The slide presents the challenges facing Nairobi Securities Exchange

1. CHALLENGES
FACING NAIROBI
SECURITIES
EXCHANGE
Prepared by:
Warui Maina

2. CHALLENGES FACING NSE
Political instability – frequent cases of insecurity
and political intolerance have reduced investor
confidence therefore reducing trading in NSE
Lengthy listing procedures – need for
compliance with certain lengthy procedures
before a company is listed discouraging listing
i.e. the company must have an audit
committee and a transaction adviser,1/3 of its
Board members be non-executive and its chief
financial officer must be a member of ICPAK.

3. High maintenance costs – Regular training of
staff to keep up with dynamic and competitive
industry is costly. Legal requirement that NSE
have automated systems approved by Capital
Markets Authority. Such systems are expensive to
acquire and maintain.
Public awareness – NSE is mandated to conduct
public workshops and seminars an d other
media outlets to raise public awareness on
financial markets activities. It is a challenges
since most Kenyans do not attend such seminars
and are financially illiterate.

4. Implementing the legal and regulatory
framework such as Internet trading guidelines,
offer of securities rule, securities and investment
bill.NSE does not have enough resources to do
so.
The supply of long term securities is limited
compared to their demand resulting into few
listed firms.
Some listed firms have gone into receivership
thus reducing the confidence in investors due to
massive losses.

5. Insider trading. Despite implementing
disciplinary measures among executives, insider
trading is yet to be fully eliminated from the
bourse.
Delay in transfer of ownership of securities due
to long procedures. The stockbroker must ensure
the owner receives transaction statements,
receipts, and purchase & sale contracts as well
as certificate of deposit a/cs before ownership is
conferred to new owner.