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CMFAS Module 10 REIT Premium Access
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Question 1 of 30
1. Question
Which of the additional information required to offer REIT bonds by way of the rights issue?
Correct
Second Schedule, particulars included as additional information required for the offer REIT bonds by way of the rights issue, information are as follows:
(a) the particulars of the rights issue
(b-d) the last day and time for the splitting of the provisional allotment, acceptance of and payment, renunciation of and payment by the renouncee for the REIT Bonds to be issued under the rights issue
(e) the terms and conditions of the offer of REIT Bonds to be issued under the rights issue
(f) the particulars of any undertaking from the substantial participants of the Scheme to subscribe for their entitlements
(g) if the rights issue is or will not be underwritten, the reason for not underwriting the issueIncorrect
Second Schedule, particulars included as additional information required for the offer REIT bonds by way of the rights issue, information are as follows:
(a) the particulars of the rights issue
(b-d) the last day and time for the splitting of the provisional allotment, acceptance of and payment, renunciation of and payment by the renouncee for the REIT Bonds to be issued under the rights issue
(e) the terms and conditions of the offer of REIT Bonds to be issued under the rights issue
(f) the particulars of any undertaking from the substantial participants of the Scheme to subscribe for their entitlements
(g) if the rights issue is or will not be underwritten, the reason for not underwriting the issue -
Question 2 of 30
2. Question
For the REIT Bonds offer and listing details, what should be indicated in the Offer Information Statement (OIS)?
I. state the discount or premium
II. state whether it is in registered or bearer form
III. never state restriction, withdrawal, or waiver
IV. disclose information on any lack of liquidityCorrect
The OIS must indicate whether the REIT Bonds are offered at a discount or premium. Indicate also whether it was offered in a registered or bearer form. Also, the amount of any expense specifically charged to the subscriber or purchaser must be stated.
When the participants’ rights are restricted, withdrawn, or waived, indicate its reasons for restriction, withdrawal, or waiver, and the basis for the offer price.
When the REIT Bonds of the same class as those being offered are listed for quotation on any approved exchange and wherein not regularly traded on the approved exchange, disclose information on any lack of liquidity.Incorrect
The OIS must indicate whether the REIT Bonds are offered at a discount or premium. Indicate also whether it was offered in a registered or bearer form. Also, the amount of any expense specifically charged to the subscriber or purchaser must be stated.
When the participants’ rights are restricted, withdrawn, or waived, indicate its reasons for restriction, withdrawal, or waiver, and the basis for the offer price.
When the REIT Bonds of the same class as those being offered are listed for quotation on any approved exchange and wherein not regularly traded on the approved exchange, disclose information on any lack of liquidity. -
Question 3 of 30
3. Question
Which of the following is not true about the use of proceeds from offer and expenses incurred concerning the particulars included in the Second Schedule of the OIS?
Correct
For the use of proceeds from offer and expenses incurred mentioned on the Second Schedule of the OIS for REIT bonds, disclose the estimated amount of the proceeds from the offer (net of the estimated amount of expenses incurred in connection with the offer). Where only a part of the net proceeds will go into the property of the REIT, indicate such amount. If none of the proceeds will go into the property of the REIT, provide a statement of that fact.
Incorrect
For the use of proceeds from offer and expenses incurred mentioned on the Second Schedule of the OIS for REIT bonds, disclose the estimated amount of the proceeds from the offer (net of the estimated amount of expenses incurred in connection with the offer). Where only a part of the net proceeds will go into the property of the REIT, indicate such amount. If none of the proceeds will go into the property of the REIT, provide a statement of that fact.
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Question 4 of 30
4. Question
If the REIT manager does not set up a nominating committee or remuneration committee, what must be included in its annual report?
I. Effect that the REIT manager is relying on the nominating committee or remuneration committee.
II. Process developing policies on remuneration and determining remuneration packages for directors and executive officers.
III. Criteria and process for selecting and appointing new directors and for reviewing the performance of and re-electing existing directors.
IV. Effect that the REIT manager is not a listed company and should not be subject to the same standards of corporate governance as listed companies.Correct
The REIT manager needs to explain clearly the reason why he did not set a committee for both remuneration and nominating. For the non-establishment of nominating and remuneration committee, the REIT manager’s annual report should show (a) the criteria and process for selecting and appointing new directors and for reviewing the performance of and re-electing existing directors, and (b) the process for developing policies on remuneration and determining remuneration packages for directors and executive officers.
Incorrect
The REIT manager needs to explain clearly the reason why he did not set a committee for both remuneration and nominating. For the non-establishment of nominating and remuneration committee, the REIT manager’s annual report should show (a) the criteria and process for selecting and appointing new directors and for reviewing the performance of and re-electing existing directors, and (b) the process for developing policies on remuneration and determining remuneration packages for directors and executive officers.
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Question 5 of 30
5. Question
What are the regulated margin requirements for product financing?
