HKSI Paper 1 English Quiz Number 9
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HKSI Paper 1 English Quiz 9 – 2018
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Question 1 of 30
1. Question
Which of the follwing section/s defines the conditions to become a substantial shareholder or continue to become a substantial shareholder of a licensed corporation as per Securities and Futures Commission?
I. Section 130 Schedule 1(3)
II. Section 131 Schedule 1 (4)
III. Section 131 Schedule 1 (5)
IV. Section 131 Schedule 1 (6)Correct
1.5 The status of substantial shareholder has special relevance to the application of the licensing regime. A person may not become or continue to be a substantial shareholder of a licensed corporation without first being approved by the SFC as such (s. 131 and Schedule 1(6), SFO).
Incorrect
1.5 The status of substantial shareholder has special relevance to the application of the licensing regime. A person may not become or continue to be a substantial shareholder of a licensed corporation without first being approved by the SFC as such (s. 131 and Schedule 1(6), SFO).
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Question 2 of 30
2. Question
What percentage nominal value required to become a substantial shareholder in a licensed corporation as per Securities and Futures Ordinance?
I. Minimum 2% of nominal value
II. More than 3% of nominal value
III. More than 5% of nominal value
IV. More than 10% of nominal valueCorrect
1.6 A substantial shareholder of a corporation is formally defined in s. 6, Schedule 1, SFO. In simple terms for the purposes of this manual, it may be taken to refer to a person who alone or together with his associates:
(a) has an interest of more than 10% of the nominal value of the issued share capital of the corporation;
(b) directly or indirectly has more than 10% of the voting power of the corporation at a general meeting; or
(c) is able to exercise 35% or more of the voting power of another corporation at a general meeting which in turn has more than 10% of the voting power of the corporation at a general meeting.
Note: The above definitions in the SFO of responsible officers, executive directors, executive officers and substantial shareholders are given specific and limited meanings applicable to intermediaries and their associated entities. The respective terms may have other meanings in other situations.Incorrect
1.6 A substantial shareholder of a corporation is formally defined in s. 6, Schedule 1, SFO. In simple terms for the purposes of this manual, it may be taken to refer to a person who alone or together with his associates:
(a) has an interest of more than 10% of the nominal value of the issued share capital of the corporation;
(b) directly or indirectly has more than 10% of the voting power of the corporation at a general meeting; or
(c) is able to exercise 35% or more of the voting power of another corporation at a general meeting which in turn has more than 10% of the voting power of the corporation at a general meeting.
Note: The above definitions in the SFO of responsible officers, executive directors, executive officers and substantial shareholders are given specific and limited meanings applicable to intermediaries and their associated entities. The respective terms may have other meanings in other situations. -
Question 3 of 30
3. Question
Directly or indirectly, what percentage of voting power required at a general board meeting to become a substantial shareholder in a licensed corporation as per the Securities and Futures Ordinance?
I. More than 2%
II. More than 3%
III. More than 7%
IV. More than 10%Correct
1.1 A substantial shareholder of a corporation is formally defined in s. 6, Schedule 1, SFO. In simple terms for the purposes of this manual, it may be taken to refer to a person who alone or together with his associates:
(a) has an interest of more than 10% of the nominal value of the issued share capital of the corporation;
(b) directly or indirectly has more than 10% of the voting power of the corporation at a general meeting; or
(c) is able to exercise 35% or more of the voting power of another corporation at a general meeting which in turn has more than 10% of the voting power of the corporation at a general meeting.
Note: The above definitions in the SFO of responsible officers, executive directors, executive officers and substantial shareholders are given specific and limited meanings applicable to intermediaries and their associated entities. The respective terms may have other meanings in other situations.Incorrect
1.1 A substantial shareholder of a corporation is formally defined in s. 6, Schedule 1, SFO. In simple terms for the purposes of this manual, it may be taken to refer to a person who alone or together with his associates:
(a) has an interest of more than 10% of the nominal value of the issued share capital of the corporation;
(b) directly or indirectly has more than 10% of the voting power of the corporation at a general meeting; or
(c) is able to exercise 35% or more of the voting power of another corporation at a general meeting which in turn has more than 10% of the voting power of the corporation at a general meeting.
Note: The above definitions in the SFO of responsible officers, executive directors, executive officers and substantial shareholders are given specific and limited meanings applicable to intermediaries and their associated entities. The respective terms may have other meanings in other situations. -
Question 4 of 30
4. Question
Which of the following statement/s is/are true?
