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Exam Review

Key Facts: FIMS Exam

Exam Questions

SEC

2 hours

Exam Time

SEC

PHP 2,000

Exam Fee

SEC

75%

Passing Score

SEC

T+1

Govt Settlement

PDEx

T+2

Corp Settlement

PDEx

The SEC FIMS exam is a 2-hour, 50-question test with a registration fee of PHP 2,000 and a 75% passing score. It is administered by the SEC Philippines and requires sponsorship by a registered broker-dealer. Major topics include PDEx trading and settlement (T+1 for government, T+2 for corporate), pricing calculations (YTM, accrued interest, duration, convexity), withholding tax rules (20% FWT, 5-year individual exemption with graduated pre-termination rates), 2026 Qualified Buyer (QB) rules, and AMLA compliance.

Sample FIMS Practice Questions

Try these sample questions to review concepts for the FIMS exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which of the following describes the key characteristics of Philippine Treasury Bills (T-bills)?

A.Short-term debt instruments issued at a discount with maturities of 91, 182, and 364 days

B.Medium-term debt instruments paying semi-annual coupons with maturities of 2 to 5 years

C.Long-term debt instruments issued at par paying quarterly interest with maturities of 10 years or more

D.Zero-coupon securities issued by private corporations with maturities of up to 270 days

Explanation: Treasury Bills (T-bills) are short-term government securities issued by the Republic of the Philippines through the Bureau of the Treasury (BTr). They do not pay a coupon; instead, they are sold at a discount to face value and mature at par (100). The standard tenors offered in the weekly auctions are 91 days, 182 days, and 364 days.

2What is the standard coupon payment frequency for Philippine Treasury Bonds (T-bonds) issued in the primary market?

A.Monthly

B.Quarterly

C.Semi-annually

D.Annually

Explanation: Philippine Treasury Bonds (T-bonds), including FXTNs (Fixed Rate Treasury Notes), pay interest semi-annually. The coupon rate is determined at auction and remains fixed throughout the life of the bond. Payments are made every six months until the maturity date, at which point the principal is also repaid.

3Retail Treasury Bonds (RTBs) are specifically structured to target retail investors. Which of the following is a distinguishing feature of RTBs compared to regular Treasury Bonds?

A.They are tax-exempt for all types of individual and corporate investors

B.They have a lower minimum investment denomination, typically PHP 5,000, and pay quarterly coupons

C.They are non-negotiable and cannot be traded in the secondary market

D.They are issued exclusively in foreign currencies such as USD or EUR

Explanation: Retail Treasury Bonds (RTBs) are designed to make government securities accessible to retail and small investors. They feature a low minimum investment threshold (typically PHP 5,000 or multiples thereof) and pay interest quarterly rather than semi-annually. RTBs are negotiable and can be traded on the secondary market through authorized selling agents.

4Which of the following statements regarding Retail Dollar Bonds (RDBs) issued by the Philippine government is correct?

A.They must be purchased and settled exclusively in Philippine Pesos

B.They are US dollar-denominated securities designed to provide retail investors a low-barrier access to foreign currency assets

C.They are sold only to institutional buyers and qualified institutional buyers (QIBs)

D.They carry a variable interest rate linked directly to the BSP overnight rate

Explanation: Retail Dollar Bonds (RDBs) are US dollar-denominated government securities that allow retail investors (including Overseas Filipino Workers) to invest with relatively small denominations (e.g., USD 200). They pay interest quarterly and help the government diversify its funding sources while offering retail investors a dollar-denominated asset with sovereign backing.

5Which agency is responsible for issuing sovereign debt securities, conducting government securities auctions, and managing the public debt of the Philippines?

A.Securities and Exchange Commission (SEC)

B.Bangko Sentral ng Pilipinas (BSP)

C.Bureau of the Treasury (BTr)

D.Philippine Dealing & Exchange Corp. (PDEx)

Explanation: The Bureau of the Treasury (BTr), an agency under the Department of Finance, is responsible for the direct issuance of sovereign debt on behalf of the Republic of the Philippines. The BTr conducts the primary auctions for Treasury Bills and Treasury Bonds, maintains the primary registration system, and manages the government's cash resources and public debt portfolio.

6In a primary market auction for Philippine Government Securities, how does the competitive bidding process function?

