Module 19 - Advisory Services (Rules And Regulations)
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Consent is freely given when it is not caused by: (i)coercion(ii)misrepresentation(iii)negligence(iv)undue Influence
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(ii) and (iii) only
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(i), (ii) and (iv) only
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(i), (iii) and (iv) only
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All of the above
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About This Quiz
This quiz covers key aspects of advisory services, focusing on rules and regulations under the Capital Markets and Services Act 2007, including consent, securities issuance, and civil remedies.
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- 2.
National First Merchant Bank, on behalf of its client, Twilight Berhad, made an invitation to an identifiable group of investors to subscribe securities of Twilight Berhad which are not yet in issue as part of the listing scheme of Twilight Berhad. The offer may only be made to: (i)directors of Twilight Berhad(ii)employees of Twilight Berhad(iii)persons who have contributed to the success of Twilight Berhad(iv)directors of a company which have contributed to Twilight Berhad’s success
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(i) and (ii) only
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(iii) and (iv) only
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(i), (ii) and (iii) only
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All of the above
Correct Answer
A. (i), (ii) and (iii) onlyExplanation
The correct answer is (i), (ii) and (iii) only. This is because the offer is made to an identifiable group of investors, which includes directors and employees of Twilight Berhad, as well as persons who have contributed to the success of the company. The offer is not limited to directors of other companies that have contributed to Twilight Berhad's success, so option (iv) is not included in the correct answer.Rate this question:
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- 3.
Which of the following statements are CORRECT regarding civil remedies provided under the Capital Markets and Services Act 2007 (CMSA)?(i)Civil action must be commenced within 6 years from the date the cause of action accrues or contravention is discovered whichever is the later(ii)The Securities Commission may only institute civil proceedings after the potential defendant has been charged with a securities offence under the CMSA(iii)An aggrieved party may take civil action under the CMSA without the contravention of a securities offence having been proved against the potential defendant(iv)The right to claim under any other law is lost if a party chooses to initiate a civil action under the CMSA
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(i) and (iii) only
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(ii) and (iv) only
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(ii), (iii) and (iv) only
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All of the above
Correct Answer
A. (i) and (iii) onlyExplanation
The correct answer is (i) and (iii) only. This means that statement (ii) and (iv) are incorrect. Statement (i) is correct because civil action must be initiated within 6 years from the date the cause of action arises or when the contravention is discovered, whichever is later. Statement (iii) is also correct because an aggrieved party can take civil action under the CMSA without the need for a securities offence to be proven against the potential defendant.Rate this question:
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- 4.
What is the minimum level of funds that must be raised by a Special Purpose Acquisition Company through its initial public offering?
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RM150 million
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RM200 million
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RM350 million
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RM500 million
Correct Answer
A. RM150 millionExplanation
The minimum level of funds that must be raised by a Special Purpose Acquisition Company (SPAC) through its initial public offering (IPO) is RM150 million. This means that the SPAC must raise at least this amount of money from investors in order to proceed with its intended acquisition plans.Rate this question:
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- 5.
An applicant submitting proposals to the Securities Commission is required to declare whether it has been subjected to any action by Bursa Malaysia Securities Berhad for breach of listing requirements or rules issued by Bursa Malaysia Securities Berhad during the last ______ year(s) prior to the submission.
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3
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5
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7
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10
Correct Answer
A. 5Explanation
The correct answer is 5. The applicant is required to declare whether they have been subjected to any action by Bursa Malaysia Securities Berhad for breach of listing requirements or rules issued by Bursa Malaysia Securities Berhad during the last 5 years prior to the submission. This means that any actions taken against the applicant by Bursa Malaysia Securities Berhad within the past 5 years must be disclosed.Rate this question:
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- 6.
