7.2: Restructure legal framework for regulation

Measurement
CMA to engage with Treasury and lawmakers, with input from financial services lawyers through The CityUK
Working Group
Achievement

The Capital Markets Authority Bill was a key input into the yet to be published Financial Services Authority Bill. The FSA Bill was approved by Cabinet and is still being reviewed by the State Law Office.

Operational Bills (e.g the Securities, Investments and Derivatives Bill) are expected to be prioritized once the FSA Bill is enacted. The Authority will continue to follow up with National Treasury for updates on progress in the publication of of the FSA Bill and the SID Bill.

Both the CDSC and CBK CSD are yet to submit their self-assessment reports on compliance with the PFMIs.

Status
Time bad
Measurement
Review to be carried out under the auspices of CMA, potentially with input from international financial services lawyers through The City UK MOU and further technical assistance from IOSCO.
Working Group
Achievement

The frameworks are reviewed on an ongoing basis.

The Authority in 2012 finalized the development of the Capital Markets Authority Bill and the Securities Investments and Derivatives Bill to address the gaps identified and to ensure that Kenya's securities legislation meets international standards following an IOSCO benchmark review in 2010.

In 2013, a Presidential Task Force report on Parastatal Reforms recommended the consolidation of financial sector Regulators and a Financial Services Authority Bill was developed which seeks to establish an Authority with the mandate of regulating the capital markets, insurance, pensions and Sacco sectors. The Bill has incorporated the IOSCO principles on securities regulation. The Bill is yet to be submitted to Parliament.

The Capital Markets Act has been amended in 2013 and 2016 to provide for inter alia-
derivatives, principle based regulation, refinement of provisions dealing with Asset Backed Securities and Public Offers, expansion of the mandate of the Authority to regulate Online forex trading and Commodities markets.

The various amendments to the Act comprise at least 80% of amendments recomended in 2010 IOSCO benchmark review and what is contained in the Capital Markets Authority Bill, 2011 and the Securities, Investments and Derivatives Bill which were developed subsequent to the review.

Status
Completed
Measurement
CMA to review international good practice and consult with market stakeholders and Treasury on standards for consultation. CMA to introduce enhanced consultation procedures.
Working Group
Achievement

The Authority subjects all regulatory and policy proposals to public exposure and organises sensitisation workshops.
The Authority has in place 4 working groups that are established under the Implementation Committee and are responsible for taking on the implementation of actions set out in the Master Plan.
The working groups comprise of representatives from relevant industry associations, market infrastructures, departments within various financial sectors regulators and a host of other market participants. At times the working groups draw upon external expertise provided by international or local consultants.

Status
Completed
Measurement
CMA and National Treasury to discuss with National Assembly.
Working Group
Achievement

Engagements with Parliamentary Committee Finance and Planning to fast track capital markets legislation is continously done as and when necesary.

Status
Completed
Measurement
CMA to discuss with National Treasury and National Assembly scope to fast-track subsidiary legislation. Enact changes to extent possible.
Working Group
Achievement

Proposals to exempt the Financial Services Sector from the requirements of the Statutory Instruments Act submitted to the National Treasury for consideration in 2016.

Status
Time bad
Measurement
CMA to discuss with financial market lawyers on arrangements for setting up a Financial Law Review panel.
Working Group
Achievement

The proposal for the establishment of the Financial Law Review Panel has been revised in accordance with the Authority's Board's guidance. To be submitted to the next board meeting in January 2018.

The proposal for the establishment of the Financial Review Panel was approved by the Board in January 2018. Establishment of the Panel is underway.

Status
In Progress
Measurement
CMA to discuss with Attorney General the possibility of enhanced training for judges and the establishment of specialist tribunals to hear cases relating to financial regulation, where purely in relation to capital market cases or on an integrated basis.
Working Group
Achievement

There is an ongoing engagement with the Judiciary for capacity building.
The FSA bill provides for the Financial Services Sector Tribunal.

Status
In Progress

Key

No Progress
Behind Schedule
Ahead of Schedule