UAE Reg-Ch7-Mock 1/2

JavaScript isn't enabled in your browser, so this file can't be opened. Enable and reload.

Email *

Full Name in English *

Mobile Number *

Abu Dhabi Securities Market.

What is the primary mission of the Abu Dhabi Securities Exchange (ADX)?

1 point

A. To maximize profits for brokerage companies

B. To be an innovative, attractive, and transparent marketplace empowering UAE’s economy

C. To regulate foreign brokerage companies

D. To issue debt instruments for governments and corporations

What is the purpose of the regulations related to E-Trading on the Abu Dhabi Securities Exchange?

1 point

A. To limit the number of securities traded

B. To ensure the confidentiality of trading information

C. To protect clients and maintain the integrity of orders reaching the ADX’s trading system

D. To increase the speed of order execution

What conditions must a brokerage company meet to gain approval for providing E-Trading services on the ADX?

1 point

A. Paying the required fee, having a marketing strategy, and providing annual reports

B. Obtaining client testimonials, having qualified technical personnel, and obtaining ADX’s approval of the E-Trading agreement

C. Paying the required fee, having technical and administrative capabilities, and obtaining ADX’s approval of the E-Trading agreement

D. Demonstrating high profits, having experienced traders, and ensuring a low level of client complaints

How long is the initial approval period for a brokerage company to provide E-Trading services, and when does it start?

1 point

A. Two years, starting from the date of ADX approval

B. One year, starting from the date of ADX approval

C. Six months, starting from the date of ADX approval

D. Three years, starting from the date of ADX approval

What is one of the obligations of a brokerage company when providing E-Trading services?

1 point

A. Ensuring a fast processing of all orders

B. Appointing a compliance officer to deal with client complaints

C. Providing clients with free access to ETrading services

D. Limiting the access of the ADX to data and documents related to ETrading orders

Under what circumstances does the ADX have the right to suspend or cancel the E-Trading service?

1 point

A. If the brokerage company experiences technical defects

B. If the ADX finds that investors have not violated any legislation

C. If the brokerage company requests the suspension of the service due to client complaints

D. If the ADX determines that the trading system is functioning properly

What is a central requirement for foreign brokerage companies to gain remote access to the ADX?

1 point

A. Having a local branch in Abu Dhabi

B. Providing ADX with collateral

C. Offering low trading fees

D. Having a large client base

What is one of the conditions a foreign brokerage company must meet to gain ADX approval for remote access?

1 point

A. The foreign brokerage company must have a record of serious violations in the past six months.

B. The foreign brokerage company must provide ADX with free access to its electronic software.

C. The foreign brokerage company must be licensed by a regulator similar to the Securities and Commodities Authority in its home country.

D. The foreign brokerage company must have a minimum capital requirement determined by the ADX.

Which of the following is not a condition for a Foreign Brokerage Company to gain remote access to ADX?

1 point

A. The foreign brokerage company must not have a record of serious violations in the past 6 months.

B. The foreign brokerage company must have a minimum capital requirement determined by the ADX.

C. Must not have had a license suspended within last 6 months.

D. Must not have been denied license by any controlling authority

E. Providing collateral

F. Must have net profit in last 2 years

A Foreign Brokerage company in order to gain remote access to ADX must have good professional record with its regulators. The professional records include:

1 point

Suspension of operations

Violations of financial creditworthiness criteria

Separation accounts

All of the above

How often must a foreign brokerage company submit a compliance report to the ADX?

1 point

A. Monthly

B. Quarterly

C. Annually

D. Biannually

What measures can the ADX take if a foreign brokerage company fails to comply with regulations?

1 point

A. Issue a warning, impose financial penalties, and cancel the approval

B. Issue a warning, liquidate or use collateral, and suspend the company from remote access trading

C. Refer the violator to the Authority, impose financial penalties, and cancel the approval

D. Suspend the company from remote access trading, impose financial penalties, and refer the violator to the Authority

2. Broker and Trading Rules of the ADX

What type of reports must brokers operating on the ADX provide to the Exchange within 45 days of the end of a specified fiscal period?

1 point

A. Monthly financial statements

B. Audited quarterly reports

C. Annual compliance reports

D. Unaudited transaction summaries

What action can the ADX take if a broker fails to comply with orders related to client orders that breach the law or regulations?

1 point

A. Issue a warning

B. Impose fines on the client

C. Order the broker to resell or repurchase securities

D. Suspend the broker's license temporarily

In a sell order, what must the broker ensure before entering the transaction, unless it meets the Authority’s regulations on short selling of securities?

