What is so difficult about doing CMA's job?

This is a post that I've been meaning to do for a while but I think the timing is apt. I actually thought that Nyaga Stockbrokers was the one that was bankrupt when rumours started last yr about a broker having liquidity issues. Its problems with itchy fingers have been well-known since 2006.

A few things would make sure that brokers/listed stocks never fail. We now have a CDSC and a WAN network which means data gathering is an easy IT affair as it should be. With this in mind, CMA should base its most of its broker monitoring around daily returns from each broker of:

1. Trades done by volume, stock, value.
2. Trades for a 1,000 or more shares or Ksh50,000+ in value
3. Cash balances in and out
4. Settled and unsettled trades
5. New accounts opened and closed

For stocks,

• quarterly earnings update must be adhered to
• firms must give a rough estimate of their forecast earnings for the forthcoming yr
• earnings warnings update must be done if a stock is going to see a 10%+ downward deviation from its earnings forecast
• a quarterly update of any changes in its principal shareholders must be done
• persistent downward fall in share price (10% in two days) must also be explained.

If CMA can't do the above, lets dissolve it and have its duties moved to a single financial services regulator.