UAE-Financial-Rules-and-Regulations Exam Info and Free Practice Test All-in-One Exam Guide Feb-2026
Pass CISI UAE-Financial-Rules-and-Regulations Actual Free Exam Q&As Updated Dump Feb 18, 2026
NEW QUESTION # 24
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 alteration fee is paid at the same time
- B. the correction is within a 5% error margin
- C. the circumstances are considered to be exceptional
- D. an impact assessment gives acceptable results
Answer: C
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 # 25
Anyone who notifies or warns a person in relation to suspicions, or reveals any transaction under review in relation to suspicions, is guilty of:
- A. layering
- B. collusion
- C. money laundering
- D. tipping off
Answer: D
Explanation:
Under UAE's Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations, revealing or notifying a person about suspicions of money laundering or disclosing any transaction under review is classified as 'tipping off'. The act of tipping off is prohibited and criminalized under the UAE's AML/CFT laws, as it can obstruct investigations and alert potential wrongdoers, allowing them to take steps to conceal illicit activities. This is a key part of maintaining the integrity of AML regulations, as it prevents individuals from undermining the enforcement process. Firms and individuals are strictly prohibited from warning clients or revealing details about investigations in order to protect the confidentiality and effectiveness of the review process.
Reference: CISI UAE Financial Rules and Regulations - Tipping Off and AML Compliance, Section 9.7.3 (2023).
NEW QUESTION # 26
In cases where securities are bought and sold during the same trading session, the client must have in its cash account enough:
- A. credit to cover the value of sale
- B. credit to cover the value of any losses
- C. credit to cover the value of purchase
- D. securities to the value of purchase
Answer: C
Explanation:
According to the CISI UAE Financial Rules and Regulations under Client Protection provisions, when a client buys and sells securities within the same trading session (day trading), the client must maintain sufficient credit to cover the value of purchase in their cash account at the time of the transaction. This rule ensures that clients have the necessary funds to settle their purchase obligations promptly, reducing settlement risk and maintaining market stability. Credit to cover sales is not required since sales generate funds rather than consume them. This provision supports orderly trading and financial discipline among market participants by preventing unsettled trades and possible defaults.
Reference: CISI UAE Financial Rules and Regulations - Client Protection, Trading and Settlement Rules, Section 4.3.2 (2023).
NEW QUESTION # 27
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 # 28
For all local funds, a semi-annual report on the public fund's performance must be prepared no later than:
- A. 2 months from the end of the semi-annual period
- B. 2 months from the end of the financial year
- C. 30 days from the end of the financial year
- D. 45 days from the end of the semi-annual period
Answer: A
Explanation:
Per CISI UAE Financial Rules and Regulations governing investment funds, a semi-annual report on the public fund's performance must be prepared no later than 2 months from the end of the semi-annual period.
This reporting timeline ensures timely disclosure to investors and regulators, providing transparency about fund performance, investment activities, and compliance with regulatory standards. The semi-annual report serves as a key accountability mechanism, enabling investors to make informed decisions and maintain confidence in the fund management. The requirement for a two-month deadline aligns with global best practices in fund reporting.
Reference: CISI UAE Financial Rules and Regulations - Investment Funds Reporting Requirements, Section
6.5.4 (2023).
NEW QUESTION # 29
The disclosure of a licensed body's legal status, including the fact that it is licensed by the Authority, is important because:
- A. it ensures that no clients suffer from perceived or actual misbehaviour at the hands of a firm which is regulated
- B. it enables those that might suffer from perceived or actual misbehaviour at the hands of a firm to raise their concerns with the regulator
- C. it allows third party firms to use, utilise, or copy the Authority's logo for any reason and this reassures clients
- D. it forces firms to disclose their regulatory status and that they are subject to the Authority's control and supervision
Answer: B
Explanation:
Disclosing a licensed body's legal status and its licensing by the Authority is crucial because it enables clients and others who may suffer from perceived or actual misbehaviour to raise their concerns with the regulator.
This transparency mechanism empowers investors and market participants to seek redress and promotes regulatory oversight. While the disclosure also signifies the firm's subjection to regulatory supervision, the primary benefit is facilitating complaint handling and protection. It does not imply that no misbehaviour occurs, nor does it authorize the unauthorised use of the Authority's branding by third parties.
Reference: CISI UAE Financial Rules and Regulations - Client Protection and Regulatory Disclosure, Section 4.1.8 (2023).