1 point

A. The client owns the securities

B. The client has sufficient credit

C. The securities are borrowed from the ADX

D. The broker has a conflict of interest

How are debt instrument prices fixed on the ADX according to supply and demand?

1 point

A. Fixed by the government

B. Through public auction procedures

C. Determined by the broker

D. Based on the instrument's historical performance

What is the term used to describe the unit price of debt instruments on the E-Trading system without any accumulated interest?

1 point

A. Dirty price

B. Market price

C. Clean price

D. ADX price

Under what conditions are brokers permitted to execute 'big block' deals on the ADX?

1 point

A. The deal must involve at least 1% of the issuer's capital

B. The deal cannot violate ADX rules

C. The execution price cannot be at 25% higher or lower than the closing price of the previous trading session

D. All of the above

Big block deals must fulfil certain conditions. Which of the following is not CORRECT?

1 point

A. The deal must involve at least 1% of the issuer's total authorized capital

B. The deal cannot violate ADX and authority rules

C. The execution price cannot be at 25% higher or lower than the closing price of the previous trading session.

D. One side of the deal must be one person while the other side can be up to a maximum of 10 persons

E. The deal must involve at least 1% of the issuer's capital

What percentage of the issuer's capital must be involved in a 'big block' deal on the ADX?

1 point

A. Less than 1%

B. Exactly 1%

C. At least 1%

D. More than 5%

How are trading commissions on 'big block' deals calculated?

1 point

A. Based on the issuer's market capitalization

B. Based on the closing price from the previous trading session

C. A fixed percentage of the deal value

D. Based on the execution price or the company's stock closing price, whichever is higher

What action can the ADX take with regard to the limits mentioned in 'big block' deals whenever it deems necessary to preserve the interests of trading and the parties to the transaction?

1 point

A. Impose additional limits

B. Waive the transaction from the specified limits

C. Suspend the 'big block' deal

D. Reject the 'big block' deal request

Big block deals must fulfil certain conditions. Which of the following is not CORRECT?

1 point

A. The deal must involve at least 1% of the issuer's total authorized capital

B. The deal cannot violate ADX and authority rules

C. The execution price cannot be at 25% higher or lower than the closing price of the previous trading session.

D. One side of the deal must be one person while the other side can be up to a maximum of 10 persons

E. The deal must involve at least 1% of the issuer's capital

What percentage of the issuer's capital must be involved in a 'big block' deal on the ADX?

1 point

A. Less than 1%

B. Exactly 1%

C. At least 1%

D. More than 5%

How are trading commissions on 'big block' deals calculated?

1 point

A. Based on the issuer's market capitalization

B. Based on the closing price from the previous trading session

C. A fixed percentage of the deal value

D. Based on the execution price or the company's stock closing price, whichever is higher

What action can the ADX take with regard to the limits mentioned in 'big block' deals whenever it deems necessary to preserve the interests of trading and the parties to the transaction?

1 point

A.Impose additional limits

B. Waive the transaction from the specified limits

C. Suspend the 'big block' deal

D. Reject the 'big block' deal request

How does the E-Trading system calculate the accumulated interest on debt instruments until the settlement date?

1 point

A. Based on the broker's recommendation

B. According to historical interest rates

C. Automatically

D. Through manual input by the broker

What is the consequence for brokers if a loss is incurred in a 'big block' deal?

1 point

A. The loss is borne by the ADX

B. The loss is transferred to the Investor Protection Fund

C. The loss is shared between the broker and the ADX

D. The loss is borne by the broker

How does the ADX price of debt instruments differ from the 'dirty' price?

1 point

A. The ADX price includes accrued interest, while the 'dirty' price does not

B. The 'dirty' price includes accrued interest, while the ADX price does not

C. Both prices are the same

D. The ADX price is calculated manually, while the 'dirty' price is automatic

What is the primary purpose of disclosing conflicts by brokers in client transactions?

1 point

A. To increase transparency

B. To attract more clients

C. To avoid regulatory fines

D. To influence client decisions

In a buy order, when must the buying client pay the value of the securities to be purchased?

1 point

A. Before the execution of the buy transaction

B. After receiving the securities

C. Within 30 days of the settlement date

D. At the end of the fiscal period

Trading commissions on big block trades are calculated

1 point

Based on execution price or on the company’s stock closing price from the previous trading session, whichever is higher.

Based on execution price or on the company’s stock closing price from the previous trading session, whichever is lower.

