Who We Are

 

The Capital Markets Authority is an independent public agency established by an Act of Parliament, Cap 485 A under the Ministry of Finance. The Authority was inaugurated in 1990 but came into being in December 15, 1989 when the Act was passed.

 

The CMA is therefore a regulating body charged with the prime responsibility of supervising, licensing and monitoring the activities of market intermediaries, including the stock exchange and the central depository and settlement system and all the other persons licensed under the Capital Markets Act. It plays a critical role in the economy by facilitating mobilization and allocation of capital resources to finance long term productive investments.

 

What We Do

 

The Authority derives its powers to regulate and supervise the capital markets industry from the Capital Markets Act and the Regulations issued there under. The regulatory functions of the Authority as provided by the Act and the regulations include the following;

 

·         Licensing and supervising all the capital market intermediaries

·         Ensuring proper conduct of all licensed persons and market institutions.

·         Regulating the issuance of the capital market products (bonds, shares etc )

·         Promoting market development through research on new products and institutions.

·         Promoting investor education and public awareness

·         Protecting investors’ interest

 

 

 

 

Our Vision

 

The Vision of the Authority is to be a world-class regulator of a vibrant capital market.

 

Our Mission

 

The mission of the Authority is to promote market confidence, investor protection and access to financial services within capital markets in Kenya and the region through effective regulation and innovation.

 

Our Motto

 

Our Motto is Promoting Capital Markets Integrity. ‘’ Kuimarisha uadilifu wa soko la mitaji’’

 

Our Core Values

 

·         Integrity

·         Transparency

·         Accountability

·         Responsiveness

·         Collaboration and Teamwork

·         Fairness

·         Commitment

·         Innovation and Continuous Learning

 

Our Objectives

 

The principle objectives of the Authority are:

 

·         to develop all aspects of the capital markets and the removal of impediments to the creation of incentives for longer term investments in, productive activities;

·         to facilitate the existence of a nationwide system of stock market and brokerage services so as to enable wider participation of the general public in stock market;

·         to create, maintain and regulate a market in which securities can be issued and traded in an orderly, fair, and efficient manner, through the implementation of a system in which the market participants regulate themselves to the maximum practicable extent;

·         to protect investor interests;

·         to operate a compensation fund to protect investors from financial loss arising from the failure of a licensed broker or dealer to meet his contractual obligations; and

·         to develop a framework to facilitate the use of electronic commerce for the development of capital markets in Kenya.

 

 

 

 

 

Composition of the Board

 

The Board provides the overall policy direction and leadership to the Authority. Its commitment, professionalism, diversity of talent and experience and independence of mind are critical factors in the successful execution of the mandate of the Authority. The primary responsibility of the board is the protection of the interest of the employees, the government, investors, issuers of securities and the market intermediaries.

 

 

The board of directors of the Authority consists of –

 

1. A Chairman appointed by the President on the recommendation of the Minister of Finance;
2. Six other members appointed by the Minister;
3. The Permanent Secretary to the Treasury or a person deputed by him;
4. The Governor of the Central Bank of Kenya or a person deputed by him;
5. The Attorney General or a person deputed by him;
6. The Chief Executive of the Authority, who serves for a four-year term and is eligible for re-appointment for another four-year term.

 

The chairman and the six members are persons who have experience and expertise in legal, financial, banking, accounting, economics or insurance matters, serve for a period of three years and are eligible for re-appointment for another three years.

 

 

How We Regulate and Develop the Capital Markets

 

The Authority, led by the Board of Directors and supported by the Chief Executive together wit the management, carries out its mandate of regulating and developing the Kenyan capital markets through a regulatory framework that is deliberately designed to meet this objective.

 

The enabling legislation

 

Just like any other industry, the capital markets industry operates within a certain regulatory framework which the players in this industry must adhere to in the course of offering their services. Since inception, the Authority has strived to deepen and broaden the capital markets by developing a regulatory framework that facilitates the development of new financial products and institutions through research and ensuring fairness and orderliness in the capital markets industry. The regulatory framework of the Authority is comprised of the following:

 

 

 

 

 

 

 

 

Main Acts:

 

1.       The Capital Markets Act;   

2.       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.       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.

 

 

Guidelines:

 

1.       Guidelines on Corporate Governance Practices by Public Listed Companies

2.       Guidelines on the Approval and Registration of Credit Rating Agencies

 

The above Acts, Regulations as well as the Guidelines are what the Authority uses to supervise and regulate the market intermediaries. The regulatory framework is crafted in such a way that it encourages self regulation to the maximum practical extent.

 

For more information on regulations please refer to our website: www.cma.or.ke

 

Draft Regulations, Rules and Guidelines:

 

The Authority has exposed the following new regulations and guidelines to the public for comment:

 

1.       The Capital Markets (Conduct of Business) (Market Intermediaries) Regulations 2009

2.       The Capital Markets (Corporate Governance) (Market Intermediaries) Regulations 2009

3.       Amendments to the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002 to cater for price determination though book building.

4.       The Capital Markets Anti-Money Laundering Guidelines.

 

Who Are Our Licensees?

 

The Authority licenses the following categories of market players:

·         Securities Exchange (Nairobi Stock Exchange)

·         Central Depository (The Central Depository and Settlement Corporation Ltd.)

·         Investment Banks 

·         Stockbrokers

·         Dealers

·         Investment Advisers

·         Fund Managers

·         Authorized Securities Dealers

·         Authorized Depositories (Custodians)

·         Credit Rating Agencies

·         Venture Capital Companies

 

Strategic Plan

 

The first Strategic Plan of the Authority (2002 -2005) was developed and launched in 2002 with a seven-prong reform agenda; In November 2006, the Authority reviewed the Capital Markets Strategic Plan:  2006-2010 representing comprehensive plans of action aimed at strategic positioning, broadening and deepening the capital markets and making Kenya a leading financial center in the region. The Strategic Plan was developed in line with the tenets of Kenya Vision 2030.

 

The current Strategic Plan (2009 -2012) outlines a nine-prong reform agenda, highlights of some main milestones realized and a sequence of the reform measures and action plan for the plan period.

 

The nine-prong reform agenda includes the following: -

 

1.       Development of financial products and services

2.       Establishment of robust, facilitative, legal and regulatory framework that conforms to international best practice.

3.       Strengthening the professional and corporate image of the Authority

4.       Enhance capital market infrastructure and institutional arrangement

5.       Strengthening professional and operational capacity of market institutions and intermediaries

6.       Promote investor education and public awareness

7.       Develop high performing human capital and promote positive corporate culture

8.       Build strategic alliances.

9.       Enhancing effective and efficient utilization of Information Communication Technology. (ICT)