Correct
The holder of a license for product financing must impose a margin from customers not equal or lesser than 110% and don’t exceed 300% of the debit balance of the margin account. In case that the customer’s margin account is 110% of the debit balance, the customer will be given two business days to increase its equity in the margin’s account.
Incorrect
The holder of a license for product financing must impose a margin from customers not equal or lesser than 110% and don’t exceed 300% of the debit balance of the margin account. In case that the customer’s margin account is 110% of the debit balance, the customer will be given two business days to increase its equity in the margin’s account.
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Question 6 of 30
6. Question
What will the holder of license do to avoid falling below the total risk requirement?
Correct
Based on the regulations of SFA under Financial and Margin Requirements for CMS license holders, the licensee must not cause or permit to fall below its total risk requirement. Financial resources and its total risk requirement must be computed following MAS’ notices. On the possibility of failing to comply with the regulated financial resources requirement, the license holder must inform the Authority and the approved exchange or clearinghouse to prevent the license from revocation.
Incorrect
Based on the regulations of SFA under Financial and Margin Requirements for CMS license holders, the licensee must not cause or permit to fall below its total risk requirement. Financial resources and its total risk requirement must be computed following MAS’ notices. On the possibility of failing to comply with the regulated financial resources requirement, the license holder must inform the Authority and the approved exchange or clearinghouse to prevent the license from revocation.
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Question 7 of 30
7. Question
What are the guidelines that must be met by preference to consider as “irredeemable and non-cumulative preference share capital”?
I. The principal of the shares is repaid outside of the liquidation of the issuer.
II. The issuer is fully responsible for the cancellation of dividend payments.
III. The principal of the shares is perpetual.
IV. The cancellation of dividend payments is not an event of default of the issuer.Correct
“Irredeemable and non-cumulative preference share capital” as described in the Financial and Margin Requirements for CMS Licenses Holders, is the preference capital consists the preference shares that meet the following requirements:
(a) “the principal of the shares is perpetual
(b) not callable at the initiative of the issuer of the shares or the shareholders, and the principal of the shares is never repaid outside of liquidation of the issuer, except in the case of a repurchase or other manner of reduction of share capital
(c) the issuer has full discretion to cancel dividend payments in which the cancellation of dividend payments is not an event of default of the issuer under any agreement. The issuer has full access to cancelled dividend payments to meet its obligations as they fall due, and does not result in any restriction being imposed on the issuer under any agreement, except about dividend payments to ordinary shareholders.”Incorrect
“Irredeemable and non-cumulative preference share capital” as described in the Financial and Margin Requirements for CMS Licenses Holders, is the preference capital consists the preference shares that meet the following requirements:
(a) “the principal of the shares is perpetual
(b) not callable at the initiative of the issuer of the shares or the shareholders, and the principal of the shares is never repaid outside of liquidation of the issuer, except in the case of a repurchase or other manner of reduction of share capital
(c) the issuer has full discretion to cancel dividend payments in which the cancellation of dividend payments is not an event of default of the issuer under any agreement. The issuer has full access to cancelled dividend payments to meet its obligations as they fall due, and does not result in any restriction being imposed on the issuer under any agreement, except about dividend payments to ordinary shareholders.” -
Question 8 of 30
8. Question
What are the items set-out in the regulations as part of the reference to the financial resources of the holder of license?
I. base capital
II. irredeemable and cumulative preference share capital
III. deducted net head office funds
IV. deferred income tax payableCorrect
Please take note that the items to be included in the sum of the reference to the financial resources must be the recently updated accounts of the holder. These items are the base capital, paid-up irredeemable and cumulative preference share capital, paid-up redeemable preferences share capital, revaluation reserves, interim unappropriated profit, collective impairment allowances, and other reserves.
Incorrect
Please take note that the items to be included in the sum of the reference to the financial resources must be the recently updated accounts of the holder. These items are the base capital, paid-up irredeemable and cumulative preference share capital, paid-up redeemable preferences share capital, revaluation reserves, interim unappropriated profit, collective impairment allowances, and other reserves.
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Question 9 of 30
9. Question
What factors shall be excluded in the financial resources?
Correct
According to SFA, when the sum of “paid-up irredeemable and cumulative preference share capital” and “paid-up redeemable preference share capital” is more than the sum of “base capital,” the excess must be excluded from the financial resource. But this has an exemption; the excess will still be included only within and does not exceed 90 days. The inclusion should be informed to the Authority and the approved exchange or approved clearinghouse.
Incorrect
According to SFA, when the sum of “paid-up irredeemable and cumulative preference share capital” and “paid-up redeemable preference share capital” is more than the sum of “base capital,” the excess must be excluded from the financial resource. But this has an exemption; the excess will still be included only within and does not exceed 90 days. The inclusion should be informed to the Authority and the approved exchange or approved clearinghouse.
