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CMFAS Module 10 – REIT
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Question 1 of 30
1. Question
As listed investment vehicles, REITs are required to comply with the initial and ongoing listing obligations under which listing manual?
Correct
It should be noted that the SGX-ST listing manual also dictates among its constituent companies the prerequisite to relative documents which specify that the salaries of the executive directors of the said company strictly do not include a percentage or a commission from the turnover. In addition to this fact, it is also stated by the SGX-ST listing manual that all fees to be paid to the executive directors of the company must be represented by a fixed total.
Incorrect
It should be noted that the SGX-ST listing manual also dictates among its constituent companies the prerequisite to relative documents which specify that the salaries of the executive directors of the said company strictly do not include a percentage or a commission from the turnover. In addition to this fact, it is also stated by the SGX-ST listing manual that all fees to be paid to the executive directors of the company must be represented by a fixed total.
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Question 2 of 30
2. Question
Taking into account the consideration to enhance the existing independence requirement of REITs, which of the following is not a prerequisite that must be satisfied by an “independent director”?
I. Independence from any substantial shareholder of the REIT manager
II. Independence from any substantial unitholder of the REIT
III. Not having the right to appoint the directors of the REIT manager
IV. Not serving on the Board of the REIT manager for a continuous period of nine years or longerCorrect
According to guidelines of Monetary Authority of Singapore under section 1, article B (Board Independence Requirements), there are 2 ways to ameliorate the self-dependence of the Board; 1) at least 50% of the Board must appoint independent directors. If the unitholders has the right to appoint the directors of the REIT manager, 1/3 of the Board is sufficient enough to appoint independent directors. 2) All Boards can be the overall independent.
Incorrect
According to guidelines of Monetary Authority of Singapore under section 1, article B (Board Independence Requirements), there are 2 ways to ameliorate the self-dependence of the Board; 1) at least 50% of the Board must appoint independent directors. If the unitholders has the right to appoint the directors of the REIT manager, 1/3 of the Board is sufficient enough to appoint independent directors. 2) All Boards can be the overall independent.
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Question 3 of 30
3. Question
What is the main advantage of having at least the majority of the REITs board of directors to be comprised of independent directors?
Correct
Basically, it is advantageous to unitholders having an independent directors in order to avoid conflict of interests and hereditary monarchy.
Incorrect
Basically, it is advantageous to unitholders having an independent directors in order to avoid conflict of interests and hereditary monarchy.
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Question 4 of 30
4. Question
Under which code does a listed company should report annually to its shareholders the remuneration of its directors, the CEO, and at least the top five key management personnel (who are not also directors or the CEO) of the company?
Correct
The Code of Corporate Governance protects the interest of unitholders whenever there’s a conflict of interest between REIT manager, its shareholders and unitholders. Hence, MAS set before the mind for consideration to establish a regulation on a REIT manager and its respective directors to prioritize the interest of unitholders should differences occurred on both parties.
Incorrect
The Code of Corporate Governance protects the interest of unitholders whenever there’s a conflict of interest between REIT manager, its shareholders and unitholders. Hence, MAS set before the mind for consideration to establish a regulation on a REIT manager and its respective directors to prioritize the interest of unitholders should differences occurred on both parties.
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Question 5 of 30
5. Question
In the matter of fee structure among REITs, REIT managers’ compensation is typically comprised of which of the following types of fees?
I. Management fees
II. Divestment fees
III. Metrics fees
IV. Acquisition feesCorrect
Every REIT has its own profit generation formula, goals, directives and other business arrangements. Hence, it is not suitable for MAS to mandate a standard metric for fee computations.
Incorrect
Every REIT has its own profit generation formula, goals, directives and other business arrangements. Hence, it is not suitable for MAS to mandate a standard metric for fee computations.
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Question 6 of 30
6. Question
As an over-arching principle, the fee structure adopted by a REIT manager should be aligned with the long-term interest of the REIT and its unitholders. Under the concept of the fee structure, the management fee is in turn made up of which of the following components?
I. A distributable income, especially if the acquisitions are accompanied by the REIT taking on additional borrowings
II. A base fee that is computed based on a fixed percentage of the value of the REIT’s deposited properties
III. A performance fee that is pegged to certain metrics
IV. A function such as an audit, finance, compliance or risk managementCorrect
MAS stated that the performance fee structure acquired by a REIT manager must be bound to be paralleled with the long-term interest of unitholders. Since REITs has different business approach, values and cultures and other frame of references. Therefore, MAS will not require an index for an acceptable fee computation.
