CMA grants Nairobi Securities Exchange approval to launch Derivatives Exchange Market

Nairobi, 29 May 2019…The Capital Markets Authority (CMA) has granted approval to Nairobi Securities Exchange (NSE) to launch and operate the Derivatives Exchange Market pursuant to the Capital Markets Act and the Capital Markets (Derivatives Markets) Regulations, 2015.

This follows the successful completion of a six-month Derivatives Pilot Test Phase conducted between July and December 2018, and resolution of key issues that emanated from the test phase.

‘The approval granted to the NSE to operationalize a Derivatives Market marks the achievement of a flagship project under the Economic Pillar of Kenya’s Vision 2030. The Derivatives Market will facilitate deeper and more liquid capital markets and position Kenya closer to becoming the Heart of Capital Markets Investment in Africa, as envisioned in the Capital Markets Master Plan’, noted CMA Chief Executive, Mr. Paul Muthaura, MBS.

Initially, the Derivatives Market will offer investors Equity Single Stock Futures (SSF) and Equity Index Futures (EIF) and later introduce other financial and commodities derivatives.

Mr. Matthew Mukisu, Manager, Derivatives Unit observed that a robust infrastructure has been set up to facilitate trading, risk management, clearing and settlement. Two banks, Stanbic Bank and the Co-operative Bank, have been approved by their primary regulator to provide clearing and settlement for the Derivatives Exchange Market.

ENDS

BACKGROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence. The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors’ interest. For more information, please contact: Antony Mwangi, Head of Corporate Communications on This email address is being protected from spambots. You need JavaScript enabled to view it.

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