This document outlines the course outline for a Securities Regulation course taught by Lyla Latif from September to December 2016. The course will cover 7 modules on topics like the historical development of securities regulation in Kenya, the current legal and regulatory framework, types of securities dealt with in the Kenyan market, and regulations governing conventional and Islamic securities. Students will read materials like the Capital Markets Act and various regulations, guidelines, and journal articles on securities regulation. The course aims to help students understand securities, their regulation, and how the field has developed in Kenya.

1. Securities Regulation Course Instructor: Lyla Latif
Module II - Evening Department of Commercial Law
Course Outline latif@uonbi.ac.ke
September – December 2016
COLLEGE OF HUMANITIES AND SOCIAL SCIENCES
SCHOOL OF LAW
PARKLANDS CAMPUS
LLB ELECTIVE COURSE UNIT ON SECURITIES REGULATION
COURSE INSTRUCTOR: LYLA LATIF
COURSE OUTLINE
Class 1: Introduction to Securities Regulation
1.1 Understanding securities, securities law, securities regulation, commercial securities, the market and the
capital market
1.2 Understanding Negotiable Instruments (NI), the types of NI and whether NI’s are different from securities
1.3 The types of securities (conventional & Islamic) in the Kenyan market
1.4 The rationale for regulating securities
1.5 The regulator (domestic & international)
1.6 The law relating to securities in Kenya
Class 2: The Historical Development of Securities Regulation
2.1 History
2.2 Rationale
2.3 Development of joint stock companies
2.4 Development of the stock exchange market
2.5 Development of the law
2.6 Market regulation
2.7 Establishing the regulator
Class 3: The Legal and Regulatory Framework in Kenya
3.1 The Ministry of Finance
3.2 The Capital Markets Authority
3.2 The Nairobi Securities Exchange
3.3 The Competition Authority
3.4 The Consumer Protection Advisory Committee
3.5 The Kenya Revenue Authority
3.6 The Central Bank
3.7 East African Member States Securities regulatory Authorities
3.8 International Organisation of Securities Commissions (IOSCO)

2. Securities Regulation Course Instructor: Lyla Latif
Module II - Evening Department of Commercial Law
Course Outline latif@uonbi.ac.ke
September – December 2016
Class 4: Securities dealt with in the Kenyan Market
Class 5: The Regulation of Securities and Investor Protection
5.1 Scams
 Ponzi scheme
 Pump and dump
 Off shore investing
 Prime bank
5.2 Bubbles and crashes
5.3 Rules governing placement of bids and offers of securities
5.4 Disclosure & transparency requirements
5.5 Anti fraud and insider trading provisions
Class 6: Regulations governing Islamic Securities
6.1 Shariah Advisory Board
6.2 Sukuk transactions and disclosure requirements
Class 7: Models of Conventional and Islamic Regulation
7.1 Conventional
 Fragmented
 Centralized
 Self
 Others, if any
7.2 Islamic
 Reactive approach e.g., UK and Turkey
 Passive approach, indicating the complete absence of a regulatory response, e.g., Saudi Arabia
 Minimalist approach e.g., GCC countries
 Pro active approach e.g., Malaysia
 Inventionist approach e.g., Pakistan
 Others, if any
READINGS
Core Texts:
Capital Markets Act, Cap 485A
Banking Act
Central Bank Act
Income Tax Act
Companies Act
The Central Depositories Act, 2000
Regulations and Rules:
1. The Capital Markets (Collective Investment Schemes) Regulations, 2001
2. The Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002

