• Africa Investor
  • Banner

    A quarterly publication of the Capital Markets Authority

  • Coins

    A proactive regulator of competitive and robust capital markets

  • Banner3

    Developing Kenya's capital markets to be an investment destination of choice through facilitative regulation and innovation.

  • Banner4

    Establishing a robust, facilitative policy, legal and regulatory framework for capital markets development

  • Banner5

    Promoting investor education, awareness and interest in the capital markets

  • Banner5

    Strengthening institutional capacity to effectively and efficiently deliver on its mandate



  • 1. Click an empty white square in the puzzle grid and a question box will appear.
  • 2. Type your answer in below the question and click Enter.
  • 3.Repeat the above steps until you have filled in the entire puzzle grid.
  • 4.To check your answers, click Check Puzzle (located below the puzzle grid). Incorrect answers will be highlighted in black.
This interactive crossword puzzle requires JavaScript and any recent web browser, including Windows Internet Explorer, Mozilla Firefox, Google Chrome, or Apple Safari. If you have disabled web page scripting, please re-enable it and refresh the page. If this web page is saved on your computer, you may need to click the yellow Information Bar at the top or bottom of the page to allow the puzzle to load.

The Financial sector stability report



VERIFIER(S) Please provide details of 3rd party that can verify allegation (Not Required)

Suspicious Activity Report: Briefly describe the improper activity and how you know about it. Specify what, who, when, where, and how. If there is more than one allegation, number each allegation, use as many words as necessary.
What wrongdoing occurred?:*

Who did the wrongdoing?:*

Where did this happen (Unit, location)?:*

What/who enabled this to happen (How)?:*

Key Suspect to be Investigated?:*

When did this occur (Date)?:*

Are you an institution or stakeholder in the capital markets and want to increase your institutions public reach and profile?

Do you want to interact with over 10,000 potential and current investors?

First Time Ever in Kenya !!



“Calling on Exhibitors’’



The Capital Markets week is a week-long event organized by the Capital Markets Authority in partnership with capital markets industry stakeholder; The weeklong event includes several concurrent initiatives countrywide during the same week that will culminate into the Capital Markets Open day.

The initiatives will run from May 3rd, 2017 to May 6th, 2017 and a Capital Markets Open day at the Kenyatta International Convention Centre, Tsavo Ballroom.

The event targets participants from business and professional communities, the County Government as well as the General Public within various regions of Kenya, Nairobi County and its environs.

The week’s objective is to create an environment where current and potential investors and Issuers may interact with various capital market Intermediaries and listed companies to receive pertinent information that will assist them to make informed decision while participating in the capital markets industry. The event is also intended to give exhibitors an opportunity to market their products and services to the public.

Exhibitors will have an opportunity to: -

  • Interact with current and potential investors on one on one basis.
  • Provide information on their institution’s products and services.
  • Interact with other institutional investors.
  • Participate in the Open Day Conferences.
  • Increase the image and visibility of their institution

Some of the institutions expected to exhibit at the Open Day during the Capital Markets week include, the Capital Markets Authority, the Central Depository and Settlement Corporation, Listed Companies, Private Equity and Venture Capital Firms, Banks, Fund Managers, Stockbrokers, Custodians, Investment Banks, Investment Advisors among others.

This is a call to All Exhibitors. If you are operating within the Capital Markets sector as a Market Intermediary, listed company or stakeholder and are interested in participating as an exhibitor during this Open Day, kindly contact the Authority through Halkano Huqa or Esther Gitonga on Tel.020 2264900 E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.or This email address is being protected from spambots. You need JavaScript enabled to view it.: Website: www.cma.or.ke


You can book your space based on differentiated participation packages tailored for your needs. Space is limited and it will be on a first come basis.




The Principal Sectretary,Dr.Kamau Thugge officially opening the 4th Annual Capital Markets 2016 Open day, Looking on is Mr.James Ndegwa Chairman of the Capital Markets Authority Board

The Code sets out the principles and specific recommendations on the structures and processes which companies should adopt in making good corporate governance an integral part of their business dealings and culture. It advocates for the application of standards on corporate governance that go beyond the minimum prescribed by legislation.

Research indicates that good governance leads to better risk management, enhanced performance and sustainability. Good governance also results in increased attractiveness to investors, increase in profitability and effective management of reputational risk.

