The Capital Markets Authority (CMA) is a Kenyan government agency responsible for regulating and developing the country’s capital markets. It ensures markets are orderly, fair, efficient, and that investor confidence and market integrity are maintained.

Legal & Regulatory Basis

The CMA operates under the Capital Markets Act of Kenya, which grants it powers to license, supervise, monitor, and enforce regulations for market intermediaries, securities issuances, and trading. It also issues regulations, guidelines, and policy instruments to guide capital market activities.

Key Objectives & Functions

Regulation & Supervision

Licensing of brokers, investment banks, fund managers, and other intermediaries.

Monitoring compliance with laws and regulations.

Overseeing securities issuance and trading activities.

Market Development

Introducing new products such as real estate investment trusts (REITs), asset-backed securities, and exchange-traded products.

Supporting financial innovation through initiatives like the regulatory sandbox.

Investor Protection & Education

Ensuring investors are informed and treated fairly.

Managing the Investor Compensation Fund to protect investors from losses due to intermediary failures.

Enforcement

Investigating misconduct, fraud, and violations of securities laws.

Enforcing penalties and safeguarding market integrity.

Facilitating Access & Inclusion

Promoting wider participation in the capital markets by retail investors and the Kenyan diaspora.

Enhancing market infrastructure with electronic platforms for more efficient trading.

Governance & Structure

The CMA is led by a board of directors, including a chairperson, chief executive officer (CEO), government representatives, and appointed members. The CEO oversees daily operations, while the board sets overall policy and strategy.

Recent Strategic Focus

Strategic Plan 2023-2028: aimed at strengthening institutions, inclusivity, service delivery, and responding to emerging capital market issues.

Market Stability Reports: providing regular updates on the health of the capital markets.

Digital Platforms & Innovation: fostering growth of mobile trading, fintech solutions, and digital financial products.

Key Challenges

Low public awareness and limited investor education.

Slow adoption of new financial products due to regulatory or market barriers.

The need for regulatory adaptation to rapid technological change, including fintech and digital assets.

Shallow liquidity and relatively low participation in some segments like bonds and derivatives.