UAE-Financial-Rules-and-Regulations Premium Exam Questions

On the Dubai Financial Market (DFM), a good-till-cancelled (GTC) order remains active and available for execution until explicitly cancelled by the investor who placed it. This means the investor maintains control over the order’s lifespan, allowing it to persist through trading sessions unless they choose to withdraw it. Brokers or clearing members do not have authority to unilaterally cancel GTC orders, ensuring investor autonomy. The market committee also does not intervene in the cancellation of individual orders under normal circumstances. This design supports investor flexibility and orderly market functioning.

CISI UAE Financial Rules and Regulations recognize the concept of a Chinese wall, which permits employees in one part of a regulated business to withhold certain information from employees in other parts. This internal information barrier is designed to prevent conflicts of interest and insider trading by restricting the flow of sensitive or non-public information between departments. By implementing Chinese walls, firms ensure compliance with legal and regulatory requirements, uphold market integrity, and protect client interests. While audit requests and privacy concerns are valid, the primary regulatory rationale for withholding information internally is to maintain effective Chinese walls.

A transaction to purchase securities could be declared null and void if it was the result of a rumour being spread. According to the CISI UAE Financial Rules and Regulations, transactions based on market manipulation, misinformation, or rumors that mislead investors and distort the market are considered invalid. The integrity of the financial markets depends on transparency and the accuracy of the information that drives trading decisions. Therefore, if a transaction is found to have been influenced by rumors, it could be declared void to maintain fairness and prevent manipulative practices.

According to CISI UAE Financial Rules and Regulations, when the client is a legal person, customer due diligence (CDD) requires verification of identity for any natural person holding a minimum controlling ownership interest of 25%. This threshold identifies beneficial owners who have significant influence or control over the legal entity. Verifying these individuals is critical for AML/CTF compliance to prevent misuse of corporate vehicles for illicit purposes. The 25% figure aligns with international standards such as FATF recommendations and ensures that regulatory scrutiny extends beyond the legal entity to its key controllers.