100+ Free Regulations and Market Practice (Kenya) Practice Questions

Pass your CISI Regulations and Market Practice (Kenya) exam on the first try — instant access, no signup required.

✓ No registration✓ No credit card✓ No hidden fees✓ Start practicing immediately

~65% Pass Rate

100+ Questions

100% Free

Loading practice questions...

Same family resources

Explore More CMA Kenya Securities Certification

Continue into nearby exams from the same family. Each card keeps practice questions, study guides, flashcards, videos, and articles in one place.

CMA Kenya / CISI Introduction to Securities & Investment (Kenya)

Practice Questions100 questions

2026 Statistics

Key Facts: Regulations and Market Practice (Kenya) Exam

Exam Questions

CISI

1 hour

Exam Time

CISI

70%

Passing Score

CISI (35/50)

T+3

NSE Settlement Cycle

CDSC

~Ksh 10k

Typical Exam Fee

CISI Providers

7 years

Record Retention

CMA / POCAMLA

The Regulations and Market Practice (Kenya) exam is a 1-hour computer-based test with 50 questions, costing approximately Ksh 10,000. Administered by the CISI and CMA Kenya, it requires a 70% passing score. The syllabus covers the Capital Markets Act, licensing, corporate governance, POCAMLA anti-money laundering, client money trust accounts, NSE trading segments, and collective investment schemes.

Sample Regulations and Market Practice (Kenya) Practice Questions

Try these sample questions to test your Regulations and Market Practice (Kenya) exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which statutory body is primarily responsible for supervising, licensing, and monitoring capital market intermediaries in Kenya?

A.Central Bank of Kenya (CBK)

B.Capital Markets Authority (CMA)

C.Nairobi Securities Exchange (NSE)

D.Insurance Regulatory Authority (IRA)

Explanation: The Capital Markets Authority (CMA) is the primary regulatory body established under the Capital Markets Act (Cap 485A) to supervise, license, and monitor capital market intermediaries in Kenya. While the CBK regulates banking institutions and the IRA regulates insurance companies, the CMA's sole mandate is the regulation and development of the capital markets. The NSE is a self-regulatory organization (SRO) but operates under the direct supervision of the CMA.

2Under the Capital Markets Act (Cap 485A), who is responsible for appointing the Chairman of the Capital Markets Authority (CMA) board?

A.The Cabinet Secretary for National Treasury and Planning

B.The President of the Republic of Kenya

C.The Chief Executive Officer of the CMA

D.The Governor of the Central Bank of Kenya

Explanation: According to the Capital Markets Act, the Chairman of the CMA board is appointed by the President of the Republic of Kenya. Other independent board members are appointed by the Cabinet Secretary for the National Treasury. The CEO is appointed by the Cabinet Secretary on the recommendation of the board, and the CBK Governor is a separate statutory role.

3An investor is aggrieved by a decision made by the Capital Markets Authority (CMA). Within how many days must they appeal to the Capital Markets Tribunal?

A.7 days

B.15 days

C.30 days

D.60 days

Explanation: Section 35A of the Capital Markets Act stipulates that any person aggrieved by a decision of the Authority may appeal to the Capital Markets Tribunal within 15 days of the notification of such decision. The Tribunal is an independent judicial body set up to hear disputes relating to the capital markets. Failure to appeal within this statutory timeframe may bar the aggrieved party from seeking relief from the Tribunal.

4Which of the following is the primary purpose of the Investor Compensation Fund (ICF) established under the Capital Markets Act?

A.To guarantee that investors do not lose money from normal stock market price drops

B.To compensate investors who suffer pecuniary loss resulting from the failure of a licensed intermediary

C.To bail out struggling stockbrokers and investment banks from bankruptcy

D.To fund the administrative operations and salaries of the Capital Markets Authority

Explanation: The primary purpose of the Investor Compensation Fund (ICF) is to compensate investors who suffer financial losses due to the insolvency, bankruptcy, or failure of a licensed capital market intermediary (such as a stockbroker). It does not protect investors from market risk or stock price fluctuations. The fund is financed by transaction levies and is strictly managed to protect retail investors rather than bail out intermediaries or fund the CMA's operations.

