CIS March 2013 Exam Diet
Examination Paper 1.4:
Ethics and Professional Standards
Law relating to Securities and Investments
Regulations of Securities and Corporate Finance
Level 1
Ethics and Professional Standards (1 - 35)
1.
Which of the following does not connote ‘integrity’ as required by the CIS Code and
Standards?
A. Soundness of moral principles.
B. Strict moral or ethical code of conduct.
C. Freedom from the influence of someone else.
D. Behaving in line with high standards of behavior.
2.
Which of the following is not an exemption to the duty of confidentiality of
information entrusted on a stockbroker? If:
A. He needs the information to defend an action instituted against the firm.
B. The client does not object in writing to the use of such information.
C. He uses the information for genuine marketing purposes.
D. Disclosure is required by law.
3.
Which of the following is not an ACIIA fundamental principle?
A. Putting the interest of clients first.
B. Professional competence.
C. Proper use of professional qualifications.
D. Having required knowledge and compliance.
4.
According to the CIS Code and Standards, a member with supervisory
responsibilities violates the Institute’s standards of professional conduct if he/she
fails to:
A. Prevent violations of the law.
B. Prevent violations of the CIS Code and Standards.
C. Establish and implement written compliance procedures.
D. Prevent disclosure of confidential information.
5.
Titi Akpata has just passed all her level 2 examination of CIS. She immediately
updated her CV and describes herself as “Titi Akpata, Graduate CIS”.
According to the CIS Code and Standards, which of the following statements is
correct? Titi:
A. Had violated the code on proper use of professional qualifications.
B. Had done nothing wrong since she has qualified as a stockbroker.
C. Had violated the code on professional misconduct.
D. Had violated the code on professional self-dealing.
6.
If any CIS member or registered student is offered a gift in the course of his official
assignment, which of the following steps is he expected to take? He should:
A. Reject the gift outright.
B. Accept the gift only if he obtains written consent from his clients, prospective
clients and employers.
C. Accept the gift if approved by his supervisor.
D. Accept the gift if he is convinced that it will not influence his decisions and
objectivity.
7.
Mr Subar Danladi is a securities analyst, working for Ara Research Company Ltd.
When canvassing for potential new business clients, he includes the promise that
his firm will provide full and favourable research coverage of the prospective client.
According to the CIS
A. Had violated the
B. Had not violated
C. Had violated the
D. Had violated the
Code and Standards, Danladi:
code on monetary compensation or benefits.
any professional standard.
code on professional competence.
code on independence and objectivity.
8.
Duties of members and registered students to employers include the following
except:
A. Act for the benefit of their employers only.
B. Not deprive their employers of the advantage of their skills and abilities.
C. Not cause harm to their employers.
D. Not divulge confidential information.
9.
CIS members and registered students shall not make a recommendation or take
investment action unless they determine that the recommendation or action is
suitable to the client. Which of the following is not an important consideration?
A. The client's financial situation.
B. The client’s investment experience.
C. The client’s academic background.
D. The client’s risk and investment objectives.
10. Abayo Daud, a portfolio manager at Kundilo Investments, manages the retirement
account established with the firm by his parents. Whenever initial public offers
(IPO) become available he allocates shares to his parents and to all his other clients
for whom the investment is appropriate. According to the CIS Code and Standards,
Daud:
A. Had violated standard on priority of transactions.
B. Had violated the code on independence and objectivity.
C. Had violated the code on professional misconduct.
D. Had not violated any professional standard.
11. Klem Erumeme, an employee of a broker/dealer firm acquired a significant
ownership interest in FXTN cocoa and held that stock in various stockbroking firms.
Klem traded on his stocks in the various dealing firms such that the bid price was
artificially raised. According to the CIS Code and Standards, Klem:
A. Had not violated any professional standard as he only increased his transactions
cost.
B. Had violated the standards on whistleblowing.
C. Had violated the standards on market manipulation.
D. Had violated the code on professional competence.
12. According to the CIS Code and Standards, which of the following actions is proper
with regard to investing in oversubscribed issues?
