The Treasury has capped the approval fee payable by initial public offering (IPO) firms and corporate bonds at Sh30 million to encourage listing of more securities.
Companies pay a fee of 0.15 per cent to the Capital Markets Authority when listing. A large issue in the size of the Safaricom IPO which raised Sh50 billion would attract a levy of Sh75 million under the previous rules.
With the Sh30 million cap, any company issuing an IPO of more than Sh20 billion will stand to make a saving on the levies chargeable.
The Central Depository and Settlement Corporation (CDSC) has also emerged a winner in the revision of capital market levies with the transaction levy charged by the depository rising from the current 0.06 per cent to 0.08 per cent of the value of a given transaction.
“The review of the fees, levies, and commissions was necessitated by the need to ensure financial sustainability of the capital markets sector, and raise levies collected by the CDSC given its national importance to market stability and to support continuous improvement of systems and strengthened operational oversight,” said CMA acting chief executive officer Paul Muthaura.
“The transaction fees levied by brokers at the NSE have been reduced from 1.78 per cent to 1.76 per cent, by reflecting the percentage increase in the CDSC levy, implying that the cost to investors has not increased.”