CMFAS CACS Paper 1 Free Trial Set Two
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Question 1 of 20
1. Question
Which of the following persons are exempt from holding a trust business licence?
I. Banks and merchant banks not regulated by MAS.
II. Trustees of collective investment schemes approved under the Securities and Futures Act.
III. Persons engaging in trust business in connection with the issuance of debentures.
IV. Persons who are exempt from holding a capital markets services licence for providing fund management or custodial services under the Securities and Futures Act (Cap. 289).Correct
Persons exempt from holding a trust business licence include the following:
– Banks and merchant banks regulated by MAS.
– Holders of a capital markets services licence, or persons who are exempt from holding a capital markets services licence for providing fund management or custodial services under the Securities and Futures Act (Cap. 289).
– Lawyers and accountants.
– Private trust companies.
– Overseas persons.
– Persons engaging in trust business in connection with the issuance of debentures.
– Trustees of collective investment schemes approved under the Securities and Futures Act (Cap. 289).
– Persons carrying out introducing activities.Incorrect
Persons exempt from holding a trust business licence include the following:
– Banks and merchant banks regulated by MAS.
– Holders of a capital markets services licence, or persons who are exempt from holding a capital markets services licence for providing fund management or custodial services under the Securities and Futures Act (Cap. 289).
– Lawyers and accountants.
– Private trust companies.
– Overseas persons.
– Persons engaging in trust business in connection with the issuance of debentures.
– Trustees of collective investment schemes approved under the Securities and Futures Act (Cap. 289).
– Persons carrying out introducing activities. -
Question 2 of 20
2. Question
What term refers to any negotiable instrument that is payable to “bearer” or to “cash” or to “the order of cash,” that has been signed but with the payee’s name omitted?
Correct
A bearer negotiable instrument refers to any negotiable instrument that is payable to “bearer” or to “cash” or to “the order of cash,” that has been signed but with the payee’s name omitted. The bearer is the person in physical possession of the bearer negotiable instrument.
Incorrect
A bearer negotiable instrument refers to any negotiable instrument that is payable to “bearer” or to “cash” or to “the order of cash,” that has been signed but with the payee’s name omitted. The bearer is the person in physical possession of the bearer negotiable instrument.
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Question 3 of 20
3. Question
The TCA aims to regulate financial institutions that provide trust services for investment and wealth management purposes. Which of the following is a type of trust business activity regulated under the Trust Companies Act (TCA)?
I. Acting as trustee in relation to an express trust.
II. Providing trust administration services in relation to an express trust.
III. Arranging for any person to act as trustee in respect of an express trust.
IV. Outsourcing processes for investment and wealth purposes.Correct
Trust business activities regulated under the Trust Companies Act include the following:
– Providing services with respect to the creation of an express trust.
– Acting as trustee in relation to an express trust.
– Arranging for any person to act as trustee in respect of an express trust.
– Providing trust administration services in relation to an express trust.Incorrect
Trust business activities regulated under the Trust Companies Act include the following:
– Providing services with respect to the creation of an express trust.
– Acting as trustee in relation to an express trust.
– Arranging for any person to act as trustee in respect of an express trust.
– Providing trust administration services in relation to an express trust. -
Question 4 of 20
4. Question
In the notice issued pursuant to section 27B of the Monetary Authority of Singapore Act (Cap. 186) (“MAS Act”). What service is involved in a specified product’s meaning?
I. An account issuance service.
II. A cashless e-laundering service.
III. A domestic money transfer service.
IV. An e-money issuance service.Correct
A “specified product” means a product that involves all of the following services:
– An account issuance service.
– A domestic money transfer service.
– An e-money issuance service.Incorrect
A “specified product” means a product that involves all of the following services:
– An account issuance service.
– A domestic money transfer service.
– An e-money issuance service. -
Question 5 of 20
5. Question
The TCA aims to regulate financial institutions that provide trust services for investment and wealth management purposes, such as succession planning. Which of the following is included in the trust business activities regulated under the TCA?
I. Providing services with respect to the creation of an express trust.
II. Not acting as trustee in relation to an express trust.
III. Arranging for any person to act as trustee in respect of an express trust.
IV. Providing trust administration services in relation to an express trust.Correct
The TCA aims to regulate financial institutions that provide trust services for investment and wealth management purposes, such as succession planning. Trust business activities regulated under the TCA are as follows:
– providing services with respect to the creation of an express trust.
– Acting as trustee in relation to an express trust.
– Arranging for any person to act as trustee in respect of an express trust.
– Providing trust administration services in relation to an express trust.Incorrect
The TCA aims to regulate financial institutions that provide trust services for investment and wealth management purposes, such as succession planning. Trust business activities regulated under the TCA are as follows:
– providing services with respect to the creation of an express trust.
