international finance and administration - icsa: the ... (full name): clerical check (full name):...

© ICSA, 2017 of 32

Please complete this box:

Candidate number: as indicated on your admission slip

Desk number:

If you are using a calculator, please enter the make and model number:

Make (company name):

Model number:

Subject no. 52B

Paper 1

International Finance and Administration Wednesday morning, 29 November 2017 Time allowed: 3 hours Do not open this examination paper until the presiding officer or an invigilator tells you to. You must not take this paper out of the examination room. The examination paper contains 30 questions and is divided into four sections. You must attempt all questions in Section A and Section B, two questions in Section C and two questions in Section D. Section A contains 20 marks, Section B contains 50 marks, Section C contains 30 marks and Section D contains 30 marks. There are 130 marks available in total for the paper. You should allow yourself approximately 30 minutes in total to answer the questions in Section A, 70 minutes in total to answer the questions in Section B and 20 minutes for each of the questions attempted in Sections C and D. You may continue your answers on a separate sheet of paper if necessary. Separate answer sheets are available from the invigilator.

Note: Unless otherwise specified, you should assume that an Act or an organisation referred to in the questions is a UK Act or organisation.

© ICSA, 2017 of 32

Section A Answer all the questions in this section. Continue your answers on a separate sheet of paper if necessary. 1 In the context of contract law, what is meant by ‘specific performance’?

__________________________________________________________________________ __________________________________________________________________________

(1 mark)

2 Give one type of activity that a service provider can conduct without authorisation from a regulator.

__________________________________________________________________________ __________________________________________________________________________

(1 mark) 3 Your colleague has been asked to provide a definition of the term ‘offshore financial centre’ for a

potential client, and has asked for your help. Provide a brief definition.

__________________________________________________________________________ __________________________________________________________________________

(1 mark)

4 A trust can be described as which type of arrangement?

(Tick one box only)

A Contractual

B Voluntary C Legal

D Non-binding

(1 mark)

© ICSA, 2017 of 32

5 Explain what a ‘fiduciary relationship’ is.

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

(2 marks)

6 The separation of the legal personality of the company from its owners and directors is referred to as the veil of incorporation (or the corporate veil). Give two examples of where a court may order the lifting or piercing of this corporate veil.

i ________________________________________________________________________

________________________________________________________________________ ii ________________________________________________________________________

________________________________________________________________________

(2 marks)

7 The phrase ‘stare decisis’ means a court decision is to be overturned.

Is this true or false? (Tick one box only)

True

False

(1 mark) 8 Using an example, explain what a ‘resulting trust’ is.

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

(2 marks)

© ICSA, 2017 of 32

9 The Crown Dependencies have their own legal systems which include both customary law and statute law. Despite this, primary legislation passed requires royal assent from the Privy Council.

Give the reason for this process.

__________________________________________________________________________ __________________________________________________________________________

(1 mark)

10 A Mareva injunction is:

(Tick one box only)

A An equitable remedy a court may make, ordering the parties to a contract to fulfil their obligations under it.

B An order of the court preventing a defendant to an action from disposing of assets or

transferring them from the jurisdiction. C A judicial order restraining a person from doing something or ordering them to do

something. D The revocation or cancellation of a contract.

(1 mark)

11 An individual is considering conducting business activities through an unlimited liability company. What might make this more attractive than a limited liability company?

__________________________________________________________________________ __________________________________________________________________________

(1 mark)

12 What are statutory laws?

__________________________________________________________________________ __________________________________________________________________________

(1 mark)

© ICSA, 2017 of 32

13 Describe the ‘maximum period’ for which a trust may exist.

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

(2 marks)

14 Other than companies, state two structures which are commonly referred to as entities.

i ________________________________________________________________________

________________________________________________________________________ ii ________________________________________________________________________

________________________________________________________________________

(2 marks)

15 What is the system of law under which judges are guided by previous decisions of the courts,

under the doctrine of judicial precedent?

__________________________________________________________________________

(1 mark)

__________________________________________________________________________

Total for Section A = 20 marks

© ICSA, 2017 of 32

Section B Answer all the questions in this section. Continue your answers on a separate sheet of paper if necessary. 16 The conditions of a contract should be fulfilled completely. If a party to the contract does not fulfil a

condition of that contract, they are said to be in breach of contract. What actions could the other party take?

