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HKSI Paper 6 (Regulation of Asset Management) English Free Trial
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HKSI Paper 6 English Free Preview
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Question 1 of 10
1. Question
The Code of Conduct applies to which of the following?
I. Persons licensed by the SFC
II. Persons registered with the SFC
III. Corporations licensed by the SFC
IV. Auditors and Lawyers with SFC clearanceCorrect
The Code of Conduct applies to all persons licensed by or registered with the SFC, both corporations and individuals and, in that sense, is the primary code on which all others are based.
Incorrect
The Code of Conduct applies to all persons licensed by or registered with the SFC, both corporations and individuals and, in that sense, is the primary code on which all others are based.
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Question 2 of 10
2. Question
Cross trades between client accounts should only be done in the following ways except?
Correct
Cross trades between client accounts should only be done:
(a) if the trades are in the best interests of both clients and in line with their investment objectives and restrictions;
(b) the trades are done at arm’s length at current market value;
(c) the activities are disclosed to both clients; and
(d) the reasons are documented prior to executing the trades.Incorrect
Cross trades between client accounts should only be done:
(a) if the trades are in the best interests of both clients and in line with their investment objectives and restrictions;
(b) the trades are done at arm’s length at current market value;
(c) the activities are disclosed to both clients; and
(d) the reasons are documented prior to executing the trades. -
Question 3 of 10
3. Question
Which of the following statements with regards to the treatment of client money by licensed corporation or associated entity is/are accurate?
I. The licensed corporation or associated entity is required to pay any money held in a segregated account that is not client money out of the account within three business days of becoming aware of the fact.
II. Fund subscription money held by a licensed corporation is subject to the Client Money Rules and will have to be deposited in a segregated account if held for more than two business days after receipt.
III. A failure by a licensed corporation or associated entity to comply with the requirements to pay money into or out of a segregated account in the manner specified, without reasonable excuse or with an intention to defraud, is an offence and the offender is liable to pay penalties and to imprisonment on conviction.
IV. A licensed corporation or associated entity which becomes aware of a failure to meet the requirements to open a segregated account, to pay money into the segregated account or to retain money in the segregated account as specified must report the fact to the SFC within one business day after becoming aware of such failures.Correct
The licensed corporation or associated entity is required to pay any money held in a segregated account that is not client money out of the account within one business day of becoming aware of the fact.
A licensed corporation or associated entity which becomes aware of a failure to meet the requirements to open a segregated account, to pay money into the segregated account or to retain money in the segregated account as specified must report the fact to the SFC within one business day after becoming aware of such failures.
A failure by a licensed corporation or associated entity to comply with the requirements to pay money into or out of a segregated account in the manner specified, without reasonable excuse or with an intention to defraud, is an offence and the offender is liable to pay penalties and to imprisonment on conviction.
Fund subscription money held by a licensed corporation is subject to the Client Money Rules and will have to be deposited in a segregated account if held for more than two business days after receipt.
Incorrect
The licensed corporation or associated entity is required to pay any money held in a segregated account that is not client money out of the account within one business day of becoming aware of the fact.
A licensed corporation or associated entity which becomes aware of a failure to meet the requirements to open a segregated account, to pay money into the segregated account or to retain money in the segregated account as specified must report the fact to the SFC within one business day after becoming aware of such failures.
A failure by a licensed corporation or associated entity to comply with the requirements to pay money into or out of a segregated account in the manner specified, without reasonable excuse or with an intention to defraud, is an offence and the offender is liable to pay penalties and to imprisonment on conviction.
Fund subscription money held by a licensed corporation is subject to the Client Money Rules and will have to be deposited in a segregated account if held for more than two business days after receipt.
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Question 4 of 10
4. Question
The following statements in regards to the SFO are accurate except?
Correct
Under the SFO, the SFC is responsible for operating a single licensing regime.
The SFO defines Type 9 regulated activity as “asset management”.
The SFC derives its licensing powers from Part V, SFO.
A corporation engaging in any activity regulated by the SFO, which includes asset management, will need to be licensed by the SFC.
Incorrect
Under the SFO, the SFC is responsible for operating a single licensing regime.
The SFO defines Type 9 regulated activity as “asset management”.
The SFC derives its licensing powers from Part V, SFO.
A corporation engaging in any activity regulated by the SFO, which includes asset management, will need to be licensed by the SFC.
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Question 5 of 10
5. Question
Paragraphs 7.1 and 7.2, Guidelines on Continuous Professional Training set out relevant topics for CPT purposes. The topics include the following for licensees except?
Correct
Paragraphs 7.1 and 7.2, Guidelines on Continuous Professional Training set out the following as relevant topics for CPT purposes.
(a) For licensees generally:
(i) applicable compliance, legislative and regulatory standards;
(ii) business conduct and ethical standards;
(iii) new financial products in the industry and the associated risk management systems;
(iv) business communication skills and trade practices;
(v) general principles of law;
(vi) computer knowledge;
(vii) basic accounting theories; and
(viii) fundamental economic analysis.Incorrect
Paragraphs 7.1 and 7.2, Guidelines on Continuous Professional Training set out the following as relevant topics for CPT purposes.