I. Authorized Financial Institutions (AFI) including banks, which has the authorization and regulated by the Hong Kong Monetary Authority (HKMA) and Securities Futures Commission (SFC) regulated dealings should have to be registered with the Securities and Finance Commission (SFC) as “Registered Institutions.”
II. Authorized Financial Institutions (AFI) excluding banks, which has the authorization and regulated by the Hong Kong Monetary Authority (HKMA) and Securities Futures Commission (SFC) regulated dealings should have to be registered with the Securities and Finance Commission (SFC) as “Registered Institutions.”
III. Authorized Financial Institutions (AFI) including banks, which has the authorization and regulated by the Hong Kong Stock Exchange (HKSE) and Securities Futures Commission (SFC) regulated dealings should have to be registered with the Securities and Finance Commission (SFC) as “Registered Institutions.”
IV. Only banks, which has the authorization and regulated by the Hong Kong Monetary Authority (HKMA) and Securities Futures Commission (SFC) regulated dealings should have to be registered with the Securities and Finance Commission (SFC) as “Registered Institutions.”Correct
1.1 AFIs (including banks) that are authorized and regulated by the HKMA and conduct the SFC regulated activities must be registered with the SFC as “Registered Institutions”, such status having been set up as a special category because of the special features of AFIs. They are jointly regulated by the HKMA and the SFC, with the HKMA being the front-line regulator that will apply all SFC regulatory criteria, including fitness and properness and business conduct, other than capital adequacy, the handling of client money and the audit requirements in supervising them. All references to registration will generally apply to this category as the term “licensing” will be used for all businesses and persons directly supervised by the SFC.
Incorrect
1.1 AFIs (including banks) that are authorized and regulated by the HKMA and conduct the SFC regulated activities must be registered with the SFC as “Registered Institutions”, such status having been set up as a special category because of the special features of AFIs. They are jointly regulated by the HKMA and the SFC, with the HKMA being the front-line regulator that will apply all SFC regulatory criteria, including fitness and properness and business conduct, other than capital adequacy, the handling of client money and the audit requirements in supervising them. All references to registration will generally apply to this category as the term “licensing” will be used for all businesses and persons directly supervised by the SFC.
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Question 5 of 30
5. Question
Who are those professionals exempted from licensing for regulated activities, because they are qualified professionals to engage in such activities?
I. Solicitors
II. Professional accountants
III. Counsels conducting such as Type 4, Type 5, Type 6 and Type 9 regulated activities.
IV. All the aboveCorrect
1.8 There are certain persons some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(a) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions (see section
1.9 below);
(b) trust companies conducting Type 4, Type 5, Type 6 and Type 9 regulated activities wholly incidental to the discharge of their trustee duties;
(c) persons licensed or registered to conduct Type 9 regulated activity who carry out Type 1, Type 2, Type 4 and Type 5 regulated activities solely for the purposes of their Type 9 regulated activity; and
(d) corporations carrying out Type 4, Type 5, Type 6 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company.Incorrect
1.8 There are certain persons some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(a) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions (see section
1.9 below);
(b) trust companies conducting Type 4, Type 5, Type 6 and Type 9 regulated activities wholly incidental to the discharge of their trustee duties;
(c) persons licensed or registered to conduct Type 9 regulated activity who carry out Type 1, Type 2, Type 4 and Type 5 regulated activities solely for the purposes of their Type 9 regulated activity; and
(d) corporations carrying out Type 4, Type 5, Type 6 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company. -
Question 6 of 30
6. Question
Who are those organizations/institutes exempted from licensing for regulated activities, because they are qualified professionals to engage in such activities?
I. Banks
II. Money exchanges
III. Trust companies doing Type 4, Type 5, Type 6 and Type 9 regulated activities.
IV. All the aboveCorrect
1.1 There are certain persons some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(a) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions (see section
1.2 below);
(b) trust companies conducting Type 4, Type 5, Type 6 and Type 9 regulated activities wholly incidental to the discharge of their trustee duties;
(c) persons licensed or registered to conduct Type 9 regulated activity who carry out Type 1, Type 2, Type 4 and Type 5 regulated activities solely for the purposes of their Type 9 regulated activity; and
(d) corporations carrying out Type 4, Type 5, Type 6 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company.Incorrect
1.1 There are certain persons some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(a) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions (see section
1.2 below);
(b) trust companies conducting Type 4, Type 5, Type 6 and Type 9 regulated activities wholly incidental to the discharge of their trustee duties;
(c) persons licensed or registered to conduct Type 9 regulated activity who carry out Type 1, Type 2, Type 4 and Type 5 regulated activities solely for the purposes of their Type 9 regulated activity; and
(d) corporations carrying out Type 4, Type 5, Type 6 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company. -
Question 7 of 30
7. Question
What is/are the other types of activities, a person registered for Type 9 activities can do without licensing in respect of those activities?
