UAE Reg -Mix Mock 3/5

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Which one of the following is the Securities and Commodities Authority permitted to do? *

1 point

To have any private interest of its own in another undertaking

b. To conduct commercial activities

c. To establish subordinate branches or offices to supervise securities and commodities markets in the UAE

d. To issue any securities

Which of the following is not a power given to SCA?

Select one:

1 point

In consultation & co-ordination with the markets licensed in the State, create regulations

To propose regulations

Create new legislation for securities and commodities trading

To form specialist technical committees, and to specify the scope of their work and their remuneration

The board of directors of the relevant market may impose on brokers any of the following penalties, EXCEPT:

Select one:

1 point

Suspension of the broker from activity for a period of a month

A monetary fine not exceeding one hundred thousand Dirhams

A warning

A recommendation to the SCA to remove the broker from the register of brokers licensed in the market

Membership will be terminated in the following cases, Except:

Select one:

1 point

The rendering of a disciplinary decision for the expulsion of the member

Late payment of fees for renewal of registration or the market commission

Failure to satisfy a condition for being licensed as a broker, or contravening any condition of listing relating to the securities.

Declaration of the member’s bankruptcy

Membership of the market is obligatory for all of the following, EXCEPT:

Select one:

1 point

Joint stock companies whose securities are listed in the market

Brokers licensed in accordance with the Law

Any other entity whose securities are listed in the market

Existing investors in securities listed in the market

Trading in securities must be carried out on the floor of the market for at least:

Select one:

1 point

four working days in the week, including official holidays

four working days in the week, excluding official holidays

five working days in the week, excluding official holidays

five working days in the week, including official holidays

In order to obtain a license, each broker’s representative must satisfy which one of the following conditions:

Select one:

1 point

He is of full legal capacity

He is a general manager or an executive manager

He practises law full time

He is GCC national

Which of the following is TRUE regarding the brokers’ rights in charging commission?

Select one:

1 point

The total commission and any discounts are decided by brokers according to the trades executed and clients.

The total commission is according to rates specified by SCA, but the broker can reduce the commission it charges.

The total commission is according to rates specified by SCA, and the broker cannot reduce the commission it charges.

A minimum of AED 30 for the broker, AED 30 for the market, AED 5 for SCA, and AED 10 for the clearing.

Licensed brokers are subject to a number of restrictions, Except for which of the following: *

1 point

A broker must submit final accounts and an annual balance sheet duly audited by an accredited auditor

b. A broker shall keep commercial books and records or use computers and other modern technology in accordance with international accounting standards (GAAP).

c. A broker must maintain the minimum capital, the bank guarantee and the staffing levels as mentioned in the regulations

d. A broker shall maintain financial solvency necessary for the conducting of its activity

Which of the following statements concerning call and put options is true?

1 point

The buyer of a put has the right to buy or sell an asset

The buyer of a call has the right to buy an asset

The buyer of a call has the right to sell an asset

The seller of a call has the right to sell an asset

The SCA board or the CEO to the SCA board may suspend the listing of any securities in the market in a number of cases, Except:

1 point

Where the market value of the securities listed falls below 50% of their nominal value or if such value suddenly rises

Where a resolution is passed by the company’s extraordinary general assembly to reduce its capital

Where the net value of the shareholders’ equity in the company falls below 50% of its capital

Where the entity or the company issuing the listed securities ceases to satisfy a condition for listing

Issuers seeking listing of their debt securities on the stock exchange must submit an application to the SCA along with the following documents, Except:

1 point

In the case of an issue guaranteed by a company, the accounts of the guarantor company

Where the issuer is a company, it’s articles of association

Unless the SCA board decides otherwise, a copy of the credit rating of the debt securities

Where the issuer is a government entity or the issue is guaranteed by the government, a copy of the document

The issuer of debt must inform the SCA and the stock exchange immediately after approval by the board of directors or managers the following information, Except:

1 point

Any decision not to make any interest payment on any of its debt securities.

Any proposed change in the capital structure of the issuer

Any proposed new issue of shares, debt securities or Islamic bonds by the issuer

A 50% or more drop in net profit

Which of the following is FALSE regarding the listing conditions of Islamic Bonds:

1 point

Any advertisement for Islamic Bonds must be authorised by SCA, with the exception of those issued by government entities.

