LIFM Topic 1-4 Revision PDF

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LIFM Topic 1 Revision Who regulates financial markets in Australia? A. ASIC B. ASX C. APRA D. All of the above Common law (also called case law, court-made law or judge-made law) is law formed and developed A. By the Courts B. By the Parliament C. Both of the above Why are financial markets regulated in Australia? A. Reduction of financial crime B. Financial stability C. Investor/consumer protection D. All of the above An example of legislation (law made by parliament) is the Corporations Act 2001 A. True B. False Who/what is Australia’s corporate, markets and financial services regular? A. ACCC B. ACMA C. ASIC D. ASX The laws administered by ASIC are designed to protect A. Consumers B. Investors C. Creditors D. All of the above Is APRA a private company or statutory body A. Company B. Statutory body Which regulator overseas banks, credit unions, building societies etc... A. ASIC B. ASX C. APRA D. None of the above

Who Am I? I was formed in ‘87’ I’m a private for profit co I oversee compliance with listing rules A. ACMA B. ACCC C. ASX D. ASIC What type of law involves the regulation of individuals in their dealings with each other? A. Criminal law B. Civil law What doctrine says the Judiciary, Legislature & Executive should be independent of each other A. Doctrine of separation of powers B. Doctrine of legal precedent C. All of the above

LIFM Topic 2 Revision A company can A. Lend and borrow money B. Enter into contracts C. Be the registered proprietor of land D. All of the above A company is A. The same as its directors B. An artificial person created by law C. A group of friends D. All of the above All public companies are listed on the ASX A. True B. False Each company in a corporate group is the same legal entity A. True B. False The body responsible for the administration and enforcement of the Corporation law is A. ACMA B. ACCC C. ASX D. ASIC

Under s45A of the CA proprietary companies are classified as either A. Limited by shares & limited by guarantee B. Public and private C. Small or large D. Listed and unlisted The current minimum number of persons required to form a pty company is A. 2 B. 3 C. 1 D. 50 A company named Mars Limited can be identified as what sort of company A. A proprietary company B. A large proprietary company C. A holding company D. A public company Company X has revenue less that $25 mil, less than 50 employees and assets < 12.5 mil, so it’s A. A large proprietary company B. A small proprietary company C. A company limited by guarantee D. A no liability company The veil of incorporation ALWAYS shields participants in the company from personal liability A. True B. False Re Darby {1911}1KB95 is an example of the law lifting the corporate veil A. Under statute law B. Under case law or common law C. Both of the above The corporate veil can only be lifted under case law/common law. A. True B. False Directors can be personally liable if they allow company to trade whilst insolvent A. True (Under ss 588G to 588M) B. False: Directors are protected by the corporate veil

LIFM Topic 3 Revision Duplicate of LIFM Disclosure and Investor Protection Under Australian law, Pty companies cannot invite the public to subscribe to shares or debt? A. True B. False Chapter 6D of the CA applies to a Primary issue of securities. A. True – it applies to a primary issue of shares or debentures B. False – it applies to selling shares on the secondary market What is the purpose of Chapter 6D? A. To make it as hard as possible for companies to raise funds B. To give work to ASIC and its employees C. To ensure investors can make informed investment decisions Unless it is exempt, when does a company need to prepare a disclosure document? A. When a company invites the public to take up shares B. When the company invites the public to take up debt C. All of the above A disclosure document is not required when A. It’s a small scale exemption B. It’s a sophisticated investor exemption C. Professional or employee exemption D. All of the above Who/what is a sophisticated investor under the CA? A. Investment is $500k B. Net assets of $2.5 mil C. Income of $250k D. All of the above are relevant What must be included in a prospectus under s710 CA? A. Rights and liabilities attaching to the securities B. Assets & liabilities of the company C. Profits, losses and prospects of the company D. All of the above Breach of the prohibitions contained in Chapter 6D can give rise to A. Civil Penalties B. Criminal Penalties C. Both of the above

Under s728 CA a company must NOT offer securities if there is: A. A misleading or deceptive statement B. An omission of material required by s710-715 C. A new circumstance that’s arisen since doc lodged with ASIC D. All of the above The due diligence defence applies to people charged with issuing a defective prospectus A. True B. False Reasonable reliance defence is available if a person places reasonable reliance on information A. Provided by an outside expert B. Provided by a director C. Provided by an agent D. Provided by an employee Common law remedies for misrepresentation include A. Rescission B. Damages C. Damages for negligent misrepresentation D. All of the above Only company directors can be criminally liable for breaches of s728 A. True B. False

LIFM Topic 4 Revision Section 124 CA sets out the legal capacity and powers of a company A. True B. False Considerations for the company with debt financing are A. There is a tax deduction for interest B. The payment of interest is a fixed obligation C. Lenders aren’t members of the company D. All of the above Considerations for the company with equity financing include A. There is no tax deduction for the payment of dividends B. A company needs to have profits to pay dividends C. The ownership of shares is at the owner’s risk D. All of the above

Where does a company get power to issue shares? A. Its constitution B. s124 CA C. s245A D. All of the above If a company is a pty company directors must ensure the number of shareholders doesn’t exceed A. 100 members B. 25 shares C. 50 members D. 50 shares Preference shareholders always have the right to vote A. True B. False Ordinary shareholders generally have the right to be repaid capital on the coy’s winding up A. True B. False If the company is insolvent when it pays a dividend directors can be personally liable under A. s588G B. s180 C. s181 D. All of the above A company wishing to issue a debenture A. Must appoint a trustee s283AA B. Must have a trust deed as per s283AB C. Can list and trade it on the ASX D. All of the above Personal property refers to A. Real estate B. Land and buildings C. Property other that land and buildings D. None of the above From 30 Jan 2012 the registration of securities given by a company for a loan is governed by A. The Corporations Act B. The ASIC Act C. The Personal Property Securities Act 2009 D. None of the above

Under the PPS if the security is not perfect then priority is based on the order of attachment A. True B. False Under the PPS Act, the security interest must _____ to the personal property? A. Attach B. Detach C. Adhere D. None of the above -> (A security interest must have 'attached' to collateral) What gives priority if the grantor (i.e. the owner of the security) fails to pay? A. The constitution B. The debenture C. Perfection (priority) D. The mortgage The key issues when lending money are to ensure A. The loan has security (security interest) B. The lender’s security interest is registered (perfection) C. Both of the above...