Understanding Kenya’s Capital Markets

By Peter Wanyama, Advocate, February 2007

1. INTROCUCTION
   

It is a fundamental truism that the existence of a robust, efficient and arguably ebullient capital market must of necessity be preceded by an established legal regime that not only provides for the establishment of a proper regulatory framework but also contains a set of rules and/or principles of law from where the rights of the various players can be easily ascertained without unnecessary litigation. On the contrary, poor legal regimes will more likely than not dampen the growth of the capital markets or at least ensure its collapse, a result that any investor would not want to hear.

We examine loosely provide a synthesis of the legal regime governing Capital Markets in Kenya on the basis of which we identify the nitty-gritty of risks arising in the trading of shares .We also attempt an identify the newest products of capital markets and evaluate how the same can be structured in the Kenyan market.