Unless the SCA board decides otherwise, the aggregate value of all Islamic bonds to be listed must be at least AED 50 million

the aggregate value of all Islamic bonds to be listed must be at least AED 10 million

The Islamic bonds are approved by the Sharia’a Committee of the issuer if the issuer is an Islamic bank or financial institution

The obligor must continuously maintain a paying agent in the UAE until the Sukuk are finally redeemed.

Under the legislation, money laundering is defined as relating to criminally derived ‘property’ and includes any of the following, Except:

1 point

moving the property overseas

the concealment or disguise of the true nature of that property

any act involving the transfer, conversion or deposit of that property

the acquisition, possession or use of such property or proceeds of that property

To maintain his licence, a broker must appoint which of the following?

Select one:

1 point

Settlement manager

Clearing manager

Operations manager

Finance manager

Any entity whose name is entered on the register of brokers must satisfy the following conditions, Except:

Select one:

1 point

The company’s paid-up capital shall not be less than AED 30 million

It submits a bank guarantee issued by a bank operating in the State in an amount of not less than AED 10 million as a minimum

The contract of incorporation is written in the Arabic language and authenticated before the competent authorities

Its activity is restricted to brokerage business

Brokers and their representatives must respect the ethics of the brokerage profession. They are obligated in terms of the following Except:

Select one:

1 point

To make internal regulations to ensure the proper selection of their products

To acquaint the market beforehand with the contents of their advertising campaigns

To give the market’s management the name of any client who has failed to fulfil his obligations

Not to report promptly to the concerned authorities any contraventions by their representatives

Which of the following should not be included in the written internal regulations by a broker:

Select one:

1 point

The system for recording correspondence

The system for discharging internal records

The broker’s system for internal audit and periodical review

The system for registering investors’ complaints

Licensed brokers are subject to a number of restrictions, Except:

Select one:

1 point

No broker unless with prior approval may exceed its maximum trading limit

A broker may not transfer the licence granted to it to another broker

The burden of proof lies with the broker to demonstrate that it had authority from its clients in respect of every order undertaken by it

A broker may not act both in the capacity of broker and also in the capacity of agent

Licensed brokers are subject to a number of restrictions, Except:

Select one:

1 point

A broker must submit final accounts and an annual balance sheet duly audited by an accredited auditor

A broker must maintain the minimum capital, the bank guarantee and the staffing levels as mentioned in the regulations

A broker shall keep commercial books and records or use computers and other modern technology in accordance with international accounting standards (GAAP).

A broker shall maintain financial solvency necessary for the conducting of its activity

Which of the following investments pays a regular coupon?

1 point

GDR

Bond

ADR

Ordinary share

In the event of a company going into liquidation, who would normally have the lowest priority for payment?

Select one:

1 point

Preference shareholders

Ordinary shareholders

Creditors

Bondholders

Which one of the following gives the buyer the right to buy an asset at the exercise price?

Select one:

1 point

Call Option

Future

Put Option

Swap

What percentage of the shares in a listed company must a natural person own to first require notification to the market?

Select one:

1 point

10%

20%

The SCA board or the CEO to the SCA board may suspend the listing of any securities in the market in a number of cases, Except:

Select one:

1 point

Where a resolution is passed by the company’s extraordinary general assembly to reduce its capital

Where the market value of the securities listed falls below 60% of their nominal value or if such value suddenly rises

Where the entity or the company issuing the listed securities ceases to satisfy a condition for listing

Where the net value of the shareholders’ equity in the company falls below 40% of its capital

SCA may cancel the listing of any securities for trading in the market in any of the following cases, Except:

Select one:

1 point

If the company discontinues its activity

If the listing of the securities remains suspended for, or beyond, a period of three months

If a resolution is passed to dissolve and liquidate the company

If any radical change in the main activity of the company occurs

Any person is punishable to imprisonment for a period of not less than three months and/or not more than three years and a fine of not less than AED 100,000 and not more than AED one million for any of the following Except:

Select one:

1 point

spreads tendentious rumours regarding the selling or buying of shares

furnishes any data, or proffers any declaration or information being untrue and such as to affect the market value of the securities

exploits publicised information which could affect the prices of securities

deals in securities on the basis of unpublicised or undisclosed information

To be listed, the debt securities must fulfil the following conditions, Except:

Select one:

1 point

The debt securities must be consistent with the requirements of the issuer’s memorandum

Unless the SCA board decides otherwise, the issuer must obtain a credit rating for its debt securities

Where the debt securities are asset-backed securities, an independent representative must be appointed

Unless the SCA board decides otherwise, the aggregate value of all debt securities to be listed must be at least AED 30 million

The issuer of debt must inform the SCA and the stock exchange immediately after approval by the board of directors or managers the following information, Except:

Select one:

1 point

Any changes in its independent auditors

Any change in its internal risk controls and corporate governance structure

Any change in the issuer’s constitutional documents

Any proposed change in the capital structure of the issuer

What is the minimum required aggregate value of debt securities to be listed?

