CMA commences public exposure of reviewed public offers, listings

The Capital Markets Authority (CMA) has developed draft Public Offers Listing and Disclosures Regulations in a bid to increase listings at the Nairobi Securities Exchange (NSE).

The move is also expected to support capital raising by Small and Medium Enterprises (SMES) and enhance investor protection

Further, the market regulator has commenced a 30-day public exposure of the same running from May 2 to June 3

“The review of the POLD Regulations is in line with the third Medium Term Plan (2018-2023) of the Vision 2030 Economic Blueprint by creating a facilitative legal framework to support financing of flagship projects through the capital market,” said CMA Chief Executive Officer, Wyckliffe Shamiah.

Shamiah explained that the review is an important first step to align the regulatory framework to market realities including the advancement of technology which has transformed the way markets operate including the capital raising business models

It further addresses approval turnaround times, shelf registration and valuation of securities, among other gaps in the existing POLD Regulations.

The draft Regulations have also introduced two new market segments: SME Fixed Income Securities Market Segment (SME FISMS) and Small and Medium Enterprises Market Segment (SMEMS).

SME FISMS is a market segment for listing debt securities with an initial offer size below Sh250 million or an amount set by CMA. The SMEMS is a market segment for listing non-debt securities issued by SMES.

Special Purpose Acquisition Vehicles (SPACS) have also been introduced. SPACs are issuers set up to raise funds through an initial public offering by buying another company, which is the resulting issuer.

The resulting issuer should have clear core business and offer reasonable returns to shareholders based on equity capital employed.

In recognition of the advancements in technology, electronic offers of securities have been introduced, considering the use of the internet or other electronic/automated means.

To enhance investor protection, the draft Regulations apply to all offers of securities to the public in Kenya, whether the issuer is seeking listing on any securities exchange in Kenya.

They also provide for issue of securities to the public and private offers of securities as well as the eligibility requirements for issue of securities.

Issuers not seeking listing of securities on a securities exchange shall still be expected to meet the eligibility criteria and comply with the disclosure requirements.