MPF exam Sanctions and Penalties 制裁及罰則 Practice questions

Question 1

A principal proposes to forfeit an MPF intermediary’s commission for a failure of duty. What should primarily be checked to determine whether the principal may impose this internal sanction?

Accepted Answer

The agency agreement or other contract between the principal and intermediary

Answer

The maximum criminal fine under section 103 of the Securities and Futures Ordinance

Answer

The fee table for the constituent funds of the MPF scheme

Answer

The maximum prison term under section 107 of the Securities and Futures Ordinance

Question 2

An MPF intermediary breaches section 103 of the Securities and Futures Ordinance by issuing a public advertisement for an MPF scheme without SFC authorisation or an applicable statutory exemption. Excluding additional daily fines for a continuing offence, what is the maximum penalty?

Accepted Answer

A fine of HK$500,000 and three years’ imprisonment

Answer

A fine of HK$1,000,000 and seven years’ imprisonment

Answer

A fine of HK$500,000 and seven years’ imprisonment

Answer

A fine of HK$1,000,000 and three years’ imprisonment

Question 3

Ms Lee is an MPF intermediary in Hong Kong. Her principal approves an advertisement inviting the public to participate in an MPF scheme, but its issue has neither SFC authorisation nor an applicable statutory exemption. Which statement is correct?

Accepted Answer

Issuing the advertisement may involve a section 103 offence; the principal’s approval does not replace authorisation or exemption

Answer

The principal’s approval is sufficient to satisfy section 103

Answer

Ms Lee’s registration as an MPF intermediary automatically exempts the advertisement

Answer

Section 103 cannot apply if the advertisement contains no misrepresentation

Question 4

Which statement about section 107 of the Securities and Futures Ordinance is NOT correct?

Accepted Answer

The offence can arise only where the misrepresentation is made through a public advertisement

Answer

Reckless misrepresentations can also involve this offence

Answer

The inducement can concern MPF schemes or pooled investment funds

Answer

The maximum penalty is a fine of HK$1,000,000 and seven years’ imprisonment

Question 5

During a private meeting, MPF intermediary Mr Chan induces Ms Wong to participate in an MPF scheme through fraudulent misrepresentations. His principal later forfeits his commission under their contract. Which statement is most appropriate?

Accepted Answer

Section 107 may still apply, carrying a maximum fine of HK$1,000,000 and seven years’ imprisonment

Answer

Forfeiture of commission prevents any further statutory criminal liability

Answer

Section 107 may still apply, but its maximum penalty is only HK$500,000 and three years’ imprisonment

Answer

As the meeting was private, there is contractual liability only and no criminal exposure under section 107

Question 6

Which statements about sanctions and penalties for MPF intermediaries are correct? (i) A principal may impose a reprimand under the parties’ contract; (ii) a continuing section 103 offence may attract additional daily fines; (iii) section 107 covers fraudulent but not reckless misrepresentations; (iv) a public advertisement may fall outside the relevant section 103 prohibition where its issue is authorised by the SFC or a statutory exemption applies.

Accepted Answer

(i), (ii) and (iv) only

Answer

(i) and (ii) only

Answer

(i), (iii) and (iv) only

Answer

All of (i), (ii), (iii) and (iv)

Question 7

For an MPF intermediary’s criminal liability, which Ordinance contains the public advertising offence under section 103 and the offence of inducing participation through misrepresentations under section 107?

Accepted Answer

Securities and Futures Ordinance

Answer

Mandatory Provident Fund Schemes Ordinance

Answer

Occupational Retirement Schemes Ordinance

Answer

Insurance Ordinance

Question 8

Ms Lam, an MPF intermediary, issues an advertisement to the public promoting only an approved pooled investment fund. Its issue has neither SFC authorisation nor an applicable statutory exemption. Which statement about section 103 of the Securities and Futures Ordinance is correct?

Accepted Answer

The section also covers approved pooled investment funds, so issuing the advertisement may constitute an offence.

Answer

The section does not apply because the advertisement does not promote an MPF scheme.

Answer

The fund’s approved status is sufficient to exempt the advertisement automatically.

Answer

The section can apply only after someone actually invests in the fund because of the advertisement.

Sanctions and Penalties 制裁及罰則

Contractual Sanctions by Principals 主事人按合約施加的處分

Section 103: Public Advertisements 第103條：向公眾發出廣告

Section 107: Misrepresentations Inducing Investment 第107條：失實陳述誘使投資

Practice