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Question 10 of 30
10. Question
What description matches with the term “qualifying letter of credit”?
Correct
As cited in the Securities and Future Act (SFA) under the Financial Requirements for Holders of Capital Markets Service (CMS) Licenses Regulations, “qualifying letter of credit” as any legally enforceable and irrevocable letter of credit wherein:
(a) made in favor of the approved exchange or approved clearing house (as the case may be) of which the holder of the license concerned is a member;
(b) issued by a bank approved by, and in a form acceptable to, the approved exchange or approved clearinghouse; and
(c) subject to such conditions or restrictions as the Authority, or the approved exchange or approved clearinghouse, may impose on the holder
But this is not applied to the holder’s letter of credit “to satisfy the business rules or other requirements of the approved exchange or approved clearinghouse.”Incorrect
As cited in the Securities and Future Act (SFA) under the Financial Requirements for Holders of Capital Markets Service (CMS) Licenses Regulations, “qualifying letter of credit” as any legally enforceable and irrevocable letter of credit wherein:
(a) made in favor of the approved exchange or approved clearing house (as the case may be) of which the holder of the license concerned is a member;
(b) issued by a bank approved by, and in a form acceptable to, the approved exchange or approved clearinghouse; and
(c) subject to such conditions or restrictions as the Authority, or the approved exchange or approved clearinghouse, may impose on the holder
But this is not applied to the holder’s letter of credit “to satisfy the business rules or other requirements of the approved exchange or approved clearinghouse.” -
Question 11 of 30
11. Question
Which does include as a factor on the “aggregate indebtedness”?
I. income tax payable
II. contingent liability
III. subordinated loan
IV. computed financial resourcesCorrect
The “aggregate indebtedness” per SFA (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations’ definition is the total liabilities of the holder. These exclude the contingent liability and other liabilities of the holder, such as (a) any amount payable on open contracts (b) any amount payable to a customer of the holder in connection with money or assets received on account of the customer and maintained in a trust account (c) deferred income tax payable (d) any liability that is fully secured by assets that are not included as the financial resources of the holder (e) qualifying subordinated loan (f) financial liability included in the financial resources computation.
Incorrect
The “aggregate indebtedness” per SFA (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations’ definition is the total liabilities of the holder. These exclude the contingent liability and other liabilities of the holder, such as (a) any amount payable on open contracts (b) any amount payable to a customer of the holder in connection with money or assets received on account of the customer and maintained in a trust account (c) deferred income tax payable (d) any liability that is fully secured by assets that are not included as the financial resources of the holder (e) qualifying subordinated loan (f) financial liability included in the financial resources computation.
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Question 12 of 30
12. Question
If Corporate Holders wanted to add new regulated activities or additional types of capital markets products to existing CMS licenses, what necessary actions should NOT they do?
Correct
Under the regulations, the new license applicants for additional regulated activities to existing CMS license require to secure and submit Form 5 (for CMS license holders) and Form 2 (for FAs) under SFR and FAR, respectively. When the application is approved, payment will be made to the Authority based on the given fee advice, then sooner, an e-license will be issued to the license holder. The previous version of the e-license will be canceled from the date on which the new e-license is issued. The CMS license holder or licensed FA should take appropriate measures to retain and/or refer to the most current version of the e-license.
Incorrect
Under the regulations, the new license applicants for additional regulated activities to existing CMS license require to secure and submit Form 5 (for CMS license holders) and Form 2 (for FAs) under SFR and FAR, respectively. When the application is approved, payment will be made to the Authority based on the given fee advice, then sooner, an e-license will be issued to the license holder. The previous version of the e-license will be canceled from the date on which the new e-license is issued. The CMS license holder or licensed FA should take appropriate measures to retain and/or refer to the most current version of the e-license.
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Question 13 of 30
13. Question
What will the holder of a license do when the aggregate indebtedness exceeds the set-out requirement?
I. Notify the Authority and the approved exchange or approved clearinghouse.
II. Submit the statements of assets and liabilities, financial resources, total risk requirements, and aggregate indebtedness to the approved exchange or approved clearinghouse every week.
III. Transfer all or part of any customer’s positions, margins, collateral, assets, and accounts to one or more scheme operators.
IV. Proceed to operate the business and target to meet the required aggregate indebtedness.Correct
As regulated by SFA, the holder of a license should not cause or permit to go beyond the limit of its aggregate resources. Failure to comply with the requirement, the holder must notify both the Authority and the approved exchange or approved clearinghouse.
When the aggregate indebtedness exceeds 600% of aggregate resources for five or more consecutive business days, the licensee must submit the following statements: assets and liabilities, financial resources, total risk requirements, and aggregate indebtedness, weekly or at other intervals until the aggregate indebtedness would equal or less than the aggregate resources for eight consecutive weeks.
