Govt. inches closer to merger of financial services regulators

The government is closing in on creating a single regulatory authority to handle the financial services sector.

This as the cabinet, chaired by President Uhuru Kenyatta, approved the draft Financial Services Authority (FSA) bill that seeks to collapse four regulatory authorities.

Plans to merge the Capital Markets Authority (CMA), the Insurance Regulatory Authority (IRA), the Retirement Benefits Authority (RBA) and the Saccos Societies Regulatory Authority (SASRA) have been in place since 2013.

The merger is part of government efforts to streamline operations under parastatal reform’s agenda.

Under the proposed Bill, all non-bank financial service providers will be licensed by the FSA through a single license.

Consolidating the roles of the regulators is based on a notion that a single outfit will be able to understand and monitor risks across the different sub-sectors of the financial services sector as well as develop policies to address the risks facing the industry as a whole.

“The initiative to reduce the number of regulatory bodies all working in the same field is part of President Kenyatta’s policy to make doing business in Kenya easier than it has ever been,” reads a statement from PSCU.

The Central Bank of Kenya (CBK) is the only regulator that will remain independent to handle affairs of the banking sector.

The central bank will however work closely with FSA to streamline oversight over financial services players.

Once the FSA is set up, insurance firms, Saccos, pension managers and listed firms will have to seek new licenses from the authority within a two year period.

The national treasury last year formed a 14-man steering committee to guide the merger process.

The committee will lay the framework and structures on how the single regulating agency will operate.

The bill will now head to the Attorney General’s office before being sent back to parliament.