Note: Participants are encouraged to read and familiarize themselves with the

FIMM-FCE Study Guide before taking the mock examination questions.

Chapter 1: Understanding Collective Investments Scheme in Malaysia

1. Investment-link funds that invest in capital market products must comply with the SC’s
regulations.

A. True
B. False

2. Which of the following Collective Investment Schemes (CIS) are offered in Malaysia?
I. Private Retirement Scheme (PRS)
II. Real Estate Investment Trust (REIT)
III. Exchange Traded Fund (ETF)
IV. Investment Linked Fund

A. I, III, and IV B. All of the above C. I and II D. II and IV

3. Which of the followings are unlisted funds?

I. Unit Trust Scheme (UTS)

II. Private Retirement Scheme
III. Close-End Fund
IV. Wholesale Fund

A. I, II and III B. I, II and IV C. I, III and IV D. All of the above

4. The Financial Markets Ombudsman Scheme (FMOS) handles disputes by investors against
licensed or registered financial service providers or capital market intermediaries involved in
the following activities:

I. Securities
II. Fund Management
III. Investment-linked funds
IV. Derivatives

A. I, II and III B. All of the above C. I, II and IV D. II, III and IV

Chapter 2: Introduction to UTS and PRS

1. UTS and PRS share the following main characteristics where both of them:

I. provide diversification of asset.

II. have a Trustee to look after the interest of the investors.
III. involve pooling of savings by investors where these savings are invested according to the
objective of the Schemes; and
IV. are schemes that encourage investors to make long-term savings and investment decisions

A. I, II and III
B. I, III and IV
C. II, III and IV
D. All of the above

2. Index Fund is also referred to as _________ due to its modus operandi of “tracking” an
index.

A. Securities Fund B. Tracker Fund C. Mixed Asset D. Composite Index

3. Which of the following is the main role of a Trustee?

A. Responsible for establishing, offering, marketing, operating and administering a fund

B. Ensures that the Management Company adheres to all requirements stipulated in the deed
and offering documents
C. Manages fund's investments which includes stock selection, research and asset allocation
D. Conduct Investor outreach programmes

4. Encik Ahmad is a young investor who would like to invest in Shariah-compliant securities.
He may invest in the following products, EXCEPT:

A. Shares of a conventional financial institution

B. Shares of halal Companies
C. Islamic Debt Securities
D. Sukuk

5. Which of the following are the risks associated with borrowing to invest in UTS?

I. Margin call
II. Interest rate fluctuations
III. Default in loan repayment
IV. Country risk

A. All of the above B. II, III and IV C. I, II and III D. I and III

6. Which of the following are loan financing risks?

I. The higher the margin of financing, the greater the potential losses/gains
II. The servicing of loan repayments may become more onerous when interest rates rise
III. Lack of experience, knowledge and expertise, as well as poor management of the Scheme
will cause the investor to default on the loan
IV. There could be a potential loss from fluctuating foreign exchange rates

A. II and IV B. I and III C. I and II D. II and III

7. A Shariah-compliant scheme invests in shares issued by Al-Ameen Berhad. However, a

recent change in business direction has resulted in Al-Ameen Berhad being classified as a non-
shariah compliant company.

What type of risk does the above statement describe?

A. Shariah specific risk

B. Change in investment fee
C. Pandemic risk
D. Business Risk

8. An investor makes contribution in a series of smaller investments into a Scheme.

This best describes____________.

A. Lump Sum Purchase

B. EPF savings
C. Reinvestment
D. Regular Saving

9. Sharon is a unitholder of the XYZ Asia Pac Equities Fund which has investments in the shares
issued by Alpha Technologies Berhad.
Who is the ultimate legal owner of investments made in Alpha Technologies Berhad?

