RES 1BE1 – Add-on Module for Singapore Exchange – Securities Trading Limited

Correct: Under the Singapore opt-in regime for Accredited Investors (AIs), individuals who meet the quantitative thresholds (such as net personal assets exceeding S$2 million, with the primary residence capped at S$1 million) are treated as retail investors by default. To be treated as an AI, the financial institution must provide a disclosure notice to the individual explaining the consequences of being an AI (i.e., the loss of certain regulatory protections under the SFA and FAA), and the individual must subsequently provide a written statement opting in to the AI status.

Incorrect: Automatic reclassification is not permitted because the default status for all individuals is ‘retail’ regardless of their wealth. Negative consent is explicitly prohibited for the AI opt-in process to ensure that investors are making an informed decision to waive protections. While verbal confirmation is useful for relationship management, the regulations specifically require a written opt-in statement and a formal disclosure process that cannot be bypassed by recorded calls alone.

Takeaway: In Singapore, qualifying individuals must actively opt-in through a formal written process and receive a disclosure of waived protections to be classified as Accredited Investors.

Correct: According to MAS Notice SFA04-N02 (and similar AML/CFT notices), the identification of beneficial owners follows a cascading three-step test. First, identify natural persons with a controlling ownership interest (typically more than 25%). If no such person exists or there is doubt, the second step is to identify natural persons exercising control through other means. If no person is identified under the first two steps, the third step is to identify the natural person(s) who hold the position of senior managing official.

Incorrect: The approach of deeming an entity as having no beneficial owner is incorrect because the regulatory framework requires moving to the ‘control’ and ‘senior management’ tests if the ownership threshold is not met. Identifying all four shareholders automatically is incorrect because the threshold is ‘more than 25%’, and the focus should shift to actual control or management. Relying solely on a self-declaration without performing the required cascading tests fails to meet the ‘reasonable measures’ standard required by MAS for customer due diligence.

Takeaway: When no individual meets the ownership threshold for beneficial ownership, financial institutions must identify individuals exercising control through other means or, failing that, the senior managing officials.

Correct: According to the SGX Listing Rules, the Mainboard is a merit-based regime where companies must meet specific quantitative requirements, such as minimum pre-tax profits, market capitalization, or revenue. In contrast, Catalist is a sponsor-supervised regime designed for fast-growing companies. Catalist does not have mandatory quantitative entry criteria; instead, the Sponsor performs the due diligence and determines if the applicant is suitable for listing, and the company must maintain a sponsor at all times to ensure compliance with SGX ST listing rules.

Incorrect: The claim that both boards require a three-year track record is incorrect because Catalist has no such mandatory requirement, allowing younger, high-growth companies to list. The suggestion that MAS exclusively regulates the Mainboard is incorrect; while MAS is the overarching regulator under the Securities and Futures Act (SFA), SGX RegCo acts as the frontline regulator for both boards. The requirement for a Continuing Sponsor is a permanent feature of the Catalist board, not the Mainboard, which operates under a different compliance framework.

Takeaway: The SGX Mainboard uses a merit-based approach with quantitative entry hurdles, while Catalist uses a sponsor-supervised approach without mandatory quantitative criteria to facilitate the listing of growth companies.

Correct: Under the Securities and Futures Act (SFA), the MAS Public Register of Representatives is a key tool for investor protection and market transparency. It is the statutory responsibility of the Principal Firm and the representative to ensure that all information provided to MAS is accurate and updated promptly. Disciplinary actions are material facts that must be disclosed to ensure the public can make informed choices about the individuals they deal with, maintaining the overall integrity of the Singapore financial markets.

Incorrect: Waiting for annual reviews or client inquiries fails to meet the continuous disclosure obligations required to maintain the accuracy of the Register. Relying solely on MAS to catch errors ignores the statutory duty of the Principal Firm to notify MAS of changes in a representative’s particulars or disciplinary status within the prescribed timelines (typically 14 days) under the SFA. Administrative convenience does not override the legal requirement for accurate public disclosure.