A. Orders should be prorated to all subscribers.
B. Orders for the smallest subscribers get filled first.
C. Orders for institutional subscribers get filled first.
D. Orders for subscribers not filled in the previous issue get filled first.
13. Mary Audu, a CIS member, is a securities trader for a small stockbroking firm.
Which of the following is least likely a requirement of CIS Code and Standards with
respect to maintaining her competency?
A. She should take reasonable action to ensure that she has sufficient knowledge of
securities and investment practice.
B. She has a responsibility to be competent, conscientious, and effective in her
work.
C. She should maintain her competency through professional development.
D. She should be able to demonstrate her versatility by undertaking work in which
she may not have had previous experience or competence.
14. According to ACIIA specific key principle 4, investment analysts shall disclose all
matters that could reasonably be expected to impair their independence and
objectivity to the following except:
A. Regulators.
B. Prospective clients.
C. Clients.
D. Employers.
15. Samuel Femi ACS, is an employee of KPQR Securities Ltd. He recently deposited the
total sum of N1 million with another stockbroking firm (XYZ Securities Ltd) to buy
FBH shares for himself and his wife. Has Femi violated the CIS Members’ Regulation
and Code of Conduct?
A. No.
B. Yes, with respect to trading practices.
C. Yes, with respect to independence and objectivity.
D. Yes, with respect to CIS employment manual.
16. Which of the following constitute(s) unethical behavior in the capital market?
A. Churning.
B. Pegging.
C. Insider trading.
D. All of the above.
17. The SEC Code of Ethics for Employees of Issuing Houses provides that an employee
is allowed to:
A. Lodge proceeds from an issue in his account or in the accounts of others.
B. Hold for a minimum period of six months subsequent to the issue, any holding in
security packaged by his employer before sale may be executed.
C. Knowingly submit false information to management or regulatory authorities.
D. Engage in an alliance or arrangement with a view to interfering with the market.
18. CIS Membership Regulation and Code of Conduct requires that when there is
conflict or dispute between members, such grievances should be:
A. Channelled to the Institute through the Registrar.
B. Channelled to the Institute through the President.
C. Channelled directly to the Conflict/Dispute Resolution Committee.
D. Channelled directly to the Council of the Institute.
19. Which of the following is not likely to be a factor that would enable a board of
directors to exercise its duty to act in the best long-term interest of stakeholders?
A. Ensuring the independence of the board.
B. Sufficiently empowering the Chief Executive to take major decisions.
C. Ensuring adequate disclosure and transparency.
D. Getting people with sufficient experience on the board.
20. Which of the following is not considered a prohibited practice according to NSE
rules:
A. Establishing fictitious accounts to execute some transactions.
B. Providing incomplete, inaccurate or misleading information to a customer.
C. Giving recommendations or information to customers leading to excessive
transactions.
D. Keeping customer’s information confidential.
21. The SEC Code of Corporate Governance for quoted companies provides that, for
accountability and reporting purposes, the board should ensure that the company’s
annual report contains the following information on the company’s capital structure
except:
A. Details of issuance of share capital during the year.
B. Details and reasons for share buybacks during the year.
C. Details of projected gearing in the next three years.
D. Details of directors and substantial shareholders interest in the company, its
subsidiaries or associates.
22. With respect to professional competence, members and registered students are not
expected to do which of the following?
A. Have sufficient knowledge of securities and investment practice.
B. Know relevant legal requirements to undertake their professional activities.
C. Must undertake work in which they are competent.
D. All of the above.
23. Which of the following statements is not correct? CIS members and registered
students should:
A. Maintain appropriate records to support the reasonableness of their investment
research.
B. Never engage in unsolicited contact.
C. Disclose the basic principles and methods used for valuation of securities.
D. Distinguish between facts and opinions when disseminating investment
information.
24. The SEC Code of Corporate Governance for quoted companies provides that Notices
of general meetings of shareholders of a company shall be sent ________ from the
date on which the meeting will be held.
A. 14 days.
B. 21 days.
C. 28 days.
D. 30 days.
25. The CIS Code and Standards prohibits members and registered students from:
A. Beneficial ownership of shares for which they take investment action, under any
condition.
B. Trading inconsistently with their firm’s published recommendation except in
cases of clear personal necessity and in line with their employer’s disclosure
procedures.
C. Giving priority to their clients’ account transactions over their employer’s
transactions.
