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Question 1 of 20
1. Question
Which of the statements are true regarding wholesale banks?
I. Wholesale banks provide the full range of banking business.
II. Wholesale banks have a restriction on their deposit-taking activities.
III. Wholesale banks have no restriction on taking Singapore dollar deposits.
IV. Wholesale banks have a restriction on taking Singapore dollar deposits.Correct
Wholesale Banks provide the full range of banking business but are restricted in their deposit-taking activities. Wholesale Banks are only allowed to take foreign currency deposits in any amount but are restricted to take deposits in Singapore dollars. They can only accept Singapore dollar deposits of at least S$250,000. They are not allowed to operate Singapore dollar savings deposit accounts. Many wholesale banks, therefore, prefer to solicit business from High Net Worth Individuals (HNWI) through their private banking arms. Such clients are usually more interested in capital markets products for investments.
Incorrect
Wholesale Banks provide the full range of banking business but are restricted in their deposit-taking activities. Wholesale Banks are only allowed to take foreign currency deposits in any amount but are restricted to take deposits in Singapore dollars. They can only accept Singapore dollar deposits of at least S$250,000. They are not allowed to operate Singapore dollar savings deposit accounts. Many wholesale banks, therefore, prefer to solicit business from High Net Worth Individuals (HNWI) through their private banking arms. Such clients are usually more interested in capital markets products for investments.
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Question 2 of 20
2. Question
What are the powers given by SFA to MAS to enable sound development of the securities and futures market?
I. Review any amendments to the rules and regulations of the Exchanges and clearing houses.
II. Manage clearinghouses.
III. Approve securities exchanges, futures exchanges and clearing houses.
IV. Audit securities exchanges, futures exchanges and clearing houses.Correct
The SFA gives MAS a wide range of powers to enable the sound development of the securities and futures market. These include (but are not limited to) the power to:
• Approve securities exchanges, futures exchanges and clearing houses;
• Review any amendments to the rules and regulations of the Exchanges and clearing houses;
• Take disciplinary actions (such as warning, fine, reprimand, suspension of license, revocation of license and issuance of prohibition order) if the licensed person
contravenes any condition or restriction imposed on its license, or any direction issued to it by MAS under the SFA, or any provision in the SFA;
• Inspect the books of Exchanges, a person operating an exempt market, clearinghouse, a person operating an exempt clearing facility, the holder of a capital markets services
license, an exempt person or a representative; and
• Conduct investigation into alleged or suspected contravention of any provision of the SFA or written direction issued under the SFA.Incorrect
The SFA gives MAS a wide range of powers to enable the sound development of the securities and futures market. These include (but are not limited to) the power to:
• Approve securities exchanges, futures exchanges and clearing houses;
• Review any amendments to the rules and regulations of the Exchanges and clearing houses;
• Take disciplinary actions (such as warning, fine, reprimand, suspension of license, revocation of license and issuance of prohibition order) if the licensed person
contravenes any condition or restriction imposed on its license, or any direction issued to it by MAS under the SFA, or any provision in the SFA;
• Inspect the books of Exchanges, a person operating an exempt market, clearinghouse, a person operating an exempt clearing facility, the holder of a capital markets services
license, an exempt person or a representative; and
• Conduct investigation into alleged or suspected contravention of any provision of the SFA or written direction issued under the SFA. -
Question 3 of 20
3. Question
Which of the following are the correct statements regarding Singapore Exchange Derivatives Trading Limited (SGX-DT)?
I. SGX-DT was established under the Companies Act and carries on the business of establishing, conducting and regulating a futures market with underlying assets
including commodities and financial instruments under the SFA.
II. SGX-DT was established under the Singapore Commercial Trading Act and carry out business and regulating futures market with underlying assets including commodities
and financial instruments under the Singapore Commodity Exchange.
III. SGX-DT lays down the rules and requirements to ensure orderly trading and settlements of futures and options on various products, including interest rates, equity,
and equity indices and energy, covering major markets such as Asia, Europe, and The United States.
