CISI UAE FRR Market Conduct Rules 4

Question 1

Under UAE conduct regulations, a 'discretionary mandate' allows a portfolio manager to:

Accepted Answer

Make investment decisions on behalf of a client within agreed parameters without prior approval for each trade

Answer

A discretionary mandate grants the portfolio manager authority to make investment decisions within agreed parameters (risk profile, asset allocation, restrictions) without requiring client approval for each individual trade.

Question 2

The UAE's conduct rules on conflicts of interest require investment firms to:

Accepted Answer

Identify, manage, and disclose conflicts that cannot be prevented

Answer

Conflicts of interest must first be prevented where possible; where unavoidable, they must be managed effectively and disclosed to affected clients, ensuring conflicts do not harm client interests.

Question 3

Under UAE market conduct rules, 'spoofing' involves:

Accepted Answer

Placing large orders with the intention of cancelling them before execution to manipulate prices

Answer

Spoofing involves placing large visible orders to create the illusion of demand or supply with no genuine intention of executing them, then cancelling before execution to manipulate prices and mislead other participants.

Question 4

The SCA requires that investment managers provide clients with performance reports:

Accepted Answer

At least quarterly, showing returns, fees, and portfolio composition

Answer

Periodic performance reporting — at minimum quarterly — enables clients to monitor portfolio performance, assess whether managers are meeting objectives, and understand fees charged against their portfolio.

Question 5

Under UAE regulations, market operators must ensure their trading systems are:

Accepted Answer

Resilient, with adequate capacity, and protected against market abuse

Answer

Market operators must maintain systems resilience, adequate capacity to handle peak volumes, robust access controls, and market surveillance capabilities to detect and prevent market abuse.

CISI UAE FRR Practice Test

CISI UAE FRR Practice Test

CISI UAE FRR Market Conduct Rules 4