Incorrect
MAS stated that the performance fee structure acquired by a REIT manager must be bound to be paralleled with the long-term interest of unitholders. Since REITs has different business approach, values and cultures and other frame of references. Therefore, MAS will not require an index for an acceptable fee computation.
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Question 7 of 30
7. Question
When a REIT makes an acquisition or a divestment, the REIT manager is usually entitled to which of the following percentages of acquisition fee and divestment fee?
I. Normally 1% of the purchase consideration acquisition fee
II. Normally 0.5% of the purchase consideration acquisition fee
III. Normally 0.5% to 1% of the sale consideration divestment fee
IV. Normally 0.75% to 1.5% of the sale consideration divestment feeCorrect
It is worth mentioning that acquisition and divestment fees also dispense financial incentives for the REIT manager. Such factors are crucial in stabilizing the distribution of the REIT manager’s overall remuneration. What’s more, is the fact that acquisition fees alone could aggregate an “asset-growth” bias. This is the reason why such fees are necessary to prompt managers in looking for better assets for the REIT while assuring that they will be compensated for the service of doing so.
Incorrect
It is worth mentioning that acquisition and divestment fees also dispense financial incentives for the REIT manager. Such factors are crucial in stabilizing the distribution of the REIT manager’s overall remuneration. What’s more, is the fact that acquisition fees alone could aggregate an “asset-growth” bias. This is the reason why such fees are necessary to prompt managers in looking for better assets for the REIT while assuring that they will be compensated for the service of doing so.
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Question 8 of 30
8. Question
While it is reasonable for REIT managers to be compensated for expenses incurred in connection with such transactions, the pegging of acquisition fee to the size of the transaction could result in which circumstance?
Correct
We should underline the fact that since the REIT manager is already compensated through other components of the REIT’s fee structure with the exclusion of the acquisition fee, it is highly probable that coming up with an additional “incentive” fee whenever the REIT shoulders further purchasing or selling of its interest or investments would no longer be encouraged.
Incorrect
We should underline the fact that since the REIT manager is already compensated through other components of the REIT’s fee structure with the exclusion of the acquisition fee, it is highly probable that coming up with an additional “incentive” fee whenever the REIT shoulders further purchasing or selling of its interest or investments would no longer be encouraged.
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Question 9 of 30
9. Question
Which members of the REIT manager may participate in the employee share option plans of the Sponsor (or its related entity) or receive part of their compensation in the form of shares in the Sponsor (or its related entity)?
Correct
It is relevant to keep in mind the fact that because of the aforesaid situation, alike remuneration might bring forth conflict between the interests of the entities involved. Thus, as a form of precautionary measure to steer clear of such issues, the prohibition of the compensation of the entities involved that is paid as interests or shares linked to the Sponsor or its associates may be considered.
Incorrect
It is relevant to keep in mind the fact that because of the aforesaid situation, alike remuneration might bring forth conflict between the interests of the entities involved. Thus, as a form of precautionary measure to steer clear of such issues, the prohibition of the compensation of the entities involved that is paid as interests or shares linked to the Sponsor or its associates may be considered.
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Question 10 of 30
10. Question
Which factor may not be able to provide a complete picture of a REIT’s capacity to take on and service the additional debt?
Correct
It is necessary to point out that the consideration presented in the question above can result in a state of affair where despite having a substandard credit rating, REITs may still be authorized in managing purchases with relatively high debts. During such situations, REITs with poor credit ratings may tackle pecuniary difficulties if they fail to accord with the rise of interest rates or when their profits fall.
Incorrect
It is necessary to point out that the consideration presented in the question above can result in a state of affair where despite having a substandard credit rating, REITs may still be authorized in managing purchases with relatively high debts. During such situations, REITs with poor credit ratings may tackle pecuniary difficulties if they fail to accord with the rise of interest rates or when their profits fall.
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Question 11 of 30
11. Question
Which of the following are prerequisites or responsibilities for licensed fund management companies?
I. Not have a dedicated compliance function
II. Manage funds for retail investors
III. Have a dedicated compliance function
IV. Manage funds for accredited or institutional investorsCorrect
We must pertinently remember that even though some of the REITs are already demonstrating a resolute department of compliance, the majority of the REITs still obtained its compliance and reporting function from outside sources, such as their Sponsors or its associates. Under the aforesaid, it is probable that a significant contrast among the demands on the assets of the department of compliance may arise. Also, while having a compliance function is not a requirement for REITs, it is obviously the opposite of FMCs.
