CMA cracks the whip against firms

May 4, 2009

, NAIROBI, Kenya, May 4 – An investment bank and two stockbrokerage firms have one month to put their house in order or lose their trading licences. 

Suntra Investment Bank, Ngenye Kariuki and Company and Reliable Securities have been granted extensions of their 2008 licences till June and the Capital Markets Authority (CMA) indicated that the firms were required to iron out outstanding issues to qualify for 2009 licenses.

"The Authority believes the issues resulting in the extensions of their 2008 licences can be fully addressed within the given period,” a statement from CMA Chief Executive Stella Kilonzo indicated.

"If the Authority had reason to believe the issues were grave it would have taken further action.”

Mrs Kilonzo said these companies will continue to do business as usual until the end of June.

She further disclosed that CMA had suspended the licenses of two investment advisers, Franklin Management and Consultants and Inter-alliance International.

"These firms will therefore not conduct the business of an investment adviser until the suspension is lifted," she said.

Mrs kilonzo further revealed that the license of Old Mutual Asset Managers (EA) Limited had been revoked at the request of the Old Mutual Group to enable the firm consolidate its licensed activity under Old Mutual Asset Managers (K) Limited whose license had been renewed.

She said CMA was considering doing away with annual licensing as it embraced risk-based supervision which would put greater emphasis on identification of emerging risks and assessing the adequacy of each intermediary’s risk management systems on a continuous basis.

“We would like to encourage the investing public to fully participate in the capital market,” she said.

Mrs Kilonzo said the Authority had renewed the licenses of Investment Banks, Fund Managers, Stockbrokers, Investment Advisors, Authorized Depositories, Collective Investment Schemes (CIS) and Employee Share Ownership Plans (ESOPS) and in so doing the Authority had upgraded Dry Associates Limited to an Investment Bank.

She said CMA and the Kenya Association of Stockbrokers and Investment Banks (KASIB) were in discussions to form an industry committee to come up with modalities of ensuring the firms whose 2008 licenses had been extended attain 2009 licenses at the earliest opportunity.

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