"Issuance of Islamic Securities involving a partnership arrangement to finance a business venture whereby all parties contribute capital in the form of cash or in kind for the purpose of financing the business"The above describes the Islamic principle of:
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Istisna’
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Murabahah
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Mudharabah
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Musharakah
Correct Answer
A. MusharakahExplanation
The given description describes the Islamic principle of Musharakah. Musharakah is a partnership arrangement where all parties contribute capital, either in the form of cash or in kind, to finance a business venture. In Musharakah, the profits and losses of the business are shared among the partners based on their agreed ratio. This principle promotes cooperation and sharing of risks and rewards in a business venture, aligning with Islamic principles of fairness and justice.Rate this question:
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- 7.
Which of the following is used to determine if an applicant’s operations are predominantly foreign-based for the purposes of listing on the Main Market of Bursa Malaysia Securities Berhad?
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Revenue
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After-tax profit
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Net tangible assets
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Shareholders' funds
Correct Answer
A. After-tax profitExplanation
After-tax profit is used to determine if an applicant's operations are predominantly foreign-based for the purposes of listing on the Main Market of Bursa Malaysia Securities Berhad. This is because after-tax profit reflects the profitability of a company after all taxes have been deducted, and it gives a clearer indication of the company's financial performance. If a company's after-tax profit is predominantly generated from foreign operations, it suggests that the company's operations are primarily based outside Malaysia, making it eligible for listing on the Main Market.Rate this question:
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- 8.
In the event that a group of companies seeks listing on Bursa Malaysia Securities Berhad and no single company within the group is able to fulfil the profit track record requirements, the Securities Commission may consider listing based on the group’s proforma accounts provided that companies within the group which collectively fulfil the profit requirements __________________ over the profit track record period. (i)have common directors(ii)are controlled by Bumiputera(iii)are involved in the same core business(iv)have common controlling shareholders
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(i) and (iv) only
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(ii) and (iii) only
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(iii) and (iv) only
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(i), (iii) and (iv) only
Correct Answer
A. (iii) and (iv) onlyExplanation
The correct answer is (iii) and (iv) only. This means that in order for the Securities Commission to consider listing a group of companies on Bursa Malaysia Securities Berhad when no single company within the group meets the profit track record requirements, the companies within the group must collectively fulfill the profit requirements and also have common controlling shareholders. This suggests that the Securities Commission prioritizes the financial stability and control of the group as a whole, rather than individual companies within the group or other factors such as common directors or being controlled by Bumiputera.Rate this question:
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- 9.
What is the profit requirement to be fulfilled by a retail company seeking listing on Bursa Malaysia Securities Berhad according to the profit test?
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An aggregate after-tax profit of not less than RM12 million over 3 to 5 full financial years and an after-tax profit of not less than RM4 million in respect of the most recent financial year
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An aggregate after-tax profit of not less than RM12 million over 3 to 5 full financial years and an after-tax profit of not less than RM8 million in respect of the most recent financial year
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An aggregate after-tax profit of not less than RM20 million over 3 to 5 full financial years and an after-tax profit of not less than RM6 million in respect of the most recent financial year
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An aggregate after-tax profit of not less than RM30 million over 3 to 5 full financial years and an after-tax profit of not less than RM10 million in respect of the most recent financial year
Correct Answer
A. An aggregate after-tax profit of not less than RM20 million over 3 to 5 full financial years and an after-tax profit of not less than RM6 million in respect of the most recent financial yearExplanation
According to the profit test for a retail company seeking listing on Bursa Malaysia Securities Berhad, the company must have an aggregate after-tax profit of not less than RM20 million over 3 to 5 full financial years. Additionally, the company must have an after-tax profit of not less than RM6 million in respect of the most recent financial year. This requirement ensures that the company has a consistent and substantial profit track record, indicating its financial stability and viability for listing on the stock exchange.Rate this question:
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- 10.
How many shares must be in the hands of public shareholders, if ABC Bhd, with an issued and paid-up capital of 60 million shares, wishes to list its shares on the Main Market of Bursa Malaysia Securities Berhad?
