international finance and administration · microsoft word - ifa paper 1 - core modules june 2016 -...

© ICSA, 2016 of 30

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Subject no. 52B

Paper 1

International Finance and Administration Wednesday morning, 8 June 2016 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, 2016 of 30

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

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9 24

10 Total

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Total

Marker (full name):

Reviewer (full name):

Clerical check (full name):

Examiner review:

Total marks for paper:

© ICSA, 2016 of 30

Section A Answer all the questions in this section. Continue your answers on a separate sheet of paper if necessary. 1 A tax system in which a person pays more tax as their earnings increase is known as:

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(1 mark) 2 Name one of the essential elements needed to form a valid contract.

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(1 mark)

3 Which document (other than a statutory law) governs meetings of directors?

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(1 mark) 4 Shares which are considered to be owned by whoever has them in their possession are known as:

(Tick one box only)

A Ordinary shares

B Bearer shares C Preferential shares

D Redeemable shares (1 mark)

5 One of the historical sources of English law is ‘common law’. The other is:

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(1 mark)

6 What is the name of the document, issued by the Registrar of Companies, which provides evidence that a company is duly registered?

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(1 mark)

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7 Which body developed a model agreement on exchange of information on tax matters?

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(1 mark) 8 Any gifts that are made to individuals will be exempt from Inheritance Tax as long as the donor

lives for five years after making the gift. Is this true or false?

(Tick one box only)

True

False (1 mark) 9 Describe two features of Sharia-compliant bank accounts.

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10 The maximum penalty for an individual convicted of insider dealing is:

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A An unlimited fine

B Imprisonment for a term not exceeding two years C A fine or imprisonment for a term not exceeding two years, or both

D A fine or imprisonment for a term not exceeding seven years, or both

(1 mark)

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11 Explain why, in the past, a person may have been recorded as a ‘dummy settlor’.

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(2 marks)

12 Auditors appointed to conduct an audit of a company owe their duties to the directors of that

company. Is this true or false?

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True

False

(1 mark)

13 Assuming the ‘three certainties’ are satisfied, describe the other conditions which must exist for a

trust to be valid.

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(4 marks) 14 Define the term ‘inter vivos’.

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15 Give an example of the grounds upon which a court may order the winding up of a company.

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(1 mark)

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Total for Section A = 20 marks

© ICSA, 2016 of 30

Section B Answer all the questions in this section. Continue your answers on a separate sheet of paper if necessary. 16 Explain the differences between a private limited company and a foundation.

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17 Describe the main legal features of public limited companies.

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(6 marks)

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18 Explain why Protected Cell Companies (PCCs) have proven attractive to both investors in, and promoters of, collective investment schemes such as ‘umbrella funds’.

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19 Identify and describe the features of a non-charitable (or purpose) trust.

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(6 marks)

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20 List four of the usual powers granted to the protector of a discretionary trust.

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21 Explain why regulators often issue codes of practice for the conduct of regulated activities.

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(6 marks)

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22 Explain the roles of the two regulatory bodies which oversee the financial services industry in the UK.

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23 Explain why a customer may wish to use an offshore bank account.

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(6 marks)

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24 Identify the types of assets which may be held in a company incorporated in an offshore centre

and explain why this would be done.

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(6 marks)

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Total for Section B = 50 marks

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Section C Answer two questions only. Continue your answers on a separate sheet of paper if necessary. 25 Evaluate the advantages and disadvantages of precedent as a way for courts to reach decisions.

(15 marks)

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26 Explain how an individual can use offshore banking or offshore trust and company services to reduce their onshore taxation liability.

(15 marks)

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27 Explain the traditional model of money laundering and discuss its limitations. (15 marks)

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Total for Section C = 30 marks

© ICSA, 2016 of 30

Section D Answer two questions only. Continue your answers on a separate sheet of paper if necessary. 28 Compare and contrast ‘settlor reserved power trusts’ and ‘fixed interest trusts’.

(15 marks)

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29 Explain how and why a company may be wound up by means of a members’ voluntary liquidation,

a creditors’ voluntary liquidation and a compulsory liquidation. (15 marks)

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© ICSA, 2016 of 30

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© ICSA, 2016 of 30

30 The new finance director of Hager Trust and Company Services, based in an international financial

centre, has asked why money is being spent on training for trust and company administrators. She argues that these employees only carry out administrative procedures and do not need any special knowledge or skills. You have been asked to explain the reasons for their training.

Prepare a briefing note in which you analyse the areas of a trust and company administrator’s role in which they need to use technical knowledge and skills.

(15 marks)

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© ICSA, 2016 of 30

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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.

international finance and administration · microsoft word - ifa paper 1 - core modules june 2016 -...

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