CySEC Basic Examination Mock Exam 1
1. What is the initial capital requirement for UCITS with more than one compartment?
200k euros for each compartment
125k euros for each compartment
200k euros in total for the UCITS
125k euros in total for the UCITS
2. After receiving its authorization, the UCITS may invest its assets according to the law within a period of:
1 month
3 months
6 months
12 months
3. Up to what percentage of additional capital required from an AIFM can be provided in the form of a guarantee by a credit institution?
25%
50%
75%
100%
4. Which of the following situations would not be a potential source of conflict of interest for an AIFM?
Between the AIFM and AIFs managed by the AIFM
Between two AIFs managed by the AIFM
Between an AIF managed by the AIFM and an AIF delegated by the AIFM to another AIFM
Between an AIF managed by the AIFM and a pension fund managed by the AIFM
5. Which of the following duties is not a requirement for effective liquidity management of AIFMs?
Employ an appropriate liquidity management system
Ensure that all investments included in the AIF have at least weekly liquidity
Adopt procedures which enable them to monitor the liquidity risk of the AIF
Ensure that the liquidity profile of the investments of the AIF complies with its underlying obligations
6. Which of the following would not be a permitted investment for UCITS?
10% of total assets in various transferable securities trading on a regulated market of Cyprus
20% of total assets in various money market instruments trading on a regulated market of Germany
10% of total assets in various transferable securities trading on a regulated market in Africa, not included in the list approved by the Minister of Finance and not mentioned in the fund's instruments of incorporation.
20% of total assets in various transferable securities trading on a regulated market in Africa included in the list but not approved by the Minister of Finance and mentioned in the fund's instruments of incorporation.
7. When dealing with an eligible counterparty, the CIF:
Does not need to assess the client’s knowledge and expertise
Needs to warn the client if the particular investment or financial product is not appropriate for them
Needs take all reasonable steps to obtain the best possible result for the client
Needs to provide appropriate information to the client on its order execution policy
8. A suspicious transaction was reported to MOKAS. During further investigations, MOKAS may use as the first point of contact :
The Audit Function
The Board of Directors
The Compliance Fun
The CEO only
9. The price of assets used in the valuation of Undertakings for Collective Investment in Transferable Securities (UCITS), if no stock exchange transaction was made on the date of valuation, would take the:
Previous day's closing price
Valuation day's bid price
Valuation day's ask price
Valuation day's mid price
10. Which of the following is not a condition for AIFMs to delegate to third parties the task of carrying out fun
The AIFM shall notify the competent authority of its home Member State before the delegation arrangements become effective
the AIFM must be able to demonstrate that the delegate is qualified and capable of undertaking the fun
The AIFM can delegate an activity only for a specified time period and the delegation must be withdrawn when this period lapses
the AIFM shall not delegate its fun
11. A potential employee who was bankrupt:
Should not be appointed
Approved and monitoring his activities in the company
Ask for extra reference letters from a bank
No extra measures are needed
12. Who appoints the Compliance Officer in a bank?
CEO
CO
BOD
CBC
13. Company wishes to appoint X and Y but only X appears on the public register, before being appointed Y has to…..
Be pre-approved by CySEC
Do nothing
Pass an internal test
Cannot be appointed
14. Persons are permitted to use inside information to:
Buy and sell the financial instrument for their own account
Indiscriminately communicate to other people
Make investment decisions for clients
Undertake the duties of their position
15. A CIF shareholder increases his shares. For which of the below percentages of ownership, a permission is needed by CBC:
15%-17%
5%-7%
28%-32%
45-48%
16. Information provided to a client via email, if:
There is proof of regular use of the email by the client
The client is working at an IT Company
Customer support prefers sending emails to clients
The client has an IT related degree
17. When redemption of a UCITS, if closed price of the day is not available, then it can be used the:
Closing previous day without adjustments
Closing previous day with adjustments
Latest price
Next day with adjustments
18. A client opens an account in the Bank. It is required enhanced due diligence because:
He is currently unemployed
Deposit of 18,000 EUR
Deposit of 9,000 EUR
His age is under 17years old
19. Bank carries out simplified due diligence:
On a regulated credit institution in France
For non face-to-face customers
For trust accounts
For PEP accounts
20. A CIF authorisation lapses automatically:
If it has not used in the last 3 months
If it has not been used in the first 3 months
No services have been provided in the last 6 months after activation
When they have provided false information
21. VCIC is not required to appoint a depositary as long as:
At least 80% of the shares are marketed through exchange
At least 70% of the shares are marketed through exchange
At least 50% of the shares are marketed through exchange
At least 10% of the shares are marketed through exchange
22. Once a CIF authorisation is withdrawn:
Obligations to be settled within three months
Obligations to be settled within six months
Obligation has to be settled within one month
Obligations has to be settled immediately
23. UCITS units may be redeemed
Within four working days at the value of the unit on the day the request was made
Within four working days at the value of the unit on the day of redemption
Three months after the redemption application
Six months after the redemption application
24. The CEO and the Board of Directors discuss in an evening meeting the acquisition of a specific listed company. The CEO goes home late and tells his wife. She immediately calls a friend and informs her about the acquisition. The next day and following Board instructions, the CEO, calls an advisor who will perform due diligence and informs him about the company’s intention to acquire a third company. Which act was not prohibited?
The disclosure by the CEO of the information to his wife
The disclosure by the CEO of the information to the advisor
The disclosure by the wife of the information to her friend
All of the above
25. The CEO and the BOD discuss the acquisition of a specific company. They call a shareholder to suggest and discuss the idea. A secretary is writing minutes in the meeting. Who of the following might not be a possessor of inside information?