The holder must notify the Authority about the transfer of all or part of any customer’s positions, margins, collateral, assets, and accounts to one or more other holders of licenses.Incorrect
As regulated by SFA, the holder of a license should not cause or permit to go beyond the limit of its aggregate resources. Failure to comply with the requirement, the holder must notify both the Authority and the approved exchange or approved clearinghouse.
When the aggregate indebtedness exceeds 600% of aggregate resources for five or more consecutive business days, the licensee must submit the following statements: assets and liabilities, financial resources, total risk requirements, and aggregate indebtedness, weekly or at other intervals until the aggregate indebtedness would equal or less than the aggregate resources for eight consecutive weeks.
The holder must notify the Authority about the transfer of all or part of any customer’s positions, margins, collateral, assets, and accounts to one or more other holders of licenses. -
Question 14 of 30
14. Question
Which of the following rules is true regarding the annual license fees set out in the Guidelines on License Applications, Representatives Notification, and Payment of Fees?
Correct
For the annual fees: A CMS license holder will pay fixed annual fees that correspond to its types of regulated activities and the types of capital markets products. Corporations with two or more regulated activities, or two or more types of capital markets products, will pay the sum of all license fees for each.
A fixed annual license fee is also required to a licensed financial adviser, not considering its number of different financial advisory services.
CMS license holders, financial advisers, and the persons exempted under the Securities and Future Act (SFA) and or Financial Advisers Act (FAA) need to pay a $5 variable fee, which is computed based on the number of representatives from 101st onwards as of 1st of January of each calendar year. For example, it has 105 representatives as 1st of January: The 101st to 105th are liable for $5 variable each.
Incorrect
For the annual fees: A CMS license holder will pay fixed annual fees that correspond to its types of regulated activities and the types of capital markets products. Corporations with two or more regulated activities, or two or more types of capital markets products, will pay the sum of all license fees for each.
A fixed annual license fee is also required to a licensed financial adviser, not considering its number of different financial advisory services.
CMS license holders, financial advisers, and the persons exempted under the Securities and Future Act (SFA) and or Financial Advisers Act (FAA) need to pay a $5 variable fee, which is computed based on the number of representatives from 101st onwards as of 1st of January of each calendar year. For example, it has 105 representatives as 1st of January: The 101st to 105th are liable for $5 variable each.
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Question 15 of 30
15. Question
How do the lodgment and annual fees being implemented to the appointed representative?
Correct
From the Securities and Futures (Licensing and Conduct of Business) Regulations, a lodgment fee is payable for the notification of intent to appoint a representative wherein; each representative pays a lodgement fee only once. A single annual payment is payable by an appointed representative, regardless of the number of different activities that he or she conducts, and the capital markets products or services he or she provides under the same principal. For appointed representative that acts for two related principal, he or she will pay the set-out lodgment and annual fees for his or her appointment under each principal.
Incorrect
From the Securities and Futures (Licensing and Conduct of Business) Regulations, a lodgment fee is payable for the notification of intent to appoint a representative wherein; each representative pays a lodgement fee only once. A single annual payment is payable by an appointed representative, regardless of the number of different activities that he or she conducts, and the capital markets products or services he or she provides under the same principal. For appointed representative that acts for two related principal, he or she will pay the set-out lodgment and annual fees for his or her appointment under each principal.
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Question 16 of 30
16. Question
If a Principal intends to appoint an appointed, provisional or temporary representative for a regulated activity or financial advisory, what specific requirements he or she needs to comply?
I. The principal may or not have an existing GIRO arrangement with the Authority for the payment of lodgment and annual fees.
II. Submit online notification such as an appointment of a provisional representative, an appointment of an appointed representative, and others via the Corporations and Representatives (“CoRe”) System
III. Completion of examination requirement by a provisional representative must be submitted online to the Authority.
IV. Lodge a notification of the intent with the AuthorityCorrect
Indicated in Section 99H of the SFA and section 23H of the FAA require a principal who intends to appoint an appointed, provisional, or temporary representative of any type of regulated activity or financial advisory service under the SFA or FAA should lodge a notification of the intent with the Authority.
Principals are also required to submit online notifications of the following via the Corporations and Representative (CoRe) System: appointment of an appointed representative, additional regulated activity and type of capital markets product, and or to provide an additional type of financial advisory service or investment product, an appointment of a provisional representative, completion of examination requirement by a provisional representative, an appointment of a temporary representative (under the SFA only), change of particulars for a representative, and cessation of a representative in any or all of the regulated activities/ financial advisory services.
The principal should have a GIRO arrangement with the Authority, and ensure it has sufficient funds where the lodgment and annual fee will be deducted.Incorrect
Indicated in Section 99H of the SFA and section 23H of the FAA require a principal who intends to appoint an appointed, provisional, or temporary representative of any type of regulated activity or financial advisory service under the SFA or FAA should lodge a notification of the intent with the Authority.
