100+ Free SEC Phase 2-7B Equities Securities Salesman (ESS) Exam — Philippines Practice Questions

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Key Facts: SEC Phase 2-7B Equities Securities Salesman (ESS) Exam — Philippines Exam

75%

Passing Score

SEC Philippines Guidelines

PHP 500

Exam Fee

SEC Fee Schedule

Exam Questions

PhilSEC Institute Specifications

3 hours

Exam Duration

PhilSEC Institute Specifications

T+2

Settlement Cycle

PSE Circular 2023

5 years

Record Retention

SRC Rule 52.1

Prepare for the Philippine SEC Equities Securities Salesman (ESS) Exam with this free bank of 100 practice questions. The 3-hour exam contains 50 multiple-choice questions administered by the PhilSEC Institute Foundation. Passing requires a minimum score of 75%.

Sample SEC Phase 2-7B Equities Securities Salesman (ESS) Exam — Philippines Practice Questions

Try these sample questions to test your SEC Phase 2-7B Equities Securities Salesman (ESS) Exam — Philippines exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1During the pre-open phase of the Philippine Stock Exchange (PSE) trading day, what is the rule regarding order cancellation and modification between 09:15 AM and 09:30 AM?

A.Orders can be cancelled or modified freely without any restrictions.

B.Order cancellation and modification are strictly prohibited during this time.

C.Only order modification is allowed, but cancellations are prohibited.

D.Only cancellations are allowed, but modifications are prohibited.

Explanation: The PSE pre-open phase runs from 09:00 AM to 09:30 AM. Order cancellation and modification are allowed from 09:00 AM to 09:15 AM, but are strictly prohibited during the final 15 minutes (09:15 AM to 09:30 AM) to establish an orderly opening price.

2At what time does the regular trading session of the Philippine Stock Exchange (PSE) resume after the daily market recess?

A.12:30 PM PST

B.01:00 PM PST

C.01:30 PM PST

D.02:00 PM PST

Explanation: The PSE trading schedule includes a mid-day market recess from 12:00 PM to 01:00 PM PST, after which continuous trading resumes at 01:00 PM PST.

3What is the standard settlement cycle (T+X) for equity transactions executed on the Philippine Stock Exchange (PSE)?

A.T+1 (Transaction date plus one business day)

B.T+3 (Transaction date plus three business days)

C.T+5 (Transaction date plus five business days)

D.T+2 (Transaction date plus two business days)

Explanation: Effective August 24, 2023, the PSE and the Securities Clearing Corporation of the Philippines (SCCP) transitioned from a T+3 to a T+2 settlement cycle to align with global standards and reduce settlement risk.

4Which entity acts as the central securities depository for equities traded on the Philippine Stock Exchange (PSE), providing book-entry settlement?

A.Philippine Depository and Trust Corporation (PDTC)

B.Securities Clearing Corporation of the Philippines (SCCP)

C.Capital Markets Integrity Corporation (CMIC)

D.Securities and Exchange Commission (SEC)

Explanation: The Philippine Depository and Trust Corporation (PDTC) acts as the depository for securities, holding shares in scripless (book-entry) form to facilitate safe custody and electronic transfer.

5During which daily trading phase on the Philippine Stock Exchange (PSE) are matched orders executed specifically at the final closing price?

A.Pre-close phase (02:45 PM – 02:48 PM)

B.Continuous trading session (01:00 PM – 02:45 PM)

C.Run-off / Trading-at-last phase (02:50 PM – 03:00 PM)

D.Pre-open phase (09:00 AM – 09:15 AM)

Explanation: During the Run-off or Trading-at-last phase from 02:50 PM to 03:00 PM, orders can only be entered and matched at the final, established closing price of the trading day.

6Which of the following describes the daily schedule of the market recess at the Philippine Stock Exchange (PSE)?

A.12:00 PM to 01:30 PM PST

B.11:30 AM to 01:00 PM PST

C.12:00 PM to 01:00 PM PST

D.12:30 PM to 01:30 PM PST

Explanation: The PSE takes a mid-day market recess for exactly one hour, from 12:00 PM to 01:00 PM PST, during which no trading occurs.

7What is the rule regarding order cancellation and modification on the Philippine Stock Exchange (PSE) during the pre-close phase between 02:48 PM and 02:50 PM?

A.Order cancellations and modifications are strictly prohibited during these two minutes.

B.Orders can be cancelled or modified freely.

C.Only cancellations are permitted, but modifications are blocked.

D.Only modifications are permitted, but cancellations are blocked.

Explanation: The pre-close phase runs from 02:45 PM to 02:50 PM. Cancellations and modifications are allowed during the first three minutes (02:45 PM to 02:48 PM) but are prohibited during the last two minutes (02:48 PM to 02:50 PM) to ensure an orderly closing price calculation.

8Which entity is responsible for clearing and coordinating the settlement of transactions executed on the Philippine Stock Exchange (PSE)?

A.Philippine Depository and Trust Corporation (PDTC)

B.Capital Markets Integrity Corporation (CMIC)

C.Securities Clearing Corporation of the Philippines (SCCP)

D.Securities Investors Protection Fund (SIPF)

Explanation: The Securities Clearing Corporation of the Philippines (SCCP), a wholly-owned subsidiary of the PSE, is the clearinghouse that coordinates the clearing and settlement of cash and securities transactions.