A. Trustee of XYZ Asia Pac Equities Fund

B. XYZ Asia Pac Equities Fund
C. The management company of XYZ Asia Pac Equities Fund
D. Sharon

10. A conventional scheme and Shariah based scheme may differ in the following area(s):
I. Objective(s) of the fund
II. Documentation
III. Accounts and reporting
IV. Investment avenues and activities

A. I
B. All of the above
C. I and II
D. I, II and III

Chapter 3: Regulatory Framework

1. The followings are the duties of the PPA, except

A. undertake general promotion and awareness of the Scheme

B. act as a resource centre for data and research for the PRS industry
C. monitor fees charged and performance offered by the different PRS Providers
D. appoint the Scheme Trustee for each Scheme

2. The requirements outlined in the Securities Commission Malaysia's Guidelines on Advertising

for Capital Market Products and Services apply to the following:

I. Unit Trust Management Companies

II. Institutional Unit Trust Scheme Advisers
III. Private Retirement Scheme Consultants
IV. Corporate Unit Trust Scheme Advisers

A. I, II and III B. I and II C. I, II and IV D. All of the above

3. Besides FIMM, which other regulators' functions have an impact on the UTS and PRS
industry?

I. Securities Commission Malaysia

II. Bank Negara Malaysia
III. Bursa Malaysia
IV. Companies Commission of Malaysia
A. I and III B. All of the above C. I and II D. I, II and III

4. Which of the following statement is CORRECT about the size of agency unit for
CUTA/CPRA?

A. An agency unit should not exceed 36 persons

B. An agency unit has no limitation
C. An agency unit should not exceed 50 persons
D. An agency unit should not exceed 38 persons

5. Which documents outline the regulatory requirements pertaining to the disclosure

documents of a Private Retirement Scheme?

I. Capital Markets and Services Act 2007

II. Guidelines for Public Offerings of Securities of Closed-end Funds
III. Guidelines on Private Retirement Schemes
IV. Capital Markets and Services (Private Retirement Scheme Industry) Regulations 2012

A. III and IV B. I and III C. I, III and IV D. All of the above

6. Which of the following statements are TRUE?

I. FIMM is a self-regulatory organisation that promotes the interest of the Malaysian banking and
insurance markets
II. FIMM Is responsible for enhancing the professional standards of Unit Trust and Private
Retirement Scheme Consultants
III. FIMM represents the industry on matters and concerns affecting the industry and embarks
on projects to promote industry growth.
IV. Persons who wish to become authorised Unit Trust and Private Retirement Scheme
Consultants must register with FIMM.

A. I, II and IV B. All of the above C. I and IV D. II, III and IV

7. What is Federation of Investment Managers Malaysia (FIMM) role as mandated by the

Securities Commission Malaysia?

I. Support industry development and act as industry’s liaison with the relevant stakeholders
II. Enhance Consultants professional standards
III. Maintain public confidence
IV. Launch new funds on behalf of the Fund Managers

A. All of the above B. I, II, and III C. I, II and IV D. I and III

8. Section 92A(1) of the Capital Markets and Services Act 2007 (CMSA) specifies the information
to be given to a person who invests in a Scheme.

This may include information that explains the key characteristics of the capital market product,
the nature of obligations assumed by parties dealing in the product, risks associated with the
products and details of the essential terms of the product. Failure to observe this requirement
could result in _________
A. a fine not exceeding RM10 million or imprisonment for a term not exceeding three (3) years or
both
B. a fine not exceeding RM30 million or imprisonment for a term not exceeding ten (10) years or
both
C. a fine not exceeding RM1 million or imprisonment for a term not exceeding three (3) years or
both
D. a fine not exceeding RM3 million or imprisonment for a term not exceeding ten (10) years or
both

Chapter 4: Marketing and Distribution

1. What is the main purpose of obtaining information relating to an investor’s investment
objectives during the suitability assessment process?

A. To ascertain the investor’s appreciation of the potential returns of the Schemes

B. To ascertain the investor’s risk profile and needs
C. To ascertain a suitable Scheme Provider for the investor
D. To ascertain the investor’s financial knowledge

2. The followings are characteristics of investment linked funds:

I. Investment linked funds are subject to monitoring by a Trustee and scrutiny by the SC.
II. Investment linked funds are required to meet the disclosure provisions within the rules and
regulation of the SC.
III. Investment linked funds are under the purview of the SC and BNM.
IV. Investment linked fund is a type of UTS.

A. II and III B. I and III C. I and IV D. None of the above

3. Which of the followings best describe the feature of an investment linked fund promoted by a
life Insurance company?

A. Investors cannot make withdrawals from investment linked funds

B. All Investment linked funds are quoted and traded on a stock exchange
C. Investment linked funds are not subject to the monitoring of a Trustee nor the Securities
Commission Malaysia
D. Investment linked funds are managed by a Unit Trust Management Company

4. An investor with RM130,000 would like to achieve RM260,000 within 14.4 years.
What is the required return on investment to reach that goal?