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

__________________________________________________________________________

(6 marks)

© ICSA, 2017 of 32

17 Explain what the ‘progressive’ and ‘proportional’ classifications of taxation are.

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

(6 marks)

18 Explain the purpose of anti-avoidance legislation in respect of taxation.

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

(4 marks)

© ICSA, 2017 of 32

19 Explain how an English court may consider different factors in reaching its decision in trust-related cases.

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

(6 marks)

20 Explain why it is common practice for trustees to maintain separate capital and income accounts.

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

(4 marks)

© ICSA, 2017 of 32

21 Explain three types of market abuse in respect of investment securities.

i _______________________________________________________________________

_______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________

ii _______________________________________________________________________

_______________________________________________________________________ _______________________________________________________________________

_______________________________________________________________________

iii _______________________________________________________________________

_______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________

(6 marks)

22 Describe the features of a foundation.

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

(6 marks)

© ICSA, 2017 of 32

23 In the past, blind trusts were commonly created in offshore centres and the trust instrument was drafted with only a well-known charity identified as a beneficiary. Many of these trusts still exist today. Explain why a trustee of a blind trust may face difficulties.

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

(6 marks)

24 List six of the nine Financial Action Task Force (FATF) special recommendations.

i ________________________________________________________________________

________________________________________________________________________ ii ________________________________________________________________________

________________________________________________________________________ iii ________________________________________________________________________

________________________________________________________________________ iv ________________________________________________________________________

________________________________________________________________________

v ________________________________________________________________________

________________________________________________________________________

vi ________________________________________________________________________

________________________________________________________________________

(6 marks)

© ICSA, 2017 of 32

__________________________________________________________________________

Total for Section B = 50 marks

© ICSA, 2017 of 32

Section C Answer two questions only. Continue your answers on a separate sheet of paper if necessary. 25 Compare and contrast the three most common forms of portfolio management service provided by

offshore investment managers.

(15 marks)

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

__________________________________________________________________________

© ICSA, 2017 of 32

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

26 In September 1997, the Basel Committee on Banking Supervision (BCBS) published the Core Principles for Effective Banking Supervision (the Core Principles).

Discuss what the Core Principles were intended to achieve, and what changes were made at each stage of their development from 1997 to date.

(15 marks)

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

27 Discuss the reasons why the services offered by providers based in offshore financial centres may be vulnerable to money laundering.

(15 marks)

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

__________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

__________________________________________________________________________

Total for Section C = 30 marks

© ICSA, 2017 of 32

Section D Answer two questions only. Continue your answers on a separate sheet of paper if necessary. 28 David was the settlor of a trust, but he is now deceased. The beneficiaries of the trust are Michael,

his son, and Michael’s wife, Kelly. A corporate trustee is the sole trustee of the trust. Kelly has asked the trustee whether David prepared a letter of wishes and has also asked what distributions have been made to Michael. The trustee needs to decide whether it should disclose this information.

Explain what factors the trustee should consider, and why.

(15 marks)

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

29 Explain how, and why, polls and proxies are used in connection with the conduct of voting at a meeting of a company.

(15 marks)

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

__________________________________________________________________________

© ICSA, 2017 of 32

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

30 Jason has been working solely as an executive director for a trust and company services provider in an international finance centre. He is considering resigning and instead serving in non-executive director roles for unconnected trust and company service providers in the same centre. His current firm will not restrict him from doing so once he has resigned.

Compare and contrast the role of executive director that Jason holds now, with the non-executive director roles that Jason plans to hold in the future.

(15 marks)

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

__________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

© ICSA, 2017 of 32

__________________________________________________________________________

Total for Section D = 30 marks

Total for paper = 130 marks

END

The scenarios included here are entirely fictional. Any resemblance of the information in the scenarios to real persons or organisations, actual or perceived, is purely coincidental.

Do not write on this page – examiner use only Section A Section B Section C

Section D

Question Question Question Question

1 16 25 28

2 17 26 29

3 18 27 30

4 19 Total Total

5 20

6 21

7 22

8 23

9 24

10 Total

11

12

13

14

15

Total

Marker (full name):

Reviewer (full name):

Clerical check (full name):

Examiner review:

Total marks for paper:

international finance and administration - icsa: the ... (full name): clerical check (full name):...

Documents