| LGST605: Financial Advisers Law and Compliance |
Instruction:
Note: The instructor reserves the right to make minor changes to the questions (e.g. correcting typos) before the exam.
1. Explain different categories of “investors” under Singapore’s Securities and Futures Act.
2. Explain the balanced scorecard regime for financial advisers under Singapore law.
3. Explain how a financial adviser should disclose fees and remuneration of the advisory services provided to a client.
4. How should a financial advisory firm proceed with customer knowledge assessment and service?
5. Discuss the role of the board and senior management in ensuring the fair treatment of customers.
6. Discuss the role and responsibility of an “independent sales audit”.
7. Explain the definition of “financial adviser” and “financial advisory service” under Singapore law.
8. Ellen is from a super-rich family that was one of the richest in Southeast Asia. Linda is her financial adviser. Explain to Linda what she should provide or explain to Ellen if Linda recommends Ellen to buy
(1) an investment-linked life insurance policy with a large sum of 2 SMU Classification: Restricted single premium;
(2) a complex structured investments product similar to a contingent convertible bond (i.e. so-called CoCo bond) issued by a British bank.
9. Stephen is on the board of FineTech Pte Ltd (FineTech or FT). One manager of FineTech proposes the following new products to be promoted to the firm’s customers:
(1) a new form of travel insurance with automated payment if there is a flight delay
(2) a life policy that builds on the concept of social network and the sharing economy. Advise Stephen:
a. whether FineTech should apply for authorization from the Monetary Authority of Singapore (MAS) if FineTech promotes the products listed in (1) and (2) only to customers
b. Assuming FineTech has been licensed by the MAS as a financial adviser, Stephen’s responsible for the products listed in (1) and (2) above.
10. Ben is the head of human resources in Cristal Financial Advisory Services Pte Ltd. Explain to Ben the following under Singapore law:
a. What are the criteria to determine whether a representative is ‘fit and proper’?
b. Donald recently resigned from his previous employment citing family reasons. However, through personal contact, it was found that Donald’s last two Balanced Scorecard scores were rated as ‘E’. Is it okay to hire Donald, who is known to have a good sales record in the past?
