NAIROBI, Kenya, Mar 18 – The National Treasury has gazetted amendments to the Capital Markets Regulations that will see reduction of fees paid by listed companies and new companies, applying to issue equity securities, corporate bond issues, capitalization or rights issue at Nairobi Securities Exchange (NSE).
The amendments adopt earlier CMA’s recommendations to reduce the fees which have been effected through Legal Notice number 35 of 2016.
CMA Acting CEO Paul Muthaura noted that the review of the fees, levies, and commissions was necessitated by the need to ensure financial sustainability of the capital markets sector.
“The move will help raise levies collected by the Central Depository and Settlement Corporation (CDSC), given its national importance to market stability and to support continuous improvement of systems and strengthened operational oversight’,” Muthaura said.
The approval fees paid to the Authority by issuers of equity securities such as an initial public offer has been 0.15 percent of the total value of the issue. However, the newly gazetted regulations have introduced a maximum fee cap of Sh30 million in order to encourage large capital markets issuances.
For capitalization or rights issue, approval fees paid to the authority by issuers is now subject to a maximum cap on amounts that an issuer will pay at any one time of Sh30 million.
In the case of corporate bonds, approval fees have been also capped at Sh30 million.
On the other hand government bonds approval fees payable at 0.075 percent of the amount raised has been capped at a maximum limit of Sh50 million.
The regulations have also increased the transaction levy charged by CDSC from the current 0.06 percent to 0.08 percent of the value of a given transaction.
The transaction fees levied by brokers at the NSE have been reduced from 1.78 percent to 1.76 percent, by reflecting the percentage increase in the CDSC levy, implying that the cost to investors has not increased.
“These developments will encourage more issuers to come to the market, while encouraging increased participation of investors in the capital market,” he said.