New law to help merge key financial regulators

National Treasury Cabinet Secretary Henry Rotich addresses journalists at Harambee house in Nairobi during a cabinet briefing on April 2, 2014. Rotich said the government is finalising a legal framework to guide mergers and implement reforms of government agencies and parastatals. PHOTO | PHOEBE OKALL |

What you need to know:

  • He said the Treasury is almost done with developing regulations on government-owned enterprises after which a Bill will be taken to the Cabinet and later to Parliament for discussion.
  • In the 2012/13 Budget reading, then Finance Minister Njeru Githae proposed the establishment of a joint supervisory entity for some of Kenya’s financial services sectors.

Delays in enacting a law on government-owned enterprises and parastatal reform have held back plans to merge financial sector regulatory authorities.

Speaking after the launch of the Capital Markets Master Plan (2013 – 2023), the National Treasury Cabinet secretary, Mr Henry Rotich, said the government is finalising a legal framework to guide mergers and implement reforms of government agencies and parastatals.

He said the Treasury is almost done with developing regulations on government-owned enterprises after which a Bill will be taken to the Cabinet and later to Parliament for discussion.

“One of the key legal frameworks that needs to be in place is the Government-Owned Enterprises Bill. We have already held discussions with the Commission for the Implementation of the Constitution.

That Bill will be going to Cabinet and later to Parliament,” Mr Rotich said.

He did not give specific timelines for the process.

SUPERVISORY ENTITY
The proposed law will amend other legislations governing the Capital Markets Authority (CMA), the Retirement Benefits Authority (RBA) and the Insurance Regulatory Authority (Ira) to facilitate the creation of the Financial Services Authority (FSA) by merging the three entities.

In the 2012/13 Budget reading, then Finance Minister Njeru Githae proposed the establishment of a joint supervisory entity for some of Kenya’s financial services sectors.

The regulators to be affected include CMA, IRA and the RBA, which would be collapsed into a single regulator.

The main reason for the proposal was to strengthen supervisory ability, safeguard stability and enhance efficiency of financial sector regulators.

It, however, remains to be seen how much longer the process will take, given that the changes were to be effected earlier this year.