Based on execution price

Based on the company’s stock closing price from the previous trading session.

3. Clearing, Depository and Registry Rules

The Clearing, Settlement, and Depository Department at the ADX operates electronic systems for:

1 point

a. Issuing passports

b. Facilitating trade clearing and settlement

c. Issuing bonus shares

d. Printing securities certificates

Clearing members of the Exchange are required to interact with the systems of the CSD Department unless:

1 point

a. They hold Emirati citizenship

b. They are exempted by the ADX rules

c. They are brokers

d. They submit a written request to the CSD Department

The CSD Department maintains confidentiality of information unless:

1 point

a. It violates applicable laws

b. The information is about brokerage firms

c. It is requested by any entity inside the State

d. The information is related to market makers

Entities required to register with the CSD Department include:

1 point

a. Stock analysts

b. Custodians

c. Market analysts

d. Foreign governments

Issuers wishing to list securities on ADX must provide the register of shareholders within:

1 point

a. 1 working day

b. 5 working days

c. 15 working days

d. 30 working days

ADX allots the Investors numbers to various types of investors. Which of the following type is NOT one of the types of investors?

1 point

Individual

Institutional

Government

National

A trading account can only be opened for a person who has:

1 point

a. A passport

b. An investor number

c. A driver's license

d. A university degree

Which of the following investors is a Foreign Institutional Investor?

1 point

Juristic person registered in UAE

Juristic person registered outside UAE or in UAE Free Zones

UAE government entity

UAE National natural person with Emirati PP & Family Book

The CSD Department has the authority to examine applications and issue investor numbers, with responsibility for accuracy lying with:

1 point

a. Investors

b. Clearing members

c. Brokers

d. Issuing companies

Investors are responsible for notifying the CSD Department of any changes to their:

1 point

a. Bank account

b. Personal data

c. Social media accounts

d. Political affiliations

Securities owners may not trade unless relevant certificates are:

1 point

a. Printed by the issuer

b. Dematerialized and deposited with the CSD Department

c. Kept with the clearing member

d. Issued by the broker

The process for depositing securities certificates includes:

1 point

a. Issuing an allotment letter

b. Verifying ownership and identity

c. Selling the certificates in the market

d. Keeping the certificates with the issuing company

Owners of securities with bonus shares must:

1 point

a. Sell the bonus shares immediately

b. Register bonus shares in their deposit account

c. Keep the bonus shares with the issuing company

d. Dispose of fractions of bonus shares in the market

To reduce settlement failure risk, clearing members must provide collateral in the form of:

1 point

a. Physical assets

b. Real estate

c. Bank guarantee, cash guarantee, or a combination

d. Stocks of the issuing company

The ADX management determines the maximum/minimum value for settlement collateral based on:

1 point

a. The weather conditions

b. Market demand

c. CSD Department approval

d. ADX management's decision

Clearing members can increase their trading ceiling by:

1 point

a. Reducing the bank guarantee value

b. Pledging securities as guarantee

c. Withdrawing cash from the settlement account

d. Notifying the CSD Department of their decision

Clearing members must open "Clearing Member’s Settlement Accounts" at:

1 point

a. Any bank worldwide

b. A licensed bank in the UAE

c. A governmentowned bank

d. An offshore financial institution

The ADX enters into an agreement with the settlement bank to define:

1 point

a. Stock prices

b. Cash settlement procedures

c. Market volatility

d. Trading hours

The CSD Department calculates the net daily amount payable by and to clearing member based on the following. Which of the following is incorrect?

1 point

Payable to clearing member = Total Sales-total purchases - commission

Payable to clearing member = Total purchases – total sales - commission

Commissions include payable to ADX and Authority

Commissions are ignored in the calculations

The settlement report on the settlement day shows:

1 point

a. Future market trends

b. Amounts payable to or by each clearing member

c. Personal information of investors

d. Dividend payouts

If a clearing member fails to provide the amount payable in the settlement account by the deadline, the settlement bank may:

1 point

a. Donate the amount

b. Utilize the overdraft facility

c. Ignore the failure

d. Reduce the amount payable

The ADX may suspend a clearing member from trading for failing to settle the amount payable by the deadline, and legal measures may be taken to claim:

1 point

a. Bonus shares

b. Interest and fees

c. Voting rights

d. Membership benefits

Clearing members must keep the minimum guarantee required by the CSD Department at all times, and falling below the minimum guarantee may result in:

1 point

a. Suspension from trading

b. Increased trading privileges

c. A bonus from the ADX

d. Exemption from collateral requirements

Securities can be pledged through a mortgage contract between the creditor and debtor, and the CSD Department makes a book entry of the rights connected with pledging:

1 point

a. Cash

b. Real estate

c. Securities owned by the debtor

d. Intellectual property

The CSD Department cannot release a pledge unless:

1 point

a. A written request is submitted by the debtor

b. The debtor provides a bank guarantee

c. The creditor follows legal procedures

d. The market conditions are favorable

4. Clearing in Commodities Markets

What is the primary role of a clearing house (central counterparty CCP) in commodities markets?

