OSK SECURITIES BERHAD (Ipoh Branch)

COMPLIANCE DEPT.
Module 6 (Set 1 Mock Exam: with answers)

1. Dr. Lim has a margin facility of RM2.0 million with SB Securities. The securities firm has an Adjusted Capital of RM10.0
million. The wife of Dr. Lim also wishes to open a margin account with SB Securities. What is the maximum limit that SB
Securities can give Mrs. Lim?
a) RM1.0 million
b) RM2.0 million
c) RM3.0 million
d) RM4.0 million
Rule 5.3.5 Single Client Rule : Credit facilities given to a single client shall not be more than 30% of MCs Adjusted
Capital(5.3.5(1)). Definition for a single client (if individual client) also took into account the spouse (5.3.5(2)(a)).
Computation : (30% x RM10.0mil) RM2.0mil = RM1.0mil.

2. RHB Securities Bhd has an Adjusted Capital of RM100 million. What is the maximum aggregate outstanding balance in
the margin accounts maintained by all clients can they have?
a) RM100 million
b) RM150 million
c) RM30 million
d) RM10 million
Rule 5.3.4 Limit of Outstanding Balance : Aggregate outstanding balance shall not exceed 100% of the Adjusted Capital of
the company
Computation : 100% x RM100mil = RM100mil

3. Member Companies shall report to the Exchange all Off-Balance Sheet transactions entered into by them,
a) on a daily basis
b) on a weekly basis
c) on a monthly basis
d) on a quarterly basis
Rule 4.2.3 Reporting On a monthly basis not later than the fifth (5th) market day

4. For as long as the declaration of Designated Securities remains in force, the committee may impose the following
conditions:
I) A margin cover on all dealings relating to such Designated Securities
II) A restriction on all such dealings to delivery before sale bargains
III) A prohibition on any sale of the Designated Securities unless the seller delivers the Designated Securities to
the Member Company at the time of entering into the contract sale
IV) Suspend the counter should manipulation or excessive speculation still persist
a) (I) and (II)
b) (I), (II) and (III)
c) (II), (III) and (IV)
d) All of the above
Rule 4.4

5. For the financial year of 1999, K&N Securities has shareholders fund and profit after tax of RM8.0 million and RM9.8
million respectively. What is the minimum percentage of profit after tax that must be placed in the Reserve Fund for that
1999 financial year?
a) RM490,000
b) RM980,000
c) RM1.96 million
d) RM4.90 million
Rule 9.1.2 Reserve Fund MC to put aside annually percentage of its audited PAT to a reserve fund base on the followings
S/Holders Fund Min percentage of PAT to be placed
Less than RM10mil 20%
Between RM10mil RM30mil 10%
More than RM30mil 0%
Computation : RM9.8mil x 20% = RM1.96mil

Page 1 of 13
Compliance Dept - Ipoh Branch
OSK SECURITIES BERHAD (Ipoh Branch)
COMPLIANCE DEPT.
Module 6 (Set 1 Mock Exam: with answers)

6. Which of the following is a CORRECT statement? An ATS Operator may

I) Cancel or withdraw an order which remains unexecuted or unmatched
II) Enter orders into the SCORE between 9 a.m. and 12.30 p.m for the morning session and 2.30 p.m and 5.00
p.m for the afternoon session
III) Not enter into the SCORE a single order of securities exceeding 500 board lots
IV) Enter orders into the SCORE and the orders are valid for that market day only
a) (I), (II) and (III)
b) (II) and (III)
c) (I) and (III)
d) (I), (II) and (IV)
Chapter 5 : Trading
I) CORRECT Rule 5.1.7(7)(a)
II) INCORRECT Rule 5.1.7(3): Orders can be entered between 8.30am and 12.30pm and 2.00pm and 5.00pm.
III) CORRECT Rule 5.17.7(8)
IV) INCORRECT Rule 5.1.7(2): Orders entered shall be valid for that trading session only

7. The business operations of an Adviser should be headed by the Member Companies

a) Chief Executive
b) Executive Director of Operations
c) Executive Director of Dealing
d) Board of Director
Rule 4.7.3(2)

8. In the event of a buying client which fails to settle its outstanding amount, the selling out process should be conducted
by the
a) Exchange, on the 3rd market day after the transaction
b) Exchange, on the 4th market day after the transaction
c) Member Companies, after 12.30pm on the 3rd market day after the transaction
d) Member Companies, after 12.30pm on the 4th market day after the transaction
Schedule 2A Part 4: For ready basis contract MC to close off purchase positions if client fail to pay by 12.30pm on T+3 and
MC to institute a selling-out (force selling) by T+4.

