Which statement is true regarding Phase II non-listed businesses?

The correct statement regarding Phase II non-listed businesses is that they must not derive more than 50% of revenue from ineligible activities. This criterion is essential for distinguishing which businesses can be classified under Phase II, allowing them to participate in certain regulatory frameworks without the same level of scrutiny as other types of businesses.

Ineligible activities generally refer to specific sectors that are considered high-risk for illicit transactions, such as gambling, adult entertainment, or other activities that may be associated with money laundering and similar concerns. Therefore, keeping the revenue from these ineligible activities below 50% helps to mitigate risks and ensure compliance with the applicable regulations without imposing unnecessary burdens on businesses that are primarily engaged in legitimate operations.

The other statements do not accurately reflect the requirements or characteristics of Phase II non-listed businesses. For instance, stating that these businesses are entirely exempt from reporting does not align with the compliance obligations they still hold. Additionally, Phase II non-listed businesses do not need to be publicly traded, which renders the requirement to have operations listed on stock exchanges irrelevant. Furthermore, while businesses can choose various structures, there are specific regulatory requirements they must adhere to, which limits their operational flexibility in practice.