I. A Type 9 registered person can also carry out Type 6 activities if they are solely for the purposes of the Type 9 regulated activity.
II. A Type 9 registered person can also carry out Type 1 activities if they are solely for the purposes of the Type 9 regulated activity.
III. A Type 9 registered person can also carry out Type 5 activities if they are solely for the purposes of the Type 9 regulated activity.
IV. A Type 9 registered person can also carry out Type 2 activities if they are solely for the purposes of the Type 9 regulated activity.Correct
1.1 There are certain persons some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(a) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions (see section
1.2 below);
(b) trust companies conducting Type 4, Type 5, Type 6 and Type 9 regulated activities wholly incidental to the discharge of their trustee duties;
(c) persons licensed or registered to conduct Type 9 regulated activity who carry out Type 1, Type 2, Type 4 and Type 5 regulated activities solely for the purposes of their Type 9 regulated activity; and
(d) corporations carrying out Type 4, Type 5, Type 6 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company.Incorrect
1.1 There are certain persons some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(a) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions (see section
1.2 below);
(b) trust companies conducting Type 4, Type 5, Type 6 and Type 9 regulated activities wholly incidental to the discharge of their trustee duties;
(c) persons licensed or registered to conduct Type 9 regulated activity who carry out Type 1, Type 2, Type 4 and Type 5 regulated activities solely for the purposes of their Type 9 regulated activity; and
(d) corporations carrying out Type 4, Type 5, Type 6 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company. -
Question 8 of 30
8. Question
Which of the above statement/s is/are true?
I. Corporations carrying out Type 5, Type 6 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company is excluded from the definition of regulated activity.
II. Corporations carrying out Type 4, Type 5, Type 6 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company is excluded from the definition of regulated activity.
III. Corporations carrying out Type 6 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company is excluded from the definition of regulated activity.
IV. Corporations carrying out Type 4 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company is excluded from the definition of regulated activity.Correct
1.1 There are certain persons some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(a) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions (see section
1.2 below);
(b) trust companies conducting Type 4, Type 5, Type 6 and Type 9 regulated activities wholly incidental to the discharge of their trustee duties;
(c) persons licensed or registered to conduct Type 9 regulated activity who carry out Type 1, Type 2, Type 4 and Type 5 regulated activities solely for the purposes of their Type 9 regulated activity; and
(d) corporations carrying out Type 4, Type 5, Type 6 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company.Incorrect
1.1 There are certain persons some of whose activities might otherwise fit the descriptions of regulated activities listed in Part 1, Schedule 5, SFO, but for the fact that these are specifically excluded from the definitions of regulated activities given in Part 2 of the Schedule. Such persons will not need licensing in respect of those activities. They include:
(a) professional accountants, solicitors and counsel conducting Type 4, Type 5, Type 6 and Type 9 regulated activities that are wholly incidental to their professions (see section
1.2 below);
(b) trust companies conducting Type 4, Type 5, Type 6 and Type 9 regulated activities wholly incidental to the discharge of their trustee duties;
(c) persons licensed or registered to conduct Type 9 regulated activity who carry out Type 1, Type 2, Type 4 and Type 5 regulated activities solely for the purposes of their Type 9 regulated activity; and
(d) corporations carrying out Type 4, Type 5, Type 6 and Type 9 regulated activities solely for their wholly owned subsidiaries, holding companies holding all their issued shares or other wholly owned subsidiaries of the holding company. -
Question 9 of 30
9. Question
What is the maximum validity period for a temporary license issued by Security and Futures Commission?
I. Not more than 9 months
II. Not more than 12 months
III. Not more than 3 months
IV. Not more than 6 monthsCorrect
1.9 The SFC may grant a temporary licence for a period not exceeding 3 months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to conduct certain specified SFC regulated activities (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong. Representatives of licensed and temporary licensed corporations may be given temporary licences for a period not exceeding 3 months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed 6 months over a 24-month period.