Incorrect
We must pertinently remember that even though some of the REITs are already demonstrating a resolute department of compliance, the majority of the REITs still obtained its compliance and reporting function from outside sources, such as their Sponsors or its associates. Under the aforesaid, it is probable that a significant contrast among the demands on the assets of the department of compliance may arise. Also, while having a compliance function is not a requirement for REITs, it is obviously the opposite of FMCs.
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Question 12 of 30
12. Question
As indicated in the PFA, the total contract value of property development activities undertaken and investments in uncompleted property developments by a REIT should not exceed what percentage of the REIT’s deposited property?
Correct
Recognize the fact that the requirement in the question above essentially sets a restriction that prevents unpredictability and risks along with the undertaking of property development ventures. By the same token, property developments among REITs prompt the maturation of their portfolios which call for further refurbishment and redevelopment. As a result, having a higher development limit will minimize the REIT’s reliance on its Sponsors.
Incorrect
Recognize the fact that the requirement in the question above essentially sets a restriction that prevents unpredictability and risks along with the undertaking of property development ventures. By the same token, property developments among REITs prompt the maturation of their portfolios which call for further refurbishment and redevelopment. As a result, having a higher development limit will minimize the REIT’s reliance on its Sponsors.
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Question 13 of 30
13. Question
Professional indemnity insurance (or “PII”) serves to protect the insured against claims arising out of the provision of professional advice. The PII may cover the following except for?
I. Civil, criminal, investigative and regulatory proceedings
II. Claims over the decisions that it makes in the management
III. Wrongful acts committed by the insured such as negligence
IV. Claims brought by or on behalf of the insured’s clientsCorrect
It is important to point out that wrongful acts committed by the insured that can be covered by the PII may also include breach of trust or misrepresentation. In addition to this, a REIT could be exposed to the risk of such claims over the decisions that it makes in the management of the REIT. Such risk may be heightened in the case of investment decisions made for assets located in a foreign jurisdiction.
Incorrect
It is important to point out that wrongful acts committed by the insured that can be covered by the PII may also include breach of trust or misrepresentation. In addition to this, a REIT could be exposed to the risk of such claims over the decisions that it makes in the management of the REIT. Such risk may be heightened in the case of investment decisions made for assets located in a foreign jurisdiction.
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Question 14 of 30
14. Question
It is the case that the trust deed for a REIT typically stipulates that liabilities and claims that a manager may suffer in carrying out its duties may be payable out of the REIT assets unless such liabilities and claims arose from which of the following circumstances?
I. Any fraud
II. Gross negligence
III. Unwilful default of the REIT manager
IV. A breach of the trust deed by the REIT managerCorrect
It is worth noticing that when such claims (as the situation in the question above) are made, it may take time to establish whether the REIT manager has acted in good faith or with due care. In the interim, the REIT manager is liable to legal costs. Also, note that most REIT managers already procure a PII.
Incorrect
It is worth noticing that when such claims (as the situation in the question above) are made, it may take time to establish whether the REIT manager has acted in good faith or with due care. In the interim, the REIT manager is liable to legal costs. Also, note that most REIT managers already procure a PII.
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Question 15 of 30
15. Question
To ensure that the property manager does not compromise on the service standards for the REIT’s properties (when compared to other properties owned by the Sponsor or its related entities), it is important for the REIT manager to accomplish which of the following responsibilities?
I. Independently assess the compliance of the property manager on a periodic basis
II. Independently assess the compliance of the property manager with the terms of the property management agreement
III. Independently assess the compliance of the property manager apart from the REIT’s properties
IV. Independently assess the compliance of the property manager in comparison with the other properties of the SponsorCorrect
We should point out that the REIT manager, under any costs, is accountable in coming up with measures that can remedy the concession of the property manager with the function of the department of property management in the situation where it is found to be in conflict. Aside from this, one action that may be considered for guaranteeing that the REIT manager will initiate the steps needed for the assessment of the property management is the requirement that the property management agreement shall not remove the authority of the REIT to dismiss the manager of the property management.
Incorrect
We should point out that the REIT manager, under any costs, is accountable in coming up with measures that can remedy the concession of the property manager with the function of the department of property management in the situation where it is found to be in conflict. Aside from this, one action that may be considered for guaranteeing that the REIT manager will initiate the steps needed for the assessment of the property management is the requirement that the property management agreement shall not remove the authority of the REIT to dismiss the manager of the property management.
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Question 16 of 30
16. Question
In recent years, there has been a trend towards the use of income support arrangements to enhance the yield of the properties acquired. Such arrangements can take several forms such as the following except for?