Takeaway: Maintaining the accuracy of the MAS Public Register of Representatives is a continuous legal obligation essential for public transparency and investor protection in Singapore’s financial sector.

Correct: According to SGX Listing Rules, all listed issuers must produce an annual sustainability report. For issuers in prioritized industries such as the energy sector, climate-related disclosures consistent with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations are mandatory. The report must also contain a statement from the Board of Directors taking responsibility for the sustainability reporting and must be subject to internal assurance to ensure the robustness of the reporting process.

Incorrect: Reporting only when targets are met or deferring climate risks is inconsistent with the ‘comply or explain’ regime and mandatory climate disclosure requirements for the energy sector. The Board of Directors cannot delegate its ultimate responsibility for the sustainability statement to external parties. Furthermore, SGX requires sustainability reports to be issued annually, not biennially or only when convenient, to maintain transparency for investors.

Takeaway: Listed entities in Singapore must provide annual sustainability reports featuring a Board statement, mandatory climate disclosures for specific sectors, and internal assurance of the reporting process.

Correct: Under SGX-ST Rules and MAS guidelines regarding Direct Market Access, a Trading Member is responsible for all orders entered under its trading codes. It must implement its own pre-trade risk management controls, including price and size filters, and cannot rely solely on the customer’s own systems. The Trading Member must maintain the ability to override or terminate the DMA access immediately if necessary to protect market integrity.

Incorrect: Allowing a client to bypass the Trading Member’s filters based on an indemnity or the client’s own system sophistication is a violation of the requirement for the broker to maintain ultimate control over order flow. The Clearing Member oversees the Trading Member’s aggregate risk but does not replace the Trading Member’s obligation to filter individual client orders. Pre-trade controls are mandatory for all DMA participants, including institutional and high-frequency traders, to prevent market disruption.

Takeaway: Trading Members must maintain independent and effective pre-trade risk controls for all DMA orders and cannot outsource this regulatory responsibility to the client.

Correct: Section 199 of the Securities and Futures Act (SFA) specifically targets the dissemination of false or misleading statements. It provides that no person shall make a statement or disseminate information that is false or misleading in a material particular and is likely to induce the sale or purchase of securities by other persons, especially if the person knows or ought reasonably to have known that the statement was false or misleading.

Incorrect: Section 197 refers to false trading and market rigging transactions, such as wash sales or matched orders, rather than the dissemination of false information. Section 218 relates to insider trading by connected persons, which involves trading on material non-public information rather than spreading false rumors. Section 200 (often confused with 201) relates to inducing persons to deal in capital markets products by reckless or dishonest concealment of material facts, but Section 199 is the primary and most direct provision for disseminating false statements to the public or clients.

Takeaway: Under Singapore’s SFA, it is a criminal offense to disseminate false or misleading information that is likely to induce others to trade or affect the market price of securities.

Correct: According to MAS Notice SFA04-N09, representatives of Capital Markets Services (CMS) license holders must complete a minimum of 9 CPD hours per calendar year. This requirement is strictly divided into at least 6 hours of Core CPD (technical skills) and at least 3 hours of Ethics or Rules-based CPD. Technical training, regardless of volume, cannot be used to satisfy the specific 3-hour Ethics/Rules requirement.

Incorrect: The suggestion to offset Ethics requirements with technical training is incorrect because MAS mandates a specific minimum for Ethics/Rules that must be distinct from technical modules. Reclassifying hours is not permitted unless the training was specifically designed and accredited as Ethics/Rules content. There is no provision for an automatic waiver of the Ethics component based on exceeding the total number of technical hours.

Takeaway: Representatives must fulfill specific minimum hour requirements for both Core and Ethics/Rules CPD categories separately to maintain their status under MAS regulations.

Correct: Under Section 39 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), any person who knows or has reasonable grounds to suspect that property represents the proceeds of criminal conduct must disclose this to the Suspicious Transaction Reporting Office (STRO). Furthermore, Section 48 of the CDSA prohibits ‘tipping-off,’ which means the client must not be informed that a report is being filed or that an investigation is underway. Filing promptly ensures compliance with the legal duty to disclose once suspicion is formed.

