CMFAS RES 2B OTC Derivatives: Reporting, Clearing, Margin & Trading Rules question: account with a CMS licence holder to trade SGX-listed futures

CMFAS RES 2BOTC Derivatives: Reporting, Clearing, Margin & Trading Rules

A client opens an account with a CMS licence holder to trade SGX-listed futures. Months later the client asks to buy an index option listed only on an overseas exchange. Which statements are CORRECT? (a) The licensee had to furnish the regulation 47E risk disclosure document before setting up the account. (b) Before executing the overseas-listed trade, the licensee must furnish the risk warning statement under SFA 04-N12 para 29D and obtain the client's acknowledgement. (c) The risk warning statement may be dispensed with because a futures risk disclosure document was already given. (d) The acknowledgement should be obtained before the trade is executed, not afterwards.

A (a), (b), (c) and (d)
B (a) and (c) only
C (b) only
D (a), (b) and (d)

Show the answer and explanation

Answer: D. (a), (b) and (d)

Section 4.4: reg 47E applies to futures dealing at account set-up (a); overseas-listed products trigger a separate risk warning statement with acknowledgement prior to execution (b) and (d). One document does not substitute for the other, so (c) is wrong.

Common mistake

The reg 47E document and the 04-N12 risk warning are cumulative, not alternatives.

Practise more RES 2B OTC Derivatives: Reporting, Clearing, Margin & Trading Rules questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practising →

Study note: OTC Derivatives: Reporting, Clearing, Margin & Trading Rules CMFAS RES 2Bpractice questions & mock exams

Related CMFAS RES 2B questions

Why does the trading mandate cover USD, EUR and GBP swaps but not SGD swaps?A retail customer fails the Customer Knowledge Assessment but insists on buying a structured OTC derivative. The licensee may proceed only if Ms Rahim signed the account opening forms for a leveraged foreign exchange account with Bedok Futures on 3 February and traded that same afternoon. The firm emailed her the risk disclosure document on 10 February asking her to sign and return it, which she did on 12 February. What is the position?

Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.

Start practising →

Original study material mapped to the public CMFAS RES 2B syllabus. Unofficial, not endorsed by MAS or IBF. Verify figures and rules against current guidance before relying on them.