REMARKS BY MR. PAUL MUTHAURA, ACTING CHIEF EXECUTIVE CAPITAL MARKETS AUTHORITY, DURING THE WORKSHOP ON EAST AFRICAN COMMUNITY COUNCIL DIRECTIVES ON CAPITAL MARKETS LEGAL AND REGULATORY FRAMEWORK MARCH 3RD 2015, CROWNE PLAZA, NAIROBI
- The Principal Secretary, State Department of the East African Affairs, Ministry of EAC Commerce and Tourism
- The Chief Executive of the Nairobi Stock Exchange, Mr. Geoffrey Odundo
- Chief Executive of the Central Depository and Settlement Corporation, Ms. Rose Mambo
- Board Members and Chief Executives of Listed Companies and Market Intermediaries
- Distinguished Invited Guests
- Ladies and Gentlemen:
All protocols observed:
- It gives me great pleasure to join you for this important workshop and extend to you all a very warm welcome on behalf of the Capital Markets Authority. We gather here to seek ways to remove the existing challenges between cross-border capital markets businesses as well as add impetus to regional integration agenda.
- Ladies and gentlemen: We are glad for your continued support as we seek to consolidate the capital markets within the region. The benefits of an expanded region to market issuers of securities include capacity to raise huge capital required for projects with vast capital outlay as well as projects extending beyond boundaries of Partner States. In respect of the market players, a single market provides ease of establishment and access across the entire region and thus minimizing the resources to set up business and expand.
- In the 2014-2015 Budget Statement, the Cabinet Secretary for the National Treasury indicated that in order to enhance efficiency and effectiveness of regulation and supervision of the financial sector institutions he will be tabling to the National Assembly the new Bills for the regulatory and supervisory aspects of the financial services sub-sector and the administrative Bill for the establishment of the Financial Services Authority. The Authority plans to carry out a review of the regulations, rules and guidelines issued under the Capital Markets Act once the new Bills are enacted. We have commenced our assessment of priority areas for review as evidenced by the recently concluded research on impact of regulations on market development. Therefore, we will take the opportunity once the Bills are enacted to review all the regulations to align them with the Bills and also ensure that the regulations are all compliant with these EAC Council Directives.
- I would like to acknowledge the support of the East African Community Secretariat in facilitating this workshop. The main objective of this workshop is to highlight the key provisions in the Council Directives to elicit feedback from our key stakeholders. However, we reiterate that in order to ensure that we produce quality legislation, kindly scrutinize the drafts and send us your comments before the end of the exposure period, which is 10th March 2015.
- Ladies and gentlemen: The workshop today provides an opportunity to discuss the further developed 8 additional Directives that are on public exposure until 10th March 2015. During this period we invite you to give us your feedback.
- The Directives on public exposure touch on various aspects of our operations. In particular:
- We held an assessment of the capital market regulatory framework in the EAC against the new IOSCO Principles in 2014 and one of the key finding was that the scope of regulated activities require to be defined. It is for this reason that a draft Directive on Regulated activities has been prepared.
- There are service providers who provide analysis of securities but they currently don’t seem to fall within the perimeter of regulation and it is in this regard that a Council Directive on Evaluative and Analytical Services has been prepared.
- In order to facilitate the implementation of the Council Directive on Regional Fixed income Securities a draft Council Directive on Credit Rating Agencies has been prepared as well. These are just some of the Council Directives that are going to be covered in today’s session.
- As I conclude my brief remarks, I wish to also indicate that the recently launched Capital Markets Master Plan will certainly move our Kenyan capital markets and economy to the next level. We really appreciate your invaluable input in the development of both the CMMP. We are in the process of establishing the Working Groups to guide the implementation of the CMMP. We will once again rely on your support.
With these few remarks, it is now my pleasure to invite the PS Ministry of EAC Commerce and Tourism to make his remarks and officially open this Workshop.