The board of the Capital Markets Authority (CMA) in September announced it had begun the process of identifying a suitable candidate to succeed Mr. Paul Muthaura who opted not to renew his term which comes to an end on 31st December 2019.
Mr Paul joined the Authority in 2005 and served in different capacities including as CEO which he took over in 2012 initially under acting capacity before being confirmed in 2016 by the then Cabinet Secretary Henry Rotich.
The CMA has indeed gone through some major changes over the past few years under Muthaura’s leadership and he attributes the success to industry players giving him an easy time to work. One of the major milestones is the enforcement and the strengthening the corporate governance in the country’s capital markets.
In an interview with The Kenyan Wallstreet, he prides himself is giving direction to the Kenya Capital markets and making Kenya favourable investment destination for foreign capital.
Moreover, his efforts have been recognised as CMA has won several awards during his tenure. For instance, the CMA was feted as the Most Innovative Regulator in Africa for five consecutive years by International Finance Magazine.
Mr Muthaura oversaw major changes and a number of reforms in Kenya’s Capital Markets during his tenure at the Authority. One of the major highlights is the demutualization of the Nairobi Securities Exchange which allowed members of the Kenyan investing public to own shares in the NSE.
In terms of technology, CMA has been at the forefront to adopt new innovation to promote investor protection, product offering, and deepening market infrastructure. Some of the products introduced during Muthaura’s term include; Real Estate Investment Trusts in 2015, Global Depository Receipts in 2017 and derivatives in 2019.
However, Muthaura says that there has been a slow uptake of new products due to the issuer understanding of the opportunity and the intermediaries capacity to sell capital markets in the current environment where there is excess liquidity and a lot of private equity funding.
Moreover, Muthaura notes that CMA has invested and upgraded market infrastructure such as NSE new platform and CDSC allowing for an additional product offering. The authority then implemented a regulatory sandbox strategy to create a safe space where new or existing players with new ideas to diversify and deepen the markets can test their ideas. Actually, Muthaura expects graduation of the first Sandbox ideas within the next few weeks thus proof that the sandbox works.
Furthermore, Muthaura says that during his tenure the management ensured conducive regulations and policies. For instance, the principle-based approval approach reduces the time to approve new regulations from 2-5 years to a couple of months.
Moreover, CMA has utilized technology to create awareness of capital markets. Outreach campaigns have targeted university students with national financial education framework in the pipeline.
On matters corporate governance, CMA has been a leader and Muthaura insists that the enforcement will continue. Muthaura is leaving a dedicated team that will set regulatory standards and ensure Kenya is a top investment destination.
Catch up more on our interview here…