7.2: Restructure legal framework for regulation

Measurement

Combination of regulatory and legislative integration leads to optimum outcome for market users and participants.

Working Group
WG3
Implementation Progress

The Capital Markets Authority Bill was a key input into the yet to be published FSA Bill. The FSA Bill was approved by Cabinet on 6 April 2017.

Operational Bills (e.g. the Securities, Investments and Derivatives Bill) are expected to be prioritized once the FSA Bill is enacted. As at 31 March 2019, the Authority continues to engage the National Treasury for updates on progress in the publication of the SID Bill.

 

Timelines
2016-2020
 
Status
In Progress (Behind Schedule)
Measurement

Revised capital markets legislation.

Working Group
WG3
Implementation Progress

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 FSA 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 FSA Bill received cabinet approval on 6 April 2017.

The Capital Markets Act was 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.

Timelines
2014-2016
 
Status
Completed
Measurement

High quality and facilitative legislation.

Working Group
WG3
Implementation Progress

CMA subjects all regulatory and policy proposals to public exposure and organises sensitisation workshops.
CMA has in place 4 working groups that are established under the IC and are responsible for taking on the implementation of actions set out in the Master Plan.

The WGs 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 WGs draw upon external expertise provided by international or local consultants.

Timelines
2014-2016
 
Status
Continuous
Measurement

High quality and facilitative legislation.

Working Group
WG3
Implementation Progress

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

Timelines
2014-2016
 
Status
Continuous
Measurement
Reduction in delays in keeping legislation up to date with market developments.
Working Group
WG3
Implementation Progress

Proposals to exempt the financial services sector from the requirements of the Statutory Instruments Act  were submitted to the National Treasury for consideration in 2016.

As at 31 March 2019, CMA is still in engagement with the NT with a view of having the financial service sector legislation exempted from the requirements of the Statutory Instruments Act.

Timelines
2014-2016
 
Status
In Progress (Behind Schedule)
Measurement
Financial Law Review Panel in place.
Working Group
WG3
Implementation Progress

The FLRP is a body that will be composed of leading domestic and international market players that will act as a think tank for early identification of potential legislative gaps that could affect the functioning of financial markets. The FLRP will play a key role in supporting review of financial laws that would also guide the NIFCA once operationalized.

The Board, in January 2018, approved the establishment of the FLRP with members drawn from various fields of expertise that consists of capital markets law, commercial law practice, tax law, Islamic finance, entrepreneurship, domestic/regional Investment banking, financial markets operations, international capital markets practice and legislative drafting.

In February 2019, the Board of the CMA approved appointments of 16 members to the FLRP.

On 29 March 2019 the Board of the CMA, established the FLRP.

Click here to access the profiles of FLRP

Timelines
2016-2020
 
Status
Completed
Measurement
More effective court arrangements.
Working Group
WG3
Implementation Progress

CMA continues to engage in different ways to build support in the development of financial expertise in courts as illustrated below:

  1. CMA participated in the East African Judges and Magistrates Annual Conference in Mombasa in October 2018 and presented an infographic on the Capital Markets Master Plan.
  2. CMA in collaboration with the National Council for Law Reporting published the Capital markets Authority Case Digest 2018 as a strategy of educating the Judiciary.

 

Timelines
2016-2020
 
Status
In Progress (Within Schedule)