CMA Regulatory Sandbox Ready to Receive Applications

Nairobi, 26 March 2019…The Board of the Capital Markets Authority (CMA) has approved the Regulatory Sandbox Policy Guidance Note (Regulatory Sandbox PGN) setting the stage for CMA to begin accepting applications for admission of fintech firms to its Regulatory Sandbox.

“We welcome fintech firms and innovators to apply for admission to the Regulatory Sandbox. Where they are successful, they will have a 12-month period to deploy and conduct live-tests of their innovative products, solutions, and services”, CMA Chief Executive Mr. Paul Muthaura said. The Sandbox is expected to also accelerate CMA’s understanding of emerging technologies, support adoption of an evidence-based approach to regulation and facilitate deepening and broadening of Kenya’s capital markets.

In line with the Authority’s investor protection mandate, Sandbox Participants will be required to comply with certain minimum regulatory requirements prescribed by law. CMA will, however, assess regulatory requirements to be temporarily modified during a Regulatory Sandbox test on a case-by-case basis. In this context, the Authority will provide guidance where it considers that a proposed innovation is already clearly addressed under existing laws and regulations and therefore not fit for inclusion in the sandbox to avoid the creation of regulatory arbitrage between players rendering equivalent products or services.

Upon exit from the Sandbox, participants will be considered for:

  1. grant of an existing applicable license or approval to operate in Kenya subject to compliance with relevant legal and regulatory requirements;
  2. grant of permission to operate in Kenya subject to compliance with the specified terms of a letter of no objection in respect of a business falling outside existing regulatory provisions; or
  3. denial of permission to operate in Kenya in light of regulatory concerns identified during the testing phase.

Mr. Muthaura noted that ‘where the testing phase highlights that there is need for a broader legal or regulatory reform, the Authority will provide regulatory guidance through the various tools at its disposal ranging from new regulations to guidelines or notices pursuant to Section 12 and 12A of the Capital Markets Act. “The opportunities created by a robust testing phase will ensure that subsequent regulatory prescription and guidance will be informed by the operational realities and insights gained from the Regulatory Sandbox test.”  

The PGN in all events specifies the circumstances in which the Authority can revoke or suspend an approval to participate in the Regulatory Sandbox as well as detailing the scope of regulatory and enforcement actions that can be taken in the event of participant misconduct.

Mr. Wycliffe Shamiah, Director of Market Operations and Head of the Authority’s Sandbox Review Committee noted that “at minimum, Sandbox applicants need to be companies incorporated in Kenya, including existing licensees of the Authority. For foreign applicants, they will be required to already be licensed by an equivalent capital markets regulator.” Fintech firms will be considered for admission based on their documented plans to offer innovative products, solutions or services with the potential to deepen Kenya’s capital markets following successful exit from the Sandbox.

“The Sandbox is however not an incubation centre and will not be able to receive applications based on ideas that have not been developed to the level of operational testing.” The Authority is nonetheless working with existing incubation centres who are in a position to support innovators to develop capital markets-related innovative ideas to a level of maturity at which they can then be admitted into the Sandbox. “The Sandbox will therefore not be considering for admission of purely conceptual proposed products, services or business models” Mr. Muthaura explained.

The Authority will treat all non-public information received in connection with a Sandbox application or test as confidential and proprietary to the concerned firms. However, Fintech firms will be responsible for taking applicable measures to protect their intellectual property.

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BACKGROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence.

The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors’ interest. For more information, please contact: Antony Mwangi, Head of Corporate Communications on This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Press Release

CMA to participate in World Investor Week 2017

Nairobi, 29 September, 2017…As one of the key initiatives of its Investor Education and Public Awareness Strategy, the Capital Markets Authority (CMA) has announced its participation in the World Investor Week (WIW) 2017 taking place from 2-8 October, 2017. The week-long event is a global outreach by securities regulators aimed at raising awareness about the importance of investor education and protection. The WIW 2017, an initiative of the International Organization of Securities Commissions (IOSCO), will see 72 countries in six continents executing investor focused activities.  

During WIW 2017, the Authority will conduct engagements targeting university students, investor education outreach through Huduma Centres in Meru and Eldoret, radio campaigns, a social media campaign and a competition on the Resource Centre Portal that was recently launched.

