FTT Securities & Futures Regulations 4

Question 1

What does 'authorised scheme' mean under the SFA?

Accepted Answer

A collective investment scheme constituted in Singapore and approved by MAS to be offered to retail investors

Answer

An authorised scheme is a collective investment scheme (CIS) constituted in Singapore that has been authorised by MAS after review of its prospectus and trust deed, allowing it to be offered to retail investors in Singapore.

Question 2

What is a 'recognised scheme' under the SFA?

Accepted Answer

A collective investment scheme constituted overseas but recognised by MAS to be offered to retail investors in Singapore

Answer

A recognised scheme is constituted overseas (in a jurisdiction with comparable regulatory standards) and recognised by MAS, allowing it to be marketed to retail investors in Singapore subject to the regulatory framework of its home jurisdiction.

Question 3

Under the SFA, what is the definition of an 'accredited investor' (individual)?

Accepted Answer

Net personal assets exceeding S$2 million or annual income of not less than S$300,000

Answer

Under the SFA, an accredited investor (individual) is defined as a person whose net personal assets exceed S$2 million (primary residence capped at S$1 million) or whose annual income is not less than S$300,000. AI status allows access to a broader range of investment products.

Question 4

What is a 'prospectus' under the SFA and why is it required?

Accepted Answer

A document offering securities to the public that must be registered with MAS to ensure full disclosure for investor protection

Answer

A prospectus is a legally required disclosure document that must be registered with MAS before securities are offered to the public. It provides investors with material information about the issuer and the securities to enable informed investment decisions.

Question 5

Which of the following is a 'capital markets product' under the SFA?

Accepted Answer

Securities, units in a collective investment scheme, derivatives contracts, and spot foreign exchange contracts (for leveraged trading)

Answer

Capital markets products under the SFA include a broad range of instruments: securities (shares, bonds, debentures), units in collective investment schemes, derivatives contracts (futures, options, swaps, structured notes), and foreign exchange contracts entered into for investment or leveraged trading purposes.

Singapore FTT Practice Test

Singapore FTT Practice Test

FTT Securities & Futures Regulations 4