CISI UAE FRR Market Conduct Rules 3

Question 1

Under UAE market conduct rules, what constitutes 'scalping' in financial markets?

Accepted Answer

An adviser recommending securities they intend to sell without disclosing this intention

Answer

Scalping in the advisory context involves an adviser recommending securities they personally hold with the intention of selling them once client buying drives up the price, without disclosing this conflict.

Question 2

The SCA's Corporate Governance Code for listed companies requires:

Accepted Answer

A minimum number of independent directors on the board

Answer

The SCA's corporate governance code requires listed companies to have a sufficient proportion of independent directors, ensuring objective oversight of management and protection of minority shareholders.

Question 3

Under UAE regulations, an investment firm's 'order execution policy' must be:

Accepted Answer

Made available to clients and reviewed at least annually

Answer

Order execution policies must be disclosed to clients, explaining how orders are executed and on which venues, and must be reviewed at least annually to ensure best execution is consistently achieved.

Question 4

UAE market conduct rules require that securities advertisements:

Accepted Answer

Include clear risk warnings and be fair, clear, and not misleading

Answer

Securities advertisements must include prominent risk warnings, be balanced between potential returns and risks, and not be misleading — the same principles applying to product marketing as to advice.

Question 5

Under SCA regulations, related party transactions by listed companies must be:

Accepted Answer

Approved by independent directors and disclosed to the market

Answer

Related party transactions must be reviewed and approved by independent directors (without the interested party voting), disclosed to the market promptly, and conducted at arm's length terms.

CISI UAE FRR Practice Test

CISI UAE FRR Practice Test

CISI UAE FRR Market Conduct Rules 3