1 point

a. Facilitating trading activities

b. Ensuring compliance with international accounting standards

c. Guaranteeing both sides of the trades it clears

d. Setting margin requirements for participants

Which of the following is a condition that a company must meet to obtain a license for clearing activities in UAE's commodities markets?

1 point

a. Minimum paid-up share capital of AED 10 million

b. Authentication of the company's memorandum of association by the official authorities

c. License fee of AED 100,000 paid annually

d. Compliance with IOSCO's Principles on Clearing on a quarterly basis

According to the regulations, what percentage of the board of directors of a commodities CCP must be independent?

1 point

a. At least one half

b. At least two thirds

c. At least one third

d. At least three fourths

What is the purpose of the 'margin' that participants are required to deposit with the clearing house in commodities markets?

1 point

a. Monthly subscription fee

b. Good faith deposit towards obligations

c. Transaction commission

d. Insurance premium

Which of the following actions requires prior approval from the Authority for a commodities CCP in the UAE?

1 point

a. Annual financial report submission

b. Adding, deleting, or modifying an activity in the trade license

c. Internal audit process implementation

d. Routine appointment of technical staff

What reports and documents must a commodities CCP provide to the Authority on an ongoing basis?

1 point

a. Only annual financial reports

b. Minutes of board meetings and committees

c. Interim financial reports and annual financial reports

d. Reports on shareholder meetings only

In the event of any material changes or developments in the company, what is a commodities CCP required to do?

1 point

a. Inform the Authority immediately

b. Wait until the next annual report submission

c. Notify other clearing members first

d. Keep the information confidential

What does a commodities CCP need to establish and administer to be used in the event of breach or default?

1 point

a. Margin fund

b. Default fund

c. Clearing volume

d. Open interest

How often must a commodities CCP perform stress tests on both its margin requirements and default fund contributions?

1 point

a. Weekly

b. Monthly

c. At least daily

d. Quarterly

What risk is NOT included in the specific risks that a commodities CCP may face, as mentioned in the operational manual for risk management?

1 point

a. Credit risks

b. Operational risks

c. Investment risks

d. Market risks

What does a commodities CCP need to establish for handling default cases against obligations by clearing members?

1 point

a. Financial assistance program

b. Compensation fund

c. Prudential requirements

d. Effective procedures approved by the Authority

What should be maintained for a minimum period of ten years by a commodities CCP regarding its clearing operations?

1 point

a. Only interim financial reports

b. Minutes of board meetings

c. Records and financial data

d. Bank guarantees

What is the minimum capital requirement for a commodities CCP to engage in clearing activities in UAE's commodities markets?

1 point

a. AED 10 million

b. AED 50 million

c. AED 100 million

d. AED 200 million

What must a commodities CCP provide to enable clearing members and their customers to abide by the regulations of margin trading?

1 point

a. Internal audit reports

b. Annual financial reports

c. Information about nonconfidential matters

d. Details of reciprocal operating agreements

What risk exposure is NOT mentioned as a consideration for maintaining a fully funded default fund by a commodities CCP?

1 point

a. Credit risk

b. Liquidity risk

c. Market risk

d. Foreign exchange risk

5. Dubai Gold & Commodities Exchange

Which of the following is not true about Dubai Gold & Commodities Exchange (DGCX) future contracts?

1 point

A-The participants are producers, manufacturers and end users

B-DGCX offers range of future contracts

C-With the future contracts, the participants hedge their price risk exposure

D-Future contracts help the participant meet their projected profit target

E-DGCX provides hedging opportunities

F-Future and options contracts are derivative contracts

Future contracts have many features. Which of the following may not be one of them?

1 point

Delivery months

Contract specifications

Contract size

Price of physical commodity

Minimum price movements

Last trading day

Final cash settlement price

Cash settlement day

Which of the following product is not a part of DGCX future contracts?

