Kenya’s financial markets regulator said on Monday it had enacted a new law to help prevent fraud and other malfeasance among listed companies.
The Capital Markets Authority (CMA) said the law dubbed Whistleblowers Regulations (2022) which aims to protect and reward whistleblowers will help it obtain timely information on misconduct or breaches of securities laws leading to the recapture of illicit gains.
“This law will aim to promote investor protection and confidence in capital markets by encouraging listed companies to comply with regulations.
It also promotes market integrity and responsible business conduct by all stakeholders,” CMA Chief Executive Wyckliffe Shamiah said in a statement released in Kenya’s capital, Nairobi.
Under the new regulations, reportable misconduct includes financial market fraud and failure to comply with legal and regulatory obligations.
“Where the CMA successfully recovers penalties and illicit capital market gains, whistleblowers will be eligible for a reward of 3% of the recovered amount,” Shamiah said.
The law comes amid incidences of fraud and financial misconduct at some listed companies in the East African nation.
The majority of investors in Kenya’s capital markets are foreigners, who account for up to 80% of daily trading on the Nairobi Stock Exchange. Final article