9. What is the minimum bid for shares that are price between RM10 and RM24.90?
a) 2 sen
b) 5 sen
c) 10 sen
d) 25 sen
Schedule 4: Minimum bid
Price (RM) Minimum bid (sen)
Less than 1.00
Between 1.00 to 2.99 1
Between 3.00 to 4.98 2
Between 5.00 to 9.95 5
Between 10.00 to 24.90 10
Between 25.00 to 99.75 25
Between 100.00 and above 50

10. Any differences arising from a contra between outstanding purchase position and outstanding sales position shall be
settled between Member Companies and their clients not later than the
a) 1st market day following the date of such contra
b) 3rd market day following the date of such contra
c) 5th market day following the date of such contra
d) 7th market day following the date of such contra
Schedule 2B: Payments- The difference resulting from contra shall be settled between MC and clients not later than fifth
(5th) market day after contra date.

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Compliance Dept - Ipoh Branch
OSK SECURITIES BERHAD (Ipoh Branch)
COMPLIANCE DEPT.
Module 6 (Set 1 Mock Exam: with answers)

11. Mr Chan bought some shares on a ready basis on 7 th Oct 1999, Tuesday. What is the last day Mr Chan must make
settlement?
a) 13th Oct 1999, Monday by 10 a.m.
b) 13th Oct 1999, Monday by 12.30 p.m.
c) 10th Oct 1999, Friday by 10 a.m.
d) 10th Oct 1999, Friday by 12.30 p.m.
Schedule 2A Scheduled settlement time (For Ready Basis contract) in respect of payment by buying clients to MC not later
than 12.30pm on T+3.

12. Which of the following statements are TRUE? A company seeking listing on the Main Board should meet the following
requirements:
I) has a profit track record of 3 years and aggregate after-tax profit of RM30 million
II) has a profit track record of 5 years and aggregate after-tax profit of RM30 million
III) a minimum after-tax profit for the most recent year of RM8.0 million
IV) prior to the listing, at least 25% of the issued and paid-up capital is in the hands of the public
a) (I) and (III)
b) (II) and (III)
c) (I), (II) and (III)
d) All of the above

13. Listed companies wishing to issue replacement warrants are required to obtain prior approval from the Securities
Commission and the limit of the issuance, aggregated with all outstanding warrant should not exceed__________ of the
listed companys share capital before the exercise.
a) 25%
b) 50%
c) 75%
d) 100%

14. Withdrawal of shares from the CDS can only be initiated under the following circumstances:
(I) share buy back
(II) conversion of loan stock into ordinary shares
(III) transfer of shares to family members
(IV) process of company restructuring
a) (I) and (II)
b) (I), (II) and (III)
c) (I), (II) and (IV)
d) All of the above

15. A foreign company owns 49% of the equity of a local stockbroking company, AMMB Securities Berhad. According to the
Memorandum and Articles of Association of AMMB, the company cannot have more than nine (9) directors in its Board
of Directors. How many directors can the foreign stockbroking company appoint into the AMMBs Board of Directors?
a) 3
b) 4
c) 5, with the approval from the Commission
d) 6, with the approval from the Commission
Rule 2.3.1(2) For foreign s/holders the aggregate number of directors representing them shall not exceed 1/3 of the total
number of directors of the MC

