still in operation

III. is not disqualified to be a director, whether within or outside Malaysia, under the corporation laws or securities laws

IV. has not have any receiver, receiver and manager or an equivalent person appointed, whether within or outside Malaysia, in respect of any of his property

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

26. A person is considered to be fit and proper if the SC the person is not engaged in any business practices appearing to the SC to be deceitful, oppressive or otherwise improper, whether unlawful or not, or which otherwise reflect discredit on his method of conducting business and it would not be contrary to public interest to register the person and –

I. the person is not engaged in or has not been associated with any other business practices or has not conducted himself in such a way as to cast doubt on his competence and soundness of judgment

II. the person is not engaged in or has not been associated with any conduct that cast doubt on his ability to act in the best interest of investors, having regard to his reputation, character, financial integrity and reliability

III. the person is suitably qualified to assume the position including having the relevant experience and track record

IV. there are no other circumstances which are likely to lead to the improper conduct of operations by the person, or reflect discredit on the manner the person would carry out his duties

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

Guidelines on Prevention of Money Laundering and Terrorism Financing for Reporting Institutions in the Capital Market

1. Which of the following is NOT a step in Money Laundering
A. Placement
B. Layering
C. Spending
D. Integration

Correct Answer
C. Spending

Explanation – Spending is not a step in money laundering because it involves the legitimate use of the laundered funds for personal or business expenses. The other three steps, placement, layering, and re-integration, are all involved in the process of disguising the illegal origins of the money and integrating it back into the legitimate economy. Placement refers to the initial introduction of the illicit funds into the financial system, layering involves complex transactions to obscure the money trail, and re-integration is the final step of bringing the laundered funds back into the legal economy.

2. What can be used to launder money?
A. Property
B. Businesses
C. Race horses
D. All of the above

Correct Answer
D. All of the above

Explanation – All of the options listed – property, businesses, and race horses – can be used to launder money. Money laundering is the process of making illegally obtained money appear legal by passing it through a complex sequence of transactions. These assets can be purchased with illicit funds and then sold or transferred to create the appearance of legitimate income or investments. This allows criminals to disguise the true source of the money and integrate it into the legal economy.

3. What does PEP stand for?
A. Potential Ex-Convicted Person
B. Political Engaged Person
C. Political Exposed Person
D. Poorly Explained Potential

Correct Answer
C. Politically Exposed Person

Explanation – A PEP or Politically exposed person is anyone that is deemed to be vulnerable to blackmail or bribery and their information must be deemed as sensitive

4. If I see something that looks suspicious what should I do?

A. Say nothing and hope that it will go away
B. Inform your Compliance officer or Manager
C. Discuss it with the client
D. Contact the Police

Correct Answer
B. Inform your Compliance officer or Manager

Explanation – Your first priority is to bring the transactions to your Supervisor who in turn is obliged to report it to his/her manager should it be deemed necessary

5. How long are verification records required to be kept by law?

A. 5 years
B. 2 years
C. 6. Month
D. 3 years

Correct Answer
A. 5 Years
Explanation – 5 Years – All records including any information obtained about the customer including proof that verification of their name and address has been carried out.

6. A number of recommendations have been made by whom?
A. A Financial Action Task Field
B. Financial Aging Terror Fund
C. Financial Action Task Force
D. Financial Laundering Task Force

Correct Answer
C. Financial Action Task Force
Explanation – FATF is the task force assigned to advise governments of their AML requirements

7. Under FATF guidelines companies have a duty of care called what?
A. Know Your Customer
B. Monitor Customers manually
C. Customer Due Care
D. Customer Due Diligence

Correct Answer
A. Know Your Customer
Explanation – Customer Due Diligence is the responsibility of the company to verify and monitor all customers transactions to ensure they are not acting in an unlawful way – it is up to every memeber of boylesports to be vigilent for this

8. If I don’t report activity that is deemed suspicious and is later discovered has been involved in money laundering – what will happen?
A. You could be held guilty of an offence and liable to a fine or imprisonment
B. You will carry on at work as a manual
C. The MLRO will be held guilty of an offence and liable to a fine or imprisonment
D. Nothing will happen

Correct Answer
A. You could be held guilty of an offence and liable to a fine or imprisonment.
Explanation – It is up to each individual to be vigilant to combat money laundering. The law sees no excuse in those who do not react

9. Which of the following terms is used to describe the process of sending money through multiple financial institutions to make it difficult to track?
A. Integration
B. Placement
C. Comouflage
D. Layering

Correct Answer
D. Layering
Explanation – Layering is the term used to describe the process of sending money through multiple financial institutions to make it difficult to track. This involves moving funds through various accounts and transactions to obscure the origin and destination of the money, making it harder for authorities to trace and detect any illegal activities such as money laundering.

