CISI UAE FRR Market Conduct Rules 1

Question 1

Under UAE SCA regulations, 'insider trading' occurs when a person trades on:

Accepted Answer

Material non-public information about a listed company

Answer

Insider trading involves using material, non-public information — to which a person has access by virtue of their position — to trade in securities, gaining an unfair advantage over other market participants.

Question 2

The SCA's Market Conduct Regulations define 'market manipulation' to include:

Accepted Answer

Transactions or orders that create a false or misleading impression of supply, demand, or price

Answer

Market manipulation includes actions designed to artificially influence security prices or create false impressions of market activity, including wash trading, painting the tape, and fictitious orders.

Question 3

Under UAE market conduct rules, 'front running' involves:

Accepted Answer

A broker trading for their own account before executing a large client order to benefit from the price movement

Answer

Front running is a form of market abuse where a broker trades for their own account ahead of executing a large client order, knowing the client's order will move the market price in a predictable direction.

Question 4

The 'Chinese Wall' in UAE financial institutions is a:

Accepted Answer

Information barrier between investment banking and trading/research departments

Answer

Chinese Walls (information barriers) are organisational and procedural controls preventing the flow of material non-public information between different departments, preventing misuse of inside information.

Question 5

Under SCA regulations, companies must announce material price-sensitive information:

Accepted Answer

Immediately upon becoming aware, before trading recommences

Answer

Companies must disclose material price-sensitive information (earnings, M&A, major contracts) immediately and simultaneously to all market participants, ensuring equal access and preventing insider advantage.

CISI UAE FRR Practice Test

CISI UAE FRR Practice Test

CISI UAE FRR Market Conduct Rules 1