– Acting as trustee in relation to an express trust.
– Arranging for any person to act as trustee in respect of an express trust.
– Providing trust administration services in relation to an express trust. -
Question 6 of 20
6. Question
What is not the meaning of the customer, in relation to a payment service provider?
Correct
Customer, in relation to a payment service provider, means a person (whether a natural person, legal person or legal arrangement):
– With whom the payment service provider establishes or intends to establish business relations.
– For whom the payment service provider undertakes or intends to undertake any transaction without an account being opened;Incorrect
Customer, in relation to a payment service provider, means a person (whether a natural person, legal person or legal arrangement):
– With whom the payment service provider establishes or intends to establish business relations.
– For whom the payment service provider undertakes or intends to undertake any transaction without an account being opened; -
Question 7 of 20
7. Question
Which of the following options is not correct about domestic wire transfers and cross-border wire transfers?
Correct
A domestic wire transfer means a wire transfer where the ordering institution and beneficiary institution are located in the same country or jurisdiction and also refers to any chain of wire transfer that takes place entirely within a country, even though the system used to transfer the payment message may be located in another country or jurisdiction while a cross-border wire transfer means a wire transfer where the ordering institution and the beneficiary institution are located in different countries or jurisdictions and also refers to any chain of wire transfer in which at least one of the financial institutions involved is located in a different country or jurisdiction.
Incorrect
A domestic wire transfer means a wire transfer where the ordering institution and beneficiary institution are located in the same country or jurisdiction and also refers to any chain of wire transfer that takes place entirely within a country, even though the system used to transfer the payment message may be located in another country or jurisdiction while a cross-border wire transfer means a wire transfer where the ordering institution and the beneficiary institution are located in different countries or jurisdictions and also refers to any chain of wire transfer in which at least one of the financial institutions involved is located in a different country or jurisdiction.
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Question 8 of 20
8. Question
Which of these is not one of the ways the new TCA framework seeks to ensure high standards of probity, professionalism and business conduct by trust service providers?
I. Ensuring that only fit and proper persons are allowed to operate.
II. Ensuring service providers respect only administration requirements.
III. Ensuring service providers do not strengthen Singapore’s status as an international financial centre.
IV. Employing only proper persons without vast experience in the TCA framework.Correct
The strong growth in the Singapore trust services industry has prompted the need to ensure high standards of probity, professionalism and business conduct by trust service providers to strengthen Singapore’s status as an international financial centre. The new TCA framework seeks to achieve this by ensuring, among other things, that only fit and proper persons are allowed to operate in the trust services industry.
Incorrect
The strong growth in the Singapore trust services industry has prompted the need to ensure high standards of probity, professionalism and business conduct by trust service providers to strengthen Singapore’s status as an international financial centre. The new TCA framework seeks to achieve this by ensuring, among other things, that only fit and proper persons are allowed to operate in the trust services industry.
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Question 9 of 20
9. Question
Which of the following is one of the Trust business activities regulated under the Trust Companies Act?
I. Acting as trustee in relation to an express trust.
II. Arranging only administration services to regulate financial institutions.
III. Providing trust administration services in relation to an express trust.
IV. Providing services with respect to the creation of an express trust.Correct
Trust business activities regulated under the TCA include the following:
– Providing services with respect to the creation of an express trust.
– Acting as trustee in relation to an express trust.
– Arranging for any person to act as trustee in respect of an express trust.
– Providing trust administration services in relation to an express trust.Incorrect
Trust business activities regulated under the TCA include the following:
– Providing services with respect to the creation of an express trust.
– Acting as trustee in relation to an express trust.
– Arranging for any person to act as trustee in respect of an express trust.
– Providing trust administration services in relation to an express trust. -
Question 10 of 20
10. Question
Which of the following principles serve as a guide for all payment service providers in the conduct of their operations and business activities?
I. A payment service provider shall exercise due diligence when dealing with customers, natural persons appointed to act on the customer’s behalf, connected parties of the customer and beneficial owners of the customer.
II. A payment service provider shall, to the fullest extent possible, assist and cooperate with the relevant law enforcement authorities in Singapore to prevent money laundering and terrorism financing.
III. A payment service provider shall not take appropriate steps to identify, assess and understand, its money laundering and terrorism financing risks.
IV. A payment service provider shall conduct its business in conformity with high ethical standards, and guard against establishing any business relations or undertaking any transaction, that is or may be connected with or may facilitate money laundering or terrorism financing.Correct
The following are principles that shall serve as a guide for all payment service providers in the conduct of their operations and business activities:
– A payment service provider shall exercise due diligence when dealing with customers, natural persons appointed to act on the customer’s behalf, connected parties of the customer and beneficial owners of the customer.