NEW QUESTION # 30
The contract size for trading in Silver Futures on the Dubai Gold & Commodities Exchange is 1,000 troy ounces of refined silver, plus or minus what prescribed margin?
- A. 5%
- B. 1%
- C. 10%
- D. 2%
Answer: A
Explanation:
For Silver Futures contracts on the Dubai Gold & Commodities Exchange (DGEX), the contract size is 1,000 troy ounces of refined silver, with a prescribed margin of 5%. The margin requirement ensures that traders have sufficient collateral to cover potential price fluctuations in the market. The 5% margin provides a balance between allowing for liquidity in the market and managing the risks associated with futures trading.
This is a standard margin level designed to protect both market participants and the exchange from extreme volatility or defaults.
Reference: CISI UAE Financial Rules and Regulations - Silver Futures Trading on DGEX, Section 7.1.3 (2023).
NEW QUESTION # 31
An in-kind shares evaluation report must be based on data covering what maximum period before the evaluation date?
- A. Four months
- B. One month
- C. Three months
- D. Two months
Answer: C
Explanation:
Under CISI UAE Financial Rules and Regulations, an in-kind shares evaluation report must be based on data covering a maximum period of three months prior to the evaluation date. This ensures the valuation reflects recent market conditions and financial information, maintaining accuracy and relevance. Longer periods could risk outdated or misleading valuations, affecting investor decisions and fund reporting. The three-month timeframe is aligned with international valuation standards applied to in-kind contributions to investment funds.
Reference: CISI UAE Financial Rules and Regulations - Investment Funds, In-Kind Share Valuation Requirements, Section 6.2.8 (2023).
NEW QUESTION # 32
When a company applies to become a Special Purpose Acquisition Company, its sponsors must prepare proposals to:
- A. manage conflicts of interest
- B. identify potential money laundering
- C. deal with succession planning
- D. reduce the risk to investors
Answer: A
Explanation:
Sponsors of companies applying to become Special Purpose Acquisition Companies (SPACs) in the UAE must prepare detailed proposals that specifically address the management of conflicts of interest. This is mandated under CISI UAE Financial Rules and Regulations to ensure that the SPAC's activities remain transparent and investors' interests are protected. Conflicts of interest may arise from the sponsors' dual roles or relationships with target companies or investors. Addressing these conflicts proactively through proposals and policies supports integrity and market confidence. While risk reduction and anti-money laundering are critical, the regulations explicitly highlight conflict management as a core area for SPAC sponsors.
Reference: CISI UAE Financial Rules and Regulations - Regulatory Infrastructure, SPAC Sponsorship Requirements, Section 6.3.4 (2023).
NEW QUESTION # 33
Where self-fund founders intend to accept in-kind shares, the fund prospectus must state whether these shares:
- A. will be held as capital assets of the fund
- B. may subsequently be disposed of
- C. are to be valued subjectively
- D. are consistent with the fund's investment strategy
Answer: D
Explanation:
For self-funded founders accepting in-kind shares into a fund, the CISI UAE Financial Rules and Regulations require that the fund prospectus clearly state whether such shares are consistent with the fund's investment strategy. This ensures transparency for investors regarding the nature and suitability of the assets held within the fund. Declaring consistency with the investment strategy helps investors assess the fund's objectives and risk profile accurately. Other details like valuation and disposal are important but the primary disclosure focus is on strategic alignment to maintain trust and regulatory compliance. This requirement underscores the importance of fund governance and investor protection.
Reference: CISI UAE Financial Rules and Regulations - Investment Funds, Fund Prospectus Requirements, Section 6.2.4 (2023).
NEW QUESTION # 34
What is the minimum fine that can be levied on a person found guilty of financing an illegal organisation?
- A. AED 300,000
- B. AED 250,000
- C. AED 150,000
- D. AED 200,000
Answer: C
Explanation:
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.
Reference: CISI UAE Financial Rules and Regulations - AML Criminal Sanctions, Section 8.4.5 (2023).
NEW QUESTION # 35
Which category of firm is required to provide accounts using a 'Unified Centralised Back Office System'?
