WEDNESDAY: 6 December 2023. Afternoon Paper. Time Allowed: 3 hours.

Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper.


1. According to Llewellyn (1999), there are two main generic types of financial regulations and supervision.

In reference to the above author, explain the TWO types of financial regulations and supervision. (4 marks)

2. Identify FOUR investment alternatives available to investors in the financial markets. (4 marks)

3. Evaluate THREE attributes of a well-constructed security market index. (6 marks)

4. Summarise SIX benefits of cross-listing shares. (6 marks)

(Total: 20 marks)



1. Explain FOUR functions of a Central Depository Agent. (4 marks)

2. Insider information means information relating to particular securities or to a particular issuer of securities that has not been made public and if it were made public, is likely to have a material effect on the price of the securities.

In relation to the above statement, identify FOUR types of insider information. (4 marks)

3. Examine THREE objectives of establishing the Central Depository and Settlement Corporation (CDSC) in relation to securities markets in your country. (6 marks)

4. Highlight SIX reasons that could lead to the suspension of a corporate trustee in a retirement benefits
administration. (6 marks)

(Total: 20 marks)



1. Highlight FOUR functions performed by the Assets Recovery Agency or equivalent body in your country. (4 marks)

2. Analyse FOUR factors that have contributed to the changing structure of securities markets in the recent past. (4 marks)

3. Explain SIX methods that could be used for determining the prices of shares for companies undertaking an Initial Public Offering (IPO). (6 marks)

4. State SIX functions undertaken by custodian banks. (6 marks)

(Total: 20 marks)



1. Summarise FOUR factors that would motivate a non-listed company to go public. (4 marks)

2. Describe FOUR requirements for licensing a stockbroker in your country. (4 marks)

3. Outline SIX duties that are undertaken by the Financial Reporting Centre (FRC). (6 marks)

4. Explain THREE consequences to a financial institution for failure to comply with regulations. (6 marks)

(Total: 20 marks)



1. Distinguish between “market risk” and “settlement risk” as used in the foreign exchange market. (2 marks)

2. In Kenya, the registration of religious institutions is governed by the Societies Act (Cap 108) and falls under the jurisdiction of the Office of the Attorney General.

Analyse FOUR requirements for registration of a religious institution. (4 marks)

3. Describe THREE reasons that could lead to the voluntary suspension of securities in a securities exchange. (6 marks)

4. Evaluate FOUR emerging challenges facing financial regulatory agenda in your country. (8 marks)

(Total: 20 marks)

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