CMA has allowed the bourse to offer its shares to the public through an Initial Public Offer (IPO) and self listing on the Main Investment Market Segment (MIMS).
NSE Chairman Eddy Njoroge says that the approval paves way for the NSE to proceed with its IPO and offer members of the public up to 31 percent of the authorised ordinary share capital of the NSE.
“The demutualisation will build investor confidence in our business as a market operator and places the NSE in a better position to facilitate Kenya’s Capital Market becoming the gateway of East and Central Africa as envisaged in the Capital Market Master Plan 2014-2023,” Njoroge said.
Njoroge says the IPO will be offered in the second half of 2014.
Efforts to demutualise the NSE started in 2005 and a demutualization committee was formed a year later to spearhead the process.
This was followed by the Finance Act 2010, which contained amendments to the Capital Market Act that had section 20 amended to provide that a securities exchange licensed under the Act should be incorporated as a company limited by shares.
The NSE was then converted from a company limited by guarantee to a company limited by shares which was followed by the gazettement of the Capital Markets (Demutualization of the NSE) regulations 2012.
Oxford Business Group have welcomed the move saying it sets the stage for the next steps of its capital markets master plan, which will introduce new alternative instruments, including derivatives, futures, and real estate investment trusts (REITS) in years to come.
“The shift from a mutual structure to a corporate one not only allows for the sale of shares on its own platform but also paves the way for partnerships with other bourses, creating opportunities for cheaper access to more securities, cross listings and, in some cases, regional integration,” Oxford Business Group said in a statement.
The NSE underwent rebranding and relocated to a new trading floor in Westlands.