- A. Category 1 - Dealing in securities
- B. Category 2 - Dealing in investments
- C. Category 4 - Credit rating agencies
- D. Category 3 - Custody, clearing and recording
Answer: D
Explanation:
Firms engaged in custody, clearing, and recording activities are required by UAE financial regulations to use a 'Unified Centralised Back Office System' to maintain and manage their accounts. This requirement is outlined in the CISI UAE Financial Rules and Regulations under Category 3 firms, which include those involved in custodial services, clearing, and recording of transactions. The centralized system ensures that these firms can manage large volumes of transaction data securely and efficiently while adhering to regulatory standards for reporting and transparency. It is designed to streamline operational processes and reduce risks related to errors, fraud, or data mismanagement.
Reference: CISI UAE Financial Rules and Regulations - Unified Centralised Back Office System, Section
7.1.3 (2023).
NEW QUESTION # 36
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. Share providers
- B. Evaluators
- C. Auditors
- 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 # 37
The Board of a securities market wished to suspend a rule relating to the operations of that market, why was it unable to do so?
- A. The majority of the board was not present
- B. It failed to seek permission from the Authority
- C. A 30-day notice was not provided
- D. An Authority penalty was pending
Answer: B
Explanation:
When the Board of a securities market wishes to suspend a rule related to the market's operations, it must first obtain permission from the regulatory Authority. According to the CISI UAE Financial Rules and Regulations, if permission is not sought from the Authority before attempting to suspend the rule, the suspension request will not be valid. This requirement ensures that the Authority has oversight over the market's operational changes and can assess whether suspending the rule aligns with regulatory goals such as market stability, fairness, and transparency. This helps prevent arbitrary or inconsistent rule changes that might undermine investor confidence or disrupt the smooth functioning of the market.
Reference: CISI UAE Financial Rules and Regulations - Market Rule Suspension Procedures, Section 2.4.7 (2023).
NEW QUESTION # 38
Which of the following customer due diligence measures should be taken if a client is a foreign politically exposed person?
- A. Seek Authority approval to proceed
- B. Attempt to establish the source of the funds
- C. Conduct a prescribed risk / benefit analysis
- D. Examine the latest Interpol watch list
Answer: B
Explanation:
For foreign politically exposed persons (PEPs), CISI UAE Financial Rules and Regulations require that firms undertake rigorous customer due diligence, including attempting to establish the source of funds. Establishing the legitimacy and origin of funds is crucial to prevent illicit money laundering and terrorism financing. While risk/benefit analyses and regulatory approvals are important, the direct verification of fund sources is a primary control measure against financial crimes involving PEPs. Checking watchlists like Interpol's is supplementary but not sufficient alone. This requirement safeguards the financial system and aligns with Federal Law No. 20 of 2018's anti-money laundering mandates.
Reference: CISI UAE Financial Rules and Regulations - AML Controls and PEP Risk Management, Section
8.2.9 (2023).
NEW QUESTION # 39
An application submitted to the ADX by the brokerage company to enable it to supply E-Trading services will result in a decision to approve or reject the application within:
- A. 10 days
- B. 30 days
- C. 5 days
- D. 2 days
Answer: C
Explanation:
Brokerage firms seeking approval from the Abu Dhabi Securities Exchange (ADX) to offer E-Trading services are subject to a timely review process. According to the CISI UAE Financial Rules and Regulations, the ADX is required to make a decision to approve or reject such applications within 5 business days. This rapid response timeline ensures that brokers can efficiently begin offering E-Trading services to clients, which is crucial in today's fast-paced financial markets. By maintaining this short decision-making window, the ADX fosters an environment of operational efficiency and responsiveness, which supports both market development and investor confidence.
Reference: CISI UAE Financial Rules and Regulations - E-Trading Approval Process, Section 10.4.1 (2023).
NEW QUESTION # 40
When debt securities are offered through a public subscription, the offeror will be required to announce any replacement of the trustee:
- A. after 5 working days
- B. immediately
- C. within a maximum of 72 hours
- D. within a maximum of 48 hours
Answer: C
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 # 41
When collecting data from official authorities, evaluators of investment fund in-kind shares are required to abide by the principles of honesty, justice and:
- A. equality
- B. prudence
- C. confidentiality
- D. governance
Answer: C
Explanation:
Evaluators of in-kind shares for investment funds must adhere to key ethical principles including honesty, justice, and confidentiality when collecting data from official authorities. Confidentiality ensures sensitive information obtained during valuation processes is protected against unauthorized disclosure, preserving trust and compliance with legal requirements. This principle complements honesty and justice by maintaining the integrity of the evaluation process and protecting the interests of the fund and its investors. Governance, equality, and prudence are important but not the specifically mandated principles in this context.
