CMA master plan to provide robust capital markets

November 23, 2011
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CMA Chief Executive Stella Kilonzo/FILE
NAIROBI, Kenya, Nov 23 – The Capital Markets Authority (CMA) has taken the first step in the development of a master plan that should guide its operations over the next five years as it seeks to facilitate the deepening of the capital markets.

CMA Chief Executive Stella Kilonzo disclosed that a steering committee, drawn from across all stakeholders, to conceptualise and implement the Capital Markets master plan has been developed.

The team, she added, had unanimous support from industry representatives including those from the Kenya Association of Stockbrokers and Investment Banks (KASIB), the Nairobi Securities Exchange, Central Depository and Settlement Corporation, investment banks, stockbrokers, fund managers, investment advisers, and collective investment schemes.

“The authority sees this meeting as a launching pad for the conceptualisation of a commonly owned Capital Markets master plan to serve as a catalyst for the coordinated growth of our market in line with Vision 2030,” she said after a meeting with the stakeholders.

Besides the master plan, the stakeholder session affirmed the importance of policy makers and legislators playing their critical role in putting in place all the necessary infrastructure and legislation on Anti-Money Laundering and Combating Terrorist Financing necessary to ensure Kenya is certified as premiere destination for capital.

The attainment of this status, it was noted was a critical step for the country to achieve its goal to be an International Financial Centre.

Kilonzo also reaffirmed the commitment of the CMA to work closely with the private sector to create a facilitative environment for the innovation of new products.

“The authority is honoured that the industry stakeholders have shown willingness to come together and discuss a shared strategy for executing the capital markets role in mobilising long-term resources to finance the Vision 2030,” the regulator added.

She pointed to the recent amendments to the Capital Markets Laws that have received the support of Parliament to facilitate the development of Self-Regulatory Organisations (SROs).

These entities, the CEO added, are expected to provide a framework for the industry to put in place adequate risk mitigation mechanisms to allow for effective product development with reduced regulatory intervention and achieve more voluntary compliance.

Acting KASIB chairman John Kirimi expressed the brokerage and investment banking community satisfaction with the move adding that it has adopted Risk-Based Supervision (RBS) implementation, developed by the Authority, at each stage of the process.

Kirimi confirmed that RBS models will not only address market stability but will also assist intermediaries to better address liquidity management and internal control.

He reiterated the support of the industry for the early conclusion of the demutualisation process and encouraged relevant players to address any pending issues to fast-track the process as soon as the current court process is concluded.

There was broad consensus amongst all attendees on the need for the industry to focus on coordinated approaches to capital markets industry investor education, market sensitisation, and marketing initiatives to harness the diverse skills, perspectives, and resources of the industry.

It was also agreed that it is critical for these joint marketing efforts to be rolled out at the county, national, regional, and international levels and be appropriately tailored for the diverse investor and issuer perspectives.

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