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A–Z · Updated September 2026

Finance & CISI Exam Glossary

116 terms you'll meet in CISI ICWIM, IISI, GFC, CFC and UAE FRR, in plain English. Each is tagged with the exams that test it. Below the A–Z: which exams the UAE CMA requires for each job role, and where CISI exams count across the GCC, UK and EU.

Tags link to the course: ICWIM IISI UAE FRR GFC CFC · UKUAE mark region-specific terms.

A

Accrued interest IISI ICWIM: Interest a bond has earned since its last coupon date but not yet paid. When a bond is sold between coupon dates the buyer pays the seller the clean price plus accrued interest, which together make the dirty price. Bond pricing primer →
Active vs passive management ICWIM: Active managers pick investments to try to beat a benchmark; passive managers track the benchmark as cheaply as possible. The trade-off is potential outperformance against higher fees and the risk of underperforming. Portfolio theory in 6 charts →
Alpha ICWIM: The return a portfolio earns above what its risk would predict — usually measured against the CAPM expected return. Positive alpha suggests manager skill; negative alpha means the risk wasn't rewarded. Portfolio theory in 6 charts →
AML / CFT CFC UAE FRR GFC: Anti-money laundering and countering the financing of terrorism: the laws, controls and reporting a firm uses to stop criminals moving or hiding illicit funds through it. AML thresholds across exams →
Annuity ICWIMUK: A contract that turns a lump sum into a series of income payments, often for the rest of the buyer's life. Common as a way to take retirement income from a pension pot. UK pensions deep dive →
Approved employee (UAE)UAE FRRUAE: An individual registered with the CMA under a licensed firm to perform a regulated job function. The exams required depend on the role: UAE FRR for everyone, plus a role-specific second exam. Exams by UAE role →
Arbitrage IISI ICWIM: Profiting from a price difference for the same (or equivalent) asset in two markets by buying where it's cheap and selling where it's dear. True arbitrage is risk-free, which is why it disappears quickly.
Asset allocation ICWIM: How a portfolio is split between asset classes such as equities, bonds, property and cash. Strategic allocation sets the long-term mix; tactical allocation makes shorter-term tilts around it. Portfolio theory in 6 charts →
At par, above par, below par IISI ICWIM: A bond trades at par when its price equals its nominal (face) value, above par when it costs more and below par when it costs less. Prices move away from par as market interest rates change. Bond pricing primer →

B

Basel Committee (BCBS)GFC: The Basel Committee on Banking Supervision sets international standards for bank capital, liquidity and risk management — the Basel accords. National regulators then put them into local rules.
Bear and bull markets IISI: A bull market is a sustained period of rising prices; a bear market is a sustained fall. The terms describe market mood and direction rather than a precise threshold.
Beneficial owner CFC UAE FRR GFC: The natural person who ultimately owns or controls a customer, or on whose behalf a transaction is carried out. Firms must identify them during due diligence; ownership or control of 25% is a common threshold. AML thresholds across exams →
Best execution GFC ICWIM: The duty to take sufficient steps to get the best possible result for a client when executing orders — weighing price, costs, speed, likelihood of execution and other relevant factors.
Beta ICWIM: How sensitive a security's returns are to movements in the market. A beta of 1 moves in line with the market; above 1 amplifies market moves; below 1 dampens them. Portfolio theory in 6 charts →
Bid–offer spread IISI: The gap between the price a market maker will buy at (bid) and sell at (offer). It's a cost of trading and tends to be wider for less liquid securities.
Bond IISI ICWIM: A debt security: the investor lends money to the issuer, who pays interest (coupons) and repays the nominal value at maturity. Issuers include governments, companies and supranational bodies. Bond pricing primer →
Book-building IISI UAE FRR: The process underwriters use to price a new share issue by collecting investors' bids — quantities and prices — before setting the final offer price.