The World Bank Group, Organization for Economic Cooperation and Development (OECD), International Forum for Investor Education (IFIE), Financial Planning Standards Board (FPSB), Inter-American Development Bank (IDB), International Network of Financial Services Ombudsman Schemes (INFO) and G20 Germany are supporting the global outreach initiative. WIW is expected to offer an opportunity to IOSCO members to work in collaboration with all investor education and protection stakeholders at both the local and international level.  

The CMA Chief Executive Mr. Paul Muthaura observed, ‘the initiative will add impetus to the Authority’s Investor Education and Public Awareness Strategy, which has seen CMA reach over 60,000 people in 30 counties so far. CMA targets investors, potential issuers and market intermediaries. The Authority is cognizant of the critical role that financial literacy plays in the attainment of the Vision 2030 objective of increasing the savings level to 30 percent of the GDP.’

Mr. Muthaura noted that the Authority continues to build strategic alliances with Government Ministries, County Governments, financial sector regulators, academia, professional associations and market intermediaries to enhance the reach of its investor education program as it seeks to deepen the capital markets.

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Background Information on the Capital Markets Authority

The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence. The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors' interest. For more information, please contact Capital Markets Authority Head of Corporate Communications, Antony Mwangi on This email address is being protected from spambots. You need JavaScript enabled to view it..

Press Release

CMA yet again feted ‘Most Innovative Capital Markets Regulator in Africa’

Nairobi, 20 September, 2017The Capital Markets Authority (CMA) has been distinguished by yet another organisation as the ‘Most Innovative Capital Markets Regulator in Africa 2017’. The Award hosted by Africa Investor was conferred in New York, on Monday 18 September 2017 and seeks to profile African capital market success stories to the global investment community.

Eight capital markets regulators in Africa were nominated for the Award including South Africa, Mauritius, Nigeria, Namibia, Botswana, Uganda and Tanzania.

‘The Authority is delighted to receive the Africa Investor Award for a second time, following our previous recognition by them in 2015. This recognition is a validation of the significant collaborative effort that stakeholders in the industry have expended to promote the Kenya’s capital markets as a premier investment destination’, Capital Markets Authority Chief Executive Mr. Paul Muthaura said.

The CMA was recognized for milestones achieved in the implementation of the Capital Market Master Plan (CMMP), which seeks to position Kenya as the Heart of African Capital Markets and the gateway for regional and international fund flows. These innovations are central to the mobilisation of investor funds through the capital markets that are critical in facilitating infrastructure development and reducing pressure on traditional funding sources from government revenue.

The Award judges sought evidence of commitments to increasing transparency and efficiency, support for innovative technologies, employment of best regulatory practice, openness to foreign investors and efforts to create an enabling environment for the capital markets industry.

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BACKROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence.

The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors’ interest. For more information, please contact: Antony Mwangi, Head of Corporate Communications on This email address is being protected from spambots. You need JavaScript enabled to view it.

CMA CEO Gets International Recognition

Nairobi September 20, 2017……The Capital Market Authority (CMA) Kenya's Chief Executive, Mr. Paul Muthaura, has been elected the Vice Chairman of the Growth and Emerging Markets Steering Committee (GEM), representing the interests of over 75 percent of the membership of International Organization of Securities Commissions (IOSCO). GEM covers emerging markets including the BRICS, frontier and nascent capital markets with many of its members showing significant potential for economic growth in the long-term. The GEMC also includes 10 representatives to the G-20, which it works with intensively together with theFinancial Stability Board (FSB), towards the global regulatory reform agenda.

The election as the Vice Chairman of GEM adds another prestigious feather to Mr. Muthaura’s cap, being an elevation from his current position as the Vice Chair of the Africa Middle East Regional Committee (AMERC) of IOSCO. He further continues to serve on the IOSCO Board, to which he was elected in September 2014.

Kenya has been recognized as a leading voice in articulating policy concerns unique to emerging markets and developing economies and is fast gaining recognition as a reference point in discussions around technology innovations within the financial services sector globally.

Commenting on the recent appointment, Mr. Muthaura said; “The appointment is a welcome opportunity for Kenya to take a leadership position in the growth and emerging markets space and play a pivotal role in influencing policy discussions and global regulatory standards at the IOSCO Board level’’.

