NAIROBI, July 18 (Xinhua) -- Kenya plans to enact a series of reforms to combat money laundering and terrorism financing, a senior government official said on Wednesday.
Henry Rotich, cabinet secretary in the National Treasury, said in Nairobi that money laundering has devastating economic, security and social consequences because it diminishes government tax revenues and harms honest taxpayers.
"I have therefore proposed amendments to the Capital Markets Act in order to curtail money laundering and the financing of terrorism as well as other key capital markets' malpractices including corporate governance breaches," Rotich said during the launch of the Capital Markets Authority (CMA) 2018/2023 strategic plan.
Kenya cannot afford to have its reputation and financial institutions tarnished by associating with money laundering, especially in today's global economy, Rotich said.
He said the government will also scale up reforms that will improve corporate governance and enhance uptake of capital products and services.
The level of new investments in the capital markets remains limited, with only 66 companies listed on the Nairobi Securities Exchange, Rotich said.
"So in order to encourage new listings particularly by local firms, the CMA will review its regulatory and legal framework to encourage new listings. This will enhance liquidity at the capital market and make the stock exchange more vibrant," he said.
Rotich said that as economies develop, capital markets tend to play a bigger role than the banking sector.
"At the moment the banking sector assets contributes over 75 percent of all financing in Kenya while the capital markets and other financial sub-sectors contribute the remainder," Rotich said.
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