Corporate Governance Regulations Quiz

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Questions and Answers

What is a requirement for a company regarding the management of its internal regulations?

They can be based solely on external guidelines.

They must be effective and regularly updated. (correct)

They must be updated only when significant changes occur.

They should never include any risk management systems.

Which of the following is NOT a principle evaluated for a company's competence?

Appointment of competent and experienced employees.

Experience in unrelated business sectors. (correct)

Commitment to separating operational activities legally.

Ability to make decisions in accordance with applicable legislation.

What obligation does a relevant person have in the case of a bankruptcy declaration?

They must stop all payments, including commercial debts.

They can choose to ignore previous financial commitments.

They are exempt from managing financial obligations.

They should have been rehabilitated. (correct)

Which statement correctly reflects the implications of bounced cheques for relevant persons?

No bounced cheques should occur in relation to business activities. Signup and view all the answers

What is an important aspect of maintaining customer interests according to the evaluated principles?

Achieving customer satisfaction through professional diligence. Signup and view all the answers

What is one reason a member of the market's board must step down?

Unauthorized absence from more than three meetings Signup and view all the answers

Which of the following is NOT a responsibility of the market’s board of directors?

Establish the market's investment portfolio Signup and view all the answers

Which source is NOT mentioned as financing for the markets?

Government grants Signup and view all the answers

What must be declared in writing by board members according to market regulations?

Securities owned by himself and his family Signup and view all the answers

Who is responsible for ensuring transparency of information in the market?

The market’s board of directors Signup and view all the answers

What does NOT need to be reported to the market by the company?

Changes in executive management Signup and view all the answers

Which of the following statements is false regarding the election of the board of directors in a public joint-stock company?

The election procedures are determined solely by the market’s chairman Signup and view all the answers

What is required when a related party transaction exceeds 5% of the company's capital?

General assembly approval is required, along with an evaluation by an accredited assessor. Signup and view all the answers

Which of the following individuals is NOT considered a related party under the Corporate Governance Guide?

Shareholders owning less than 30% of capital Signup and view all the answers

What must happen if there is a significant change to the terms of an already approved related party transaction?

It must be re-evaluated and approved by the board or general assembly. Signup and view all the answers

What is the potential consequence for related parties who engage in transactions contrary to the specified requirements?

They may be liable for damages to the company. Signup and view all the answers

Which statement accurately describes the nature of transactions with related parties that are part of normal business operations?

They are not considered related party transactions if no preferential conditions are granted. Signup and view all the answers

What is the role of the Insiders Register in the context of insider management?

It tracks and supervises transactions of insiders and notifies amendments. Signup and view all the answers

What is the threshold value for a related party transaction to require board approval without general assembly approval?

5% of the company's capital Signup and view all the answers

What is the responsibility of a company when submitting the Insiders Register to the SCA?

It needs to submit an updated list at the start of each fiscal year and upon any amendments. Signup and view all the answers

In what scenario can related parties participate in the voting process regarding a transaction?

Under no circumstances, regardless of the transaction amount. Signup and view all the answers

What must occur when a related party transaction is proposed that exceeds the company's capital threshold?

Approval from the board and a re-evaluation are required from an accredited assessor. Signup and view all the answers

What is required from the board of directors of the market regarding their affiliations?

They need to acknowledge that they are not members of any public joint-stock company board. Signup and view all the answers

What type of declaration must board members provide regarding securities?

A written declaration of securities owned by them or their family members. Signup and view all the answers

How quickly must board members report changes in their declared securities?

Within one week of becoming aware of the change. Signup and view all the answers

What document must accompany the statement from the market’s director general?

A written securities declaration from both the director general and deputy. Signup and view all the answers

What must the board of directors declare regarding their spouse and minor children?

Securities owned by them and their holdings with any brokers. Signup and view all the answers

What must be included in the market licence application besides the board members' declarations?

The organisational structure of the market. Signup and view all the answers

What does the local resolution establishing the market serve as?

A legal basis for the establishment of the market. Signup and view all the answers

What additional requirement is expected from the market regarding the technical and administrative organs?

A statement describing their specialist areas. Signup and view all the answers

What is the nature of the undertaking required from the members regarding their declarations?

To update the SCA about changes in declared securities promptly. Signup and view all the answers

What is the maximum time frame for the board to make a decision on a complete licence application?

30 days Signup and view all the answers

What must the SCA do if it decides to reject a licence application?

State the reasons for rejection Signup and view all the answers

What is the period within which the SCA examines a licence application after submission?

15 days Signup and view all the answers

What authority does the SCA have in relation to the compliance of regulations by the markets?

Conduct inspections and investigations Signup and view all the answers

What must concerned parties do if notified to complete their licence application?

Complete the application within 15 days Signup and view all the answers

During an inspection, what can the SCA's inspection team do?

Enter offices and review documents Signup and view all the answers

What options do applicants have if their licence application is rejected?

Re-submit the application when reasons no longer exist Signup and view all the answers

What aspect of the market's operations does the electronic registration system manage?

Trading, deposit, clearing, and settlement operations Signup and view all the answers

What must the SCA do if additional particulars are required before determining an application?

Notify the applicant to submit more details Signup and view all the answers

What is the role of the SCA regarding information and complaints about market activities?

Conduct necessary investigations into the information or complaints Signup and view all the answers

Study Notes

UAE Financial Rules and Regulations SCA & CISI

This workbook relates to syllabus version 3.0.
It covers exams until 30 April 2023.
The third edition was published in 2021.

Important Information

Changes in industry practice, economic conditions, legislation, regulations, and technology mean practitioners must keep their knowledge up-to-date.
The workbook content is current at the time of publication and supersedes earlier versions.
Check the CISI website regularly for updates on new workbooks and examination dates.

Learning and Professional Development

The Chartered Institute for Securities & Investment (CISI) is the leading professional body for investment sector professionals.
CISI examinations are widely used by firms to meet regulatory requirements.
Examinations are recognised by regulators worldwide, from the UK to Singapore, Dubai, and the US.
Workbooks are annually updated by industry experts and Accredited Training Partners.
Resources are available on the CISI website (cisi.org/candidateupdate).

Foreword

The UAE Securities & Commodities Authority (SCA) was established in 2000 to ensure compliance with international best practices.
The SCA maintains market stability, transparency, integrity, and investor awareness in the UAE.
The Chartered Institute for Securities & Investment (CISI) provides vocational qualifications in the securities and investment industry.

Table of Contents (page 5)

Associated Market and Securities Legislation and Practice (page 29) -
Investment Funds (page 55)
Anti-Money Laundering, Combating the Financing of Terrorism and Illegal Organisations (page 81)
Client Protection (page 121)
Trading (page 141)
Dubai Financial Market (DFM) (page 189) -
Glossary (page 209)
Multiple Choice Questions (page 215)
Syllabus Learning Map (page 257)
Study time estimation of 100 hours

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Description

Test your knowledge on corporate governance and market regulations. This quiz covers the responsibilities and principles that companies must follow, as well as the implications of actions taken by board members. Assess your understanding of the legal obligations in the corporate environment.