CME-5B: Saudi Capital Market Rules and Regulations – Corporate Finance Sample Paper

Q: Are these CME-5B: Saudi Capital Market Rules and Regulations – Corporate Finance sample questions updated for 2026?

Yes, these free practice questions are continuously reviewed and updated to reflect the latest official syllabus changes and regulatory requirements for candidates in Saudi Arabia.

Q: How similar is this sample paper to the real CME-5B: Saudi Capital Market Rules and Regulations – Corporate Finance exam?

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Q: What is the pass mark for the CME-5B: Saudi Capital Market Rules and Regulations – Corporate Finance certification?

While the pass mark can vary slightly by specific exam versions, most CISI exams require a score of 70% to pass. We recommend consistently scoring 80% or higher on our practice question bank before sitting for your real test in Saudi Arabia.

Q: Can I take this free mock exam multiple times?

Yes, you can retake this 30-question sample paper as many times as you like. However, to ensure comprehensive preparation and avoid simply memorizing answers, we highly recommend unlocking our full premium question bank which features over 500 unique scenario-based practice questions.

Question 1

How often must a listed company's board meet?

Accepted Answer

At least 4 times per year

Answer

At least once annually

Answer

At least monthly

Answer

At least twice annually

Question 2

What differentiates an Exempt Offer from a Private Placement?

Accepted Answer

Exempt Offers are based on investor number or amount thresholds, whereas Private Placements are restricted to specific investor categories

Answer

Exempt Offers can only be marketed to Institutional clients

Answer

Exempt Offers require a full CMA-approved prospectus

Answer

Exempt Offers are not subject to any CMA regulations

Question 3

What is the deadline for publishing audited annual financial reports?

Accepted Answer

Within 3 months of fiscal year-end

Answer

Within 12 months of fiscal year-end

Answer

Within 6 months of fiscal year-end

Answer

Within 1 month of fiscal year-end

Question 4

What is the acceptance condition in a takeover bid?

Accepted Answer

The minimum acceptance level to declare the offer unconditional

Answer

Court approval

Answer

CMA approval

Answer

The minimum share price required

Question 5

What document is required for a Public Offer of securities?

Accepted Answer

A CMA-approved prospectus

Answer

A board resolution only

Answer

An offering memorandum

Answer

A letter of intent

Question 6

What is a 'material event' for disclosure purposes?

Accepted Answer

An event that would reasonably be expected to have a material effect on the share price

Answer

Employee promotions

Answer

Any routine business activity

Answer

Only annual results announcements

Question 7

Which of the following is a requirement for a custodian of an SPE?

Accepted Answer

It must be a CMA-licensed Capital Market Institution authorised for custody

Answer

It must have the right of encumbrance over the SPE's securities

Answer

It must prepare the SPE's annual financial statements

Answer

It must be the sponsor of the SPE

Question 8

When do continuing obligations apply to an issuer?

Accepted Answer

Only after the listing of securities

Answer

Throughout the entire offering period until allotment

Answer

Only during the prospectus approval process

Answer

Both before and during the public offering phase

Question 9

What is the minimum required meeting frequency for the audit committee?

Accepted Answer

At least 4 times a year

Answer

At least twice a year

Answer

At least once a year

Answer

Monthly

Question 10

What is 'bookbuilding'?

Accepted Answer

The process of inviting institutional investors to submit bids to determine demand and pricing

Answer

Recording shareholder names

Answer

The process of writing the prospectus

Answer

Maintaining accounting records

Question 11

What must a mandatory offer bid for?

Accepted Answer

ALL remaining shares of the target company

Answer

Only institutional shareholders' shares

Answer

Only voting shares

Answer

Only the shares needed to reach 51%

Question 12

What are dealing restrictions for insiders?

Accepted Answer

Persons with inside information are prohibited from trading until the information is public

Answer

Only board members are restricted

Answer

Insiders can trade freely as long as they disclose

Answer

Restrictions only apply during the bid period

Question 13

What is the maximum permitted term for a board director under the Corporate Governance Regulations?

Accepted Answer

3 years

Answer

4 years

Answer

2 years

Answer

5 years

Question 14

Are investment fund units governed by the Rules on the Offer of Securities and Continuing Obligations?