D. Disclosing their employers’ illegal activities to anyone in line with their duty of
confidentiality.
26. With respect to trading for an unidentified/unnamed principal, which of the
following statements is/are true? Members and registered students:
A. Can trade if approvals have been obtained from the MD/CEO.
B. Can only trade if they obtain evidence that the client involved has political
immunity.
C. Cannot trade unless the identity of a client is known.
D. Can trade unless the client is a politically exposed person.
27. According to the CIS Code and Standards, plagiarism means _________
A. Any use of materials prepared by another.
B. The use of more than 20 pages of materials prepared by another, even if
acknowledged.
C. The use of materials prepared by another in substantially the same form as the
original, even if acknowledged.
D. None of the above.
28. The board of directors of a quoted company is expected to meet at
least___________
A. Once every quarter.
B. Once every month.
C. Once every six months.
D. Once in a year.
29. CIS members and registered students frequently find themselves in a position
where they hold fiduciary duty to their clients. This entails which of the following
obligations?
A. To act in the best interest of their clients.
B. To ensure a guaranteed minimum return on their client’s investment.
C. To act with discretion and care.
D. (A) and (C) above.
30. Johnson, a CIS member took a bet with his colleague on the future direction of the
stock market in the foreseeable future. According to the CIS Code and Standards,
Johnson:
A. Had done nothing wrong since he took a bet with a professional colleague.
B. Had violated the Code and Standards by taking a bet on the market.
C. Had not violated the Code because there was no monetary reward associated
with the bet.
D. Had violated the Code because his supervisor was not aware of the bet.
31. In the event of conflict of provisions, CIS members and registered students must
comply with which of the following laws, rules, regulation, code or standards?
A. SEC rules.
B. NSE trading rules.
C. CIS Codes and Standards.
D. The strictest of the above regulations.
32. In respect of the number of concurrent directorship a director of a company may
hold, the SEC Code of Corporate Governance for quoted companies provides that
there should be____________
A. A limit of 2
B. A limit of 3
C. A limit of 5
D. No limit.
33. Which of the following situations would likely create conflict of interest?
A. An analyst writing a report and making a recommendation on behalf of his
securities firm on the shares of Black Oil plc, a company in which his wife has
substantial shareholding.
B. An analyst, who just issued a SELL recommendation on the shares of Global
Mortgages Limited, placing a large BUY order on the same stock for his own
portfolio.
C. XYZ Issuing House packaging an IPO for ABC Limited. The MD of ABC Limited had
engaged XYZ Issuing House for this assignment based on a recommendation by
the financial consultant of ABC Limited.
D. (A) and (B) above.
34. If a CIS member and registered student gains access to material non-public
information as a result of a fiduciary, special or confidential relationship, which of
these represent the appropriate action he should take in line with the Code and
Standards?
I. He should submit a written report to his supervisor on the matter.
II. He should not take investment action on the basis of such information.
III. He could use such information only for analysis but not for trading.
A.
B.
C.
D.
I and II only.
II only.
II and III only.
All of the above.
35. The Code of Corporate Governance issued by SEC for quoted companies provides
that membership of the board of directors should not be less than _________
A. 3
B. 5
C. 7
D. 8
Law Relating to Securities and Investments (36 - 65)
36. Which of the following adequately describes the ‘negotiation’ of a bill under the Bills
of Exchange Act?
A. Advertising the bill in the newspaper.
B. Handing over a bill, which is not a bearer’s bill, to another.
C. Transferring the bill by one person to another, coupled with endorsement.
D. Transferring the bill with a covering letter.
37. What is the authorization issued by the High Court to enable the administration of
the property of a deceased who died intestate?
A. Letter of hypothecation.
B. Provisional licence.
C. Letters of administration.
D. Letters of understanding.
38. Which of the following types of contract is binding on an infant?
A. Contract in restraint of trade.
B. Contract of marriage.
C. All contracts relating to land.
D. Contract of necessaries.
39. Which of the following are Nigerian Statutes?
I.
II.
III.
IV.
Laws of a state.
Acts of parliament.
Statutes of general application.
Equity.
A.
B.
C.
D.
I and II only.
II and III only.
III and IV only.