1 point

Gold

Silver

Bonds

Oil

Equity Index futures and options

The final cash settlement price for the WTI Light Sweet Crude Oil Futures Contract in DGCX is converted using the official US Dollar reference rate issued by:

1 point

A-The Reserve Bank of India, or equivalent successor rate that is determined by the Exchange

B-UAE Central Bank

C-Federal Reserve of USA as the contract is in USD

D-Rate published by any of the above can be accepted

Which of the following is not true about final cash settlement price?

A-It has a benchmark reference to the price that is made available on the last trading day.

B-The final cash settlement price is the price of physical commodity at the last trading day

C-In the event that this price is not available, the Clearing Corporation will determine such final cash settlement price as it considers appropriate, at its absolute discretion.

D-The final cash settlement price is linked to the producer price index-PPI

1 point

ABCD

What is the primary purpose of the Dubai Gold & Commodities Exchange (DGCX)?

1 point

A) To trade equities

B) To provide a platform for commodity derivatives trading

C) To regulate financial institutions

D) To facilitate foreign exchange transactions

How often are delivery months available for trading in the Gold futures contract on the DGCX?

1 point

A) Monthly

B) Every two months

C) Quarterly

D) Annually

What is the contract size for the Gold Futures contract on the DGCX?

1 point

A) 1,000 barrels

B) 32 troy ounces

C) 1,000 grams

D) 1,000 troy ounces

On what basis is the final cash settlement price determined for the Gold Futures contract on the DGCX?

1 point

A) Daily trading volume

B) Average market price

C) Daily settlement price on the last trading day

D) Opening price on the last trading day

What is the minimum price movement for the India Gold Quanto Futures contract on the DGCX?

1 point

A) US$0.01 per lot

B) US$0.10 per troy ounce

C) US$1.00 per lot

D) CNH 0.01

When is the last trading day for the Silver Futures contract on the DGCX?

1 point

A) The last business day of the contract delivery month

B) 15th calendar day of the delivery month

C) Four business days prior to the 25th calendar day of the month preceding the delivery month

D) The second last business day of the second month preceding the delivery month

What is the contract size for the West Texas Intermediate (WTI) Light Sweet Oil Futures contract on the DGCX?

1 point

A) 100 barrels

B) 1,000 barrels

C) 32 troy ounces

D) 1,000 grams

How is the final cash settlement price determined for the Brent Crude Oil Futures contract on the DGCX?

1 point

A) Daily trading volume

B) Average market price

C) Relevant reference futures price

D) Opening price on the last trading day

What is the contract size for the Mini West Texas Intermediate Crude Oil Futures contract on the DGCX?

1 point

A) 1,000 barrels

B) 100 barrels

C) 32 troy ounces

D) Three barrels

How is the final cash settlement price for the Dubai India Quanto Crude Oil Futures determined?

1 point

A) Daily settlement price

B) Official US Dollar reference rate issued by the Reserve Bank of India

C) Average market price

D) Opening price on the last trading day

What is the contract size for the MSCI India Index Futures contract on the DGCX?

1 point

A) 1,000 barrels

B) 25 index points x price

C) 1,000 grams

D) 1,000 troy ounces

What is the minimum price movement for the Mini West Texas Intermediate Light Sweet Crude Oil Future traded in DGCE?

1 point

AED 0.05

AED 0.01

USD 0.01

USD 0.05

When is the last trading day for the MSCI India Index Futures contract, excluding business day adjustments?

1 point

A) The last Thursday of the delivery month

B) The second last business day of the second month preceding the delivery month

C) Four business days prior to the 25th calendar day of the month preceding the delivery month

D) Every two months starting February each year

What action does the Exchange take if an alleged or apparent error in the closing price of an equity index is reported within 30 minutes of the final cash settlement price publication?

1 point

A) Request the index provider to investigate and correct the error

B) Reject the reported error

C) No action is taken

D) Request the member to correct the error

What is the liability stance of the Exchange and its representatives regarding the correction of closing prices in the index?

1 point

A) Accepts liability for any decision related to corrections

B) No liability is accepted for decisions related to corrections

C) Liability is determined case by case

D) Liability is transferred to the index provider

Which contract offers participants a means of hedging price risk exposure for the MSCI India Index?

1 point

A) Gold futures

B) Silver Futures

C) MSCI India Index Futures

D) Brent Crude Oil Futures

A copy of your responses will be emailed to the address you provided.

Submit

Clear form

Never submit passwords through Google Forms.

reCAPTCHA

Privacy Terms

This content is neither created nor endorsed by Google. - Terms of Service - Privacy Policy

Does this form look suspicious? Report

Forms