Jul 02, 2026 PASS CISI UAE-Financial-Rules-and-Regulations EXAM WITH UPDATED DUMPS
UAE-Financial-Rules-and-Regulations Questions PDF [2026] Use Valid New dump to Clear Exam
NEW QUESTION # 22
In order for the contents of a financial promotion which quotes yield figures to satisfy the clear, fair, and not misleading rule, it should:
- A. make the promotion available simultaneously in printed form and online
- B. give a balanced impression of both short and long term prospects
- C. always assume the communication is intended for a retail client
- D. ensure all monetary examples are calculated to at least two decimal places
Answer: B
Explanation:
For a financial promotion that quotes yield figures to comply with the clear, fair, and not misleading rule, it must give a balanced impression of both short and long term prospects. This ensures that the promotion does not mislead the client by focusing too heavily on short-term returns or exaggerating long-term performance. A balanced presentation of both short and long-term outcomes is essential for providing a full, accurate picture of the investment, allowing clients to make informed decisions. This approach aligns with the principles of transparency and fairness that underpin financial regulation.
Reference: CISI UAE Financial Rules and Regulations - Financial Promotions and Yield Quotes, Section
5.2.3 (2023).
NEW QUESTION # 23
When debt securities are offered through a public subscription, the offeror will be required to announce any replacement of the trustee:
- A. immediately
- B. within a maximum of 48 hours
- C. after 5 working days
- D. within a maximum of 72 hours
Answer: D
Explanation:
CISI UAE Financial Rules and Regulations stipulate that for debt securities issued via public subscription, the offeror must announce any replacement of the trustee within a maximum of 72 hours. Prompt notification ensures transparency, allowing investors to be informed about key custodial and fiduciary changes that may affect the security's management and enforcement of rights. Delays beyond this period could impact investor confidence and violate continuous disclosure requirements, thus the 72-hour timeframe strikes a balance between operational feasibility and timely communication.
Reference: CISI UAE Financial Rules and Regulations - Debt Securities Public Offers and Trustee Notifications, Section 5.8.6 (2023).
NEW QUESTION # 24
If in-kind shares are provided when the fund is founded; if the subscription fails and there is no special agreement, who would bear the expenses?
- A. Auditors
- B. Share providers
- C. Evaluators
- D. Founders
Answer: D
Explanation:
According to CISI UAE Financial Rules and Regulations, when in-kind shares are provided at fund inception and the subscription fails, the founders bear the related expenses in the absence of any special agreement. This allocation reflects the founders' responsibility in establishing and capitalizing the fund and absorbing initial setup costs, including those related to failed subscriptions. Share providers, auditors, or evaluators are not typically liable for such expenses unless contractual terms explicitly assign such responsibility. This regulatory stance encourages clarity and accountability in fund founding arrangements.
Reference: CISI UAE Financial Rules and Regulations - Investment Funds Incorporation and Expense Allocation, Section 6.2.11 (2023).
NEW QUESTION # 25
Establishing a local investment fund requires the approval of the Authority, for a public fund this will either be granted or rejected within:
- A. 20 working days
- B. 30 working days
- C. 5 working days
- D. 10 working days
Answer: A
Explanation:
According to the CISI UAE Financial Rules and Regulations, the process for establishing a local investment fund, including a public fund, involves obtaining approval from the relevant regulatory authority, which is usually the Securities and Commodities Authority (SCA). For public funds, the authority is required to either grant or reject the application within 20 working days from the submission date. This time frame ensures that there is adequate time for the Authority to review the application, conduct necessary evaluations, and ensure that the fund complies with all regulatory and legal requirements. The 20-working-day period ensures efficiency while allowing for a thorough review.
Reference: CISI UAE Financial Rules and Regulations - Investment Fund Establishment Process, Section
6.2.1 (2023).
NEW QUESTION # 26
An error was made by a broker which led to a trade being conducted using the wrong trading account number.
If the trader submitted a request to have the number amended 40 minutes after the end of the trading session, the amendment would only be made if:
- A. an impact assessment gives acceptable results
- B. the circumstances are considered to be exceptional
- C. an alteration fee is paid at the same time
- D. the correction is within a 5% error margin
Answer: B
Explanation:
In trading systems regulated under the CISI UAE Financial Rules and Regulations, brokers must ensure the accuracy of account details associated with transactions. However, if an error occurs, such as using an incorrect trading account number, amendments are generally not allowed beyond the trading session unless specific conditions are met. The CISI rules state that amendments will only be made in exceptional circumstances. For instance, if the request for the amendment is made shortly after the session, such as within
40 minutes, and it can be demonstrated that the error had no significant impact on market stability or the involved parties, it may be considered exceptional. Therefore, a correction request is usually subject to a careful review of its impact, and the circumstances of the error must be deemed significant enough to warrant such an exception.
Reference: CISI UAE Financial Rules and Regulations - Trading Errors and Amendments, Section 8.4.1 (2023).
