CIS September 2012 Exam Diet
Examination Paper 1.4:
Ethics and Professional Standards
Law relating to Securities and Investments
Regulations of Securities and Corporate Finance
Ethics and Professional Standards (1 - 35)
1.
Which of the following sanctions may not be imposed by the Board of NSE for
contravening provisions of the Code of Conduct for dealing members?
A. Restitution.
B. Suspension.
C. Expulsion.
D. Imprisonment.
2.
Which of the following is not an exemption to the duty of confidentiality of a
member to his client?
A. If the client is known to have committed a criminal offence.
B. If the client has not given a definite instruction about confidentiality of
information.
C. To defend an action instituted against a member.
D. If the member is required to disclose such information by the due process of
law.
3.
Which of the following is not an unethical practice in the capital market?
A. Pegging of securities.
B. Comingling.
C. Churning.
D. None of the above.
4.
When making investment recommendations and taking investment actions,
members shall at all times do the following except:
A. Maintain professional independence.
B. Give guarantee on investment performance.
C. Make fair judgments.
D. Maintain professional objectivity.
5.
In order to enhance public confidence in the investment profession, members are
expected to do which of the following?
I. Observe high standards of honesty.
II. Demonstrate integrity.
III. Deal fairly with clients.
IV. Suppress information about infractions by professionals.
A.
B.
C.
D.
I and II only.
II and III only.
I, II and III only.
All of the above.
6.
Which of the following is incorrect? A member shall:
A. Not trade in quoted securities outside the recognized markets.
B. Not make ‘abnormal’ secret profit.
C. Not allow personal interest to override clients' interests.
D. Not use or borrow customers' funds or securities without his or her authority.
7.
Any person subject to CIS disciplinary process shall have the following rights
except:
A. Have the right to be given notice of any disciplinary proceedings.
B. Have the right to be represented at any such disciplinary proceedings.
C. Have the right to call and cross-examine any witness at such disciplinary
proceedings.
D. Have the right of appeal against any disciplinary order made against him to the
Federal Court of Appeal.
8.
Which of the following is not a fundamental Principle of Association of Certified
International Financial Analyst (ACIIA) members?
A. Trust, credibility and justice.
B. Reasonable care and diligence.
C. Independence and objectivity.
D. Required knowledge and compliance.
9.
Investment analysts, whilst in the possession of material non-public information
relating to issuers of financial instruments shall do the following except,
A. Disclose the information only to parties who would not misuse it.
B. Not use such information in investment analysis.
C. Not communicate such information to others.
D. (B) and (C) above.
10. Investment analysts shall disclose all matters that could reasonably be expected to
impair their independence and objectivity to the following except:
A. Their employers.
B. Their clients.
C. Their prospective clients.
D. SEC.
11. Baba Gana, ACS, is working for Prexus Securities Limited, an investment banking
firm. He recently discovered that one of his colleagues, Jayeola Jeunsoke, who is
working with him in a merger arrangement between two banks, has been illegally
tipping off his brother-in-law about upcoming mergers. Baba Gana should:
A. Report his discovery to CIS.
B. Inform SEC.
C. Report his discovery to his supervisor.
D. Warn Jayeola to stop, because his activities are illegal.
12. After work each day, Ade Ojikutu, ACS, runs a popular internet blog where he
comments on various equity stocks on the NSE. The blog includes a bio of Ade with
his education and employment history. He receives no compensation for the blog.
On the blog, Ade recommends purchases and sales of stocks based upon ‘intuition’,
which he claims has helped him to create wealth in the market over the years.
When blogging, Ade most likely violates CIS Code and Standards relating to which
of the following?
A. Fair dealing.
B. Whistle blowing.
C. Diligence and reasonable basis.
D. Misrepresentation.
13. Ife Ajike, ACS, is a stockbroker in Finewealth Securities Limited. Just after buying
100,000 units of Transnational Corporation Plc shares for her personal account, Ife
learns that her firm is preparing an investment report with a buy recommendation
on the Transnational Corporation stock. According to CIS Code and Standards, Ife:
A. Must sell her stock within 30 days and disclose this action to her firm.
B. Must sell her stock immediately and disclose this action to her firm.
C. Must request that her firm disclose her beneficial ownership in the investment
report.
