The proposed new law entitled the Financial Markets Conduct Bill 2018 has recommended the establishment of five entities to regulate matters surrounding access to credit. The Bill is relevant to individuals or firms that offer financial services such as credit.
If signed into law, the four bodies under the Financial Markets Conduct Act will be the Financial Markets Conduct Authority, the Financial Sector Ombudsman, the Conduct Compensation Fund Board, and the Financial Services Tribunal.
The Financial Markets Conduct Authority
Authority’s objective will entail protecting retail financial customers, promoting competition and development in the financial sector, and supporting the government’s economic policy.
The Bill proposes the creation of a board to manage the Authority. The board of directors shall be made up of a non-executive chairperson selected by the President, the Cabinet Secretary (CS), the governor of the Central Bank of Kenya (CBK), five people with relevant experience picked by the CS, and the chief executive.
The Financial Sector Ombudsman
The functions of the the Financial Sector Ombudsman shall entail tackling any issues brought forward by retail financial customers, financial service providers, and financial service providers. In addition, this body shall have a board with a chairperson appointed by the President, a Chief Ombudsman, and two other members chosen by the CS.
The Conduct Compensation Fund Board
The function of this board will include holding and managing the Conduct Compensation Fund and determining and making compensation payments.
The Financial Services Tribunal
The members of this tribunal shall be appointed by the Judicial Service Commission and the Chief Justice shall lay down the rules guiding it such as fees to be charged and the procedure to be used by the Tribunal. The Bill, however, does not explain the functions of the tribunal.
Currently, the public has been invited to give its feedback on the Bill by June 5 which seeks to control untoward banking and consumer finance behaviour.
