CySEC Basic Mock 3

GRIP Investments Ltd is a legally registered UCIT operating out of Cyprus. They decide to invest in money market instruments in France. What is the maximum percent of assets they can invest?

10%
20%
35%
40%

Alligator FX a CIF has decided to establish a branch in Belgium, in order to do this they must provide CySEC with all of the following information except?

Address
Organizational Structure
Persons responsible for management
Initial capital

How many directors are required by CySEC to constantly run the daily operations of a CIF and be part of senior management?

1
2
1 and when needed 2
2 and when needed 3

CySEC has the power to withdraw a CIF authorization based on certain circumstances such as: Providing false or misleading information during the authorization process. Which of the following is not considered a circumstance for withdrawal?

The CIF has not used it license for 6 months.
The CIF no longer meets the conditions which authorization was granted.
The CIF has systematically infringed the laws and regulations.
The CIF falls under different Cypriot legislation outside the scope of this investment services law.

A Cyprus AIFM has outsourced a German company for a certain function, this 3rd Party company has sub-delegated this function to a 4th party in the UK. Which regulator needs to be informed?

Central Bank of Cyprus
Cyprus Securities and Exchange Commission (CySEC)
German Regulator (BAFIN)
UK Regulator (FCA)

A UCIT has invested in OTC derivatives, the market order is of average size, to whom must the UCIT report the order?

Private investors.
Professional investors.
CySEC
Trade repository

Company X has made a capital acquisition of Company Y. At what level must Company X report the acquisition to CySEC?

8% – 13%
13% – 19%
31% – 38%
42% – 49%

Sailor Fx has had its authorization withdrawn, within what time frame must they settle their obligations?

Within one month of receiving the notification from CySEC.
Within three months of receiving the notification from CySEC.
Within six months of receiving the notification from CySEC.
Within 12 months of receiving the notification from CySEC.

Topline Investments has decided to hire Marianna as an executive director based on her proven work experience in the field. But she cannot be appointed, what is Topline Investments waiting for?

Copy Of Academic Qualifications.
For her to pass the CySEC Exam.
Reference letter from her previous employer.
Approval from CySEC.

When implementing an AML policy, which of the following statements is/are correct?

1. All clients should be high-risk

2. All non face to face clients are high risk

3. Face to face clients are low risk.

4. All clients from a specific country can be high risk regardless if face to face or not.

1 + 2 + 3 + 4
2 + 4
2 + 3 + 4
2 + 3

CySEC has discovered that an AIFM which is regulated in another member state and is managing a UCIT established in Cyprus has violated a law. What is the action that CySEC must take?

Revoke the license of the UCIT.
Consult with ESMA regarding the violation.
Consult with the competent authorities in the other member state.
Consult with the EU.

Savine Investments Ltd is a legally registered UCIT operating out of Cyprus. They decide to invest in bonds which have been issued by Deutsche bank. What is the maximum percent of assets they can invest?

10%
15%
20%
25%

Of the following two examples:

a) A newly opened deposit account receives a wire transfer from outside the country.

b) A large cash transaction into a deposit account.

The said transactions might be considered as supicious transactions in what regards?

More likely Money Laundering.
More likely Terrorist Financing.
Money Laundering and Terrorist Financing.
None.

Emily Investments a VCIC has shares listed on the London Stock Exchange (LSE). At what percent are they expected to intervene to prevent the shares from deviating from their net asset value?

2%
3%
5%
7%

Global Quest FX a CIF recently provided an investment service to an individual client. The firm correctly did not make an assesment of the clients knowledge and exepertise, why?

The firm became authorized a month ago.
The client was over the age of 65.
The firm provided execution services only.
The transaction was for an OTC product.

Within what timeframe after the end of the relevant period is a UCIT obligated to provide a publication of the summarised statement of assets and expenses?

15 Days.
1 Month.
2 Months.
4 Months.

What is the best way to correctly describe the required working relationship between the risk management department of an AIFM and the operating units of an AIFM?

The risk management department manages the operating units.
Functionally segregated.
The operating units manage the risk management department.
Horizontally integrated.