Reference: CISI UAE Financial Rules and Regulations - Investment Funds Valuation and Ethical Standards, Section 6.2.9 (2023).
NEW QUESTION # 42
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. Liability is apportioned
- C. It will be re-determined
- D. The provider will correct it
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 # 43
If an issuer provides its shareholders with bonus shares, then the CSD Department will deposit the bonus shares issued in the account and will register them as a whole, round number. What happens in the case that there are fractions of shares?
- A. The issuing company must sell them within 30 days
- B. The issuing company must sell them within 45 days
- C. These are also added to the shareholder's account
- D. They are totalled up and put in a suspense account
Answer: D
Explanation:
When bonus shares are issued, the Central Securities Depository (CSD) registers shares in whole numbers only. Any fractions of shares that result from the bonus share calculation cannot be credited to individual shareholder accounts. According to CISI UAE Financial Rules and Regulations, these fractional shares are aggregated and placed into a suspense account by the CSD. The suspense account holds these fractional shares collectively until such time as they can be properly managed, such as by being sold off and the proceeds distributed to shareholders in proportion to their holdings. This process prevents fractional shares from being credited inaccurately, ensuring operational clarity and market integrity. The issuing company is not immediately responsible for selling these fractions, but regulatory oversight governs their eventual disposal.
Reference: CISI UAE Financial Rules and Regulations - Securities Issuance and Registration, Section 5.3.6 (2023).
NEW QUESTION # 44
When updating their money laundering compliance framework, firms involved in crypto assets are required to take into account the recommendations of which body?
- A. World Bank
- B. Financial Action Task Force
- C. Bank for International Settlements
- D. United Nations Office on Drugs and Crime
Answer: B
Explanation:
Under the UAE's Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) framework, firms, including those involved in crypto assets, are required to align their compliance practices with international standards. The Financial Action Task Force (FATF) provides the global framework and recommendations to combat money laundering and terrorism financing. Firms must adhere to these recommendations to update and maintain their AML compliance programs effectively, ensuring that they remain in line with the best global practices and avoid involvement in illicit activities. The FATF's guidelines specifically address the risks posed by crypto assets and set standards for monitoring, reporting, and controlling potential misuse of such assets for money laundering purposes.
Reference: CISI UAE Financial Rules and Regulations - Anti-Money Laundering Framework and Crypto Assets, Section 9.2.4 (2023).
NEW QUESTION # 45
If there is a material change in the nature of the relevant software, the regulations state that investors who have accepted an offer of crypto assets must be notified:
- A. within no less than 14 days
- B. promptly in advance
- C. within no less than 7 days
- D. immediately after implementation
Answer: B
Explanation:
The CISI UAE Financial Rules and Regulations require that investors in crypto assets be promptly notified in advance of any material change in the nature of the software relevant to the assets. This advance notification is crucial to allow investors to make informed decisions regarding their holdings before changes take effect.
Material changes could affect functionality, security, or value of the crypto asset. The regulation promotes transparency and investor protection by ensuring timely and clear communication, preventing investors from being blindsided by unexpected developments. The requirement aligns with international best practices on disclosure for crypto asset issuers.
Reference: CISI UAE Financial Rules and Regulations - Legislation and Practice, Crypto Asset Regulation, Section 7.2.1 (2023).
NEW QUESTION # 46
If a discrepancy comes to light when conducting an external reconciliation, what must the firm do?
- A. Immediately suspend operations with the third party
- B. Investigate and correct it as soon as possible
- C. Immediately inform the regulator verbally and follow this up in writing
- D. Close the client's account by close of business on the same day
Answer: B
Explanation:
If a discrepancy is identified during an external reconciliation process, the firm is required to investigate and correct it as soon as possible. The CISI UAE Financial Rules and Regulations emphasize that discrepancies, whether in financial data or operational procedures, must be thoroughly examined to determine the root cause and rectified promptly. Immediate corrective action helps to ensure that financial statements and other reports remain accurate and reliable, preventing any further errors or compliance issues. While it may be necessary to inform the regulator or suspend operations in extreme cases, the first priority is to address the discrepancy through investigation and correction.
Reference: CISI UAE Financial Rules and Regulations - Reconciliation and Error Resolution, Section 8.1.4 (2023).
NEW QUESTION # 47
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