Incorrect: Seeking an explanation from the client after a suspicion has already been formed carries a high risk of tipping off the client, which is a criminal offense under the CDSA. Internal grace periods or delays for ‘verification’ are not permitted once the threshold of ‘reasonable grounds to suspect’ is met. While the Monetary Authority of Singapore (MAS) is the regulatory body for financial institutions, Suspicious Transaction Reports must be filed specifically with the STRO, which is part of the Commercial Affairs Department (CAD) of the Singapore Police Force.

Takeaway: Suspicious transactions must be reported promptly to the STRO, and any action that might alert the client to the suspicion must be avoided to prevent the offense of tipping-off.

Correct: According to the MAS Guidelines on Complaints Handling and Resolution, financial institutions are expected to acknowledge receipt of a complaint within 2 business days. Furthermore, to ensure objectivity, the investigation must be carried out by a person who is not directly involved in the matter being complained about. A final written response should be provided to the complainant within 20 business days of receiving the complaint.

Incorrect: The timeline of 7 business days for acknowledgement and 30 business days for a final response exceeds the standards set by MAS. Allowing the original relationship manager involved in the dispute to conduct the investigation fails the requirement for independent and objective review. Referring a client directly to the SGX disciplinary committee is incorrect as the standard external dispute resolution path for retail clients is the Financial Industry Disputes Resolution Centre (FIDReC) after the internal process is exhausted. Requiring Board of Directors review for every individual complaint is not a regulatory requirement and would be an inefficient use of resources that could delay the 20-business-day response mandate.

Takeaway: In Singapore, internal dispute resolution must prioritize independence and adhere to the 2-business-day acknowledgement and 20-business-day final response timelines prescribed by MAS guidelines.

Correct: The Securities and Futures Act (SFA) is designed to ensure that Singapore’s capital markets are fair, efficient, and transparent. It achieves this by regulating market operators, intermediaries, and representatives, while also establishing strict market conduct rules to protect investors and reduce systemic risk.

Incorrect: The assertion that the SFA guarantees investors against financial losses is incorrect, as the Act focuses on the integrity of the market process rather than protecting against investment risk or corporate insolvency. Prioritizing the profitability of the exchange operator over market integrity is not an objective of the SFA; rather, it regulates the exchange to ensure public interest is served. Restricting speculative trading is not an objective of the SFA, as speculation provides liquidity; the Act instead focuses on preventing market manipulation and ensuring transparency.

Takeaway: The primary objective of the Securities and Futures Act is to foster a trusted financial environment through the regulation of market conduct and the protection of investor interests.

Correct: Under the Code of Corporate Governance in Singapore, the Nominating Committee is responsible for reviewing the succession plans for directors and ensuring the board has the appropriate balance of skills, experience, and knowledge. When a gap in expertise is identified—such as in data protection or technology risk—the NC must proactively identify and recommend candidates who can fill those specific gaps to ensure the board can provide effective oversight of the firm’s risks.

Incorrect: Providing monthly briefings is a good practice for ongoing education but does not replace the NC’s duty to ensure the board’s composition is fundamentally competent for its oversight role. Adjusting director fees is the primary function of the Remuneration Committee, not the NC, and does not solve the competency gap. The board cannot outsource its ultimate oversight responsibility to a third party; it must maintain sufficient internal collective competence to supervise the firm’s activities effectively.

Takeaway: The Nominating Committee is central to ensuring board competency by identifying skill gaps and recommending the appointment of directors with the necessary expertise to oversee specific risks like data protection.

Correct: According to the Securities and Futures Act (SFA) in Singapore, a person is prohibited from sell-shorting unless they have a ‘presently exercisable and unconditional right’ to vest the securities in the purchaser at the time the order is placed. This means the borrowing arrangement or ownership must be legally certain and immediately actionable at the point of trade entry, rather than being a future possibility or a verbal promise of later delivery.