10. In the U.S., banks must report deposits of $10,000.00 or more. What is the term for breaking up large sums of money into smaller amounts for deposit?
A. Smuggling
B. Shorting
C. Shrinking
D. Smurfing

Correct Answer
D. Smurfing
Explanation – Smurfing is the term used for breaking up large sums of money into smaller amounts for deposit. This practice is done to avoid triggering the mandatory reporting requirement by banks in the U.S. for deposits of $10,000.00 or more. Smurfing involves making multiple smaller deposits to fly under the radar and avoid suspicion. It is an illegal activity often associated with money laundering and other illicit financial activities

11. Money laundering is the process by which the proceeds of criminal activity are introduced into legitimate mainstream of financial commerce.
A. True
B. False

Correct Answer
A. True
Explanation – Money laundering is the act of disguising the illegal origins of money obtained through criminal activities and making it appear as if it came from legitimate sources. This process involves funneling the illicit funds through various transactions and financial institutions, making it difficult to trace their original source. By integrating these funds into the mainstream financial system, criminals can enjoy the profits of their illegal activities without arousing suspicion. Therefore, the statement that money laundering is the process of introducing the proceeds of criminal activity into legitimate financial commerce is true.

12. A customer comes in four days in a row, each time requesting a transfer of $2,900. You do not need to report this as a suspicious activity.
A. Truer
B. False

Correct Answer
B. False
Explanation – This statement is false because the customer’s behavior of requesting the same amount of money for four consecutive days can be seen as suspicious activity. Consistently requesting large sums of money could indicate potential money laundering or illicit activities. As a responsible financial institution, it is important to report such patterns to the appropriate authorities for further investigation.

13. Which of these activities might require a suspicious activity report?
A. A Customer cancels a transaction and requests to do a second transaction for a less amount in order to avoid providing ID.
B. A customer requests an unusually high dollar transaction and cannot explain the reason for the transaction or the source of funds
C. A customer appears nervous and asks unusual questions
D. A customer tries to bribe a teller
E. All these activities

Correct Answer
E. All these activities
Explanation – All of these activities might require a suspicious activity report because they are indicative of potential illegal or unethical behavior. The first scenario suggests an attempt to evade identification, which can be a red flag for illicit activities. The second scenario involves a large transaction without a clear explanation or source of funds, which could indicate money laundering or fraud. The third scenario of a nervous customer asking unusual questions may suggest potential criminal intentions or attempts to gather information for illegal purposes. Lastly, attempting to bribe a teller is a clear violation of ethical and legal standards. Therefore, all of these activities warrant a suspicious activity report.

14. Select 3 possible indicators to look for in Money Laundering.
A. Unusual volume of payment destinations, often with the same provider
B. Player wagers on both casino and sportsbook
C. Numerous withdrawals, just under the qualifying threshold
D. Player uses an E-wallet
E. Multiple and frequent deposits followed by multiple and frequent withdrawals, either shortly afterwards or overlapping further deposits
F. All of the above

Correct Answer(s)
A. Unusual volume of payment destinations, often with the same provider
C. Numerous withdrawals, just under the qualifying threshold
E. Multiple and frequent deposits followed by multiple and frequent
withdrawals, either shortly afterwards or overlapping further deposits
Explanation – The answer is “Unusual volume of payment destinations, often with the same provider”, “Numerous withdrawals, just under the qualifying threshold”, and “Multiple and frequent deposits followed by multiple and frequent withdrawals, either shortly afterwards or overlapping further deposits”. These indicators can suggest money laundering activities as they involve suspicious patterns of financial transactions such as frequent deposits and withdrawals, using multiple payment destinations, and keeping withdrawals just under the qualifying threshold to avoid suspicion.

15. What is the laundering stage that separates the illicit money from its source, obscures the audit trail and severs links with the original crime to make it appear like a normal financial transaction called?
A. Entering in the system
B. Legitimising
C. Layering
D. Placement
E. Integration

Correct Answer
C. Layering
Explanation – Layering is the laundering stage that separates the illicit money from its source, obscures the audit trail, and severs links with the original crime to make it appear like a normal financial transaction. This stage involves complex transactions and multiple layers of financial activities to make it difficult for authorities to trace the origin of the funds. By creating a complex web of transactions and moving the money through various accounts and jurisdictions, layering aims to distance the illegal funds from their criminal source, making it harder to detect and investigate the illicit activity.

16. Which are the 3 stages of money laundering?
A. Hedging
B. Placement
C. Identity fraud
D. Integration
E Whitening
F. Layering

Correct Answer(s)
B. Placement
D. Integration
F. Layering
Explanation – The three stages of money laundering are placement, layering, and integration. Placement refers to the process of introducing illegal funds into the financial system. Layering involves complex transactions and multiple accounts to obscure the origin of the funds. Integration is the final stage where the laundered money is integrated back into the legitimate economy, making it difficult to trace its illicit origins.

17. To be classified as an eligible introducer, local entities should be:
A. Licensed under a financial services regulator
B. A reputable law firm
C. Known to the bank

Correct Answer
A. A) Licensed under a financial services regulator
Explanation – The correct answer is A. Local entities licensed under a financial services regulator qualify as eligible introducers.

