CISI UAE FRR CBUAE & FSRA Regulations 1 — Questions and Answers
Question 1: The Financial Services Regulatory Authority (FSRA) is the regulator for which UAE jurisdiction?
- Abu Dhabi Global Market (ADGM) (Correct answer)
- Dubai International Financial Centre (DIFC)
- Onshore Abu Dhabi
- Sharjah Financial Centre
Correct answer: Abu Dhabi Global Market (ADGM)
The FSRA is the independent financial services regulator of the Abu Dhabi Global Market (ADGM), regulating financial institutions, markets, and professionals operating within ADGM.
Question 2: Which CBUAE regulation governs the licensing and supervision of finance companies in the UAE?
- Finance Companies Regulation (2018) (Correct answer)
- Banking Law No. 14 of 2018
- SCA Decision No. 3 of 2020
- CBUAE Notice 1016/2018
Correct answer: Finance Companies Regulation (2018)
The Finance Companies Regulation (2018) issued by the CBUAE sets out the requirements for licensing, capital, governance, and conduct of finance companies providing credit and leasing services.
Question 3: The FSRA's regulatory framework for ADGM is based on which legal system?
- English common law (Correct answer)
- UAE civil law
- Islamic Shariah law
- French civil law
Correct answer: English common law
ADGM adopted English common law as its legal foundation, providing legal certainty and familiarity for international financial institutions and investors accustomed to common law jurisdictions.
Question 4: Which CBUAE requirement sets limits on large exposures to single counterparties?
- Large Exposure Regulations (LER) (Correct answer)
- Liquidity Coverage Ratio
- Basel III Capital Framework
- Consumer Protection Regulation
Correct answer: Large Exposure Regulations (LER)
The Large Exposure Regulations limit the maximum exposure a bank can have to a single counterparty or group of connected counterparties, reducing concentration risk and systemic contagion.
Question 5: Under CBUAE regulations, what is the maximum loan-to-value ratio for a UAE national purchasing a first home valued above AED 5 million?
- 70% (Correct answer)
- 80%
- 90%
- 60%
Correct answer: 70%
CBUAE mortgage regulations set a maximum LTV of 70% for UAE nationals purchasing a first home valued above AED 5 million, requiring a minimum 30% down payment to limit systemic mortgage risk.
Question 6: The CBUAE's Governance Standards for banks require the Risk Committee to consist of:
- Majority non-executive directors with relevant risk expertise (Correct answer)
- A majority of executive directors
- Only independent directors
- Equal numbers of executives and non-executives
Correct answer: Majority non-executive directors with relevant risk expertise
Board Risk Committees must be composed of a majority of non-executive directors with relevant expertise, ensuring independent oversight of the bank's risk appetite and risk management framework.
CISI UAE FRR CBUAE & FSRA Regulations 1
The Financial Services Regulatory Authority (FSRA) is the regulator for which UAE jurisdiction?