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CMA Act under review

NAIROBI, Kenya, Feb 3- The Nairobi Stock Exchange (NSE) and Central Depository and Settlement Corporation (CDSC) will soon be self-regulatory organisations once amendments to the Capital Markets Authority Act and the Licensing Regulations are effected.

Capital Markets Authority (CMA) Chief Executive Officer Stella Kilonzo said on Wednesday that the regulator was proposing a review of the Act which would give the security exchange powers to enforce certain provisions and ensure that some standards are applied and adhered to once the demutualisation exercise – which involves the separation of the private ownership of the bourse from the management – was completed.

“What we are proposing is the creation of a separate unit that will conduct the first line regulation within the NSE (Nairobi Stock Exchange),” she said in reference to the advertisement that they had put in the local dailies inviting stakeholders and the public to send in their comments on the draft amendments to the law within 30 days.

The unit will be concerned with ensuring the compliance of listing requirements of the members as well as that of their trading rights which would go a long way in safeguarding investors’ interests.

“The main objective of the self regulating organisations will be to regulate the operations, standards of practise and business conduct of the users of the services,” read the advert posted in the dailies on February 1.

As a regulator, Mrs Kilonzo said CMA would play the oversight role of ensuring that all operators play by the set rules and help deepen the financial services sector.

“We have to satisfy ourselves that that is in place and that has to be done within a certain framework,” she explained.

At the same time, the CEO said the demutualisation of the NSE would be underway as soon as the Demutualisation Bill received a Cabinet nod. The Bill was presented to Cabinet late last year.

The draft Bill was prepared by the steering committee that was set up to oversee the process and presented to the Cabinet by the parent Ministry of Finance. Upon Cabinet’s approval, the Bill which has been in the pipeline since 2007 and which is expected to improve governance systems in the bourse, will be tabled before Parliament for debate and enactment.

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Mrs Kilonzo spoke when the CMA was awarded an ISO 9001: 2008 Quality Management Systems certificate from the Kenya Bureau of Standards (KEBS) that will among other things help instil confidence in the regulator’s services and products.

“By receiving the certification, it is a public undertaking that means that we will abide by certain standards for all aspects of work and we are committed to that,” the CEO said adding that they would also strive to improve their services.

While presenting the certificate, KEBS lauded the regulator for recognising the need to deliver quality service which would develop the financial services sector.

“The ISO 9001 standard is an internationally recognised standard that will give you the competitive edge and will help you stand out as a leading organisation with best practises in the financial sector,” said KEBS General Manager in charge of Standards Development Eva Oduor.

She pledged the Bureau’s commitment to assist local industries improve on the quality of their products and services and ensure that the customers interests are not compromised.

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