Capital Markets Authority Eases Compliance Requirements for Listed Firms

Capital Markets Authority Eases Compliance Requirements

CMA acting chief executive Wyckliffe Shamiah

  • This is the latest measures taken by the watchdog in the wake of the coronavirus pandemic, which has also resulted in large scale sell-off in the domestic market

The Capital Markets Authority (CMA) has issued fresh guidelines to reduce compliance burden on market participants, stockbrokers and mutual fund managers, including extension in deadline for submission of financial results.

This is with the intention of helping them cope with the economic effects of the coronavirus.

“The authority as a responsive regulator is sensitive to the unfolding financial situation affecting market players and has relaxed disclosure obligations in relation to the publication of financial statements in two newspapers of national circulation until 30 June 2020,” CMA Acting Chief Executive, Mr. Wyckliffe Shamiah said.

The regulator says the deadline for all the licensed intermediaries, issuers of securities to the public, Collective Investment Schemes and other approved persons with timelines for submission and publication of audited financial statements in March and April 2020, has been extended by one month respectively.

He, however, says that firms that can complete and file their statements and publish the same within the regulatory timelines, have been encouraged to do so to ensure investors obtain information in a timely manner.

To ensure timely and seamless flow of the required information to the investing public, CMA has directed that all required disclosures be published on the following platforms; own websites and social media platforms; Nairobi Securities Exchange website for all issuers and trading participants; and the CMA website by all entities affected by this guidance.

Mr. Shamiah explained that the assessment of secondary market performance indicates a decline in equity market prices, reflected in the stock indices, with the NSE-20 Share Index declining by 4.9 percent last week, compared to the significant decline of 11.5 percent in the previous week. 

“The performance of the Kenyan market seems to be better off than many securities exchanges globally. Mixed performance is expected among listed companies as some of the sectors of the economy may be more affected than others.”

The exit by some foreign investors from the market has created an opportunity for local retail and institutional investors to take advantage of the undervalued shares of listed companies. 

Bear Run: NSE Drops Below 2,000 Points as Coronavirus Worries Weigh on Valuations

Domestic institutional investors such as Pension Schemes, Collective Investment Schemes and Insurance Companies with a long-term investment horizon are encouraged to invest in blue-chip companies listed during this period subject to existing limits on asset class investments set out by their respective regulators.