SCA Regulations and Compliance Quiz

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Questions and Answers

What must occur if the board rejects a licence application?

Reasons for rejection must be stated. (correct)

The applicant must wait for six months to reapply.

The application cannot be resubmitted.

The decision is final with no explanation needed.

What is one of the powers of the SCA during inspections?

To make public all findings of the investigation.

To permanently revoke a company’s license.

To order parties under investigation not to dispose of securities. (correct)

To determine the salary of market employees.

How soon must the market provide financial statements to the SCA after the financial year ends?

Within one month. (correct)

Within two months.

Immediately after the year ends.

Within six months.

What may the SCA do regarding appeals against market penalties?

Adjudicate upon the appeals submitted. Signup and view all the answers

Which action can the board take regarding trading in securities?

Temporarily halt trading in exceptional circumstances. Signup and view all the answers

What is required from parties under investigation by the SCA?

To submit a written statement about the investigation subject. Signup and view all the answers

What information may the SCA make use of during its investigation?

Complaints and information relating to market or broker activity. Signup and view all the answers

What is the maximum timeframe for notifying concerned parties of the board's decision?

One week. Signup and view all the answers

How many questions are associated with Anti-Money Laundering and Combating the Financing of Terrorism?

14Q Signup and view all the answers

Which chapter contains the most questions related to Markets?

Markets Signup and view all the answers

What is the total number of pages dedicated to the Dubai Financial Market (DFM)?

31P Signup and view all the answers

How many questions are allocated to the Licensed Bodies chapter?

14 Signup and view all the answers

What is the total estimated study time required for this workbook?

100 hours Signup and view all the answers

Which section provides a glossary of terms relevant to the content?

Glossary Signup and view all the answers

Which chapter contains the fewest questions?

Client Protection Signup and view all the answers

Which chapter has the highest number of pages dedicated to its content?

Anti-Money Laundering and Combating the Financing of Terrorism Signup and view all the answers

What is the maximum duration a board member can serve on the SCA board?

Four years, renewable once Signup and view all the answers

Under what circumstances does a board member immediately forfeit their membership?

Bankruptcy Signup and view all the answers

What must board members declare regarding their securities?

Those owned by themselves, their spouse, and minor children Signup and view all the answers

How is the validity of a board meeting determined?

If a majority of members attend Signup and view all the answers

What type of reports must markets and brokers submit annually?

Audited financial statements Signup and view all the answers

What happens if a vote during a board meeting is tied?

The chairman has the deciding vote Signup and view all the answers

Which of the following is NOT a responsibility of the Board of Directors?

Audit annual financial statements Signup and view all the answers

How soon must changes in securities holdings be declared by a board member?

Within one week Signup and view all the answers

What is a role approved for managing investment funds’ investments?

Portfolio Manager Signup and view all the answers

Which legal form can act as a public clearing activity provider?

Brokerage Firm Signup and view all the answers

What is the minimum paid-up capital required for institutions in the custody, clearing, and recording category?

AED 50 million Signup and view all the answers

Who can perform administrative services for investment funds?

None; there's no approved role Signup and view all the answers

What type of financial institution must be established to operate in custody, clearing, and recording?

Joint Stock Companies Signup and view all the answers

Which of the following is not a main function expected by the SCA in the third category?

Chief Financial Officer Signup and view all the answers

Which professional role is expected for the custody, clearing, and recording category?

Compliance Officer Signup and view all the answers

Which of the following can act as a depository bank according to the licensing requirements?

Banks or Foreign Bank Branches Signup and view all the answers

What is one of the responsibilities of the market's board of directors?

Handle applications for broker entries and securities listings Signup and view all the answers

Who is required to be notified within one week after a member is entered on the market's register?

The Securities Commission Authority (SCA) Signup and view all the answers

Which of the following entities is NOT obligated to have membership in the market?

Government agencies Signup and view all the answers

What must the market's General Assembly monitor?

General conditions in the market Signup and view all the answers

Which power can the market's board of directors exercise pertaining to the training of staff?

Develop necessary cadres in modern methods Signup and view all the answers

Who attends the meetings of the General Assembly as an observer?

A representative of the SCA Signup and view all the answers

Which of the following functions is NOT explicitly listed among those that the market's specialist technical organs will perform?

Risk assessment for investments Signup and view all the answers

What is the voting entitlement of each member in the General Assembly?

