CMFAS RES 1A Licensing & Business Operations question: conduct regulated activities without a CMS licence

CMFAS RES 1ALicensing & Business Operations

Which of the following is NOT generally regarded as an exempt financial institution able to conduct regulated activities without a CMS licence?

A A bank licensed under the Banking Act
B A merchant bank regulated by MAS
C A new proprietary trading start-up with no other licence
D A finance company licensed under the Finance Companies Act

Show the answer and explanation

Answer: C. A new proprietary trading start-up with no other licence

Banks, merchant banks and finance companies (and insurers) are exempt financial institutions. A newly incorporated start-up with no other licence is not exempt and would need a CMS licence to conduct regulated activities.

Common mistake

Exemption depends on holding another qualifying regulatory status — it is not available merely because a firm is small or new.

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Related CMFAS RES 1A questions

An individual who has been licensed for derivatives dealing in a comparable overseas jurisdiction for the past 2 years joins a Singapore CMS licence holder and has not yet passed the requisite CMFAS module. Which status allows him to start conducting regulated activities while he sits the examination?A derivatives dealer at Firm X receives a large customer order. A friend at Firm Y, an unrelated broker, asks about its size so he can position ahead of it, and the dealer tells him. Which statement is correct?An accredited investor tells his dealer over the phone that he does not want monthly statements. Separately, a retail customer writes in asking not to receive them. Which statement is correct?

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Original study material mapped to the public CMFAS RES 1A syllabus. Unofficial, not endorsed by MAS or IBF. Verify figures and rules against current guidance before relying on them.