5Which source of revenue forms the primary ongoing funding mechanism for the Investor Compensation Fund (ICF) in Kenya?

A.A direct allocation from the National Government's annual budget

B.A transaction levy of 0.01% charged on buy and sell transactions of listed securities

C.Annual licensing fees paid by listed public companies

D.Fines imposed on market manipulators and inside traders

Explanation: The ongoing funding of the Investor Compensation Fund (ICF) is primarily derived from a transaction levy of 0.01% on both purchase and sale transactions of equity securities listed on the Nairobi Securities Exchange. Fines and treasury allocations may supplement the fund, but transaction levies provide the consistent, volume-based funding stream. Licensing fees paid by intermediaries go to the CMA's general operational revenues rather than the ICF.

6The Capital Markets Authority (CMA) operates under the political and administrative oversight of which government entity?

A.The State House (Office of the President)

B.The National Treasury and Economic Planning

C.The Central Bank of Kenya (CBK)

D.The Ministry of Industry, Trade and Cooperatives

Explanation: The Capital Markets Authority (CMA) is a semi-autonomous government agency (SAGA) under the National Treasury and Economic Planning. The Cabinet Secretary for the National Treasury is responsible for capital markets policy, appointing board members, and laying regulations before Parliament. While the President appoints the Chairman, administrative and policy oversight resides with the Treasury.

7Which of the following bodies is responsible for regulating retirement benefits and pension schemes in Kenya, acting as a co-regulator alongside the CMA?

A.Insurance Regulatory Authority (IRA)

B.Retirement Benefits Authority (RBA)

C.Central Bank of Kenya (CBK)

D.Sacco Societies Regulatory Authority (SASRA)

Explanation: The Retirement Benefits Authority (RBA) regulates pension schemes and retirement benefits in Kenya. Because pension funds are major institutional investors in the capital markets, the RBA and CMA collaborate closely to ensure financial system stability. The IRA, CBK, and SASRA regulate insurance, banks, and Saccos respectively.

8According to the Capital Markets Code of Corporate Governance Guidelines for Listed Companies, what is the recommended minimum percentage of independent non-executive directors on a listed company's board?

A.At least 10% of the board members

B.At least one-third (33%) of the board members

C.At least half (50%) of the board members

D.At least two-thirds (67%) of the board members

Explanation: The CMA Code of Corporate Governance recommends that independent non-executive directors should constitute at least one-third (33%) of the board of directors. This ensures that the board has sufficient independent voices to protect minority shareholder interests and objective decision-making. Having only 10% is too low, while 50% or 67% is not the mandatory minimum recommendation under the code.

9Which of the following correctly describes the legal status of the Corporate Governance guidelines issued by the CMA?

A.They are purely voluntary recommendations with no compliance reporting required

B.They operate on an 'Apply or Explain' basis, requiring annual disclosure of compliance or explanation for deviations

C.They are strict criminal laws where any deviation results in immediate arrest of directors

D.They only apply to private companies seeking to list in the future

Explanation: The Capital Markets Code of Corporate Governance operates on an 'Apply or Explain' principle. Listed companies are required to disclose their level of compliance with the Code in their annual report, and where they have deviated, they must provide a detailed explanation and a transition path to compliance. It is not purely voluntary, nor is it a criminal statute.

10Under the principles of capital markets regulation, what is the primary role of a Self-Regulatory Organization (SRO) like the Nairobi Securities Exchange?

A.To take over the statutory licensing powers of the CMA completely

B.To establish and enforce trading rules and member conduct codes for its own market operations under CMA oversight

C.To act as a trade union representing the interest of brokers against investors

D.To guarantee a fixed return to all retail investors

Explanation: A Self-Regulatory Organization (SRO) like the NSE has the authority to create and enforce its own internal rules, member codes of conduct, and trading procedures. This lightens the regulatory burden on the CMA, though the CMA retains final oversight and must approve all SRO rules. An SRO cannot replace the CMA's statutory licensing powers, nor does it act as a trade union or guarantee returns.

