Iran Capital Market Dealing Exam common mistakes
Iran Capital Market Dealing Exam · Understand the traps and how to avoid them.
Treating the SEO (Iran Fara Bourse) and the TSE (Tehran Stock Exchange) as one market with identical rules, so questions about which instruments list where, which regulator approval applies, or which trading/price-limit regime governs get answered with the TSE rule by default.
Most study material and news coverage centres on the TSE, so candidates learn one market's framework and silently generalise it to the other, even though the two have separate listing boards, disclosure tiers and base-market rules under the same overarching regulator (SEO).
What to do instead
Build a two-column comparison table for every structural topic (listing requirements, disclosure frequency, price limits, market maker rules, instruments admitted) and, before answering, ask which market the stem names. If the stem names no market, choose the answer that is true of the instrument type rather than of one exchange.
Applying the wrong price-limit and order-type combination to a scenario: stating a fixed percentage limit for all instruments, or assuming stop, iceberg or market orders are freely available on every board, instead of matching the limit band and permitted order types to the specific instrument and board.
Price limits and order validity rules are set at exchange/board level and differ between the main board, the base market and various instrument classes; candidates memorise a single number or a single order list and stop there.
What to do instead
For each board and instrument class, memorise three things together: the daily limit band, the permitted order types and validity, and what triggers a temporary halt. Practise with stems that deliberately mix boards so the difference becomes automatic.
Confusing T+ settlement timing, the trade date versus settlement date, and who bears the counterparty risk at each stage, so questions about when cash and securities actually move, or who guarantees the trade, are answered with the wrong party or the wrong day.
The pre-settlement, clearing and settlement steps are conceptually similar across markets, and candidates blur the roles of the exchange, the clearing house/central securities depository and the broker, then guess at the timing.
What to do instead
Draw the post-trade timeline once, from execution to final transfer, labelling each step with the responsible entity and the day offset. Rehearse DvP questions by asking 'what has moved, and who is on the hook, at this instant?' rather than recalling a rule by name.
Mixing up the priority and validity rules of the order book, e.g. assuming price priority alone decides execution when time priority applies at the same price, or treating a disclosed quantity as the full order size.
Order-handling questions are written as short narratives, and candidates answer from intuition about 'best price wins' without tracking the sequence of arrivals or the hidden portion of an order.
What to do instead
Solve order-book stems by writing out the book row by row in arrival order and matching incoming orders against it explicitly. Always separate 'displayed quantity' from 'total order quantity' before computing the fill.
Answering AML/KYC questions with generic 'identify the customer and report suspicious activity' language instead of the specific obligations: when enhanced due diligence is triggered, who is a beneficial owner and at what threshold, what records must be kept and for how long, and to which authority a suspicious transaction report goes.
Candidates rely on general awareness of AML principles and never pin down the numeric thresholds, the timing of reports, or the distinction between customer due diligence and ongoing monitoring.
What to do instead
Create a one-page AML fact sheet with every number (ownership threshold, record-retention period, reporting deadline) and every actor (compliance officer, FIU, regulator). Learn each threshold with a one-line example so it is recalled as a scenario, not a definition.
Treating rights issues as an ordinary new share offering: getting the entitlement ratio, the subscription period, the tradability of rights, and the dilution effect on non-subscribing holders wrong, or forgetting the capital-increase registration step.
Rights issues combine corporate-law procedure, exchange process and arithmetic, and candidates learn the arithmetic without the procedural sequence, or vice versa.
What to do instead
Learn the rights issue as a fixed sequence (board approval, regulatory registration, entitlement determination, subscription window, allocation of unsubscribed shares, capital registration) and attach the arithmetic to each step. Practise dilution calculations from a stated pre-issue holding.
Conflating sukuk with conventional bonds on risk and structure: assuming sukuk pay interest, that all sukuk are asset-backed rather than asset-based, or that a given sukuk structure (ijara, murabaha, musharaka) carries the same credit and ownership characteristics.
The vocabulary overlaps with conventional fixed income, so candidates map sukuk onto bond concepts and lose the distinction between asset-based and asset-backed structures and between the underlying contract types.
What to do instead
For each sukuk contract type, note three things: what asset or usufruct underlies it, what cash flow the holder receives and on what basis, and what recourse the holder has on default. Then contrast it explicitly with a conventional bond in the same scenario.
Confusing the roles of the regulator (SEO), the exchange, the clearing house/depository, the broker and the investment fund manager, and answering 'who approves / who supervises / who executes' with the wrong institution.
Several institutions touch the same transaction, and candidates learn institution names as a list rather than as a division of responsibilities, so any 'who does X' stem becomes a guess.
What to do instead
Build a responsibility matrix with institutions as rows and activities (licensing, listing approval, trade execution, clearing, settlement, enforcement, fund oversight) as columns, and fill it once. Answer role questions by locating the activity in the matrix rather than by recalling names.
Answering professional-ethics items by choosing the option that protects the firm or the client relationship, rather than the option that satisfies the duty of care, fair treatment and disclosure obligations, and failing to identify a conflict of interest when it is presented politely.
Ethics stems are written as plausible business situations, and candidates apply commercial instinct instead of the conduct rules; conflicts of interest are especially missed when they are embedded in an otherwise normal-sounding instruction.
What to do instead
For every ethics stem, first name the duty at stake (best execution, suitability, confidentiality, disclosure, fair treatment), then name the conflict, then choose the option that discloses or removes the conflict. Reject any option whose justification is 'it benefits the client or firm' without a rule-based reason.
Mixing up the categories and rules of collective investment schemes: treating all funds as open-ended, confusing NAV with market price, or applying the wrong redemption, valuation or disclosure rule to a listed fund versus an unlisted one.
Fund types share vocabulary (units, NAV, redemption) but differ in structure, pricing mechanism and disclosure, and candidates learn one fund model and stretch it to all.
What to do instead
Tabulate fund types by pricing basis (NAV versus market price), redemption mechanics, valuation frequency and disclosure obligations, and practise identifying the fund type from the stem before answering. Always state whether units trade on an exchange or are redeemed with the fund.