SMR, 2015

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Questions and Answers

Which requirement is essential for the administration of a collective investment scheme?

Written constitution requirement (correct)

Safeguarding client's assets

Annual reports and financial statements

Use of third party holders of clients' money

What must a license application include according to market operator requirements?

Details of significant influence over management (correct)

Record keeping practices

Prospectus of the collective investment scheme

Names of all third-party service providers

Which of the following actions can lead to the revocation of a capital markets services licence?

Suspension from trading

Modification of market operator regulations

Failure to submit annual reports (correct)

Changes to systems

What is a key requirement concerning the use of clients' money in a collective investment scheme?

Compliance with anti-money laundering requirements Signup and view all the answers

In which context is the requirement for a prospectus particularly emphasized?

Marketing foreign property collective investment schemes Signup and view all the answers

What aspect does supervision of market operators most heavily focus on?

Conduct of business and integrity Signup and view all the answers

Which term refers to the delegation of services within collective investment schemes?

Service agreements Signup and view all the answers

Which document is crucial for informing potential investors about a collective investment scheme?

Prospectus of the collective investment scheme Signup and view all the answers

What is required to be included in an advertisement related to an offering or admission to trading?

It must indicate where investors can obtain the prospectus. Signup and view all the answers

Which of the following statements about advertisements is true?

Advertisements must be approved by a holder of a capital markets services licence. Signup and view all the answers

What is the purpose of the bold statement in a written advertisement?

To clarify that it is an advertisement and not a prospectus. Signup and view all the answers

Which of the following types of communication qualifies as an advertisement under the regulations?

A catalog containing financial product offerings. Signup and view all the answers

How should the information in an advertisement compare to the information in a prospectus?

It must be accurate and not misleading. Signup and view all the answers

What is the Authority required to ensure about an applicant before granting a licence for investment services?

That the applicant and its systems satisfy all necessary requirements. Signup and view all the answers

What is explicitly stated in the regulations regarding how advertisements should be recognized?

They should be clearly recognizable as advertisements. Signup and view all the answers

In assessing an applicant's risks, which of the following factors is considered?

The activities of the applicant and the associated risks they pose. Signup and view all the answers

What is a potential consequence of not following advertisement regulations as described?

The advertisement could be deemed misleading or inaccurate. Signup and view all the answers

Which mode of advertisement is NOT mentioned in the regulations?

Printed pamphlets distributed at public events. Signup and view all the answers

Which factor is NOT explicitly mentioned as part of determining an applicant's fitness and propriety?

The applicant's market share in global investments. Signup and view all the answers

What may the Authority consider regarding the applicant's home state regulations?

The regulatory framework that the applicant needs to comply with. Signup and view all the answers

In terms of advertising, what must be avoided to ensure the integrity of the offering?

Using vague language that can confuse investors. Signup and view all the answers

What constitutes an 'advertisement' according to the stated regulations?

Any information disclosed in oral or written form concerning an offering. Signup and view all the answers

Which of the following actions can the Authority take when considering a licence application?

Conduct any necessary enquiries regarding the applicant. Signup and view all the answers

What is the primary requirement for reporting entities regarding the release of price sensitive information?

It must be disclosed without delay to the market as a whole. Signup and view all the answers

Under what condition can a reporting entity delay disclosing price sensitive information?

If there is an unexpected event that requires clarification. Signup and view all the answers

What must a reporting entity do when there is a risk of information leaking before a full announcement?

Make a holding announcement outlining the situation and reasons for the delay. Signup and view all the answers

Which type of price sensitive information does not require a new announcement?

Interest rate changes that are already publicly available. Signup and view all the answers

What responsibilities do reporting entities have concerning the accuracy of price sensitive information?

They are required to ensure the information is detailed, accurate, and not misleading. Signup and view all the answers

What impact does the requirement for fee access to information have on a reporting entity's obligations?

Entities must still announce the information regardless of any fees. Signup and view all the answers

What constitutes price sensitive information for reporting entities?

Details that can affect stock prices if disclosed publicly. Signup and view all the answers

What should reporting entities do if they have price sensitive information but are not yet ready for a full announcement?