Incorrect: The requirement for a valid sell order is not based on end-of-day availability or the ability to procure shares by the settlement date (T+2). Relying on written confirmations of future availability or the expectation of purchasing shares from the market later (covering) does not satisfy the legal threshold of having a ‘presently exercisable and unconditional right’ at the time of the order. Such practices would constitute naked short selling, which is strictly prohibited under Singapore’s regulatory framework to maintain market stability.

Takeaway: In Singapore, a sell order is only compliant if the seller possesses a presently exercisable and unconditional right to vest the securities at the moment the order is entered into the system.

Correct: According to the Securities and Futures (Licensing and Conduct of Business) Regulations, where there is a change in any of the particulars of a representative that are entered in the Register of Representatives (such as the principal place of business), the representative must notify the Monetary Authority of Singapore (MAS) of the change no later than 14 days after the date of the change.

Incorrect: The suggestion of 7 working days is incorrect as it does not align with the statutory 14-day window provided in the SFA regulations. A 30-day period is incorrect because it exceeds the maximum allowable time for updating representative particulars, which could lead to regulatory breaches. While immediate notification is a high standard of professional conduct, the legal requirement specifically mandates a 14-day limit rather than requiring an instantaneous update on the day of the move.

Takeaway: Representatives in Singapore must notify MAS of any change in their principal place of business within 14 days to ensure the Register of Representatives remains accurate.

Correct: Under the Securities and Futures Act and MAS guidelines, for retail offers of certain investment products such as collective investment schemes and structured notes, a Product Highlights Sheet (PHS) must be provided. The PHS is a mandatory, standalone document designed to be clear, concise, and easily understood, typically limited in page length. It serves to ensure that retail investors can quickly grasp the essential features and risks of the product. Providing the full prospectus does not exempt the financial institution from the obligation to provide the PHS.

Incorrect: The requirement to provide a PHS is a regulatory mandate for retail offerings and cannot be waived by the client or the representative. While Specified Investment Products (SIPs) require a Customer Knowledge Assessment (CKA) or Customer Suitability Assessment (CSA), this does not remove the disclosure requirement of the PHS. Furthermore, a verbal summary or the provision of the full prospectus is not a legal substitute for the physical or electronic delivery of the actual PHS document.

Takeaway: The Product Highlights Sheet is a mandatory disclosure document for retail investment products in Singapore that must be provided to ensure key risks and features are accessible and understood.

Correct: In the Singapore regulatory context, the Monetary Authority of Singapore (MAS) and the SGX emphasize that market participants must uphold the ‘Spirit of the Law.’ This means acting with integrity and ensuring fair dealing for all investors. Market reputation is built on trust; therefore, even if a specific technical rule is not broken, conduct that undermines the fairness or transparency of the market can lead to significant reputational damage and regulatory scrutiny. Ibrahim must prioritize the ethical intent of the regulations to protect the firm’s long-term standing.

Incorrect: Focusing solely on the literal text of the SFA or SGX Rulebooks is a narrow approach that ignores the broader regulatory expectations of ethical conduct and the ‘Fair Dealing’ outcomes mandated by MAS. Simply patching a technical loophole or dismissing a report because it lacks a specific legal citation fails to address the systemic risk of an unethical culture, which can eventually lead to a loss of investor confidence and severe enforcement actions by Singaporean authorities.

Takeaway: Upholding the spirit of the law and ethical standards is essential for maintaining market reputation and ensuring long-term regulatory compliance in Singapore’s financial sector.

Correct: Under the Securities and Futures Act (SFA), a person becomes a substantial shareholder when they hold an interest in at least 5% of the voting shares of a listed corporation. The SFA requires the substantial shareholder to notify both the listed corporation and the Monetary Authority of Singapore (MAS) of their status and any subsequent changes in the percentage level of their interest within 2 business days of becoming aware of the change.

Incorrect: Notifying only the SGX is incorrect because the SFA specifically mandates that the notification be sent to the issuer and the MAS. The timeline of 5 business days or 14 business days is incorrect, as the statutory requirement under the SFA is 2 business days. Furthermore, the responsibility to notify the MAS cannot be delegated to the corporation; the substantial shareholder holds the primary legal obligation to inform both the corporation and the regulator.

