CMFAS RES 1A The Capital Markets Industry & Participants question: expert

CMFAS RES 1AThe Capital Markets Industry & Participants

An 'expert investor' under the SFA is a person who:

A Has passed the CMFAS examinations
B Carries on a business that involves the acquisition and disposal, or the holding, of capital markets products, whether as principal or agent
C Is any retail investor over a certain age
D Is always an institution

Show the answer and explanation

Answer: B. Carries on a business that involves the acquisition and disposal, or the holding, of capital markets products, whether as principal or agent

SFA section 4A defines an expert investor as a person whose business involves the acquisition and disposal, or the holding, of capital markets products (as principal or agent), the trustee of a prescribed trust, or a person prescribed by MAS (RES 1B guide 5.2.2.3). It is a business-based test, not a wealth or experience test.

Common mistake

EI status turns on the person's business, not on passing an exam, age or personal wealth.

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