NEW QUESTION # 27
The policies of a firm applying for a financial activities licence must include arrangements to provide a copy of its complaints handling procedure to clients:
- A. on request
- B. within 48 hours of accepting the client
- C. on receipt of a complaint
- D. within 24 hours of accepting the client
Answer: A
Explanation:
Under the CISI UAE Financial Rules and Regulations, firms applying for a financial activities licence are required to have formal policies addressing client protection, including clear complaints handling procedures.
Such firms must make these proceduresavailable to clients on request, ensuring transparency and accessibility without imposing undue burden on clients or firms. The regulatory framework does not mandate automatic distribution within fixed timeframes upon client acceptance or complaint receipt but emphasizes accessibility and prompt responsiveness when clients seek the information. This approach balances operational feasibility and client rights to be informed about how their complaints will be managed. Providing the procedure upon request also fosters a trust-based relationship and helps resolve disputes effectively.
Reference:CISI UAE Financial Rules and Regulations - Client Protection and Complaints Handling, Section 4.2.7 (2023).
NEW QUESTION # 28
When establishing a local investment fund, how much are the founders required to subscribe?
- A. At least 10 million dirhams
- B. At least 20 million dirhams
- C. At least 5 million dirhams
- D. At least 1 million dirhams
Answer: A
Explanation:
When establishing a local investment fund in the UAE, the founders are required to subscribe a minimum amount to demonstrate commitment and to comply with the legal and financial requirements set by the Securities and Commodities Authority (SCA). The minimum required subscription is at least 10 million dirhams. This ensures that the fund has a solid financial base, contributing to its credibility and ability to cover initial operational and management expenses. The founders' subscription also serves to align their interests with those of potential investors and provides an assurance of the fund's viability and long-term sustainability.
Reference: CISI UAE Financial Rules and Regulations - Fund Formation Requirements, Section 6.1.2 (2023).
NEW QUESTION # 29
If the two evaluators for an in-kind share transfer produce different fair value figures, what figure must be used?
- A. The one produced by the most experienced evaluator
- B. The highest one
- C. The lowest one
- D. The average of the two amounts
Answer: D
Explanation:
In the case of an in-kind share transfer where two evaluators produce different fair value figures, the average of the two amounts is typically used. This approach helps ensure fairness and reduces the risk of biases from individual evaluations. The CISI UAE Financial Rules and Regulations recommend averaging the values to arrive at a reasonable and balanced assessment, especially when the evaluators may have different methods or opinions regarding the valuation of assets. This method is widely accepted as it prevents any single evaluator's assessment from disproportionately influencing the final valuation.
Reference: CISI UAE Financial Rules and Regulations - In-kind Share Transfer Valuation, Section 8.4.2 (2023).
NEW QUESTION # 30
The role of the authorised agent of the exchange-traded fund (ETF) is to:
- A. announce the net value of the unit's assets on a daily basis
- B. ensure that the transfer of ownership of units is completed
- C. update sell and buy orders
- D. regularly announce the indicative value of the net value of assets
Answer: D
Explanation:
The authorised agent of an ETF has a critical role in maintaining transparency and liquidity in the market.
According to CISI UAE Financial Rules and Regulations, the authorised agent is responsible for regularly announcing the indicative value of the net assets of the ETF units. This indicative net asset value (iNAV) provides investors and market participants with a near real-time estimate of the underlying assets' value, reflecting market fluctuations throughout the trading day. Unlike the official net asset value (NAV), which is typically calculated at the end of the trading day, the iNAV supports intra-day trading decisions and helps maintain price alignment between the ETF units and their underlying assets. This responsibility is fundamental in ensuring efficient price discovery and protecting investor interests in the ETF market.
Reference: CISI UAE Financial Rules and Regulations - Investment Funds and ETF Operations, Section
6.4.2 (2023).
NEW QUESTION # 31
The whistleblowing policy submitted by an applicant for a financial activities licence must include a mechanism for:
- A. escalating any reports to board level
- B. protecting the reporting employee
- C. ensuring all staff have a named reporting contact
- D. disciplining staff proven to have breached rules
Answer: B
Explanation:
The CISI UAE Financial Rules and Regulations require that the whistleblowing policy submitted by licence applicants incorporates a clear mechanism for protecting the reporting employee. This protection includes confidentiality safeguards, protection against retaliation, and secure channels for raising concerns. Ensuring the safety and anonymity of whistleblowers is fundamental to encouraging the reporting of unethical or illegal conduct, thereby enhancing regulatory compliance and corporate governance. Other aspects such as escalation procedures and disciplinary measures are important but secondary; the central pillar of effective whistleblowing policy is the protection of the individual who reports wrongdoing.
Reference: CISI UAE Financial Rules and Regulations - Regulatory Infrastructure and Whistleblowing, Section 3.4.2 (2023).