I, II and IV only.
40. Which of the following are not essential ingredients of a valid contract?
I.
II.
III.
IV.
Warranty.
Intention to create legal relations.
Consideration.
Terms.
A.
B.
C.
D.
I and II only.
II and III only.
III and IV only.
I and IV only.
41. Which of the following is a promise which is made after the performance of the act
which prompts the promise?
A. Gratuitous consideration.
B. Past consideration.
C. Inadequate consideration.
D. Insufficient consideration.
42. Which of the following statements is made for the purpose of deceiving the other
party?
A. Deceitful misrepresentation.
B. Negligent misrepresentation.
C. Fraudulent misrepresentation.
D. Deliberate misrepresentation.
43. Which of the following is the legal term for a situation where a person is made to
enter into a contract through violence or threat of violence?
A. Force majeure.
B. Duress.
C. Blackmail.
D. Undue influence.
44. Which of the following terms seeks to abrogate or limit the liability of both or one of
the parties to a contract?
A. Exemption clauses.
B. Limitation clauses.
C. Abrogation clauses.
D. Elimination clauses.
45. The rule that a director of a company must not make a secret profit is part of his
__________
A. Duty of care.
B. Fiduciary duty.
C. Common law duty.
D. Duty of good faith.
46. Which of the following will discharge a contract by frustration?
I.
II.
III.
IV.
Changes in law or operation of law
Agreement of the parties
Destruction of the subject matter
Provisions having been made for the event which occurs
A.
B.
C.
D.
I and II only.
I, II and III only.
I, III and IV only.
II, III and IV only.
47. A guarantor has _________
A. Full liability.
B. Primary liability.
C. Secondary liability.
D. Partial liability.
48. Which of the following matters, under the Third Schedule of the Investment and
Securities Act 2007, must be contained in a prospectus through which securities are
offered to the public?
I.
II.
III.
IV.
The number of founders or management or deferred shares.
The total amount which the company has in its bank accounts.
The names, descriptions and addresses of the directors or proposed directors.
The number of shares (if any) fixed by the company’s articles as the qualification
of a director.
A.
B.
C.
D.
I and II only.
I, II and III only.
I, III and IV only.
II, III and IV only.
49. For which of the following statutes is the Economic and Financial Crimes
Commission the coordinating agency?
I.
II.
III.
IV.
The
The
The
The
Money Laundering Act.
Criminal Code.
Advanced Fee Fraud and Other Related Offences Act.
Companies and Allied Matters Act.
A.
B.
C.
D.
I and II only.
I, II and III only.
I, II and IV only.
II and III only.
50. Which of the following are not functions of the Central Bank of Nigeria?
I.
II.
III.
IV.
To
To
To
To
act as banker and financial adviser to the Federal Government.
advise major corporations on fiscal matters.
act as banker and financial adviser to all the states of the federation.
issue legal tender currency in Nigeria.
A.
B.
C.
D.
I and II only.
II and III only.
I and IV only.
I, III and IV only.
51. Which of the following is the usual money market instruments which may be used
to transact business in the autonomous foreign exchange market established by
S.1(i) of the Foreign Exchange (Monitoring and Miscellaneous) Provisions Act 2004?
I.
II.
III.
IV.
Foreign bank notes.
Travellers’ cheques.
Bankdrafts.
Telegraphic transfers.
A.
B.
C.
D.
I and II only.
II and III only.
III and IV only.
All of the above.
52. Which of the following are not attributes of the Nigerian Investment Promotion
Commission?
I.
II.
III.
IV.
It
It
It
It
is not a body corporate.
has perpetual succession.
can sue and be sued in the name of its Governing Council.
has a common seal.
A.
B.
C.
D.
I and II only.
I and III only.
I and IV only.
I, II and IV only.
53. Which of the following is not an incorporation document?
A. Statement of Nominal Share Capital.
B. Certificate of Occupancy.
C. Memorandum of Association.
D. Articles of Association.
54. Which of the following is a type of defamation?
A. Detinue.
B. Libel.
C. Perjury.
D. Conversion.
55. A capital trade point under the Investment and Securities Act means:
A. A trade point for sale of tangible assets.
B. An auction sale venue.
C. A venue registered by SEC for sale of equities.
D. A Stock Exchange.
56. Which of the following is the minimum share capital required by a public company
under CAMA?