16. Hisham is a Remisier at SJ Securities Berhad and has a trading limit of RM300,000. However, due to his outstanding
performance, his trading has reached its limit. In order not to lose out on the commission, Hisham has made a private
arrangement with another remisier, Dollah that he will re-direct some of his deals to him for a sharing of half of the
commission. What are the actions that the committee of the Exchange can take?
I) suspend Hishams dealers representative license
II) struck off Hishams dealers representative license from the register
III) reprimand Dollah
IV) reprimand SJ Securities if they fail to report to the Exchange upon knowing the above arrangement
a) (I) and (II)

Page 3 of 13
Compliance Dept - Ipoh Branch
OSK SECURITIES BERHAD (Ipoh Branch)
COMPLIANCE DEPT.
Module 6 (Set 1 Mock Exam: with answers)

b) (I), (II) and (III)

c) (II), (III) and (IV)
d) All of the above
Firstly Hishams action is wrong as per Rule 4.8.2(8) that stated that a DR cannot divides or shares his commission with any
other person than his Member Company. He can be struck off the Register by the Committee.
Rule 11.2.1 : A DR who breached the rules are liable to a reprimand, fine, suspension, name struck off from register and
restrictions on his activities as a DR.
Article 8.1 : Any Member(AMMB is a Voting Member) who breached the rules are liable to a reprimand, fine, suspension,
expel and restriction on its activities to its functions as a Dealer .

17. Which of the following statements are TRUE?

I) an order should be prioritise according to price and time
II) a Limit Order has priority over Market Order
III) for Limit Orders, preference is given to the highest buy orders and lowest sell orders
IV) when buy/ sell orders are quoted at the same price, preference is given to the earliest buy/ sell order, i.e. first
in first out matched
a) (I) and (II)
b) (II) and (III)
c) (I) and (III)
d) (I), (III) and (IV)
Rule 5.1.8 Matching priority
I) CORRECT
II) INCORRECT Market Order has priority over Limit Order
III) CORRECT
IV) CORRECT

18. As stated in the Companies Act 1965, a Special Resolution should be accorded the appropriate notice of
a) 7 days
b) 14 days
c) 21 days
d) 28 days

19. Section 45 of the SIA 1983 states that a dealer can withdraw monies from a trust account for the purpose of making a
payment:
I) to, or in accordance with written instructions of, a person entitled to the money
II) defraying brokerage and other proper charges
III) to top-up on the margin clients position
IV) as instructed by KLSE to settle for losses
a) (I) and (II)
b) (I), (II) and (III)
c) (I), (II) and (IV)
d) All of the above
Section 45 SIA A dealer shall not withdraw monies from a trust account except for the purpose of making a payment
a. to, or in accordance with the written instructions of a, a person entitled to the money
b. defraying brokerages and other proper charges, or
c. that is otherwise authorized by law

20. For Direct Business transactions whose price is above 10% the relevant Volume-Weighted Average Price (VWAP), the
following information must be furnished to the Exchange:
I) details of the buyer and seller
II) the number of shares involved and price
III) the average transaction of the buyer/ seller for the last one month
IV) the basis on which the price was agreed
a) (I) and (II)
b) (I), (II) and (III)
c) (I), (II) and (IV)
d) All of the above

Page 4 of 13
Compliance Dept - Ipoh Branch
OSK SECURITIES BERHAD (Ipoh Branch)
COMPLIANCE DEPT.
Module 6 (Set 1 Mock Exam: with answers)

R/R 3 of 1999 4 information is to be provided to the Exchange not later than 5 trading days from the date of the DBT. Apart
from the 3 mentioned above the other information is: the specific reason for the transfer.

21. Placement can be defined as:

a) an issue of new shares to the public at a price agreed upon by the issuer and the merchant bank
b) an issue of securities that are not offered to the general public but to party/ parties considered desirable to
the company
c) an issue of securities to holders of other classes of securities upon exercise of conversion of the securities held
d) an issue of new shares for exchange of assets or share capital of another company

