Page 201 - CAPE Financial Services Syllabus Macmillan_Neat

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02269020/CAPE/KMS 2016 SPEC

FINANCIAL SERVICES STUDIES

UNIT 2 - PAPER 02

KEY AND MARK SCHEME

- They conduct investigations into suspected breaches of
the rules sometimes in conjunction with the law
enforcement bodies.

- They enforce the rules and they cooperate and exchange
information with other regulators.

1 mark for each underlined phrase up to a maximum of 3
marks

(d) Importance of legislation

- Legislation is important because it provides stability to
the markets and serves to protect customers, workers and
tax payers from moral hazards that are inherent in
certain decisions.

- Legislation is also necessary to ensure risks inherent in
a market economy are understood by stakeholders.

- It provides the backbone on which the broader financial
sector rests which enables them to provide the necessary
financing for businesses which in turn spurs economic
growth and development.

- In addition, all commercial banks and other institutions
deemed to be carrying on banking business are required to
be licensed under the Banking Act and are regulated. As
part of the ongoing supervision, licensed financial
institutions are required to submit monthly, quarterly
and annual returns. These returns provide essential
information to assess the performance of the institutions
and the financial system and to inform policy decisions.

1 mark for each for identifying the point; 1 mark for
explanation up to a maximum of 6 marks