– A payment service provider shall conduct its business in conformity with high ethical standards, and guard against establishing any business relations or undertaking any transaction, that is or may be connected with or may facilitate money laundering or terrorism financing.
– A payment service provider shall, to the fullest extent possible, assist and cooperate with the relevant law enforcement authorities in Singapore to prevent money laundering and terrorism financing.Incorrect
The following are principles that shall serve as a guide for all payment service providers in the conduct of their operations and business activities:
– A payment service provider shall exercise due diligence when dealing with customers, natural persons appointed to act on the customer’s behalf, connected parties of the customer and beneficial owners of the customer.
– A payment service provider shall conduct its business in conformity with high ethical standards, and guard against establishing any business relations or undertaking any transaction, that is or may be connected with or may facilitate money laundering or terrorism financing.
– A payment service provider shall, to the fullest extent possible, assist and cooperate with the relevant law enforcement authorities in Singapore to prevent money laundering and terrorism financing. -
Question 11 of 20
11. Question
A payment service provider should take appropriate steps to identify, assess and understand, its money laundering and terrorism financing risks. Which of the following is one of the appropriate steps to take?
I. Documenting the payment service provider’s risk assessments.
II. Considering all the relevant risk factors before determining the level of overall risk and the appropriate type and extent of mitigation to be applied.
III. Develop new products and new business practices, including new delivery mechanisms.
IV. Keeping the payment service provider’s risk assessments up-to-date, and having appropriate mechanisms to provide its risk assessment information to the Authority.Correct
A payment service provider shall take the following appropriate steps to identify, assess and understand, its money laundering and terrorism financing risks:
– Documenting the payment service provider’s risk assessments.
– Considering all the relevant risk factors before determining the level of overall risk and the appropriate type and extent of mitigation to be applied.
– Keeping the payment service provider’s risk assessments up-to-date.
– Having appropriate mechanisms to provide its risk assessment information to the authority.Incorrect
A payment service provider shall take the following appropriate steps to identify, assess and understand, its money laundering and terrorism financing risks:
– Documenting the payment service provider’s risk assessments.
– Considering all the relevant risk factors before determining the level of overall risk and the appropriate type and extent of mitigation to be applied.
– Keeping the payment service provider’s risk assessments up-to-date.
– Having appropriate mechanisms to provide its risk assessment information to the authority. -
Question 12 of 20
12. Question
The covered entity is required to provide written information to the client after the transaction. Is verbal disclosure still required?
Correct
As far as practicable, disclosure of information to clients should be made in written form prior to or at the point of entering into the transaction. Where this is not possible, the Covered Person may make a verbal disclosure to the client first and follow up with written disclosure as soon as practicable.
Incorrect
As far as practicable, disclosure of information to clients should be made in written form prior to or at the point of entering into the transaction. Where this is not possible, the Covered Person may make a verbal disclosure to the client first and follow up with written disclosure as soon as practicable.
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Question 13 of 20
13. Question
Which of the following are the reasons for establishing the private banking advisory group?
I. To foster professional standards.
II. To enhance transparency to clients.
III. To enhance confidence in the private banking industry.
IV. To strengthen the market conduct incompetency standards.Correct
The Private Banking Advisory Group (“PBAG”), comprising senior industry leaders (representatives from the private banking industry), was established in January 2010 with the support of the Monetary Authority of Singapore (“MAS”) to foster professional standards, enhance transparency to clients and confidence in the private banking industry in Singapore. This Code sets out standards of good practice on competency and market conduct expected of financial institutions (including their staff) operating in the private banking industry in Singapore which are providing financial services to Accredited Investors (“AIs”).
Incorrect
The Private Banking Advisory Group (“PBAG”), comprising senior industry leaders (representatives from the private banking industry), was established in January 2010 with the support of the Monetary Authority of Singapore (“MAS”) to foster professional standards, enhance transparency to clients and confidence in the private banking industry in Singapore. This Code sets out standards of good practice on competency and market conduct expected of financial institutions (including their staff) operating in the private banking industry in Singapore which are providing financial services to Accredited Investors (“AIs”).
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Question 14 of 20
14. Question
The standards of the CACS code are intended to provide broad guidance, and are not meant to be exhaustive or to replace any legislation, regulations or guidelines issued by the relevant authorities in Singapore. Which of the following is not a guideline?
Correct
The standards of the CACS code are intended to provide broad guidance, and are not meant to be exhaustive or to replace any legislation, regulations or guidelines issued by the relevant authorities in Singapore. Further reference should always be made to applicable legislation, regulations or guidelines, which may include but would not be limited to the following:
– Banking act.
