New NSE unit to manage securities trading activities

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New NSE unit to manage securities trading activities


Geoffrey Odundo, CEO of the Nairobi Stock Exchange. PHOTO FILE | NMG

Nairobi Securities Exchange Plc (NSE) #ticker: NSE is set to restructure its operations, transferring bond and stock trading activities to a new subsidiary.

The brokerage firm currently manages securities trading directly in addition to owning other units offering related services such as settlement of transactions.

To effect the changes aimed at improving corporate governance, operational efficiency and refining strategic direction, the company will transform into a non-operating holding company called NSE Group Plc.

He will create a new wholly owned subsidiary called Nairobi Securities Exchange Limited which will manage the securities business.

“The restructuring will effectively separate the securities industry from other ancillary business entities. This will translate into operational efficiency and better financial performance for the NSE, ”the company said in a circular to shareholders.

“In addition, the proposed NSE Group Plc, as a non-operational holding company, will be in a better position to support the efficient operations of the group by putting in place administrative, legal, risk management and governance systems, processes and practices. appropriate to manage and shape the development of its subsidiaries operating under a common model of shared services.

The Capital Markets Authority (CMA) will regulate the NSE group as a listed company, while the subsidiary that manages the securities business will be regulated as an exchange service provider.

“The majority of staff are expected to transition to the new company, as this entity will have significant exchange activities,” the company said.

“However, some roles will be transferred to NSE Group Plc, as Group roles, particularly in light of the shared services model envisioned, and will be shared with the new company as well as with the other subsidiaries.”

The shareholding of investors in the self-listed company and its subsidiaries will not change. NSE wholly owns NSE Clear Limited, NSE LLP and Kenya Futures and Commodities Exchange Limited.

It also has stakes in the Central Depository and Settlement Corporation (22.5%) and AKS Nominees (88.9%).

NSE is the latest to transform into a non-operating holding company, a strategy that gives a company greater flexibility in terms of expanding into new areas, raising funds, allocating capital and overseeing operations. existing bases.

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