A. 5.1% p.a B. 6% p.a C. 5.15% p.a D. 5% p.a

5. Which of the following items are reflected in both UTS/PRS deed and prospectus/disclosure
document:

I. rights and responsibilities of the investors

II. experts' reports
III. removal, replacement and retirement of UTMC/PRS Provider and Trustee
IV. maximum fees and charges

A. I, Il and III B. I, III and IV C. I, II and IV D. All of the above

Chapter 5: Industry Code of Ethics and Rules of Professional Conduct
1. Consultants who breach the provisions of the FIMM’s Code of Ethics will face actions,
including

I. imprisonment
II. a private reprimand
III. a revocation of registration with the Securities Commission Malaysia
IV. a suspension of registration with the Federation of Investment Managers Malaysia

A. I and III only B. II and IV only

C. I, II and IV only D. II, III and IV only

2. The following statements are true about a Consultant abetting others in committing a
misconduct, EXCEPT:

A. It involves engaging with one or more persons in any conspiracy to commit a misconduct
B. It involves instigating or instructing any person to commit a misconduct
C. It is conducted by intentionally aiding others, by any act or omission, to commit a
misconduct
D. It refers to when a consultant report acts of misconduct to FIMM

3. Which of the following scenarios could happen when an organisation fails to inculcate a
strong compliance culture?

I. Increased client complaints and costs of restitution

II. Increased risk of litigation by clients
III. Decreased number of clients due to inability to create trust and confidence
IV. Enhanced consultants' professional standards

A. I and II B. All of the above C. I, II and III D. I

4. Which of the following is an example of poor after sales service?

A. Giving the investor regular updates on the status of their investment

B. Helping investors rebalance their portfolios
C. Providing advice to the investor on ways to manage their investment
D. Promoting growth funds to investors with conservative risk profile

5. Sally, who is a UTS and PRS consultant, has executed a transaction by using a form that was
pre-signed by her client.
Which of the following core principle of the FIMM's Code of Ethics did Sally breach?

A. Honesty and Integrity

B. Professionalism
C. Avoidance of conflict of interest
D. Disclosure of information

6. Which of the following should a consultant do?

I. make statement on yields or returns of any Scheme without any objective and reasonable
basis
II. provide an investor with clear explanation on the features of the Schemes that are being
marketed
III. provide accurate, timely and adequate information concerning the Schemes to assist an
investor in making an informed investment decision
IV. avoid any conflict of interest when dealing with an investor

A. All of the above B. I, II and III C. II, III and IV D. II and IV

7. Based on Core Principle Disclosure of information of the Code of Ethics, Distributors and
Consultants are prohibited from:

I. providing any forecast of any Scheme's performance

II. making statements on yields or returns without any objective and reasonable basis
III. concealing any information about a Scheme when comparing it with other Schemes
IV. engage in aggressive sales practices

A. II and III B. I and IV C. I, II, and III D. I and II

8. FIMM can take disciplinary action against Consultants/Distributors if they _____________.

A. abet the commission of a misconduct under the FIMM's Code

B. attempt to commit a misconduct under the FIMM's Code of Ethics
C. All of the above are correct
D. commit an act preparatory to or in furtherance of the commission of a misconduct under this
Code

9. The following statements are examples of Core Principle 2: Professionalism from FIMM’s
Code of Ethics, EXCEPT for:

A. Consultants shall provide prompt, efficient and continuous service to investors

B. Consultants shall exercise due care, skill and diligence when dealing with investors
C. Consultants shall encourage Investors to Invest in UTS or PRS through loan financing
D. Consultants are expected to have high standards of professionalism

10. FIMM Code of Ethics provides for the ethical standards and professional conduct of
Distributors and Consultants in _________________ .

