Capital Markets Authority Reviews Collective Investment Schemes Framework

the cumulative inflows in 12 months to January this year totalled $3,113 million (Kshs. 342.4 billion) compared to $2811 million (Kshs. 309.2 billion) in 12 months to January 2020 which represents a 10.8% increase.

The Capital Markets Authority of Kenya has onboarded a consultant to review the Capital Markets (Collective Investment Schemes) Regulations, 2001 to make them more robust and facilitative to market dynamics.

With support from FSD Africa, the proposed legal framework review is designed to address stakeholders’ concerns in line with the aspirations of the 10-year Capital Market Master Plan (2014-2023).

“The proposed legal framework review is designed to address stakeholders’ concerns with the current framework and facilitate the development of a robust asset management sector,” said CMA chief executive Wyckliffe Shamiah in a statement Tuesday.

“A need has (also) emerged for sophisticated products such as pooled funds that are well managed and currently not available in the existing asset classes. There are also calls for greater flexibility and risk/investment strategy to determine portfolio allocation among asset classes.”

The review of the Regulations follows the issuance of the new Guidance to Fund Managers of CISs on Valuation, Performance Measurement, and Reporting (Guidance) by CMA in September 2020.

The Guidance, which takes effect on 1 January 2021, is expected to entrench international best practices in the capital markets by standardizing investment performance measurement and presentation by collective investment schemes.

The total asset base of the 19 active licensed collective schemes amounted to KSh88.1 billion by the end of June 2020, having grown from KSh76.1 billion in December 2019.

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