Capital Markets

CMA set to certify stockbrokerage staff


Capital Markets Authority acting CEO Paul Muthaura (left) with acting strategy director Luke Ombara at a media briefing in Nairobi September 2. PHOTO | DIANA NGILA

The Capital Markets Authority (CMA) in partnership with a London firm is set to roll out an independent certification programme targeting staff of licensees in customer and operation departments.

Acting chief executive Paul Muthaura said the regulator is partnering with the UK-based Chartered Institute of Securities and Investments (CISI) to offer the certification examinations, initially mandatory for new licensees and later for all operators.

The staff certification will cut across intermediaries such as stockbrokers, investment banks, fund managers and investment advisers.

CISI, formed in 1992 by London Stock Exchange practitioners, currently has more than 40,000 members in 110 countries. It offers courses in capital markets operations, wealth management, risk and compliance.

Mr Muthaura Tuesday told the press that in analysing staff, CMA currently puts them through a fitness analysis that considers academic qualifications, relevant experience and history of proper and transparent conduct.

“In addition to academics and work experience we will move further to also look at what key exams they have sat to show evidence that they have translated that academic or professional experience into relevant, independently analysed standards of service,” said Mr Muthaura.

Currently when intermediaries are being licensed they are required to give disclosures on their financial and technological capacities, work operation systems and analysis of staff competence.

Mr Muthaura said the staff of intermediaries while obtaining the initial licence would be required to already have sat the exam although they may alternatively be given a grace period within which to do so.

“We have powers under the law to remove anyone from operations if they have not met that standard,” he said.

Stockbrokers said the standardised international certification would give the market confidence in the practitioners and allow them easy access to the global capital markets.

Some stockbrokers and their employees have been in the spotlight for misappropriating client cash leading to collapse of several brokers.

“It is the right move. As the market deepens and the industry grows we will need to have more focused certification that is recognised internationally,” said Kasib chief executive Willy Njoroge.

“Going forward, however, it is also important to look at how our local certification can also be recognised internationally.”

Addressing the stipulations of the Statutory Instruments Act (2013), Mr Muthaura said financial sector regulators (CBK, IRA, CMA, RBA and Sasra) have jointly made a detailed policy submission seeking particular exemptions for the financial sector.

He said the provision in the Act that require parliamentary and line ministry approvals for all regulatory interventions means it is more difficult for them to address market problems quickly.