A. dealing with Fund Managers

B. marketing and distribution of Unit Trust Scheme and Private Retirement Scheme
C. drafting Product Highlight Sheet
D. preparing marketing and promotional material

Chapter 6: Personal Financial Planning

1. Which of the following statement is correct?

A. Both individual Financial Planners and Consultants must register with FIMM
B. Both Financial Planners and Consultants must be licensed by the SC
C. Investment planning can be undertaken by Financial Planners only
D. Consultants must understand their clients’ investment goal and risk appetite.
2. In a comprehensive investment planning engagement, a consultant should:

I. determine the client's financial objectives and his order of importance

II. analyse the client's financial position and cash flow
III. identify investment options that provide guaranteed future returns
IV. determine the risk and return characteristics of the client's current investments

A. I, III and IV B. All of the above C. I, II and III D. I, II and IV

3. What is the MAIN reason for the financial planning industry to shift from a commission-

based payment to charging advisory fees?

A. Commission based payment is an outdated model

B. Financial planners have received complaints from clients about high commission charges
C. Commission based payment which is transaction-driven, makes it inappropriate when
advising clients on setting and achieving financial goals
D. Charging advisory fees is a more profitable business model

4. Which of the following aspects of an individual's financial life are covered in financial
planning?

I. Cash Management
II. Risk Management and Insurance Planning
III. Investment Planning
IV. Retirement and Estate Planning
V. Tax Planning

A. I, II, III and IV B. I, III, IV and V C. All of the above D. I, II, III and V

5. Dinesh is 28 years old and currently works as a Senior Executive at a marketing agency. He
has recently started a family and has bought a comfortable house. He has set aside a small
portion for investment.

What fund type would be most suitable for Dinesh to invest in?

A. Growth and Balanced UTS/PRS?

B. Income and Aggressive UTS/PRS
C. Income and Balanced UTS/PRS
D. Growth and Aggressive UTS and PRS

6. William was a Financial Planner who was approached by Reza to help plan Reza’s financial
wellbeing. As a good practice what is the initial step William should take to serve Reza better?

A. Developing and presenting financial planning options and alternatives

B. Gathering information and understanding Reza's current financial status
C. Establishing relationship with Reza by defining services offered, responsibilities and costs
involved
D. Analysing Reza's income, expenses and existing investments

7. Harry is a financial planner who wants to do an income tax planning for his client, John. John
is unable to provide details to Harry and needs to speak to his tax agent for more information.
What should Harry do?
A. Request for John to introduce him to the tax agent so he may interact with the tax agent
directly
B. To advise John to hire a new tax agent that Harry is familiar with
C. To get John to act as an intermediary between Harry and the tax agent, as Harry is not allowed
to contact the tax agent directly
D. Refuse to speak to the tax agent as this will give rise to a conflict-of-interest situation

8. Which of the following statements are TRUE?

I. Financial planning is not a regulated activity

II. A sole proprietor that has been granted a Capital Market Services Licence for financial
planning is not allowed to have any licensed representative to act on its behalf
III. The SC grants financial planning licence to individuals only
IV. The SC is the sole credential provider for those who intend to be financial planners

A. II only
B. I only
C. II, III and IV
D. All of the above

Chapter 7A: Features and Operations of Unit Trust Scheme

1. Assume the NAV of XYZ Equity Fund is determined as RM78,896,540 and that there are
96,500,000 units in circulation. Also assume that no transaction cost factor applies as
transaction costs are not material.

What is the selling and repurchase prices of a unit by rounding up the unit prices to four decimal
places?

(A) RM 1.2231
(B) RM 0.8176
(C) RM 0.6112
(D) RM 2.3154

2. Which of the following statements about unit holders' rights are correct?

I. Rights of unit holders are stipulated in the deed and offering documents
II. Unit holders do not have the right to require the funds' asset to be transferred to them
III. Unit holders can undertake the duties of the Trustee
IV. Unit holders’ liabilities are limited

A. All of the above B. I, III and IV C. I, II and III D. I, II and IV

3. Parties to a UTS trust deed include:

I. UTMC
II. IUTA
III. CUTA
IV. Trustee

A. I, II and III B. I only C. I, II, III and IV D. I and IV

4. ABC Fund has a total NAV of RM105,885,936 and units in circulation of 138,000,000.
Assuming there is no transaction cost, the selling price of the fund is RM0.7673.
What is the NAV per unit of ABC Fund?