A. N300,000
B. N1 billion
C. N500,000
D. N5,000,000
57. Which of the
exchange?
A. A holder
B. A holder
C. The wife
D. A holder
following almost adequately described a holder for value of a bill of
who provided consideration by way of service.
to whom the bill was endorsed by their father.
of a drawer of the bill.
in good faith without consideration.
58. A Judge that refuses to be bound by a previous judgment of a superior court is said
to be:
A. Superintending.
B. Asserting.
C. Distinguishing.
D. Pretending.
59. The most important consequence of incorporation is the conferment of corporate
personality. In the same vein the only means of extinguishing the corporate
personality is through:
A. Appointing a receiver.
B. Setting the company premises ablaze.
C. Dismissing the staff.
D. Winding-up.
60. When a person applies for the shares of a company upon an advertisement, which
of the following is the status of the application?
A. An invitation to treat.
B. An offer.
C. An acceptance.
D. None of the above.
61. Under the Investment and Securities Act, the term “take–over” means:
A. Merger.
B. Acquisition by one company to take over control of another company.
C. Consolidation of share capital of a company.
D. Issuing the shares of the company to another at discount.
62. Which of the following is an active participant in a unit trust scheme?
A. The Registrar-General of Corporation Affairs Commission.
B. The Securities and Exchange Commission.
C. The unit holders.
D. The Central Bank of Nigeria.
63. Which of the following is not correct in respect of payment of dividend?
A. Dividend is payable out of capital.
B. Dividend is a privilege and not a right.
C. Dividend when declared is a specialty debt recoverable with 12 years.
D. Dividend is declared at the Annual General Meeting.
64. Which of the following is true of Ratification as a means of creating agency
relationship?
A. The principal can ratify any action.
B. The act sought to be ratified must be legal.
C. The agent can be a minor.
D. The Corporate Affairs Commission must approve any ratification.
65. The judicial body which has an exclusive jurisdiction over disputes between capital
market operators and their client is ____________
A. Federal High Court.
B. National Industrial Court.
C. Investment and Securities Tribunal.
D. State High Court.
Regulations of Securities and Corporate Finance (66 - 100)
66. The sale of securities to the public for cash, at a fixed price, the proceeds of which
goes to the vendor is:
A. Offer for subscription.
B. Offer for sale.
C. Offer by tender.
D. Offer by introduction.
67. Appeals against the decisions of NSE can be lodged at:
A. SEC only.
B. Investment & Securities tribunal only.
C. Federal High Court.
D. (A) and (B) above.
68. Which of the following documents is not required for transmission in relation to the
estate of a person who dies leaving a Will?
A. Letter of administration.
B. Probate.
C. Death certificate.
D. Original share certificates.
69. Article 2 of the NSE rules and regulations centres on:
A. Reporting of breaches.
B. Prescribed mode of advertisement.
C. Mode of changing of directors/shareholders.
D. Maintenance of clients’ accounts.
70. Mr. Obi buys and sells securities through five stockbroking firms. How many CSCS
investor account numbers and clearing house numbers is he supposed to have?
A. One and five respectively.
B. Five and one respectively.
C. Five apiece.
D. One apiece.
71. Which of the following is not required in inter-member transfer of stocks?
A. The investor’s signature.
B. The signature of the resident house.
C. The signature of the target house.
D. The signature of CSCS official.
72. The All-Share index comprises:
A. Companies in the first, second and third-tier securities markets.
B. Companies in the first and second-tier securities markets.
C. Companies on the first-tier only.
D. Companies on the second-tier only.
73. According to article 42 of NSE, a dealing member may share its brokerage
commission only with:
A. Dealing member of a recognized Stock Exchange.
B. Stockbroking agents.
C. Authorized dealing clerks.
D. All of the above.
74. Which of the following statements is/are true in respect of provisions of NSE rule
100 on how to calculate the daily stock price movement?
A. Calculation is based on speculative motives by the dealing members.
B. On a mark to market basis.
C. The price adjustment shall be in accordance with the stipulated manner in which
the upper and lower price band is determined by the Exchange.