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10 million
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15 million
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20 million
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25 million
Correct Answer
A. 15 millionExplanation
To list its shares on the Main Market of Bursa Malaysia Securities Berhad, ABC Bhd must have 15 million shares in the hands of public shareholders. This is because the issued and paid-up capital of the company is 60 million shares, and to list on the Main Market, at least 25% of the shares must be held by public shareholders. 25% of 60 million is 15 million shares. Therefore, ABC Bhd needs to have 15 million shares in the hands of public shareholders in order to meet the listing requirements.Rate this question:
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- 11.
TVC Sdn Bhd (TVC) after having issued an offer document to acquire the entire voting shares in Eeezy Sdn Bhd (ESB) discovers that the offer document that had been issued contained a material omission. Which of the following parties must TVC immediately disclose the fact to? (i)Securities Commission(ii)Relevant stock exchange(iii)Shareholders by way of circular(iv)Public by way of press notice
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(i) and (iv) only
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(ii) and (iii) only
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(ii), (iii) and (iv) only
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All of the above
Correct Answer
A. (i) and (iv) onlyExplanation
TVC must immediately disclose the fact to the Securities Commission and the public by way of a press notice. The Securities Commission is the regulatory authority that oversees the issuance of offer documents and disclosure requirements in relation to acquisitions. Therefore, it is important for TVC to inform them about the material omission. Additionally, TVC must also disclose the fact to the public through a press notice to ensure transparency and provide information to all stakeholders.Rate this question:
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- 12.
Which of the following statements in respect of a corporation listed on the ACE Market seeking a transfer of listing to the Main Market are CORRECT? (i) It may seek a transfer if it fulfills the Infrastructure Project Corporation Test(ii) It may seek a transfer if it has a market capitalisation of RM300 million(iii) It may seek a transfer if it has `uninterrupted’ profit of 3 to 5 full financial years based on audited financial statements prior to submission to the Securities Commission, the aggregate after-tax profit is at least RM20 million and the after-tax profit for the most recent financial year must be at least RM6 million(iv) If it is seeking a transfer based on the strength of its existing core business, the applicant is not required to comply with the `uninterrupted’ profit requirement
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(i) and (ii) only
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(iii) and (iv) only
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(i), (ii) and (iii) only
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(i), (iii) and (iv) only
Correct Answer
A. (i), (iii) and (iv) onlyExplanation
A corporation listed on the ACE Market seeking a transfer to the Main Market may seek a transfer if it fulfills the Infrastructure Project Corporation Test (i). It may also seek a transfer if it has uninterrupted profit of 3 to 5 full financial years based on audited financial statements, with the aggregate after-tax profit being at least RM20 million and the after-tax profit for the most recent financial year being at least RM6 million (iii). Lastly, if the corporation is seeking a transfer based on the strength of its existing core business, it is not required to comply with the uninterrupted profit requirement (iv). Therefore, the correct answer is (i), (iii), and (iv) only.Rate this question:
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- 13.
Which of the following statements are CORRECT with regard to the alternative routes available for listing on the Main Market of Bursa Malaysia Securities Berhad? (i)An applicant which chooses to satisfy the profit track record test must have an uninterrupted profit track record of 3 to 5 full financial years with an after-tax profit of at least RM6 million for the most recent financial year(ii)An applicant which chooses to satisfy the market capitalisation test must have an after-tax profit of at least RM8 million for the most recent financial year(iii)An applicant which chooses to satisfy the market capitalisation test must have been incorporated and generated operating revenue for at least one full financial year prior to the submission to the Securities Commission(iv)An applicant which chooses to satisfy the infrastructure project company test must have the right to build and operate an infrastructure project with project costs of at least RM100 million
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(i) and (iii) only
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(ii) and (iv) only
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(i), (iii) and (iv) only
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All of the above
Correct Answer
A. (i) and (iii) onlyExplanation
The correct answer is (i) and (iii) only. This means that the statements (ii) and (iv) are incorrect. Statement (i) states that an applicant must have an uninterrupted profit track record of 3 to 5 full financial years with an after-tax profit of at least RM6 million for the most recent financial year. Statement (iii) states that an applicant must have been incorporated and generated operating revenue for at least one full financial year prior to the submission to the Securities Commission. Therefore, only statements (i) and (iii) are correct.Rate this question:
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- 14.
