HKSI LE Paper 1 Part 4 Free Practice Questions: Licensing, Registration & Subsidiary Legislation

Question 1

XYZ open-ended fund company has sub-funds. The SFC applies to the Court of First Instance in respect of a contravention by the company. Under section 213(3C), which of the following orders may the Court make?

Accepted Answer

Direct that the investments attributable to a portion of a sub-fund be realised, that any liabilities attributable to that portion be discharged, and that the remaining funds be distributed to shareholders in accordance with the OFC rules — Sections 213(3A) and (3C)(b)(ii) provide that, on the SFC's application, the Court of First Instance may order the investments made in respect of a part of a sub-fund to be realised and, after discharging liabilities attributable to that part, the remaining funds distributed to shareholders under the OFC rules. The same subsection also allows orders removing directors, investment managers or custodians; the other options are not orders authorised by it.

Question 2

Regarding incorporation of an OFC and submission of incorporation documents, which of the following statements is correct?

Accepted Answer

Incorporation documents must be delivered in the manner prescribed by the OFC rules — Section 112C provides that documents required for OFC incorporation must be delivered in the manner prescribed by the OFC rules. There is no requirement that they be lodged with the Court by a director or pre-approved by the Financial Secretary.

Paper 1 Part 4: Licensing, Registration & Subsidiary Legislation

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