As part of sensitization project, the Authority has independently, as well as in partnership with the World Bank Group, conducted training and sensitization of trainers on the requirements of the Code who will in turn train other trainers on the provisions of the Code. In addition, the Authority has conducted a Masterclass for senior management (Chief Executive Officers, Chief Financial Officers and Company Secretaries) of listed companies and it will conduct further trainings for Board Members and Chairpersons in quarter one of 2017 to ensure that companies and their management are fully aware of their responsibilities and requirements of the Code.
The Authority will continue to conduct sensitizations as and when necessary as part of the implementation process and to identify gaps, address issues and respond to challenges arising from the implementation of the Code. The Code also calls for trainings for board members based on their development needs which includes a 12-hour annual training on governance.
For effective corporate governance and whenever circumstances necessitate, the Authority may review the Code with the intention of updating its provisions to reflect the circumstances or policy objectives. However, the Authority notes that the updates will be managed and take into account stakeholder inputs in order to avoid disruptions in effective implementation.
The Code was gazetted on March 4, 2016. It will be deemed to replace the Guidelines on Corporate Governance Practices by Listed Companies in Kenya, 2002 when it comes into effect on March 4, 2017.
The Code was gazetted into law on March 4, 2016 and shall be fully applicable with effect from March 4, 2017. Issuers will therefore be obligated to align their governance structures and reporting arrangements to the standards set in the Code in preparation for that date.

The Code applies to all entities who have received approvals from the Authority to issue securities to the public whether those issuers have been listed or not. Issuers of restricted offers of securities to sophisticated, institutional or professional investors are exempted from compliance with the Code but are nonetheless encouraged to adopt the best practices provided.
The mandatory requirements are not subjected to the “Apply or Explain” standard and require full compliance. They have therefore been replicated in the Capital Markets (Securities) (Public Offers, Listing and Disclosures) (Amendment) Regulations, 2016. The mandatory provisions are subject to all the enforcement powers and provisions under the Capital Markets Act.

The best practice requirements have the flexibility of allowing issuers to explain any instances of non-application and the steps being taken and commitments being made towards full application of the best practice requirements.

The mandatory provisions have been replicated in the Capital Markets (Securities) (Public Offers, Listing & Disclosures) (Amendment) Regulations, 2016. The amendment regulations can be found at www.cma.or.ke. The mandatory requirements relate to board composition, independence and evaluation, establishment of board committees, multiple directorships, succession planning, formal and transparent policies and procedures, financial accounts and reporting, conflict of interest policies, shareholders’ rights, risk management, sustainability, related party transactions, risk management and internal controls.
“Apply or explain” is the regime guiding the enforcement of the best practice components of the Code. This provides that a company is expected to apply the Code in its entirety but allows for some flexibility to explain any instances where a company has not applied the Code as stipulated given the different nature and scope of business. The explanation must be accompanied by a commitment by the company to fully apply the Code within a definite time or to elaborately explain what arrangements it has already put in place to ensure compliance with the principles set out in the Code.
Where a company fails to apply the best practices prescribed by the Code, it should disclose the non-application to relevant stakeholders including the Capital Markets Authority with firm commitment to move towards full compliance with the guidelines or principles set out in the Code. The overall intention is full application of the Code. The disclosure on the status of application of the Code should be made in the company’s annual report.

Unsatisfactory explanations or failure to implement measures explained will result in enforcement proceedings in accordance with the Capital Markets Act.


The Code provides a clear distinction between Principles, Recommendations and Guidelines. In terms of application, the principles set out the core governance standards while the recommendations set out how the principles can be achieved. The guidelines are meant to provide key pointers for effective application of the principle and recommendation.
Integrated reporting is a process that brings together the material information about a company’s strategy, governance, performance and prospects in such a way that reflects the commercial, environmental, social and governance context within which it operates. It therefore combines the most material elements of information currently reported in separate strands (such as financial report, governance, legal and compliance report, audit reports, etc.) into one coherent whole.
A governance audit is an annual assessment of the level of compliance of a company with sound governance practices as prescribed by the Code. It is carried out by a competent and recognized professional accredited for that purpose by the Institute of Certified Public Secretaries of Kenya (ICPSK).

The list of accredited governance auditors is available upon inquiry to the Institute of Certified Public Secretaries of Kenya (ICPSK). It is important for the issuer to ensure that the lawyers they select to do their legal and compliance audits have the necessary competence and experience for the audits.

