CMFAS M2a Exam Free Trial

A CMS Licensee should also put in place proper policies and procedures for EDD including but not limited to the following:
i. Implement appropriate internal policies, procedures and controls to identify and determine if a customer or beneficial owner (BO) is a PEP i.e. a PEP policy;
ii. Obtain the approval from CMI’s senior management to establish or continue business relations where the customer or beneficial owner is a PEP or subsequently a PEP; and
iii. Establish by appropriate and reasonable means the source of wealth and source of funds of any customer or BO.

Breaches of security will impact:
 Banking Secrecy provisions in the Banking Act
 Personal Date Protection Act (PDPA)
 Civil Action
 Fines
 Imprisonment Terms
 Reputation

PENALTY FOR BREACH OF SECTION 48(1) & 48(2)
a) Fine up to S$30,000 or
b) Imprisonment up to 3 years or
c) Both

The TSOFA was enacted to give effect to the International Convention for the Suppression of the Financing of Terrorism which Singapore signed in 2001 and the United Nations Security Council Resolution 1373. The TSOFA criminalises terrorism financing and allows for the seizure and confiscation of property related to terrorist and terrorism purposes. It also imposes a duty on all to provide information pertaining to terrorism financing to the Police, and failure to do so is a criminal offence.

The prohibition in the MAS Notice would include a prohibition against the provision of financial services by a CMS licence holder to a person in connection with that person’s transaction or business relationship with a designated person or for the benefit of (whether directly or indirectly) a designated person. It shall however not apply to transactions or business relationships in respect of which CMS licence holder has written to the MAS for approval and where the MAS has given its written approval.

Reference Price for non-Designated Futures Contracts
The opening price of the contract shall be the reference price. If the opening price is not available, SGX may use other prices that it thinks in its discretion are reasonable. For instance, SGX may use the previous day’s closing price.

If there is no interest in a given contract for an extended period of time, SGX-DT may choose to de-list the contract, removing it from the market. De-listed contracts will no longer be available for trading.
SGX-DT, at its own discretion, may decide to de-list any contract at any given time for the maintenance of a fair, orderly and transparent market.

As the Market transits into the “Open” state, an Equilibrium Price will be generated by the SGX-DT QUEST. The Equilibrium Price is the price that uncrosses the market order book, which enables the largest quantity of trades to be executed.
Thereafter, trading continues as normal, with the relevant Trade Matching Algorithms guiding the matching of orders.

I & IV.
It is not possible to predict unforeseen emergencies, however examples of an emergency situation may include:
• An excessive trading position accumulated by a person or persons;
• Unwarranted speculation in any of the markets;
• A state of war or threatened hostilities;
• The introduction of, or change to, official controls affecting a market or contract, (such as the closure of the foreign market where the underlying asset is traded);
• A breakdown or failure of QUEST or any other communication, equipment or market facilities operated by the Exchange; or
• Any other undesirable situation or practice that adversely affects market integrity or investor rights.

II & III.
Terrorist Financing can be defined by some as the reverse of money laundering as clean money is sometimes used to finance criminal and terrorist acts. Such acts usually have its roots in political beliefs or ideology and are used to threaten and influence government policies and go against the rule of law.

All orders entered into QUEST will be matched with the best price given priority i.e. orders at the highest bid and lowest offer are matched first over other orders in the same contract month/spreads.

Day Order: It should be noted that whilst the name of the validity is “Day”, the order is only valid in the same trading session. As such, an order entered on the 29th March during the T-session will be automatically deleted by QUEST at the end of the T-Session. The order will not be valid or active during the T+1 Session of 29th March. This validity is appropriate for orders that are only to be executed during the particular trading session.

Validities allowed: Day, GTC, FOK, FAK

Limit Orders allow traders to specify the exact price they wish to get matched at. A Limit Order specifies the maximum price that a buyer is willing to pay, or the minimum price a seller is willing to receive for one contract. Limit orders will also specify a quantity for the order.

I & III.
SSOs trigger the entry of an order into the order book when the market transitions into a new session state. Market participants can query for the list of valid session states and select the appropriate session state. SSO’s are typically used to execute trades during the Pre-Open Auction (Market-on-Open), or the Pre-Close Auction (Market-on-Close). This allows the trader to enter his order any time before the desired session state, rather than having to wait till this market transits to that session state.

II & IV.
All NLTs must be reported to the Exchange.
NLTs can be registered via one of the following modes of registration:
– The eNLT system (Electronic Negotiated Large Trade — a web-based system);
– The Trade Report Application Programming Interface functionality; or
– The Trade Registration System and any enhancements, updates and variations to such system from time to time. NLT’s can be registered by the counterparties or their Clearing Members and their affiliates, on their behalf. Prior approval must first be obtained from the Clearing Members of both the buyer and the seller, before the NLT is submitted for registration by the counterparties.

SGX-ST Rule 13.8.5 prohibits a Trading Member or a Trading Representative from dealing in securities in a manner that will or may affect or maintain the price of the securities, where the intent is to induce other persons to subscribe for, buy or sell the securities is deemed market manipulation and is prohibited. However, this rule does not apply to stabilising action carried out in accordance with Regulation 3 of the Securities and Futures (Market Conduct)(Exemption) Regulations.

Under SFA Section 200(1), it is an offence to induce or attempt to induce another person to deal in securities by:
1. Making or publishing any statement, promise or forecast that he knows or ought reasonably to have known to be misleading, false or deceptive;
2. Any dishonest concealment of material facts;
3. Reckless making or publishing of any statement, promise or forecast that is misleading, false or deceptive; or
4. Recording or storing in, or by means of, any mechanical, electronic or other device.

SFR(LCB)
Offences are punishable with a fine not exceeding $50,000.

For open positions, Members will refer to the maintenance margin requirements for the contract.
Maintenance margin is the minimum required level of margin the customer must maintain in his account at all times in order to support the trade, and it is usually lower than initial margin. When a customer’s total net equity falls below the maintenance margin requirements, a margin call is issued by the Member to the customer.

In cases where a customer holds long and short positions in the same contract, but on different exchanges, a Member is allowed to grant the customer a margin credit, therefore reducing the customer’s total amount of margin requirement.