Offshore Business Environment

Transcription

1 Subject no. 52A Certificate in Offshore Finance and Administration Offshore Business Environment February 2011 Wednesday morning 2 February 2011 Time allowed: 2 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. This examination paper is divided into three sections. You must attempt all parts of Question 1 in Section A, all questions in Section B, and two questions only in Section C. Section A carries 20 marks (2 marks for each part of Question 1). Section B carries 30 marks (6 marks for each question). Questions in Section C each carry 25 marks. You should allow yourself approximately 20 minutes in total to answer the questions in Section A, 40 minutes in total to answer the questions in Section B and 30 minutes for each of the questions attempted in Section C. ICSA, 2011 Page 1 of 6

2 Section A (Answer all parts of Question 1 Select only one of the options A, B, C or D for each part) 1. (i) The principles of statutory interpretation include: A. Maxims. B. Rules. C. Doctrines. D. Precedents. (ii) A bank in Paris agreeing a spot EUR/GBP contract with a bank in Chicago would have to take into account public holidays in: A. France and the UK. B. France and the US. C. France, the UK and the US. D. The UK and the US. (iii) Which international organisation has as one of its aims tax harmonisation? A. IMF B. FATF C. FSF (now FSB) D. OECD (iv) In which year did the first European Anti-Money Laundering (AML) Directive come into force? A B C D ICSA, 2011 Page 2 of 6

3 (v) The following are examples of legal remedies. Which one of the following is an equitable remedy? A. Quantum meruit. B. Damages. C. Rejection. D. Injunction. (vi) In terms of Taper Relief, what is the reduction of capital gains tax (CGT) that occurs if an asset has been held for 12 years before its disposal? A. 30% B. 40% C. 50% D. 60% (vii) Which particular person(s) must the trustees act in the best interests of? A. Protector. B. Settlor. C. Family of the settlor. D. Beneficiaries. (viii) Which UK contract law case determined the definition of consideration? A. Cutter v Powell. B. Miller v Jackson. C. Whitely v Chappell. D. Currie v Misa. (ix) Which payment system is Fedwire the US equivalent of? A. CHAPS B. CHIPS C. TARGET D. BACS ICSA, 2011 Page 3 of 6

4 (x) Which of the following is a Basel principle agreed in 1988? A. Co-operation with law enforcement agencies. B. Customer acceptance policy. C. Ongoing monitoring of higher risk accounts. D. Risk management. (Total: 20 marks) ICSA, 2011 Page 4 of 6

5 Section B (Answer all five questions) 2. Identify three problems associated with English common law that Equity sought to reduce. 3. Name six products and/or services available from offshore banks. 4. Identify four objectives which a portfolio manager should seek to achieve in managing the assets of clients on a discretionary basis. 5. Suggest three services a bank could offer that a money launderer may consider a way to conceal the source of money. 6. There is a presumption that written commercial agreements are usually intended to be legally binding. State three exceptions to the above statement. (Total: 30 marks) ICSA, 2011 Page 5 of 6

6 Section C (Answer two questions only) 7. (a) Outline the advantages for a bank in setting up as a managed bank in an offshore jurisdiction. (17 marks) (b) Suggest four possible stages that a managed bank might go through to become a standalone bank. (8 marks) (Total: 25 marks) 8. You work for a financial services provider in a well-regulated and well-supervised offshore jurisdiction. Explain the: (a) (b) (c) Criteria by which your company was deemed by the regulator fit and proper to attain a licence to undertake trust company business. (11 marks) Further criteria your trust company would also have to comply with to secure a licence to undertake investment business. (8 marks) Advantages to your company that regulation brings. (Total: 25 marks) 9. (a) Identify the different elements within the tax environment of an offshore jurisdiction that make the jurisdiction attractive to potential clients. (15 marks) (b) Discuss the potential tax liability that would arise if it can be demonstrated that a client is able to control an offshore structure. In your answer, state five ways in which an onshore jurisdiction typically seeks to deter tax avoidance. (10 marks) (Total: 25 marks) The scenarios included here, except where expressly identified, are entirely fictional. Any resemblance of the information in the scenarios to real persons or organisations, actual or perceived, is purely coincidental. ICSA, 2011 Page 6 of 6

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