A.Primary Dealers submit bids specifying the volume they wish to buy and the desired yield, and bids are accepted starting from the lowest yield upward

B.Retail investors submit bids through commercial banks specifying the maximum price they are willing to pay, and the BTr allocates securities alphabetically

C.Primary Dealers submit bid yields, and the BTr accepts all bids that match the prevailing secondary BVAL rates exactly

D.The BSP determines the allocation prior to the auction based on the reserve requirements of each participating bank

Explanation: In BTr auctions, competitive bids are submitted by eligible Government Securities Eligible Dealers (GSEDs) who specify the amount they wish to purchase and the yield they are willing to accept. The BTr accepts bids starting from the lowest yield (cheapest cost of borrowing for the government) and moves upward until the auction's target volume is met. The highest accepted yield becomes the cut-off yield.

7What yield is applied to non-competitive bids accepted in a Bureau of the Treasury (BTr) primary auction?

A.The highest competitive yield accepted (cut-off yield)

B.The lowest competitive yield submitted in the auction

C.The weighted average yield of all accepted competitive bids

D.A fixed yield set by the BTr prior to the opening of the bidding window

Explanation: Non-competitive bids are submitted by GSEDs who agree to purchase a specified volume of securities without proposing a yield. These bids are guaranteed allocation (up to limits) and are priced at the weighted average yield of the competitive bids that were accepted in the same auction. This protects retail and smaller buyers from bidding at outlying yields.

8Under what circumstance is the BTr Auction Committee most likely to reject bids or declare a failed auction?

A.If the total volume of bids submitted is less than three times the offered amount

B.If the bid yields submitted by GSEDs are unacceptably high compared to secondary market levels or BTr targets

C.If the currency exchange rate fluctuates by more than 1% on the day of the auction

D.If the non-competitive bids exceed 5% of the total auction size

Explanation: The BTr Auction Committee has the authority to reject bids or cancel an auction if GSEDs demand interest rates (yields) that the government deems too high relative to prevailing secondary market rates (such as BVAL) or fiscal targets. Rejecting these bids helps prevent artificial spiking of borrowing costs. In such cases, the auction may be partially awarded or declared a total failure.

9What is the primary function of the Registry of Scripless Securities (RoSS) maintained by the Bureau of the Treasury?

A.To trade corporate bonds and equities in the secondary market

B.To act as the official electronic registry and legal book of record for ownership of government securities

C.To clear and settle all cash payments for interbank transactions

D.To register salesman licenses for fixed income professionals

Explanation: The Registry of Scripless Securities (RoSS) is the official electronic ledger maintained by the BTr that records the ownership of all scripless (dematerialized) government securities issued by the Philippine government. It serves as the definitive legal proof of ownership for these securities. Transfers of ownership resulting from primary auctions or secondary market trades are executed by debiting and crediting accounts within RoSS.

10How are securities accounts structured in the Registry of Scripless Securities (RoSS) to protect client assets?

A.All securities are pooled in a single omnibus account under the BTr's name

B.Dealers must maintain separate proprietary accounts (Sponsor Accounts) and segregated client accounts

C.Client securities are registered in physical paper certificate form rather than book-entry

D.Securities are registered under the clearing bank's asset account without reference to the dealer

Explanation: To ensure proper client asset protection and avoid co-mingling, GSEDs and custodians must maintain segregated accounts in RoSS. Proprietary holdings are kept in a Sponsor/Principal Account, while client holdings are held in Segregated Client Accounts or Custodian Client Accounts. This structure ensures that client assets are insulated from the insolvency or liabilities of the dealer.

About the FIMS Exam

The SEC Fixed Income Market Salesman (FIMS) Exam is a licensing requirement under the Securities Regulation Code (SRC) of the Philippines. It certifies that market professionals possess the mandatory knowledge and ethical standards to sell fixed income instruments such as Treasury Bills, Treasury Bonds, Retail Treasury Bonds (RTBs), and corporate commercial papers. The exam tests market structure, pricing math, tax treatments, and compliance rules.

