HTTP 200 OK
Allow: GET, PUT, PATCH, DELETE, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept
{
"id": 193520,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/193520/?format=api",
"text_counter": 102,
"type": "speech",
"speaker_name": "Mr. Kimunya",
"speaker_title": "The Minister for Finance",
"speaker": {
"id": 174,
"legal_name": "Amos Muhinga Kimunya",
"slug": "amos-kimunya"
},
"content": "Mr. Speaker, Sir, the local annuities market is not very competitive due to lack of adequate information, thus making it difficult for retirees to identify good annuity providers. In addition, in order to increase the competition for the annuity market, I propose to provide for pension schemes to have an income draw-down as an alternative to annuities, subject to a minimum draw-down period of 10 years. I further propose to introduce a requirement on annuity providers to publish, on a quarterly basis, information on annuity products and rates in the print media. This will go a long way in helping retirees to choose an annuity provider with better returns. Mr. Speaker, Sir, the retirement benefits regulations require the actuary to provide for annual pension increases during an actuarial valuation, or a defined benefits scheme, and to determine a rate of increase to apply until the next actuarial valuation. However, there is no equivalent provision for increasing pension for members in deferment, who have not reached retirement age. In order to address this omission, I propose to introduce a requirement for the actuary to provide for annual increments in deferred pensions for members of a defined benefits scheme during an actuarial valuation, and require trustees to implement the same. The current requirement of fully paid up share capital of Kshs10 million for the corporate trustee of an individual retirement benefits scheme has so far proved to be a hinderance to the establishment of these schemes. In order to encourage the establishment of individual retirement benefits schemes, which serve a key role in increasing coverage, especially in the informal and self- employed sectors, I propose to allow for a paid up share capital of Kshs10 million to be inclusive of unimpaired reserves, as is the case for fund managers and administrators. Mr. Speaker, Sir, on measures to deal with the deepening of capital market development, in the recent past we amended the Capital Markets Authority Act, the Stamp Duty Act and introduced asset-backed securities, among other measures, in connection with the issuance of asset-backed securities to a special purpose vehicle. Unfortunately, the said securities have not yet appeared in our market. In order to deepen capital market development, I have taken a further step to gazette asset-backed securities regulations to guide the issuance of these instruments. To this end, I wish to encourage public enterprises that have long-term financial needs, and a credible record to consider the option of issuing asset-backed securities in the market. Mr. Speaker, Sir, in order to strengthen corporate governance, and safeguard public interest in our capital markets industry, I intend to introduce greater professionalism and accountability for fiduciary obligations imposed on directors and senior managers of stock brokers, investment banks and fund managers. To this end, I propose to bar any person who controls directly or indirectly 25 per cent of issued share capital, among other things, from holding a management position in that company. In that spirit, I propose further to introduce a 25 per cent minimum cap shareholding and control of the specified licence persons with a three year transition period for the existing licensees to comply. This will bring them at par with the banking industry which is also holding monies in public trust, so that nobody will hold more than 25 per cent and control the company. I believe the sad issues of Francis Thuo and Nyaga stockbrokers will be things of the past in our country. Mr. Speaker, Sir, the recent mismanagement of public funds by some stock brokerage firms in the capital markets industry has raised serious concerns about the powers of the Capital Markets Authority (CMA) to protect investors. In this regard, I propose to strengthen the Authority's powers to trace and freeze assets upon reasonable suspicion of a person's involvement in fraudulent activities. I expect this measure to ensure prompt and effective responses by the Authority on reported cases of malpractice by any of its licensees to safeguard investors money. Mr. Speaker, Sir, currently, the paid up share capital for stockbrokers and investment banks is Kshs5 million and Kshs30 million, respectively. You will recall that the Safaricom IPO has seen June 12, 2008 PARLIAMENTARY DEBATES 1159 these houses handle amounts to the tune of Kshs236 billion. To adequately capitalise these institutions to reflect their turnover levels in a stock exchange where market capitalization is now over and above Kshs1 trillion, I propose to increase the paid up share capital requirement to Kshs50 million for the stockbrokers and Kshs250 million for the investment banks within three years."
}