IV. SGX-DT only follow the rules laid down by the Government of Singapore.Correct
SGX-DT was established under the Companies Act and carries on the business of establishing, conducting and regulating a futures market with underlying assets including commodities and financial instruments under the SFA. SGX-DT lays down the rules and requirements to ensure orderly trading and settlement of futures and options on various products, including interest rates, equity, and equity indices and energy, covering major markets such as Asia, Europe, and the United States. These are contained in the Futures Trading Rules, which govern SGX-DT Trading Members.
Incorrect
SGX-DT was established under the Companies Act and carries on the business of establishing, conducting and regulating a futures market with underlying assets including commodities and financial instruments under the SFA. SGX-DT lays down the rules and requirements to ensure orderly trading and settlement of futures and options on various products, including interest rates, equity, and equity indices and energy, covering major markets such as Asia, Europe, and the United States. These are contained in the Futures Trading Rules, which govern SGX-DT Trading Members.
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Question 4 of 20
4. Question
Select the correct statement related to Qualifying CCP.
I. Qualifying CCP members are subject to higher capital requirements for the trade and default fund exposures under the new Basel III framework.
II. Qualifying CCP members are subject to lower capital requirements for their trade and default fund exposures under the new Basel III framework.
III. SGX-DC is not a qualifying CCP.
IV. SGX-DC is now a Qualifying CCP.Correct
SGX-DC is now a Qualifying CCP. As mentioned in Section 1.4.1.4, members of Qualifying CCPs are subject to a lower capital requirement for their trade and default fund exposures under the new Basel III framework. Similarly, this means that as an SGX-DC member, one will benefit from lower capital costs.
Futures Clearing Members are governed by the SGX-DC Clearing Rules.
1.4 SGX Listing Framework
SGX provides an avenue for companies to raise capital for their businesses. It also sets the rules for this avenue through its listing requirements.Incorrect
SGX-DC is now a Qualifying CCP. As mentioned in Section 1.4.1.4, members of Qualifying CCPs are subject to a lower capital requirement for their trade and default fund exposures under the new Basel III framework. Similarly, this means that as an SGX-DC member, one will benefit from lower capital costs.
Futures Clearing Members are governed by the SGX-DC Clearing Rules.
1.4 SGX Listing Framework
SGX provides an avenue for companies to raise capital for their businesses. It also sets the rules for this avenue through its listing requirements. -
Question 5 of 20
5. Question
What is the timeline for submission to approval and trading for Initial Public Offer (IPO)?
I. 2-6 month time for Pre-submission
II. 2-6 month time for SGX & MAX review
III. 2 month time for Lodgment & Public Exposure on MAS Opera website
IV. 1-2 week time for Registration & LaunchCorrect
The average timeline for submission to approval and trading is as follows:
i. Pre-submission consultation – 2-6 months ii. SGX & MAS review 9 – 12 weeks iii. Lodgement & Public Exposure on MAS Opera website – 2 weeks iv. Registration & Launch – 1-2 weeks v. Trading Commences
Incorrect
The average timeline for submission to approval and trading is as follows:
i. Pre-submission consultation – 2-6 months ii. SGX & MAS review 9 – 12 weeks iii. Lodgement & Public Exposure on MAS Opera website – 2 weeks iv. Registration & Launch – 1-2 weeks v. Trading Commences
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Question 6 of 20
6. Question
Which of the following statements are true?
I. A company that is already listed on an overseas exchange must abide by the rules of it’s home exchange.
II. It is not mandatory to abide by the rules of home exchange if a company already listed on an overseas exchange.
III. A company listed in on an overseas exchange can also choose to list and raise funds via GDRs on SGX Mainboard.
IV. GDRs are specialist products offered only to institutional and accredited investors.Correct
A company that is already listed on an overseas exchange must abide by the rules of its home exchange. It can also choose to list and raise funds via GDRs on SGX Mainboard. GDRs are specialist products offered only to institutional and accredited investors. GDR issuers must provide all information and documents (in English) to SGX at the same time as such information are released to the home exchange.
Incorrect
A company that is already listed on an overseas exchange must abide by the rules of its home exchange. It can also choose to list and raise funds via GDRs on SGX Mainboard. GDRs are specialist products offered only to institutional and accredited investors. GDR issuers must provide all information and documents (in English) to SGX at the same time as such information are released to the home exchange.
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Question 7 of 20
7. Question
What are the admission standards for Mining, Oil & Gas (MOG) listing companies?