D. Need take no action to disclose her beneficial ownership in the Transnational
Corporation stock.
14. Dammy, a CIS member took a bet with his colleague about the future direction of
the stock market in the foreseeable future. According to the CIS Code and
Standards, Dammy _________
A. Had violated the code because his supervisor was not aware of the bet.
B. Had done nothing wrong since he took a bet with a professional colleague.
C. Had not violated the code because there was no monetary reward associated
with the bet.
D. Had violated the Code and Standards by taking a bet on the market.
15. According to Code of Corporate Governance issued by SEC, whose responsibility is
it to implement and establish a whistle-blowing mechanism in quoted companies in
Nigeria? The __________
A. Managing Director.
B. Board of Director.
C. Shareholders.
D. Management.
16. According to the CIS Code and Standards, which of the following statements about
fair dealing is least accurate? The Standard related to fair dealing __________
A. Imposes a duty with respect to both clients and prospective clients.
B. Pertains to both investment recommendations and investment actions.
C. States that a member should treat all clients equally.
D. Relates also to other professional activities apart from investment analysis.
17. Which of the following is not a procedure of compliance with respect to the standard
“independence and objectivity?”
A. Protecting the integrity of opinion.
B. Declaring gifts from clients.
C. Creating restricted trading lists.
D. Reporting unethical trading behaviour.
18. According to the CIS Code and Standards, which of the following actions is proper
with regard to investing in oversubscribed issues?
A. Orders for the smallest subscribers get filled first.
B. Orders for institutional subscribers get filled first.
C. Orders should be prorated to all subscribers.
D. Orders for subscribers not filled in the previous issue get filled first.
19. For CIS members and candidates to fulfill their responsibilities to their employers,
which of the following statements is not true? CIS members and candidates
___________
A.
Shall inform their employers in writing of their obligation to comply with the
Code and Standards.
B. Need not inform their employer of their obligation to comply with the CIS Code
and Standards if the employer has publicly adopted CIS Code and Standards as
part of its firm’s policies.
C. Are required to submit the names of their employers to CIS for screening.
D. Can notify their employers of their obligation to comply with the CIS Code and
Standards via e-mail.
20. According to the CIS Code and Standards, what is the first step that a member
should take if he or she has grounds to believe that imminent or ongoing employer
activities are illegal or unethical?
A. Maintain a file of the activity or activities with proper documentation.
B. Bring the activity to the attention of an appropriate authority in accordance with
the law, where their disclosure is protected by law.
C. Move to establish a formal written policy of violations and penalties within the
firm.
D. Maintain confidentiality in order to preserve the integrity of the firm.
21. Joshua Dagogo and Jamiu Ibraheem both work for Goodpay Securities Limited.
Joshua got a cash gift of N1 million offer from the firm that clears Goodpay’s
securities’ trades. Jamiu unexpectedly got a gift of N800,000 from one of his clients
as a reward for good performance during the past year. They both seek written
permission from their supervisor. Their supervisor, acting under independence and
objectivity, will most likely:
A. Reject both requests.
B. Accept Joshua’s request but reject Jamiu’s request.
C. Reject Joshua’s request but accept Jamiu’s request.
D. Accept both requests.
22. Sulaimon Kuru, a research analyst for the manufacturing industry, has
recommended that the firm take an equity interest in DCCA, a fast growing
company producing household goods. After writing and publishing his initial report,
Sulaimon purchases DCCA stock for his own portfolio. He has been asked to write a
second report on DCCA.
What action should Sulaimon take to be compliant with the CIS Code and Standards?