NEW QUESTION # 32
A fund manager is considering investing in medium-term bonds, commercial papers, and deposit certificates.
Under the regulations, which of these can be held under a cash investment fund?
- A. Medium-term bonds, commercial papers and deposit certificates
- B. Medium-term bonds and commercial papers only
- C. Commercial papers and deposit certificates only
- D. Deposit certificates and medium-term bonds only
Answer: C
Explanation:
CISI UAE Financial Rules and Regulations define that cash investment funds may hold commercial papers and deposit certificates only. Medium-term bonds are typically excluded from cash funds as they have longer maturities and more interest rate risk, which conflicts with the liquidity and capital preservation objectives of cash funds. Commercial papers and deposit certificates, with their shorter maturities and high liquidity, are appropriate instruments for cash funds, providing stable, low-risk returns in line with regulatory requirements.
Reference: CISI UAE Financial Rules and Regulations - Investment Funds Asset Eligibility, Section 6.4.3 (2023).
NEW QUESTION # 33
If an error in the final cash settlement price of an equity index comes to the attention of the Exchange more than 30 minutes after the publication of the final cash settlement price, what happens?
- A. No correction will be made
- B. It will be re-determined
- C. The provider will correct it
- D. Liability is apportioned
Answer: A
Explanation:
Under CISI UAE Financial Rules and Regulations governing market operations, if an error in the final cash settlement price of an equity index is discovered more than 30 minutes after publication, the Exchange will not make any correction. This rule limits the window for price correction to maintain market certainty and finality of settlements. After the 30-minute threshold, the published price stands as final, protecting contractual certainty and operational stability. While the provider may acknowledge errors, no re- determination or liability adjustment occurs post-deadline. This policy aligns with international exchange practices designed to minimize market disruption.
Reference: CISI UAE Financial Rules and Regulations - Market Settlement and Price Correction Rules, Section 7.5.9 (2023).
NEW QUESTION # 34
Which of the following is a sanction available to the Authority in the event of a violation of its provisions?
- A. Impose a financial fine of not less than AED 100,000
- B. Suspend any financial activity practised during an investigation
- C. Suspend the licensed body for a period of two years
- D. Impose a financial fine of not more than AED 100,000
Answer: A
Explanation:
The CISI UAE Financial Rules and Regulations empower the Authority to impose financial fines of not less than AED 100,000 on licensed entities or persons found in violation of regulatory provisions. This minimum fine serves as a deterrent and underscores the regulator's authority to enforce compliance. While suspension of licensed bodies or activities can be imposed in some cases, the standard and frequently applied sanction is the financial penalty starting from AED 100,000. The Authority's sanctions framework ensures robust regulatory oversight and promotes adherence to UAE financial laws.
Reference: CISI UAE Financial Rules and Regulations - Regulatory Sanctions and Penalties, Section 2.6.4 (2023).
NEW QUESTION # 35
Following a public subscription, what must a Special Purpose Acquisition Company do with the proceeds?
- A. Deposit not less than 100% of the public subscription proceeds within two business days of receipt
- B. Deposit not less than 90% of the public subscription proceeds within two business days of receipt
- C. Deposit not less than 100% of the public subscription proceeds within one business day of receipt
- D. Deposit not less than 90% of the public subscription proceeds within one business day of receipt
Answer: C
Explanation:
Special Purpose Acquisition Companies (SPACs) operating under UAE financial regulations must safeguard investors' funds post-public subscription. According to the CISI UAE Financial Rules and Regulations, SPACs are required to deposit100% of the public subscription proceeds within one business day of receipt into an escrow or segregated account. This requirement ensures that the funds are secured and managed transparently while awaiting acquisition activities. The strict one-business-day deadline prevents misuse or misallocation of investor money and aligns with international best practices for fund protection. This is critical in maintaining market confidence and regulatory compliance, as SPACs act as investment vehicles with inherent risk related to future mergers or acquisitions.
Reference:CISI UAE Financial Rules and Regulations - Investment Funds and SPAC Requirements, Section 6.3.1 (2023).
NEW QUESTION # 36
The Depository Centre must periodically report to the Authority on shareholders who hold more than what threshold percentage of equity in the Centre's capital?
- A. 3%
- B. 5%
- C. 15%
- D. 10%
Answer: B
Explanation:
The Depository Centre is required to periodically report to the Authority on shareholders who hold more than
5% of equity in the Centre's capital. This threshold ensures that the Authority is informed about substantial holdings, which could influence corporate governance, voting rights, and overall control within the company.
The report helps maintain transparency regarding ownership structures, which is critical for monitoring potential conflicts of interest, shareholder influence, and market stability. Regular updates on these holdings contribute to the regulatory oversight of significant shareholders.
Reference: CISI UAE Financial Rules and Regulations - Reporting Requirements for Depository Centres, Section 7.1.2 (2023).
NEW QUESTION # 37
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