I. The vendor of the property entering into a master lease agreement with the REIT at rents
II. A REIT acquiring a property under a sale and leaseback arrangement
III. A REIT raising IPO proceeds and using these proceeds to support distributions to unitholders post-listing
IV. The vendor of the property not guaranteeing a certain minimum rental for a number of years after the REIT acquires the propertyCorrect
Please remember that there could be authorized reasons for the arrangements mentioned in the question. An example of these reasons includes the case where the construction of the property is at its latest, hence the periodic rate per usage of the property and the number of units of the renters have not been established yet.
Incorrect
Please remember that there could be authorized reasons for the arrangements mentioned in the question. An example of these reasons includes the case where the construction of the property is at its latest, hence the periodic rate per usage of the property and the number of units of the renters have not been established yet.
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Question 17 of 30
17. Question
A number of REITs have adopted the stapled securities structure where units in a REIT are stapled to units in what form of business organization?
Correct
Despite the fact that the Business trust (or simply “BT”) and the REIT continue to exist as separate operating institutions under the stapled securities structure, you must still bear in mind that the financial instruments of the stapled group are bound contractually to trade as a single unit. Into the bargain, the stapled group shall also be dividends of the same underlying assets.
Incorrect
Despite the fact that the Business trust (or simply “BT”) and the REIT continue to exist as separate operating institutions under the stapled securities structure, you must still bear in mind that the financial instruments of the stapled group are bound contractually to trade as a single unit. Into the bargain, the stapled group shall also be dividends of the same underlying assets.
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Question 18 of 30
18. Question
The stapling of a REIT to an entity with active business operations could potentially impact which component among REITs?
Correct
There is no denying of the fact that the escalation in the population of securities that can not be acquired or divested separately may eventually modify the REIT market in the aspect of its essence and attributes. These changes can an extreme disadvantage for REITs who are establishing a stapled securities structure with business entities that they have little or correspondence with. In general, this system presents prospective effects on the supposition of the investors on the REITs financial returns.
Incorrect
There is no denying of the fact that the escalation in the population of securities that can not be acquired or divested separately may eventually modify the REIT market in the aspect of its essence and attributes. These changes can an extreme disadvantage for REITs who are establishing a stapled securities structure with business entities that they have little or correspondence with. In general, this system presents prospective effects on the supposition of the investors on the REITs financial returns.
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Question 19 of 30
19. Question
Which committee among REITs helps to ensure that there is a formal and transparent procedure for developing policies on executive remuneration and for determining the remuneration packages of individual directors?
Correct
In addition to the insights above, the remuneration committee (or “RC”) can also safeguard the situation where instead of aligning the arrangement of compensation for the board and its executives with the Sponsor or its associates, the structure is rather in accordance with the long-term interest of the investors in units and the REIT’s own instructions regarding the management of risks.
Incorrect
In addition to the insights above, the remuneration committee (or “RC”) can also safeguard the situation where instead of aligning the arrangement of compensation for the board and its executives with the Sponsor or its associates, the structure is rather in accordance with the long-term interest of the investors in units and the REIT’s own instructions regarding the management of risks.
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Question 20 of 30
20. Question
Conflicts of interest may arise, in particular, if the CEO or executive directors of the REIT manager have concurrent roles in entities related to which another entity?
Correct
A piece of additional information that you should bear in mind is the actuality that in the real estate market, the variance among individual sectors has been indistinct in the past years. This is a result of the undertaking of some REITs where they venture their assets in businesses where the real estate is used for combined developments. In these cases, the interest of the unitholders is then compromised because of the REIT management’s conflicting appointments concerning the same geographic market.
Incorrect
A piece of additional information that you should bear in mind is the actuality that in the real estate market, the variance among individual sectors has been indistinct in the past years. This is a result of the undertaking of some REITs where they venture their assets in businesses where the real estate is used for combined developments. In these cases, the interest of the unitholders is then compromised because of the REIT management’s conflicting appointments concerning the same geographic market.
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Question 21 of 30
21. Question
While there could be legitimate reasons for such income support arrangements among REITs in some circumstances, these arrangements may give rise to certain concerns, such as which of the following options below?
