Chapter 2 - Associated Markets and Securities Legislation Flashcards
What constitutes legal evidence of trading and ownership?
Entries registered in the market’s records, whether entered manually or electronically, and any documents issued by the market
What are the key responsibilities of a Market’s Board?
- Appoint the market’s director general and his deputy,
- Establish the market’s organisational structure, the internal regulations
- draw up the necessary proposals in relation to the amending of the regulations and to present them to the SCA;
- monitor trading transactions in securities and commodities
- present reports and data to the SCA and to issue the press releases necessary
- approve the annual balance sheet of the market’s income and expenditure;
- levy penalties on brokers pursuant to the provisions of the law, and to recommend to the SCA the
removal of them - consult with the SCA in respect of the fees charged
- handle applications for the entering of brokers and the listing of securities
- deal with any other matters to ensure the proper and regular working of the market.
What is the General Assembly?
The members of the market who have paid the registration and renewal fees constitute its General
Assembly. Each member has one vote in the meetings of this assembly. Its meetings will be attended by
a representative of the SCA as an observer
Who lays down the rules of the General Assembly?
The Market’s Board of Directors
How often must trading occur on a Market?
At least 5 days a week. At least 2 hours each day
What must the electronic trading system ensure?
- The automatic stopping of purchase orders which exceed the limits of the broker’s bank guarantee
- The enabling of all companies whose securities are listed in the market to view the register of their own shares.
On what basis may an executed trade be cancelled?
The director general of the market may cancel an executed transaction after a written request from the
two brokers to the transaction is submitted to him
What is a special order?
A special order is defined as any order approved in advance by the market for a securities transaction in
excess of 80% of the amount of the broker’s bank guarantee.
How soon after Year End must a Market give SCA its accounts?
1 month
What is the definition of Capital Base?
The sum of Tier 1 capital and Tier 2 capital, after
making certain deductions from the total of tier 1 capital and tier 2 capital
Tier 1 Capital
Paid-up share capital and published reserves of a bank, including minority interests
Tier 1 Capital Deductions
- goodwill and other intangible assets;
- own shares held;
- shortfall in provisions;
- current year loss;
Tier 2 Capital
- undisclosed reserves;
- revaluation of assets, but limited to a maximum of 45% of the excess of the market value over their
net book value. Revaluation reserves in respect of a bank’s property assets are not to be included; - hybrid (debt/equity) capital instruments;
- subordinated term loans
Tier 2 Deductions
- Investments in unconsolidated subsidiaries;
- Investments in associate companies;
- Investments in other banks or financial institutions;
UAE Capital Ratios
Total Capital = 10%
Tier 1 Capital = 6%
Tier 2 Capital = 67% of Tier 1