22. The Continuing Listing Requirements provide that;

I) Financial statements to be provided to the KLSE quarterly, within 2 months from the end of every financial
quarter giving all information prescribed by the KLSE.
II) preliminary financial statement to be provided to the KLSE within 3 months of the end of the financial year
III) audited annual accounts to be issued within 4 months of the end of the financial year giving all information
prescribed by the KLSE.
IV) annual reports to be received by shareholders within six months of the end of the financial year.
a) (I) and (II)
b) (I), (II) and (III)
c) (I), (III) and (IV)
d) All of the above
Listing Requirements of KLSE-Chapter 9: Continuing Disclosure. Refer to Part K Periodic Disclosures.
Also in Examination Study Guide:Module 6 (Stock Market & Securities Law) Topic 4 Paragraph 2.2

23. Insider as defined by the Companies Act 1965 is:

a) an officer of the corporation who has privilege information that may effect the share price of the company to rise
b) a director of the corporation who has unpublished price sensitive information that could affect that the share price
of the company materially
c) a person who in or in relation to dealing in securities of a corporation has any information which if
generally known might reasonably be expected to affect materially the price of the share
d) the chief financial officer of the corporation that handles all the financial information of the company

24. Which of the following statements are true in regards to corporate shareholdings in a Member Company:
I) A company or corporation with a shareholders fund of more than RM100mil may be allowed to hold more
than 51% of the total paid-up capital of a Member Company.
II) A foreign stockbroking company may not be allowed to be a shareholder of a Member Company.
III) A foreign stockbroking company shareholdings in a Member Company shall be restricted to no more than
30% of the total paid-up capital of the Member Company
IV) The committee may allow a foreign stockbroking company to hold more than 30% of the total paid-up capital
of a Member Company if it (upon consultation with the Securities Commission) is satisfied that the foreign
stockbroking company has contributed positively towards the business of a Member Company.
a) I & II
b) I, III & IV
c) I & III
d) I, II, III
Rule 2.4.3: Addition to refer to no. IV the foreign stockbroking company is allowed to hold more than 30% under the said
circumstances provided that no foreign stockbroking company shall at any time be permitted to hold more than 49%
of the total paid-up capital of the Member Company.

25. Individual shareholdings shall be:

a) not more than 10% of the total paid up capital of the Member Company
b) not more than 33% of the total paid up capital of the Member Company
c) not more than 49% of the total paid up capital of the Member Company
d) not more than 51% of the total paid up capital of the Member Company
Rule 2.4.2 (1): Unless a prior written approval of the Minister has been obtained, no natural person may hold more than 10%
of the total paid-up capital of any MC; provided always that the aggregate total participation of natural persons in the share
capital of the MC shall not be more than 49% of its total paid-up capital.

Page 5 of 13
Compliance Dept - Ipoh Branch
OSK SECURITIES BERHAD (Ipoh Branch)
COMPLIANCE DEPT.
Module 6 (Set 1 Mock Exam: with answers)

26. Settlement for net purchases by a Member Company must be made to SCANS by:
a) 12.30 pm on T+2
b) 10.00 am on T+3
c) 12.30 pm on T+3
d) 10.00 am on T+4
Schedule 2A : Part 2

27. A person may be viewed as fraudulently inducing someone to deal in securities, if that person

I) does not care whether the statement or information is true or false

II) knows or reasonably to have known that the statement or information is false or misleading in a material
particular
III) makes or publishes any statement, promise or forecast that he knows to be misleading, false or deceptive
IV) dishonestly conceal some material facts
a) (I) and (II)
b) (II) and (III)
c) (II), (III) and (IV)
d) All of the above
Section 86 of SIA False or misleading statement: A person shall not make a statement, or disseminate information, that
is false or misleading in a material particular and is likely to induce the sale or purchase of securities by other
persons or is likely to have the effect of raising, lowering, maintaining or stabilizing the market price of the securities
if, when he makes the statement
a) he does not care whether the statement/information is true or false
b) he knows or ought reasonably to have known that the statement or information is false or
misleading in a material particular.
Section 87 Fraudulently inducing persons to deal in securities: I) A person shall not
a) by making or publishing any statement, promise or forecast that he knows to be misleading,
false or deceptive.
b) by any dishonest concealment of material facts.
c) by the reckless making or publishing, dishonestly or otherwise, of any statement, promise or
forecast that is misleading, false or deceptive; or
d) by recording or storing in, or by means of, any mechanical, electronic or other device
information that he knows to be false or misleading in a material particular,
induce or attempt to induce another person to deal in securities.

