Fund managers, invest advisers stare at higher licensing charges


Capital Markets Authority (CMA) CEO Wycliffe Shamiah during the Capital Markets Soundness Report media briefing at the authority's offices on January 30, 2023. PHOTO | DIANA NGILA | NMG

Invest advisors and fund managers who hold licences from the Retirement Benefits Authority (RBA) face higher licensing fees in new proposals published by the Capital Markets Authority (CMA).

According to the Draft Capital Markets Licensing Requirements Regulations published last week, persons or firms applying to be investment advisers will be required to pay Sh100,000 for a permit and renewal, from the current Sh50,000.

Equally, fund managers licensed by RBA will see their licensing costs rise to Sh100,000 from Sh50,000 previously, but will see their license renewal costs retained at Sh50,000 should the proposals sail through.

Extra adjustments meanwhile propose to raise application fees for approval, license or renewal of licenses from the current flat rate of Sh2,500.

Individuals or firms seeking an investment bank license will pay Sh20,000 in application fees while fees charged to seekers of custodian, trustee, fund manager, stockbroker and dealer licences have been set at Sh10,000.

The draft nevertheless retains brokerage commission and fees at present levels.

The maximum chargeable commission for equity investors will be unchanged at 2.1 percent for transactions worth up to Sh100,000, and 1.76 percent for those above this amount.

The share of the commissions due to the CMA and the Nairobi Securities Exchange (NSE) remains 0.12 percent, and that of the Central Depository and Settlement Corporation (CDSC) is at 0.08 percent.

The transaction fees payable by investors in the secondary bond market is likewise unchanged at 0.035 percent.

Further, the new regulations seek to establish a new hybrid market intermediary to be known as a broker-dealer— one that will combine the functions of stockbrokers and dealers.

The broker-dealer will in addition to stockbroking be allowed to promote or arrange the underwriting of issuance of securities.

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