18. How does the home address on a utility bill, best assist in identifying the prospect
A. The bank may want to visit the prospect
B. The utility bill shows the monthly expenses
C. The home address coupled with the name is evidence of a place of residence

Correct Answer
C. The home address coupled with the name is evidence of a place of residence
Explanation – The correct answer is C. While the bank may want to visit the prospect, that is not the common reason for requesting a utility bill and personal visits are not the norm. Further the monthly expenses (b) has no real relevance.

19. What is enhanced due diligence?
A. When your company has special expertise in due diligence procedures
B. When you rely on due diligence procedures performed by others
C. When specific pre-defined circumstances occur which demand increased due diligence

Correct Answer
C. When specific pre-defined circumstances occur, which demand increased due diligence
Explanation – The answer is C. Specific circumstances (which are defined) require enhanced due diligence, such as limited interaction with the prospect, an exposed person, a high risk country.

20. Customer Due Diligence (CDD) is the responsibility of _______
A. Compliance
B. Risk
C. Customer Facing Staff
D. Operations

Correct Answer
C. Customer Facing Staff
Explanation – Customer Due Diligence (CDD) refers to the process of verifying the identity and assessing the risk associated with a customer before establishing a business relationship. This involves gathering and analyzing relevant information about the customer to ensure compliance with anti-money laundering (AML) and Know Your Customer (KYC) regulations. Customer Facing Staff are responsible for directly interacting with customers and collecting the necessary information for CDD purposes. They play a crucial role in conducting due diligence checks, verifying customer identities, and identifying any potential risks or red flags. Therefore, Customer Facing Staff are responsible for carrying out Customer Due Diligence.

21. After starting a business relationship with a client which of the following would cause concern and be a ‘Red Flag’?
A. Unrealistic wealth compared to profile
B. Trades with no/little benefits and losses without concern
C. Large/rapid movement of funds
D. All the above

Correct Answer
D. All the above.
Explanation – All of the above would cause concern and be a ‘Red Flag’ in a business relationship with a client. Unrealistic wealth compared to profile could indicate potential fraud or illegal activities. Trades with no/little benefits and losses without concern may suggest reckless or suspicious behavior. Large/rapid movement of funds could be a sign of money laundering or other illicit financial activities. Therefore, all of these factors raise concerns and should be considered red flags in a business relationship.

22. Which of the following is NOT a ‘high risk’ customer?
A. Cash intensive business eg. money transfer, casino etc.
B. Customer with complex structures that make identifying ownership difficult
C. A PEPs stockbroker
D. A customer whose ownership structure is through ‘bearer shares’

Correct Answer
C. A PEPs stockbroker.
Explanation – A PEPs stockbroker is not considered a ‘high risk’ customer because PEPs (Politically Exposed Persons) are individuals who hold prominent public positions, such as government officials or heads of state. While PEPs themselves are considered high risk due to their potential for corruption or money laundering, a stockbroker who deals with PEPs is not inherently high risk. The other options, such as cash-intensive businesses, customers with complex structures, and customers with ownership through ‘bearer shares’, all have characteristics that make them more susceptible to illicit activities and therefore are considered high risk.

23. Which one of the following is NOT a ‘low risk’ customer?
A. Other regulated financial institutions
B. Listed companies
C. Government and Public Authorities
D. Charities

Correct Answer
D. Charities.
Explanation – Charities are not considered “low risk” customers because they can be vulnerable to money laundering and terrorist financing activities. While other regulated financial institutions, listed companies, and government and public authorities are subject to strict regulations and oversight, charities often handle large amounts of funds from various sources, making them more susceptible to potential misuse. Therefore, they are categorized as higher risk customers in terms of financial transactions.

24. Who does Compliance Responsibility lie with?
A. Board of Directors
B. Senior Management & Staff
C. Compliance Office
D. All of the above

Correct Answer
D. All of the Above
Explanation – Compliance responsibility lies with all of the above options: the Board of Directors, Senior Management & Staff, and the Compliance Office. This means that everyone within the organization, from the highest level of leadership to the employees, is responsible for ensuring compliance with laws, regulations, and internal policies. The Board of Directors sets the tone at the top and establishes policies, Senior Management & Staff implement and enforce these policies, and the Compliance Office provides guidance and oversight to ensure compliance. By involving all these parties, the organization can create a culture of compliance and minimize the risk of non-compliance.

25. Which of the following is not acceptable as verification of identity?
A. Passport
B. Driving Licence
C. Birth Certificate

Correct Answer
C. Birth Certificate
Explanation – A birth certificate is not acceptable as verification of identity because it only confirms the individual’s place and date of birth, but it does not provide any photo identification or personal details such as name or address. In contrast, a passport and driving license both contain a photograph, full name, and other personal information, making them more reliable forms of identification.