D. (A) and (B) above.
75. Which of the following best describes ‘under-subscription’ of shares?
A. Where securities are not disposed within 6 months and returns of such not
disclosed to SEC.
B. Where an issue achieves less than 25% subscription level and the issue is not
firmly underwritten.
C. Where an issue achieves less than 25% subscription level and the issue is firmly
underwritten.
D. Where there is a preferential allotment.
76. SEC rule 192 stipulates that an investment adviser may perform any of the
following functions except:
A. Financial advisory services.
B. Making recommendation as to type of securities to buy or sell.
C. Publication of financial market report.
D. Maintenance and management of investors fund.
77. Which of the following is a statutory instrument that protects a dealing firm from
employee theft/stealing, fraud or dishonesty?
A. Trade guarantee fund.
B. Investors’ protection fund.
C. Statutory deposit with NSE.
D. Fidelity bond.
78. In line with SEC rule 146, which of the following is not correct?
A. Monies received by dealing member should be promptly deposited in a
segregated account.
B. A dealing member shall maintain accounts for its clients separated from its
operations accounts.
C. A dealing member may use monies belonging to one client to finance the trades
of any other client.
D. None of the above.
79. SEC rule 60 stipulates that:
A. Application for extension of time of the offer period shall be made to NSE at least
5 working days before the date of closure of the issue.
B. Application for extension of time of the offer period shall be made to SEC at least
5 working days before the date of closure of the issue.
C. Application for extension of time of the offer period (right issues in particular
shall be made to the Registrar provided a circular was sent to the shareholder
and also publicized in at least 2 national daily newspaper.
D. (A) and (B) above.
80. Dealing member firm compliance officers are:
A. Investment advisers who make recommendations as to type of securities to buy
or sell.
B. Financial analysts who render financial advisory service.
C. Research analysts who publicize financial market periodicals.
D. Supervisory officers identified by the Exchange to advise dealing member firm
and its employees on rules and regulations.
81. Which of the following is/are an exemption to the registration of securities with
Securities and Exchange Commission?
A. Where non-registration is in the interest of the public and does not endanger the
investor’s interest.
B. Where registration will discourage the investors’ confidence.
C. Where securities to be offered are bonus shares and right issues and debentures.
D. All of the above.
82. In observing the provisions of NSE Articles on professional conducts by a dealing
member, which of the statements is correct?
A. A dealing member shall enter into any business relationship with a client
premised on a guaranteed return to the client.
B. A dealing member shall act to ensure that its authorized clerks and employees
act in the best interest of its clients.
C. A dealing member shall use the privilege of its membership of the Exchange to
act in its best interest.
D. (A) and (B) above.
83. Which of the following statements is/are true as regards eligibility for NSE
registration as a fixed interest market maker?
I. Must be a licensed broker and authorized dealing clerks of NSE.
II. Must be a licensed broker-dealer.
III. Must meet the minimum net capital requirement with relevant expertise,
experience and good past performance records.
IV. Must be registered SEC and CSCS.
A.
B.
C.
D.
IV only.
II, III and IV only.
I and IV only.
II and III only.
84. Rule 32 of NSE provides that any application by any company for a quotation of its
shares on the Exchange must be sponsored by:
A. Issuing house of the company.
B. Trustee to the company.
C. Stockbroker to the issue.
D. The Registrar of the company.
85. When Registrars verify share certificates:
A. They are sent to CSCS for electronic entry into the investors’ accounts.
B. They are retained by the registrars and the schedules sent to CSCS for electronic
entry into the investors’ accounts.
C. They are sent to the Nigerian Stock Exchange for noting.
D. They are sent to the settlement banks to enable them credit the investors with
the proceeds.
86. When an existing shareholder gets his rights circular during rights offering, which of
the following options is (are) not available to him?
A. He may choose to ignore the rights circular.
B. He may take up his allotted rights and apply for more.
C. He may decline the rights partially and subscribe to less than his rights
entitlement.
D. He may renounce his rights and request for the cash equivalent from the issuer.
87. Which of following is correct under the current SEC rules?
A. Underwriting is compulsory except where it is declined by the issuer, and
approved by SEC.
