Financial Markets Law – KASNEB Syllabus



This paper is intended to equip the candidate with the knowledge, skills and attitudes that will enable him/her to comply with the laws and regulations governing financial markets.


A candidate who passes this paper should be able to:

  • Comply with the legal provisions relating to financial markets
  • Comply with the licensing regulations of the securities exchange
  • Comply with the guidelines and rules of the central depository system
  • Identify the offences and penalties relating to trading in securities
  • Demonstrate an understanding of the processes and law of anti money laundering
  • Maintain securities registers, accounts and records


Regulation of financial services

  • Historical development of law and regulation governing financial
  • Need for regulation
  • Regulatory strategies in financial services
  • Financial regulators
  • Central Bank of Kenya
  • Capital Markets Authority
  • Deposit Protection Fund
  • Insurance Regulatory Authority
  • Retirement Benefits Authority
  • Sacco Societies Regulatory Authority
  • Institute of Certified Investment and Financial Analysts (ICIFA)
  • Professional bodies in financial services
  • Regulations in the international financial markets
  • The International Organisation of Securities Commissions (IOSCO) principles for self regulation

Regulation of capital markets

  • Capital Markets Authority
  • Investor Compensation Fund Board
  • The Capital Markets Tribunal
  • The Capital Markets Fraud Investigations Unit
  • The International Organisation of Securities Commissions principles relating to the regulator

Regulation of financial services intermediaries

  • Stockbrokers
  • Stock dealers
  • Investment banks
  • Investment advisers
  • Fund managers
  • Credit rating agencies
  • Collective Investments Schemes
  • Custodians
  • The International Organisation of Securities Commissions principles for credit rating agencies, collective investment schemes and market intermediaries

Central depository system

  • The Central Depository and Settlement Corporation
  • Establishment of the central depository
  • Duties of a central depository
  • Central depository agents
  • Penalties for breach of duty
  • Security measures
  • Disclosure of information by central depository agents
  • Central Depository Guarantee Fund

Immobilisation and dematerialisation

  • Meaning
  • Prescription of securities for immobilisation
  • Transfer to a central depository or nominee company
  • Operation of securities account
  • Restriction of trade in eligible securities

Raising capital in the securities market

  • Private offers/private placements
  • Public offers
  • Prospectus /information memorandum
  • The International Organisation of Securities Commissions(IOSCO) principles relating to the issuer

Securities exchange

  • Establishment
  • Membership
  • Rules of the securities exchange
  • Listing requirements
  • Self listing of the exchange
  • Cross border listing

Securities transactions

  • Book entry of transactions and prohibition
  • Records of depositors
  • Suspended securities
  • Charging or mortgaging of securities
  • Bonus and rights issue
  • Prohibition of dealings in book entry securities
  • Insider trading
  • The International Organisation of Securities Commissions (IOSCO) principles for enforcement of securities regulation

Securities registers, accounts and records

  • Interests in securities
  • Restrictions in securities transactions
  • Register of interests in securities
  • Maintenance of records
  • Accounts statements
  • Record of depositors
  • Audit of accounts, records and registers

Corporate governance

  • Meaning of corporate governance
  • Application of corporate governance principles in financial markets
  • Role of capital market authority in enforcement of corporate governance
  • International Organisation of Securities Commissions (IOSCO) principles for cooperation in regulation

Prevention of money laundering

  • Meaning of money laundering
  • components of money laundering
  • Anti money laundering legislation
  • The Assets Recovery Agency
  • Criminal Assets Recovery Fund
  • Prevention of terrorism regulations
  • Counter Financing of Terrorism Inter-Ministerial Committee: objectives, functions and powers
  • The Financial Reporting Centre: objectives, functions and powers
  • Due diligence requirements
  • Wire transfers

Emerging issues and trends

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