Takeaway: A substantial shareholder in Singapore must notify both the listed issuer and the MAS within 2 business days of reaching or crossing the 5% voting share threshold.

Correct: Under the Securities and Futures Act (SFA) and SGX-ST Rules, a person is prohibited from selling securities that they do not own (short selling) unless they have a ‘reasonable ground’ to believe they can deliver the securities. In the context of Singapore’s regulatory framework, this typically requires having a legally binding Securities Borrowing and Lending (SBL) agreement or a firm commitment from a lender in place at the time of the trade to ensure the settlement obligation can be met on T+2.

Incorrect: Relying on a general expectation of market liquidity is insufficient and may lead to settlement failure, which is a breach of SGX-ST Rules regarding short selling. Formalizing SBL only after a CDP failure notice is reactive and does not satisfy the requirement to have a delivery mechanism in place at the time of the trade. Utilizing proprietary holdings to cover client short positions without a formal SBL agreement violates rules regarding the proper documentation of securities lending and the clear separation of client and house transactions.

Takeaway: In Singapore, short sellers must have a firm borrowing arrangement or legal commitment in place at the time of the trade to ensure settlement and comply with SGX-ST and SFA requirements.

Correct: According to the Securities and Futures (Licensing and Conduct of Business) Regulations in Singapore, a holder of a Capital Markets Services (CMS) license must provide a contract note to the client by the end of the next business day (T+1). A critical mandatory disclosure in this note is the capacity in which the licensee acted, specifically whether they acted as a principal or as an agent for the client.

Incorrect: The suggestion that contract notes are only required for high-value trades is incorrect, as the regulation applies to all transactions to ensure investor protection. The idea that a client can waive the T+1 requirement for a seven-day delay is false, as the timeline is strictly regulated under the SF(LCB)R. Finally, the name of the securities exchange or market where the trade was executed is a mandatory disclosure item, not an optional one.

Takeaway: In Singapore, contract notes must be issued by the next business day and must include essential details such as the firm’s capacity as principal or agent and the specific exchange used.

Correct: Under Section 82 of the Securities and Futures Act (SFA), no person shall carry on a business in any regulated activity or hold himself out as carrying on such business unless he is the holder of a Capital Markets Services (CMS) license. A person who contravenes this section is guilty of an offense and is liable on conviction to a fine not exceeding $150,000 or to imprisonment for a term not exceeding 3 years or to both. For a continuing offense, a further fine not exceeding $15,000 for every day the offense continues after conviction may be applied.

Incorrect: The suggestion that the SGX handles licensing and composition sums for SFA violations is incorrect, as the MAS is the primary regulator for licensing under the SFA. Retrospective licensing is not a standard regulatory procedure for unauthorized activities; such breaches are treated as criminal offenses. Furthermore, contracts entered into by an unlicensed person may be voidable at the option of the client under Section 339 of the SFA, meaning they are not automatically enforceable by the entity.

Takeaway: Operating a regulated business without a valid CMS license in Singapore is a serious criminal offense under the SFA, carrying heavy fines and potential imprisonment for the individuals involved.

Correct: Under the tax transparency treatment provided by the Inland Revenue Authority of Singapore (IRAS), an S-REIT that distributes at least 90% of its taxable income is not taxed on that income at the corporate level. This ‘pass-through’ mechanism ensures that the income is only taxed once—at the unitholder level—making S-REITs a highly efficient vehicle for income-seeking investors in Singapore.

Incorrect: The other options are incorrect because tax transparency applies specifically to the distributed taxable income, not the total gross revenue. Furthermore, the 90% distribution requirement is a condition for tax transparency, not a mechanism for receiving a tax rebate or a waiver of the MAS-mandated 10% development limit. Gearing ratios are separate regulatory requirements under the Code on Collective Investment Schemes and do not directly dictate the tax transparency status of the REIT’s distributions.

Takeaway: To qualify for tax transparency in Singapore, an S-REIT must distribute at least 90% of its taxable income, which prevents double taxation by shifting the tax liability from the REIT entity to the unitholders.