I. The income support may have the effect of inflating the valuation of the property
II. The REIT may not be exposed to the credit risk of the party providing income support.
III. The investors may be misled by the headline yield when the income support provides an only short-term enhancement to the REIT’s yield
IV. The investors may be using these proceeds to support distributions to unitholders post-listingCorrect
In the case of the circumstance of option III from the question above, you must remember that such a state of affairs can not be endorsed once the validity period of the stream of financial funding has passed. Thus, short-term enhancements to the REIT’s yield may not continue especially when the income support is devised as a provider of the REIT’s lease rate which is relatively costly than the current rate in the prevailing market.
Incorrect
In the case of the circumstance of option III from the question above, you must remember that such a state of affairs can not be endorsed once the validity period of the stream of financial funding has passed. Thus, short-term enhancements to the REIT’s yield may not continue especially when the income support is devised as a provider of the REIT’s lease rate which is relatively costly than the current rate in the prevailing market.
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Question 22 of 30
22. Question
It is common for loan agreements to contain what specific covenant where the lender has a right to require repayment of the loan in the event of a change in control of either the REIT or the REIT manager?
Correct
It must be observed that such a covenant as the question above has the ultimate role of safeguarding the dividends of the lenders. If you’re curious why this is the case, then keep in mind that any change from the command could highly influence the credit or risk profile of the REIT. More than that, the contract between a loan borrower and lender with a specified ‘change of control’ covenant may be used to establish a REIT manager.
Incorrect
It must be observed that such a covenant as the question above has the ultimate role of safeguarding the dividends of the lenders. If you’re curious why this is the case, then keep in mind that any change from the command could highly influence the credit or risk profile of the REIT. More than that, the contract between a loan borrower and lender with a specified ‘change of control’ covenant may be used to establish a REIT manager.
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Question 23 of 30
23. Question
With regards to the Act that applies to all holders of a capital markets services license for REIT management, who is described as the person who holds directly or indirectly 15% or more of the total number of issued shares excluding treasury shares in the company?
Correct
Take into account the fact that in relation to the controlling shareholder of the REIT manager, or the REIT manager, the trustee or controlling unitholder of the REIT (being a company) means any other company which is it is a subsidiary or holding company or is a subsidiary of such holding company or one in the equity of which it or such other company or companies that have taken together (directly or indirectly) have an interest of 30% or more.
Incorrect
Take into account the fact that in relation to the controlling shareholder of the REIT manager, or the REIT manager, the trustee or controlling unitholder of the REIT (being a company) means any other company which is it is a subsidiary or holding company or is a subsidiary of such holding company or one in the equity of which it or such other company or companies that have taken together (directly or indirectly) have an interest of 30% or more.
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Question 24 of 30
24. Question
Currently, a REIT manager is not required to have a Nominating Committee (or “NC”). From the choices below, which are reasons cited by some REIT managers for not having an NC?
I. The REIT entity did not provide the REIT with a right of first refusal
II. The REIT manager is not a listed entity
III. The Board considers it unnecessary to establish an NC
IV. There has been no entity that represents itself as a Sponsor of the REITCorrect
Don’t forget the view that an NC can efficiently strengthen a REIT manager’s process of sourcing for new directors, as the NC will have the responsibility of making informed recommendations to the Board on all board appointments. More so, given that the majority of an NC should comprise independent directors (who should, among other requirements, be independent of the Sponsor), reliance on the NC of the Sponsor is not a good substitute.
Incorrect
Don’t forget the view that an NC can efficiently strengthen a REIT manager’s process of sourcing for new directors, as the NC will have the responsibility of making informed recommendations to the Board on all board appointments. More so, given that the majority of an NC should comprise independent directors (who should, among other requirements, be independent of the Sponsor), reliance on the NC of the Sponsor is not a good substitute.
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Question 25 of 30
25. Question
A number of REITs have undertaken fundraising exercises through the issuance of hybrid securities. An instrument (such as hybrid securities), can be considered as a permanent form of capital if it attains which of the following requirements?
I. It is perpetual in nature
II. The payment of dividends or distributions is not entirely at the discretion of the REIT
III. It is deeply subordinate
IV. There are no terms that would incentivize the REIT to redeem earlyCorrect
Withhold the practicality that hybrid securities can be in the form, such as convertible perpetual preference units and perpetual securities. As these hybrid securities bear the characteristics of both equity and debt securities, REIT managers in Singapore would normally consult the Monetary Authority of Singapore on the treatment of the hybrid securities for the purpose of determining their aggregate leverage prior to issuance.
Incorrect
Withhold the practicality that hybrid securities can be in the form, such as convertible perpetual preference units and perpetual securities. As these hybrid securities bear the characteristics of both equity and debt securities, REIT managers in Singapore would normally consult the Monetary Authority of Singapore on the treatment of the hybrid securities for the purpose of determining their aggregate leverage prior to issuance.
