The cabinet yesterday gave a boost to a move to create a powerful Financial Services Authority which will merge four financial regulatory bodies. The country’s top decision making organ approved the draft Financial Services Authority Bill 2016.
The State-sponsored Bill sets out to create the Financial Services Authority (FSA) which will consolidate and take over the functions of the Capital Markets Authority (CMA), the Insurance Regulatory Authority (IRA), the Retirement Benefits Authority (RBA) and the Saccos Societies Regulatory Authority (SASRA).
The purpose of the reform of the financial sector is to provide a consolidated supervision for financial services to eliminate regulatory gaps, and to increase protection of consumers of financial services.
The move is part of the radical proposal proposed by the task force chaired by President’s legal President Advisor MP Abdikadir Mohammed and CBA Group CEO Isaac Owundo that called for scrapping of hundreds of parastatals to streamline their operations.
The restructuring could see hundreds of civil servants and some parastatal chiefs lose their jobs as the government moves to stem corruption, wastage of public funds and overlapping duties among State corporations.
The far- reaching proposed measures in the structure and organisation of parastatals are meant to curb waste, including the scrapping of whole entities and the merging of others.
The Financial Services Authority is aimed at reducing the number of regulatory bodies working in the financial field provide a single supervisory centre to eliminate regulatory gaps and raise the level of protection to consumers.
Under the proposed Bill, all non-bank financial service providers will be licensed by the FSA through a single license.
The move is also seen as progressive to moving the country into a regional financial hub.
The authority will have a full range of administrative and enforcement powers to meet its statutory mandate.
It will also retain the right to withdraw any delegation of powers for self-regulation, if it is not satisfied with the organisation given such powers.