The Nairobi Securities Exchange (NSE) Plc has officially launched its Unquoted Securities Platform (USP). The USP is a market infrastructure that facilitates the trading, clearing and settlement of securities of unquoted companies in Kenya.
NSE plan for the financial markets
This development is part of NSE’s ongoing initiatives to ensure the market can facilitate the trading and clearing of all financial market transactions.
Speaking during the virtual event, Geoffrey Odundo, NSE Chief Executive, noted, “There has been substantial growth in the number of securities trading over the counter. Most involve leading securities of well-developed companies across various sectors of the economy including commercial banks and insurance companies, co-operative societies, leading private companies among many more.
Equally, the last few years have witnessed an increase in the number of companies raising long term initial and ongoing equity and debt capital through private placements.” he added.
The automated USP solution at the NSE offers numerous advantages that companies can explore as they pursue capital raising and price discovery while providing a more accessible transfer platform for investors.
Investors enjoy reducing settlement delays, and the system allows surveillance by the Exchange and the Regulator, thereby protecting investors in the market.
The register of investors is managed by an independent registrar protecting the record from possible manipulation.
Additionally, the platform eliminates possibilities of human error associated with manual processing.
The platform provides access to capital and introduces capital market transactions easing their possible transition into the primary quoted market for issuers.
Speaking during the event, Wyckliffe Shamiah, Chairman, CMA, said, “With regards to innovation, the Authority consistently seeks to provide a conducive policy and regulatory environment for the deployment of new and innovative ideas, including FinTech and business models that have the potential to deepen capital markets in Kenya.”
Through the CMA Regulatory sandbox, innovations continue to be rolled out into the market, and the impact is slowly but surely showing,” said Shamiah.
Early this year, Acorn Holdings Ltd quoted its Income and Development Real Estate Investments Trusts on the USP, making Acorn the first company to tap into the market infrastructure to trade shares of unquoted companies.
Edward Kirathe, Chief Executive, Acorn Holdings Limited, noted, “Acorn Holdings Limited is delighted to tap into Kenya’s capital market to unlock growth opportunities as it seeks to grow its impact in Purpose Built Student Accommodation space.”
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