CISI UAE FRR Investment Products and Markets

Question 1

What are the two main stock exchanges operating in the UAE?

Accepted Answer

Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM)

Answer

The Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM) are the two primary stock exchanges in the UAE, both regulated by the SCA.

Question 2

What is a sukuk in Islamic finance as practiced in the UAE?

Accepted Answer

An Islamic financial certificate similar to a bond but compliant with Sharia law

Answer

Sukuk are Islamic financial certificates that represent ownership in an underlying asset or project, providing returns without charging interest, making them Sharia-compliant alternatives to bonds.

Question 3

Which of the following is a feature of the UAE's Delivery Versus Payment (DVP) settlement system?

Accepted Answer

Securities and payment are exchanged simultaneously to reduce settlement risk

Answer

DVP ensures that the transfer of securities occurs only when payment is made simultaneously, minimizing counterparty risk in securities transactions on UAE exchanges.

Question 4

What is the T+2 settlement cycle used in UAE stock exchanges?

Accepted Answer

Settlement of trades occurs two business days after the trade date

Answer

T+2 means that the settlement of a securities trade (delivery of shares and payment) occurs two business days after the trade execution date on UAE exchanges.

Question 5

What is the primary purpose of the Emirates Securities and Commodities Authority's (SCA) disclosure requirements?

Accepted Answer

To ensure transparency and protect investors through timely disclosure of material information

Answer

SCA disclosure requirements mandate that listed companies provide timely, accurate, and complete information to the market, ensuring transparency and protecting investor interests.

CISI UAE FRR Practice Test

CISI UAE FRR Practice Test

CISI UAE FRR Investment Products and Markets