I. MOG listing aspirants should have a market capitalization of not less than S$200 million based on the issue price and post-invitation issued share capital.
II. MOG listing aspirants should have a market capitalization of not less than S$300 million based on the issue price and post-invitation issued share capital.
III. Have sufficient working capital for 2 years from listing.
IV. Have sufficient working capital for 18 months from listing.Correct
A MOG listing aspirant that is not in production seeking a listing has to satisfy the following conditions:
• Has market capitalization of not less than S$300 million based on the issue price and post-invitation issued share capital; and
• Discloses its plans, milestones and capital expenditure to advance to the production stage.The requirement for all MOG companies:
• Have at least achieved Indicated Resources (for Minerals) or Contingent Resources (for Oil & Gas);
• Have sufficient working capital for 18 months from listing;
• Have at least one independent director with appropriate industry experience and expertise; and
• Appoint an audit firm with the relevant industry experience.Incorrect
A MOG listing aspirant that is not in production seeking a listing has to satisfy the following conditions:
• Has market capitalization of not less than S$300 million based on the issue price and post-invitation issued share capital; and
• Discloses its plans, milestones and capital expenditure to advance to the production stage.The requirement for all MOG companies:
• Have at least achieved Indicated Resources (for Minerals) or Contingent Resources (for Oil & Gas);
• Have sufficient working capital for 18 months from listing;
• Have at least one independent director with appropriate industry experience and expertise; and
• Appoint an audit firm with the relevant industry experience. -
Question 8 of 20
8. Question
What are the documents required for an IPO listing?
I. Promoters history and personal profile
II. Promoters banking details
III. Company prospectus
IV. Information filed on MAS OPERA websiteCorrect
• Prospectus;
• Lodged on MAS OPERA website.Incorrect
• Prospectus;
• Lodged on MAS OPERA website. -
Question 9 of 20
9. Question
What are the acceptable accounting standards for Singapore Capital Market?
I. Chinese standard
II. Singapore Standard
III. International Accounting Standards
IV. US Accounting StandardCorrect
Singapore, US or International Accounting Standards.
Domicile At the discretion of the issuer.Incorrect
Singapore, US or International Accounting Standards.
Domicile At the discretion of the issuer. -
Question 10 of 20
10. Question
Which of the following statements are correct for listing on Catalist?
I. A company seeking a listing on Catalist can only choose the primary listing route.
II. A company seeking a listing on Catalist can only choose the secondary listing route.
III. A company seeking a listing on Catalist need to have a sponsor approved by SGX.
IV. A company seeking a listing on Catalist need not have a sponsor.Correct
A company seeking a listing on Catalist can only choose the primary listing route. The company must also have a sponsor for the Catalist listing, who has been approved by SGX.
Incorrect
A company seeking a listing on Catalist can only choose the primary listing route. The company must also have a sponsor for the Catalist listing, who has been approved by SGX.
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Question 11 of 20
11. Question
Select the correct statement regarding the selection of sponsors for listing on Catalist?
I. There are no particular guidelines to select the sponsors other than SGX approval.
II. Sponsors are chosen and approved by SGX based on strict eligibility criteria, which include experience in corporate finance and compliance advisory work.
III. Sponsors undergo strict supervision and their activities regulated through the continuing obligation route.
IV. Sponsors can employ anybody without getting approval from SGX.Correct
Sponsors are chosen and approved by SGX based on stringent eligibility criteria which include experience in corporate finance and compliance advisory work, and they are closely supervised and regulated through the continuing obligation route. They are required to employ qualified professionals who must also be approved by SGX as “Registered Professionals”.
Incorrect
Sponsors are chosen and approved by SGX based on stringent eligibility criteria which include experience in corporate finance and compliance advisory work, and they are closely supervised and regulated through the continuing obligation route. They are required to employ qualified professionals who must also be approved by SGX as “Registered Professionals”.
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Question 12 of 20
12. Question
What is the objective of MAS?
I. The objective of MAS is to intervene Singapore Financial Market and regulate its activities.
II. MAS act as the central bank of Singapore, including the conduct of monetary policy, the issuance of currency, the oversight of payment systems and serving as banker
to and financial agent of the Government.