A client of a UCIT has decided to redeem their units, within how many working days must the cash value of the units be paid to the client?

One.
Three.
Four.
Five.

In the case an investment firm offers shares or units of an AIF under a portfolio managmeent agreement, what criteria are to be applied from a regulatory standpoint?

A Credit institution (CI) or depository must oversee the activity.
The firm must obtain authorization as an AIFM.
The Firm must be authorized for this purpose.
The marketing of units or shares must fall under regulations.

UCITS implement a synthetic risk and reward indicator methodology which is based on the volatility of the fund. The volatility period covered is usually for how many previous years?

3 Years
5 Years
7 Years
10 Years

According to regulations set out by CySEC, when a CIF deals on own account with regards to a financial instrument this activity is classified as a:

Investment activity.
Non-regulated activity.
Semi-regulated activity.
Non-liable activity.

CySEC has the right to impose additional obligations on an Alternative Investment Fund Manager (AIFM) that has been authorized to market to potential investors in Cyprus:

Provided they are approved by the EU.
Without any restrictions.
As long they are in accordance with common market practice.
Provided they are not stricter than those of the EU.

What type of illegal activity is defined by a client suddenly entering and withdrawing large orders?

Momentum ignition.
Layering.
Quote stuffing.
Placement.

The compliance/AML function has to carry out sample testing of transactions for terrorism financing, this should be carried out:

On a random basis.
At least annually.
Based on the perceived level of Risk.
Based on the directives provided by the regulator.

It has been observed that a CIFs suitability assessment system is flawed for its intended purpose. The observation is found to be justified in the case where?

The firm uses risk based portfolios as part of their main offering.
Extensive client classifications are depended upon.
Possible investments are mainly conducted by risk-profiling tools.
During the advice process the results can be modified.

Julia is a senior level manager in QWE investments limited. QWE is the issuer of a financial instrument named OKM. If Julias spouse purchases shares of OKM for his personal account at 13:00 on Thursday, the transaction must be published by the latest?

15:00 on Thursday.
17:00 on Thursday.
Before the start of the next working day of the stock exchange.
By the end of the next working day of the stock exchange.

The CBC has obtained sensitive data relating to confidential information, with respect to supervision activities the information was made public. What justification did the CBC have to make the data public?

Money laundering played a major role.
The bank had a daughter company operating outside the republic.
Prior approval to release the information was obtained from CySEC
The data released was limited to statistical aggregates.

With regards to money laundering and terrorist financing what is required for a risk-based approach to be effective?

Customers from the same country are placed in the same risk category.
Services provided to customers are treated as low risk where as financial instruments provided to customers are high risk.
The higher the risk classification of a product the higher the amount that is invested in the product.
An accurate differentiation between different types of risk posed by each customer, country, services and financial instruments.

Before granting authorization to a CIF, CySEC must be provided with information regarding the identity of any shareholder who holds at least a minimum of what % of the CIFs of voting rights?

5%
10%
20%
30%

M1 management services Ltd is a management company that manages UCITS in its home state, they have applied to manage a UCITS in Cyprus. CySEC has rejected their application. What is the likely reason for the rejection of M1 by CySEC?

They are only authorized in their home state to manage a different type of UCITS
They only have 3 years experience in UCITS management.
They intend to provide services in Cyprus without establishing a branch.
Despite proceeding they do not intend to appoint a director who is a resident of Cyprus.

In a firm the first point of contact with regards to The Unit for Combating Money Laundering (MOKAS) is?

CEO.
Head of Risk.
Compliance Officer.
Head of Reception and Transmission.

In the case where an AIFM whose client an AIF obtains control over a non listed company, whose exercise of voting rights has become suspended. Control can be defined as more than what % of the companies voting rights?

30%
40%
50%
60%

TMNT Capital Ltds Board of Directors has failed to include the compliance officers duties and responsibilites in their report. The omission of these details is:

Acceptable since the compliance officer is a member of the board of directors.
Likely a breach of the prevention and money laundering regulations.
Acceptable if CySEC has been informed.
Likely to lead to an external auditor from MOKAS visiting for an inspection.