One vote per member Signup and view all the answers

What is the primary responsibility regarding the User Manual for the accounting system?

Keep an updated copy of the User Manual Signup and view all the answers

What must be done immediately following a sudden malfunction in the accounting system?

Notify the Authority and provide a technical report Signup and view all the answers

In case of a change in the accounting system used, what action must be taken?

Notify the Authority with reasons for the change Signup and view all the answers

What element is NOT a responsibility associated with the technical support for the accounting system?

Monitor user interactions with the system Signup and view all the answers

What is required to be included in the notification to the Authority in case of a malfunction?

Expected duration of malfunction Signup and view all the answers

Which document must accompany an application from a market to the SCA?

Specific documents as outlined by SCA requirements Signup and view all the answers

What does the SCA need to do within a certain timeframe regarding applications from markets?

Decide on applications promptly Signup and view all the answers

What information should the Insiders Register maintain about temporary insiders?

Nature of their insider status Signup and view all the answers

Study Notes

UAE Financial Rules and Regulations

This workbook relates to syllabus version 4.0 and will cover exams from 10 September 2023 to 20 May 2025
The study material was created by the Chartered Institute for Securities & Investment in association with the Securities and Commodities Authority Training Centre.
This is an educational workbook and the Chartered Institute for Securities & Investment accepts no responsibility for persons undertaking trading or investments.
The publisher and authors are not responsible for any loss to any person acting or refraining from action as a result of any material in the publication.
Any unauthorised use of the material may result in civil and criminal prosecution.

Workbook Structure

The workbook covers 100 examination questions, with different areas of the syllabus to be studied
The workbook is divided into chapters, including the regulatory infrastructure, licensed bodies, investment funds, markets, anti-money laundering, client protection, and trading.
There is a detailed syllabus learning map.
The workbook also contains a glossary and multiple choice questions.

Key Topics and Concepts

Federal Law No. 4 of 2000: The law establishing the UAE Securities and Commodities Authority (SCA).
Securities & Commodities Authority (SCA): The UAE's financial regulator.
SCA resolutions: Rules and regulations issued by the SCA.
Corporate Governance: Principles and regulations for running a company.
Codes of Conduct: Ethical guidelines for financial professionals.
License Categories/Requirements: Different types of licenses required for financial activities.
Accounting System Controls: Requirements regarding the accounting system used by firms and their clients.
Markets (Local/Public): Structure, administration and regulations involved in the UAE markets.
Clearing, Settlement, Transfer of Ownership, and Custody: The process of security transactions and ownership.
Disclosure and Transparency: Rules to ensure transparency and disclosure of information and actions.
Market Licensing and Supervision: Criteria, conditions, and procedures for licensing markets.
Disclosure and Transparency: Procedures to observe ethical practices regarding business dealings, and disclose all dealings in a clear and accurate manner
Market Administration/Governance: Legal and regulatory framework governing markets.
Conflict of Interest: Avoiding conflicts of interest when dealing with investors.
Related Party Transactions: The rules on dealing with related parties.
Codes of Conduct: The ethical standards for firms operating on the DFM.
Trading in Securities: Details of trading practices and order handling
Debt Securities: The issuance, listing requirements, ongoing obligations, and regulatory compliance for debt securities.:
Islamic Securities: Rules for Islamic securities and their compliance with Shariah-based principles.:
Derivatives: Regulations concerning exchange-traded derivatives, which can be based on local securities or indexes, or foreign securities.
Crypto Assets: The regulations covering crypto asset activities and crypto exchanges.
Anti-Money Laundering and Combating the Financing of Terrorism: Offences, the role of financial institutions, practical measures, and reporting requirements
Client Protection: Suitability standards, appropriateness standards, client asset practices, client communications and financial promotions, promoters and introducers, and regulations for special acquisition companies.
Obligations of Brokerage Firms: Financial solvency, market notifications, obligations to clients, and conduct requirements; and more
Order Handling (DFM): Prioritization of orders; procedures for handling client orders and complaints; handling market data, confidentiality and segregation of accounts.

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Description

Test your knowledge on the Securities and Commodities Authority (SCA) regulations and compliance protocols. This quiz covers topics such as licensing application processes, powers during inspections, financial statement reporting, and market penalties. Perfect for those studying financial markets and regulatory frameworks in the UAE.