B. Underwriting is optional.
C. Every offer must be 80% underwritten.
D. Every offer must be 75% underwritten.
88. Which of the following is permissible in stockbroking?
A. Payment to a third party on written instruction of the owner.
B. Sale of share at a discount provided the owner and the buyer agree.
C. Purchase of scarce shares at a premium provided the buyer agrees.
D. Use of proceeds to buy other securities at the owners' instruction.
89. Bello Animashaun, a client of XYZ Securities Ltd wishes to sell very large units of
stocks (Block Divestment). XYZ Securities Ltd is most likely to seek the approval of
which of the following?
I.
II.
III.
IV.
Securities and Exchange Commission.
The Market Maker of the securities concerned.
The Managing Director of the XYZ Securities Ltd.
The Nigerian Stock Exchange in conjunction with the Central Securities Clearing
System.
A.
B.
C.
D.
IV only.
I and II only.
I, II, and IV only.
None of the above.
90. The listing requirements for companies listed on the first tier securities market do
not include:
A. A minimum of 300 shareholders.
B. The company cannot raise more than N100m.
C. Five years audited reports and accounts.
D. At least 25% of the nominal share capital must be given to the public.
91. Which of the following does not come under the jurisdiction of Chartered Institute
of Stockbrokers?
A. Issuing houses.
B. Stockbroking firms.
C. Registrars.
D. All of the above.
92. In accordance with SEC rule 68(1), allotment proposals must be submitted to SEC
within ______ after the close of an issue.
A. 4 weeks.
B. 8 weeks.
C. 6 weeks.
D. 9 weeks.
93. The shares of a company could be put under full suspension for which of the
following reasons?
A. Fraudulent practices e.g. share price manipulation.
B. When a quoted company intends to raise additional capital by way of public offer
or right issue.
C. When a company is under investigation by the NSE.
D. Where a quoted company intend to merge with or acquired another company.
94. Which of the following statements is/are not correct with respect to dividend paid
by companies to investors in shares in Nigeria?
A. Dividends paid by some companies are exempted from withholding tax.
B. Withholding tax is deducted from dividends at the rate of 10%
C. Withholding tax in respect of dividends paid to both corporate and individual
shareholders are remitted to the Federal Board of Inland Revenue.
D. (A) and (C) above.
95. Which of the
A. Transfer
B. Transfer
C. Transfer
D. Transfer
following describe what nominal transfer is?
of shares between members of the same family using similar surname.
of shares between one broker and another.
of shares between members of the same association.
of shares made on the floor of the Exchange.
96. What is completion board meeting?
A. The final meeting of issuer, issuing house, and stockbroker to conclude
arrangements for a public issue of shares.
B. The final meeting of a company to take a decision to make a public offer of its
shares.
C. A meeting of board of directors of a professional body to conclude a major
proposal.
D. End of the year board meeting where pending issues are concluded.
97. Rule 29 of SEC spells out the conditions for the registration of an issuing house.
Which of the following is not required?
A. A minimum of 3 sets of duly completed form SEC 2 to be filled by the sponsored
individuals.
B. Copy of certified copy of the Certificate of Incorporation obtained for CAC.
C. Copy of Memorandum and Article of Association certified by CAC.
D. Fidelity bond representing 10% paid-up capital.
98. SEC rule 19 provides that corporate bodies shall file application for renewal of
registration at least 30 days prior to the due date of registration. Which of the
following documents is not required?
A. Latest management account of the applicant which shall not be more than 90
days.
B. Valid fidelity bond.
C. Proof of compliance with minimum paid-up capital requirement.
D. Evidence of maintenance of the minimum number of sponsored officers.
99. Which of the following does not need to be registered by SEC? Securities offered
through__________
A. Offer for sale.
B. State and local Governments bonds.
C. Offer by introduction.
D. None of the above.
100. In line with SEC rule 205, which of the following does not describe the functions of
the trustee to a unit trust scheme?
A. Deciding where the funds of the scheme shall be invested.
B. Monitoring the activities of the fund manager on behalf of and in the interest of
unit holders of fund contributors.
C. Maintaining custody of funds and documents relating to the investment by the
scheme or fund.
D. Monitoring of the register of unit holder or contributors.
Total = 100 marks