A. RM 1.7673
B. RM 0.7673
C. RM 1.3033
D. RM 0.2327

5. Which of the following statements are TRUE?

I. UTS provides an ideal investment avenue for investors with limited capital
II. UTS enables investors to accumulate wealth and manage inflation in medium to long term
III. Generally, investments in UTS may provide better returns with an acceptable level of risk in
the long term
IV. Investors in UTS/PRS do not purchase securities in the portfolio directly

A. II and III B. All of the above C. I, II and III D. I and II

6. As of 1 May 2018, Alan owned 1,000 units of Fund MNO with an NAV price per unit of RM2.00.

A distribution of RM0.40 per unit was declared and paid in the form of units. Immediately after
the distribution payment, the NAV price per unit of Fund MNO was reduced to RM1,60.

What is the total number of units Alan owns after the distribution?

A. 800 units B. 250 units C. 1,000 units D. 1,250 units

7. The qualitative analysis of the performance of a UTS include the assessment on the following
items, EXCEPT:

A. Investment management style

B. UTMC credibility
C. Service aspects
D. UTMC's Director Anti Money Laundering Act (AMLA) checking.

8. Select the CORRECT examples of changes to a fund that may materially prejudice the
interests of unit holders

I. change of the nature or objective of the fund

II. change in distribution policy
III. increase in fees or charges
IV. change in IT service provider

A. II and III B. All of the above C. I, II, and III D. I and II

9. Please select the INCORRECT statement regarding trust deed.

A. Provisions and covenants of the trust deed must meet the minimum requirement specified in
the UTF Guidelines
B. The operation of each UTS is governed by a trust deed
C. Trustee is responsible for the overall operation of a UTS
D. The trust deed sets out the rights and obligations of the UTMC, trustee and unit holders

10. Investors may from time-to-time request for the following personal data in the Register to
be updated, EXCEPT:

A. Change of mailing address and/or emall address

B. Change of bank account number
C. Change of name
D. Change of medical history

11. Why do UTMCs declare unit split for their schemes?

I. Reduce the stated selling and repurchase prices

II. Reduce the historical and forward pricing
III. Maintain a lower unit price
IV. Maintain creation and cancellation prices

A. II and IV B. I and III C. II, III and IV D. I only

12. As of Dec 20X2, Ali owned 2,000 units of ABC Bond Fund with NAV per unit of RM1.00 and
1,000 units of DEF Equity Fund with NAV per unit RM1.50.
A dividend of RM 0.20 per unit of for ABC was declared in the form of fund units. After the
dividend declaration, NAV per unit of ABC Bond Fund is RM0.80.

On the same date, a 2-for-1 unit split was declared for DEF Equity Fund. After the unit split, Ali
held two units of DEF Equity Fund but with an NAV per unit of RM0.75.

How many units does Ali own in ABC Bond Fund and DEF Equity Fund after the corporate
actions?

A. 5,000 units B. 3,800 units C. 3,500 units D. 4,000 units

13. What are the main functions of a Trustee in a Unit Trust Scheme?

I. Invest monies in assets

II. Safeguard assets of the scheme
III. Protect investors' interests
IV. Manage and market the scheme

A. I and II B. All of the above C. II and III D. I, II, and III

Chapter 7B: Features and Operations of PRS Scheme

1. PRS Provider Delta has three core funds in their PRS. Which of these names can be accepted
as names of the core funds?

I. Delta Growth Fund

II. Delta Cash Management Fund
III. Delta Moderate Fund
IV. Delta FBMKLCI Tracker Fund

A. I, II, III
B. I, III
C. II, III
D. II, IV
2. Potential investors will be given a copy (either a hard or soft copy) of the disclosure material
when they request for subscription to a Scheme. In the case of Private Retirement Scheme
(PRS), this disclosure material is known as:

A. Annual Report
B. Information Memorandum
C. Disclosure Document
D. Prospectus

3. Which of the following statements relating to Product Highlights Sheet (PHS) is FALSE?

A. A separate PHS must be made available for each core and non-core PRS fund
B. A PHS facilitates an investor's understanding of the investment product
C. A potential investor can be provided either a hard or soft copy of the PHS
D. A potential investor should be given reasonable time to read and understand the PHS