Make a holding announcement with an outline of the planned announcement. Signup and view all the answers

How does the obligation of announcing price sensitive information relate to general knowledge within the market?

Entities must communicate even lesser-known information that could impact prices. Signup and view all the answers

What obligation does a reporting entity breach by providing price sensitive information on a selective basis?

Continuing obligation of disclosure Signup and view all the answers

When must a reporting entity correct inaccurate or misleading information in a market announcement?

As soon as they become aware Signup and view all the answers

What must a reporting entity do if it has securities listed in multiple jurisdictions?

Coordinate the release of price sensitive information across all jurisdictions Signup and view all the answers

What type of license permits an individual to carry out one or more regulated activities on behalf of another?

Representative's license Signup and view all the answers

Which of the following activities can a holder of a representative's license perform?

Carry on any regulated activities a holder of a capital markets services license is authorized for Signup and view all the answers

What is the requirement for a reporting entity regarding delays in reporting to the Authority?

They must report without delay regardless of other markets Signup and view all the answers

What type of license is required to conduct business as a capital markets service provider?

Capital markets services license Signup and view all the answers

If a reporting entity realizes it has disclosed information inadequately, what must it do?

Make a full announcement to the market immediately Signup and view all the answers

What action must a reporting entity take if the disclosure requirements are stricter in another jurisdiction?

Disclose the same information in both jurisdictions Signup and view all the answers

What happens when a reporting entity fails to meet its continuing obligations of disclosure?

It may incur penalties or sanctions Signup and view all the answers

Study Notes

Capital Markets Services Licences

Capital Markets Services Licence allows a person to carry out business in one or more regulated activities for a fee.
Representative's Licence allows an individual to carry out one or more regulated activities on behalf of a company that holds a capital markets services licence.
Licence Requirements
- Applicant must satisfy requirements in the Order (Brunei Darussalam's legislation) and relevant Regulations.
- Applicant must be "fit and proper" for the licence - This includes assessment of the systems that they operate or plan to operate, their organisational structure, and any potential risk to Brunej Darussalam's reputation or financial system.
Licence Scope
- The Authority may grant a licence to a company to operate a securities exchange or a clearing house, if they satisfy the relevant requirements, including maintaining an official list of securities in a proper and independent manner.
- The Authority may also consider any detrimental effect on the integrity or reputation of Brunei Darussalam when evaluating an applicant for a licence.

Reporting Entities and Price Sensitive Information

Reporting Entities are required to disseminate unreleased price sensitive information to the market without delay.
Price Sensitive Information is any information relating to a reporting entity that is not publicly known and that could significantly affect the value of a reporting entity's securities.
Examples of Price Sensitive Information include: material changes to the financial condition, earnings, or operations of the reporting entity.
Dissemination of Price Sensitive Information should be done without delay and ensure that the information is accurate, not misleading, and detailed enough for investors to make informed investment decisions.

Prospectus of Collective Investment Schemes

Prospectus is required to be published for all collective investment schemes, including foreign collective investment schemes. Investors should not subscribe for any securities based on an advertisement without referring to the prospectus.
Types of Prospectus
- Private Collective Investment Scheme: This type does not require a public prospectus, but the information provided should be accurate and not misleading.
- Recognised Collective Investment Scheme: This type is regulated by the Authority and requires a prospectus for public investors.
- Foreign Property Collective Investment Scheme: This type requires a prospectus that outlines the investment's objectives, risks, and management structure.

Other Key Points

Anti-Money Laundering Requirements must be adhered to by all collective investment schemes.
Record Keeping is a crucial part of compliance for all market operators, including reporting entities and collective investment schemes. This includes financial transactions and price sensitive information.
Written Constitution is required for all collective investment schemes.
Advertisement for Collective Investment Schemes must be approved by a licensed person.
The Authority may grant additional directions to market operators.

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Description

This quiz covers the essential aspects of Capital Markets Services Licences, including the scope, requirements, and the roles of different licences. You'll learn about the compliance obligations and the implications for financial entities in Brunei Darussalam. Test your knowledge on how these licences operate within regulated activities and their significance in maintaining market integrity.