Principals are also required to submit online notifications of the following via the Corporations and Representative (CoRe) System: appointment of an appointed representative, additional regulated activity and type of capital markets product, and or to provide an additional type of financial advisory service or investment product, an appointment of a provisional representative, completion of examination requirement by a provisional representative, an appointment of a temporary representative (under the SFA only), change of particulars for a representative, and cessation of a representative in any or all of the regulated activities/ financial advisory services.
The principal should have a GIRO arrangement with the Authority, and ensure it has sufficient funds where the lodgment and annual fee will be deducted. -
Question 17 of 30
17. Question
What are the required to be disclosed by the REIT manager on the remuneration of directors and executive officers?
I. Directors and executive officers will be paid in the form of shares or interests in the controlling shareholder or its related companies.
II. The annual report does not include the remuneration of its chief executive and each director on a named basis.
III. The procedure of setting remuneration of directors and executive officers may not be included in the annual report.
IV. The REIT may not include the remuneration of its top five executive officers in the annual report as long as it submits explanation its non-compliance.Correct
On the Notice is issued under section 101 of the Securities and Futures Act (Cap. 289) [the “Act”] and applies to all holders of a capital markets services licence for real estate investment trust management (REIT managers), a REIT manager should diclose the following:
– remuneration policies and its remuneration setting procedures of directors and executive officers in the annual report of the REIT
– the remuneration of directors and executive officers are: (a) paid in the form of shares or interests in the controlling shareholder or its related companies; or (b) linked (directly or indirectly) to the performance of any entity other than the REIT
– include in the annual report: (a) the remuneration of its chief executive officer and each director on a named basis; (b) the remuneration of at least its top five executive officers (which shall not include the chief executive officer and executive officers who are directors), on a named basis, in bands of S$250,000.If a REIT manager does not wish to or is unable to comply with providing the necessary information, the REIT manager explain its non-compliance in the annual report of the REIT.
Incorrect
On the Notice is issued under section 101 of the Securities and Futures Act (Cap. 289) [the “Act”] and applies to all holders of a capital markets services licence for real estate investment trust management (REIT managers), a REIT manager should diclose the following:
– remuneration policies and its remuneration setting procedures of directors and executive officers in the annual report of the REIT
– the remuneration of directors and executive officers are: (a) paid in the form of shares or interests in the controlling shareholder or its related companies; or (b) linked (directly or indirectly) to the performance of any entity other than the REIT
– include in the annual report: (a) the remuneration of its chief executive officer and each director on a named basis; (b) the remuneration of at least its top five executive officers (which shall not include the chief executive officer and executive officers who are directors), on a named basis, in bands of S$250,000.If a REIT manager does not wish to or is unable to comply with providing the necessary information, the REIT manager explain its non-compliance in the annual report of the REIT.
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Question 18 of 30
18. Question
Which of the following criterion best describe the financial resources requirement?
Correct
The regulations to be applied for the Financial Resources Requirement based on SFA are as follows: A reference to the holder of license excludes those who only hold a license to credit rating services and a venture capital fund manager. Any licensee will receive and comply with written directions from the Authority. MAS set out rules on how the holder should compute its financial resources and total risks requirements.
Incorrect
The regulations to be applied for the Financial Resources Requirement based on SFA are as follows: A reference to the holder of license excludes those who only hold a license to credit rating services and a venture capital fund manager. Any licensee will receive and comply with written directions from the Authority. MAS set out rules on how the holder should compute its financial resources and total risks requirements.
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Question 19 of 30
19. Question
What are the procedures should the Corporate Holders to follow for the application of a new license under the SFA and FAA?
I. Submit Form 1 or Form 1A under the SFR
II. Receive instructions on how the application fee is made to the Authority
III. Get the issued e-license upon the approval of license application
IV. License fee payments must be made after two weeks from the date of the fee advice.Correct
As amended in the 2018 month of October, persons who wish to apply for a new license for any regulated activity under the SFA (other than fund management) should submit Form 1 under the SFR.
The person who acts as Financial Adviser (FA) in Singapore should hold an FA license. Persons who made a license application submitted electronically via CeL will receive payment advice and instructions. When the license application is approved, the applicant will receive an electronic license that is accessible via CoRe system within MASNET.
Please take note that the application fee is non-refundable and should be made within two weeks from the date of the fee advice. Late payments will be subjected to a penalty of $100 for every day of delay and a maximum of $3000.Incorrect
As amended in the 2018 month of October, persons who wish to apply for a new license for any regulated activity under the SFA (other than fund management) should submit Form 1 under the SFR.
The person who acts as Financial Adviser (FA) in Singapore should hold an FA license. Persons who made a license application submitted electronically via CeL will receive payment advice and instructions. When the license application is approved, the applicant will receive an electronic license that is accessible via CoRe system within MASNET.