(a) For licensees generally:
(i) applicable compliance, legislative and regulatory standards;
(ii) business conduct and ethical standards;
(iii) new financial products in the industry and the associated risk management systems;
(iv) business communication skills and trade practices;
(v) general principles of law;
(vi) computer knowledge;
(vii) basic accounting theories; and
(viii) fundamental economic analysis. -
Question 6 of 10
6. Question
Asset managers must consider the provisions of the Code of Conduct which covers the following except?
Correct
Asset managers must consider the provisions of the Code of Conduct, which cover:
(a) the General Principles, such as honesty, diligence and so on, which are subsequently expanded to cover practical situations;
(b) the position of PIs, who do not need the same protection as retail investors;
(c) the position of analysts who prepare and issue research reports, who need to comply with high standards of integrity and ethical behaviour, particularly where there may be conflicts of interest;
(d) risk disclosure statements that intermediaries are expected to make in their dealings with investors;
(e) additional requirements for specific regulated activities, including dealing in securities listed or traded on the SEHK (Schedule 3, Code of Conduct), dealing in futures and other contracts traded on the HKFE (Schedule 4, Code of Conduct), and securities margin financing (Schedule 5, Code of Conduct); and
(f) electronic tradingIncorrect
Asset managers must consider the provisions of the Code of Conduct, which cover:
(a) the General Principles, such as honesty, diligence and so on, which are subsequently expanded to cover practical situations;
(b) the position of PIs, who do not need the same protection as retail investors;
(c) the position of analysts who prepare and issue research reports, who need to comply with high standards of integrity and ethical behaviour, particularly where there may be conflicts of interest;
(d) risk disclosure statements that intermediaries are expected to make in their dealings with investors;
(e) additional requirements for specific regulated activities, including dealing in securities listed or traded on the SEHK (Schedule 3, Code of Conduct), dealing in futures and other contracts traded on the HKFE (Schedule 4, Code of Conduct), and securities margin financing (Schedule 5, Code of Conduct); and
(f) electronic trading -
Question 7 of 10
7. Question
The general approach and underlying philosophy the SFC adopts in undertaking its statutory regulatory obligations and responsibilities are set out in the following papers except?
I. The Regulatory Framework for Intermediaries
II. The International Organization of Securities Commissions
III. The Multilateral Memorandum of Intermediaries
IV. The Approach to Supervision of IntermediariesCorrect
The general approach and underlying philosophy the SFC adopts in undertaking its statutory regulatory obligations and responsibilities is set out in two papers, the Regulatory Framework for Intermediaries and the Approach to Supervision of Intermediaries.
Incorrect
The general approach and underlying philosophy the SFC adopts in undertaking its statutory regulatory obligations and responsibilities is set out in two papers, the Regulatory Framework for Intermediaries and the Approach to Supervision of Intermediaries.
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Question 8 of 10
8. Question
The SFC will be responsible for the following in regards to a licensed/registered SFC asset manager engaging in the investment management of a product which is registered and approved by the MPFA as an MPF product except?
Correct
Where an asset manager licensed by or registered with the SFC engages in the investment management of a product which is registered and approved by the MPFA as an MPF product, the SFC will be involved as follows:
(a) The SFC will be responsible for:
(i) registering, approving and monitoring investment managers;
(ii) supervising the activities of investment advisers and securities dealers providing services with respect to MPF products; and
(iii) investigating alleged breaches of the SFC Code on MPF Products and taking enforcement action as necessary.Incorrect
Where an asset manager licensed by or registered with the SFC engages in the investment management of a product which is registered and approved by the MPFA as an MPF product, the SFC will be involved as follows:
(a) The SFC will be responsible for:
(i) registering, approving and monitoring investment managers;
(ii) supervising the activities of investment advisers and securities dealers providing services with respect to MPF products; and
(iii) investigating alleged breaches of the SFC Code on MPF Products and taking enforcement action as necessary. -
Question 9 of 10
9. Question
Corporate governance has been defined in various ways, but it can be seen as primarily concerned with the proper relationship between which of the following?
I. A company’s management
II. A company’s board
III. A company’s shareholders
IV. A company’s stakeholdersCorrect
Corporate governance has been defined in various ways, but it can be seen as primarily concerned with the proper relationship between a company’s management, its board and its shareholders, and possibly also its stakeholders
Incorrect
Corporate governance has been defined in various ways, but it can be seen as primarily concerned with the proper relationship between a company’s management, its board and its shareholders, and possibly also its stakeholders
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Question 10 of 10
10. Question
Which of the following best defines a contract or an option on a contract made under the rules or conventions of a futures market?
Correct
The definition of “futures contracts” is somewhat briefer: a contract or an option on a contract made under the rules or conventions of a futures market.
Incorrect
The definition of “futures contracts” is somewhat briefer: a contract or an option on a contract made under the rules or conventions of a futures market.
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