Incorrect
1.9 The SFC may grant a temporary licence for a period not exceeding 3 months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to conduct certain specified SFC regulated activities (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong. Representatives of licensed and temporary licensed corporations may be given temporary licences for a period not exceeding 3 months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed 6 months over a 24-month period.
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Question 10 of 30
10. Question
What is/are the condition/s for grating a temporary license?
I. A corporation principally carries on its business overseas, permitting it to carry out certain specified Securities and Futures Commission regulated activities other than 8 and Type 9 in Hong Kong.
II. A corporation not involved in overseas business, and carry out certain specified Securities and Futures Commission regulated activities other than Type 3, Type 7, Type 8 and Type 9 in Hong Kong.
III. A corporation not involved in overseas business, and carry out certain specified Securities and Futures Commission regulated activities other than Type 3, Type 8 and Type 9 in Hong Kong.
IV. A corporation principally carries on its business overseas, permitting it to carry out certain specified Securities and Futures Commission regulated activities other than Type 3, Type 7, Type 8 and Type 9 in Hong Kong.Correct
1.9 The SFC may grant a temporary licence for a period not exceeding 3 months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to conduct certain specified SFC regulated activities (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong. Representatives of licensed and temporary licensed corporations may be given temporary licences for a period not exceeding 3 months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed 6 months over a 24-month period.
Incorrect
1.9 The SFC may grant a temporary licence for a period not exceeding 3 months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to conduct certain specified SFC regulated activities (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong. Representatives of licensed and temporary licensed corporations may be given temporary licences for a period not exceeding 3 months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed 6 months over a 24-month period.
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Question 11 of 30
11. Question
What is the possible temporary permit period a representative of a licensed corporation can get?
I. Maximum 2 months
II. Maximum 3 months
III. Maximum 4 months
IV. Maximum 6 monthsCorrect
1.9 The SFC may grant a temporary licence for a period not exceeding 3 months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to conduct certain specified SFC regulated activities (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong. Representatives of licensed and temporary licensed corporations may be given temporary licences for a period not exceeding 3 months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed 6 months over a 24-month period.
Incorrect
1.9 The SFC may grant a temporary licence for a period not exceeding 3 months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to conduct certain specified SFC regulated activities (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong. Representatives of licensed and temporary licensed corporations may be given temporary licences for a period not exceeding 3 months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed 6 months over a 24-month period.
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Question 12 of 30
12. Question
What is the possible temporary permit period a representative of a temporarily licensed corporation can get?
I. Maximum 6 months
II. Maximum 12 months
III. Maximum 4 months
IV. Maximum 3 monthsCorrect
1.9 The SFC may grant a temporary licence for a period not exceeding 3 months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to conduct certain specified SFC regulated activities (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong. Representatives of licensed and temporary licensed corporations may be given temporary licences for a period not exceeding 3 months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed 6 months over a 24-month period.
Incorrect
1.9 The SFC may grant a temporary licence for a period not exceeding 3 months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to conduct certain specified SFC regulated activities (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong. Representatives of licensed and temporary licensed corporations may be given temporary licences for a period not exceeding 3 months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed 6 months over a 24-month period.
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Question 13 of 30
13. Question
What is the maximum period a temporary license can hold by a representative?
I. 3 months in 24 months
II. 12 months in 24 months
III. 6 months in 24 months
IV. 9 months in 24 monthsCorrect
1.9 The SFC may grant a temporary licence for a period not exceeding 3 months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to conduct certain specified SFC regulated activities (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong. Representatives of licensed and temporary licensed corporations may be given temporary licences for a period not exceeding 3 months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed 6 months over a 24-month period.
Incorrect
1.9 The SFC may grant a temporary licence for a period not exceeding 3 months, subject to conditions, to a corporation which principally carries on its business overseas, allowing it to conduct certain specified SFC regulated activities (other than Type 3 and Type 7 to Type 9 regulated activities) in Hong Kong. Representatives of licensed and temporary licensed corporations may be given temporary licences for a period not exceeding 3 months for the same purpose. The total period for which temporary licences can be held by the same person may not exceed 6 months over a 24-month period.
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Question 14 of 30
14. Question
Which of the following statement/s is/are correct?
I. A provisional license shall be given to the representative license applicant for a period until the licensing application finalized by Securities and Futures Commission.
II. A provisional license shall be given to the representative license applicant for three months maximum irrespective of the issuance of the license by Securities and Futures Commission.