SC’S Proliferation Financing (PF) Guidelines
1. What are the main obligations that intermediaries have to comply under the SC’s PF Guidelines?
I. To maintain sanctions list
II. To conduct screening on customers
III. To freeze, block and reject
IV. To report to authorities

A. I and II only
B. III and IV only
C. I, II, III Only
D. All of the above

Note:
1. PROLIFERATION FINANCING (PF) – is an act of providing funds or financing services which are used to develop nuclear, chemical or biological weapons and any related materials to weapons of mass destructions (WMD).
2. TARGETED FINANCIAL SANCTIONS (TFS) – is an act of asset freezing,
blocking and rejection of transactions and persons to prevent, suppress, and disrupt the proliferation of WMD and its financing in line with sanctions imposed by the United Nations Security Council (UNSC) through its resolutions (UNSCR).

MODULE 9 (Set1)
Questions

1. The following guidelines for the issuance of unlisted debentures must be adhered to Which of the following guidelines is an exception?
A. Issuers should disclose material changes to the unlisted debentures and the availability of financial statements to investors.
B. Disclosure of bid or redemption prices should be made as soon as practicable
C. Issuers of new unlisted debentures should commence providing annual reports from the date of issuance of the unlisted debentures
D. None. All of the above guidelines have to be adhered to.

2. What would constitute to conducting fund management activity?
A. A person that acts as investment advisor to other investment managers
B.A person that is able to exercise control over the management of the investment portfolio
C. both of the above
D. None of the above

3. Which of the following statements the risk management of a fund management company is false?
A. The risk management should form an integral part of the portfolio management function
B. All pertinent risks associated with customer assets should be identified and measured
C. Management must be kept informed of risk exposures on a continual and timely basis.
D. All policies, procedures and reports relating to the risk management function should be properly documented and maintained

4. Which of the following is a fund management company expected to perform?
A. Have in place an internal audit team
B. meet the annual audit requirements
C. Disclose to potential customers its Professional indemnity Insurance arrangements
D. All of the above

5. A fund management company shall ensure that assets under management are subject to:
A. independent custody
B. non-independent valuation and customer reporting
C. Both of the above
D. None of the above

6. A fund management company shall put in place mitigating measures to mitigate any conflicts of interest and, where appropriate, disclose any conflicts of interest to its customers. This would include aby actual or potential conflicts of interest that may arise, such as:
I. the fund management company procures the services of related corporations or other entities in which the CEO, directors or representatives of the fund management company have controlling interests or substantial shareholdings;
II. the fund management company invests into the fund using its proprietary moneys or moneys belongings to its related entities or employees;
III. the fund management company invests customer moneys into the securities of the fund management company’s related entity;
IV. the CEO, director or representative of the fund management company has interests which are distinct from his/her role as CEO. director or representative of the fund management company, as the case may be, and which may be in conflict with the interests of the customers of the fund management company

A. I only
B. I, ii only
C. I, ii, Iv only
D. All of the above

7. A fund management company should ensure that disclosure, at the minimum, include the following,
I. the investment policy and strategy, as well as risks associated with the strategy;
II. the items with respect to fees, termination or exit;
III. the valuation policy and performance measurement standards;
(iv) the use of leverage; (iv) the counterparties, brokers and prime brokers;
IV. the custodians, trustee, fund administrators and auditors

A. I, II, III
B. I, II. III. IV
C. II, III, IV
D. All of the above

8. The underlying investments of a unit trust consist of all of the following except:
A. cash
B. deposits with financial institutions
C. money market instruments
D. Eligible debt securities

9. A fund management company should report which of the following as assets under the fund management company’s non-discretionary management?
A. The moneys contracted to the investment manager in respect of which the fund management company has agreement to provide the fund management services
B. The moneys and equity contracted to the investment manager in respect of which the fund management company has an agreement to provide the fund management services
C. The money and debt contracted to the investment manager in respect of which the fund management company has an agreement to provide the fund management services.
D. The moneys and assets contracted to the investment manager in respect of which the fund management company has an agreement company has an agreement to provide the fund management

10. In reporting assets under a fund management company’s non-discretionary management, the fund management company should only include the portion that is attributable to t based on appropriate proxies such as the:
A. geographical focus of the fund management company
B. asset class focus of the fund management company
C. investment time-horizon of the fund management company
D. All of the above

11. Moneys committed by investors but not crawn should be ________ the fund management company’s managed assets.
A. included in
B. excluded from
C. remove from
D. added on

12. Any leverage to which the managed assets are exposed should be ___________ the fund management company’s managed assets.
A. included in
B. excluded from
C. removed from
D. added into

13. Which of the following is NOT a criteria for fund management companies to meet?
A. A fund management company should ensure that the minimum competency requirements are met.
B. A fund management company should ensure that its shareholders, director, representatives and employees, as well as the fund management company itself, are fit and proper.
C. A fund management company carrying out find management on behalf of any customer other than an accredited or institutional investor does not need to meet the base capital thresholds
D. A fund management company should have in place compliance arrangements that are commensurate with the nature, scale ad complexity of its business.