Accepted Answer

No, they are covered separately by Investment Fund Regulations

Answer

Yes, they are treated as standard equity securities and require a full prospectus

Answer

Yes, they are governed exclusively by these rules for private placements

Answer

Yes, they are considered exempt offers regardless of investor categories

Question 15

Under the Corporate Governance Regulations, what length of service negates a director's independence?

Accepted Answer

More than 9 consecutive or inconsecutive years

Answer

More than 7 inconsecutive years

Answer

More than 5 consecutive years

Answer

More than 10 consecutive years only

Question 16

Under the SPE Rules, who is responsible for appointing the board of directors, the custodian, and the auditor of the SPE?

Accepted Answer

The trustee

Answer

The sponsor

Answer

The unitholders

Answer

The CMA

Question 17

What is a direct listing?

Accepted Answer

Listing existing shares for trading without raising new capital

Answer

A reverse merger

Answer

An IPO with full underwriting

Answer

A private sale to institutional investors

Question 18

What is the role of the independent adviser in a takeover bid?

Accepted Answer

To provide an independent recommendation to target shareholders on whether to accept or reject the bid

Answer

To manage the company after the takeover

Answer

To approve the bid on behalf of the CMA

Answer

To negotiate the price on behalf of the bidder

Question 19

Who must chair the audit committee under the Corporate Governance Regulations?

Accepted Answer

An independent director

Answer

The CEO

Answer

An executive director

Answer

The Chairman of the Board

Question 20

What happens to a board member's status if they were employed by the company within the preceding 2 years?

Accepted Answer

Their independence is negated

Answer

They can only serve on the audit committee

Answer

They must return all remuneration

Answer

They are disqualified from serving on the board entirely

Question 21

What is the minimum shareholding threshold required for shareholders to add items to the general assembly agenda?

Accepted Answer

5%

Answer

10%

Answer

20%

Answer

1%

Question 22

Under the M&A Regulations, what restriction applies to a person acquiring 40% or more of an offeree's voting shares?

Accepted Answer

They cannot dispose of those shares for 6 months without Authority approval

Answer

They must appoint a new board of directors for the offeree company

Answer

They must immediately launch a mandatory offer for the remaining shares

Answer

They are barred from voting at the general assembly for 12 months

Question 23

What is the required document retention period for company minutes, reports, and documents under the Corporate Governance Regulations?

Accepted Answer

10 years

Answer

5 years

Answer

3 years

Answer

7 years

Question 24

What is the typical lock-up period for founders after an IPO?

Accepted Answer

12 months

Answer

6 months

Answer

24 months

Answer

3 months

Question 25

If a listed company issues new shares to buy an unlisted company, representing more than 50% of its voting rights post-acquisition, what is this called?

Accepted Answer

A reverse takeover

Answer

A partial offer

Answer

An exempt offer

Answer

A mandatory offer

Question 26

What must happen in a related party transaction?

Accepted Answer

Disclosure and shareholder approval; the related party must abstain from voting

Answer

No special requirements apply

Answer

Board approval is sufficient

Answer

CMA must conduct the transaction

Question 27

Which threshold triggers the requirement to disclose related-party contracts to the Authority and the public without delay?

Accepted Answer

1% of total revenues

Answer

5% of total revenues

Answer

5% of net profit

Answer

10% of total assets

Question 28

What is the minimum notice period required for announcing a general assembly under the Corporate Governance Regulations?

Accepted Answer

21 days

Answer

30 days

Answer

7 days

Answer

14 days

Question 29

What is a 'rights issue'?

Accepted Answer

An offer of new shares to existing shareholders in proportion to their current holdings

Answer

An exchange of debt for equity

Answer

A share buyback programme

Answer

An offer only to new investors

Question 30

After receiving Authority approval for a new financing transaction by an SPE, within what period must the FIRST issuance commence?

Accepted Answer

12 months

Answer

18 months

Answer

24 months

Answer

6 months

CME-5B: Saudi Capital Market Rules and Regulations – Corporate Finance Free Sample Paper & Question Bank

How often must a listed company's board meet?

CME-5B: Saudi Capital Market Rules and Regulations – Corporate Finance

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