Which of the following categories of principal advisers are permitted to submit all types of corporate proposals? (i)Investment banks(ii)Universal brokers(iii)1+1 brokers(iv)Special scheme brokers
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(i) and (ii) only
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(iii) and (iv) only
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(i), (ii) and (iii) only
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All of the above
Correct Answer
A. (i) and (ii) onlyExplanation
Investment banks and universal brokers are the only categories of principal advisers that are permitted to submit all types of corporate proposals. This means that they have the authority to propose various types of corporate actions, such as mergers, acquisitions, and capital raising, on behalf of their clients. On the other hand, 1+1 brokers and special scheme brokers are not allowed to submit all types of corporate proposals, indicating that they have limitations or restrictions on the types of proposals they can submit. Therefore, the correct answer is (i) and (ii) only.Rate this question:
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- 15.
What must be included in the custodian agreement between a Special Purpose Acquisition Company (SPAC) and the custodian of its trust account?(i)The conditions for the resignation and termination of the custodian(ii)The obligation by the SPAC to maintain an interest bearing account and to state the holder and operator of the account(iii)Provisions relating to the powers of the custodian to decide without reference to the management team(iv)Conditions under which the custodian is allowed to invest the monies in the trust account in permitted investments
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(i) and (iii) only
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(ii) and (iv) only
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(i), (iii) and (iv) only
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All of the above
Correct Answer
A. All of the aboveExplanation
The custodian agreement between a Special Purpose Acquisition Company (SPAC) and the custodian of its trust account must include the conditions for the resignation and termination of the custodian (i), provisions relating to the powers of the custodian to decide without reference to the management team (iii), and the conditions under which the custodian is allowed to invest the monies in the trust account in permitted investments (iv). Additionally, the agreement must also include the obligation by the SPAC to maintain an interest-bearing account and to state the holder and operator of the account (ii). Therefore, all of the above options are correct.Rate this question:
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- 16.
Which of the following statement is NOT TRUE pertaining to the appointment of an independent adviser in relation to take-over offers?
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In a partial take-over offer, appointment of the independent adviser is by the offeree
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In a reverse take-over offer, appointment of the independent adviser is by the offeror
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In a take-over offer where the Board of Directors of the offeror is faced with conflict of interest, appointment of independent adviser is by the offeree
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In a mandatory take-over offer, appointment of independent adviser is by the offeree
Correct Answer
A. In a take-over offer where the Board of Directors of the offeror is faced with conflict of interest, appointment of independent adviser is by the offereeExplanation
In a take-over offer where the Board of Directors of the offeror is faced with conflict of interest, appointment of independent adviser is by the offeree. This means that when the board of directors of the company making the take-over offer has a conflict of interest, it is the offeree (the company being targeted for the take-over) who has the authority to appoint an independent adviser. This is done to ensure that the offeree receives unbiased and impartial advice during the take-over process.Rate this question:
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- 17.