A. Sell his DCCA stock in a relatively short period of time.
B. Restrict any additional purchase of DCCA stock.
C. Disclose his DCCA holdings at the time of the second report.
D. Remove himself as a DCCA analyst.
23. Which of the following categories under the CIS Code and Standards admonishes
CIS members and candidates against dishonesty, fraud, deceit and against
committing any act that reflects adversely on their professional reputation, integrity
or competence?
A. Knowledge of the law.
B. Independence and objectivity.
C. Misrepresentation.
D. Misconduct.
24. Which of the
another?
A. He must
B. He must
C. He must
D. He must
following is not expected of a person who has a fiduciary duty to
act in the other's best interest.
maintain the other's trust and confidences.
always meet their expectations.
act with care, skill and prudence.
25. Mallam Yaro is a non-executive director of a conglomerate company, Lever Plc. He
was recently appointed as a non-executive director of another conglomerate
company, Bury Plc, which operates in the same industry with Lever Plc. According
the SEC Code of Corporate Governance for quoted companies, should he take up
the appointment?
A. Yes, since they are different companies.
B. Yes, but he should let the Chairman of Lever know of his new appointment.
C. No, so as not to take up excessive work load.
D. No, to avoid conflict of interest.
26. According to the Code of Corporate Governance, meetings of the Board shall be:
A. Once every two months.
B. Once every three months.
C. Once every four months.
D. Once every six months.
27. In order to attract a big client, Funfair Securities Limited, a dealing member of the
Nigerian Stock Exchange, promised the prospective client that if he brings in N100
million for the firm to manage, the firm will ensure that he gets a minimum return
of N10 million at the end of every quarter. This action:
A. Violates CIS Code and Standard on prohibition against guarantees.
B. Violates CIS Code and Standards on preservation of confidentiality.
C. Violates CIS Code and Standards on fiduciary duties.
D. Has not violated any provision of CIS Code and Standards.
28. A CIS member runs a small investment management firm. The firm subscribes to a
service from a large investment research firm that provides research reports which
can be repackaged as in-house research by smaller firms. The firm distributes these
reports to clients with specific references as to their source and author. According
to the CIS Code and Standards, has the member violated the Standard related to
misrepresentation?
A. No.
B. Yes, because she distributed plagiarized material.
C. Yes, because she misrepresented her firm’s services.
D. Yes, because she did not obtain written permission to use the materials.
29. According to the CIS Code and Standards, a supervisor establishing procedures to
eliminate conflicts of interest relating to personal trading would least likely
recommend requiring:
A. A ban on employee investments.
B. Disclosures of beneficial ownership.
C. Duplicate confirmations of employee transactions.
D. Approval of employees’ transaction.
30. According to the CIS Code and Standards, members are least likely required to
disclose to clients their ____________
A. Service as directors.
B. Firm’s market-making activities.
C. Responsibilities to CIS.
D. Gifts received from other clients.
31. According to the CIS Code and Standards, a member with supervisory
responsibilities violates the Institute’s Standards of Professional Conduct if the
member 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.
32. Ramon Azeez, FCS, is an investment analyst with an investment bank. Ramon is
asked to write a report about African Cement, a client. Despite his concerns about a
slowdown in the demand for cement in view of a recent economic downturn, Ramon
issues a very positive report on African Cement. When issuing his report, Ramon
least likely violates the CIS Code and Standard relating to:
A. Disclosure of conflict of interest.
B. Loyalty, prudence and care.
C. Loyalty to employer.
D. Duties to clients and prospective clients.
33. Jaye Alaye is enrolled as a candidate in the CIS professional examination program.
He works as an assistant for an investment company. Jaye sees his company’s
purchase list and purchases several of the recommended stocks. Jaye most likely
violates the CIS Standard relating to:
A. Prohibition against misrepresentation.
B. Priority of transactions.
C. Diligence and reasonable care.
D. Responsibility of supervisors.
34. Fred Okon, ACS, is an analyst at InterCity Bank. Fred receives compensation for
referrals to the bank’s brokerage and personal financial-planning divisions. His
recent referrals are long-time clients from his previous employer, and Fred does not
mention InterCity Bank’s referral arrangement. Does Fred violate any CIS Code and
Standards?
