After taking a public beating from almost everybody in the country (from the President down to school kids) the Capital markets Authority (CMA) has decided to announce how it will bite back with a raft of new proposals posted at its website
- Raises stockbroker share capital to 50 million shillings (~$800,000) from the current 5 million, while that of investment banks goes up to 250 million
- Bars people who have been convicted of an economic crime from being brokers - But since no one gets convicted of economic crimes in Kenya, how about being associated with a collapsed firm? The new law says anyone who previously worked at another firm must get clearance from the former (but what if it collapsed?).
- owner/ managers: Owners cant be day to day managers, and no one can own more than 25% of a broker/i-bank
- Brokers must also maintain lists of employees and keep better records absolutely!
- best of all they must publish half yearly financial results in the newspapers, and also get insurance cover equivalent to 5 x their daily turnover (good luck with that),
and some indigestion perhaps
But the CMA also gives itself a lot of work to do, and which it may not be able to keep up with:
- Brokers can't close office / or open one without notifying CMA
- brokers must report any overdrawn customer account within 24 hours
- Brokers will forward monthly accounts, and quarterly portfolio reports to CMA.
- Investor compensation fund is now a CDS compensation fund (what’s that, and who runs it?)
- muzzles agents; agents can’t work for more than one broker
- sad news: today's fatal plane crash in S. Sudan has a Kenyan connection
- New stockbroker is an old one renamed according to the business daily; some name changes work, others don’t