C

Call option and put option IISI ICWIM: A call gives the holder the right, but not the obligation, to buy the underlying at the strike price; a put gives the right to sell. The buyer pays a premium; the writer takes on the obligation. Derivatives payoffs in diagrams →
CAPM ICWIM: The capital asset pricing model: expected return = risk-free rate + beta × (market return − risk-free rate). It prices only systematic risk, because specific risk can be diversified away. ICWIM calculation formulas →
Category 1–5 licences (UAE)UAE FRRUAE: The five categories in which the CMA licenses firms, set out in SCA Decision No. 13 of 2021 — from securities dealing (Category 1) to advice and arrangement (Category 5). The licence belongs to the firm, not the individual. UAE Cat 1–4 overview →
CBUAE UAE FRRUAE: The Central Bank of the UAE. It supervises banks, exchange houses, finance companies, payment services and — since 2020 — insurers. Onshore capital markets sit with the CMA instead. UAE regulators explained →
CDD, EDD and SDD CFC UAE FRR GFC: Customer due diligence means identifying and verifying a customer and any beneficial owner and understanding the relationship. Enhanced due diligence (EDD) applies to higher-risk customers such as PEPs; simplified due diligence (SDD) may apply where risk is demonstrably low. AML thresholds across exams →
Client categorisation GFC ICWIM: Sorting clients into categories — typically retail, professional and eligible counterparty — which decides how much regulatory protection they receive. Retail clients get the most.
CMA (Saudi Arabia): The Capital Market Authority of Saudi Arabia, which regulates the Saudi securities market and the firms and individuals working in it. It is a different body from the UAE's CMA.
CMA (UAE)UAE FRRUAE: The Capital Market Authority, the UAE's federal regulator for onshore capital markets. It was the Securities & Commodities Authority (SCA) until 1 January 2026; the FRR exam still uses the old name. What is the UAE CMA? →
Collective investment scheme IISI ICWIM: A fund that pools many investors' money into one professionally managed portfolio — for example unit trusts, OEICs, investment trusts and ETFs. Investors get diversification and scale they couldn't achieve alone.
Compliance function GFC: The team that helps a firm meet its regulatory obligations: advising the business, monitoring and testing controls, and reporting to senior management. It sits in the second line of defence and must be independent. GFC vs CFC vs RFS →
Conflict of interest GFC ICWIM: A situation where a firm's or employee's interests could compete with a client's, or one client's with another's. Firms must identify conflicts and prevent or manage them — with disclosure as a last resort.
Consumer Duty GFCUK: The FCA's rule requiring UK firms to deliver good outcomes for retail customers across products, price and value, understanding and support. It came into force for open products on 31 July 2023.
Convertible bond IISI ICWIM: A bond the holder can exchange for a set number of the issuer's shares. The conversion option usually means a lower coupon than an equivalent straight bond.
Correlation ICWIM: A measure from −1 to +1 of how two assets' returns move together. Combining assets with low or negative correlation reduces portfolio risk — the core of diversification. Portfolio theory in 6 charts →
Coupon IISI ICWIM: The interest a bond pays, quoted as a percentage of its nominal value. A 5% coupon on £100 nominal pays £5 a year, whatever the bond's market price. Bond pricing primer →
Credit rating IISI ICWIM: An agency's opinion of an issuer's ability to pay its debts. Ratings of BBB− (Baa3) and above are investment grade; lower ratings are sub-investment grade, often called high yield.
CRS and FATCA GFC: Tax-transparency regimes. FATCA requires financial institutions worldwide to report accounts held by US persons; the OECD's Common Reporting Standard (CRS) exchanges account information automatically between participating countries.
Custodian IISI ICWIM UAE FRR: An institution that safekeeps securities and cash for clients or funds and handles settlement and corporate actions. Under UAE fund rules the custodian must be independent of the fund manager.