A. No.
B. Yes, with respect to misrepresentation.
C. Yes, with respect to conflict of interest.
D. Yes, with respect to self dealing.
35. It is sometimes necessary to build a “firewall” between research and investment
banking divisions in a large firm. Which of the following is the main reason for this?
A. To minimize fraud and error.
B. To minimize the incidence of misrepresentation.
C. To minimize conflict of interest.
D. To ensure prudence.
Law Relating to Securities and Investments (36 - 65)
36. What is an occurrence which makes the performance, or further performance of a
contract impossible called?
A. Wrongful act of one of the parties.
B. Act of enemies.
C. Frustration.
D. Act of God.
37. A promise which is made after the performance of an act which prompts the
promise is referred to as:
A. Void consideration.
B. Past consideration.
C. Voidable consideration.
D. Illegal consideration.
38. What is a testamentary document made to amend previous provisions of a
Will called?
A. Codicil.
B. Nuncupative Will.
C. Superior Will.
D. Probate.
39. Which of the following is not a court of record in Nigeria?
A. Federal High court.
B. National Industrial Court.
C. Supreme Court.
D. Chief Magistrates Court.
40. In family and social arrangement there is _________
A. A presumption in favour of enforceability.
B. No requirement of consideration.
C. A presumption against enforceability.
D. There is an implied contract.
41. What is the consequence of a breach of a contracted warrantee?
A. It enables the injured party to terminate the contract.
B. It enables the injured party to sue for damages or terminate the contract.
C. It enables the injured party to sue for damages.
D. It enables the injured party to sue for damages and terminate the contract.
42. What arises where a third party rules on a representation made by a principal to
the effect that he holds out someone as his agent?
A. Agency by estoppel.
B. Agency by ratification.
C. Agency of necessity.
D. Agency by cohabitation.
43. The Tort of Negligence will be established if there is any of the following except:
A. Duty of care.
B. Breach of duty.
C. Consequential injury.
D. Assumption of the risk.
44. Which of the following circumstances will not result in the revocation of a Will?
A. The making of a latter Will.
B. Subsequent birth of a child by the testator.
C. Subsequent marriage by the testator.
D. The tearing of the Will.
45. A trust which arises from the presumed intention of the settler in the trust
instrument is called?
A. Express private trust.
B. Resulting trust.
C. Constructive trust.
D. Public trust.
46. What are the laws passed by British overlords in Nigeria during the colonial era
called?
A. Edict.
B. Bye law.
C. Colonial law.
D. Ordinances.
47. In Nigeria, the decision of the courts based on the material facts of a case is called:
A. Judicial precedence.
B. Stare decisis.
C. Case law.
D. All of the above.
48. Which of the following arise(s) when a testator wishes to provide for all or part of
his estate for the benefit of successive generations?
A. Will trust.
B. Settled estate.
C. (A) and (B) above.
D. None of the above.
49. Which of the following has been statutorily defined as a Bill of the Exchange, drawn
on a banker, and payable on demand?
A. A Promissory note.
B. A Cheque.
C. (A) and (B) above.
D. None of the above.
50. What is an undertaking or promise whereby one person agrees to be answerable for
the payment of a debt, or the performance of some act by another person who
must be legally bound to pay the debt or to perform the act concerned called?
A. Indemnity.
B. Security.
C. Guarantee.
D. All of the above.
51. Which of the following is not a corporate trust?
A. Custodian trusts.
B. Debenture trusts.
C. Will trusts.
D. Consortium.
52. Which of the following is the principle under which a person will be held liable for
the tort(s) committed by another person?
A. Mutual liability.
B. Vicarious liability.
C. Strict liability.
D. Concurrent liability.
53. Which of the following is not a vitiating element of a contract?
A. Mistake.
B. Misrepresentation.
C. Duress.
D. Privity of contract.
54. In line with the provision of 1999 Constitution in Nigeria, legislative powers are
divided into which of the following?