Please take note that the application fee is non-refundable and should be made within two weeks from the date of the fee advice. Late payments will be subjected to a penalty of $100 for every day of delay and a maximum of $3000. -
Question 20 of 30
20. Question
What happens when the licensee’s base capital lies below the set-out requirement?
Correct
Securities and Futures Act (SFA) indicated that the Base Capital Requirement (BCR) must meet the minimum requirement so that the CMS license application should be granted to the holder. But some cases might be considered under specified circumstances below:
(1A) “A licensee that intends to commence or cease business in any regulated activity, or change the scope of its business in a regulated activity, a different base capital requirement must be applied. The holder of the license must obtain the prior written approval from the Authority to comply with the new base capital requirement.”
(2) The licensee must notify the Authority immediately and the approved exchange or approved clearinghouse of which it is a member, that it failed to comply with the new base capital requirement.
(3) the holder of a license becomes aware that it will fail to comply, the Authority may revoke the license of the holder under regulation section 95 of the SFA.Incorrect
Securities and Futures Act (SFA) indicated that the Base Capital Requirement (BCR) must meet the minimum requirement so that the CMS license application should be granted to the holder. But some cases might be considered under specified circumstances below:
(1A) “A licensee that intends to commence or cease business in any regulated activity, or change the scope of its business in a regulated activity, a different base capital requirement must be applied. The holder of the license must obtain the prior written approval from the Authority to comply with the new base capital requirement.”
(2) The licensee must notify the Authority immediately and the approved exchange or approved clearinghouse of which it is a member, that it failed to comply with the new base capital requirement.
(3) the holder of a license becomes aware that it will fail to comply, the Authority may revoke the license of the holder under regulation section 95 of the SFA. -
Question 21 of 30
21. Question
What comprises the “base capital”?
I. paid-up ordinary share capital
II. financial resources
III. non-cumulative preference share capital
IV. appropriated profit or lossCorrect
In determining “base capital” for a corporation or licensee, get the sum of the paid-up ordinary share capital, paid-up irredeemable, and non-cumulative preference share capital, reserve fund maintained, and unappropriated profit or loss in their latest audited account.
Incorrect
In determining “base capital” for a corporation or licensee, get the sum of the paid-up ordinary share capital, paid-up irredeemable, and non-cumulative preference share capital, reserve fund maintained, and unappropriated profit or loss in their latest audited account.
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Question 22 of 30
22. Question
Which of the following statements is true regarding the notification for additional regulated activities?
Correct
If the representative remains with the same principal, no lodgment fee will be charged to the representative for the notification of intent to add regulated activities or additional types of capital markets products under the SFA or to provide additional type(s) of financial advisory service or investment product under the FAA.
Additional annual fees would depend on the principal of the appointed representatives whether to add or not for the addition of any regulated activity.Incorrect
If the representative remains with the same principal, no lodgment fee will be charged to the representative for the notification of intent to add regulated activities or additional types of capital markets products under the SFA or to provide additional type(s) of financial advisory service or investment product under the FAA.
Additional annual fees would depend on the principal of the appointed representatives whether to add or not for the addition of any regulated activity. -
Question 23 of 30
23. Question
What are the things should the REIT manager consider in the conduct of board meetings?
Correct
According to section 101 of the Securities and Futures Act (Cap. 289) that applies to all holders of a capital markets services licence for real estate investment trust management for the conduct of board meetings, the REIT manager should ensure that all resolutions of its board of directors concerning the REIT must approved by a majority of directors.
Directly or indirectly interested shareholders or subsidiaries and its appointed nominees and interested directors are abstain from voting during the board meetings.
The quorum must only comprise of a majority of independent directors and not interested directors.Incorrect
According to section 101 of the Securities and Futures Act (Cap. 289) that applies to all holders of a capital markets services licence for real estate investment trust management for the conduct of board meetings, the REIT manager should ensure that all resolutions of its board of directors concerning the REIT must approved by a majority of directors.
Directly or indirectly interested shareholders or subsidiaries and its appointed nominees and interested directors are abstain from voting during the board meetings.
The quorum must only comprise of a majority of independent directors and not interested directors. -
Question 24 of 30
24. Question
In order the Authority could monitor the leverage position of REITs, what REIT managers are required to provide?
I. base capital
II. value of property portfolio
III. aggregate leverage
IV. amount of borrowingsCorrect
To all REIT Managers & Trustees approved under Section 289 of the Securities & Futures Act, they need to provide the information of aggregate leverage (which should not exceed to 35% but may be raised to maximum of 60%). Also to enable the Authority monitors effectively the REITs leverage position, the managers managing a REIT provide the information of the value of property (S$m) and its date of valuation, and the amount of borrowings (S$m).
Incorrect
To all REIT Managers & Trustees approved under Section 289 of the Securities & Futures Act, they need to provide the information of aggregate leverage (which should not exceed to 35% but may be raised to maximum of 60%). Also to enable the Authority monitors effectively the REITs leverage position, the managers managing a REIT provide the information of the value of property (S$m) and its date of valuation, and the amount of borrowings (S$m).