CEO
External auditor
Secretary writing minutes in the meeting
The shareholder
26. Bank submits the insiders list to CySEC:
When requested
Once per month
By 31 January each year
End of June and end of December
27. Alternative Investment Fund Managers Directive provides that:
An EU authorized AIFM may market its units anywhere in EU
An EU authorized AIFM may market its units to professional investors anywhere in EU
An EU authorized AIFM may market its units to professional investors anywhere worldwide
An EU authorized AIFM may market its units to investors anywhere worldwide
28. Client and transaction information must be kept:
For the duration of the relationship
For 5 years from the start of the relationship
For 5 years from the date of transaction
For 5 years after the relationship has expired
29. In case the issuer judges that the public disclosure of inside information may prejudice his legitimate interests, he may apply to CySEC for delayed publication, provided that
The information is only known by the employees of the company
The information is sensitive and if it is published it will have a small impact on the prices of financial instruments
The non-disclosure of the information will be misleading to the public
The issuer is still under negotiations and the agreement is not yet finalized. Disclosing the information now may lead to a collapse in the agreement
30. The obligation of public disclosure by issuers shall be made:
By announcement to CySEC and CSE which list it on the internet site and by announcement to the Internet site of the issuer
By announcement to CySEC
By announcement to CSE
By announcement to the internet site of the issuer
31. The compliance officer must:
Have knowledge of the law and legislation
Have knowledge of the law and legislation and prior experience
Have a senior management position
Have just adequate academic background
32. The spouse of a manager of an issuer, needs to publish a transaction she has made for her own account in financial instruments of the issuer:
By the end of each month
By the end of each year
Prior to the start of the next working day of the stock exchange after the transaction has taken place
By 31 January each year
33. A CIF must monitor the effectiveness of its order execution arrangements regularly in order to:
Report compliance to the Board of Directors
Assess whether the execution venues continue to provide the best possible results for the client
Evaluate the services provided by the execution venues
Ensure that there are enough execution venues to support the clients' orders
34. The stage at which the ultimate beneficiary appears to be holding legitimate funds is the:
Placement
Layering
Integration
Layering & integration
35. Under MiFID, clients are classified as?
Retail, professional or intermediate
Private, professional or intermediate
Private, intermediate or eligible counterparty
Retail, professional or eligible counterparty
36. What is the minimum number of feeder UCITS for a master UCITS, in order to have the choice to raise capital from other investors as well?
2
5
1
10
37. Which of the following may not be generally categorized as a professional client:
A US Investment Firm
A Russian bank
An individual working in an Investment Firm as an investment advisor
A close-end listed investment organization
38. The compliance fun
To the CEO
To the shareholders
To the internal auditor
To the Board of Directors
39. A newly hired employee:
Must receive an induction training to ensure awareness with procedures of the company
No need to go through an induction training program if the employee is from another similar sized company
Must begin from working at the operational level and then moving on to control fun
Enroll on the next scheduled training available
40. What is the max penalty for not complying with the provisions of the Prevention and Suppression of Money Laundering and Terrorist Financing Law:
‚¬125.000
‚¬200.000
‚¬350.000
‚¬341.720
41. A person employed by a CIF must:
Submit a criminal record certificate
Submit his university degrees
Not have a portfolio in another CIF
Be clients of the CIF
42. A CIF when providing information to clients regarding past performance of a Financial Institution, the following information must be provided:
It must disclose the sources and currency
It must disclose the sources, currency and commission paid
It must disclose the sources, currency, commission paid and a warning that the figures are merely historic
It must disclose the sources, currency, commission paid, warning that the figures are merely historic and any assumptions must be disclosed
43. What is a qualifying holding in an investment firm?
50% or more of the share capital or the voting rights
33% or more of the share capital or the voting rights
20% or more of the share capital or the voting rights
10% or more of the share capital or the voting rights
44. What is not a condition for granting authorization by CySEC?
The CIF must have a separate compliance unit
To have at least 2 managerial staff with good reputation and sufficient experience
CYSEC must approve of the shareholders and beneficiaries of the investment firm
The CIF must have its registered office in Cyprus
45. Which information may not be included in the prospectus and key investor information for UCITs:
Short description of the investment objectives and investment policy
Past-performance or performance scenarios
Costs and associated charges
Valuation method
46. Which of the following is an ancillary service:
Investment advice
Placing of financial instruments without a firm commitment
Operating an MTF
Credits and loans
47. When does CYSEC withdraw a CIF’s authorization?
When the CIF has renounced its license
When there are suspicions that a violation may endanger the client’s interests
When the CIF systematically infringes the provisions of the law
If the CIF has not used its license for the last 6 months
48. UCITs in the form of a Variable Capital Investment Company (VICI) may not have a depositary.
It is not allowed. Every UCITS must have a depositary
If the UCITS is listed.
When the board of the VICI undertakes to perform the duties of the depositary as well.
If the VCIC is listed with at least 80% of its shares traded in the stock exchange
49. An AIFM that also offers Portfolio Management with discretionary powers will
Not invest the client’s portfolio in units of the AIF
Obtain prior approval from client before investing his portfolio in units of the AIF
The AIFM cannot have discretionary powers in a portfolio
The AIFM cannot have discretionary powers in a portfolio unless the client has close links with the AIF
50. Whenever a CIF appoints a new director:
The CIF must inform CySEC within 5 days
The CIF must inform CySEC within 1 month
The CIF must inform CySEC within 1 month of the appointment and then obtain approval
The CIF must obtain prior approval from CySEC within 1 month
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