A. Exclusive, concurrent and residual list.
B. Exclusive, residual and crucial list.
C. Residual, important and concurrent list.
D. None of the above.
55. Which of the following is a type of contract which is valid and subsisting until it is
avoided or rescinded at the option of one of the parties to the contract, usually the
innocent party?
A. Void contract.
B. Unenforceable contract.
C. Avoidable contract.
D. Voidable contract.
56. Nuisance is a legal term that covers which of the following?
A. Acts unwarranted by Law.
B. Acts which cause inconvenience to other party.
C. Acts which cover damage to individual or public.
D. All of the above.
57. Which of the following is defined as, “some right, interest, profit or benefit accruing
to the one party or some forbearance, detriment, loss of responsibility given,
suffered, or undertaken by the other”?
A. Promise.
B. Agreement.
C. Consideration.
D. None of the above.
58. In the law of agency which of the following is not the duty of an agent?
A. To obey and follow instruction of his principal.
B. Duty to be careful, skilful and diligent in the discharge of his duties.
C. Duty to make only reasonable profit from the agency.
D. Duty to keep true and accurate profit from the agency.
59. Which of the following is not a statutory requirement of a Bill of Exchange?
A. It must be in writing.
B. It must be an order.
C. It must be duly signed or marked.
D. It is not transferable.
60. A Bill which is not complete on its face is called:
A. Inchoate Bill.
B. Accommodation Bill.
C. Foreign Bill.
D. None of the above.
61. Which of the following is not an incorporation document in the formation of a
company?
A. The Memorandum of Association.
B. The Article of Incorporation.
C. List and particulars of first Directors.
D. A statutory declaration of compliance sworn to by legal practitioner.
62. A prospectus by its legal nature is ____________
A. An offer.
B. A document uberrimae fidei.
C. Invitation to treat.
D. (B) and (C) above.
63. Which of the following categories of persons is not disqualified from membership of
a company?
A. An insane person.
B. A person declared bankrupt by a competent court.
C. Any person below the age of twenty one years.
D. None of the above.
64. A company is not permitted to utilize the amount in a company’s share premium
account for which of the following purposes?
A. To pay preliminary expenses of the company.
B. To pay discount allowed on any issue of shares.
C. To pay allowed commission on any issue of shares.
D. None of the above.
65. Which of the following statements are correct about the power, functions and duties
of a receiver-manager in a company?
I.
II.
III.
IV.
He
He
He
He
has
has
has
is a
a duty to stop the business and collect the debts.
a duty to realize the assets.
no authority to carry on the business as a going concern.
fiduciary.
A.
B.
C.
D.
I and II only.
I, II and III only.
I, II and IV only.
All of the above.
Regulations of Securities and Corporate Finance (66 - 100)
66. Where a client makes cash payment for the purchase of shares, delivery of the
shares is required on which day?
A. T
B. T + 3
C. T + 4
D. T + 6
67. Certificate of exemption is:
A. A document issued by the NSE that empowers the issuer to publish an abridged
instead of a full prospectus.
B. A document issued by the SEC that waives some of the registration
requirements.
C. A document that approves the extension of the period of offer of securities.
D. A commitment or undertaking signed by the company with the NSE pledging to
file all information with the NSE when they fall due.
68. In a sales transaction on the NSE, which of the following fees are applicable?
I.
II.
III.
IV.
Trade commission.
NSE fees.
CSCS fees.
SEC fees.
A.
B.
C.
D.
I, II and III only.
I, III and IV only.
II, III and IV only.
All of the above.
69. Which of the following capital market participants are not fiduciaries?
A. Trustees.
B. Directors.
C. Executors.
D. Auditors.
70. Which of the following is incorrect about a margin account? It ________
A. Allows an equity investor to borrow money to buy more shares.
B. Guarantees higher profit.
C. Exposes the investor to greater investment risks.
D. Can be closed out without recourse to the investor if he fails to honour a
margin call.
