Investment Funds Flashcards
6 cards from real CME-1 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Investment Funds flashcards as text
What is the maximum management fee that a public fund can charge without CMA pre-approval?
Answer: There is no cap; it must be disclosed in the Terms and Conditions
CMA regulations do not impose a specific cap on management fees for public funds. However, all fees must be clearly disclosed in the fund's Terms and Conditions document and approved by the fund board.
How frequently must a public investment fund publish its Net Asset Value (NAV)?
Answer: At least daily for open-end funds
Public open-end funds must calculate and publish their NAV at least on each dealing day. For most public funds, this means daily NAV publication to ensure investors can make informed subscription and redemption decisions.
What happens when a fund manager wants to make material changes to a public fund's Terms and Conditions?
Answer: They must notify unitholders and obtain CMA approval before implementation
Material changes to a public fund's Terms and Conditions require prior CMA approval and adequate notice to unitholders. Investors must be given sufficient time to redeem their units if they disagree with the changes.
What is the role of the fund's independent director or board member?
Answer: Protecting unitholder interests and ensuring proper governance
Independent directors on a fund's board serve as guardians of unitholder interests, providing independent oversight of the fund manager's actions, reviewing conflicts of interest, and ensuring compliance with regulations.
What is Sharia compliance in the context of Saudi investment funds?
Answer: Ensuring investments adhere to Islamic law principles, including avoiding riba and haram activities
Sharia-compliant funds follow Islamic law principles by avoiding interest (riba), excessive uncertainty (gharar), and investments in prohibited activities (haram) such as alcohol, gambling, or conventional banking.
Under CMA regulations, when must a fund manager report a material event to the CMA?
Answer: Immediately upon occurrence
Fund managers must notify the CMA immediately upon the occurrence of any material event that may affect the value of fund units or the ability of unitholders to exercise their rights.
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