14. Fund management companies must have in place compliance arrangements that are commensurate with all of the following except the _________ of its business.
A. nature
B. scale
C. performance
D. complexity

15. Ultimate responsibility for compliance with applicable laws and regulations rests with the fund management company’s:
A. CEO and board of directors
B. Compliance department
C. Both of the above
D. None of the above

16. Compliance support of a fund management company may be provided only by a/an:
a. internal department
B. foreign related entity
C. third party service provider
D. All of the above

17. At a minimum, the risk management framework of a fund management company should address all of the following except:
A. Governance
B. Independence
C. Competency of the risk management function
D. Capabilities

18. The risk management function of a fund management country should be subject to adequate oversight by the _______ of the fund management company.
A. Board
B. Senior management
C. Both of the above
D. None of the above

19. The risk management function of a fund management company should be __________ the portfolio management function.
A. integrated into
B. segregated from
C. both of the above
D. None of the above

20. the business activities of a fund management company must be subject to adequate internal audit and it may be conducted by a/an:
A. internal audit function within the fund management company
B. internal audit team from the head office of the fund management company
C. third party service provider
D. All of the above

21. Which of the following statements is NOT true?
A. All policies, procedures and reports relating to the risk management function must be documented.
B. A fund management company must meet quarterly audit requirements
C. The Securities Commission may direct a fund management company to appoint another auditor if the appointed auditor is deemed to be unsuitable
D. All of the above

22. A fund management company shall ensure that assets under management are subject to:
A. internal custody
B. external custody
C. independent custody
D. Any of the above

23. Independent custodians include all of the following except:
A. prime brokers
B. depositories
C. Fund management companies
D. banks

24. A fund management company shall ensure that assets under management are subject to independent valuation by a/an;
A. fund administrator
B. custodian
C. inhouse fund valuation that is segregated from the investment management function
D. All of the above

25. The annual audit performed by the independent auditor is meant to serve as;
A. a periodic check on the valuation of the assets
B. an independent valuation of the assets
C. Both of the above
D. None of the above

26. Which of the following statements regarding a Fund Management Company is false?
A. It cannot procure the services of entities in which its CEO has controlling interests.
B. It may invest into the fund using moneys belonging to its related entities or employees.
C. It may invest customer moneys into the securities of its related entities.
D. It should ensure that there is adequate disclosure to its customers in respect of each fund that it manages.

27. A fund management company should ensure that there is adequate disclosure to its customers in respect of:
A. the investment policy and strategy, as well as risks associated with the strategy.
B. the terms with respect to fees, termination or exit.
C. the valuation policy and performance measurement standards.
D. All of the above.

28. A fund management company should ensure that there is adequate disclosure to its customers in respect of:
A. the use of leverage, to the extent permitted by the investment mandate.
B. the counterparties, brokers and prime brokers used by the fund or account.
C. the custodians, trustee, fund administrators and/or auditors used by the fund or account.
D. All of the above.

29. A fund management company should ensure that disclosures are provided to its customers:
A. on a periodic basis
B. as and when material changes occur
C. Both of the above
D. None of the above

30. Which of the following generally refers to a window period during which investors of a fund are not allowed to redeem their fund investment?
A. gating
B. Side Pocket
C. Lock-up
D. Limitation

31. Representatives of the fund management company are individuals who conduct:
A. client servicing
B. portfolio construction and allocation
C. research and advisory
D. All of the above

32. which of the following statements regarding a fund management company is NOT true?
A. Compliance staff of a fund management company may perform roles such as that of an in-house legal counsel.
B. A fund management company should have an independent compliance function with staff who are suitable qualified and independent from the front office.
C. A fund management company should designate a senior from the front office to be responsible for compliance.
D. A fund management company may engage an external service provider to support its compliance arrangements.

33. Which of the following statements is TRUE?

A. A fund management company must use service providers who are members of relevant professional bodies.
B. A fund management company must submit periodic regulatory returns in relation to its fund management activities.
C. Both of the above.
D. None of the above.

34. Which of the following statements is TRUE?
A. A fund management company cannot engage in central dealing for funds managed by other persons, including its related entities.
B. Engaging in securities borrowing and lending is not considered to be dealing in securities.
C. A fund management company may deal in securities, so long as such activity is solely incidental to its fund management business.
D. All of the above.

35. Which of the following person would be considered to be conducting fund management activity if the person Is able to exercise direct or indirect control over the management of the investment portfolio?
A. A person that acts as investment advisor
B. A person that acts as a sub-advisor
C. A person that provides research to other investment managers
D. All of the above

36. In determining whether a person is able to exercise control over the investment portfolio, which of the following factors is considered?
A. He/she is involved in the construction of the investment portfolio
B. He/she has knowledge of, or access to the holdings of the portfolio beyond what is publicly available.
C. He/she is named or referred to in the fund’s prospectus, offering documents or marketing materials
D. All of the above

37. Which of the following situations require a fund management company to subject its managed assets to independent custody?
A. The manage assets are listed for quotation or quoted on a securities exchange
B. The manage assets are interests in a close-up fund where the closed fund is to be used for private equity or venture capital investments.
C. The manage assets are offered only to accredited or institutional investors
D. All of the above

38. Which of the following is NOT TRUR?
A. If the managed assets are not subject to independent custody arrangements, the fund management company is required to disclose this fact to the investors and to obtain their acknowledgement.
B. The fund management company is required to provide the investor with an audit report of the assets each year.
C. A fund management company that manages private equity and venture capital funds are not required to comply with client segregation requirements in respect of client moneys.
D. A fund management company that acts as investment adviser to another investment manager should satisfy itself that the assets that it advises on are subject to independent custody.