28. Where a Member Company sends circular or other similar written communications in which he makes a
recommendation with respect to securities, they must

I) make a concise statement of its own interest in the securities concerned

II) make known that information to all its clients
III) ensure the circular is signed by a Director, an Executive Officer or the Secretary of the Member Company
IV) preserve a copy of the circular for a period of seven (7) years

a) (I) and (II)

b) (I), (II) and (III)
c) (I), (III) and (IV)
d) All of the above
Refer to Section 39 of SIA: Certain persons to disclose certain interests in securities
No (I):CORRECT: Section 39 (1) stated that a dealer who sends out written communications in which he made
recommendations must make a concise statement of the nature of his interest in the securities.
No (III):CORRECT: Section 39(6)(d) stated that where that person is a corporation, the circulars must be signed by a
director, an executive officer or the secretary.
No (IV):CORRECT: Section 39(7) stated that all written communications must be kept a copy for 7 years.

Page 6 of 13
Compliance Dept - Ipoh Branch
OSK SECURITIES BERHAD (Ipoh Branch)
COMPLIANCE DEPT.
Module 6 (Set 1 Mock Exam: with answers)

29. When someone acquires more than _________ of the shares that carry voting rights, then he must extend a mandatory
general offer to the remaining shareholders of that particular company.

a) 25%
b) 33%
c) 50%
d) 75%

30. Which of the following statements are TRUE about the Executive Director of Operation?

I) responsible to oversee the functions of the Compliance Officer

II) must have at least 5 years of relevant working experience
III) to be engaged full time in the office of the Member Company
IV) a member of a recognised stock exchange

a) (I) and (II)

b) (I), (II) and (III)
c) (II), (III) and (IV)
d) All of the above
No. (I) is incorrect as according to Rule 3.6.6 (1) : The Compliance Officer shall report directly to the board of directors.

31. Code of Takeover & Merger is only applicable for:

a) private companies with paid-up capital of more than RM10 million

b) public listed companies
c) companies with bumiputra participation of more than 51%
d) any companies intending for takeovers or mergers

32. WinSCORE system can be used for:

I) credit control management

II) submission of Capital adequacy Ratio
III) order and trade routing
IV) managing the Member Companys risk

a) (I) and (II)

b) (I) and (III)
c) (I), (II) and (III)
d) All of the above

33. The following types of collateral are acceptable for margin account:

I) government bonds
II) fixed deposits certificates in foreign currency denomination
III) local bankers acceptances
IV) guarantees issued by local banks

a) (I) and (II)

b) (III) and (IV)
c) (I), (II) and (III)
d) All of the above
Refer to Rule 5.37.7: Other collateral includes securities listed on the Stock Exchange; Local Fixed Deposits certificates;
Malaysian Treasury Bills.

Page 7 of 13
Compliance Dept - Ipoh Branch
OSK SECURITIES BERHAD (Ipoh Branch)
COMPLIANCE DEPT.
Module 6 (Set 1 Mock Exam: with answers)

34. Direct Business Transactions must be within

a) 10% of the VWAP of the previous sessions closing price

b) 10% of the VWAP of the previous days closing price
c) 15% of the VWAP of the previous sessions closing price
d) 15% of the VWAP of the previous days closing price

35. What is the time interval for updating the indexes in BFE?

a) real time
b) every second
c) every 30 seconds
d) every minute

36. Which is the authority to grant a Dealer Representative license?

a) KLSE
b) Ministry of Finance
c) Securities Commission
d) FIC

37. What is the maximum percentage of brokerage that a dealers representative is entitled?

a) 30%
b) 40%
c) 50%
d) 60%
Rule 4.8.2 (7): The commission of a Commissioned Dealer's Representative shall not exceed 40% of the brokerage charged
by the Member Company to clients introduced by him

38. The stock market is made up of two markets, i.e. the primary market and secondary market. The secondary market is a
central market place provided by the stock exchange:

a) which allows a company to raise initial capital

b) where people can sell and buy securities previously issued
c) to issue rights issue and other securities
d) to issue bonds and options

