Podcast
Questions and Answers
What must happen before the Commission can refuse to grant or renew a licence?
What must happen before the Commission can refuse to grant or renew a licence?
- The applicant must be given an opportunity to be heard. (correct)
- The Commission must notify the applicant within 30 days.
- The applicant must provide additional financial information.
- The Commission must conduct an external review.
Which body is allowed to hold a licence as a market operator?
Which body is allowed to hold a licence as a market operator?
- Any registered charity.
- A cooperative society.
- An individual sole trader.
- A body corporate, such as an incorporated partnership. (correct)
What is a requirement for a market operator to maintain their licence?
What is a requirement for a market operator to maintain their licence?
- They must operate in multiple markets.
- They must pass an annual exam.
- They must meet minimum financial requirements. (correct)
- They must have a minimum of five years of experience.
What is the status of the fee paid for the processing of a licence application?
What is the status of the fee paid for the processing of a licence application?
What does the licence granted by the Commission entail?
What does the licence granted by the Commission entail?
Which circumstance would lead to the refusal of a licence application for an individual?
Which circumstance would lead to the refusal of a licence application for an individual?
What type of conviction within the last ten years would disqualify an individual from obtaining a licence?
What type of conviction within the last ten years would disqualify an individual from obtaining a licence?
What does the Commission need to believe about an applicant's character to refuse a licence application?
What does the Commission need to believe about an applicant's character to refuse a licence application?
Which statement is NOT a condition for refusal of a licence application?
Which statement is NOT a condition for refusal of a licence application?
If an applicant is thought to be incapable of performing licence holder duties efficiently, what could this mean?
If an applicant is thought to be incapable of performing licence holder duties efficiently, what could this mean?
What is prohibited in terms of circulating information regarding securities?
What is prohibited in terms of circulating information regarding securities?
Which of the following is considered a manipulative act under the regulations?
Which of the following is considered a manipulative act under the regulations?
What must a person who has insider information about a body corporate do regarding securities transactions?
What must a person who has insider information about a body corporate do regarding securities transactions?
What constitutes a conflict of interest under these regulations?
What constitutes a conflict of interest under these regulations?
Which action could lead to fraud or deceit in connection with securities?
Which action could lead to fraud or deceit in connection with securities?
When is it acceptable for a person to disseminate information about securities?
When is it acceptable for a person to disseminate information about securities?
What should a person do if they receive a benefit for circulating security-related information?
What should a person do if they receive a benefit for circulating security-related information?
What determines the prohibition of dealing in securities based on non-public information?
What determines the prohibition of dealing in securities based on non-public information?
Under what condition can a broker-dealer deal in securities on behalf of another person?
Under what condition can a broker-dealer deal in securities on behalf of another person?
What constitutes a defense if prosecution is instituted against a person for entering into a transaction with privileged information?
What constitutes a defense if prosecution is instituted against a person for entering into a transaction with privileged information?
What does the term 'officer' include in relation to a body corporate?
What does the term 'officer' include in relation to a body corporate?
What is the minimum penalty for someone convicted of an offense under sections 147 to 153?
What is the minimum penalty for someone convicted of an offense under sections 147 to 153?
Which of the following is NOT a condition for a broker-dealer to conduct transactions as an agent?
Which of the following is NOT a condition for a broker-dealer to conduct transactions as an agent?
Which individual is categorized as an 'officer' of a body corporate?
Which individual is categorized as an 'officer' of a body corporate?
Which of the following penalties can be imposed for contravening section 147 to section 153?
Which of the following penalties can be imposed for contravening section 147 to section 153?
What relationship must the other person have with the broker-dealer to satisfy the conditions of transaction execution?
What relationship must the other person have with the broker-dealer to satisfy the conditions of transaction execution?
Who is permitted to deposit a security with an intermediary for lending purposes?
Who is permitted to deposit a security with an intermediary for lending purposes?
What is a consequence of contravening the guidelines on securities lending?
What is a consequence of contravening the guidelines on securities lending?
What is required in a securities lending transaction?
What is required in a securities lending transaction?
Which of the following describes a repurchase agreement?
Which of the following describes a repurchase agreement?
What is required for an individual to engage in margin trading or financing?
What is required for an individual to engage in margin trading or financing?
What action can the Commission take regarding margin trading?
What action can the Commission take regarding margin trading?
What is the main characteristic of margin trading?
What is the main characteristic of margin trading?
What might happen if someone does not follow the guidelines for margin trading and financing?
What might happen if someone does not follow the guidelines for margin trading and financing?
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Study Notes
Licensing and Application Process
- The Commission may request additional information from applicants as needed.
- Applicants or current license holders must be given a chance to be heard before a license can be denied or not renewed.
- Processing fees for license applications are non-refundable.
- If an applicant meets the specific requirements, the Commission must grant a license.
Market Operator License Conditions
- Licenses for market operators, excluding investment advisers, can only be granted to corporate entities or incorporated partnerships.
- Operators must comply with ongoing minimum financial requirements set by the Commission.
- Licenses come with specific conditions outlined by the Commission.
Grounds for License Refusal
- An individual applicant may be denied if they have been adjudged bankrupt, convicted of fraud-related offenses within the last ten years, or lack satisfactory education or professional experience.
- An applicant can also be refused if they are deemed to lack good reputation or ability to perform license duties responsibly.
Securities Lending and Borrowing
- Securities lending involves a temporary exchange of securities, necessitating collateral at least equal in value.
- A repurchase agreement (repo) is a short-term borrowing method where a seller sells securities and agrees to repurchase them shortly at a higher price.
Margin Trading and Financing Guidelines
- The Commission can issue and amend guidelines regarding margin trading and financing practices.
- Participants in margin trading must meet specified capital requirements and comply with related rules.
- Penalties apply for violating margin trading guidelines.
Prohibited Actions in Securities Transactions
- It is illegal to disseminate misleading information about a security’s price based on transactions involving that security.
- Employing deceitful practices, or making untrue statements during securities transactions is prohibited.
Insider Trading Regulations
- Individuals with non-public information related to a corporate entity cannot trade in that company's securities.
- Exceptions exist for licensed brokers who act purely as agents in trades under strict conditions, without advising the trading party.
Legal Consequences
- Violating insider trading laws or misleading securities transactions can lead to fines of 1,000 to 2,500 penalty units or imprisonment for 4 to 5 years.
- Convicted individuals may also be liable for compensation.
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