This archive report was first published on 20 December 2019.
As of September 2019, the Capital Markets Authority (CMA) had begun the process of identifying a suitable candidate to succeed Paul Muthaura, whose term was set to end on December 31, 2019.
Paul Muthaura joined the Authority in 2005 and served in various capacities, including as CEO, which he took over in 2012 initially in an acting capacity before being confirmed in 2016 by Cabinet Secretary Henry Rotich.
Under Muthaura's leadership, the CMA has undergone significant changes, including the enforcement and strengthening of corporate governance in Kenya's capital markets.
According to Muthaura, the success of these efforts can be attributed to the support of industry players, who have given him an easy time to work.
One of the major milestones during Muthaura's tenure was the demutualization of the Nairobi Securities Exchange, which allowed members of the Kenyan investing public to own shares in the NSE.
Additionally, the CMA has introduced several new products, including Real Estate Investment Trusts in 2015, Global Depository Receipts in 2017, and derivatives in 2019.
However, Muthaura notes that there has been a slow uptake of these new products due to issuer understanding and intermediaries' capacity to sell capital markets in the current environment.
The CMA has also invested in upgrading market infrastructure, such as the NSE's new platform and the Central Depository and Settlement Corporation (CDSC), allowing for additional product offerings.
Furthermore, the Authority has implemented a regulatory sandbox strategy to create a safe space for new or existing players to test their ideas and diversify the markets.
According to Muthaura, the first sandbox ideas are expected to graduate within the next few weeks, providing proof that the sandbox works.
During his tenure, Muthaura's management ensured conducive regulations and policies, including a principle-based approval approach that reduces the time to approve new regulations from 2-5 years to a couple of months.
The CMA has also utilized technology to create awareness of capital markets, targeting university students through outreach campaigns and developing a national financial education framework.
On matters of corporate governance, Muthaura insists that the enforcement will continue, leaving behind a dedicated team to set regulatory standards and ensure Kenya remains a top investment destination.