D

Delta: How much an option's price changes for a small change in the underlying price. A call's delta runs from 0 to 1; a put's from −1 to 0. It's one of the option Greeks. Option Greeks visualised →
Derivative IISI ICWIM: A contract whose value is derived from an underlying asset, rate or index — futures, forwards, options and swaps. Used to hedge risk, to speculate, or to gain exposure cheaply. Derivatives payoffs in diagrams →
DFM and ADX UAE FRRUAE: The Dubai Financial Market and the Abu Dhabi Securities Exchange, the UAE's two onshore stock exchanges, both supervised by the CMA. UAE FRR thresholds cheat sheet →
DFSA and DIFCUAE: The Dubai Financial Services Authority regulates firms in the Dubai International Financial Centre, a free zone with its own common-law regime. CMA licensing rules don't apply there. UAE regulators explained →
Diversification IISI ICWIM: Spreading investments across assets that don't move perfectly together, so that losses in one are offset by others. It reduces specific risk but can't remove market risk. Portfolio theory in 6 charts →
Dividend yield IISI ICWIM: A share's annual dividend divided by its current price, shown as a percentage. It measures the income return on a share at today's price. ICWIM calculation formulas →
DNFBPs CFC UAE FRR: Designated non-financial businesses and professions — such as lawyers, accountants, real estate agents and dealers in precious metals — that fall within AML/CFT rules because they can be misused for money laundering. AML thresholds across exams →
Duration ICWIM: The weighted average time to receive a bond's cash flows. Modified duration estimates how much the price moves for a 1% change in yield — the longer the duration, the more interest-rate risk. Bond pricing primer →

E

Efficient frontier ICWIM: The set of portfolios giving the highest expected return for each level of risk. Any portfolio below the frontier could be improved without taking more risk. Portfolio theory in 6 charts →
ESG ICWIM GFC: Environmental, social and governance factors that investors use alongside financial analysis, and that regulators increasingly require firms to disclose. ESG investing for candidates →
ETF IISI ICWIM: An exchange-traded fund: a fund whose shares trade on a stock exchange throughout the day, usually tracking an index at low cost.
Eurobond IISI: A bond issued in a currency other than that of the market where it's sold — for example a US dollar bond sold to investors in London. Typically issued by an international syndicate.

F

FATF CFC GFC UAE FRR: The Financial Action Task Force, the inter-governmental body that sets the global AML/CFT standards (its 40 Recommendations) and assesses how well countries apply them. AML thresholds across exams →
FATF grey list CFC GFC: FATF's list of jurisdictions under increased monitoring while they fix strategic AML/CFT weaknesses. The UAE was listed in March 2022 and removed in February 2024.
FCA GFC ICWIMUK: The Financial Conduct Authority, the UK's conduct regulator for financial services firms and markets. Its rules set the qualifications UK retail advisers must hold.
Fiscal vs monetary policy IISI ICWIM: Fiscal policy is government taxing and spending; monetary policy is the central bank's control of interest rates and money supply. Both are used to manage growth and inflation. Macro indicators guide →
Fit and proper GFC UAE FRR: The standard regulators apply to people in regulated roles: honesty and integrity, competence and capability, and financial soundness.
FIU and goAML CFC UAE FRRUAE: A Financial Intelligence Unit receives and analyses suspicious transaction reports and passes intelligence to law enforcement. In the UAE, reports are filed to the FIU through its goAML system. AML thresholds across exams →
FSRA and ADGMUAE: The Financial Services Regulatory Authority regulates firms in Abu Dhabi Global Market, a free zone with its own common-law regime. CMA licensing rules don't apply there. UAE regulators explained →
Futures and forwards IISI ICWIM: Agreements to buy or sell an asset at a fixed price on a future date. Futures are standardised, exchange-traded and margined; forwards are bespoke, over-the-counter contracts. Derivatives payoffs in diagrams →

G

GDP IISI ICWIM: Gross domestic product: the total value of goods and services an economy produces over a period. Two consecutive quarters of falling real GDP is a common definition of recession. Macro indicators guide →
Gearing IISI ICWIM: The level of a company's debt relative to its equity. Higher gearing magnifies returns to shareholders in good times and losses in bad ones. Also called leverage.
Gilts IISI ICWIMUK: Bonds issued by the UK government. Conventional gilts pay a fixed coupon; index-linked gilts adjust coupons and repayment for inflation. Bond pricing primer →
Greeks: Measures of an option's sensitivity to different inputs: delta (underlying price), gamma (change in delta), vega (volatility), theta (time) and rho (interest rates). Option Greeks visualised →
Greenwashing GFC: Presenting a product or firm as more environmentally friendly than it really is. Regulators increasingly treat misleading sustainability claims as a conduct issue. ESG regulation cheat sheet →

