The compliance regulation guide, submitted by an applicant for a license from the Authority, must set out procedures and mechanisms which will ensure that the compliance officer:
Correct Answer: C
Per CISI UAE Financial Rules and Regulations, the compliance regulation guide submitted by licensing applicants must include procedures and mechanisms that ensure the compliance officer has access to sufficient resources. Adequate resources are critical for the compliance officer to effectively oversee adherence to regulatory requirements, manage risks, and implement compliance programs. This includes staffing, technology, training, and authority necessary to fulfill the role's responsibilities. While emergency powers or deputizing may be operationally important, the regulations emphasize resource adequacy as a fundamental compliance enabler. Reference: CISI UAE Financial Rules and Regulations - Regulatory Infrastructure and Compliance Officer Requirements, Section 3.3.6 (2023).
Question 7
A brokerage firm's records include client agreements, selling orders and accounts. Under the Professional Code of Conduct, which of these does the DFM have the right to access and review?
Correct Answer: D
The Dubai Financial Market's Professional Code of Conduct grants the DFM the right to access and review all core client-related records maintained by brokerage firms, including client agreements, selling orders, and accounts. This comprehensive access enables the DFM to monitor compliance, investigate complaints, and ensure that firms adhere to regulatory and ethical standards. Access to all three categories is essential to provide a complete picture of client interactions and transactions, ensuring market transparency and investor protection. Partial access would impair effective oversight and enforcement. Reference: CISI UAE Financial Rules and Regulations - DFM Professional Code of Conduct, Records Access and Review, Section 4.1.6 (2023).
Question 8
An applicant for a financial activities licence must have procedures in place to recover electronic records from the archive within what maximum period?
Correct Answer: B
According to CISI UAE Financial Rules and Regulations, applicants for a financial activities licence must ensure that their record-keeping systems allow for recovery of electronic records from archives within a maximum period of three business days. This requirement ensures timely access to data necessary for audits, investigations, and regulatory reviews. The three-business-day timeframe balances operational feasibility with regulatory needs for responsiveness and data integrity, supporting transparency and compliance in the UAE financial sector. Reference: CISI UAE Financial Rules and Regulations - Record-Keeping and Data Recovery Procedures, Section 3.5.10 (2023).
Question 9
Which of the following is an administrative penalty that can be imposed on financial institutions that violate the law and regulations in relation to money laundering and terrorism financing?
Correct Answer: C
Under Federal Law No. 20 of 2018 and CISI UAE Financial Rules and Regulations, financial institutions that violate anti-money laundering (AML) and counter-terrorism financing (CTF) laws may be subjected to administrative penalties ranging from no less than AED 50,000 and no more than AED 5,000,000 for each violation. These substantial fines underscore the UAE's commitment to stringent AML/CTF enforcement and deterrence. Administrative penalties are imposed alongside other measures such as corrective actions and possible criminal sanctions, ensuring comprehensive regulatory oversight. Reference: CISI UAE Financial Rules and Regulations - AML Enforcement and Penalties, Section 8.5.4 (2023).
Question 10
If the mid-point is used to determine the theoretical auction price for a pre-closing session of the DFM, it is:
Correct Answer: C
The Dubai Financial Market (DFM) utilizes precise rules to calculate the theoretical auction price during pre- closing sessions to ensure market transparency and fairness. According to the CISI UAE Financial Rules and Regulations and DFM official trading manuals, when the mid-point price is used in price determination, it is roundedupto the nearest price tick. This rounding mechanism ensures consistency in pricing and avoids fractional pricing issues that could disrupt the matchingof buy and sell orders. The concept of a price tick is a minimum price movement allowed in trading, defined by the market's tick size schedule. By rounding up, the market supports price stability and protects sellers during the auction process. This is explicitly stated in DFM' s trading rules section regarding auction price calculation and tick size adjustments. Reference:CISI UAE Financial Rules and Regulations - Dubai Financial Market Rules, Auction Price Determination, Section 5.2.3 (2023).