A CIF operating for 6 months has decided to hire a new director. When will the CIF need to notify CySEC of the hiring?

15 Days Prior
30 Days Prior
30 Days After
60 Days After

According to General Guideline 9 – Record Keeping, investment firms need to at a minimum:

Keep audit ex-post records.
Ensure that paper hard copies are kept as a back up electronically.
Maintain adequate recording and retention arrangements.
Keep the records for seven years.

When a CIF executes a transaction for a financial instrument on a regulated market, when should the transaction be reported?

No Later than the close of the same day.
10 Days after
21 Days after
No later than the close of the next business day

CySEC has discovered a foreign IF to be in violation of the stipulated rules and regulations, which of the following actions will CySEC take?

Freeze company assets
Issue a warning
Make a publication in local newspapers
Any revocation of authorisation will be reported to ESMA

Any person who acquires shares in an issuer exceeding 5, 10, 15, 20, 25, 30, 50, or 75% where voting rights are attached to these shares, an notification

must be sent to CySEC showing the changes of voting rights
must be sent to the issuers showing the changes of voting rights
must be sent to CySEC and the issuer showing the changes of voting rights
is not needed as long as this is a subsequent purchase and not an initial one

Depending on the nature of their business CIFs should register with the Investor Compensation Fund (ICF). When should a CIF registered with the ICF be obligated to provide full information regarding the funds to their clients?

On the clients request.
Annually.
Before every new investment.
At the first client meeting.

Which of the following individuals who have a direct relationship with a person effectively managing the operations within an issuer are not obligated to publish all transactions they have made for their own personal account in financial instruments of the issuer?

The managers child who is considered a dependent.
An ex-spouse of the manager that has not lived at the same address for 10 months.
Any partner of the manager according to Cyprus law to be considered a spouse.
An ex-spouse of the manager that has not lived at the same address for 15 months.

The management of Jupiter FX has decided to temporarily cease the license for the trading activity that they received. After what period of inactivity must CySEC revoke their license?

1 year.
6 months.
2 years.
15 months.

John is in posession of data which may be deemed as inside information, however John was able to pass this information to George without breaching or being in violation of any regulations. Why was this possible?

George previously employed John.
John only communicated the details to George verbally.
It was necessary as part of Johns normal business activities.
When John gave the details to George they were already 31 days old.

A CIF has 2 clients, Client X and Client Y. The CIF is offering the same investment product to both. They ask Client X if he understands the proposed investment product they also ask Client Y how much of his investment he can afford to lose in one year. Which question is unreliable with regards to suitability?

Question to Client X
Question to Client Y
Questions to both X and Y
Neither Question to X and Y

BountyFX needs to hire 2 dealers and has decided to hire Samantha and Gordan. However only Samantha appears on the public register, before Gordan can be appointed, BountyFX has too?

Make sure he has the CySEC exam.
Make Sure he has 5 years experience.
Get pre-approval from CySEC
They do not need approval because he has already passed his CySEC exam.

An internally managed AIF, is calculating how much capital is required by CySEC to perform the operations effectively. How much is required for them to manage a portfolio above and below 250 Million?

Up to 5 Million / 200,000
Up to 10 Million / 300,000
Up to 15 Million / 400,000
Up to 20 Million / 500,000

A UCIT had an outstanding track record using algorithmic trading to make profitable deals. Unfortuantely the UCIT which is a common fund has now been dissolved, what would be the reason for this?

Assets are decreased to 10% of the threshold.
Assets are decreased to 15% of the threshold.
Assets are decreased to 20% of the threshold.
Assets are decreased to 25% of the threshold.

A VCIC listed in a stock exchange operating in Germany is not required by law to appoint a depositary as long as?

At least 50% of the VCIC shares are listed in the above exchange.
At least 60% of the VCIC shares are listed in the above exchange.
At least 70% of the VCIC shares are listed in the above exchange.
At least 80% of the VCIC shares are listed in the above exchange.

CySEC Basic Mock 3

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