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Question 26 of 30
26. Question
The REIT shall ensure that its internal controls to address and mitigate potential conflicts of interests are subject to regular reviews by which committee?
Correct
Be reminded that a REIT’s Audit Committee must satisfy specific requirements, such as being comprised of at least three directors, having all of its being non-executive directors, having a Chairman who is an independent director, and lastly, at least a majority of the members of the Audit Committee (for which purpose the chairman of the Audit Committee shall be reckoned as a member of the Audit Committee) shall be independent directors.
Incorrect
Be reminded that a REIT’s Audit Committee must satisfy specific requirements, such as being comprised of at least three directors, having all of its being non-executive directors, having a Chairman who is an independent director, and lastly, at least a majority of the members of the Audit Committee (for which purpose the chairman of the Audit Committee shall be reckoned as a member of the Audit Committee) shall be independent directors.
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Question 27 of 30
27. Question
Under the matter of conducting board meetings, the REIT shall ensure that all resolutions of its board of directors concerning the REIT must be approved by a majority of its directors, including at least what number of independent director/s?
Correct
Dwell upon the actuality that regarding the conduction of board meetings, the REIT shall also ensure that for matters in which a director has an interest, the interested director shall abstain from voting in such matters; and the quorum must comprise a majority of the directors (excluding such interested directors).
Incorrect
Dwell upon the actuality that regarding the conduction of board meetings, the REIT shall also ensure that for matters in which a director has an interest, the interested director shall abstain from voting in such matters; and the quorum must comprise a majority of the directors (excluding such interested directors).
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Question 28 of 30
28. Question
In terms of investment and property funds among REITs, what do we call the instruments or investments of such high liquidity and safety that they are as good as cash?
Correct
Acknowledge the fact that a deposited property, on the other hand, means the value of the property fund’s total assets based on the latest valuation, or in the case of a stapled securities structure, the value of the stapled group’s total assets based on the latest valuation. Further comprising, the Controlling unitholder means a person who in fact exercises control over the property fund.
Incorrect
Acknowledge the fact that a deposited property, on the other hand, means the value of the property fund’s total assets based on the latest valuation, or in the case of a stapled securities structure, the value of the stapled group’s total assets based on the latest valuation. Further comprising, the Controlling unitholder means a person who in fact exercises control over the property fund.
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Question 29 of 30
29. Question
A director of the manager of an authorized real estate investment trust shall do the following tasks except for which options from below?
I. Take all reasonable steps to ensure that the manager discharges its duties
II. Act in the best interests of all the participants of the authorized REIT as a whole
III. No action or proceedings may be brought by or on behalf of all or any of the participants of an authorized REIT
IV. Give priority to the interests of all the participants of the authorized REIT as a wholeCorrect
Be mindful of the fact that on the matter of giving priority to the interests of all the participants of the authorized REIT as a whole by the director of the manager, this shall be further applied over the interests of the manager and the shareholders of the manager in the event of a conflict between the interests of all the participants as a whole and the interests of the manager or the shareholders of the manager.
Incorrect
Be mindful of the fact that on the matter of giving priority to the interests of all the participants of the authorized REIT as a whole by the director of the manager, this shall be further applied over the interests of the manager and the shareholders of the manager in the event of a conflict between the interests of all the participants as a whole and the interests of the manager or the shareholders of the manager.
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Question 30 of 30
30. Question
Prior to every annual general meeting of the REIT, or at least once in a calendar year, the Board shall review and determine which of the following cases?
I. Whether each existing director is independent of every substantial shareholder of the holder and substantial unitholder of the REIT
II. Whether each existing director is independent of management and business relationships with the holder and the REIT
III. Whether each existing director is independent of judgment and ability to act in the interests of all the unitholders
IV. Whether each existing director is independent of a substantial shareholder of the holder and a substantial unitholder of the REITCorrect
Also, bear in mind that a director of a holder of a capital markets services license for REIT management shall be considered to be independent of management and business relationships with the holder (whether or not the holder is acting for or on behalf of the REIT) and the REIT if the director has no management relationships with the holder or with any of its related corporations; and the real estate investment trust.
Incorrect
Also, bear in mind that a director of a holder of a capital markets services license for REIT management shall be considered to be independent of management and business relationships with the holder (whether or not the holder is acting for or on behalf of the REIT) and the REIT if the director has no management relationships with the holder or with any of its related corporations; and the real estate investment trust.