KENYA: NSE Receives Regulatory Approval to Roll Out Day Trading

Wednesday October 27 2021

On 26^th October 2021, the Nairobi Securities Exchange (NSE) announced that it has received approval from the Capital Markets Authority (CMA) to initiate day trading. The roll out of day trading will go live on 22^nd November, 2021 as part of NSE’s strategy to enhance market liquidity.

Day trading refers to the practice of purchasing and selling a security within a single day or trading session or multiple times over the course of the day. To complement this milestone, the NSE Board approved an incentive structure whereby investors who participate in day trades will receive a discount on the second leg of the transaction which will be levied at 0.114% compared to normal trades which are levied at 0.12% .This benefit will be enjoyed by the investor directly through their trading accounts. The NSE has since championed the requisite infrastructure enhancements to ensure that this is achieved.

This milestone is a culmination of the investment in technology whereby the NSE commissioned a new trading system in October 2019 that enabled separation of the trading and post trading activities. The separation effectively enables the introduction of new products including Covered Short Selling and Day Trading which will revolutionize the capital markets and strengthen NSE’s position as the preferred investment hub in the region.

The introduction of day trading is part of NSE’s strategic objective to enhance liquidity. Equally, it is an extension of ongoing initiatives to increase investor participation in the market which has also seen the introduction of the Unquoted Securities Platform (USP) earlier this year.

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