CMA issues guidelines for holding virtual general meetings to issuers of securities to the public
Nairobi 08 June 2020… In line with its investor protection mandate, the Capital Markets Authority (CMA) has issued guidelines to issuers of securities to the public for hosting virtual general meetings. The guidelines have been issued in line with the recent High Court Ruling, the challenges posed by the Covid-19 pandemic and the Government Directive banning public gatherings.
According to the CMA Acting Chief Executive, Mr. Wyckliffe Shamiah, the Circular applies to any issuers of securities to the public who finds it impracticable to conduct a general meeting in the manner required by its articles of association due to the measures set out by the Government in view of the Covid-19 pandemic. This is in line with the Court Ruling while allowed companies listed on the Nairobi Securities Exchange to hold virtual general meetings subject to the following terms: obtain a No Objection from CMA before issuing the notice to shareholders on the intended general meeting; send to CMA details of how the meeting will be held; and demonstrate how requisite information will be provided to shareholders to enable them make informed decisions.
Mr. Shamiah explained that CMA will process all complete applications received from issuers within fourteen days and hence listed companies must factor in this time as they plan for their AGMs. Upon receipt of a no objection, issuers are at liberty to issue a twenty-one day statutory notice of the intended general meeting to its shareholders. Mr. Shamiah said, ‘‘In order to protect the rights of all shareholders, the CMA has emphasized that all shareholders should be given ample time to raise their questions and receive explanations from the Directors and/or management’’.
‘’We are collaborating with issuers of securities to the public to ensure that shareholders are provided with adequate information to help make informed decisions in line with our investor protection mandate’’, said Mr. Shamiah. He lauded the Judiciary for the landmark ruling which enables the capital markets industry to leverage technology to facilitate general meetings.
Mr. Shamiah explained that the capital markets industry players have been working closely through joint strategies to ensure business continuity and
Key outcomes of the engagements include; waiver of the need for listed companies and market intermediaries to publish their financials in newspapers and flexibility to use websites and social media channels instead; and guidance to the Boards of listed companies to progress key issues such as approval and payment of dividends and appointment of auditors which would be ratified once AGMs are convened. In line with the commitment to support national efforts to address the adverse effects of the Coronavirus pandemic, the capital markets industry stakeholders led by CMA donated Ksh30 million to the Covid-19 Emergency Response Fund.