SCA Market Conduct and Compliance

Question 1

What constitutes insider trading under SCA regulations?

Accepted Answer

Trading securities based on material non-public information obtained through a privileged position, or tipping others to trade on such information

Answer

Trading based on publicly available research

Answer

Any trading by company employees

Answer

Trading during market hours

Question 2

What is market manipulation as defined by the SCA?

Accepted Answer

Artificial interference with the free formation of prices through false or misleading practices such as wash trading, spoofing, or disseminating false information

Answer

Placing large orders

Answer

Active trading by institutional investors

Answer

Providing market research

Question 3

What disclosure requirements does the SCA impose on major shareholders?

Accepted Answer

Major shareholders must disclose when their holdings cross specified thresholds (typically 5%), report changes in holdings, and disclose any trading by board members

Answer

No disclosure is required

Answer

Only holdings above 50% must be disclosed

Answer

Disclosure is voluntary

Question 4

What AML/CFT obligations does the SCA impose on securities market participants?

Accepted Answer

Customer due diligence, ongoing monitoring, suspicious transaction reporting to FIU, record keeping, and compliance officer appointment

Answer

No AML obligations for securities firms

Answer

Only banks have AML obligations

Answer

AML applies only to cash transactions

Question 5

What conduct of business rules does the SCA establish for licensed firms?

Accepted Answer

Fair dealing, best execution obligation, suitability assessments, conflict of interest management, client communication standards, and complaints handling procedures

Answer

No conduct rules exist

Answer

Only fair pricing is required

Answer

Conduct rules are advisory only

Question 6

What whistleblower protections does the SCA provide?

Accepted Answer

Protection from retaliation for persons who report securities violations in good faith, with confidential reporting channels and potential financial rewards

Answer

No whistleblower protections exist

Answer

Only anonymous reports are protected

Answer

Whistleblowers face penalties for reporting