CME-1 Securities Regulations 2

Question 1

Which regulation governs the offering of securities to the public in Saudi Arabia?

Accepted Answer

Rules on the Offer of Securities and Continuing Obligations

Answer

The Rules on the Offer of Securities and Continuing Obligations (OSCOs) govern public offerings in Saudi Arabia. These rules set requirements for prospectus content, disclosure, and ongoing obligations of issuers.

Question 2

What is the minimum public float requirement for companies listing on the Main Market of Tadawul?

Accepted Answer

30% of shares

Answer

Companies listing on the Main Market of Tadawul must have a minimum free float of 30% of their share capital offered to the public, ensuring sufficient liquidity and market participation.

Question 3

Under CMA regulations, what is the cooling-off period during which investors can withdraw their subscription from an IPO?

Accepted Answer

Within 2 business days of the prospectus amendment

Answer

Investors have the right to withdraw their subscription within 2 business days following the publication of a supplementary prospectus or material amendment to the original prospectus.

Question 4

A CMA-licensed investment fund manager must ensure client assets are held by which entity?

Accepted Answer

An independent custodian

Answer

CMA regulations require that client assets be held by an independent custodian to ensure asset segregation and protect investors from potential misuse or commingling of funds by the fund manager.

Question 5

What constitutes market manipulation under Saudi securities law?

Accepted Answer

Creating a false or misleading impression of trading activity

Answer

Market manipulation includes any action designed to create a false or misleading impression of trading activity, supply, demand, or price of securities. This includes wash trading, painting the tape, and spoofing.

CME-1 Practice Test

CME-1 Practice Test

CME-1 Securities Regulations 2