Correct: In Singapore, FIDReC provides an independent and affordable alternative to the courts for resolving disputes between consumers and financial institutions. The standard procedure requires the consumer to first attempt to resolve the issue with the financial institution. If the final response is unsatisfactory, the consumer should approach FIDReC, typically within six months of that final response. The process begins with mediation, where a FIDReC Case Manager assists both parties in reaching a settlement.

Incorrect: The Monetary Authority of Singapore (MAS) is a regulatory body and does not adjudicate individual commercial disputes or award compensation to investors. The Consumers Association of Singapore (CASE) generally handles disputes related to consumer goods and services, whereas financial disputes are specifically handled by FIDReC. Under FIDReC’s rules, mediation is a mandatory first stage; a complainant cannot skip mediation to go straight to adjudication.

Takeaway: Retail investors must first exhaust the financial institution’s internal grievance process before approaching FIDReC for its two-stage resolution process of mediation followed by adjudication.

Correct: Under the Securities and Futures (Licensing and Conduct of Business) Regulations, CMS licensees are strictly required to segregate customer moneys from their own funds by placing them in a trust account with a specified financial institution. This protects customer assets from the firm’s creditors. Additionally, the SFA mandates the priority of customer orders, requiring that a licensee must not trade for its own account when it has an unexecuted customer order that could be filled on the same or better terms, ensuring the customer’s interests are placed above the firm’s.

Incorrect: Commingling customer funds with operational funds is a direct violation of the segregation requirements under the SFA, even if accounting ledgers are maintained. Using customer money for the firm’s own margin requirements is prohibited as it exposes customer assets to the firm’s credit risk. Prioritizing proprietary orders to establish benchmarks or based on trade volume violates the statutory duty to give priority to customer orders, which is a fundamental conduct of business requirement in Singapore.

Takeaway: CMS licensees must strictly adhere to the segregation of customer assets in trust accounts and ensure the priority of customer orders over proprietary trades to maintain market integrity and investor protection.

Correct: Under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) in Singapore, any person who knows or has reasonable grounds to suspect that property may be connected to criminal conduct must file an STR. The standard is ‘suspicion,’ not ‘proof.’ Furthermore, Section 48 of the CDSA prohibits ‘tipping-off,’ meaning the adviser must not disclose to the client or any third party that a report is being made, as this could prejudice an investigation.

Incorrect: Gathering concrete evidence is incorrect because the legal threshold for reporting is ‘reasonable grounds to suspect,’ and delaying a report for a private investigation may hinder law enforcement. Informing the client about the red flag or the potential report constitutes ‘tipping-off,’ which is a criminal offense in Singapore. Simply terminating the relationship without filing a report is a failure to comply with the mandatory reporting obligations under the CDSA.

Takeaway: In Singapore, the legal obligation to report suspicious transactions to the STRO is triggered by reasonable suspicion, and strict confidentiality must be maintained to avoid the offense of tipping-off.

Correct: In Singapore, the CDP serves as the Central Counterparty (CCP) for trades cleared through it. This is achieved through novation, a legal process where the original contract between the buyer and seller is replaced by two separate contracts: one between the CDP and the buyer, and another between the CDP and the seller. This ensures that the CDP guarantees the performance of the trades, effectively centralizing and managing counterparty credit risk.

Incorrect: Requiring 120% cash collateral in an MAS-escrow account is not a standard CDP requirement for all trades; while brokers may have margin requirements, the CDP’s systemic risk management relies on novation and the Clearing Fund. Physical delivery of certificates is no longer the primary method as Singapore uses a scripless, book-entry settlement system. The Singapore Government and MAS do not provide an unconditional sovereign guarantee for private trading losses; instead, the CDP manages defaults through its own financial resources and contributions from clearing members to the Clearing Fund.

Takeaway: The CDP mitigates systemic counterparty risk in Singapore by acting as a Central Counterparty (CCP) through novation, guaranteeing the settlement of trades.

