UAE-Financial-Rules-and-Regulations Exam Dumps - CISI Investment Operations Certificate (IOC) Questions and Answers

Behaviour regulations submitted by license applicants, such as a professional code of ethics, are classified undergovernance regulationswithin the CISI UAE Financial Rules and Regulations framework. Governance regulations encompass policies, standards, and codes that guide the ethical conduct, integrity, and responsibilities of licensed entities and their employees. They are designed to promote accountability, compliance, and good corporate citizenship within the financial industry. Unlike technical systems, which relate to operational infrastructure, or employee regulations focused on HR and workplace rules, governance regulations provide the overarching ethical and procedural guidelines essential for sustaining market confidence and protecting stakeholders. The inclusion of a professional code of ethics ensures license applicants demonstrate commitment to the principles of fairness, transparency, and fiduciary duty, which are fundamental requirements by the Securities and Commodities Authority (SCA) for licensing approval.

If a listed company faces accumulated losses of 50% or more of its capital, the company is required to be moved from a first category listing to a second category of listing. This measure is designed to protect investors by ensuring that only financially stable companies remain in the primary listing category, which is subject to stricter regulatory oversight and higher investor expectations. The second category listing provides a lower level of visibility, which reflects the increased financial risks associated with such companies. This helps mitigate the potential impact on other market participants.

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.

Under the CISI UAE Financial Rules and Regulations, brokers are required to submit regular statements of account to clients. These statements must include the client’s balance of securities and cash, as well as details of all transactions executed. The statement must be submitted on a monthly basis, unless a different arrangement is specifically agreed upon between the broker and the client. This ensures transparency, allowing clients to stay informed about their investment portfolios and the status of their accounts. Regular monthly reporting is a fundamental requirement for protecting client interests and ensuring that financial institutions operate with the highest standards of accountability and client service.

Under the CISI UAE Financial Rules and Regulations, in the event of a tie vote by the board of the Authority, the chairman or their deputy is granted the casting vote to resolve the deadlock. This mechanism ensures decisions can be made efficiently without indefinite postponement. The casting vote provides a decisive voice to the chair in balancing the board’s decisions, reflecting common governance principles in corporate and regulatory bodies. Automatic carriage or rejection of resolutions without further input is not allowed, and postponement is typically avoided to maintain regulatory effectiveness.

Under Federal Law No. 20 of 2018 and relevant CISI UAE Financial Rules and Regulations, the minimum fine imposed on a person convicted of financing an illegal organisation is AED 150,000. This penalty underscores the seriousness with which the UAE treats the crime of funding illegal or terrorist entities. Alongside financial sanctions, convicted individuals may face imprisonment and other legal consequences. These stringent penalties are part of the UAE’s commitment to combating terrorism financing and protecting national and international security.

CISI UAE Financial Rules and Regulations clearly state that an introducer may only provide financial analysis if it is licensed to do so. Licensing ensures that the introducer has the required qualifications, governance, and regulatory oversight to deliver accurate and compliant financial analyses. Providing financial analysis without licensing can mislead investors and expose them to unsuitable advice. Therefore, introducers without proper licensing are prohibited from offering such analyses, irrespective of client requests or absence of recommendations, preserving market integrity and investor protection.

The CISI UAE Financial Rules and Regulations allow the waiver of the requirement for licensed bodies to disclose their legal status only in specific scenarios such as when an emergency has been notified to the Authority. This provision recognizes that during certain urgent situations, standard disclosure obligations may be temporarily suspended to allow for swift action or confidentiality. Other circumstances such as ongoing court cases, market corrections, or takeover bids do not automatically justify waivers of disclosure obligations, preserving investor transparency and trust under normal conditions.

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.

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.