Compliance and Eligibility Assessment Quiz

A financial applicant must show they are responsible with their finances by consistently paying commercial debts, banking loans and fulfilling legal obligations. Proof of ability to handle future financial responsibilities is also required.

An applicant must demonstrate that they possess the necessary skills and experience in the field of financial activity. This includes proven experience managing risk effectively within the field.

Financial applicants must provide accurate and complete information and documents. Their records should be clear of any activities that could negatively impact the safety or reputation of the state or authorities.

A financial applicant must demonstrate adherence to all relevant legal requirements for operating within the financial sector as well as general legislation. This includes absence of administrative sanctions from authorities.

An applicant's name should not appear on any international sanction lists issued by organizations like the UN. These lists typically include individuals or entities associated with activities like money laundering, terrorism financing or illegal organizations.

Applicant, their partners, or board of directors must have a clean record. They should not be involved in any serious crimes or violations within the past five years, nor have moderate violations within the past two years.

Applicants are expected to have a clear record with no active investigations, either administrative or criminal, pending at the time of submitting their application.

The applicant must demonstrate an understanding of the financial activity, be capable of managing risks effectively and possess experience applying that knowledge in a practical setting. This includes experience managing financial operations and mitigating risk.

Ensuring that the chosen external party meets all necessary standards and qualifications before entrusting them with tasks.

Maintaining oversight of outsourced work to ensure tasks are completed correctly and obligations are met.

Having a plan for handling emergencies and mitigating risks related to outsourcing.

Making sure that outsourcing doesn't hinder the ability to fulfill obligations to clients, the Authority, and maintain control.

Protecting confidential information and data when outsourcing tasks to external parties.

The core functions of the license applicant cannot be entirely outsourced to other companies.

The written agreement between the license applicant company and the external party performing the outsourced work.

Providing the Authority with copies of the outsourcing contract and any subsequent modifications.

The general partner manages every aspect of the private equity fund, including its assets, investments, and operational decisions, aligning with the fund's investment strategy.

At least once a year, the general partner must perform a detailed valuation of the fund's assets based on the financial reports of the companies where the fund invests.

A private equity fund must calculate its net asset value and unit price every three months, using international valuation standards and fair value principles.

A venture capital fund invests in high-risk assets, such as new projects, innovative technologies, or distressed companies, with the potential for high returns.

At least 70% of a venture capital fund's assets must be invested in either equity instruments of unlisted companies, loans to unlisted companies, or loans to new or distressed projects.

A venture capital fund can invest in other venture capital funds but these investments must be limited to no more than 10% of the fund's assets.

Venture capital funds are subject to similar regulations as other investment funds but also have specific investment restrictions defined by law.

A venture capital fund can invest in publicly traded companies but such investments cannot exceed 30% of its total assets.

An open-ended investment fund that tracks the components of a specific index, providing investors with broad market exposure.

The specific index that an ETF tracks. Examples include the S&P 500 or a sector-specific index.

The document that provides detailed information about an ETF, including its investment strategy, fees, and risks.

The difference between the buying price (ask) and the selling price (bid) of an ETF unit.

The way an ETF's units are issued and redeemed.

The allowed deviation of an ETF's performance from the index it tracks.

The minimum liquidity of an ETF's underlying components.

The ETF's investment strategy, outlining how it invests in the components of the index.

The evaluation reports must be shared with certain key parties, including the fund's management company, investment manager, administrative services company, and auditor. The reports must also be provided to the SCA as requested.

The individual or team responsible for assessing the fair value of in-kind shares must be independent from the fund and any related parties. This prevents potential conflicts of interest and ensures an unbiased assessment.

In-kind shares must be able to be sold easily, meaning they can be converted into cash without significant difficulty. This ensures the fund can liquidate the shares if necessary.

In-kind shares must be valued by two independent evaluators, and the lower value of the two assessments is used. This practice helps ensure a conservative and reasonable valuation.

The evaluator must have extensive experience in evaluating assets, including a minimum of three years specifically in the field of evaluating in-kind shares. This ensures they have the necessary expertise.

In addition to general licensing requirements, evaluators of in-kind shares must also possess a specific license or approval from the relevant authority for valuation. This signifies they are qualified to perform evaluations.

If there are no publicly announced market prices for the in-kind shares at the time of evaluation, if the last announced price is over three months old, or if trading is limited and inactive, both evaluators must be licensed financial advisers. This helps ensure a reliable valuation in these situations.

The in-kind shares must be consistent with the investment fund's prospectus and investment policy. This ensures that the shares align with the intended investment strategy and objectives.

Identification, evaluation, and management of risks, ensuring the risk officer advises the board and senior management.

Clear processes to monitor and control identified risks, ensuring the firm's financial health.

A guide that outlines the policies and processes for ensuring compliance with relevant legislation.

The compliance officer must have independent access to resources, including qualified employees.

The compliance officer has unrestricted access to records, board of directors, and senior management.

Immediate reporting and corrective actions are taken for any compliance violations.

A guide outlining the procedures and mechanisms for internal audits to ensure compliance with rules and regulations.

The internal auditor works independently and has access to all records and information.