III. MAS conduct integrated supervision of financial services and financial stability surveillance.
IV. The mission of MAS is to manage official foreign reserves of Singapore.Correct
MAS was established under the MAS Act (1970), which came into force in 1972. Its mission is to promote sustained non-inflationary economic growth, and a sound and progressive financial center. Its functions are to:
a. Act as the central bank of Singapore, including the conduct of monetary policy, the issuance of currency, the oversight of payment systems and serving as banker to and
financial agent of the Government;
b. Conduct integrated supervision of financial services and financial stability surveillance;
Capital Markets Financial Advisory Services Examination Module 1A – Rules and Regulations for Dealing in Securities (SGX-ST Members)
c. Manage the official foreign reserves of Singapore; and
d. Develop Singapore as an international financial centre.Incorrect
MAS was established under the MAS Act (1970), which came into force in 1972. Its mission is to promote sustained non-inflationary economic growth, and a sound and progressive financial center. Its functions are to:
a. Act as the central bank of Singapore, including the conduct of monetary policy, the issuance of currency, the oversight of payment systems and serving as banker to and
financial agent of the Government;
b. Conduct integrated supervision of financial services and financial stability surveillance;
Capital Markets Financial Advisory Services Examination Module 1A – Rules and Regulations for Dealing in Securities (SGX-ST Members)
c. Manage the official foreign reserves of Singapore; and
d. Develop Singapore as an international financial centre. -
Question 13 of 20
13. Question
What role does CDP play in the Capital Markets Industry in Singapore?
I. CDP is the only approved securities exchange in Singapore and is responsible for setting the rules and membership and trading requirements of the exchange.
II. For the securities market, CDP offers incorporated clearing, depository facilities, and settlement covering both equities and fixed income instruments.
III. CDP principally serves the Singapore market but has links with other central depositories in the United States, Japan, and China to support the settlement of cross-
border trades.
IV. CDP review any amendments to rules and regulations of the Exchange and clearing houses.Correct
SGX-ST is the only approved securities exchange in Singapore and is responsible for setting the rules and membership and trading requirements of the exchange. SGX-ST can mete out disciplinary action for non- compliance with any of the requirements.
SGX-ST allows companies and investors to achieve capital-raising and investment objectives through its rules, such as the listing requirements for companies that wish to raise capital and to have their securities traded on SGX-ST. Companies which are already listed can also raise further capital through the market and SGX-ST.
Companies can choose to be listed on the SGX Mainboard or the Catalist Board. The Mainboard caters to the needs of more established companies, with higher entry and listing requirements such as minimum profit and market capitalization levels. The Catalist Board caters to the needs of smaller or fast-growing companies and has a different model where companies must be brought to list by approved Sponsors via an initial public offering (IPO). For these companies, there are no minimum quantitative entry criteria required by SGX. Instead, Sponsors will decide if the listing applicant should be listed.
Incorrect
SGX-ST is the only approved securities exchange in Singapore and is responsible for setting the rules and membership and trading requirements of the exchange. SGX-ST can mete out disciplinary action for non- compliance with any of the requirements.
SGX-ST allows companies and investors to achieve capital-raising and investment objectives through its rules, such as the listing requirements for companies that wish to raise capital and to have their securities traded on SGX-ST. Companies which are already listed can also raise further capital through the market and SGX-ST.
Companies can choose to be listed on the SGX Mainboard or the Catalist Board. The Mainboard caters to the needs of more established companies, with higher entry and listing requirements such as minimum profit and market capitalization levels. The Catalist Board caters to the needs of smaller or fast-growing companies and has a different model where companies must be brought to list by approved Sponsors via an initial public offering (IPO). For these companies, there are no minimum quantitative entry criteria required by SGX. Instead, Sponsors will decide if the listing applicant should be listed.
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Question 14 of 20
14. Question
What are the settlement criteria of securities executed through SGX?
I. All trading executed on SGX required to settle on T+22.
II. All trading executed on SGX required to settle on T+33
III. During the run, the securities transferred from a seller’s securities account to that of the buyer and vice versa.
IV. During the run, the securities deposited with SGX until finalization.Correct
All trades executed on SGX are required to be settled on T+33. Each trade is settled on a gross basis during an end-of-day settlement run. During the run, securities are transferred from a seller’s securities account to that of the buyer and vice versa.
