Capital markets industry announces measures to mitigate the adverse effects of the coronavirus pandemic
In line with the mandate of ensuring an orderly, fair and efficient market as well as protection of investors, the capital markets industry is working jointly to ensure that market activities continue normally even as the country copes with the devastating effects of COVID-19 after confirmation of the few known cases reported to date.
The Capital Markets Authority (CMA), Nairobi Securities Exchange (NSE), Central Depository and Settlement Corporation (CDSC) and the other market players are working closely to ensure normal operations during this time, despite the scaled-down physical interaction measures taken.
CMA Acting Chief Executive, Mr. Wyckliffe Shamiah, said the Authority has put in place necessary business continuity plans to ensure the safe and orderly conduct of its business during this time and is working with the entire capital markets industry so that appropriate measures are taken as the usual service is made available.
Shamiah said, ‘’CMA continues to collaborate with NSE and CDSC, market intermediaries, issuers and other capital markets industry stakeholders to ensure that there is minimal disruption to market activities while supporting the Government of Kenya strategies to contain the spread of the Coronavirus’’.
He added that although the overall impact on the economy from what is being witnessed is likely to be enormous, the Authority is looking into measures that shall alleviate resulting suffering to the industry.
To ensure normal operations continue at the Nairobi Securities Exchange (NSE), the NSE Chief Executive, Mr. Geoffrey Odundo, said the business continuity plan of the Exchange has been operationalized to support online and mobile trading with a URL available on NSE’s website. Mr. Odundo added that the URL leads investors directly to the trading participants online or mobile portals for ease of trading from the comfort of their home.
Additionally, market players have successfully been working remotely with trading systems accessed via Virtual Private Networks. Mr. Odundo added that the industry is encouraging local firms capable and approved by the Ministry of Health to produce supplies required to combat the COVID-19 pandemic to raise capital through the NSE including Ibuka, with some of the compliance requirements eased for them by the CMA.
The Central Depository and Settlement Corporation (CDSC) Chief Executive, Mr. Nkoregamba Mwebesa, added that through its Business Continuity Plan, CDSC has ensured settlement continues through secure remote links with all settlement participants. Investors are also able to check their portfolios using the CDSC Mobile App, and their various queries are being addressed through social media platforms. Mr. Mwebesa added that CDSC is still offering all other depository services to Central Depository Agents and other stakeholders.
These measures are aimed at ensuring that investors have remote access to the market through various channels, with the ability to easily buy or sell their securities with minimal physical movement and contact in line with the Ministry of Health Directives. The Kenya Association of Stockbrokers and Investment Banks (KASIB) Chief Executive, Mr. Willie Njoroge, welcomed the support from the Authority, which has authorized and shall continue to guide, monitor and regulate the use of automated customer onboarding processes to reduce the need for physical verification of documents and in-person visits while facilitating easy access to the market by investors.
The Fund Managers Association (FMA) Chairman, Mr. Jonathan Stichbury, said the association through its member firms will continue to operate and actively investing the Kenyan capital markets on behalf of their institutional and retail clients – and to support the proper functioning of the capital markets. Mr. Stichbury added that FMA is already working with its members on CSR initiatives to support Kenyans affected by the COVID-19 outbreak and its economic effects. CDSC, NSE, CMA and KASIB are also consulting with industry players to determine what other measures can be put in place to support investors in the capital markets, and these will be announced in due course.