3. Securities Regulation Course Instructor: Lyla Latif
Module II - Evening Department of Commercial Law
Course Outline latif@uonbi.ac.ke
September – December 2016
3. The Capital Markets (Licensing Requirements) (General) Regulations, 2002
4. The Capital Markets (Takeovers and Mergers) Regulations, 2002
5. The Capital Markets (Foreign Investors) Regulations, 2002
6. The Capital Markets Tribunal Rules, 2002
7. The Capital Markets Asset Backed Securities Regulations 2007
8. The Capital Markets (Registered Venture Capital Companies) Regulations 2007.
9. The Capital Markets(Conduct of Business) (Market Intermediaries) Regulations 2011
10. The Capital Markets(Corporate Governance) (Market Intermmediaries) Regulations, 2011
11. The Capital Markets (Demutualization of the Nairobi Securities Exchange Limited) Regulations 2012
12. The Capital Markets Real Estate Investment Trusts Collective Investment Schemes Regulations 2013
13. The Capital Markets (Derivatives Markets) Regulations, 2015
Guidelines:
1. Code of Corporate Governance Requirements for Issuers of Securities to the Public, 2015
2. Guidelines on the Approval and Registration of Credit Rating Agencies
3. Guidelines on Financial Resource Requirements for Market Intermediaries
4. Guidelines on Issuance of Asset Backed Securities
Journal Articles:
Allen, F., & Faulhaber, G. R. (1989). Signalling by under-pricing in the IPO market. Journal of Financial
Economics, 23, 303-323.
Demirguc-Kunt, A., & Levine, R. (1996). Stock market development and financial intermediaries: Stylised
Facts. World Bank Economic Review, 10(2), 341-369.
Garcia, V. F., & Liu, L. (1999). Macroeconomic determinants of stock market development. Journal of
Applied Economics, 2(1), 29-59.
International Monetary Fund, and Central Bank of Kenya. (1984). Development of money and capital markets
in Kenya. Government Printer. Nairobi.
Jacob K. Gakeri, Regulating Kenya’s Securities Markets: An Assessment of the Capital Markets Authority’s
Enforcement Jurisprudence. International Journal of Humanities and Social Science Vol. 2 No. 20 [Special
Issue – October 2012].
http://www.ijhssnet.com/journals/Vol_2_No_20_Special_Issue_October_2012/25.pdf
Jacob K. Gakeri, Calibrating Regulatory Disclosure in Kenya’s Securities Markets: Challenges and
Opportunities for Investors. International Journal of Humanities and Social Science Vol. 4 No. 5; March 2014.
http://www.ijhssnet.com/journals/Vol_4_No_5_March_2014/14.pdf
Sheila Nyasha, The Dynamics of Stock Market Development in Kenya. The Journal of Applied Business
Research Vol. 30 No: 1; January/February 2014.
www.cluteinstitute.com/ojs/index.php/JABR/article/download/8284/8316
Zohar Goshen. The Essential Role of Securities Regulation. Duke Law Journal Volume 55 February 2006
Number 4. http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=1279&context=dlj

4. Securities Regulation Course Instructor: Lyla Latif
Module II - Evening Department of Commercial Law
Course Outline latif@uonbi.ac.ke
September – December 2016
Discussion & Working Papers:
Beck, T., et al. (2010). Banking sector stability, efficiency, and outreach in Kenya. The World Bank Policy
Research Working Paper 5442.
Rose. W. Ngugi, Development of the Nairobi Stock Exchange: A Historical Perspective. KIPPRA Discussion
Paper No. 27 March 2003. http://pdf.usaid.gov/pdf_docs/Pnads081.pdf
Reports:
Capital Markets Authority, Central Bank of Kenya, Insurance Regulatory Authority, Retirement Benefits
Authority, Sacco Societies Regulatory Authority, Ministry of Finance and Ministry of Co-operative
Development and Marketing. (2011). Kenya financial sector stability report 2010. The Joint Regulators
Board.
EAST AFRICAN MEMBER STATES SECURITIES REGULATORY AUTHORITIES, REQUIREMENTS FOR
REGIONAL BOND ISSUANCE. Adopted at the 33rd Consultative Meeting of the East African Member States
Securities Regulatory Authorities.
http://www.cmauganda.co.ug/sites/default/files/downloads/Proposed%20Regional%20Bonds%20Issuance%
20Requirements%20and%20Approval%20Process%5B1%5D.pdf