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CME-2B – Saudi Compliance and AML Regulations: free practice test

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Practice test questions with answers and explanations

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01A capital market institution plans a temporary suspension of securities business for a foreseeable reason. What is the minimum written notice to the Authority?

Practice question Unit: Capital Market Institutions Regulations

  1. A3 months after cessation

    Notice after cessation does not satisfy the advance-notice requirement.

  2. B45 days before cessation ✓ Correct answer

    Article 12(a)(1) requires at least 45 days’ advance notice.

  3. C7 days after cessation

    Seven days after the event does not meet the advance-notice rule for planned cessation.

  4. D30 days before cessation

    Thirty days is shorter than the required minimum here.

Reference: Capital Market Institutions Regulations, Article 12(a)(1); amended 7 January 2026.

02A proposed controller is financially sound, but its structure would obstruct supervision of the institution. What must be considered before approval?

Practice question Unit: Capital Market Institutions Regulations

  1. AFinancial soundness alone is sufficient

    Financial soundness is not the only stated test.

  2. BControl must not impair effective supervision or compliance ✓ Correct answer

    Article 13(d) requires the Authority to be satisfied that supervision or compliance will not be impaired.

  3. CClient consent cures any supervisory obstacle

    Client consent does not substitute for effective supervision.

  4. DForecast institutional profits determine the decision

    Profit forecasts do not remove supervision and compliance requirements.

Reference: Capital Market Institutions Regulations, Article 13(d); amended 7 January 2026.

03An investor has received marketing material and paid no subscription yet. The manager says their public-fund contractual relationship exists solely because the CMA approved the offer. Which act establishes that relationship under Article 34?

Practice question Unit: Investment Funds Regulations

  1. ASigning the fund’s terms and conditions. ✓ Correct answer

    Article 34(b) establishes the contractual relationship by signing the relevant fund’s terms; 34(a) also uses signing for establishment by the first potential holders and manager.

  2. BThe investor reading an unsigned marketing leaflet.

    Reading unsigned promotional material is not the signing specified by the Article.

  3. CAn unrelated bank opening a deposit account.

    An unrelated deposit account does not create this public-fund contract.

  4. DThe CMA’s approval of the public offer alone.

    Regulatory approval does not itself sign a contract for the investor.

Reference: Investment Funds Regulations, 24 November 2025 amendment, Article 34(a),(b).

04A private fund’s draft cover says its terms may be distributed to anyone in Saudi Arabia and the CMA guarantees their accuracy. Which correction follows from Annex 11’s required disclaimer?

Practice question Unit: Investment Funds Regulations

  1. AKeep unrestricted distribution if a manager signs.

    The manager’s signature does not remove the distribution restriction.

  2. BKeep the guarantee if no loss has occurred.

    Past absence of loss does not create a regulatory guarantee.

  3. CRestrict distribution; do not claim a CMA guarantee. ✓ Correct answer

    The cover disclaimer limits Saudi distribution to permitted persons and disclaims CMA representations on accuracy/completeness and liability for reliance losses.

  4. DRemove all investor due-diligence warnings instead.

    The required disclaimer includes investor due-diligence and adviser warnings, not their removal.

Reference: Investment Funds Regulations, 24 November 2025 amendment, Article 84(c); Annex 11, cover-page section (g).

05A registered person handling an order has reasonable grounds to believe it involves client manipulation. The firm’s automated system shows no alert, and the desk proposes accepting the order until the system flags it. What is required?

Practice question Unit: Market Conduct Regulations

  1. ADo not accept or execute it. ✓ Correct answer

    Article 11(a) applies if the institution or registered person has reasonable grounds; an automated alert is not an additional prerequisite.

  2. BAccept it until an automated alert appears.

    The registered person’s grounds already trigger the prohibition.

  3. CWait for the client to confess manipulation.

    A confession is not required by the reasonable-grounds standard.

  4. DExecute it if most desk staff disagree.

    The Article does not make the duty dependent on a majority vote.

Reference: Market Conduct Regulations, Article 11(a), amended 25 January 2021.

06An offer is neither exempt, public nor a Parallel Market offer, and subscriptions are restricted to qualified and institutional clients. How is it classified?

Practice question Unit: Corporate Finance

  1. ANecessarily a public offer

    The stated subscription restriction matches private placement on these facts.

  2. BA private placement ✓ Correct answer

    This is one private-placement route under Article 8(a).

  3. CAlways a limited retail offer

    Limited offers are another route, not the necessary classification here.

  4. DAutomatically an exempt offer

    The facts exclude exemption; investor status does not automatically change that.

Reference: Rules on the Offer of Securities and Continuing Obligations, Article 8(a); amended 19 January 2026.

07Outside the stated exceptions, when may a capital market institution begin dealing services for a new client?

Practice question Unit: Investment Accounts Instructions

  1. ABefore approval if the client promises to send it later

    A future promise is not the required documented approval.

  2. BAfter obtaining documented approval of the opening agreement and opening the account ✓ Correct answer

    The Article requires approval, documentation and account opening before covered services.

  3. CAfter receiving only the client’s name

    A name alone does not satisfy acceptance requirements.

  4. DAfter an initial test trade

    The Article does not permit an initial trade before these conditions are met.

Reference: Investment Accounts Instructions, amended 5 January 2026, Article 3(b).

08An institution assessed laundering risks orally years ago and retained no report. What correction is needed?

Practice question Unit: Anti-Money Laundering Law

  1. ADocument, update and provide it to supervisors on request. ✓ Correct answer

    Article 5 and paragraph 5/1 require documentation, periodic updating, and provision to the supervisor on request.

  2. BReplace the assessment with an annual profits statement.

    Profits do not constitute an assessment of laundering-risk factors.

  3. CHave the manager orally confirm unchanged risks without documentation.

    An oral statement alone satisfies neither documentation nor updated assessment.

  4. DPrepare a report only after a final criminal conviction.

    Assessment is preventive and does not await conviction.

Reference: Anti-Money Laundering Law, Article 5; Implementing Regulations published 26 June 2026, paragraph 5/1.

09An employee notices an inconsistency casting doubt on the adequacy of an existing customer’s identity information. What is the due-diligence consequence?

Practice question Unit: Anti-Money Laundering Law

  1. ADefer the issue until the agreement expires automatically.

    Contract expiry is not the trigger for correcting doubtful information.

  2. BAccept the conflicting details without examination to avoid delay.

    Avoiding delay does not justify ignoring doubts about information.

  3. CThis triggers a due-diligence requirement. ✓ Correct answer

    Paragraph 7/1(e) identifies doubts about previously obtained information’s accuracy or adequacy as a trigger.

  4. DNo action is needed because the customer passed onboarding.

    Previous onboarding does not remove the new doubt’s effect.

Reference: Anti-Money Laundering Law, Article 7; Implementing Regulations published 26 June 2026, paragraph 7/1(e).

10An institution assesses terrorist-financing risk using only the client’s residence. What must also be considered?

Practice question Unit: Countering Terrorism Crimes and Financing

  1. AThe app’s colour

    App colour does not analyse the delivery channel and its risks.

  2. BOnly the client’s business logo

    A logo does not replace specified risk factors.

  3. COnly the marketing staff count

    Marketing headcount alone does not assess the prescribed factors.

  4. DProducts, services, transactions and delivery channels ✓ Correct answer

    The Article requires multiple factors including products and their delivery channels.

Reference: Implementing Regulations of the Law of Combating Terrorist Crimes and its Financing, Article 16(1)(c); read with the June 2026 amendments.

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