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Capital Markets Regulatory Framework
The capital markets industry is governed by the Capital Markets and Securities Act, Chapter 79 R.E. 2002. The CMS Act is supplemented by 19 Regulations and Guidelines governing specific aspects of capital markets. The Capital Markets and Securities Authority derives is regulatory powers in Section 10 of the CMS Act. The CMSA regulates the industry by exercising surveillance over capital markets intermediaries and issuers of securities with a view of maintaining proper standards of conduct, professionalism thus ensuring integrity of securities dealings.

Evolution of the Capital Markets Legal Framework
In 1997, the CMS Act was amended to include provisions on Public Offers of Securities; Collective Investment Schemes; and Advertisements relating to Securities. Further to the 1997 amendments, in 2010 the Act was amended to among others, comply with the requirements on becoming a signatory to the International Organization of Securities Commissions (IOSCO) MMoU on information sharing and international cooperation. The 2010 amendments addressed the deficiencies in the following areas:-

  • Limited scope of the powers of the CMSA, due to the narrow definition of the term "securities" that did not include "commodity derivatives",
  • Unclear powers of the CMSA to cooperate internationally linked with secrecy provisions that preclude information provision to foreign regulators, and
  • The scope and status of the confidentiality provisions applicable to the staff of CMSA

In the financial year 2011/2012 a comprehensive review of the capital markets regulatory framework commenced in order to make proposals for a new capital markets legislation to cope with the current trends in the market, given that the CMS Act was enacted more than seventeen years ago. In the financial year 2013/2014 the drafting of the new capital markets and commodity exchanges legislation was initiated in order to improve the regulation and supervision powers of the Authority, to bring it in line with developments taking place internationally and to include provisions for effective regulation and supervisory aspects of commodity exchanges.