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RES5 — Rules, Ethics and Skills for Financial Advisory Services — Question Sheet

Chapter 1 · 20 questions, random order · answer all, then reveal your score

1. A representative whose status has been revoked by the MAS wishes to challenge the decision. He may: [Medium]
Correct: A. Under Section 33, a person aggrieved by a refusal, revocation or suspension may appeal to the Minister within 30 days of notification, and the Minister's decision is final. (Ref: pp. 1-35; RES5-C01-S18-F001)
2. Which statement best distinguishes an exempt financial adviser from an excluded financial adviser? [Hard]
Correct: A. Exempt FAs carry on FA business but are exempted from the licence requirement. Excluded persons (First Schedule) do not fall within the definition of a financial adviser at all. (Ref: pp. 1-7, 1-8; RES5-C01-S04-F007, RES5-C01-S04-F008)
3. A change occurs in an appointed representative's particulars, and the principal notifies the MAS 22 days later. This is: [Medium]
Correct: D. A change in a representative's particulars must be notified to the MAS no later than 14 days after it occurs, using Form 18. (Ref: pp. 1-32; RES5-C01-S14-F004)
4. An exempt bank describes itself in marketing material as 'licensed by the MAS as a financial adviser'. This is: [Hard]
Correct: B. An exempt person, including its representatives, cannot represent itself as being licensed, regulated, supervised or registered by the MAS. Exempt status is not the same as being licensed. (Ref: pp. 1-14; RES5-C01-S06-F008)
5. The minimum age to be an appointed representative is: [Medium]
Correct: B. An individual must be at least 21 years old to be an appointed representative. (Ref: pp. 1-24; RES5-C01-S10-F011)
6. A principal must retain the information and documents relied on for a fit-and-proper certificate for: [Medium]
Correct: D. Regulation 4A(3) of the FAR requires retention for five years from the date of lodgement — not from resignation or cessation. (Ref: pp. 1-32; RES5-C01-S14-F003)
7. By when must a principal notify the MAS that an individual has ceased to be its representative? [Hard]
Correct: A. Under Section 23(8) read with Regulation 12A, cessation must be notified no later than the next business day — distinct from the 14-day deadline for a change in particulars. (Ref: pp. 1-28; RES5-C01-S11-F005)
8. A principal lodges a document with the MAS that omits a material matter, making the document misleading. The maximum fine is: [Medium]
Correct: D. Under Section 32(1), a false or misleading statement (or a material omission) in a lodged document carries a fine not exceeding S$50,000. A reasonable-inquiries defence exists but the offence is not fine-free by default. (Ref: pp. 1-35; RES5-C01-S17-F001)
9. An exempt fund manager that is also an exempt financial adviser may serve a maximum of how many investors? [Medium]
Correct: D. The total number of qualified investors and accredited investors served should not exceed 30 in total. (Ref: pp. 1-13; RES5-C01-S06-F002)
10. When a provisional representative meets a client in the course of providing financial advice, he must: [Hard]
Correct: A. The principal must ensure the provisional representative is accompanied at all times by an authorised person when meeting any client — a provisional rep cannot meet clients alone. (Ref: pp. 1-32, 1-33; RES5-C01-S14-F005)
11. A person who is neither licensed nor exempt uses the words 'financial adviser' in its business name. The maximum fine on conviction is: [Medium]
Correct: B. Contravening the restriction on the term 'financial adviser' (Section 17) carries a fine not exceeding $12,500 (plus $1,250 per day for a continuing offence). (Ref: pp. 1-19; RES5-C01-S07-F004)
12. The maximum period for which an individual may be a provisional representative is: [Medium]
Correct: D. An individual may only be a provisional representative for a period not exceeding three months from the date of entry in the public register. (Ref: pp. 1-29; RES5-C01-S12-F002)
13. A public accountant, in the course of tax work, gives a client some incidental investment comments. Under the FAA the accountant is most likely: [Medium]
Correct: C. A public accountant whose advisory work is solely incidental to the accounting practice is an excluded financial adviser under the First Schedule and falls outside the definition of a financial adviser. (Ref: pp. 1-8, 1-9; RES5-C01-S04-F009)
14. An overseas adviser relocating to Singapore has 9 months of comparable regulated experience abroad and applies to be a provisional representative. Most likely: [Hard]
Correct: D. A provisional representative generally needs at least 12 months of comparable, recent overseas regulation; 9 months falls short, so the MAS may refuse entry. (Ref: pp. 1-30, 1-34; RES5-C01-S13-F002, RES5-C01-S15-F003)
15. Which of the following IS a regulated investment product under the FAA (that is, NOT excluded)? [Medium]
Correct: A. A life policy is a regulated investment product. General insurance, deposit-taking products and loans/mortgages are excluded from the definition of investment product. (Ref: pp. 1-10, 1-11; RES5-C01-S04-F012, RES5-C01-S04-F010)
16. A licensed financial adviser (as principal) permits an individual who is not an appointed or provisional representative to provide financial advisory services. The maximum fine is: [Hard]
Correct: A. Under Section 22(9), the principal's maximum fine is S$50,000 — double the representative's S$25,000 penalty. (Ref: pp. 1-26; RES5-C01-S10-F016)
17. An appointed representative wishes to act for two principals at the same time. This is: [Medium]
Correct: A. Under Section 27(1), a representative acts for only one principal unless the MAS approves otherwise in writing; an appointed representative may act for related corporations. (Ref: pp. 1-23; RES5-C01-S10-F003, RES5-C01-S10-F004)
18. A licensed financial adviser may describe itself as 'independent' only if: [Hard]
Correct: D. All three conditions in Section 21(1) must be met: no commission/benefit creating product bias, freedom from restriction on products recommended, and no conflict of interest from association with a product provider. (Ref: pp. 1-19, 1-20; RES5-C01-S08-F001)
19. Orchid Advisory carries on a business advising clients on unit trusts. It holds no financial adviser's licence and is not an exempt financial adviser. Which statement is correct? [Easy]
Correct: C. Under Section 6(1) of the FAA, no person may act as a financial adviser unless licensed or exempt. Neither a qualified director nor disclosure removes that requirement. (Ref: pp. 1-7; RES5-C01-S04-F001)
20. Under the FAA, a licensed financial adviser is: [Medium]
Correct: B. For the definition of a financial adviser, 'person' means a corporation and not an individual; individuals act as representatives. (Ref: pp. 1-7; RES5-C01-S04-F004)

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