Overview of Regulatory Framework

The capital markets industry operates within a certain regulatory framework which the players in this industry need to adhere to in the course of offering their services. Since inception, the Authority has strived to deepen and broaden the capital markets by developing a regulatory framework that facilitates the development of new financial products and institutions through research and ensuring fairness and orderliness in the capital markets industry. The regulatory framework of the Authority is comprised of the following:

Main Acts:

1. The Capital Markets Act;
2. The Central Depositories Act, 2000

Regulations and Rules:

• The Capital Markets (Collective Investment Schemes) Regulations, 2001
• The Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002
• The Capital Markets (Licensing Requirements) (General) Regulations, 2002
• The Capital Markets (Takeovers and Mergers) Regulations, 2002
• The Capital Markets (Foreign Investors) Regulations, 2002
• The Capital Markets Tribunal Rules, 2002
• The Capital Markets Asset Backed Securities Regulations 2007
• The Capital Markets (Registered Venture Capital Companies) Regulations 2007.
• The Capital Markets(Conduct of Business) (Market Intermediaries) Regulations 2011
• The Capital Markets(Corporate Governance) (Market Intermmediaries) Regulations, 2011
• The Capital Markets (Demutualization of the Nairobi Securities Exchange Limited) Regulations 2012
• The Capital Markets Real Estate Investment Trusts Collective Investment Schemes Regulations 2013
• The Capital Markets (Derivatives Markets) Regulations, 2015

Guidelines:

1. Code of Corporate Governance Requirements for Issuers of Securities to the Public, 2015
2. Guidelines on the Approval and Registration of Credit Rating Agencies
3. Guidelines on Financial Resource Requirements for Market Intermediaries

The above Acts, Regulations as well as the Guidelines are what the Authority uses to supervise and regulate the market intermediaries. The regulatory framework is crafted in such a way that it encourages self regulation to the maximum practical extent.