CMFAS Securities Regulations M1 — Questions and Answers
Question 1: Which act primarily governs the securities and futures industry in Singapore?
- Companies Act
- Securities and Futures Act (SFA) (Correct answer)
- Banking Act
- Insurance Act
Correct answer: Securities and Futures Act (SFA)
The Securities and Futures Act (SFA) is the principal legislation governing the securities, futures, and derivatives industry in Singapore.
Question 2: What is the primary role of the Monetary Authority of Singapore (MAS)?
- To collect taxes
- To regulate and supervise the financial sector (Correct answer)
- To manage government spending
- To operate the stock exchange
Correct answer: To regulate and supervise the financial sector
MAS is Singapore's central bank and integrated financial regulator, responsible for supervising all financial institutions.
Question 3: Which of the following activities requires a Capital Markets Services (CMS) licence?
- Selling groceries online
- Dealing in securities (Correct answer)
- Providing accounting services
- Offering insurance policies
Correct answer: Dealing in securities
Dealing in securities is a regulated activity under the SFA that requires a Capital Markets Services licence from MAS.
Question 4: What is the purpose of the Securities and Futures (Licensing and Conduct of Business) Regulations?
- To set tax rates for financial institutions
- To prescribe licensing requirements and conduct standards (Correct answer)
- To determine stock prices
- To regulate real estate transactions
Correct answer: To prescribe licensing requirements and conduct standards
These regulations prescribe detailed requirements for licensing of intermediaries and set out standards of conduct for the financial industry.
Question 5: Who is required to pass the CMFAS examinations?
- All Singapore citizens
- Representatives of licensed financial institutions (Correct answer)
- University professors
- Government employees
Correct answer: Representatives of licensed financial institutions
Representatives who carry out regulated activities on behalf of licensed financial institutions must pass the relevant CMFAS modules.
Question 6: What is the minimum base capital requirement for a holder of a CMS licence for dealing in securities?
- $50,000
- $250,000
- $500,000 (Correct answer)
- $1,000,000
Correct answer: $500,000
A CMS licence holder for dealing in securities is required to maintain a minimum base capital of $500,000 under MAS regulations.
CMFAS Securities Regulations M1
Which act primarily governs the securities and futures industry in Singapore?