III. No provisional license shall issue to the representative license applicant under any circumstances.
IV. The provisional license shall be given to the representative license applicant if there is a recommendation by Hong Kong Monetary Authority.Correct
1.9 Applicants for representative licences may on application be given provisional licences to cover the period before the decision on a licensing application is finalized by the SFC. The provisional licences shall be revoked upon the approval or refusal by the SFC of the representative’s licence application.
Incorrect
1.9 Applicants for representative licences may on application be given provisional licences to cover the period before the decision on a licensing application is finalized by the SFC. The provisional licences shall be revoked upon the approval or refusal by the SFC of the representative’s licence application.
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Question 15 of 30
15. Question
Which of the following statement is true?
I. The provisional license shall revoke upon the refusal of the license application by the Securities and Futures Commission.
II. The provisional license shall revoke upon approval of the license application by the Securities and Futures Commission.
III. The provisional license shall revoke upon approval or refusal of the license application by the Securities and Futures Commission.
IV. The Provisional license shall revoke upon approval or refusal of the license application by the Hong Kong Monetary Authority.Correct
1.9 Applicants for representative licences may on application be given provisional licences to cover the period before the decision on a licensing application is finalized by the SFC. The provisional licences shall be revoked upon the approval or refusal by the SFC of the representative’s licence application.
Incorrect
1.9 Applicants for representative licences may on application be given provisional licences to cover the period before the decision on a licensing application is finalized by the SFC. The provisional licences shall be revoked upon the approval or refusal by the SFC of the representative’s licence application.
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Question 16 of 30
16. Question
Which of the following statement/s is/are correct?
I. A person not licensed for Type 1 regulated license cannot proclaim as a bond dealer.
II. A person not licensed for Type 1 regulated license cannot proclaim as a bond broker.
III. A person not licensed for Type 1 regulated license cannot proclaim as a security dealer.
IV. All of the aboveCorrect
1.11 Applicants for representative licences may on application be given provisional licences to cover the period before the decision on a licensing application is finalized by the SFC. The provisional licences shall be revoked upon the approval or refusal by the SFC of the representative’s licence application.
Incorrect
1.11 Applicants for representative licences may on application be given provisional licences to cover the period before the decision on a licensing application is finalized by the SFC. The provisional licences shall be revoked upon the approval or refusal by the SFC of the representative’s licence application.
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Question 17 of 30
17. Question
What are the three fitness and properness requirements as per Fit and Proper Guidelines?
I. Financial status or solvency
II. Nationality
III. Educational or other qualification or experience
IV. Ability to carry out regulated activity independentlyCorrect
Incorrect
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Question 18 of 30
18. Question
Who will monitor the compliance issues of Fit and Guidelines regulations mattering to Authorized Financial Institutions?
I. Hong Kong Stock Exchange
II. Auditor
III. Director board members
IV. Hong Kong Monetary AuthorityCorrect
1.9 The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the Fit and Proper Guidelines. These relate to:
(a) financial status or solvency;
(b) educational or other qualifications or experience (having regard to the nature of the functions to be performed);
(c) ability to carry on the regulated activity competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.
These requirements apply to applicants and to licensed and registered persons on an ongoing basis. Compliance with the requirements will be monitored by the HKMA in the case of AFIs and their executive officers and staff, and by the SFC in the case of others.Incorrect
1.9 The corporate (including its officers e.g. directors, managers, etc.) and individual applicants for licensing or registration have to satisfy fitness and properness requirements stated in the Fit and Proper Guidelines. These relate to:
(a) financial status or solvency;
(b) educational or other qualifications or experience (having regard to the nature of the functions to be performed);
(c) ability to carry on the regulated activity competently, honestly and fairly; and
(d) reputation, character, reliability and financial integrity.
These requirements apply to applicants and to licensed and registered persons on an ongoing basis. Compliance with the requirements will be monitored by the HKMA in the case of AFIs and their executive officers and staff, and by the SFC in the case of others. -
Question 19 of 30
19. Question
Which of the following statement/s is/are correct regarding Financial Status or Solvency issues.
I. The individual should not be an undischarged bankrupt in Hong Kong or elsewhere.
II. The individual should not be a recently discharged bankrupt in Hong Kong or elsewhere.
III. The individual should not be currently indulged in bankruptcy or similar nature of proceedings.
IV. All of the above.Correct
1.9 An individual applicant should not, in Hong Kong or elsewhere, be an undischarged bankrupt or a recently discharged bankrupt, be currently involved in bankruptcy or similar proceedings or have failed to meet any judgment debt.
