QUESTIONS:

A) Assess the importance of investment regulations.

Regulations are rules that set standards for conduct and that carry the force of law. They are
set and enforced by government bodies and by other entities authorized by government bodies.
This enforcement aspect is a critical difference of regulations with ethical principles and
professional standards. Violations of ethical principles and professional standards have
consequences, but those consequences may not be as severe as those for violations of laws and
regulations. Therefore, laws and regulations can be used to reinforce ethical principles and
professional standards

Investment regulations: Means all laws, domestic or foreign, applicable to the Investment
Management Services business including, without limitations.

Importance

i. Direct Creation of Jobs: Firms must reallocate resources, including new hires, in order
to comply with regulations. The resources utilized to comply with regulations will not be
utilized for other productive activities. The net effect on employment is difficult to
estimate for any particular regulation. The key question is whether or not the resources
that go to compliance are producing a mix of goods and services that consumers value
more as compared to what they give up.
ii. Support economic policy: The higher proportion of debt funding used in the financial
services industry, particularly by financial institutions, and the interconnections between
financial service industry participants create the risk of a systematic failure that is, failure
of the entire financial system
iii. Prior notification and consultation: Involving the investors and other stakeholders in
the process of legal and regulatory changes contributes to their legitimacy and
effectiveness. It also reflects a commitment to professionalism and contributes to building
trust between investors and relevant stakeholders. Moreover, policy is more likely to be
sound and not produce unintended side effects if it is structured and permits input from
all interested parties.
 iv. Company Identification: The investment companies generally are not regulated by the
states. States may however, require investment companies to file notices with them and
pay filling or registration fees, information about state securities laws is available from
state securities regulators.

B) Analyze the effects of investment regulations on investment level in Tanzania.

 Policies Towards Foreign Direct Investment

The United Republic of Tanzania, according to the investment regulations the
government officials, welcomes foreign direct investment (FDI) as it pursues its
industrialization and development agenda. However, in practice, government policies and
regulations do not affectively keep and attract investment. The 2019 World Investment
Report indicates that FDI flows to Tanzania increased from USD 938 million in 2017 to
USD 1.1billion in 2018, although they have not recovered to pre-2015 levels. (The Bank
of Tanzania reports 2018 FDI as USD 2.82 billion, down from USD 5.07 billion in
2017.). investors and potential investors local content requirements, regulatory/political
instability, lack of trust between the GoT and the private sector, and mandatory initial
public offerings (IPOs) in key industries.
 Limits on Foreign Control and Right to Private Ownership and Establishment
The Foreign investors generally receive treatment equivalent to domestic investors but
limits still persist in a number of sectors. Tanzania conforms to best practice in several
cases. There are no geographical restrictions on private establishments with foreign
participation ownership, no limitations on number of foreign entities that can operate in a
given sector, and no sectors in which approval is required for foreign investment
greenfield FDI but not for domestic investment.
However, Tanzania discourages foreign investment in several sectors through limitations
on foreign equity ownership or other activities, including aerospace, agribusiness
(fishing), construction and heavy equipment, travel and tourism, energy and
environmental industries, information and communication, and publishing, media, and
entertainment.
 Specific examples include the following: The Tourism Act of 2008 bars foreign
companies from engaging in mountain guiding activities, and states that only Tanzanian
citizens can operate travel agencies, car rental services, or engage in tour guide activities
(with limited exceptions).

C) Describe ethical requirements in investment portfolio management.

Ethics can be defined as a set of moral principles or rules of conduct that provide guidance for
our behavior when it affects others. Widely acknowledged fundamental ethical principles include
honesty, fairness, diligence, and care and respect for others. Ethical conduct follows those
principles and balances self-interest with both the direct and the indirect consequences of that
behavior for other people.

i. Place the integrity of the investment profession and the interests of clients above their
own personal interests.
ii. Promote the integrity and viability of the global capital markets for the ultimate benefit of
the society at large
iii. Use reasonable care and exercise independent professional judgement when conducting
investment analysis, making investment recommendations, taking investment actions,
and engaging in other professional activities.
iv. Maintain and improve their professional competence and strive to maintain and improve
the competence of other investment professionals.
v. Practice and encourage others to practice in a professional and ethical manner that will
reflect credit on themselves and profession.
vi. Act with integrity, competence, diligence, and respect and in an ethical manner with the
public, clients, prospective clients, employers, employees, colleagues in the investment
profession, and other participants in the global capital markets
REFERENCE;

Haim Levy, Thierry Post, (2005), “Investments”, Pearson Education Limited.

Ian Alexander, Clive Harris, (2005), “The Regulation of Investment in Utilities: Concepts and
Applications”, World Bank Publications.

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