Capital markets regulation
International Journal of Humanities and Social Science
Vol. 2 No. 20 [Special Issue – October 2012]
Regulating Kenya’s Securities Markets: An Assessment of the Capital Markets
Authority’s Enforcement Jurisprudence
Dr. Jacob K. Gakeri
Senior Lecturer
School of Law, University of Nairobi
Kenya Box 30197 Nairobi, 0010 GPO Kenya.
Abstract
The importance of an optimal regulatory and enforcement matrix in enhancing securities markets cannot be overemphasized. Countries with deep and vibrant securities markets generally have effective regulatory and enforcement philosophies. This paper seeks to characterize the regulatory and enforcement paradigms of Kenya’s securities markets in the context of the global regulatory and enforcement philosophies. From the analysis, it is evident that the regulatory paradigm is indissolubly government or national with nominal self-regulation.
Although the statutory framework enshrines self-regulation, the relevant provisions are ambiguous and remain ineffectual. The notion of self-regulation remains an illusion. The regulator enjoys plenary legislative and supervisory powers over market intermediaries and listed companies without being subject to meaningful accountability mechanisms. Amendments to the Capital Markets Act and its Regulations have consolidated the
Capital Markets Authority’s position as a paramount regulator. Finally, the enforcement history of the Capital
Markets Authority discloses no decipherable philosophy. Enforcement actions have been intermittent and reflect no imperatives.
This paper examines Kenya’s securities markets regulatory and enforcement paradigms and their impact on market development. Using the statutory mandate, influence of the executive, the Capital Markets Authority
(CMA) and the Nairobi Securities Exchange (NSE) over the securities markets, it assesses whether the regulatory model is Government, self or a configuration of the two. Drawing from the tenures of different chief
Vol. 2 No. 20 [Special Issue – October 2012]
Regulating Kenya’s Securities Markets: An Assessment of the Capital Markets
Authority’s Enforcement Jurisprudence
Dr. Jacob K. Gakeri
Senior Lecturer
School of Law, University of Nairobi
Kenya Box 30197 Nairobi, 0010 GPO Kenya.
Abstract
The importance of an optimal regulatory and enforcement matrix in enhancing securities markets cannot be overemphasized. Countries with deep and vibrant securities markets generally have effective regulatory and enforcement philosophies. This paper seeks to characterize the regulatory and enforcement paradigms of Kenya’s securities markets in the context of the global regulatory and enforcement philosophies. From the analysis, it is evident that the regulatory paradigm is indissolubly government or national with nominal self-regulation.
Although the statutory framework enshrines self-regulation, the relevant provisions are ambiguous and remain ineffectual. The notion of self-regulation remains an illusion. The regulator enjoys plenary legislative and supervisory powers over market intermediaries and listed companies without being subject to meaningful accountability mechanisms. Amendments to the Capital Markets Act and its Regulations have consolidated the
Capital Markets Authority’s position as a paramount regulator. Finally, the enforcement history of the Capital
Markets Authority discloses no decipherable philosophy. Enforcement actions have been intermittent and reflect no imperatives.
This paper examines Kenya’s securities markets regulatory and enforcement paradigms and their impact on market development. Using the statutory mandate, influence of the executive, the Capital Markets Authority
(CMA) and the Nairobi Securities Exchange (NSE) over the securities markets, it assesses whether the regulatory model is Government, self or a configuration of the two. Drawing from the tenures of different chief