39. Member Company shall send out statements to all its margin clients at the following intervals?

a) the following day of transaction

b) weekly
c) monthly
d) yearly

40. The Committee may impose the following conditions for Designated Securities:

I) a margin of cover on all dealings relating to such Designated Securities

II) a restriction on all such dealing to delivery before sale bargains
III) a restriction on all trading in the Designated Securities by a Member Company to the extent that the
outstanding contracts of that Member Company in respect of the Designated Securities at any one time do
not exceed fifteen percent (15%) of the paid up capital of the Issuer whose securities have been so
designated or such other percentage as the Committee may from time to time direct
IV) a prohibition on any sale of the Designated Securities unless the seller delivers the Designated Securities to
the Member Company at the time of entering into the sale contract

a) (I) and (II)

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Compliance Dept - Ipoh Branch
OSK SECURITIES BERHAD (Ipoh Branch)
COMPLIANCE DEPT.
Module 6 (Set 1 Mock Exam: with answers)

b) (I), (II) and (III)

c) (I), (II) and (IV)
d) All of the above
No (III) is incorrect : Refer to Rule 4.4.1(c) the correct percentage is 5%

41. Upon completion of the transaction, Direct business transaction done in a trading session shall be reported to the
Exchange within

a) 15 minutes of completion of transaction

b) 30 minutes before commencement of the morning trading session
c) at any time
d) 15 minutes before commencement of the morning trading session
Refer to Rule 7.2.2(1)(a) to confirm the above. Refer to Rule 7.2.2(1)(c) For DBT done after 5.15pm, the reporting is on the
following market day, within 30 minutes before the commencement of the morning trading session

42. The price of VWAP of previous day was RM12.50. At what price if Direct Business is transacted where Member
Company need not obtain prior approval from the Exchange?
a) RM14.30
b) RM14.38
c) RM11.80
d) RM10.20
Refer to R/R 3 of 1999: DBT will need prior approval of the Exchange if it is transacted outside the price limit. The ceiling limit
price is +15% of the VWAP and the floor limit price is -15% of the VWAP.
Calculation Ceiling limit price : RM12.50 x 15% = RM14.38; Floor limit price: RM12.50 x 15% = RM10.63

43. What is the minimum financial obligation a non-member has to meet before he is listed as a defaulter with the
Exchange?

a) RM2,000
b) RM3,000
c) RM4,000
d) RM5,000
Refer Rule 3.3.1

44. XYZ Sdn Bhd is a Member Company. The shareholders consists of the following:
XLS is a Corporation holding 30% of the total paid up capital,
X is Koperasi Rakyat holding 20% of total paid up capital,
En Rahman holds 40% of total paid up capital and;
Datuk Muthu holds 10% of the total paid up capital.
What are the possible breaches?

I) Individual shareholding exceeding 10%

II) Corporate shareholding exceeding 10%
III) Corporate shareholders shall not hold 30% of the paid up and more than 49% of the total paid up capital of
the Member Company
IV) Aggregate individual shareholdings exceeding 49%
a) (I) and (II)
b) (I), (II) and (III)
c) (I) and (IV)
d) (I), (II) and (IV)
En Rahman shareholdings of 40% violates Rule 2.4.2 that stated that a person may not hold more than 10% of the paid-up
capital of the Member Company. En Rahman and Datuk Muthu combined shareholdings of 50% also violates the Rules
which stated that the aggregate total participation of individuals must not be more than 49%.
Local company with shareholders funds of less than RM100mil can only hold up to 51% of the total paid-up capital of a
Member Company. If it has bigger shareholders funds it is allowed to hold more.
No (III) above should refer to foreign stockbroking company which can hold only up to 30%. However, if the Committee and
the SC is satisfied that the foreign stockbroking company has and will contribute positively towards the business, it may be
allowed to hold more than 30% but not more than 49%.