A local investment bank has successfully landed itself a mandate which requires them to advise several individuals on the listing of a Special Purpose Acquisition Company (SPAC).Which of the following scenarios are NOT requirements to be fulfilled in respect of the listing of the SPAC under the Equity Guidelines?(i)To ensure the SPAC is able to raise sufficient funds through its public offering, the principal adviser is required to underwrite the unsubscribed portion of securities(ii)The issue price of any convertible securities and warrants issued as part of the listing scheme of the SPAC must be priced at least RM0.50 each(iii)The exercise price for the warrants to be issued as part of the SPAC’s listing scheme can be set at a discount to the SPAC’s ordinary shares offered to the public(iv)Members of the management team can have a collective equity interest of 10% in the SPAC on the date of listing
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(i) and (ii) only
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(iii) and (iv) only
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(i), (ii) and (iii) only
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All of the above
Correct Answer
A. (i), (ii) and (iii) onlyExplanation
The correct answer is (i), (ii) and (iii) only. This means that the requirements to be fulfilled in respect of the listing of the SPAC under the Equity Guidelines are not to ensure the SPAC is able to raise sufficient funds through its public offering by underwriting the unsubscribed portion of securities, the issue price of any convertible securities and warrants issued as part of the listing scheme of the SPAC must be priced at least RM0.50 each, and the exercise price for the warrants to be issued as part of the SPAC's listing scheme can be set at a discount to the SPAC's ordinary shares offered to the public. The requirement regarding the collective equity interest of the management team is not mentioned as a non-requirement.Rate this question:
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- 18.
ABC Services Berhad, a company listed on Bursa Malaysia Securities Berhad Second Board made a request to Bursa Malaysia Securities Berhad for a suspension of trading because it intends to hold a press conference to make a material announcement before the close of trading. In the event that Bursa Malaysia Securities Berhad approves the suspension, the period of suspension that may be approved by Bursa Malaysia Securities Berhad can be up to __________.
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1 market day
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2 market days
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3 market days
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5 market days
Correct Answer
A. 1 market dayExplanation
The correct answer is 1 market day. When a company intends to make a material announcement, it may request a suspension of trading from Bursa Malaysia Securities Berhad. If approved, the period of suspension can be up to 1 market day, allowing the company to hold a press conference and make the announcement before trading resumes.Rate this question:
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- 19.
What is the implementation timeframe for an Islamic securities progamme?
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Within 14 days from the date of the Securities Commission’s (SC) approval
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Within 6 months from the date of SC’s approval
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Within 12 months from the date of SC’s approval
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Within 2 years from the date of SC’s approval
Correct Answer
A. Within 2 years from the date of SC’s approval -
- 20.
Where a listed issuer ventures into an internet-related business, what are the minimum information required to be announced to the public in respect of the business model of the venture agreement as stipulated in the Listing Requirements of Bursa Malaysia Securities Berhad? (i)Exact size of the market(ii)Strategic alliances or partnerships(iii)Target market of the product and services to be offered(iv)Source and nature of revenue to be derived from the venture
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(i) and (ii) only
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(i), (iii) and (iv) only
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(ii), (iii) and (iv) only
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All of the above
Correct Answer
A. (ii), (iii) and (iv) onlyExplanation
The minimum information required to be announced to the public in respect of the business model of the venture agreement, as stipulated in the Listing Requirements of Bursa Malaysia Securities Berhad, includes strategic alliances or partnerships, the target market of the product and services to be offered, and the source and nature of revenue to be derived from the venture. The exact size of the market is not specifically mentioned as a requirement.Rate this question:
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- 21.
Which of the following statements regarding the requirements for the issuance of structured products (SPs) are CORRECT? (i)Tradable SPs must be rated by a rating agency recognised by the Securities Commission (SC) (ii)A qualified dealer may make a submission directly to the SC for a proposal to issue SPs (iii)The SC’s prior approval is required for the issuance of non-tradable SPs where both parties are qualified banks (iv)A Special Purpose Vehicle sponsored by Cagamas Berhad need not be a resident in Malaysia
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(i) and (ii) only
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(i) and (iii) only
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(i), (ii) and (iii) only
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(ii), (iii) and (iv) only
Correct Answer
A. (i) and (ii) onlyExplanation
The correct answer is (i) and (ii) only. This means that the statements (i) Tradable SPs must be rated by a rating agency recognised by the Securities Commission (SC) and (ii) A qualified dealer may make a submission directly to the SC for a proposal to issue SPs are both correct. Statement (iii) is incorrect as it states that the SC's prior approval is required for the issuance of non-tradable SPs where both parties are qualified banks. Statement (iv) is also incorrect as it states that a Special Purpose Vehicle sponsored by Cagamas Berhad need not be a resident in Malaysia.Rate this question:
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- 22.
