Capital Markets Authority

The Capital Markets Authority was established in 1989 through an Act (Cap 485A,Laws of Kenya) passed by the parliament of Kenya. The government of Kenya started thinking about the reformation of the economic policies of the country.

• The motive of the government was to encourage the private sector in the national economy.
• At the same time, the Kenyan government also wanted to develop the capital market of the country so that it can provide the necessary funds needed for the development of the national infrastructure.

After several surveys, the Capital Markets Authority was established for all the above purposes.

Objectives of Capital Markets Authority:

The Capital Markets Authority has been designed to meet several objectives.

• The CMA has the responsibility to develop the capital markets of Kenya.
• For the above purpose, it is necessary to remove all the obstructions which should also be done by the Authority.
• CMA is also responsible for encouraging the long term investment policies.

To reform the capital market, reformation of the stock markets is very necessary. The Capital Markets Authority is responsible for developing and modernizing the stock markets of Kenya so that it can attract more investors and the volume of transaction can be raised. At the same time, the Capital Markets Authority in Kenya is also responsible for creating the Kenyan security market. The regulatory power of the securities market is also provided to the Authority. The protection of the investor is a prime job of the Capital Markets Authority.

The Capital Markets Authority also bears the responsibility of creating and maintaining a compensation fund. There are certain situations where an investor suffers because of the failure of the licensed brokers. Such financial losses can be fulfilled through the compensation fund.

The global capital markets are dependent on the online systems. This system helps in making the stock trading process smooth and quick. This easy method of investment encourages the investor. The Capital Markets Authority takes care of this factor also. It has the responsibility of creating and maintaining such systems to ensure the free flow of the capital market.