Capital Markets Authority

Tuesday, 07 September 2010

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Mandate of the Authority

The Capital Markets Authority is established by an Act of Parliament to promote, regulate and facilitate the development of an orderly, fair and efficient Capital Markets in Kenya.

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Disposal of Motor Vehicles CMA launches its strategic plan and the service delivery charter Renewal Of Capital Market Licences For The Year 2010 Tenders Book building and anti-money laundering guidelines Authority approves renewal of two commercial papers totaling kshs. 204M; The CMA Fraud Investigation Unit (CMFIU) arrests an Investment Advisor

September 2010

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Automated Trading And Settlement System For Bonds

In reference to an article appearing today in a section of the media on the Automated Trading and Settlement System for bonds, the Capital Markets Authority reiterates its keenness to facilitate the introduction of an automated trading and settlement system for bonds.

The Authority however indicates that; ‘in approving an Automated Trading and Settlement System for bonds, the Authority has to satisfy itself of the integrity of the system by ensuring it fully complies with the Capital Markets Act and regulations with a view to ensuring that the wide interests of the capital markets are safeguarded’.

The Authority further says that the matters raised in the article are under regulatory review, adding that all the stakeholders (NSE, CDSC, CBK) have remained fully engaged on the requirement of the Automated Trading and Settlement System within a framework of a sub-committee that was formed in early October 2009 to not only fast-track this automation but rather to also ensure that it is as seamless as possible.

With regard to the trading of Kengen bond, the Authority indicates that paragraph 16.1 (26- 29) of the approved Kengen Public Infrastructure Bond Offer Information Memorandum explain clearly how this will be done in the event that CDSC and NSE will not have activated the CDS system for bonds by the time the Kengen bonds are listed.

Highlights

AUTHORITY APPROVES A BONUS ISSUE BY JUBILEE HOLDINGS LIMITED.

The Capital Markets Authority (CMA) has granted approval toJubilee Holdings Ltd for the issue of bonus shares in the ratio of one (1) new ordinary share for every ten (10) ordinary shares held as at close of business on June 14, 2010, and their subsequent listing on the Main Investment Market Segment of the Nairobi Stock Exchange. This will result in an additional 4,500,000 ordinary shares of a par value of Kshs. 5.00 each to the shareholders of Jubilee Holdings Limited.

“In approving the bonus issue and listing of the additional shares, the Authority has considered the application by Jubilee Holdings Ltd and is satisfied that it meets the requirements of the Capital Markets Act 485(A) and Regulations issued there under.” Said CMA Chief Executive, Mrs. Stella Kilonzo.

Appointment Of Transaction Advisers

The Capital Markets Authority wishes to draw the attention of all licensees and members of the public to the provision of Regulation 5A of the Capital Markets (Public Offer, Disclosure and Listing) Regulations 2002 which came into effect on June 11, 2009 and which provides as follows:

Any company proposing to offer its securities to the public or a section of the public shall appoint a transaction adviser.
A transaction adviser appointed under paragraph (1) shall be responsible for ensuring that the offer of securities is made in accordance with the Act and regulations issued thereunder.
A person shall not be eligible for appointment as a transaction advisor unless such a person is licensed as an investment bank or is approved by the Authority to act as a transaction advisor for the particular offer of securities.

In accordance with this provision, ALL issuers of securities to the public are required to appoint a Transaction Adviser that is licensed as an Investment Bank or in the alternative, prior to appointing a transaction adviser that is not a licensed Investment Bank, to seek the Authority’s approval of such a person.

Kindly note that that save for Investment Banks, all persons seeking to act as transaction advisers shall be required to seek prior approval from the Authority before they are considered eligible to act as a transaction advisers.

The Authority may consider the appointment of a joint team of transaction advisers provided that the same comprises a licensed Investment Bank.

Renewal Of Capital Market Licences For The Year 2010

The attention of the Capital Markets Authority has been drawn to an erroneous report that appeared on the Tuesday May 11th 2010 Standard Newspaper’s , Financial Journal section, Page 9 titled ‘Will CMA renew brokers licences?’.
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CAUTIONARY STATEMENT

The public are advised to be wary of and to avoid giving money to companies that hold themselves out as carrying on the business of Investment Advisers or any other licensed activity without holding valid licenses issued under the Capital Markets Act.

The public should note that the Capital Markets Act (Cap 485A) and regulations prohibit any company from carrying on the business of a licensed person without the requisite licence. A list of all persons holding a license from the Authority is available on the website of the Authority (www.cma.or.ke) and investors should not hesitate to contact the Authority for any clarifications on the same.

The Authority shall take appropriate action against any unlicensed persons that carry on or hold themselves out as carrying on the business of a licensed person. In this regard the Authority specifically warns the public over any dealings with the following entities:

1.    Caribbean Stocks
2.    Caribbean Solutions Finders Limited
3.    Orgacilla Merchants

We would like to take this opportunity to request the public to provide the Authority with any information on any such unlicensed persons to enable us to take action in the interest of investors.

Investors with queries or complaints may also contact the Capital Markets Fraud Investigation Unit on 0714 693414, 0714693365, 0731544389, 0733199622 or by email on This e-mail address is being protected from spam bots, you need JavaScript enabled to view it