Page 9 of 13
Compliance Dept - Ipoh Branch
OSK SECURITIES BERHAD (Ipoh Branch)
COMPLIANCE DEPT.
Module 6 (Set 1 Mock Exam: with answers)

45. Information which is found in the prospectus is:

I) information about the issue

II) non-financial information about the issuer
III) financial information about the issuer
IV) a statement as to the inherent risks involved

a) (I) and (II)

b) (I), (II) and (III)
c) (I), (II) and (IV)
d) All of the above

46. For the purpose of trading on margin account, outstanding balance means:

a) the amount owed by a client in his margin account arising from his transaction in securities, including all
commission charges and interest expenses
b) the aggregate amount of cost and collateral deposited into a clients margin amount but excludes securities which
are purchased and carried in his margin account
c) the amount owed by a client in his margin account arising from his transaction in securities, excluding all
commission charges and interest expenses
d) the sum of margin and securities purchased or carried in clients margin account

47. Siti is a client of XYZ Sdn Bhd, which is a Member Company of KLSE. She wants to buy shares of a selected counter at
a specified price. En Rahman is her Dealers representative and wants to sell the same shares at the same price. The
transaction will most likely be matched. En Rahman must

I) inform Siti that he is the seller of the shares

II) obtain consent from the Director of the member Company he is attached to
III) obtain approval from Securities Commisssion
IV) inform KLSE before executing the order

a) (I) and (II)

b) (II), (III) and (IV)
c) (I), (II) and (III)
d) All of the above
Rule 3.4.3 (10) Conflict of interest: A Dealer's Representative shall fully disclose such conflict of interest to the Member
Company and the client prior to the execution of the transaction.
As En Rahman is a Dealer's Representative he is also bound by Rule 5.2.1 on Transactions by Employees & Directors under
which is stated that he would need to get the Member Companys directors consent before he could trade.

48. Compliance Officer can do the followings:

I) Execute orders/ trades for designated clients of Member Company

II) Review the handling of complaints from clients and recommending solutions
III) Approve the application forms and documents of accounts of clients
IV) Review employees transactions

a) (I), (II) and (IV)

b) (II), (III) and (IV)
c) (II) and (IV)
d) none of the above
Read Rule 3.6.2: The duties of Compliance Officers are mainly on supervisory, reviewing and monitoring.

Page 10 of 13
Compliance Dept - Ipoh Branch
OSK SECURITIES BERHAD (Ipoh Branch)
COMPLIANCE DEPT.
Module 6 (Set 1 Mock Exam: with answers)

49. Member Company shall not grant credit facilities to the following persons:

I) any of its directors and/ or employees

II) any individual to whom any of its directors/ employees has provided a guarantee
III) any person who is prohibited under S.93(2) of the SIA
IV) any corporation in which any of its directors/ employees has interest as a partner, manager, guarantor/ agent
other than as a Stockbroking agent

a) (I), (II) and (III)

b) (I), (III) and (IV)
c) (I), (II) and (IV)
d) All of the above
Rule 5.3.6

50. An initial margin must be placed by client with the Member Company not later than _______ following the contract date
of the purchase of securities and the amount of margin shall be such that his equity is not less than ________ of the
outstanding balance in the margin account.

a) 3 calendar days, 150%

b) 3 market days, 150%
c) 3 market days, 130%
d) 5 market days, 150%
Rule 5.3.10(1)

51. A client has bought shares based on the recommendation of an Adviser and has suffered losses. The client now wants
to sue the Adviser for the losses suffered. What are the defenses that are not available to the Adviser?
I) the client would not have sued if he had made a profit
II) the adviser did not know of the change in the clients investment objective
III) the adviser had disclosed his interest in those securities
IV) the recommendation was based on the reasonable basis/ research

a) (I)
b) (I) and (II)
c) (I), (II) and (III)
d) none of the above

52. Member Company has a position as follows:

Client A bought 6,000 units of X shares,
Client B bought 4,000 units of X shares and
Client C sold 20,000 units of X shares.
Settlement between Member Company and SCANS shall be:
a) sell of 20,000 units and buy 10,000 units
b) net sell of 10,000 units
c) net buy of 10,000 units
d) none of the above

