Regional markets adopt Kenyan ethical standards

Deputy president William Ruto (L), president of the African Securities Exchange Association Oscar Onyema and CEO of the Nigerian stock exchange and Chief Executive Capital Markets Authority Paul Muthaura, during the launch of 7th Building African Financial Markets seminar at Villa Rosa Kempinski [Edward Kiplimo, Standard]

Kenya will export standards for individuals allowed to take part in the capital markets.

This is after the regional heads of securities adopted fit and proper test.

The East Africa Securities Regulatory Authorities (EASRA) said on Thursday that the uniform standards will ensure only operators who meet the highest ethical standards operate in the region.

"The framework has provisions focusing on the ability of a person to carry on a regulated activity competently honestly and fairly," EASRA Chair Paul Muthaura said.

This cooperation is seen as a way to handle the challenges over the recent past where the region has been witnessing corporate governance issues in the financial markets.

Kenyan businesses and managers have been involved in cross-border crises, especially after the Imperial Bank’s collapse, which operated a subsidiary in Uganda.

The Imperial Bank saga, the closure of Uchumi Supermarket without paying suppliers kicked off a diplomatic tiff with Ugandans who are disappointed with Kenyan investors' behaviour in the country.

This year, Prime Bank Chairman Rasiklal Kantaria was mentioned in a case over the Crane Bank woes.

The cooperation recognises cross-listing by local firms in the region that include East African Breweries, Equity Bank, Jubilee Holdings Ltd, Umeme Ltd, Centum Investments Ltd, Kenya Airways, Kenya Commercial Bank and Nation Media Group.

The regional body has also agreed to set up a sandbox - an insulated testing environment, for new technologies as the regulators catch up with their impact on the market.

Regulators have been unable to catch up with the burst of technology which has exposed locals to the possibility of losing money.

About 50,000 people - brokers and dealers were conducting online forex trade without approval, mainly using offshore platforms not overseen by Kenyan regulators.

CMA had to ban the online forex trading to develop rules, including raising Sh50 million in the minimum capital to protect consumers.

On Tuesday, CMA launched an online forex broker EGM Securities. Mr Muthaura said the license is a proof of commitment to comply with regulatory requirements.

 

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