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 came into being on December 15, 1989 when the Act was passed and was inaugurated in March 1990.
The CMA is 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
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 investors, the government, employees, issuers of securities and the market intermediaries.
The board of directors of the Authority consists of –
- A Chairman appointed by the President on the recommendation of the Cabinet Secretary of The National Treasury;
- Six other members appointed by the Cabinet Secretary;
- The Principal Secretary of the National Treasury or a person deputed by him;
- The Governor of the Central Bank of Kenya or a person deputed by him;
- The Attorney General or a person deputed by him;
- 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 with 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
- The Capital Markets Act;
- The Central Depositories Act, 2000
Regulations and Rules
- The Capital Markets (Collective Investment Schemes) Regulations, 2001
- The Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002
- The Capital Markets (Licensing Requirements) (General) Regulations, 2002
- The Capital Markets (Takeovers and Mergers) Regulations, 2002
- The Capital Markets (Foreign Investors) Regulations, 2002
- The Capital Markets Tribunal Rules, 2002
- The Capital Markets Asset Backed Securities Regulations 2007
- The Capital Markets (Registered Venture Capital Companies) Regulations 2007.
- The Capital Markets(Conduct of Business) (Market Intermediaries) Regulations 2011
- The Capital Markets(Corporate Governance) (Market Intermediaries) Regulations, 2011
- The Capital Markets (Demutualization of the Nairobi Securities Exchange Limited) Regulations 2012
- The Capital Markets Futures Exchanges Licensing Requirements Regulations 2013
- The Capital Markets Real Estate Investment Trusts Collective Investment Schemes Regulations 2013
Guidelines
- Guidelines on Corporate Governance Practices by Public Listed Companies
- Guidelines on the Approval and Registration of Credit Rating Agencies
- Guidelines on Financial Requirements for Market Intermediaries
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.
Who Are Our Licensees
- The Authority licenses the following categories of market players:
- Securities Exchanges
- Central Depositories
- Investment Banks
- Stockbrokers
- Dealers
- Investment Advisers
- Fund Managers
- Authorized Securities Dealers
- Authorized Depositories (Custodians)
- Credit Rating Agencies
- Venture Capital Companies
VISION AND MISSION
Our Vision
To be an innovative regulator of a robust and globally competitive capital market.
Our Mission
To make Kenya’s capital market the premier choice for investors and issuers through robust regulation, supporting innovation and enhanced investor protection.
Our Core Values
To fulfill its mandate, pursue the Vision and accomplish its Mission the CMA will be guided by its core values of:
- Integrity– We are committed to acting at all times with honesty, fairness, accountability, transparency, ethically and above board in all our operations;
- Commitment– We shall perform our duties with the highest level of professionalism, dedication with a view to exceeding the expectations of our clients and stakeholders;
- Responsiveness – We are sensitive to and will deal with issues and situations affecting all our stakeholders in proactive and timely manner, using flexible decision making processes;
- Innovation and Continuous learning– We are committed to facilitating continuous learning and innovation; and
- Collaboration and Teamwork– We are committed to teamwork within the Authority and collaboration with our partners in the provisions of our services.
Strategic Objectives
The principle objectives of the Authority are:
- Ensuring a robust, facilitative and responsive policy and regulatory framework for capital market development and efficiency;
- Facilitate the development, diversification and uptake of capital markets products and services;
- Ensure sound market infrastructure, institutions and operations;
- Leveraging technology to drive efficiency in the capital markets value chain;
- Ensure optimal institutional efficiency and effectiveness of CMA; and
- Enhance strategic influence.
