Free Sample Question
Asset Management

Which ONE of the following is excluded from the SFO definition of asset management?

A
Securities contract management
B
Futures contract management
C
Activities wholly incidental to securities dealing
D
Real estate investment scheme management
Subscription Money

What is the responsibility of a licensed asset manager on receiving fund subscription money?

A
Return monies to the client if held for more than two business days
B
Deposit monies in a segregated account if held for more than two business days after receipt
C
Fund subscription money is exempt from Client Money Rules
D
Deposit monies into the licensed asset manager’s house account until the money has to be transferred into the fund
Relevant Persons

The Fund Manager Code of Conduct stipulates that ‘relevant persons’ within a fund management firm are restricted in their personal investment dealings.  Which ONE of the following is NOT considered a ‘relevant person’?

A
An employee of a fund manager who makes recommendations with respect to buying investments
B
Any employee of a fund manager
C
A director of a fund management firm who makes investment decisions on behalf of a client
D
A fund manager employee who makes recommendations on which investments to sell
Connected Persons

Charlie Chang works for Serious Securities as a fund manager and often places trades for client portfolios with a broker that is 100% owned by Serious Securities.  Under the Fund Manager Code of Conduct, which ONE of the following actions taken by Charlie is INAPPROPRIATE?

A
Charlie can negotiate below market rates for depositing client funds with the broker
B
Charlie can insist on best execution standards
C
Charlie can negotiate below market rates for broker commission
D
Charlie can insist that all trades are conducted at arms length
Measuring Spread Limits

Bigco is an asset manager with a fund focused on the technology sector.  It has created an overseas subsidiary, Abroadco, to ease its entry into foreign technology markets.  As per the Code on Unit Trusts and Mutual Funds, how would limits on the spread of investments be calculated?

A
Abroadco’s investments would only be considered if it is incorporated in a recognized jurisdiction
B
Bigco and Abroadco’s investments must be added together to decide whether they exceed the relevant holding limits
C
Only Abroadco’s investments should be considered
D
Bigco and Abroadco’s investments must be separately assessed to determine whether they exceed the relevant holding limits
Insider Dealing

Bertie Ho, a futures dealer, received price-sensitive information from a relative Pansy, secretary to the CEO of a listed Hong Kong corporation, Cheerful Trading.  On realizing the likely impact of the information, Bertie started to sell futures contracts in Cheerful Trading.  Bertie then informed his colleagues about the trade.  Which ONE of the following statements is INCORRECT?

A
Bertie is guilty of insider dealing
B
Bertie is guilty of market misconduct under the Securities and Futures Ordinance because he has disclosed information about a prohibited transaction
C
Pansy is likely to be guilty of insider dealing
D
Bertie is only guilty of insider dealing if the price-sensitive information related to a likely takeover