KENYA: Implementation of the Capital Market Master Plan to be Fast-Tracked

Wednesday November 4 2015

The Capital Markets Authority of Kenya has announced as part of its drive to accelerate the implementation of the Capital Market Master Plan (CMMP), the National Steering Committee (CMMP-SC) received the first set of key recommendations designed to ensure that the objective of transforming Nairobi into a financial hub is realised through the execution of the CMMP.

The Steering Committee also received an update on notable CMMP milestones achieved so far including; development of a new Corporate Governance Code for Public Listed Companies and a Stewardship Code for institutional investors; removal of the 75 percent limit for foreign ownership of listed companies; approval of the first REIT seeking to raise Ksh12.5 billion; licensing the Nairobi Securities Exchange (NSE) to set up a derivatives exchange; demutualization and self-listing of NSE; the introduction of fiscal incentives to support the roll out of REITS and ABS; reduction of the NSE trading participant admission fees from Ksh250 million to Ksh25 million to lower barriers to market access; and initiatives to enhance market liquidity through Securities Lending and Borrowing, Margin Trading, and Short-Selling.

Other recommendations tabled for consideration related to: tax neutrality measures such as exemption of REITs and ABS from Value Added Tax to ensure the tax cost of structured finance is not significantly higher than conventional funding and; facilitating the effective setting up of a spot commodity exchange in Kenya through the extension of CMA’s mandate to regulate spot commodities exchanges across the relevant sectors of the economy such as such Mining, Agriculture and Energy in order to centralize oversight and secure coordination of standards.

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