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Question 25 of 30
25. Question
If any director or executive officers are paid in the form of shares or interests in the controlling shareholder or its related entities or linked to the performance of any entity other than the REIT, what is not included to be disclosed?
Correct
Based on the guidelines set out in the disclosures related to remuneration of directors and executive officers, wherein any directors or executive officers are paid n the form of shares or interests in the controlling shareholder or its related entities or linked (directly or indirectly) to the performance of any entity other than the REIT, the disclosures should comprise:
(a) explanation of the basis of the compensation and its long-term interests of the REIT and its unitholders, and why this will not result in the directors or the executive officers prioritising the interests of such controlling shareholder or such related or other entities over that of the REIT and its unitholders
(b) set out the mitigating measures put in place to address potential conflicts of interest arising from such form of compensation
(c) factors taken into consideration in determining the mix of different forms of remuneration for directors and executive officers respectively and the relative importance of such factorsIncorrect
Based on the guidelines set out in the disclosures related to remuneration of directors and executive officers, wherein any directors or executive officers are paid n the form of shares or interests in the controlling shareholder or its related entities or linked (directly or indirectly) to the performance of any entity other than the REIT, the disclosures should comprise:
(a) explanation of the basis of the compensation and its long-term interests of the REIT and its unitholders, and why this will not result in the directors or the executive officers prioritising the interests of such controlling shareholder or such related or other entities over that of the REIT and its unitholders
(b) set out the mitigating measures put in place to address potential conflicts of interest arising from such form of compensation
(c) factors taken into consideration in determining the mix of different forms of remuneration for directors and executive officers respectively and the relative importance of such factors -
Question 26 of 30
26. Question
Which of the following has to be excluded in the offer information statement for REIT bonds for a person named as the issue manager or underwriter?
Correct
Included in the particulars of the OIS for the REIT bonds of the Second Schedule, where a person named as the issue manager or underwriter (but not a sub-underwriter) to the offer, are the following:
(a) a statement that the person has given, and has not withdrawn, his written consent to being named in the offer information statement as the issue manager or underwriter(b) a statement by the person to the effect that he, as an issue manager or underwriter, having made all reasonable inquiries. He acknowledges to the best of his knowledge and belief that the facts in the offer information statement are accurate in all material respects as at the date of the offer information statement. And that he is not aware of any other material facts, the omission of which would make any statement in the offer information statement misleading in any material respect.
Incorrect
Included in the particulars of the OIS for the REIT bonds of the Second Schedule, where a person named as the issue manager or underwriter (but not a sub-underwriter) to the offer, are the following:
(a) a statement that the person has given, and has not withdrawn, his written consent to being named in the offer information statement as the issue manager or underwriter(b) a statement by the person to the effect that he, as an issue manager or underwriter, having made all reasonable inquiries. He acknowledges to the best of his knowledge and belief that the facts in the offer information statement are accurate in all material respects as at the date of the offer information statement. And that he is not aware of any other material facts, the omission of which would make any statement in the offer information statement misleading in any material respect.
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Question 27 of 30
27. Question
How will be determined if a person, whether a false or misleading statement about a future matter, has made in the offer information statement?
I. If a person made the statement without having reasonable grounds for making the statement.
II. If the false or misleading statement, or the omission to state any information or new circumstance, is materially adverse from the investor’s point of view.
III. If the person proves that he placed reasonable reliance on the information given to him
IV. If the person proves that he publicly withdrew his consent to being named in the offer information statement in that way.Correct
Failure not to contain false or misleading statements for the offer information statement means that a person made the statement without having reasonable grounds for making the statement.
On the other hand, a person should not be taken not to have complied with false or misleading statements if:
– the false or misleading statement, or the omission to state any information or new circumstance, is not materially adverse from the investor’s point of view
– the person proves that he publicly withdrew his consent to being named in the offer information statement in that way
– the person proves that he (a) made all inquiries (if any) that were reasonable in the circumstances; and (b) after doing so, believed on reasonable grounds that the statement was not false or misleading
– the person proves that he placed reasonable reliance on the information given to him by an entity, a director, or equivalent person or an employee or agent, of the entity or (b) an individual, someone other than an employee or agent of the individual
– the person proves that he was not aware of the matterIncorrect
Failure not to contain false or misleading statements for the offer information statement means that a person made the statement without having reasonable grounds for making the statement.
On the other hand, a person should not be taken not to have complied with false or misleading statements if:
– the false or misleading statement, or the omission to state any information or new circumstance, is not materially adverse from the investor’s point of view
– the person proves that he publicly withdrew his consent to being named in the offer information statement in that way
– the person proves that he (a) made all inquiries (if any) that were reasonable in the circumstances; and (b) after doing so, believed on reasonable grounds that the statement was not false or misleading
– the person proves that he placed reasonable reliance on the information given to him by an entity, a director, or equivalent person or an employee or agent, of the entity or (b) an individual, someone other than an employee or agent of the individual
– the person proves that he was not aware of the matter -
Question 28 of 30
28. Question
What information is not necessary to include on the REIT based on the set-out regulations for the Second Schedule of the Offers of Investments?