The Code requires the Board to carry out independent legal and compliance audit at least once every two years. The audit seeks to establish the level of adherence to applicable laws, regulations and standards. The independent legal and compliance audit must be carried out by a legal professional in good standing with the Law Society of Kenya (LSK). The Board is required to ensure that any non-compliance findings are acted upon expediently.

The governance audit seeks to establish the level of compliance with the governance practices set out in the Code. Some areas to be audited include leadership, transparency, disclosures, stakeholder engagement, board systems and compliance with laws, among other areas. On the other hand, a legal and compliance audit is principally focused on compliance with the law applicable to the entity. It is worth noting that a governance audit has an element of assessment of compliance with laws, but this is not as exhaustive as a legal and compliance audit. While a governance audit is conducted by a recognized and accredited by ICPSK professional, a legal and compliance audit is done by a legal professional in good standing with LSK. In some instances, an accredited ICPSK professional may also be a member of LSK hence competent to do both audits but the issues to be assessed will remain distinct.
All these audits seek to assess and confirm that the issuer’s financial, governance and legal requirements are met. Each audit is distinct. Where an accredited governance auditor is also a lawyer in good standing with the Law Society of Kenya, the lawyer can conduct the governance as well as legal/compliance audits.
Yes!The Authority is working in collaboration with ICPSK to develop governance audit standards, guidelines, manuals and toolkits which shall be used in the governance audit exercise which shall be in place to guide all governance audits under the Code.
An independent director is a member of a board of directors who does not have a material or pecuniary relationship with the company or related persons, is compensated through sitting fees or allowance and owns not more than five percent of the shares of the company. The Authority has noted that there is some inconsistency in the Code where Article 1.1.2 provides that an independent director should not hold any shares in the company. The Authority has clarified that a holding of not more than five percent of the shares of the company will allow a director to be considered as independent.After nine years of continuous service, an independent director is deemed to cease to be independent and if he or she remains on the board he or she will be required to be re-designated as a non-executive director.

A non-executive director refers to a member of the board of a company who does not form part of the management team and who is not an employee of the company or affiliated with it in any other way but can own shares in excess of 5% or may be a board member in excess of nine years.

The Code requires that the Board should establish relevant committees with written terms of reference. Some of the key functions that committees should be established to cover include audit, nominations, risk management, remuneration, finance and governance.Some of the committees specifically mentioned in the Code include nominations committee, audit committee and the remuneration committee. Each company hasdiscretion to set up such committees as it requires to meet its business needs.
It is the audit firm. The requirement for rotation seeks to enhance independence, objectivity and professional critique of the auditor.
Some policies, given their scope and volume, may need to be stand-alone documents in the interest of accessibility and understanding but this shall be at the discretion of each issuer subject to being able to evidence the specifics of relevant policies within the CG Scorecard.
Rotation will be assessed based on the period served even prior to March 2017 in order to promote the principles of transparency and independence that are central to effective external audit.
Some of the Board policies mentioned include those on diversity, remuneration, communication, related party transactions, conflict of interest, voting, stakeholder relations, whistle-blowing, disclosure, corporate social responsibility, environmental, social and governance, information technology, procurement, among others.These policies need not be in separate documents. Some policies can be merged. The fundamental requirement is for companies to have guiding documents to inform effective and transparent decision-making.
The Authority is developing a corporate governance scorecard, reporting templates, checklists and guidelines that will be used in assessing how and to what extent a company has applied the Code. In addition, the annual governance audit tools will be aligned to those used by the Authority in order to ensure consistent assessment of the soundness of corporate governance practices of an Issuer.
Yes!The Authority will publish the reporting templates, checklists and forms on its website for convenient access and use by issuers and other relevant entities.

Sign up for our Newsletter today

Contact Us

Embankment Plaza, 3rd Floor
Longonot Road, off Kilimanjaro Avenue, Upperhill
P.O Box 74800-00200, Nairobi Kenya
Tel: +254 20 2264400/ 2264900/ 2221910/ 2221869
Backup Wireless Lines: 0722 207767/ 020 2611464
Cell: +254 722 207767, Email: corporate@cma.or.ke
Copyright © 2018 Capital Markets Authority, 2014 ISO 9001:2008 Certified. All Rights Reserved.
Joomla! is Free Software released under the GNU General Public License.