Exam sponsor: Securities and Exchange Commission (SEC) Philippines. The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

50 multiple-choice questions

Time Limit

2 hours

Passing Score

75%

Exam / Certification Fees

PHP 2,000

Exam sponsor website

Reported exam pass rate: ~70%. estimated pass rate This describes exam candidates, not OpenExamPrep users or results from using our resources. Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Official sources

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

20%

Market Structure and Instruments

Treasury Bills (91, 182, 364 days), Treasury Bonds, RTBs, RDBs, GSED auctions, RoSS registry rules, custodian segregation (BSP Circulars 392 & 528), money market instruments (IBCL, CPs, Repos), and PDEx trading rules.

30%

Pricing and Yields

Clean vs. dirty prices, yield calculations (YTM, current yield, YTC, YTW), day count conventions (Actual/365 for government, 30/360 for corporate, Actual/360 for money market), duration/convexity, and BVAL contribution rules.

15%

Taxation of Fixed Income

20% final withholding tax on interest for residents/NRAETBs, 25% for NRANETBs and NRFCs, 15% on FCDU interest for residents (TRAIN Law), 5-year individual exemption, and graduated pre-termination rates (20%, 12%, 5%).

20%

Laws and Regulations

Securities Regulation Code (SRC) Section 28 registration, licensing eligibility/renewal, 2026 Qualified Buyer (QB) individual rules (experience AND income/portfolio/net worth limits), institutional QB limits, and SBL rules.

15%

Sales Compliance & AMLA

Client suitability assessment, Risk Disclosure Statement (RDS) execution, order priority (client first), best execution, covered transactions (PHP 500,000+), suspicious transactions reporting within 5 working days, and record-keeping.

Preparing for the FIMS Exam

What You Need to Know

Passing score: 75%
Assessment: 50 multiple-choice questions
Time limit: 2 hours
Exam / certification fees: PHP 2,000 Official sources

Using Our Practice Resources

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FIMS: Suggested Study Strategy

1Memorize the day count conventions: Actual/365 for Government Securities, 30/360 for Corporate Bonds, and Actual/360 for money market tools.

2Understand the difference between Clean Price (excludes accrued interest) and Dirty Price (settlement price = Clean Price + Accrued Interest).

3Be ready to calculate T-bill pricing (using discount rate and Actual/360) and investment yield/BEY (using price and Actual/365).

4Master the Qualified Buyer (QB) 2026 criteria: experience plus either PHP 10M income, PHP 10M portfolio, or PHP 30M net worth.

5Know the graduated pre-termination withholding tax rates (20% for <3 years, 12% for 3-4 years, 5% for 4-5 years) for long-term investments.

6Understand SBL (Securities Borrowing and Lending) and repo mechanics, including daily mark-to-market margins and haircuts.

Frequently Asked Questions

What is the SEC FIMS exam?

The FIMS (Fixed Income Market Salesman) exam is a licensing assessment conducted by the Securities and Exchange Commission (SEC) of the Philippines. It is designed to license individuals who sell fixed-income securities, ensuring they understand market operations, valuation math, and regulatory compliance.

What is the passing score and time limit?

The exam consists of 50 multiple-choice questions. Candidates are given 2 hours to complete the exam. The passing score is 75%, meaning you must answer at least 38 questions correctly.

What are the Qualified Buyer (QB) 2026 thresholds?

Under the 2026 rules, an individual QB must have at least 2 years of financial experience AND meet one of the following: annual gross income >= PHP 10M, financial portfolio >= PHP 10M, or net worth >= PHP 30M. Institutional QBs must have assets >= PHP 100M, portfolio >= PHP 60M, or net worth >= PHP 100M.

How is interest income from fixed income instruments taxed in the Philippines?

Resident individuals, domestic corporations, and NRAETBs are subject to a 20% final withholding tax on interest. Individual holdings of 5 years or more are exempt, but if pre-terminated, they face graduated final tax rates: 20% (if held <3 years), 12% (if 3-4 years), and 5% (if 4-5 years). NRANETBs and NRFCs are subject to a 25% final withholding tax.

What are the primary anti-money laundering (AMLA) requirements for fixed income salesman?

Salesmen must perform Customer Due Diligence (KYC). They must report Covered Transactions (cash/equivalent transactions exceeding PHP 500,000 within one banking day) and Suspicious Transactions (STRs, regardless of amount) to the AMLC. STRs must be reported within 5 working days from detection. Record-keeping is required for 5 years.