Correct
MAS makes regulations based on section 337 of the SFA that on the particulars to be included in an offer information statement for an offer of REIT bonds for Second the Schedule, the REIT information must be the following:
(a) its nature of operations and principal activities
(b) its general development from the beginning of the period comprising the three most recently completed financial years to the latest practicable date
(c) participants’ funds in (the number of units issued and the number of units outstanding) and the total amount of the borrowings outstanding and fixed or floating interest at the latest practicable date
(d) the number of units of the REIT owned by each substantial participant at the latest practicable date
(e) any legal or arbitration proceedings, including pending or contemplated, which may have, or which have had in the 12 months immediately preceding the date of lodgment of the offer information statement, a material effect on the REIT’s financial position or profitability
(f) units issued within the 12 months immediately preceding the latest practicable date (cash: number of units
(g) a brief summary of each material contractIncorrect
MAS makes regulations based on section 337 of the SFA that on the particulars to be included in an offer information statement for an offer of REIT bonds for Second the Schedule, the REIT information must be the following:
(a) its nature of operations and principal activities
(b) its general development from the beginning of the period comprising the three most recently completed financial years to the latest practicable date
(c) participants’ funds in (the number of units issued and the number of units outstanding) and the total amount of the borrowings outstanding and fixed or floating interest at the latest practicable date
(d) the number of units of the REIT owned by each substantial participant at the latest practicable date
(e) any legal or arbitration proceedings, including pending or contemplated, which may have, or which have had in the 12 months immediately preceding the date of lodgment of the offer information statement, a material effect on the REIT’s financial position or profitability
(f) units issued within the 12 months immediately preceding the latest practicable date (cash: number of units
(g) a brief summary of each material contract -
Question 29 of 30
29. Question
Which of the following is not true about the trend information and forecast or projection of the Offer Information Statement (OIS)?
Correct
Based on the set-out regulations (Securities and Securities-based Derivatives Contracts), offer information statement shall not include any prediction, projection, or forecast as to the future or likely performance of the REIT, or use words such as “targeted” or “expected” or any similar words or description in relation to a rate of return unless, it is accompanied by a prominent statement to the effect that the prediction, projection or forecast is not necessarily indicative of the future or likely performance of the REIT.
Incorrect
Based on the set-out regulations (Securities and Securities-based Derivatives Contracts), offer information statement shall not include any prediction, projection, or forecast as to the future or likely performance of the REIT, or use words such as “targeted” or “expected” or any similar words or description in relation to a rate of return unless, it is accompanied by a prominent statement to the effect that the prediction, projection or forecast is not necessarily indicative of the future or likely performance of the REIT.
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Question 30 of 30
30. Question
The following are the additional required pieces of information for convertible REIT bonds as set out in the particulars to be included in the Second Schedule of the OIS, except for one. Which is not an additional requirement?
Correct
The additional required pieces of information in the particulars to be included in an offer information statement for REIT bonds set out in the Second Schedule are the following:
(1) information concerning the nature of the securities, securities-based derivatives contracts, equity interests or property offered by way of conversion, exchange, subscription, or purchase and the rights attached thereto including, in particular, the voting rights, entitlement to shares in profits, and, in the event of liquidation, any surplus and any other special rights.
(2) information on the terms, conditions, and procedures for conversion, exchange, subscription or purchase and details of the circumstances under which they are amended, including the following information: (g) if there is no established market for the securities, securities-based derivatives contracts, equity interests or property which is the subject of the conversion, exchange, subscription or purchase, the manner of determining the subscription or exercise or conversion price, including who establishes the price or is responsible for the determination of the price, the various factors considered in such determination and the parameters or elements used as a basis for determining the priceIncorrect
The additional required pieces of information in the particulars to be included in an offer information statement for REIT bonds set out in the Second Schedule are the following:
(1) information concerning the nature of the securities, securities-based derivatives contracts, equity interests or property offered by way of conversion, exchange, subscription, or purchase and the rights attached thereto including, in particular, the voting rights, entitlement to shares in profits, and, in the event of liquidation, any surplus and any other special rights.
(2) information on the terms, conditions, and procedures for conversion, exchange, subscription or purchase and details of the circumstances under which they are amended, including the following information: (g) if there is no established market for the securities, securities-based derivatives contracts, equity interests or property which is the subject of the conversion, exchange, subscription or purchase, the manner of determining the subscription or exercise or conversion price, including who establishes the price or is responsible for the determination of the price, the various factors considered in such determination and the parameters or elements used as a basis for determining the price