Correct: Under the PDPA’s Protection Obligation, an organization in Singapore must protect personal data in its possession or under its control by making reasonable security arrangements to prevent unauthorized access, collection, use, disclosure, or similar risks. This obligation remains fully in effect during business continuity and disaster recovery operations, requiring the bank to ensure that even temporary sites and shared workstations meet appropriate security standards for sensitive investment information.

Incorrect: The suggestion that encryption can be waived is incorrect because the Protection Obligation does not provide exemptions for urgency or internal access. The idea that security measures are secondary to business continuity is a misconception; regulatory compliance must be maintained alongside operational resilience. Relying on deemed consent to bypass security controls is a misunderstanding of the PDPA, as consent (deemed or otherwise) relates to the collection, use, and disclosure of data, not the relaxation of security protection standards.

Takeaway: The PDPA Protection Obligation requires continuous and reasonable security arrangements for sensitive client data, even during business continuity exercises or emergency recovery scenarios.

Correct: Under Sections 218 and 219 of the Securities and Futures Act (SFA), insider trading occurs when a person in possession of price-sensitive information that is not generally available deals in securities. For ‘connected persons’ (or those who receive information from them), there is a strict prohibition against trading while in possession of such information. The RM’s claim of using technical analysis or the lack of a paper trail in the CRM does not absolve them of liability if it can be shown they possessed material non-public information through their spouse.

Incorrect: False trading under Section 197 of the SFA relates to market manipulation techniques like wash sales or matched orders intended to create a false appearance of market activity, which is distinct from trading on non-public information. Disclosure of a conflict of interest to an employer is an internal compliance requirement but does not provide a legal defense for insider trading under the SFA. Furthermore, the SFA’s insider trading framework is generally an information-connected regime where the focus is on the possession of the information rather than proving a specific subjective intent to profit.

Takeaway: Liability for insider trading under the SFA is determined by the possession of material non-public information, and professional justifications like technical analysis cannot override these statutory prohibitions.

Correct: In Singapore, when a CPF member turns 55, a Retirement Account (RA) is created. The Full Retirement Sum (FRS) is the benchmark amount used to determine the retirement sum to be set aside. However, a member can choose to set aside only the Basic Retirement Sum (BRS), which is half of the FRS, provided they own a property in Singapore with a remaining lease that covers them until at least age 95. This property is then used as a pledge or charge to allow the withdrawal of RA savings above the BRS.

Incorrect: The suggestion that the ERS is a mandatory ceiling is incorrect; the ERS is the maximum amount a member can choose to top up their RA to receive higher CPF LIFE payouts, but it does not limit total CPF holdings. The recommendation to prioritize BRS regardless of property ownership is incorrect because the BRS option is strictly conditional upon meeting property sufficiency requirements. The statement that these sums are static is incorrect as the BRS, FRS, and ERS are adjusted annually by the government to account for inflation and the rising standard of living.

Takeaway: At age 55, the FRS is the default retirement sum requirement unless the member meets specific property ownership criteria to qualify for the BRS.

Correct: Approach A is correct because it accurately reflects the financial theory behind corporate actions on the SGX. A bonus issue is a ‘book entry’ where reserves are moved to share capital; it increases the number of shares and reduces the price per share proportionally, leaving the total value of the shareholder’s stake unchanged. A rights issue, however, involves an actual cash infusion. While the share price adjusts to a Theoretical Ex-Rights Price (TERP) which is lower than the pre-announcement price, the company’s total value increases by the amount of new capital raised. The long-term impact on shareholder value depends on how effectively the company uses that new capital.

Incorrect: Approach B is incorrect because a bonus issue does not create wealth; it is simply a stock split by another name. Approach C is incorrect because the market capitalization of a company increases after a rights issue by the amount of new capital raised, and bonus issues do not convert debt to equity. Approach D is incorrect because in a renounceable rights issue, shareholders are not ‘forced’ to subscribe; they can sell their ‘nil-paid’ rights on the SGX to realize the value of the subscription privilege, and bonus issues definitely affect the share price (it drops).

Takeaway: While both bonus and rights issues result in a lower share price per unit, a bonus issue is value-neutral at the point of issuance, whereas a rights issue increases the company’s total capital and potential for future growth.