About the Regulations and Market Practice (Kenya) Exam

The Regulations and Market Practice (Kenya) exam is a mandatory professional qualification developed by the CISI in collaboration with the Capital Markets Authority (CMA) of Kenya. It tests candidates on their understanding of the local legal and regulatory framework, intermediary licensing, internal controls and risk management, client asset rules, market abuse offenses (such as insider trading), Nairobi Securities Exchange (NSE) trading rules, CDSC clearing, and collective investment schemes (unit trusts, REITs, AIFs).

Assessment

50 multiple-choice questions

Time Limit

1 hour

Passing Score

70% (35 out of 50)

Exam Fee

~Ksh 10,000 (Chartered Institute for Securities & Investment (CISI) & CMA Kenya)

Regulations and Market Practice (Kenya) Exam Content Outline

20%

Legal and Regulatory Framework

Capital Markets Act (Cap 485A), CMA powers, Capital Markets Tribunal appeals, and corporate governance guidelines.

Licensing of Capital Market Intermediaries

Licensing process, minimum paid-up and net capital requirements, fit and proper criteria, and license categories.

16%

Governance and Controls of Market Intermediaries

Duties of compliance and internal audit officers, risk management, audited accounts submission, and outsourcing rules.

30%

Conduct of Business

Client trust account segregation, KYC/AML under POCAMLA, FRC suspicious reporting, suitability, and market abuse/insider trading.

16%

Markets and Trading Rules

NSE operations, listing requirements (MIMS, AIMS, GEMS), GEMS Nom-Ad role, NEXT derivatives trading, and CDSC clearing/guarantee fund.

10%

Investment Funds

Collective Investment Schemes (CIS), Trustee/Custodian/Manager roles, Alternative Investment Funds, and REITs.

How to Pass the Regulations and Market Practice (Kenya) Exam

What You Need to Know

Passing score: 70% (35 out of 50)
Assessment: 50 multiple-choice questions
Time limit: 1 hour
Exam fee: ~Ksh 10,000

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

Regulations and Market Practice (Kenya) Study Tips from Top Performers

1Carefully study the Capital Markets Act (Cap 485A) and the role/powers of the CMA and the Tribunal.

2Memorize the licensing requirements and minimum paid-up capital limits for different intermediaries (e.g., Investment Bank Ksh 250M, Stockbroker Ksh 50M).

3Understand the compliance officer's role, annual reporting timelines (3 months post-financial year), and record retention (7 years).

4Focus on business conduct rules, especially client money trust accounts, KYC procedures, and POCAMLA suspicious reporting timelines (within 2 days to FRC).

5Learn the market abuse offenses, such as insider trading definitions, tipping, front-running, churning, wash sales, and their respective penalties.

6Differentiate between NSE listing segments (MIMS vs AIMS vs GEMS requirements) and know the CDSC settlement cycle (T+3) and Guarantee Fund role.

7Master the structure of a Collective Investment Scheme, noting the separation of duties between the Fund Manager, Trustee (must be a bank), and Custodian.

Frequently Asked Questions

What is the Regulations and Market Practice (Kenya) qualification?

It is a professional certification program developed by the CISI and CMA Kenya. It is designed to ensure that all capital market practitioners in Kenya possess a solid understanding of the local regulatory environment, market conduct rules, and investor protection standards.

How many questions are on the exam, and what is the duration?

The exam consists of 50 multiple-choice questions. Candidates are given 1 hour (60 minutes) to complete the test. It is administered as a computer-based exam at authorized CISI test centers.

What is the passing score for the CMA Kenya Regulations exam?

The passing score is 70%, which means you must answer at least 35 out of 50 questions correctly. A score of 46 or above results in a Pass with Merit.

What topics are covered in the syllabus?

The syllabus is divided into six elements: Legal and Regulatory Framework (20%), Licensing of Intermediaries (8%), Governance and Controls of Intermediaries (16%), Conduct of Business (30%), Markets and Trading Rules (16%), and Investment Funds (10%).

How much does the exam cost, and how do I register?

The exam fee is approximately Ksh 10,000 (excluding registration and learning manual fees). You can register and book the exam online through the official CISI website or via accredited training providers in Kenya.