The following question refers to the table below: Issued and paid-up capital of Hibiscus BhdRM80 million15/12/2XX4Issued RM6 million convertible securities If on 1/4/2XX5, Hibiscus Bhd wishes to issue new convertible securities, in addition to that already issued on 15/12/2XX4, what is the MAXIMUM amount of convertible securities that it can further issue without having to further obtain shareholders approval?
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None
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RM2 million
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RM6 million
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RM10 million
Correct Answer
A. RM2 millionExplanation
Based on the information given, the maximum amount of convertible securities that Hibiscus Bhd can further issue without obtaining shareholders' approval is RM2 million. This is because the company has already issued RM6 million convertible securities on 15/12/2XX4, and there is no mention of any additional authorized capital or any changes in the company's capital structure. Therefore, the company can only issue an additional RM2 million convertible securities without requiring further approval from shareholders.Rate this question:
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- 23.
Wawasan Berhad’s Board of Directors proposed to issue 22.5 million new shares under a share scheme for its employees. Its current issued and paid-up capital consists of 150 million shares comprising ordinary shares of RM0.80 each. If one of its directors holds 30 million of the issued shares, what is the MAXIMUM shares that can be allocated to him under the share scheme for the employees?
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2.25 million
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3.00 million
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5.63 million
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15.00 million
Correct Answer
A. 2.25 millionExplanation
Since one of the directors already holds 30 million shares, the maximum shares that can be allocated to him under the share scheme for employees would be the difference between the proposed new shares (22.5 million) and the shares he already holds (30 million), which is 2.25 million. Therefore, the correct answer is 2.25 million.Rate this question:
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- 24.
Runaway Bhd proposes to be listed on the Main Market of Bursa Malaysia Securities Berhad. Its proposed issued and paid up capital will be RM100 million. The minimum that has to be offered under the public offer portion is _______________.
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RM3 million
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RM5 million
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RM10 million
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RM25 million
Correct Answer
A. RM5 millionExplanation
The question is asking for the minimum amount that needs to be offered under the public offer portion for Runaway Bhd's listing on the Main Market of Bursa Malaysia Securities Berhad. The correct answer is RM5 million, which means that Runaway Bhd must offer at least RM5 million worth of shares to the public as part of their listing.Rate this question:
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- 25.
MARCH 2XX1 SUNMONTUEWEDTHUFRISAT 12345678910111213141516171819202122232425262728293031 On 1/3/2XX1, BBB Berhad proposed a take-over bid for the voting shares of XYZ Berhad. It had sent out the required written notice on 1/3/2XX1. When would be the latest date for BBB Berhad to submit the draft offer document to which the take-over offer relates to the Securities Commission for its consent?
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5/3/2XX1
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15/3/2XX1
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22/3/2XX1
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1/4/2XX1
Correct Answer
A. 5/3/2XX1Explanation
The latest date for BBB Berhad to submit the draft offer document to the Securities Commission for its consent would be 5/3/2XX1. This is because the company sent out the required written notice on 1/3/2XX1, and typically, the draft offer document needs to be submitted within a certain timeframe after the notice is sent. In this case, it is reasonable to assume that the deadline would be within a few days or weeks after the notice, and 5/3/2XX1 falls within that timeframe.Rate this question:
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- 26.
What is the maximum tenor for a stand-alone Islamic Medium Term Notes (MTN) Programme?