H

Hedge fund IISI ICWIM: A lightly regulated pooled fund that can use leverage, short selling and derivatives, typically aiming for absolute returns and charging performance fees.
Hedging IISI ICWIM: Taking an offsetting position — often with derivatives — to reduce the risk of an existing exposure. A hedge limits losses but usually gives up some potential gain. Derivatives payoffs in diagrams →

I

Inflation and CPI IISI ICWIM: Inflation is the rate at which prices rise, eroding purchasing power. The consumer prices index (CPI) measures it by tracking the cost of a representative basket of goods and services. Macro indicators guide →
Inheritance tax ICWIMUK: UK tax charged on the value of a person's estate on death above a tax-free threshold. Planning uses exemptions, lifetime gifts and trusts.
Insider dealing GFC CFC UAE FRR ICWIM: Dealing in securities on the basis of inside information — precise, non-public information that would be likely to move the price. A criminal offence in most jurisdictions.
IOSCO GFC: The International Organization of Securities Commissions, which brings together the world's securities regulators and sets principles for securities regulation.
IPO IISI UAE FRR: An initial public offering: a company's first sale of shares to the public and admission to trading on an exchange.
ISA ICWIMUK: An Individual Savings Account: a UK wrapper in which savings and investments grow free of UK income tax and capital gains tax, up to an annual subscription limit.

K

KYC CFC GFC ICWIM: Know your customer: gathering and verifying information about a client. It serves both AML (who they are, where their money comes from) and suitability (their needs and circumstances).

L

Leverage IISI ICWIM: Using borrowed money or derivatives to increase exposure beyond the capital invested — which magnifies both gains and losses. See also gearing.
Liquidity risk ICWIM GFC: The risk that an asset can't be sold quickly without a large price discount, or that a firm can't meet its payments as they fall due.
Listing and prospectus UAE FRR IISI: Listing is admission of securities to trading on an exchange. A prospectus is the disclosure document an issuer publishes so investors can make an informed decision.

M

Market abuse GFC CFC UAE FRR: Insider dealing, unlawful disclosure of inside information and market manipulation — behaviour that undermines fair and orderly markets.
Market capitalisation IISI: The total market value of a company's shares: share price multiplied by the number of shares in issue.
Market maker IISI: A firm that quotes buy and sell prices in a security and stands ready to trade at them, providing liquidity and earning the spread.
MiFID II GFC ICWIM: The EU directive governing investment services since January 2018: client categorisation, best execution, product governance, cost disclosure and market transparency.
Money laundering CFC UAE FRR GFC: Making criminal proceeds appear legitimate, classically in three stages: placement (getting cash into the system), layering (moving it to obscure its origin) and integration (bringing it back as apparently clean funds). AML thresholds across exams →

N

NAV IISI ICWIM UAE FRR: Net asset value: a fund's assets minus its liabilities. NAV per share or unit is the basis for pricing most open-ended funds.
Nominal vs real return IISI ICWIM: The nominal return is the headline percentage gain; the real return strips out inflation to show the change in purchasing power. ICWIM calculation formulas →

O

OEIC and unit trust IISI ICWIMUK: Open-ended UK funds that create and cancel shares (OEIC) or units (unit trust) as investors come and go, so they're priced close to the value of the underlying assets.
Operational risk GFC: The risk of loss from failed processes, people or systems, or from external events — from trade errors and fraud to cyber attacks.
OTC IISI ICWIM: Over the counter: traded directly between two parties rather than on an exchange. OTC contracts can be tailored but carry counterparty risk.

P

P/E ratio IISI ICWIM: Price/earnings ratio: share price divided by earnings per share. A high P/E suggests investors expect strong growth, or that the shares are expensive. ICWIM calculation formulas →
Pensions: DB, DC and SIPP ICWIMUK: A defined benefit (DB) scheme promises an income based on salary and service; a defined contribution (DC) pot depends on what's paid in and how it grows. A SIPP is a self-invested personal pension. UK pensions deep dive →
PEP CFC UAE FRR GFC: A politically exposed person — someone with a prominent public function, and their family and close associates. PEPs pose higher corruption risk, so they require enhanced due diligence. AML thresholds across exams →
Preference shares IISI ICWIM: Shares that pay a fixed dividend and rank ahead of ordinary shares for dividends and in a winding-up, but usually carry no voting rights.
Primary vs secondary market IISI: The primary market is where securities are first issued and sold, raising money for the issuer; the secondary market is where investors then trade them with each other.
Proliferation financing CFC: Providing funds or financial services that support the development of weapons of mass destruction, in breach of international sanctions.