39. Companies that mage funds that will invest into _____ are required to apply a Capital Markets Services Representative’s Licence in fund management.
A. immovable assets
B. futures contracts
C. real estate funds
D. All of the above

40. CMS licensing requirements would only apply where:
A. The manager of the assets is an external manager
B. the managed assets comprise a portfolio of securities and futures contracts
C. the manager is in the business of fund management.
D. All of the above

41. The fund management company should ensure an orderly winding down of its businesses prior to cessation by:
A. putting in place communication plans to ensure sufficient notice period has been given to its customers
B. discharging all customer obligations and ensuring that customer assets and/or moneys have been accounted for and returned to customers before it ceases
C. Both of the above
D. None of the above

42. In a typical fund management company setting, individuals who are engaged in which of the following roles are required to be appointed as representatives?
A. client servicing
B. business development
C. marketing
D. All of the above

43. Which of the following statements is NOT TRUE?
A. Managers of property funds meet the criteria of a Real Estate Trust (REIT), will be treated as REIT managers and are not required to hold a CMS licence.
B. The fund management company should be able to demonstrate that a proposed Non-Executive Director can add value and make a meaningful contribution to the fund management company.
C. An individual who is engaged only in dealing for funds managed by the fund management company would have to be appointed as a representative.

D. All of the above 44. Which stage of the money laundering process does a syndicate repay loans or credit cards with illegal proceeds?
A. Placement
B. Layering
C. Integration
D. None of the above

45. Which stage of the money laundering process does a syndicate purchase foreign money with illegal funds through foreign currency exchanges?
A. Placement
B. Layering
C. Integration
D. None of the above

46. Which of the following is a process intended to mask the proceeds obtained from crime so that they appear to come from a legitimate source?
A. Money laundering
B. Terrorism financing
C. Embargoes
D. Fraud

47. Which stage of the money laundering does a criminal purchase luxury goods from genuines to resell them to unknowing customers?
A. Placement stage
B. Layering stage
C. Integration stage
D. Transfer stage

48. Which of the money laundering process does a criminal deposit cash obtained from their crime into banks?
A. Placement stage
B. Layering stage
C. Integration stage
D. Transfer stage

49. Which stage of the money laundering process refers to the placement of laundered funds back into the financial system and making them appear as legitimate?
A. Placement stage
B. Layering stage
C. Integration stage
D. Transfer stage

50. Which stage of the money laundering process refers to the creation of financial transactions designed to disguise the audit trait of money laundering?
A. Placement stage
B. Layering stage
C. Integration stage
D. Transfer stage

51. Which stage of the money laundering process refers to the physical disposal of benefits for criminal conduct?
A. Placement stage
B. Layering stage
C. Integration stage
D. Transfer stage

52. Which of the following is a process intended to finance criminal acts?
A. Money laundering
B. Terrorism financing
C. Embargoes
D. Sanctions

53. The prohibition of financial dealings with a certain countries is known as:
B. A. Money laundering
B. Terrorism financing
C. Embargoes
D. Sanctions

54. The prohibition of trade on certain types of products or services with another country is known as:
A. Money laundering
B. Terrorism financing
C. Embargoes
D. Sanctions

55. Which of the following can a criminal use to block the audit trail for money laundering purposes?
A. Create shell companies
B. Create an offshore company
C. Go through a private banker to deal with the CMS licence holder
D. All of the above

56. Which of the following statements is true regarding fund management companies?
A. Fund management companies can arrange with a custodian to lend their customer’s securities with their consent.
B. Fund management companies must obtain approval from the Securities Commission before they can reduce their paid-up ordinary share capital.

C. Fund management companies cannot provide unsecured loans to any person who is not an employee of the fund management company.
D. All of the above

57. Which of the following terms describes outsourcing which of disrupted could significantly impact a fund management company’s business operation, reputation or profitability?
A. Material outsourcing
B. Basic outsourcing
C. Critical outsourcing
D. Risk outsourcing

58. Fund management companies are required to inform Security Commission if it is:
A. insolvent
B. likely to insolvent
C. unable to meet its obligations
D. All of the above

59. If a fund management company notifies the Security Commission that is insolvent, the Security Commission may exercise is powers to:
A. appoint a statutory adviser to advise the fund management company on proper management of its business
B. assume control of the business of the fund management company
B. Both of the above
D. None of the above

60. Fund management companies are required to notify the Security Commission whenever they enter into:
A. material outsourcing agreements
B. non-material outsourcing agreements
C. Both of the above
D. None of the above

MODULE 9 (Set2)