Incorrect
1.9 An individual applicant should not, in Hong Kong or elsewhere, be an undischarged bankrupt or a recently discharged bankrupt, be currently involved in bankruptcy or similar proceedings or have failed to meet any judgment debt.
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Question 20 of 30
20. Question
What is the competence age requirement for an individual?
I. 21 years
II. 25 years
III. 18 years
IV. 28 yearsCorrect
1.16 An individual applicant should meet age requirements (i.e. 18 years for representatives or equivalents) and competence qualifications as listed in the Fit and Proper Guidelines and amplified in the Guidelines on Competence.
Incorrect
1.16 An individual applicant should meet age requirements (i.e. 18 years for representatives or equivalents) and competence qualifications as listed in the Fit and Proper Guidelines and amplified in the Guidelines on Competence.
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Question 21 of 30
21. Question
Name any three characters and integrity requirements essential as per Fit and Proper guidelines mentioned in the Security and Futures Ordinance.
I. No breach of any codes or guidelines promulgated by Security and Futures Commission or other regulators.
II. Must be completed 7 years as a director of a regulated company.
III. Not disqualified by the court from acting as a director as described in the Fit and Proper Guidelines.
IV. Not faced any disciplinary action by any professional associations.Correct
1.9 An individual applicant should satisfy the SFC (or the HKMA as appropriate) that he:
(a) is of good character;
(b) has not breached any codes or guidelines promulgated by the SFC or other regulators;
(c) has not been subject to disciplinary action by professional associations;
(d) has not been disqualified by the court from acting as a director, as detailed in the Fit and Proper Guidelines; and
(e) has not been a director or substantial shareholder of, or been involved in managing, an insolvent corporation.Incorrect
1.9 An individual applicant should satisfy the SFC (or the HKMA as appropriate) that he:
(a) is of good character;
(b) has not breached any codes or guidelines promulgated by the SFC or other regulators;
(c) has not been subject to disciplinary action by professional associations;
(d) has not been disqualified by the court from acting as a director, as detailed in the Fit and Proper Guidelines; and
(e) has not been a director or substantial shareholder of, or been involved in managing, an insolvent corporation. -
Question 22 of 30
22. Question
What is/are the compliance conditions an intermediary should meet while associating with a licensed corporation?
I. Never faced any bankruptcy proceeding
II. Should meet capital requirements
III. Should have met minimum transactions target
IV. Never should have failed to meet a judgment debt.Correct
1.19 An intermediary should:
(a) be able to comply with the capital requirements: for licensed corporations, the FRR; for registered institutions, the HKMA’s capital adequacy requirements; and
(b) not be subject to bankruptcy proceedings or have failed to meet a judgment debt.Incorrect
1.19 An intermediary should:
(a) be able to comply with the capital requirements: for licensed corporations, the FRR; for registered institutions, the HKMA’s capital adequacy requirements; and
(b) not be subject to bankruptcy proceedings or have failed to meet a judgment debt. -
Question 23 of 30
23. Question
What are the competency structures outlined for intermediaries in Fit and Proper Guidelines?
I. Capital shareholding
II. Sound internal control
III. Risk management system
IV. Proper business structureCorrect
1.20 An intermediary is expected to demonstrate that it is competent, in accordance with the Guidelines on Competence, and to conduct its regulated activity efficiently and effectively.
1.21 The guidelines apply to applicants as well as to intermediaries already licensed or registered, as long as they retain this status. Competence includes proper business structures, sound internal control and risk management systems and competent personnel. These are detailed in Appendix A to the Guidelines on Competence.Incorrect
1.20 An intermediary is expected to demonstrate that it is competent, in accordance with the Guidelines on Competence, and to conduct its regulated activity efficiently and effectively.
1.21 The guidelines apply to applicants as well as to intermediaries already licensed or registered, as long as they retain this status. Competence includes proper business structures, sound internal control and risk management systems and competent personnel. These are detailed in Appendix A to the Guidelines on Competence. -
Question 24 of 30
24. Question
What are the characters and integrity requirements as per Fit and Proper Guidelines?
I. Reliability
II. Reputation
III. Police verification certificate
IV. Financial integrityCorrect
1.9 A corporate applicant must be reliable and have a good reputation and financial integrity. It must also meet similar requirements as in section 1.18 above, except for section 1.18(d).
These requirements will have to be satisfied on an ongoing basis after licensing or registration has been obtained.