Q

Quantitative easing ICWIM: A central bank creating money to buy assets, usually government bonds, to push down long-term interest rates and support the economy when rate cuts alone aren't enough. Macro indicators guide →

R

Redemption yield (YTM)IISI ICWIM: The total annual return from buying a bond at today's price and holding it to maturity, including coupons and any gain or loss to redemption. Bond pricing primer →
REIT IISI ICWIM UAE FRR: A real estate investment trust: a listed vehicle that owns property and must pay out most of its income as dividends in return for favourable tax treatment.
Repo IISI ICWIM: A sale and repurchase agreement: selling securities and agreeing to buy them back later at a higher price. Economically it's short-term borrowing secured on the securities.
Rights issue IISI ICWIM: A company raising new equity by offering existing shareholders new shares in proportion to their holdings, usually at a discount to the market price.
Risk appetite GFC: The type and amount of risk a firm is willing to take in pursuit of its objectives, set by the board and used to steer decisions and limits.

S

Sanctions CFC GFC: Restrictions imposed by governments and bodies such as the UN — asset freezes, trade bans and financial restrictions — that firms must screen for and comply with.
SAR and STR CFC UAE FRR: Suspicious activity report / suspicious transaction report: the disclosure a firm makes when it knows or suspects money laundering or terrorist financing. In the UAE, STRs go to the FIU; in the UK, SARs go to the National Crime Agency. AML thresholds across exams →
SCA UAE FRRUAE: The Securities & Commodities Authority, renamed the Capital Market Authority (CMA) from 1 January 2026. See CMA (UAE). What is the UAE CMA? →
Sharpe ratio ICWIM: A portfolio's return above the risk-free rate divided by its standard deviation — the reward earned per unit of total risk. Higher is better. ICWIM calculation formulas →
SM&CR GFCUK: The UK's Senior Managers and Certification Regime, which makes named senior managers accountable for their areas and requires firms to certify staff in key roles as fit and proper.
Standard deviation ICWIM: A statistical measure of how widely returns vary around their average — the usual measure of an investment's volatility, or total risk. Portfolio theory in 6 charts →
Structured product ICWIM: A packaged investment whose return is linked to an underlying asset or index through a formula, often combining a bond with derivatives to offer capital protection or enhanced income.
Suitability ICWIM UAE FRR: The requirement that a recommendation fits the client's objectives, financial situation, risk tolerance, and knowledge and experience. Suitability framework guide →
SukukUAE: Sharia-compliant certificates that give investors a share in underlying assets and the income they produce, rather than an interest-bearing loan. Widely issued in the GCC.
Swap IISI ICWIM: An agreement to exchange streams of cash flows — for example fixed-rate interest for floating-rate interest — over a set period.

T

Three lines of defence GFC: A risk-governance model: the business owns and manages risk (first line), risk and compliance oversee it (second line) and internal audit gives independent assurance (third line). GFC vs CFC vs RFS →
Tipping off CFC UAE FRR: Alerting someone that a suspicious transaction report has been made or that an investigation is under way. It is a criminal offence. AML thresholds across exams →
Treasury bills IISI: Short-term government debt issued at a discount to face value and repaid at par, rather than paying a coupon.
Trust ICWIMUK: A legal arrangement in which trustees hold assets for the benefit of beneficiaries, on terms set by the settlor. Used for estate planning, protection and control.

U

UCITS IISI ICWIM: The EU framework for retail investment funds that can be marketed across member states under common rules on diversification, liquidity and investor protection.
Underwriting IISI UAE FRR: A bank or syndicate guaranteeing to buy any part of a new issue that investors don't take up, in return for a fee.

