Regulating Kenya’s securities markets an assessment of the capital markets authority’s enforcement jurisprudence

Abstract

The importance of an optimal regulatory and enforce ment matrix in enhancing securities markets cannot be overemphasized. Countries with deep and vibrant sec urities markets generally have effective regulatory and enforcement philosophies. This paper seeks to chara cterize the regulatory and enforcement paradigms of Kenya’s securities markets in the context of the global reg ulatory and enforcement philosophies. From the anal ysis, it is evident that the regulatory paradigm is indissolubl y government or national with nominal self-regulati on. Although the statutory framework enshrines self-reg ulation, the relevant provisions are ambiguous and remain ineffectual. The notion of self-regulation remains an illusion. The regulator enjoys plenary legislati ve and supervisory powers over market intermediaries and l isted companies without being subject to meaningful accountability mechanisms. Amendments to the Capita l 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 philoso phy. Enforcement actions have been intermittent and reflect no imperatives .