The cost of shares trading is set to rise marginally following a new proposal that lifts the Central Depository and Settlement Corporation (CDSC) transaction levy, negating the quest for lower trading fees especially for individual investors.
New proposals contained in Capital Markets (Licensing Requirements) General Regulations, 2025 seek to lift the CDSC levy from the current 0.08 percent to 0.12 percent on the value of each transaction.
This will lift the CSDC revenues from trading to the same level as the Capital Markets Authority (CMA) and the Nairobi Securities Exchange.
For investors trading in shares valued at less than Sh100,000, the total maximum cost of transactions will rise to 2.14 percent from a flat 2.1 percent currently, if the proposal is adopted.
The regulations are currently before Parliament for consideration.
Trades above Sh100,000 will attract a maximum cost of 1.74 percent from 1.7 percent at present.
An investor buying 1,000 Absa shares on Friday last week for Sh34.50 a piece would have for instance paid a total of Sh35,017.50 inclusive of total charges.
Under the new proposals, the same transaction will cost Sh13.80 more with the total consideration rising to Sh35,031.30.
Other trading fees –including brokerage commissions, the investor compensation fund fee and the central depository guarantee fee— remained unchanged.
The rise in the CDSC levy and its overall impact on trading fees is expected to undermine the quest to bring more retail/individual investors who are the most sensitive to the cost of fees.
It works against recent interventions, including the launch of shares trading via mobile-money platform M-Pesa to onboard more retail participants.
Investors can also buy a single company’s stock after amendments that eliminated the 100-share minimum rule in 2025.
The Nairobi Securities Exchange (NSE) plans to bring up to nine-million active retail investors to the market by the end of 2029, betting on innovations that include lowering barriers to entry including trading fees.
“The target of nine million active retail investors indicates a desire to democratise access to the market, promoting financial inclusion and enhancing capital market participation across Kenya and potentially, the broader African region,” the NSE said in its 2025-2029 strategy outline.
“This goal targets one-third of Kenya’s working population aged between 18 and 64, which currently stands at 32 million,” it added.
Shares trading attracts seven kinds of fees including transaction fees to CMA and NSE and investor compensation fund and Central Depository Guarantee fund which are set at 0.01 percent, each.
Each transaction also attracts a Sh2 stamp duty for every Sh10,000 in value.
Net brokerage commissions are set at a maximum of 1.76 percent for transactions values up to Sh100,000 and a maximum of 1.5 percent for higher trades.
The higher CDSC transaction fees come four years after the settlement services providers pushed for a new Sh100 monthly charge on stock market accounts which would have seen it collect nearly Sh1.8 billion a year.
CDSC was forced to suspend the charge after investors protested the extra cost, noting that it was seeking further consultations with the market’s regulator CMA and market stakeholders.
Investors argued the new charge would discourage trading at the bourse and lead to account closures at a time when the market faced multi-year lows on trade volumes.
A higher CDSC transaction fee will lift the firm’s revenues from trading to Sh174 million from Sh116 million assuming Sh145.47 billion in equity turnover as was the case in 2025.
The CDSC realised Sh195 million in revenues for 2024 including Sh169.7 million from the 0.08 percent transaction levy.
Market participants are keen on lower fees especially for retail investors and have pushed a proposal to eliminate the Sh2 stamp duty for transactions up to Sh10,000.
“We had a conversation with President Ruto (during the launch of the Ziidi trader) and we proposed to have the stamp duty removed for transactions where the value is under 10,000. Market players will also need to bring down their levies including brokers as you cannot just ask one single party to lower their fees,” said Eric Ruenji the co-founder and chairman of Theo Capital.