Select one:

1 point

30 million Dirham

20 million Dirham

50 million Dirham

10 million Dirham

If a trader deliberately gives the misleading impression that demand for a particular share is greater than it really is, this type of behaviour is likely to be classed as:

Select one:

1 point

money laundering

market abuse

whistleblowing

a conflict of interest

Which of the following instances of non-compliance with laws and regulations by an individual should the firm report to the regulator?

Select one:

1 point

Regularly failing to pass annual refresher training

Partaking in market abuse

Theft from colleagues

Failure to pass appropriate external examinations

How often should a money laundering reporting officer or other responsible senior executive provide information to its governing body and senior management on the effectiveness of the anti-money laundering systems and controls?

Select one:

1 point

Every quarter

Each time an incident occurs

Every six months

At least annually

Which of the following is a stage in a successful money laundering operation?

Select one:

1 point

Differentiation

Integration

Aggregation

Segregation

Which of the following is the BEST description of ‘layering’?

Select one:

1 point

Moving money around through a series of transactions to disguise the ultimate owner

The process of defining a Chinese wall

The process of obtaining regulatory permissions

Aggregating a firm’s capital adequacy across a range of financial asset groupings

Which of the following documents is most likely to give rise to concerns about misuse of inside information?

Select one:
*

1 point

Unpublished draft reports and accounts of a listed company

A paper listing possible implications of Greece leaving the euro currency

A magazine article about recruitment highlighting staffing issues at a company

Confidential government papers regarding a change to capital gains tax

Which of the following does NOT need to be recorded on an insider list?

Select one:
*

1 point

The date on which the insider list was created and updated

The reason why the person is on the insider list

The identity of each person who has access to inside information

The name of the person who identified the individual as being an insider

Which of the following roles has specific statutory responsibilities?

Select one:

1 point

Group compliance officer

Head of IT

All employees of an authorised financial services firm

MLRO

Which of the following is NOT an action that an investor could take to protect themselves from becoming a victim of financial crime?

Select one:

1 point

Consider whether the investment sounds too good to be true

Keep passwords and PIN numbers secure

Shred sensitive material, such as financial statements, before disposal

Carefully read the terms and conditions of a product

Which of the following is NOT an example of money laundering?

Select one:

1 point

A client of the firm requesting the proceeds of a share sale in cash

Handling the proceeds of crime

Handling stolen goods

Assisting a known criminal to buy a house

In respect of the firm’s systems and controls for financial crime prevention, which of the following is a responsibility of the firm’s directors and senior management?

Select one:

1 point

Publish the MLRO report for review by all shareholders

Internal audit must review the controls every two years

Ownership of financial crime prevention must be allocated to the chief risk officer or chief compliance officer

To understand their personal liability if legal obligations are not met

A money launderer is moving funds between currencies, shares and bonds. This stage of the money laundering process is known as:

Select one:

1 point

Investment-Switching

Integration

Placement

Layering

Which of the following types of financial instrument is normally covered by the insider trading rules?

Select one:

1 point

OEIC shares

Futures on energy products

Technology shares

Options on agricultural products

Which of the following is NOT a recognised term for the stages of money laundering?

Select one:

1 point

Switching

Placement

Layering

Integration

What is Insider Dealing?

Select one:

1 point

A civil activity involving buying equities prior to their rise in value

A criminal activity involving placement and layering

A criminal offence involving the abuse of price sensitive information.

A civil offence which carries a very large fine

A Chinese wall is an arrangement made by a firm to:

Select one:

1 point

help manage conflicts of interest

create a firewall that stops computer hackers from China

segregate duties between any controlled functions roles

ensure bonus allocations between different departments are fair

‘Criminal Property’, as specified in Federal Law No. 4 of 2002, is derived from the following offences, Except:

Select one:

1 point

bribery, embezzlement and damage to public property

illicit dealing in firearms and ammunition

fraud, market abuse and related offences

any other offences referred to in international conventions to which the UAE is a party

Financial institutions intentionally committing money laundering are liable for a fine not less than

Select one:

1 point

AED 500,000

AED 200,000

AED 100,000

AED 1,000,000

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