The SFC carries out vetting tests with the police, the customs and excise authorities and overseas regulators, if necessary, to satisfy itself as regards criminal and disciplinary records.Incorrect
1.9 A corporate applicant must be reliable and have a good reputation and financial integrity. It must also meet similar requirements as in section 1.18 above, except for section 1.18(d).
These requirements will have to be satisfied on an ongoing basis after licensing or registration has been obtained.
The SFC carries out vetting tests with the police, the customs and excise authorities and overseas regulators, if necessary, to satisfy itself as regards criminal and disciplinary records. -
Question 25 of 30
25. Question
What is the type of license for Compliance adviser?
I. Type 3
II. Type 4
III. Type 2
IV. Type 6Correct
1.9 A compliance adviser is a Type 6 licensee or registrant permitted under its licence or certificate of registration to undertake work as a sponsor appointed to act as a compliance adviser under the Listing Rules.
Incorrect
1.9 A compliance adviser is a Type 6 licensee or registrant permitted under its licence or certificate of registration to undertake work as a sponsor appointed to act as a compliance adviser under the Listing Rules.
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Question 26 of 30
26. Question
Whom does Securities and Futures Commission depend on the vetting of an applicant?
I. Police department
II. Customs department.
III. Court order
IV. Excise officialsCorrect
1.22 A corporate applicant must be reliable and have a good reputation and financial integrity. It must also meet similar requirements as in section 1.18 above, except for section 1.18(d).
These requirements will have to be satisfied on an ongoing basis after licensing or registration has been obtained.
The SFC carries out vetting tests with the police, the customs and excise authorities and overseas regulators, if necessary, to satisfy itself as regards criminal and disciplinary records.Incorrect
1.22 A corporate applicant must be reliable and have a good reputation and financial integrity. It must also meet similar requirements as in section 1.18 above, except for section 1.18(d).
These requirements will have to be satisfied on an ongoing basis after licensing or registration has been obtained.
The SFC carries out vetting tests with the police, the customs and excise authorities and overseas regulators, if necessary, to satisfy itself as regards criminal and disciplinary records. -
Question 27 of 30
27. Question
What is the role of a Sponsor as per Fit and Proper Guidelines?
I. To act as a sponsor for listing any securities on a recognized stock market as per the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited.
II. To act as a sponsor for listing any securities on a recognized stock market as per the Rules Hong Kong Monetary Authority on the Stock Exchange of Hong Kong Limited.
III. To act as a sponsor for listing any securities on a recognized stock market as per the resolution of company directors.
IV. To act as a sponsor for listing any securities on a recognized stock market as per the judicial intervention.Correct
1.9 A sponsor is defined as a Type 6 licensee or registrant and permitted under its licence certificate of registration to act as a sponsor in respect of applications for listing of any securities on a recognized stock market under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“Listing Rules”).
Incorrect
1.9 A sponsor is defined as a Type 6 licensee or registrant and permitted under its licence certificate of registration to act as a sponsor in respect of applications for listing of any securities on a recognized stock market under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“Listing Rules”).
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Question 28 of 30
28. Question
Which of the following statement/s is/are true?
I. Apart from the fit and proper requirements sponsors and compliance advisers must meet minimum capital requirements, including a minimum paid-up capital of HK$1 million all times and meet additional Continuous Professional Training.
II. Apart from the fit and proper requirements sponsors and compliance advisers must meet minimum capital requirements, including a minimum paid-up capital of HK$5 million all times and meet additional Continuous Professional Training.
III. Apart from the fit and proper requirements sponsors and compliance advisers must meet minimum capital requirements, including a minimum paid-up capital of HK$8 million all times and meet additional Continuous Professional Training.