Fund management means undertaking on behalf of a customer:
A. the management of a portfolio of securities or futures contracts
B. foreign exchange trading for the purpose of managing the customer’s funds
C. Both of the above
D. None of the above
Fund management does not include the management of a portfolio of:
A. securities
B. futures
C. real estate investment trust
D. foreign exchange trading
Which of the following persons can be considered to be conducting fund management activity?
A. Investment advisor
B. Sub-advisor
C. A person who gives researcher to other investment managers
D. All of the above
Which of the following factors should be considered in determining whether a person can exercise control over the investment portfolio?
A. Whether the person is involved in the construction of investment portfolio
B. Whether the has knowledge of the holdings of the portfolio beyond what is publicly available.
C. Both of the above
D. None of the above
a person is considered to be conducting fun management activities if the person is able to exercise control over the management of the investment portfolio.
A. direct
B. indirect
C. Both of the above
D. None of the above
Which of the following persons is considered a qualified investor?
A. An institutional investor
B. A limited partnership comprising only of accredited investors
C. A limited partnership comprising only of institutional investors
D. All of the above
Which of the following should be included in determining the value of the assets under management?
A. Assets in respect of which the fund management company has an agreement to provide the fund management services.
B. Moneys committed by investors but not drawn down.
C. Leverage to which the managed assets are exposed to.
D. All of the above.
A client engages ABC Fund Management Company to manage a pool of assets worth RM10M. ABC fund management company sub-contracts RM 4M out of the RM 10M to XYZ fund management company to manage. How much should ABC fund management company declare as the value of their assets under management?
A. $0 B. RM4M C. RM6M D. RM10M
A client engages ABC Fun Management Company to manage a pool of assets worth RM 10M,. ABC fund management company sub-contract RM 4M out of the RM 10M to XYZ fund management company to manage. How much should XYZ fund management company declare as the value of their assets under management?
A. $0
B. RM 4M
C. RM 6M
D. RM 10M
Fund management companies must meet __ audit requirements.
A. monthly
B. quarterly
C. semi-annual
D. annual
The risk management framework of a fund management company must address:
A. Identifying risks associated with customer assets
B. Monitoring of risks
C. Documentation of risk management policies
D. All of the above
Fund management companies are required to disclose its Professional Indemnity Insurance arrangements to:
A. existing customers
B. potential customers
C. Both of the above
D. None of the above.
The requirement for a fund management company to have quantum of total assets under management applies to the:
A. Fund management company’s related corporations
B. B. Fund management company itself
C. Fund management company’s holding
D. All of the above
Which of the following statements regarding customer’s monies is false?
A. If the customer’s monies are denominated in a foreign currency, the fund management company can deposit them in an overseas custodian account.
B. A fund management company has absolute discretion to draw down on its customer’s monies.
C. A fund management company can hold monies held on trust in the account of customers in the form of debt instruments issued by the government of the country where the fund management company conducts its business.
D. All of the above.
Which of the following ca fund management companies perform when handling customer’s monies?
A. Deposit all monies received on account of its customer in a trust account
B. Deposit customer’s funds with proprietary funds.
C. Both of the above
D. None of the above
A fund management company can make withdrawals from a customer’s account only if it is:
A. making a payment for their customer’s obligation
B. defraying its brokerage charges
C. Both of the above
D. All of the above
A fund management company can make withdrawals from a customer’s account for the purpose of:
A. hypothecating the assets
B. securities lending
C. reimbursing money that it has advanced to the account
D. All of the above
It is mandatory for a fund management company to provide risk disclosure to:
A. retail investors
B. accredited investors
C. institutional investors
D. All of the above
All fund management companies are required to:
A. implement an appropriate risk management framework.
B. determine their own net asset values of assets under management and convey these values to the customers to which the assets relate to.
C. combine assets under management with propriety assets of the fund management companies in a trust account.
D. All of the above.
A fund management companies are required to:
A Prioritise the purchase or sale of securities or future contracts or investments made on behalf of customers.
B. Mitigate and disclose any conflict of interest to the customer.
C. Ensure that assets under its management are subject to independent valuation
D. All of the above
Fund management company are required to segregate their managed assets if the assets are:
A. listed on a securities market
B. a closed-end fund which is to be used for private equity
C. offered to retail investors
D, All of the above
Fund management companies are required to segregate their managed assets if the assets are offered to:
A. retail investors
B. accredited investors
C. institutional investors
D. All of the above
Which of the following statements is true regarding fund management companies?
A. Fund management companies do not need to place assets in a trust or custody account if they have obtained customer’s acknowledgement.
B. Fund management companies do not need to provide customers with audit reports
C. Both of the above
D. None of the above
The directors of the fund management company are criminally liable if the fund management company’s non-compliance is a result of their:
A. consent
B. connivance
C. neglect
D. All of the above
Under which circumstances must a fund management company obtain approval from the Security Commission?
A. The appointment of a CEO
B. A change in appropriate of a non-executive to an executive officer
C. Both of the above
D. None of the above
When there is a change in appointment a director of a fund management company, it is not required to obtain approval from the Securities Commission if:
A. it is a foreign company
B. The director resides overseas
C. The director is not directly responsible for the fund management company’s local business.