Incorrect
All trades executed on SGX are required to be settled on T+33. Each trade is settled on a gross basis during an end-of-day settlement run. During the run, securities are transferred from a seller’s securities account to that of the buyer and vice versa.
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Question 15 of 20
15. Question
Which of the following statements are right with Merchant Banks?
I. Merchant banks are not licensed under the Banking Act but approved under the MAS Act.
II. Merchant banks are licensed under the Banking Act and do not require approval from MAS.
III. Merchant banks can accept deposits or borrow from the public in any form except banks, finance companies, shareholders and companies controlled by shareholders.
IV. Merchant banks cannot accept deposits or borrow from the public in any form except banks, finance companies, shareholders and companies controlled by
shareholders.Correct
Merchant Banks are not licensed under the Banking Act but are approved under the MAS Act. They are not allowed to accept deposits or borrow from the public in any form except from banks, finance companies, shareholders and companies controlled by shareholders. Merchant banks, therefore, are also not found in the retail space but can undertake corporate finance activities (including flotation, underwriting, buying and selling of shares and other securities), which falls under capital markets services or private banking through its Asian Currency Unit for non-Singapore dollar banking business.
Incorrect
Merchant Banks are not licensed under the Banking Act but are approved under the MAS Act. They are not allowed to accept deposits or borrow from the public in any form except from banks, finance companies, shareholders and companies controlled by shareholders. Merchant banks, therefore, are also not found in the retail space but can undertake corporate finance activities (including flotation, underwriting, buying and selling of shares and other securities), which falls under capital markets services or private banking through its Asian Currency Unit for non-Singapore dollar banking business.
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Question 16 of 20
16. Question
Which of the following statements are correct concerning Custodian Services for Securities?
I. Securities financing and securities lending are not similar activities and hence required separate CMS license.
II. Securities financing and securities lending are similar activities and hence does not require separate CMS license.
III. Besides provided general custodial services, custodians maintain records of the movement of securities to and from their clients’ accounts and are the interface for
their clients to exchanges for the settlement and delivery of securities.
IV. Providers of Custodial Services for Securities not required an SMS license.Correct
These entities are required to hold a CMS license in providing custodial services. Custodians serve institutional clients, as well as individual clients. Besides providing general custodial services, custodians maintain records of the movement of securities to and from their clients’ accounts and are the interface for their clients to the exchanges for the settlement and delivery of securities. Some custodians also provide securities financing and securities lending services. Securities lending is deemed as dealing in securities and consequently, an entity which carries out securities lending is required to have a CMS license to deal in securities. Securities financing and securities lending are not similar activities and require a different type of CMS license.
Incorrect
These entities are required to hold a CMS license in providing custodial services. Custodians serve institutional clients, as well as individual clients. Besides providing general custodial services, custodians maintain records of the movement of securities to and from their clients’ accounts and are the interface for their clients to the exchanges for the settlement and delivery of securities. Some custodians also provide securities financing and securities lending services. Securities lending is deemed as dealing in securities and consequently, an entity which carries out securities lending is required to have a CMS license to deal in securities. Securities financing and securities lending are not similar activities and require a different type of CMS license.
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Question 17 of 20
17. Question
What is the legislation to be administered by MAS apart from its administrative responsibilities?
I. Develop Singapore as an international financial center.
II. Securities and Futures Act (Cap.289) (SFA), the main legislation governing the securities and futures industry in Singapore.
III. Manage the official foreign reserves of Singapore
IV. Securities and Futures (Clearing Facilities) Regulations.Correct
MAS is responsible for, amongst others, the administration of the following legislation which is relevant to the securities and futures industry, including:
• Securities and Futures Act (Cap. 289) (SFA), the main legislation governing the securities and futures industry in Singapore.
• Securities and Futures (Licensing and Business Conduct) Regulations;
• Securities and Futures (Markets) Regulations;
• Securities and Futures (Clearing Facilities) Regulations;
• Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licence) Regulations; and
• Securities and Futures (Corporate Governance of Approved Exchanges, Designated Clearing Houses and Approved Holding Companies) Regulations.Incorrect
MAS is responsible for, amongst others, the administration of the following legislation which is relevant to the securities and futures industry, including:
• Securities and Futures Act (Cap. 289) (SFA), the main legislation governing the securities and futures industry in Singapore.