9To engage in short selling on the Philippine Stock Exchange (PSE), what must a client establish prior to executing the short sale order?

A.A Securities Borrowing and Lending (SBL) agreement to secure the target shares.

B.A margin account with at least 80% initial equity in cash.

C.A written guarantee from a commercial bank confirming lines of credit.

D.An option contract giving the client the right to buy the shares at a discount.

Explanation: Naked short selling is strictly prohibited under Philippine regulations. Investors must have a Securities Borrowing and Lending (SBL) arrangement in place to borrow the shares before executing a short sale.

10Under the Philippine Stock Exchange (PSE) short selling guidelines, which securities are eligible for short selling?

A.All securities listed on the PSE Main Board without exception.

B.Only newly listed companies during their first 90 days of trading.

C.Only non-dividend paying small-cap companies with high volatility.

D.Constituents of the PSE Index (PSEi), select MidCap/Dividend Yield stocks, and Exchange-Traded Funds (ETFs).

Explanation: The PSE restricts short selling to liquid and large-cap securities. Eligible stocks are limited to PSEi constituents, select stocks in the PSE MidCap and Dividend Yield indices, and ETFs.

About the SEC Phase 2-7B Equities Securities Salesman (ESS) Exam — Philippines Exam

The SEC Phase 2-7B Equities Securities Salesman (ESS) Exam is the mandatory licensing test for professionals seeking to act as equities salesmen/saleswomen for broker-dealers in the Philippines. It validates competence in the Securities Regulation Code (SRC) business rules, PSE trading mechanics, client suitability (KYC), margins, and market integrity standards.

Assessment

50 multiple-choice questions covering regulatory framework, PSE trading rules, client accounts, and market conduct.

Time Limit

3 hours

Passing Score

75%

Exam Fee

PHP 500.00 (Securities and Exchange Commission (Philippines))

SEC Phase 2-7B Equities Securities Salesman (ESS) Exam — Philippines Exam Content Outline

40%

PSE Trading Rules & Market Operations

PSE trading phases (pre-open, recess, run-off), board lots, tick sizes, static price bands (+50% ceiling / -30% floor), dynamic thresholds, and block sales.

30%

Client Account Management & Suitability

Know-Your-Customer (KYC) requirements, customer account opening, margin trading rules (50% initial, 25% maintenance), discretionary account setups, and client priority.

20%

Securities Regulation Code (SRC) & Compliance

Key provisions of Republic Act No. 8799, salesman licensing, books and records retention (5 years), independent directors (Rule 38), and SRO compliance rules.

10%

Market Conduct, Fraud & Prohibited Practices

Market manipulation (painting the tape, wash sales, marking the close), front-running, churning, insider trading, and Anti-Money Laundering Act (AMLA) compliance.

How to Pass the SEC Phase 2-7B Equities Securities Salesman (ESS) Exam — Philippines Exam

What You Need to Know

Passing score: 75%
Assessment: 50 multiple-choice questions covering regulatory framework, PSE trading rules, client accounts, and market conduct.
Time limit: 3 hours
Exam fee: PHP 500.00

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

SEC Phase 2-7B Equities Securities Salesman (ESS) Exam — Philippines Study Tips from Top Performers

1Memorize the PSE trading phases, especially the no-cancellation pre-open (09:15 AM - 09:30 AM) and pre-close (02:48 PM - 02:50 PM) periods.

2Understand the math behind long margin accounts: calculate equity as (Market Value - Loan) / Market Value and check against the 25% maintenance floor.

3Review the static price thresholds: ceiling is always +50% of reference price, while the floor is -30% of reference price.

4Know the Anti-Money Laundering Act (AMLA) triggers: covered transactions are cash or equivalent exceeding PHP 500,000 within one banking day, and reports must be filed within 5 working days.

5Familiarize yourself with corporate actions: dividend dates (ex-date is T-1 relative to record date), stock splits, and cumulative voting rights for minority holders.

Frequently Asked Questions

What is the passing score for the Philippine SEC Equities Securities Salesman Exam?

To pass the specialized Phase 2 Equities Securities Salesman (ESS) exam, candidates must achieve a score of at least 75% (38 correct answers out of 50 questions). This is higher than the Phase 1 General Exam passing score of 65%.

What is the settlement cycle for stock transactions on the PSE?

The settlement cycle on the PSE is T+2 (Transaction date plus two business days). This took effect on August 24, 2023, transitioning from the previous T+3 settlement cycle to reduce market settlement risk.

What are the margin account requirements under Philippine SEC rules?

For margin accounts, the initial margin requirement is 50% of the transaction value. The regulatory maintenance margin floor is 25% for long positions and 30% for short positions. Brokerage firms may enforce stricter house rules.

Can I take the Phase 2-7B exam without passing Phase 1?

No. Passing the SEC Certification Exam Phase 1 (General) is a mandatory prerequisite before you can sit for any of the Phase 2 specialized module exams.

What is the difference between an Associated Person and a Salesman under SEC rules?

A Salesman is licensed to solicit and trade securities for clients. An Associated Person is the designated compliance officer of the broker-dealer who supervises the salesmen and is strictly prohibited from performing sales or trading functions.