Elegant Chapter 5 - Anti-Money Laundering

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Elegant Chapter 5 - Anti-Money Laundering - Part 2

56. Which authority is empowered to publish names of violators of market abuse rules?

1 point

Securities and Commodities Authority

Ministry of Economy

Central Bank only

Dubai Chamber of Commerce

Clear selection

57. Which of the following accurately describes "layering" as market abuse?

1 point

Entering multiple fake orders to move market prices

Simultaneous purchase and sale of securities

Hedging positions through index futures

Delaying execution of large block trades

Clear selection

58. Which defense is permissible against insider dealing allegations under UAE law?

1 point

Information was already publicly available

Trade was executed by foreign broker only

Investor held shares for more than 3 years

Information was obtained from analyst's research report

Clear selection

59. Which of the following is NOT an SCA penalty for market abuse?

1 point

Imprisonment for natural persons

Administrative fines

Suspension of license

Public disclosure of violators

Clear selection

60. Which of the following actions would most clearly represent market manipulation?

1 point

Coordinated trading to create artificial liquidity

Long-term investment by institutional investors

Sectoral diversification of portfolio

Retail trading after official disclosure of results

Clear selection

61. UAE AML regulations require institutions to maintain customer due diligence (CDD) and transaction records for:

1 point

A minimum of five years after the end of the relationship

A maximum of three years after account closure

Until the client ceases trading

Only if requested by the FIU

Clear selection

62. When are Suspicious Transaction Reports (STRs) required to be submitted by financial institutions?

1 point

Immediately, without delay, upon suspicion

Within 7 business days of transaction completion

Within 30 calendar days of year-end audit

Only when confirmed by board of directors

Clear selection

63. If a financial institution fails to submit an STR when legally required, the penalty may include:

1 point

Imprisonment for responsible officers

Warning letter only

Waiver of regulatory fees

Transfer of case to Ministry of Economy

Clear selection

64. Which of the following entities in the UAE receives STRs?

1 point

Financial Intelligence Unit (FIU)