IV. Apart from the fit and proper requirements sponsors and compliance advisers must meet minimum capital requirements, including a minimum paid-up capital of HK$10 million all times and meet additional Continuous Professional Training.Correct
1.9 In addition to the general fit and proper requirements discussed above, sponsors and compliance advisers must:
(a) have sufficient expertise and resources;
(b) have their management taking up the ultimate responsibility for the supervision of sponsor work and compliance with applicable laws and regulations;
(c) have at least two Principals (i.e. responsible officers or executive officers appointed by the firm to be in charge of the supervision of the transaction team) at all times. Principals must meet specified requirements, including being responsible officers and having a minimum of 5 years’ relevant corporate finance experience, and have played a substantial role in advising a listing applicant as a sponsor in at least two completed The Stock Exchange of Hong Kong Limited (“SEHK”) initial public offerings (“IPOs”) in the past 5 years;
(d) have effective systems and controls and internal assessment mechanisms;
(e) meet minimum capital requirements, including a minimum paid-up share capital of HK$10 million at all times; and
(f) meet additional CPT requirements.Incorrect
1.9 In addition to the general fit and proper requirements discussed above, sponsors and compliance advisers must:
(a) have sufficient expertise and resources;
(b) have their management taking up the ultimate responsibility for the supervision of sponsor work and compliance with applicable laws and regulations;
(c) have at least two Principals (i.e. responsible officers or executive officers appointed by the firm to be in charge of the supervision of the transaction team) at all times. Principals must meet specified requirements, including being responsible officers and having a minimum of 5 years’ relevant corporate finance experience, and have played a substantial role in advising a listing applicant as a sponsor in at least two completed The Stock Exchange of Hong Kong Limited (“SEHK”) initial public offerings (“IPOs”) in the past 5 years;
(d) have effective systems and controls and internal assessment mechanisms;
(e) meet minimum capital requirements, including a minimum paid-up share capital of HK$10 million at all times; and
(f) meet additional CPT requirements. -
Question 29 of 30
29. Question
What is the minimum Continuous Professional Training period?
I. 5 hours every calendar year
II. 10 hours every calendar year
III. 20 hours every calendar year
IV. 25 hours every calendar yearCorrect
1.9 The SFC expects every individual licensee to undertake a minimum of 5 CPT hours every calendar year for each regulated activity, with proportional hours for those who obtained their licences during the year. The SFC has introduced the concept of licensees falling into different “competence groups”, enabling those who carry on more than one regulated activity to be credited with CPT hours for all regulated activities within the same competence group. For example, whereas a licensee for Type 1 and Type 4 regulated activities would only need to engage in a minimum of 5 CPT hours, a licensee for Type 1 and Type 9 regulated activities would need to engage in a minimum of 10 CPT hours, as the first two regulated activities are under the same competence group while the latter two are not. For details, see paragraph 4.3.3, Guidelines on CPT.
Incorrect
1.9 The SFC expects every individual licensee to undertake a minimum of 5 CPT hours every calendar year for each regulated activity, with proportional hours for those who obtained their licences during the year. The SFC has introduced the concept of licensees falling into different “competence groups”, enabling those who carry on more than one regulated activity to be credited with CPT hours for all regulated activities within the same competence group. For example, whereas a licensee for Type 1 and Type 4 regulated activities would only need to engage in a minimum of 5 CPT hours, a licensee for Type 1 and Type 9 regulated activities would need to engage in a minimum of 10 CPT hours, as the first two regulated activities are under the same competence group while the latter two are not. For details, see paragraph 4.3.3, Guidelines on CPT.
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Question 30 of 30
30. Question
What is the minimum Continuous Professional Training required for Type 1 and Type 9 regulated activities?
I. Minimum 5 hours
II. Minimum 10 hours
III. Minimum 15 hours
IV. Minimum 20 hoursCorrect
1.9 The SFC expects every individual licensee to undertake a minimum of 5 CPT hours every calendar year for each regulated activity, with proportional hours for those who obtained their licences during the year. The SFC has introduced the concept of licensees falling into different “competence groups”, enabling those who carry on more than one regulated activity to be credited with CPT hours for all regulated activities within the same competence group. For example, whereas a licensee for Type 1 and Type 4 regulated activities would only need to engage in a minimum of 5 CPT hours, a licensee for Type 1 and Type 9 regulated activities would need to engage in a minimum of 10 CPT hours, as the first two regulated activities are under the same competence group while the latter two are not. For details, see paragraph 4.3.3, Guidelines on CPT.
Incorrect
1.9 The SFC expects every individual licensee to undertake a minimum of 5 CPT hours every calendar year for each regulated activity, with proportional hours for those who obtained their licences during the year. The SFC has introduced the concept of licensees falling into different “competence groups”, enabling those who carry on more than one regulated activity to be credited with CPT hours for all regulated activities within the same competence group. For example, whereas a licensee for Type 1 and Type 4 regulated activities would only need to engage in a minimum of 5 CPT hours, a licensee for Type 1 and Type 9 regulated activities would need to engage in a minimum of 10 CPT hours, as the first two regulated activities are under the same competence group while the latter two are not. For details, see paragraph 4.3.3, Guidelines on CPT.
