Capital Markets and Corporate Finance in Singapore
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Questions and Answers

What does the secondary market primarily allow investors to do?

  • Manage or transfer their risk (correct)
  • Guarantee profit from investments
  • Acquire new shares directly from companies
  • Increase the value of their assets

    • Which of the following is NOT considered a common derivative product?

  • Options
  • Futures
  • Leverage certificates
  • Bonds (correct)

    • What is the primary focus of Chapter 1 in the Study Guide?

  • Overview of the capital markets ecosystem and regulations (correct)
  • Overview of Initial Public Offer processes
  • Documentation for equity and bond issues
  • Post listing obligations for financial entities

    • What role does the Singapore Exchange (SGX) play in risk management?

    <p>A provider of capital-raising opportunities</p> Signup and view all the answers

    Which chapter discusses the roles of parties involved in equity and bond issues?

    <p>Chapter 2: Raising Capital</p> Signup and view all the answers

    Which sector is NOT mentioned as part of the listings on the Singapore Exchange?

    <p>Technology</p> Signup and view all the answers

    What key process is outlined in Chapter 3 of the Study Guide?

    <p>Initial Public Offer and listing processes</p> Signup and view all the answers

    What was a significant effect of the Asian Financial Crisis of 1997 on Singapore's bond market?

    <p>Diversification of financial services markets</p> Signup and view all the answers

    What aspect of post-listing is highlighted in Chapter 4?

    <p>Delisting process and post-listing obligations</p> Signup and view all the answers

    Which product type is classified under risk management facilitated by SGX?

    <p>Company Warrants</p> Signup and view all the answers

    Which component is included in the Study Guide to enhance understanding of key learning points?

    <p>Practical examples and case studies</p> Signup and view all the answers

    What type of bonds are included in Singapore's bond market post-crisis?

    <p>Quasi-government and local corporate bonds</p> Signup and view all the answers

    Candidates are encouraged to pursue which of the following after passing the CMFAS Examinations?

    <p>IBF accredited programs leading to certification</p> Signup and view all the answers

    Which of the following statements about SGX is incorrect?

    <p>SGX only collaborates with local businesses.</p> Signup and view all the answers

    Which chapter addresses the ethical principles relevant to corporate finance?

    <p>Chapter 1 contains rules and regulations including ethics</p> Signup and view all the answers

    What is the main purpose of the Study Guide's organization?

    <p>To ensure candidates grasp essential rules, ethics, and skills</p> Signup and view all the answers

    What is the primary purpose of the capital markets?

    <p>To raise capital for business activities through securities issuance</p> Signup and view all the answers

    Which regulatory body is responsible for overseeing the capital markets in Singapore?

    <p>Monetary Authority of Singapore (MAS)</p> Signup and view all the answers

    What type of securities might a company issue to raise capital in the primary market?

    <p>Equity securities such as shares</p> Signup and view all the answers

    The process of selling financial instruments once they are issued takes place in which market?

    <p>Secondary market</p> Signup and view all the answers

    Which of the following is NOT a component of the Representative Notification Framework under MAS?

    <p>CGH Compliance Guidelines</p> Signup and view all the answers

    Which regulatory organization is responsible for overseeing trading activities in Singapore?

    <p>Singapore Exchange Regulation Pte Ltd (SGX RegCo)</p> Signup and view all the answers

    What is a common type of risk that investors take on when purchasing securities?

    <p>Performance risk that relates to the company's success</p> Signup and view all the answers

    The rules governing the operations of the Central Depository (CDP) include which of the following?

    <p>CDP Clearing Rules</p> Signup and view all the answers

    What is the purpose of SGX RegCo's establishment?

    <p>To enhance governance and segregate regulatory functions</p> Signup and view all the answers

    Which entity is responsible for the day-to-day regulation of the securities market in Singapore?

    <p>Singapore Exchange Securities Trading Limited</p> Signup and view all the answers

    What distinguishes the Mainboard from Catalist on SGX-ST?

    <p>Mainboard has higher entry and listing requirements than Catalist</p> Signup and view all the answers

    Which body has the authority to impose disciplinary actions for non-compliance with trading rules?

    <p>Singapore Exchange Securities Trading Limited</p> Signup and view all the answers

    Which of the following entities collaborates with SGX on regulatory policies?

    <p>Commercial Affairs Department</p> Signup and view all the answers

    What model does Catalist utilize for companies wishing to list?

    <p>Companies must be brought to list by approved sponsors</p> Signup and view all the answers

    Which agency is NOT mentioned as collaborating with SGX?

    <p>Ministry of Trade and Industry</p> Signup and view all the answers

    What function does SGX RegCo NOT perform?

    <p>Day-to-day trading operations</p> Signup and view all the answers

    What is the Base Capital Requirement (BCR) for a CMS licence holder advising on corporate finance?

