CISI UAE FRR CBUAE & FSRA Regulations 4 — Questions and Answers
Question 1: The CBUAE's Stored Value Facilities Regulation governs:
- Electronic money and prepaid card providers (Correct answer)
- Traditional savings accounts
- Government treasury operations
- Islamic banking deposits
Correct answer: Electronic money and prepaid card providers
The SVF Regulation covers providers of electronic stored value facilities including prepaid cards, mobile wallets, and other electronic payment instruments, setting licensing and operational requirements.
Question 2: Under FSRA regulations, which category of client receives the highest level of regulatory protection?
- Retail clients (Correct answer)
- Professional clients
- Market counterparties
- Recognised bodies
Correct answer: Retail clients
Retail clients receive the highest level of regulatory protection under FSRA rules, benefiting from enhanced disclosure, suitability assessments, and conduct of business protections not available to professional clients.
Question 3: The CBUAE requires banks to maintain an Internal Audit function that is:
- Independent of operational management and reports to the Board Audit Committee (Correct answer)
- Embedded within the compliance department
- Supervised by the Chief Risk Officer
- Outsourced to an external firm without internal oversight
Correct answer: Independent of operational management and reports to the Board Audit Committee
Internal Audit must be independent of the activities it audits and report directly to the Board Audit Committee, providing objective assurance on internal controls and governance.
Question 4: The FSRA's Prudential — Investment, Insurance Intermediation and Banking (PRU) Rulebook sets out:
- Capital and financial resource requirements for ADGM-authorised firms (Correct answer)
- Market conduct rules for trading
- Consumer complaint procedures
- Data protection obligations
Correct answer: Capital and financial resource requirements for ADGM-authorised firms
The PRU Rulebook establishes minimum capital, financial resources, and prudential requirements for different categories of ADGM-authorised firms, calibrated to their business activities.
Question 5: The CBUAE's Interest Rate Risk in the Banking Book (IRRBB) guidelines require banks to:
- Measure and manage interest rate risk arising from banking book positions (Correct answer)
- Report interest rate derivatives to the UAEFIU
- Set fixed interest rates on all retail products
- Hedge all interest rate exposure using derivatives
Correct answer: Measure and manage interest rate risk arising from banking book positions
IRRBB guidelines require banks to identify, measure, monitor, and control interest rate risk in their banking book, conducting stress tests and reporting material exposures to the CBUAE.
Question 6: Under ADGM regulations, which body has jurisdiction over civil and commercial disputes in ADGM?
- ADGM Courts (Correct answer)
- Dubai Courts
- Abu Dhabi Courts
- Federal Supreme Court of the UAE
Correct answer: ADGM Courts
ADGM has its own court system — the ADGM Courts — with jurisdiction over civil and commercial matters within ADGM, applying English common law and providing internationally recognised dispute resolution.
CISI UAE FRR CBUAE & FSRA Regulations 4
The CBUAE's Stored Value Facilities Regulation governs: