Home Business Kenya’s NSE secures regulatory approval for derivatives industry

Kenya’s NSE secures regulatory approval for derivatives industry


A worker checks an digital board exhibiting industry facts for the duration of a trading session at the Nairobi Securities Trade in Nairobi, Kenya September 6, 2018. REUTERS/Thomas Mukoya/File Picture

Kenya’s Nairobi Securities Trade has gained regulatory acceptance to start a derivatives market place, the Cash Marketplaces Authority claimed on Wednesday.

The NSE, the key entry stage for foreigners looking for to devote in East Africa, has been grappling with the worries of setting up a derivatives industry for several years.

“This (acceptance) follows the prosperous completion of a six-month Derivatives Pilot Exam Period executed involving July and December 2018, and resolution of crucial challenges that emanated from the examination section,” the CMA said in a statement.

Buyers will in the beginning be offered solitary inventory futures and fairness index futures, the CMA mentioned, just before other economic and commodity derivatives are introduced.

Trade executives have explained derivatives trading would improve liquidity on the bourse, which has 65 stated companies of which telecoms and banking institutions are some of the most seriously traded.

The NSE will be the second trade in Sub-Saharan Africa immediately after Johannesburg to launch trading in derivatives.

Kenya’s Stanbic Financial institution, section of Stanbic Holdings and Co-operative Financial institution of Kenya, have been certified by the central financial institution to take care of clearing and settlement for the derivatives trade, the CMA claimed.

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