71. Which of the following is an objective of an income fund?
A. To maximise current income.
B. To maximise capital gains.
C. To maximise both capital gain and income.
D. None of the above.
72. In line with SEC rule 110, which of the following is not considered an ‘insider’ in a
company?
A. An officer of a related company.
B. A Director of the company.
C. An employee of the company.
D. The spouse of an investor who holds 6% of the shares of a company.
73. SEC is not empowered by the Investment and Securities Act 2007 to register which
of the following?
A. Security Exchanges.
B. National Association of Securities Dealers.
C. Capital Trade Points.
D. None of the above.
74. Which of the following securities is/are not subject to registration by SEC according
to Sec rule 40?
I.
II.
III.
IV.
Private placement by public companies.
Offer by introduction.
Local Government Bonds.
Federal Government Bonds.
A.
B.
C.
D.
I and II only.
I and III only.
II and IV only.
IV only.
75. Which of the following is not a type of underwriting contract?
A. Standby.
B. Best effort.
C. Firm.
D. Consolidated.
76. Under NSE Articles 96, contact notes for all purchases and sales must be sent out
not later than:
A. The end of the next trading date.
B. 2 days after the trading date.
C. 7 days after the trading date.
D. 2 weeks after the trading date.
77. The Administrative Proceedings Committee (APC) __________
A. Is an internal administrative committee of NSE.
B. Affords the opportunity of hearing to parties alleged to have breached the
provisions of the securities laws and regulations.
C. Has final say in all capital market disputes as its judgement is not subject to
appeal.
D. (A) and (B) above.
78. Which of the following is not a function of the Nigerian Stock Exchange?
A. To regulate the activities of individual Stockbrokers and update their
knowledge.
B. To administer and enforce the rules of fair practice.
C. To provide a means for arbitrating disputes among members.
D. To cooperate with SEC and other agencies to solve problems affecting the
securities industry.
79. A member of Nigerian Stock Exchange is expected to report a breach of the NSE
Articles to ____________
A. SEC
B. CIS
C. The Investment and Securities Tribunal.
D. None of the above.
80. Which of the following is the primary legislation that provides for the establishment
of the Securities and Exchange Commission and empowers it to function as the
apex regulatory body in the Nigerian capital market?
A. The Securities and Exchange Commission Rules and Regulations.
B. Investment and Securities Act (2007).
C. Companies and Allied Matters Act (1990).
D. The Constitution of the Federal Republic of Nigeria.
81. Self-regulatory organisations like the NSE do which of the following:
I.
II.
III.
IV.
Set arbitration policies.
Establish fair trading policies.
File criminal prosecution.
Set prices in the market.
A.
B.
C.
D.
I and II only.
I, II and III only.
I, II and IV only.
All of the above.
82. Which of the following documents is required at the completion board meeting
when a company is in the process of issuing shares?
A. Article of Association.
B. Vending Agreement.
C. Memorandum of Association.
D. Basis of Allotment.
83. Which of these is not a benefit of the Automated Trading System and CSCS?
A. Increased opportunity for margin trading.
B. Increased opportunity for price discovery.
C. Enhanced transparency and efficiency of the market.
D. Obviated the risks associated with loss of share certificate.
84. According to SEC rule 50, which of the following capital market participants is
expected to file the registration statement for the offer of securities?
A. The issuer.
B. Stock broker to the Issue.
C. NSE on behalf of the issuer.
D. The issuing House.
85. When opening an account for a new customer, which of the following documents is
not necessary?
A. Passport photograph.
B. Educational qualification.
C. Means of identification.
D. Mother’s maiden name.
86. Which of the following is not correct about the process of allotment of shares?
A. Allotment is the joint responsibility of the Issuing House and the Issuer.
B. Allotment has to be completed and an allotment announcement submitted to
the Commission within six weeks of the close of the issue.
