- Advertisement -

Kenyan Investors Protest New Maintenance Fee

The CDSC has, however, maintained that the fee is there to stay

- Advertisement -

Investors are up in arms over the newly introduced monthly Ksh100 account maintenance fee by the Central Depository and Settlement Corporation Limited (CDSC).

CDSC provides automated clearing, delivery and, settlement facilities for transactions carried out at the Nairobi Securities Exchange (NSE). Many analysts have argued that the newly introduced fee will push away retail investors, further lowering the prospects for an already struggling bourse.

The CDSC has, however, maintained that the fee is there to stay. It adds up to Ksh1,200 a year and applies to all CDS accounts.

“Dear Investor, effective July 15, 2022, CDSC will introduce a CDS account maintenance fee of Sh100 per month payable annually,” the company informed investors.

According to the corporation, the fee is necessary to keep CDSC financially stable and to enable it to offer better and expanded services. Worryingly, only 61,000 of the 2.03 million share accounts at the CDSC have participated in trading over the past two years.

The Initial Public Offering (IPO) drought at the NSE is in its sixth year, indicative of the depressed market.

READ>>Kenya Power Appoints New Acting MD

Official data shows shares traded at the NSE have fallen from from 7 billion shares in 2017 to 4 million shares traded in 2021.

Respected investor and former NSE Chairman Jimnah Mbaru was among those who voiced opposition to the fees. He called for CDSC to be run as a department within the NSE.

“The Nairobi Securities Exchange should takeover the CDSC and drop these proposed fees. We need to continue to reduce the costs of trading securities on the exchange. In our small market the CDSC should be the BACKOFFICE of the Trading Floor,” he tweeted on May 17.

A petition started on May 18 seeking to stop the new charges from taking effect had racked up close to 400 signatures within a few hours.

READ>>Opportunity: Showmax is Looking for Two New Originals in Kenya

- Advertisement -
MARTIN SIELEhttps://loud.co.ke/
Martin K.N Siele is the Content Lead at Business Today. He is also a Quartz contributor and a 2021 Baraza Media Lab-Fringe Graph Data Storytelling Fellow. Passionate about digital media, sports and entertainment, Siele also founded Loud.co.ke
- Advertisement -
Must Read
- Advertisement -
Related News
- Advertisement -
0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments