[kictanet] Consequences of Media Regulation??

Tue May 22 13:20:50 EAT 2007

Thanks Daktari.

Am at ease now. Nevertheless, taking advantage of your proposed
opportunity window on the way forward, there is need to streamline the
bill with the CMA Act of 2000 touching on Financial Reporting.

Below are the current provisions relating to Financial Journalism as
contained in the current CMA Act.

Now while the intention or spirit when these rules were made in 2000
was to ensure that there was no manipulation by a journalist for his
own gain, the trend is bound to change with the proliferation of the
internet when reporting on the market.

A case example is the KQ issue in yesterday's leading daily where the
writer predicted losses yet there  has not been any official statement
by KQ (that I know of, confirming the claims made).

The line is pretty thin and thats why we felt the need to be careful
when using internet/websites as our main form of disseminating
information.

As of now CMA is taking responses on proposed amendments to the Act
and its regulations and I know some market players have raised
yesterday's article as a point that needs to be addressed.

The trend like in other markets where a player pays a journalist to
twist an article to his advantage has been around but its going to
increase and what shall result will be general regulations since
Kenyan regulators are not known to use specifics.

As for now, I feel OK, since my specialisation is in financial
research as opposed to financial journalism.

32. (1)	This section applies to -

(a)	 any person who is licensed under this Act; and

(b)	a financial journalist.

(2)	For the purposes of this section, "financial
journalist" means a person who contributes advice concerning
securities or prepares analyses or reports concerning securities for
publication in a newspaper or periodical.

(3)	For the purposes of this section, a reference to
securities is a reference to securities which are quoted on a
securities exchange.

(4)	A person to whom section (1) applies shall
maintain a register of the securities in which he has an interest and
such interest or any changes in such interest shall be entered in the
register within seven days of the acquisition or change in the
interest.

(5)	The Authority  or any person authorized by it in
that behalf may require any person to whom section (1) applies to
produce for inspection the register required under subsection (4) and
the Authority or any person so authorized may make extracts from the
register.

Bill Kagai

On 5/22/07, bitange at jambo.co.ke <bitange at jambo.co.ke> wrote:
> Dear Kagai,
> Thank you for your response.  The section on financial reporting is aimed
> to curb those use the information that is not readly available to the
> general public for financial gain.  Take for example the off loading of
> Uchumi shares by someone who had knowledge that was not in public domain.
> Obviously that amounts to insider trading.
>
> There is a difference between financial research and journalism.  In
> research you are trying to predict certain events using publicly available
> knowledge.  In journalism one may be privy (either by interviewing a CEO
> or information is brought to you to publish but you delay it while buying
> or dumping sshares) to the fact that Company X is to offer a dividend and
> split it shares.  If you use the information to profiteer before the
> public is aware of it, then you are in breach of the law.  This is how it
> is done with the Securities and Exchange Commission in the USA.
>
> I do not know which category you belong but there is room to propose how
> you see the way forward.
>
>
>
> Regards
>
>
> Ndemo.
>
>
> > Bwana PS,
> >
> > Taking que from your latest post, allow me to express myself in 4
> > quick/short bullets regarding my personal concern on Media Regulation.
> >
> > 1. I run a company <www.mediacorp.co.ke> whose business is modelled in
> > doing research on capital markets including the NSE and selling our
> > findings  to subscribed clients. The proposed regulation that
> > researchers and analysts including their families not to trade in
> > shares is of great concern.
> >
> > 2. Regulating local companies will give international competition
> > undue advantage. e.g. Will the same rule apply to researchers and
> > analysts employed by Reuters, Bloomberg, CNBC who run similar services
> > and are busy setting up shops in Kenya??
> >
> > 3. If our main mode of dispatch is via internet, will regulation still
> > be enforced because our website is locally registered?? If we change
> > to a <.com>, and register the company outside the country, will we
> > enjoy immunity enjoyed by foreign competition??
> >
> > 4. Is media sent via internet also within the regulation ambit?? Will
> > this apply only to <.co.ke> or will Kenyans prefer to use <.com> to
> > 'avoid' regulation.
> >
> > Sir, before the proposed regulation, our concern was getting accurate
> > research to many Kenyans who have invested in stocks especially those
> > in the diaspora who do not have access to newspapers and local news.
> > Many were requesting more infomation on how the law protects their
> > investments if say.. a brokerage closes down...but it seems our
> > efforts will be nipped right in the bud by the proposed regulation.
> >
> > Sir, Please guide me if my fears are unfounded...Source of my concern
> > is from the story posted on Business Daily here
> > <http://bdafrica.com/index.php?option=com_content&task=view&id=1070&Itemid=3880>
> >
> > --
> > With Kind Regards,
> > Bildad Kagai
> > MD - MediaCorp Limited
> > Suite B2, Tetu Apartments
> > StateHouse Avenue
> > P. O. Box 20311-00200
> > Tel. 254 20 272 8332
> > URL. www.mediacorp.co.ke
> > --
> >
> > _______________________________________________
> > kictanet mailing list
> > kictanet at kictanet.or.ke
> > http://kictanet.or.ke/mailman/listinfo/kictanet
> >
> > Please unsubscribe or change your options at
> > http://kictanet.or.ke/mailman/options/kictanet/bitange%40jambo.co.ke
> >
> > ----------------------------------------------
> > This message has been scanned for viruses and
> > dangerous content by Jambo MailScanner, and is
> > believed to be clean.
> > ---------------------------------------------
> > "easy access to the world"
> >
> >
>
>
>
> ----------------------------------------------
> This message has been scanned for viruses and
> dangerous content by Jambo MailScanner, and is
> believed to be clean.
> ---------------------------------------------
> "easy access to the world"
>
>
> _______________________________________________
> kictanet mailing list
> kictanet at kictanet.or.ke
> http://kictanet.or.ke/mailman/listinfo/kictanet
>
> Please unsubscribe or change your options at http://kictanet.or.ke/mailman/options/kictanet/mediacorp.research%40mediacorp.co.ke
>

-- 
--
With Kind Regards,
Bildad Kagai
MD - MediaCorp Limited
Suite B2, Tetu Apartments
StateHouse Avenue
P. O. Box 20311-00200
Tel. 254 20 272 8332
URL. www.mediacorp.co.ke
--