C. With e-allotment, shares allotted will be credited to the CSCS account of
allottees within 25 working days.
D. None of the above.
87. Chartered Institute of Stockbrokers regulates the activities of its members through
which of the following arms:
A. The Investigating Panel.
B. The Disciplinary Tribunal.
C. Membership Panel Tribunal.
D. (A) and (B) above.
88. The registration requirements of a receiving banker include which of the following?
I. Fidelity bond issued by NDIC.
II. Evidence of complying with CBN minimum capital requirement.
III. Sworn undertaking to abide by the Investments and Securities Act and the
Rules and Regulations of the Commission.
A.
B.
C.
D.
II only.
I and II only.
II and III only.
All of the above.
89. According to SEC rule, the Code of Conduct for management and Staff of rating
agencies prohibit key officers of the rating firm from_________
A. Investing in clients’ shares out rightly.
B. Investing in clients’ shares without the approval of the commission.
C. Investing more than N500,000 in clients’ shares.
D. None of the above.
90. Shelf Registration is:
I.
A filing undertaken by issuers intending to raise at least N500 million from the
market.
II. Permits issuers to disclose certain information in a core disclosure document
that is updated on a regular basis.
III. Applicable to all types of registrable securities as defined in section 264 of the
Investments and Securities Act, 1999.
A.
B.
C.
D.
I and II only.
I and III only.
II and III only.
All of the above.
91. Which of the following is not a function of CSCS?
A. Serves as central depository for share certificates.
B. Adjudicates in disputes relating to share transfers.
C. Acts as sub-registry for all quoted securities.
D. Issues central securities identification numbers to shareholders.
92. How many months after initial payment are dividends due to a shareholder
considered ‘unclaimed dividends’?
A. 12 months.
B. 15 months.
C. 30 months.
D. 36 months.
93. Which of the following parties has a part to play in the transmission of share
certificates?
A. The NSE.
B. The SEC.
C. The Registrar.
D. The settlement bank.
94. Which of the following statements is not true under relevant securities regulations
in Nigeria?
A. A stockbroker must always act in the best interest of the customer.
B. The stockbroker must notify the NSE if he gets involved in a serious legal
matter.
C. A broker/dealer may be disciplined for violations committed by a dealing clerk
who is an employee of the broker/dealer.
D. None of the above.
95. All
A.
B.
C.
D.
of the following are prohibited activities except:
Commingling.
Hypothecation.
Insider trading.
Front running.
96. To enhance full dematerialisation on the Nigerian Stock Exchange, each investor
requires which of the following?
A. A unique CSCS Clearing House Number.
B. An Investor’s account number with SEC.
C. A CSCS Clearing House Number in each Stockbroking firm he uses.
D. All of the above.
97. To be listed in the Second Tier Market of the Nigerian Stock Exchange, a company
must satisfy which of the following conditions?
A. At least 50% of nominal capital to be offered to the public.
B. The company cannot raise more than N100 million from the Stock Market.
C. No single shareholder can own more than 75% of the issued share capital of
the company.
D. (B) and (C) above.
98. NSE Article 15 requires dealing members to submit to the Exchange their financial
statements within how many days of the end of the fiscal year?
A. 30 days
B. 60 days.
C. 90 days.
D. 120 days
99. Which of the following procedures is not required before a state could issue bonds
in Nigeria?
A. State Executive Council resolution to issue the bond.
B. Approval by the Federal Executive Council.
C. State law to authorize borrowing from the capital market.
D. An irrevocable standing payment order.
100. Which of the following statements is incorrect in respect of the qualifications of a
Chief Executive of a dealing member in line with NSE Article 154?
A. He must be at least 45 years of age.
B. He must be duly registered by the Nigerian Stock Exchange.
C. He must have core Stock broking experience of at least 5 years.
D. He must have minimum of 5 years of cognate experience in the finance industry.
Total = 100 marks
END OF PAPER