Ministry of Finance

SCA directly

ADX and DFM jointly

Clear selection

65. The compliance officer in a UAE financial institution must be:

1 point

Senior enough to ensure independence and authority

An executive director of the firm

Approved directly by shareholders

An auditor from outside the firm

Clear selection

66. If a client refuses to provide required CDD documentation, the institution must:

1 point

Not establish or terminate the business relationship

Proceed with monitoring on a risk-based approach

Wait for SCA guidance before acting

Delay action until next annual review

Clear selection

67. Enhanced Due Diligence (EDD) measures are mandatory in which situation?

1 point

Business relationships with high-risk countries

Accounts opened by listed PJSCs

Clients investing in government Sukuk

Low-value transactions below AED 10,000

Clear selection

68. Which of the following is considered a predicate offence for money laundering in the UAE?

1 point

Bribery and corruption

Filing late corporate returns

Misplacing annual audit reports

Missing shareholder meeting deadlines

Clear selection

69. Financial institutions must implement AML measures based on:

1 point

A risk-based approach

A one-size-fits-all approach

Only FIU directives

Market capitalization of the client

Clear selection

70. Which of the following may be held personally liable for AML violations in a UAE firm?

1 point

Compliance officer

External auditors

Independent directors

Shareholders with <5% stake

Clear selection

71. The maximum civil fine for insider dealing under UAE law is:

1 point

AED 1 million

AED 10 million

AED 50 million

Unlimited

Clear selection

72. Which authority is empowered to impose administrative penalties for market abuse?

1 point

Securities and Commodities Authority

Central Bank of UAE

Ministry of Finance

Abu Dhabi Department of Economic Development

Clear selection

73. Civil penalties for insider trading may include:

1 point

Suspension or cancellation of license

Tax exemption withdrawal

Exclusion from shareholder AGMs

Restriction from dividend distribution

Clear selection

74. Which penalty can apply specifically to natural persons found guilty of market abuse?

1 point

Imprisonment

Cancellation of company license

Transfer of shares to SCA

Suspension of stock exchange membership

Clear selection

75. Which of the following would be considered an aggravating factor in market abuse penalties?

1 point

Repeated violations by the same firm

Voluntary disclosure of wrongdoing

Implementation of strong compliance controls

Prompt reporting of insider transactions

Clear selection

76. The SCA may publish:

1 point

Names of violators, penalties imposed, and details of violations

Confidential client data of violators

Shareholding structures of violators

Tax records of the violators' families

Clear selection

77. Which defence against insider trading is legally valid under UAE law?

1 point

The information was already available to the public

The trade was small in size and immaterial

The investor held shares for more than 5 years

The information was shared only with family members

Clear selection

78. An employee who trades on the basis of confidential price-sensitive information received from a director commits:

1 point

Insider dealing

Market hedging

Share dilution

Rights issue trading

Clear selection

79. Disseminating false information to manipulate prices is classified as:

1 point

Market manipulation

Permitted advertising

Investor relations activity

Public relations exercise

Clear selection

80. Criminal penalties for market manipulation may include:

1 point

Imprisonment and fine up to AED 1 million

Only public censure

Tax reassessment

Forced dividend payout

Clear selection

81. Which firm activity would create a direct conflict of interest under SCA rules?

1 point

Firm underwriting an IPO while publishing research on the same issuer

Firm acting as market maker in a listed security

Firm providing general investor education

Firm offering custody services

Clear selection

82. Which of the following measures is required to manage conflicts of interest?

1 point

Clear disclosure to affected clients

Guaranteeing minimum client returns

Excluding retail clients from participation

Only annual training of employees

Clear selection

83. Which firm control is most effective in preventing misuse of insider information?

1 point

Chinese Walls

Dividend announcements

Quarterly shareholder reports

AGM disclosures

Clear selection

84. Which of the following breaches independence of investment research?

1 point

Analyst's remuneration linked to investment banking revenues

Analyst disclosing conflicts in research reports

Analyst using company financial statements

Analyst covering multiple industries

Clear selection

85. Research analysts must disclose:

1 point

Whether they or their firms hold positions in the securities covered

The client's full investment portfolio

The company's unaudited tax filings

All government bond yields

Clear selection

86. Firms must ensure that research publications:

1 point

Contain balanced, not misleading, presentation

Include guaranteed profit forecasts

Exclude mention of global risks

Are distributed only to qualified investors

Clear selection

87. Which of the following practices undermines research objectivity?

1 point

Analyst holding shares in the company being covered

Analyst interviewing company management

Analyst reviewing publicly available industry reports

Analyst using third-party market data

Clear selection

88. Which practice is considered a prohibited inducement to analysts?

1 point

Company offering gifts to influence research opinions

Company providing audited annual reports

Company hosting analyst conference calls

Company issuing investor presentations

Clear selection

89. Research reports must always:

1 point

Disclose material conflicts of interest

Be filed with FIU before publication

Be limited to less than 20 pages

Be approved by external auditors

Clear selection

90. Which of the following can be considered "inside information" for insider trading purposes?

1 point

Undisclosed merger negotiations

Company's published annual results

Sector reports by a research firm

General economic outlook

Clear selection

91. An employee who tips off a friend about confidential takeover news commits:

1 point

Insider dealing

Portfolio management

Market hedging

Research disclosure

Clear selection

92. A broker placing fake orders to influence market perception without execution is engaging in:

1 point

Spoofing

Index arbitrage

Dividend stripping

Hedging

Clear selection

93. Which market abuse practice involves creating activity by selling and repurchasing the same security?

1 point

Wash trading

Arbitrage

Rights trading

Buyback program

Clear selection

94. If a firm commits repeated violations of AML obligations, the SCA may impose:

1 point

Suspension of license

Exemption from STR filing

Increase in share capital

Waiver of penalties

Clear selection

95. Firms must ensure conflicts of interest are:

1 point

Prevented, managed, or disclosed

Ignored if immaterial

Allowed if client consent is assumed

Deferred until SCA review

Clear selection

96. Research reports must distinguish clearly between:

1 point

Factual statements and investment opinions

Company earnings and dividends

Board resolutions and annual reports

Analyst opinions and market manipulation

Clear selection

97. A firm deliberately issuing misleading statements to inflate share price would be guilty of:

1 point

Market manipulation

Rights issue violation

Share dilution

Conflict of interest

Clear selection

98. Which party bears ultimate responsibility for AML compliance in a financial institution?

1 point

The Board of Directors

Only compliance officer

Only external auditor

Ministry of Finance

Clear selection

99. Which is NOT a suspicious transaction indicator under UAE AML rules?

1 point

Unusually complex transactions without clear purpose

Structuring deposits to avoid reporting thresholds

Client refuses to provide identification

Dividend distributions by PJSCs

Clear selection

100. The main purpose of enhanced due diligence is to:

1 point

Apply stricter checks to high-risk clients

Reduce documentation requirements

Eliminate need for STRs

Waive record-keeping obligations

Clear selection

101. Which of the following would trigger AML enhanced monitoring?

1 point

Transactions with countries subject to UN sanctions

Annual dividend payments by listed companies

Routine share transfers

Payments of listing fees

Clear selection

102. Which of the following is considered a criminal AML offence?

1 point

Assisting another person to conceal proceeds of crime

Failing to file annual tax returns

Delaying audit reports by 2 weeks

Dividend miscalculations

Clear selection

103. The SCA may impose administrative penalties including:

1 point

Suspension of activities

Appointment of government shareholders

Waiver of reporting obligations

Grant of tax incentives

Clear selection

104. Which party is primarily responsible for filing STRs in a firm?

1 point

Compliance officer

Chairman of the board

External auditor

Head of investor relations

Clear selection

105. Failure to maintain proper Chinese Walls can result in:

1 point

Exposure to insider trading charges

Exemption from AML audits

Waiver of STR obligations

Mandatory rights issues

Clear selection

106. Which UAE authority enforces AML and market abuse rules in securities markets?

1 point

Securities and Commodities Authority

Central Bank

Ministry of Finance

Dubai Chamber

Clear selection

107. Civil penalties for market abuse are intended to:

1 point

Protect market integrity and investor confidence

Compensate government budgets

Replace corporate governance rules

Reduce FIU reporting requirements

Clear selection

108. Which information barrier technique is most critical in investment banks?

1 point

Chinese Walls

Annual dividend reports

Market capitalization notices

AGM resolutions

Clear selection

109. Which party must be informed if suspicious activity is detected in securities transactions?

1 point

Financial Intelligence Unit (FIU)

Abu Dhabi Securities Exchange

Ministry of Finance

Central Bank of UAE

Clear selection

110. A firm engaging in deliberate dissemination of rumours to inflate share price is guilty of:

1 point

Market manipulation

Portfolio rebalancing

Share buyback

Dividend fraud

Clear selection

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