– Securities and futures act.
– Financial advisers act.
– The corruption, drug trafficking and other serious crimes (confiscation of benefits) act.
– Terrorism (suppression of financing) act.
– Subsidiary legislation, notices, guidelines and information papers issued by the relevant regulatory authorities.Incorrect
The standards of the CACS code are intended to provide broad guidance, and are not meant to be exhaustive or to replace any legislation, regulations or guidelines issued by the relevant authorities in Singapore. Further reference should always be made to applicable legislation, regulations or guidelines, which may include but would not be limited to the following:
– Banking act.
– Securities and futures act.
– Financial advisers act.
– The corruption, drug trafficking and other serious crimes (confiscation of benefits) act.
– Terrorism (suppression of financing) act.
– Subsidiary legislation, notices, guidelines and information papers issued by the relevant regulatory authorities. -
Question 15 of 20
15. Question
The Private Banking Advisory Group (PBAG) was established in January 2010 with the support of the Monetary Authority of Singapore (MAS). Which of the following groups of individuals does the Private Banking Advisory Group comprise of?
Correct
The Private Banking Advisory Group (PBAG), comprises of senior industry leaders (representatives from the private banking industry). The Private Banking Advisory Group was established to further strengthen the competency and market conduct standards of the private banking industry in Singapore.
Incorrect
The Private Banking Advisory Group (PBAG), comprises of senior industry leaders (representatives from the private banking industry). The Private Banking Advisory Group was established to further strengthen the competency and market conduct standards of the private banking industry in Singapore.
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Question 16 of 20
16. Question
Which of the following is a reason why the Private Banking Advisory Group (PBAG) developed the private banking code of conduct?
I. To enhance transparency to clients.
II. To enhance confidence in the private banking industry in Singapore.
III. To hinder the corporate progress of senior industry leaders.
IV. To foster professional standards.Correct
The private banking code of conduct was developed by the Private Banking Advisory Group to foster professional standards, enhance transparency to clients and confidence in the private banking industry in Singapore.
Incorrect
The private banking code of conduct was developed by the Private Banking Advisory Group to foster professional standards, enhance transparency to clients and confidence in the private banking industry in Singapore.
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Question 17 of 20
17. Question
The CACS comprises two papers: paper 1 and paper 2. What amount of time is allocated to complete CACS paper 1?
Correct
The time allocated to complete CACS paper 1 is 2 hours. The papers comprise multiple-choice questions that could be based on case scenarios, relating to the knowledge dominant competencies within the IBF Standards on Market Conduct and Product Knowledge.
Incorrect
The time allocated to complete CACS paper 1 is 2 hours. The papers comprise multiple-choice questions that could be based on case scenarios, relating to the knowledge dominant competencies within the IBF Standards on Market Conduct and Product Knowledge.
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Question 18 of 20
18. Question
Covered Entities and their Covered Persons should remind the client that its overall assessment of the client’s profile and product recommendation will be based on the information provided by the client. Which of these is not information that is included in a client’s profile?
I. Financial situation
II. Next of kin’s interests
III. Investment objectives
IV. Leisure preferenceCorrect
The following information and more makes up the client’s profile:
– Investment objectives
– Risk tolerance such as the use of leverage
– Investment experience and knowledge
– Investment time horizon
– Financial situation
– Constraints such as investment preference and liquidity needsIncorrect
The following information and more makes up the client’s profile:
– Investment objectives
– Risk tolerance such as the use of leverage
– Investment experience and knowledge
– Investment time horizon
– Financial situation
– Constraints such as investment preference and liquidity needs -
Question 19 of 20
19. Question
Which of the following types of expenditures include activities such as buying a vacation home, taking lavish vacations, and the likes?
Correct
Activities such as buying a vacation home, taking lavish vacations, and the likes are desired expenditures. Desired expenditures are non-primary goals, that are not considered when calculating the total investable portfolio or required return.
Incorrect
Activities such as buying a vacation home, taking lavish vacations, and the likes are desired expenditures. Desired expenditures are non-primary goals, that are not considered when calculating the total investable portfolio or required return.
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Question 20 of 20
20. Question
Which of the following constraints greatly impact an individual’s investment policy statement (IPS)?
I. Legal/regulatory factors
II. Time horizon
III. Unique circumstances
IV. Tax considerationsCorrect
Individual investors have finite lives and are taxable entities. Legal/regulatory factors may have an impact, but for the most part, individual investors can invest in almost any manner they please.
Incorrect
Individual investors have finite lives and are taxable entities. Legal/regulatory factors may have an impact, but for the most part, individual investors can invest in almost any manner they please.
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