53. Where an investor holds scrip in a listed Company that is taken into the CDS, in order to trade he/ she must first deposit
that script into CDS account. The investor can trade

a) upon the deposit reference number being given and the account provisionally credited
b) any time after 14 days of deposit
c) his credit balance is given free status
d) KLSE advertises in the newspaper

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Compliance Dept - Ipoh Branch
OSK SECURITIES BERHAD (Ipoh Branch)
COMPLIANCE DEPT.
Module 6 (Set 1 Mock Exam: with answers)

54. Securities Commissions approval is required for

I) an issue of securities by a private Company

II) an issue of securities due to an employee share option
III) an issue of securities arising from a non renounceable scheme rights issue by a listed public company
IV) an issue of securities arising from a bonus issue of an unlisted public company

a) (I) and (II)

b) (II) and (III)
c) (I), (II) and (III)
d) all of the above

55. The following are the characteristic of a Company Limited by Guarantee:

I) the liability of each member is limited to the amount the member has guarantee to contribute if the company
has insufficient assets to pay its debts when it is wound-up
II) member cannot be called on to contribute any capital while the company is a going concern
III) cannot be formed with or become a company with a share capital
IV) ability to increase capital from time to time

a) (I) and (II)

b) (II), (III) and (IV)
c) (I), (III) and (IV)
d) all of the above

56. What is the penalty for acting without the relevant license?

a) fine not less than RM500,000 or imprisonment for up to 1 year or both

b) fine up to 1 million or imprisonment for up to 10 years or both
c) fine not less than RM500,000 or imprisonment for up to 10 years or both
d) fine up to RM1 million or imprisonment for up to 1 year
SIA Section 15c

57. A company has an issued capital of RM400 million, divided into 800,000,000 shares of 50 cent each. It has a paid up
capital shares at 40 cent each. What is the companys uncalled capital?

a) RM320 million
b) RM480 million
c) RM80 million
d) RM40 million
800,000,000 shs x 10 sen = RM80mil

58. The objective of the KLSE Composite Index is:

I) to efficiently reflect the performance of companies listed on the KLSE

II) to be generally sensitive to investors expectation
III) to be generally indicative of the impact of government policy
IV) to be reasonably responsive to the structural changes in the different sectors of the Malaysian economy

a) (I) and (II)

b) (I), (III) and (IV)
c) (I), (II) and (III)
d) all of the above
Module 6 pg 1 8

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Compliance Dept - Ipoh Branch
OSK SECURITIES BERHAD (Ipoh Branch)
COMPLIANCE DEPT.
Module 6 (Set 1 Mock Exam: with answers)

59. Which of the following is wrong about buying-in?

I) Exchange to announce through its on-line display system half an hour before the commencement of the
market trading day
II) Buying-in shall be conducted between 9.00 a.m. to 12.30 p.m. and 2.30 p.m. to 5 p.m.
III) The bidding price shall be 10% higher of the closing price for the previous trading session, or of the last
recorded sale at the close of trading on previous market day
IV) If the securities are not obtained on the first day, the buying-in shall be continued on the second and each
succeeding market day and the bid price shall be raised by at least 5 minimum bids until the securities are
bought

a) (I), (II) and (III)

b) (II), (III) and (IV)
c) (II) and (III)
d) (III) and (IV)
No (II) is incorrect as buying-in is conducted between 8.30am to 12.30pm and 2.00pm to 5.00pm
No (III) is incorrect as bidding price is 10 minimum bids (not percentage)

60. Which of the following is true about Reverse Takeovers?

I) only companies listed for minimum 3 years is eligible to perform a reverse takeover
II) complimentary assets or business injected must show at last 2 years of uninterrupted profit
III) for non-complimentary assets or business injected on main board company, the aggregate profit after tax
must be at least RM18 million for 3 years
IV) for non-complimentary assets or business injected on second board company, the aggregate profit after tax
must at least RM12 million for 3 years or 5 years
V) Financial services company is not allowed to be injected

a) (I), (III) and (V)

b) (II), (III) and (IV)
c) All of the above
d) None of the above

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Compliance Dept - Ipoh Branch