4. Based on the World Bank's pension pillars, which of the following pillars exist in Malaysia’s
pension landscape?

I. Pillar 0 - State (Base or social pension)

II. Pillar 1 - Mandatory (Public pension plans that are publicly managed)
III. Pillar 2 - Mandatory (Occupational/personal pension plans)
IV. Pillar 3 - Voluntary (Voluntary personal pension schemes)
V. Pillar 4 - Voluntary (Non-financial arrangements/informal support informal support e.g. family
financial support by the younger generation)

A. III, IV and V B. I, II and III C. I, III, IV and V D. II, III and V

5. Which of the following fees and charges can affect PRS Members' return on Investments?

I. Commission
II. Annual Management Fees
III. Annual trustee fee
IV. Investment-Linked Product charges

A. I, II and III B. I and III C. III and IV D. II and IV

6. Which of the following scenarios where PRS withdrawals will be exempted from the 8% tax
penalty?

I. Member wants to pay for house renovation

II. Member is leaving Malaysia permanently
III. Member wants to repay housing loan
IV. Member wants to pay the medical expenses for his/her daughter who is suffering from a
serious illness

A. II, III and IV B. I, II and IV C. I, II and III D. I, Ill and IV

7. Which of the followings are the duties and responsibilities of the Private Pension
Administrator (PPA)?

I. Keep records of all transactions or monies paid or received

II. Undertake general promotion and awareness of the PRS
III. Act as a resource centre for data and research for the PRS industry
IV. Ensure proper conduct of all market participants through supervisory, surveillance and
enforcement work

A. I and III B. I and IV C. II and Ill D. All of the above

8. Which of the following statements on mandatory pension schemes are TRUE?

I. Mandatory pension schemes are retirement schemes that are mandated by law
II. In Malaysia, all private sector employees must participate in the EPF scheme
III. EPF savings can be withdrawn at the retirement age while a portion of it can only be
withdrawn under specific circumstances
IV. The purchase of annuities qualified as mandatory pension schemes

A. I, III and IV B. I, II and III C. All of the above D. I, II and IV

9. Which of the following are the benefits of PRS?

I. Provide a pool of funds to support retirees during retirement phase

II. Benefit to the Malaysian capital market
III. Reduce the burden on Government finances
IV. Additional source of long-term capital for economic growth

A. All of the above B. II and III C. I and IV D. I and II

10. Mr X started to invest in PRS ABC Fund at the age of 44 and he did not choose any core
fund. Prior to his 45th birthday, the PRS Provider informs Mr X that his fund will be switched
according to the rules of the default option. Which type of fund will it be switched to?

A. Moderate Fund B. Conservative Fund

C. Growth Fund D. Cash Management Fund
Answer
Chapter 1: Understanding Collective Investments Scheme in Malaysia
1. B
2. B
3. B
4. B
Chapter 2: Introduction to UTS and PRS
1. D
2. B
3. B
4. A
5. C
6. C
7. A
8. D
9. A
10. B
Chapter 3: Regulatory Framework
1. D
2. D
3. B
4. A
5. C
6. D
7. B
8. D
Chapter 4: Marketing and Distribution
1. B
2. D
3. C
4. D
5. B
Chapter 5: Industry Code of Ethics and Rules of Professional Conduct
1. B
2. D
3. C
4. D
5. B
6. C
7. C
8. C
9. C
10. B
Chapter 6: Personal Financial Planning
1. D
2. D
3. C
4. C
5. D
6. C
7. A
8. A
Chapter 7A: Features and Operations of Unit Trust Scheme
1. B
2. D
3. D
4. B
5. B
6. D
7. D
8. C
9. C
10. D
11. B
12. A
13. C
Chapter 7B: Features and Operations of PRS Scheme
1. B
2. C
3. A
4. C
5. A
6. A
7. D
8. B
9. B
10. A

Calculation
Chapter 7A: Features and Operations of Unit Trust Scheme

1. Answer: B
NAV per unit = RM78,896,540 = RM0.8176
96,500,000 units
6. Answer: D

New units = ($0.40 x 1000 units) / $1.60 = 250 units

Total units = 1000 units + 250 units = 1250 units

12. Answer: A

Bond Fund
Dividend value = 2000 units x RM0.20 = RM400
Units held after dividend = 2000 units + (RM400 / RM0.8) = 2500 units

Equity Fund
After the 2 for 1 unit split = 1000 units x 2 = 2000 units

Total unit owned = 4500 units (but don’t have answers in exam paper)