    <p>S$250,000</p> Signup and view all the answers

    Which of the following statements about the Capital Markets Services (CMS) licence holder's requirements is true?

    <p>The activities conducted must fall under the regulated activities in the SFA.</p> Signup and view all the answers

    If a corporate finance adviser holds multiple regulated activities, what will their Base Capital Requirement be based on?

    <p>The highest BCR among all activities</p> Signup and view all the answers

    What is the role of the Monetary Authority of Singapore (MAS) in approving CMS licence applicants?

    <p>MAS ensures that applicants will operate honestly and fairly.</p> Signup and view all the answers

    Options on equity indices like SGX Nifty are categorized under which type of derivatives?

    <p>Securities-based derivatives</p> Signup and view all the answers

    What must be true about the substantial shareholders and officers of a CMS licence applicant?

    <p>They must be deemed 'fit and proper' by MAS.</p> Signup and view all the answers

    Which of the following is NOT a reason MAS would reject a CMS licence application?

    <p>The applicant has experience in the relevant field.</p> Signup and view all the answers

    What is one of the conditions for an applicant to be considered for a CMS licence?

    <p>The applicant must operate primarily in Singapore.</p> Signup and view all the answers

    What is the time frame for a CMS licence holder to inform MAS of any change in particulars?

    <p>14 days</p> Signup and view all the answers

    Which of the following is NOT a required change that must be reported to MAS?

    <p>The number of employees</p> Signup and view all the answers

    What may cause a CMS licence to lapse?

    <p>Winding up or dissolving of the licence holder</p> Signup and view all the answers

    What action may MAS take if it believes that a CMS licence holder has not acted in the best interest of its customers?

    <p>Suspend or revoke the CMS licence</p> Signup and view all the answers

    What can happen if a CMS licence holder continues business after its licence has lapsed?

    <p>They may face heavy financial penalties</p> Signup and view all the answers

    Which particular information must be reported if the business operates under a different name?

    <p>Name under which the business is carried on</p> Signup and view all the answers

    What is the primary reason MAS requires updates on changes in particulars?

    <p>For publication and communication with the investing community</p> Signup and view all the answers

    Which of the following may NOT lead to the revocation of a CMS licence?

    <p>Reporting changes in particulars swiftly</p> Signup and view all the answers

    Study Notes

    Capital Markets and Corporate Finance in Singapore

    • Primary Market: Businesses raise capital through securities (shares, bonds, warrants). Investors buy these, taking on risk tied to company performance.
    • Secondary Market: Allows investors to manage or transfer risk through trading in securities, futures, options, or derivatives. SGX (Singapore Exchange) is a key platform in the Asia Pacific region.

    Debt Capital Markets in Singapore

    • Significant diversification in financial services markets, especially after the 1997 Asian Financial Crisis.
    • Singapore's bond market offers various securities, including government, quasi-government, and corporate bonds.

    Regulatory Bodies and Oversight

    • MAS (Monetary Authority of Singapore): Key regulatory body governing capital markets activities.
    • SGX (Singapore Exchange): Provides capital raising and risk management opportunities.
    • SGX RegCo (Singapore Exchange Regulation Pte Ltd): Independent subsidiary focusing on regulatory functions, separated from commercial activities.
    • SGX-ST (Singapore Exchange Securities Trading Limited): Securities subsidiary of SGX, responsible for securities market regulation, rules, and membership.
    • CAD (Commercial Affairs Department): Collaborates with SGX on regulatory policies, risk management, and enforcement.
    • ACRA (Accounting and Corporate Regulatory Authority): Collaborates with SGX.

    Capital Markets Services (CMS) Licence

    • Base Capital Requirement (BCR): S$250,000 for corporate finance advisors. Higher BCR applies if conducting multiple activities.
    • General Criteria: Focus on applicant reputation, established track record (at least 5 years), supervision by home regulatory authority, and "fit and proper" individuals (officers, employees, representatives).
    • Notification of Changes: Changes to business particulars (name, address, activities) must be reported to MAS within 14 days.
    • Lapsing/Revocation/Suspension: Licence lapses on winding up, dissolution, or other MAS-prescribed occurrences. MAS can revoke/suspend for lack of efficiency, honesty, fairness, or acting against customer interests.

    Key Legislation and Rules

    • Securities and Futures Act (SFA) and Regulations: Key legislation governing capital markets activities in Singapore.

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    Related Documents

    CMFAS RES 4 Study Guide (6 June 2024) PDF

    Description

    This quiz explores the intricacies of capital markets and corporate finance in Singapore. It covers the primary and secondary markets, the role of regulatory bodies like MAS and SGX, and the evolution of the debt capital markets post-1997. Test your knowledge on how these components contribute to Singapore's financial landscape.

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