V

Venture capital IISI UAE FRR: Equity finance for early-stage, high-growth companies, in return for a stake and often a role in how the business is run.
Volatility ICWIM: How much an asset's price moves around over time, usually measured by standard deviation. Higher volatility means a wider range of possible outcomes. Portfolio theory in 6 charts →

W

Warrant IISI: A security giving the right to buy new shares in the issuing company at a set price within a set period — similar to a call option, but issued by the company itself.
Whistleblowing GFC: Staff raising concerns about wrongdoing inside a firm through protected channels. Regulators expect firms to have effective arrangements and to protect whistleblowers.

Y

Yield curve IISI ICWIM: A chart of bond yields against maturity. It usually slopes upward; an inverted curve, where short yields exceed long ones, is often read as a recession warning. Bond pricing primer →

Z

Zero-coupon bond IISI ICWIM: A bond that pays no coupons and is issued at a discount to its nominal value. The investor's whole return is the rise from issue price to par at maturity. Bond pricing primer →

Licences — where CISI exams count

How regulators use CISI qualifications, limited to what we can source. Requirements change, so always confirm with your firm's compliance team or the regulator before you book.

UAE onshore — CMA (formerly SCA): exams by job role

The CMA sets exam requirements by job function, not by licence category. Every licensed role needs UAE Financial Rules & Regulations, plus a second CISI exam for most roles:

Role	Exams required
Fund investment manager / portfolio manager	UAE FRR + ICWIM
Financial analyst / chief financial analyst / financial manager (capital market)	UAE FRR + ICWIM
Promotion manager	UAE FRR + ICWIM
Financial analyst for financial advisor (issuance manager) & listing advisor	UAE FRR + Corporate Finance Technical Foundations
Chief compliance officer / head of compliance	UAE FRR + Combating Financial Crime
Chief risk management officer / head of risk management	UAE FRR + Risk in Financial Services
Credit rating analyst / head of credit rating analysts	UAE FRR + Risk in Financial Services
Trading manager / broker representative	UAE FRR + Fundamentals of Financial Services
Operation manager; investment operation / profit sharing manager / investment manager	UAE FRR + Global Securities Operations
Chief technology officer	UAE FRR + IT in Investment Operations
Director / head of category	(UAE FRR only)

Source: the regulator's qualifications-led licensing chart, issued under the SCA name (March 2024) and hosted by CISI. More detail in our UAE licensing guide.

Qatar

The Qatar Financial Centre Regulatory Authority (QFCRA) and the Qatar Financial Markets Authority (QFMA) both set mandatory CISI qualification requirements. CISI runs local papers for each: Qatar Financial Centre Rules and Regulations, and Qatar Financial Markets Authority Regulations.

Source: CISI · CISI local papers

Kuwait

The Kuwait Capital Markets Authority certifies practitioners in specified capital-markets positions through international qualification tests, working with CISI. CISI offers a Kuwait Rules & Regulations paper.

Source: CISI · CISI local papers

Saudi Arabia

The Saudi Capital Market Authority sets local licensing requirements. CISI offers Saudi Capital Market Rules and Regulations papers.

Source: CISI local papers

Jordan

The Jordan Securities Commission adopted CISI's International Introduction to Securities & Investment (IISI) as the core qualification in its certification programme.

Source: CISI, Jan 2020

United Kingdom

The FCA requires staff in certain retail roles, such as investment advisers, to hold an appropriate qualification from its list. For UK retail investment advice, CISI's route is the Investment Advice Diploma. ICWIM is an international qualification and isn't that route.

Source: CISI Investment Advice Diploma

European Union

CISI states that ICWIM meets the ESMA appropriate-qualification requirements for investment advisers. IISI and ICWIM also hold EBTN Triple E status.

Source: CISI ICWIM · CISI, Jan 2020

Singapore and Hong Kong

Licensed roles use local licensing exams: CMFAS modules in Singapore and HKSI licensing examinations in Hong Kong. Check with the local regulator before assuming a CISI qualification counts towards them.

Source: CISI local papers

UAE free zones (DIFC, ADGM)

The DFSA (DIFC) and FSRA (ADGM) run their own competence frameworks; the CMA's onshore table above doesn't apply. Check the requirements for your role with your firm.

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