The Capital Markets Authority (CMA) has been feted as the ‘Most Innovative Capital Markets Regulator in Africa 2019’ by the International Finance Magazine in recognition of its ongoing efforts to facilitate innovations in the capital market in Kenya.
“The Authority is pleased to receive this recognition for the fifth consecutive year from this respected publication, which is a testament to the Authority’s commitment to supporting innovation as a catalyst for transformative growth of the capital markets,” said CMA Chief Executive, Paul Muthaura.
He said the Authority aims to leverage technology to drive efficiency in the capital markets value chain.
“We target to effectively balance robust regulatory and compliance requirements with the objectives of market deepening and growth. This involves consistent evaluation of regulatory approaches to ensure they do not operate as an obstacle but rather as a facilitator for potential innovators who want to focus on making financial services more reliable, efficient, convenient and affordable,” Muthaura said.
CMA has been recognized consistently as a leading voice in articulating policy concerns unique to emerging markets and developing economies in various global standard-setting bodies such as the International Organization of Securities Commissions (IOSCO) on whose board he has sat since September 2014.
The Authority has been credited for introducing the Regulatory Sandbox in May 2019 to support innovations in the capital markets with three firms admitted so far. The Regulatory Sandbox is a regulatory framework offered to financial technology firms to facilitate live testing of innovative products, solutions and services.
To cement Kenya’s efforts towards supporting innovation in the capital markets, CMA was admitted to the Global Financial Innovation Network (GFIN) in January 2019, a key milestone in supporting the transformation of the capital markets in Kenya through nurturing innovation. GFIN is an international network of 38 financial services regulators and related organizations, committed to supporting financial innovation.
To facilitate the development, diversification, and uptake of capital markets products, the Authority facilitated the launch of various products in 2019. A green bond market was launched and the first unlisted green bond approved in August 2019 to facilitate capital mobilization of Sh5 billion, and the Derivatives Market was launched by the Nairobi Securities Exchange in July 2019 following the successful completion of a six-month Pilot Test Phase in 2018.
Investor protection also remains a central focus for the Authority given that market participation is a function of the confidence of investors that their investments are safe. CMA is in the process of procuring a new, robust, multi-asset surveillance system that will be able to conduct market surveillance on the growing scope of products being introduced.
Following the launch of the Authority’s Strategic Plan 2018-2023 and its continued implementation, Muthaura expressed confidence that the capital markets will continue to evolve in order to support the attainment of the aspirations of the Government’s Big Four Agenda through the provision of innovative products to supply the much-needed long term funding to help Kenya achieve double-digit growth as envisaged in the Vision 2030 Economic Blueprint.