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3 years
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5 years
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7 years
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No restriction
Correct Answer
A. No restrictionExplanation
The correct answer is "No restriction" because a stand-alone Islamic Medium Term Notes (MTN) Programme does not have a maximum tenor. Unlike other types of MTN programmes that may have specific time limits, Islamic MTN programmes do not impose any restrictions on the duration of the tenor. This allows issuers to have flexibility in terms of the maturity period for their Islamic MTN programme.Rate this question:
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- 27.
James acquired voting shares through a sale and purchase agreement giving rise to him having an obligation to make a mandatory offer under the Malaysian Code on Take-Overs and Mergers (TOM Code). Pursuant to the TOM Code, when must James send out the written notice of the take-over offer?
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Upon the signing of the sale and purchase agreement
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Upon the sale and purchase agreement becoming unconditional
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Upon the full payment and transfer of the voting shares to James
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No requirement to submit a written notice under the TOM Code
Correct Answer
A. Upon the sale and purchase agreement becoming unconditionalExplanation
According to the information provided, James acquired voting shares through a sale and purchase agreement. The question asks when James must send out the written notice of the take-over offer under the TOM Code. The correct answer is "Upon the sale and purchase agreement becoming unconditional." This means that James must wait until all conditions of the agreement have been met before sending out the written notice.Rate this question:
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- 28.
Mega BroadBand Berhad (MBBB) is seeking listing on the Main Board of Bursa Malaysia Securities Berhad. The enlarged issued and paid-up capital of MBBB upon listing is RM350 million, comprising 350 million ordinary shares of RM1.00 each. What is the minimum number of shares that must be offered under the balloted public offer portion?
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3.0 million
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7.0 million
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10.0 million
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17.0 million
Correct Answer
A. 10.0 millionExplanation
The minimum number of shares that must be offered under the balloted public offer portion is 10.0 million. This is because the question states that the enlarged issued and paid-up capital of MBBB upon listing is RM350 million, comprising 350 million ordinary shares of RM1.00 each. Therefore, to meet the minimum requirement for the balloted public offer portion, at least 10.0 million shares must be offered.Rate this question:
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- 29.
Where an originator is the only primary subscriber resulting in the originator holding not more than 10% of the Asset-Backed Securities (ABS), the originator must use its best endeavours to place out the excess ABS within a period of not more _____________ from the date of issuance of such ABS.
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1 month
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2 months
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3 months
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6 months
Correct Answer
A. 3 monthsExplanation
When an originator is the only primary subscriber and holds not more than 10% of the Asset-Backed Securities (ABS), they are required to make their best efforts to sell the excess ABS within a period of not more than 3 months from the date of issuance. This means that the originator should actively try to find buyers for the excess ABS within this timeframe to ensure that they do not hold a significant portion of the securities themselves.Rate this question:
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- 30.
Which of the following structured products are required to be rated by a rating agency recognised by the Securities Commission? (i) A tradable structured product(ii) A non-tradable structured product(iii) A structured product of Cagamas Berhad which is collateralised by securities issued by a company listed on Bursa Malaysia Securities Berhad(iv) A structured product of a locally incorporated special purpose vehicle sponsored by a qualified dealer collateralised by securities issued by a company listed on Bursa Malaysia Securities Berhad
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(i) and (ii) only
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(iii) and (iv) only
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(i), (iii) and (iv) only
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All of the above
Correct Answer
A. (i), (iii) and (iv) onlyExplanation
Tradable structured products (i) are required to be rated by a recognized rating agency because they are traded in the market and investors need information on their creditworthiness. Structured products of Cagamas Berhad collateralized by securities issued by a company listed on Bursa Malaysia Securities Berhad (iii) are also required to be rated as they involve a significant amount of risk due to the collateralization. Similarly, structured products of a locally incorporated special purpose vehicle sponsored by a qualified dealer collateralized by securities issued by a company listed on Bursa Malaysia Securities Berhad (iv) are required to be rated to provide transparency and assurance to investors. Therefore, the correct answer is (i), (iii), and (iv) only.Rate this question:
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