The Chairman and Board of Directors of the Capital Markets Authority
Chairmen, Board Members, Chief Executives and Industry Executives
Distinguished markets stakeholders
Ladies and Gentlemen:
Good evening to you all and thank you for gracing this brainstorming forum for industry stakeholders;
We have convened here on three main fronts. Firstly, this milestone event is a unique meeting of minds to dialogue
Secondly, we would like to celebrate with all of you who are the innovators of this industry that have created wealth and transformed the lives of Kenyan’s through enhanced access and improved service delivery.
Thirdly we are celebrating the Capital Markets Authority’s recognition as the most innovative regulator of capital markets in Africa, an award conferred by Africa Investor Pan African award series in New York recently;
As the Chair of the committee of the Board of the Authority responsible for stewardship on all technical and policy matters, and on behalf of my Chairman, present here this afternoon, I can confirm the Authority’s commitment to doing things differently but for the better. Innovation, while largely acclaimed in the ICT goes beyond digitization. I work in the banking sector and I can attest to the transformation that technology and innovation have brought to the ideas of financial inclusion and efficiency. The good news is that the entire economy stands to benefit from such aggressive competition within the financial markets which will eventually translate into greater efficiency in terms of service delivery and cost;
Ladies and gentlemen: We are honoured to note that recognition for efforts towards innovation is not new to the Authority. Barely a year ago, the Authority earned the Microsoft Global Dynamics Customer Excellence Awards 2014 for implementing its new ERP and Risk based Supervision System. This solution which is a mix of financial, customer relationship and supply chain management solutions has helped the Authority work more effectively by facilitate business process re-engineering aimed at enhancing efficiency and service delivery. However, my job this evening is to share with you the more recent true innovations that have been realized in our market.
In this regard, recently we have experienced the roll out Equity Linked Notes and Credit Linked Notes to broaden the fixed income market; the framework for real estate investment trusts catering for both traditional income REITs as well as the home grown Development REITS is a first of its kind in the globe. The Growth Enterprise Market Segment at the Nairobi Securities Exchange has attracted four new listings in under two years. The markets has seen the development of shariah-compliant asset classes under Collective Investment Schemes in addition to the Authority licensing two shariah-complaint Investment Banks. We of course continue to see innovative back office systems being introduced by market intermediaries such as fund managers, stockbrokers and investment to improve client access and reach.
Ladies and gentlemen: In order to maintain this momentum, the Authority is among the first jurisdiction in Africa to develop a principles-based approval framework, specifically designed to facilitate the coming to market of unregulated innovations. We have already granted a no-objection for a crowdfunding platform that plans to source funds from outside Kenya to finance local Small and Medium Enterprises, while we recently published a Policy Guidance Note to support the listing of Exchange Traded Funds and target to use the same tool to support the issue of other products such as Global Depository Receipts and Global Depository Notes;
Notwithstanding this, we remain conscious that the regulator is merely a facilitator. Without industry investing in research and innovation new products and services could not be brought to the market. Remember, as outlined in the CMMP, the main driver of innovation must be market participants themselves, identifying opportunities and developing new products and services to meet them. Our role is to support innovation, transparency and competition.
Before we go into a more celebratory mood later this evening, and as we hear from the upcoming panel on opportunities for increased innovation, we wish to encourage you all to proactively engage one another and us as the regulator on additional products and services that will continue to deepen the capital markets in Kenya.
Ladies and gentlemen: As I conclude, I would like to reassure industry stakeholders that the Authority will continue support new ideas and thinking so as to develop our markets to even greater heights. By so doing, we will be inching closer to realizing the key role of the capital markets in mobilizing long term funding to support critical development projects in Kenya as espoused in the Vision 2030 Economic Blue Print.
I would also like to thank you all again for all your support. I must also recognize our development partners who have been very key in extending technical assistance to support new ideas, the Kenya Government and other policy makers that have facilitated an enabling policy and institutional environment.
Ladies and gentlemen: today is about bonding………..it is about celebrating, but also about boldly raising issues that will help in developing our market further. In a few hours we will be joining hands with fellow Kenyans in remembering Mashujaas, who just like you, have played a big role in improving the lives of Kenya.
It is now my pleasure to declare the stakeholders’ round table officially open and to hand over to Paul Muthaura and the esteemed panelists to challenge our minds.
I wish you all most fruitful deliberations.