In 2017, FSVC received a grant from Bloomberg to strengthen liquidity in the Kenyan capital markets.  Working with the Capital Markets Authority (CMA) of Kenya, FSVC structured a technical assistance program to help address regulatory and market-based impediments to liquidity, and advise on the development of new products and services to improve market access.


In March 2017, FSVC volunteer experts from the U.S. Securities and Exchange Commission (SEC), Bloomberg and Fordham University traveled to Nairobi to conduct a series of consultations regarding several key areas for improvement, including securities lending and borrowing (SLB), strengthening of collective investment schemes (CIS) reporting and structuring and positioning Kenyan securities and the overall market for inclusion in the right market indices.

During the program, the team of experts met with CMA officials, financial sector regulators and market stakeholders to present international best practices in adopting and implementing SLB and CIS transparency, as well as offer suggestions for new products which will facilitate trading on the Kenyan market.  The volunteer experts also discussed the adoption of measures that will enable the recognition of Kenyan markets on globally competitive indices.  FSVC and the CMA also hosted a widely attended round table discussion attended by over 80 market stakeholders and regulatory agency representatives.  This event was covered extensively by local media outlets throughout East Africa.

As a result of the program, FSVC experts were able to provide the CMA with a comprehensive report outlining their recommendations to improve the volume and pace of trading within the capital markets.  This report will serve as a roadmap for CMA officials as they continue to build upon the impressive growth registered in recent years.

Program Impact

  • Public forum attended by over 80 market stakeholders and covered by 19 local news outlets.
  • Final report recommending next steps to implement SLB, strengthen CIS and gain access to global market indices.Collective Investment Schemes:
    • Reviewed CMA’s CIS reporting templates to align them to global best practices in definitions and constituents of asset classes;
    • Reviewed and proposed the requirements for reporting of CISs in line with best practices, focusing on disclosure, nature of the reports (gross or net) and Know-Your-Customer (KYC)/Anti-Money Laundering (AML); and
    • Reviewed and proposed best practices regarding valuation of a CIS/mutual fund following peer reviews in emerging markets.

    Securities Lending and Borrowing:

    • Reviewed CMA’s draft SLB policy framework, tax and accounting regulations to ensure that they meet international standards;
    • Reviewed the outline for institutional and infrastructure framework for market makers; securities exchange; the central securities depositories as well as the actual lenders and borrowers; and
    • Introduced process flows for SLB benchmarked on international best practices.

    Market Indices:

    • Identified critical capital market gaps preventing Kenya’s inclusion into MSCI Emerging Market Index;
    • Suggested reforms to Kenyan debt and equity market infrastructure to meet MSCI criteria; and
    • Reviewed requirements to create a secondary bond market that will allow the CMA to develop a yield curve.