Mr. Muthaura added that his election as the GEM Vice Chair, cements Kenya’s position as a thought leader, given the major strides the country has made in transforming the capital market landscape by facilitating a robust legal and regulatory framework and introduction of new products, which serves to enhance issuer and investor confidence, while encouraging innovation.

Mr. Muthaura stands out among regulators in the growth and emerging markets for his role in spearheading the implementation of key reforms in the capital markets in Kenya, which have facilitated accelerated innovation and growth. Some of the key innovations include; the introduction of  principles-based approval regime for new products and services; the rollout of Global Depositary Receipts and Notes, Exchange Traded Funds, Real Estate Investment Trusts, and Exchange Traded Derivatives; and the overhaul of Kenya’s  Corporate Governance framework.

The recent appointment adds impetus to Mr. Muthaura’s role in developing practical solutions at GEM, AMERC and Board level in IOSCO to mitigate the unintended consequences of global regulatory reforms on emerging and frontier markets, strengthening Africa's voice in the Financial Stability Board and the G-20 work-streams related to capital markets issues and fostering new approaches to capacity building by leveraging expertise within the membership.

The appointment of Mr. Muthaura comes against the backdrop of continued implementation of the Capital Market Master Plan (2014-2023), the industry’s 10-year blueprint, designed to bolster industry efforts to ensure that Kenya attracts local and foreign interest and investment.

This has seen the introduction of new products and pursuit of ambitions to list 3-4 companies annually to broaden and deepen the capital markets in Kenya as Nairobi seeks to be established as an International Financial Centre.

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BACKROUND INFORMATION ON GROWTH AND EMERGING MARKETS COMMITTEE (GEM)

The Growth and Emerging Markets Committee (GEM) is the largest Committee within IOSCO, representing over 75 percent of the IOSCO's ordinary membership. Mr. Ranjit Ajit Singh, Chairman, Securities Commission, Malaysia, and Vice Chair of the IOSCO Board, is the Chair of GEM. The Committee seeks to promote the development and greater efficiency of emerging securities and futures markets by establishing principles and minimum standards, providing training programs and technical assistance for members and facilitating the exchange of information and transfer of technology and expertise.

GEM comprises 88 members and 19 non-voting associate members who include the world's fastest growing economies and 10 of the G-20 members. Emerging economies are expected to represent a growing portion of IOSCO membership as new members continue to join.

IOSCO is the only international standard setter that has a Committee solely responsible for emerging market issues. This inclusiveness increases IOSCO's effectiveness and positions it to play a bigger part in shaping the global regulatory framework: IOSCO has been allocated an extra seat at the Financial Stability Board Plenary for the Chairman of the GEM. The GEM also has a seat on the IFRS Foundation Monitoring Board.

The Africa/Middle East Regional Committee is one of the four regional committees constituted by IOSCO to focus on regional issues relating to securities regulation in the Africa/Middle East Region. The Committee is chaired by Mr. Mounir Gwarzo of the Securities and Exchange Commission of Nigeria and has 24 members from markets ranging from Financial Services Board South Africa, the Dubai Financial Services Authority, Capital Markets Authority Saudi Arabia, the Egyptian Financial Supervisory Authority and the West Africa Monetary Union.

BACKGROUND INFORMATION ON THE INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS (IOSCO)

The International Organization of Securities Commissions (IOSCO) is the international body that brings together the world's securities regulators and is recognized as the global standard setter for the securities sector. IOSCO develops, implements and promotes adherence to internationally recognized standards for securities regulation. It works intensively with the G20 and the Financial Stability Board (FSB) on the global regulatory reform agenda.

BACKROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence.

The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors’ interest. For further press information, please contact: Antony Mwangi, Head of Corporate Communications, on Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

As a member of IOSCO,  CMA will be participating through several upcoming initiatives in collaboration with stakeholders in the World Investors Week to promote greater investor education and protection worldwide from October 2nd to 8th, 2017. 

The World Investor Week (WIW) is a global campaign to raise awareness about the importance of investor education and protection and highlight the various initiatives of securities regulators in these two critical areas. IOSCO members that participate in the campaign provide, in their own jurisdictions, a wide variety of activities such as launching of publications or services, promoting contests, organizing events such as workshops and conferences, and conducting local/national campaigns.

Click the Link for more details:  http://www.worldinvestorweek.org/participants.html

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