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CMA downplays row with Munya


Capital Markets

CMA downplays row with Munya


CMA

Capital Markets Authority (CMA) CEO Wyckliffe Shamiah at a past stakeholders’ meeting. FILE PHOTO | NMG

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Summary

  • The Capital Markets Authority (CMA) has defended its new role in coffee marketing, playing down fears that a turf war with the Agriculture ministry over the matter would disrupt operations in the industry.
  • Chief executive Wyckliffe Shamiah said the row with the ministry and some industry stakeholders is out of a misunderstanding of roles under the new Coffee Exchange Regulations 2020.

The Capital Markets Authority (CMA) has defended its new role in coffee marketing, playing down fears that a turf war with the Agriculture ministry over the matter would disrupt operations in the industry.

Chief executive Wyckliffe Shamiah said the row with the ministry and some industry stakeholders is out of a misunderstanding of roles under the new Coffee Exchange Regulations 2020.

“The minister has argued around the point of CMA being far from coffee. Our understanding has been that we are not interfering with the whole coffee value chain, but are only coming in at the marketing end which is through the coffee exchange,” he told in a virtual briefing yesterday.

“The rationale has been because in the capital markets we already have oversight over other exchanges, which operate on the same principle as the coffee exchange. We are not going in with structures, which disrupt completely the way the marketing needs to be done, but it should be within the law.”

Under the new regulations published last year by Treasury secretary Ukur Yatani, coffee trading companies, as well as the weekly commodity auction, are now regulated under the Capital Markets Act — a departure from the past where the operations are controlled under the Coffee (General) Regulations through the Agriculture and Food Authority’s (AFA) Coffee Directorate.

The Treasury said the changes effected through Section 12(1) of the Capital Markets Act cover all key coffee trading functions, including licensing of brokers, the establishment of companies trading in the commodity, as the establishment of a direct settlement system would guarantee speedy and transparent payment of proceeds from sales.

With the changes, the coffee sector is now overseen by three different government entities, these being the Ministry of Agriculture through AFA, counties, and the CMA as the exchange regulator.

This has triggered conflict with Agriculture Cabinet secretary Peter Munya and some coffee dealers accusing the CMA of “overstepping its mandate”.

The licensing of brokers has been the most contentious point of departure between the CMA and Mr Munya, with each issuing their instructions on the deadline for new applications and extension of the old trading rules for the exchange.

The CMA has also issued five new licences to brokers under the new rules, much to the chagrin of Mr Munya.

Mr Shamiah said that the CMA is happy that there are ongoing discussions on reforms in the sector in the Senate through two coffee Bills, which he expects will help bridge the divide between the regulator and the agriculture ministry.

“We are hoping that within no time the government — especially the Cabinet — will give guidance so that shortly each of us can find their own space and allow coffee farmers to do their business smoothly as they have done before,” he said.



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