Regulatory Framework

Capital Markets Regulatory Framework

The capital markets industry is governed by the Capital Markets and Securities Act, Chapter 79 R.E. 2002. The CMS Act is supplemented by 19 Regulations and Guidelines governing specific aspects of capital markets. The Capital Markets and Securities Authority derives is regulatory powers in Section 10 of the CMS Act. The CMSA regulates the industry by exercising surveillance over capital markets intermediaries and issuers of securities with a view of maintaining proper standards of conduct, professionalism thus ensuring integrity of securities dealings.

Evolution of the Capital Markets Legal Framework

In 1997, the CMS Act was amended to include provisions on Public Offers of Securities; Collective Investment Schemes; and Advertisements relating to Securities. Further to the 1997 amendments, in 2010 the Act was amended to among others; comply with the requirements on becoming a signatory to the International Organization of Securities Commissions (IOSCO) MMoU on information sharing and international cooperation. The 2010 amendments addressed the deficiencies in the following areas:-

  • Limited scope of the powers of the CMSA, due to the narrow definition of the term "securities" that did not include "commodity derivatives",
  • Unclear powers of the CMSA to cooperate internationally linked with secrecy provisions that preclude information provision to foreign regulators, and
  • The scope and status of the confidentiality provisions applicable to the staff of CMSA