D. All of the above
A fund management company is required to notify the Security Commissions under which of the following circumstances?
A. Drawing down on a qualifying subordinate loan.
B. Repayment of any subordinated loan principal.
C. Entering into an arrangement in which a person will obtain effective control of the fund management company.
D. All of the above
Which of the following statements regarding fund management companies is true?
A. Fund management companies can issue preference shares without the need to notify the Securities Commission.
B. Fund management companies are not allowed to repay the principal of preference shares through repurchase of redemption.
C. All fund management companies and their representatives must disclose and record their interest in securities which are listed for quotation.
D. D. All of the above.
Operational risk requirement for fund management companies is calculated based on:
A. average annual gross income
B. average annual base capital
C. average annual base capital at risk
D. average balance sheet assets at risk
Total Risk Requirement for fund management companies includes which of the following types of risks?
A. Operational risk
B. Counterparty risk
C. Underwriting risk
D. All of the above
Which of the following statements regarding commissions and rebates is true?
A. A fund management company can retain for its own account any cash or commission rebates arising from transactions for funds.
B. Commission net of rebates should not be charged to clients.
C. Both of the above
D. None of the above
Commissions received should be included in the fund management company’s annual report which states:
A. the commissions received from each broker
B. that the commissions were for the scheme’s benefit.
C. that trades were made on a best execution basis.
D. All of the above.
A fund management company and its representatives may receive commissions from a broker provided that:
A. the commissions can assist in providing investment advice to the customer.
B. best execution is carried out for the transaction.
C. the fund manager does not enter into unnecessary trades to achieve a sufficient volume of transactions to qualify for commissions.
D. All of the above
A fund management company must provide a statement of account to which of the following entities?
A. Individual investors
B. Accredited investors
C. A related corporation of the fund management company
D. All of the above
A fund management company must provide to each customer, on a monthly basis, a statement of account containing:
A. Securities transactions of the customers
B. The net unrealized profits/losses in all futures positions.
C. Financial charges to the account
D. All of the above.
A fund management company must provide to each customer, on a monthly basis, a statement of account containing:
A. Future positions and leveraged foreign exchange positions
B. The status of the customer’s assets in the fund management company’s custody.
C. The movement of the customer’s asset in the fund management company’s custody
D. All of the above
Fund management companies are required to keep records of all the following except the particulars of:
A. every underwriting and placement transaction entered into by the fund management company
B. all income and expenses of the fund management company
C. all assets and liabilities of the fund management company
D. all cash flow statements of the fund management company
Fund management companies are required to keep records of all the following excepts the:
A. the names of any person who has trading authority over a customer’s account.
B. particulars of every transaction carried out on behalf of customers.
C. particulars of all representatives of the fund management company
D. particular of each asset that is not the property of the fund management company but for which it is accountable.
Fund management companies are required to keep records that contain documents of:
A. every power of attorney authorizing the fund management company to operate the client’s account on a discretionary basis.
B. every written agreement entered into between the fund management company and its customer
C. every statement acknowledging the receipt of assets from customer
D. All of the above.
Fund management companies are required to submit all of the following documents to the Securities Commissions except the:
A. Profit and loss statement
B. Balance sheet
C. Cash flow statement
D. Auditor’s report on the financial statements
All of the following are annual reporting requirements for fund management companies except:
A. Statement of financial resources
B. Statement of total risk management
C. Statement of appointment auditors
D. Aggregate indebtedness
Fund management companies may use customer’s monies for:
A. the payment of debt of the fund management company
B. the payment under an order or a process of any court
C. Both of the above
D. None of the above
Fund management companies can use money received from a customer _ to another person.
A. as guarantee
B. as security
C. to extend credit
D. None of the above
Money received on account of the customer does not include money:
A. used to reduce the debt owned by the customer to the fund management company.
B. used in the course of business of the fund management company.
C. used by the management company for managing the customer’s funds.
D. All of the above.
Money received on account of the customer does not include money:
A. used to pay the customer
B. used to defray brokerage charges
C. used to pay other person entitled to the money
D. All of the above
All interests earned from maintenance of customer’s monies in a trust account shall accrue only to the:
A. Customer
B. Fund management company
C. Trustee
D. Custodian
Assets received on account of the customer fund management companies must be deposited in a:
A. trust account
B. custody account
C. Fund management company account
D. Any of the above
Money received on account of the customer fund management companies must be deposited in a:
A. trust account
B. custody account
C. Fund management company account
D. Any of the above
A fund management company may pledge its customer’s assets if:
A. it is an amount owned by the customer to the fund management company.
B. the amount pledged exceeds the amount owned.
C. Both of the above.
D. None of the above.
Fund management companies must ensure that transactions are fully collaterised when borrowing securities from:
A. retail investors
B. accredited investors
C. Both of the above
D. None of the above
Fund management companies must obtain written consent from __ before lending out the securities belonging to them.
A. retail investors
B. accredited investors
C. Both of the above
D. None of the above.