• Securities and Futures (Licensing and Business Conduct) Regulations;
• Securities and Futures (Markets) Regulations;
• Securities and Futures (Clearing Facilities) Regulations;
• Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licence) Regulations; and
• Securities and Futures (Corporate Governance of Approved Exchanges, Designated Clearing Houses and Approved Holding Companies) Regulations. -
Question 18 of 20
18. Question
What role does CDP play in the Capital Markets Industry in Singapore?
I. CDP is the only approved securities exchange in Singapore and is responsible for setting the rules and membership and trading requirements of the exchange.
II. For the securities market, CDP offers incorporated clearing, depository facilities, and settlement covering both equities and fixed income instruments.
III. CDP principally serves the Singapore market but has links with other central depositories in the United States, Japan, and China to support the settlement of cross-
border trades.
IV. CDP review any amendments to rules and regulations of the Exchange and clearing houses.Correct
CDP was established in 1987 as a wholly owned subsidiary of SGX. It provides integrated clearing, settlement and depository facilities for the securities market, covering both equities and fixed income instruments. CDP principally serves the Singapore market but has links with other central depositories in the United States, Japan and China to support the settlement of cross-border trades.
Incorrect
CDP was established in 1987 as a wholly owned subsidiary of SGX. It provides integrated clearing, settlement and depository facilities for the securities market, covering both equities and fixed income instruments. CDP principally serves the Singapore market but has links with other central depositories in the United States, Japan and China to support the settlement of cross-border trades.
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Question 19 of 20
19. Question
Why is Force Order Range called a pre-execution mechanism?
I. Force Order Range helps investors to keep away from error trades when entering essential values of orders.
II. Force Order Range is a pre-execution mechanism which helps investors to evade error trades when entering prices of orders.
III. Force Order Range helps investors to keep away from error trades when entering Forced Key of orders.
IV. Any orders provided by the outside of the Force Order Range must be complete by the use of the Forced Key function before submission, and so Force Order Range is
called a pre-execution mechanism.Correct
Force Order Range is a pre-execution mechanism which helps investors to avoid error trades when entering prices of orders. Any orders outside the Force Order Range must be confirmed by the use of the Forced Key function before those orders can be submitted. The Force Key function is intended to complement, and not replace, Member’s responsibility to adopt adequate and appropriate measures and practices to safeguard against the execution of error trades. 18
Incorrect
Force Order Range is a pre-execution mechanism which helps investors to avoid error trades when entering prices of orders. Any orders outside the Force Order Range must be confirmed by the use of the Forced Key function before those orders can be submitted. The Force Key function is intended to complement, and not replace, Member’s responsibility to adopt adequate and appropriate measures and practices to safeguard against the execution of error trades. 18
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Question 20 of 20
20. Question
What are the reasons that may lead to lapsing, revocation and suspension of CMS License?
I. If the CMS license holder’s name and address of the principal place of business changes frequently, then the CMS license will lapse.
II. A CMS license will be considered lapsed if the CMS license holder is found wind up or dissolved either in Singapore or elsewhere.
III.MAS may also suspend a CMS license if found that the CMS license holder or its representatives or officers has been unsuccessful to perform efficiently, sincerely and
reasonably, or has not worked for the best interest of its clients or has broken the conditions entailed on their licences16.
IV. The CMS License, once issued is permanent, and nobody can suspend or revoke the licenseCorrect
A CMS Licence will lapse if the CMS license holder is wound up or dissolved, whether in Singapore or elsewhere. MAS may also revoke or suspend a CMS license if it has reasons to believe that the CMS license holder or its representatives or officers had failed to discharge its duties efficiently, honestly and fairly, or had not acted in the best interest of its customers or had breached the conditions imposed on their licences16.
Incorrect
A CMS Licence will lapse if the CMS license holder is wound up or dissolved, whether in Singapore or elsewhere. MAS may also revoke or suspend a CMS license if it has reasons to believe that the CMS license holder or its representatives or officers had failed to discharge its duties efficiently, honestly and fairly, or had not acted in the best interest of its customers or had breached the conditions imposed on their licences16.