Sub-custody guide: Kenya
A notable initiative was the successful de-mutualisation and
self-listing of the Nairobi Securities Exchange (NSE) in June and September
2014 respectively. Other short-term initiatives include the modernisation of
Kenya’s Central Depository and Settlement Corporation, as well as the review of
the regulatory framework to support the introduction of new products such as
commodities and derivatives, margin trading and securities lending.
A less positive change for participants is the introduction
of the capital gains tax at a 5% rate, effective January 1 2015. “The
application of the tax is still unclear and the market participants are
awaiting the publication of guidelines by the Kenya Revenue Authority, on how
the tax will be implemented,” says Janet Waiguru, head of Standard Bank’s
investor services business in East Africa.
“Notwithstanding this, Kenya has been one of the hot markets
for foreign investors in 2014, as witnessed in the significant growth seen in
our sub-custody book in the market,” says Waiguru.
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