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CME-5B – Saudi Capital Market Rules and Regulations (Corporate Finance): free practice test

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Practice test questions with answers and explanations

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01Which statement is correct? Topic: offer routes and scope.

Practice question Unit: Rules on the Offer of Securities and Continuing Obligations

  1. AIssuing securities or inviting subscription ✓ Correct answer

    Q0: Issuing securities and inviting subscription fall inside OSCO’s offer definition.

  2. BRedeeming fund units under fund rules in file 0

    Q0.1: Fund units follow separate CMA fund rules, not OSCO offers.

  3. CFiling internal board minutes only on hypothesis 1

    Q0.2: Internal board discussion alone is not an offer.

  4. DPaying an ordinary bank loan in example 2

    Q0.3: Ordinary loan repayment is not a securities offer.

Reference: OSCO, current consolidated text (Arts 1, 3).

02Which statement binds parties? Topic: offer routes and scope.

Practice question Unit: Rules on the Offer of Securities and Continuing Obligations

  1. AA closed staff share gift as wrong reading 9

    Q3.0: Closed gifts are not public offers.

  2. BAn exempt institutional round as rejected choice 10

    Q3.1: Exempt rounds follow Article 6, not the public prospectus track.

  3. CAn internal capital note only in memo 11

    Q3.2: Internal notes alone are not public offers.

  4. DA public offer requiring a prospectus #3 ✓ Correct answer

    Q3: Public offers normally require an Authority-approved prospectus.

Reference: OSCO, current consolidated text (Arts 23–25).

03Which statement survives review? Topic: private placements and limited offers.

Practice question Unit: Rules on the Offer of Securities and Continuing Obligations

  1. ASAR 2 million with no cap nuance in example 18

    Q6.0: Two million exceeds the limited-offer cap.

  2. BNo monetary limit at all at application 19

    Q6.1: A monetary cap applies under Article 9.

  3. CSAR 200,000 maximum per offeree #6k ✓ Correct answer

    Q6: Limited offers also cap consideration at SAR 200k per offeree.

  4. DSAR 50 only as a token in review 20

    Q6.3: A token SAR 50 is not the published cap.

Reference: OSCO, current consolidated text (Art 9).

04Which statement should be followed? Topic: private placements and limited offers.

Practice question Unit: Rules on the Offer of Securities and Continuing Obligations

  1. AA silent filing with no statement in memo 27

    Q9.0: Silence does not meet the prominent-statement duty.

  2. BA prominent risk statement in offer documents ✓ Correct answer

    Q9: Private-placement advertising documents must carry a prominent statement.

  3. COnly a verbal hallway warning in pack 28

    Q9.2: Verbal hallway warnings are not the required document statement.

  4. DA logo change instead of text in draft 29

    Q9.3: A logo change is not a risk statement.

Reference: OSCO, current consolidated text (Art 10).

05Which statement is compliant? Topic: public offers and prospectuses.

Practice question Unit: Rules on the Offer of Securities and Continuing Obligations

  1. AAn Authority-approved prospectus #12k0 #12k0 ✓ Correct answer

    Q12: Public offers of shares generally require an approved prospectus.

  2. BA unapproved marketing teaser alone in review 36

    Q12.1: A teaser is not an approved prospectus.

  3. CAn unsigned draft brochure before approval 37

    Q12.2: An unsigned draft is not approval.

  4. DA verbal pitch to one client after checks 38

    Q12.3: A single verbal pitch is not the prospectus route.

Reference: OSCO, current consolidated text (Arts 23–25, 29).

06Which statement is market practice? Topic: price stabilisation mechanics.

Practice question Unit: Rules on the Offer of Securities and Continuing Obligations

  1. AFifty percent of total capital in draft 45

    Q15.0: Fifty percent of capital is not the over-allotment cap.

  2. BOne hundred percent greenshoe in note 46

    Q15.1: A full 100% greenshoe exceeds the 15% limit.

  3. CZero; over-allotment is banned in log 47

    Q15.2: Over-allotment is permitted within the 15% limit.

  4. DFifteen percent of shares offered v170 § ✓ Correct answer

    Q15: Maximum over-allotment is 15% of shares offered for subscription.

Reference: OSCO, current consolidated text (Stabilisation Instructions).

07Which option governs this? Topic: capital alteration routes.

Practice question Unit: Rules on the Offer of Securities and Continuing Obligations

  1. AOnly cash gifts to directors after checks 54

    Q18.0: Director cash gifts are not capital-increase routes.

  2. BShare buybacks with no process for contrast 55 #1810 #

    Q18.1: Buybacks are a different capital action.

  3. CRights issues, capitalisation, debt conversion, assets ✓ Correct answer

    Q18: Capital increases include rights, capitalisation, debt conversion, and asset acquisition routes.

  4. DChanging the fiscal year alone as alternate 56

    Q18.3: Fiscal-year changes are not capital increases.

Reference: OSCO, current consolidated text (Arts 53–57).

08What outcome is required now? Topic: SPE financing approval timing.

Practice question Unit: Special Purposes Entities

  1. AAuthority financing approval before offering SPE debt ✓ Correct answer

    Q0: SPE debt offerings require Authority financing approval first.

  2. BA press advertisement alone as approval in file 0

    Q0.1: A newspaper ad is not Authority approval.

  3. CA non-Authority private endorsement on hypothesis 1 #

    Q0.2: A club endorsement is not regulatory approval.

  4. DNo approval step of any kind in example 2

    Q0.3: An approval step is required.

Reference: Special Purposes Entities Rules, current consolidated text (SPE Rules / OSCO Art 38).

09What record rule survives review? Topic: M&A general duties and information.

Practice question Unit: Merger and Acquisition Regulations

  1. ADirectors’ duties in offers attach to both sides ✓ Correct answer

    Q0: Offeror and offeree directors both carry M&A duties.

  2. BDuties attach to administrative staff alone in file 0

    Q0.1: Reception staff are not the duty-bearers.

  3. CDuties attach to non-qualified visitors only on hypothesis 1

    Q0.2: non-qualified visitors are not the duty-bearers.

  4. DNobody after a market rumour begins in example 2

    Q0.3: Duties continue; rumours do not erase them.

Reference: Merger and Acquisition Regulations, current consolidated text (M&A Regs).

10Which offer reading must be observed? Topic: shareholder assembly rights.

Practice question Unit: Corporate Governance Regulations

  1. AShareholders’ rights at general assemblies #36 ✓ Correct answer

    Q0: CGR protects shareholder rights in general assemblies.

  2. BShareholders have no assembly rights in file 0

    Q0.1: Shareholders do have assembly rights.

  3. COnly employees vote at assemblies on hypothesis 1

    Q0.2: Voting is for shareholders, not only employees.

  4. DAssemblies are optional informal gatherings in example 2

    Q0.3: Assemblies are governance bodies, not mere clubs.

Reference: Corporate Governance Regulations, current consolidated text (CGR).

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