The Nairobi Securities Exchange (NSE) has issued a new compliance circular urging shareholders, trading participants, and investors to strictly adhere to existing shareholding limits set under the Capital Markets (Nairobi Securities Exchange Limited Shareholding) Regulations, 2016.
In a circular dated 29 October 2025, the NSE reminded all market participants that individual investors, companies, and trading participants must comply with the prescribed ownership thresholds designed to preserve the integrity, transparency, and competitiveness of Kenya’s capital markets.
According to the circular, individuals or private companies are prohibited from directly or indirectly holding more than 5% of the NSE’s equity share capital, while public companies may not exceed 10%. Additionally, trading participants, including brokers and dealers, are collectively barred from owning more than 40% of the exchange’s total issued shares.
The new communication, signed by Frank Mwiti, Chief Executive Officer of the Nairobi Securities Exchange, underscores the regulator’s commitment to upholding Kenya’s market stability amid a period of rising investor activity and cross-border participation.
“All shareholders, trading participants, and relevant persons are advised to exercise due caution when dealing in shares of the Exchange, whether on their own behalf or for clients, to ensure that no transaction breaches the prescribed shareholding thresholds,” the circular stated.
The NSE’s move comes as part of ongoing efforts to prevent excessive ownership concentration, which could compromise independence and governance of the exchange. Market analysts say the guidance reflects the exchange’s broader push to align with international best practices in ownership regulation and corporate transparency.
By reiterating the limits, the NSE aims to maintain a diverse and balanced shareholder base, ensuring that no single entity or group of related investors can exert undue influence over market operations.
The circular further requires investors and intermediaries to notify the NSE in advance of any proposed share transactions involving its equity, especially when nearing or exceeding the threshold limits. Written confirmation must be obtained from the exchange before such transactions are executed.
This precaution, according to the NSE, will support regulatory compliance and investor protection, while promoting fairness and accountability in Kenya’s capital markets.
The NSE has also encouraged investors to review their current and prospective holdings to ensure continued compliance with the regulatory framework. Non-compliance, experts warn, could result in enforcement action or restrictions on trading activities.
The reminder also comes at a time when Kenya’s capital markets are witnessing growing interest from both local pension funds and foreign institutional investors seeking exposure to East Africa’s largest economy. With this surge in participation, regulators are under pressure to ensure equitable access and mitigate concentration risks.
The NSE’s compliance reminder echoes broader efforts by the Capital Markets Authority (CMA) and the Central Bank of Kenya (CBK) to strengthen corporate governance in the financial sector. It also complements Kenya’s ongoing capital markets reforms, which aim to enhance liquidity, transparency, and investor confidence.
As the NSE continues its modernization agenda, including the rollout of new digital trading systems and increased product diversification, maintaining regulatory compliance remains a top priority. The exchange’s management believes that upholding these shareholding thresholds will foster a healthier investment climate and support sustainable market growth.
In closing, Mwiti reaffirmed the Exchange’s commitment to regulatory integrity, calling on all stakeholders to align their operations with the market’s legal and ethical standards.
“The Exchange further advises all parties to review their current and prospective holdings to ensure continued compliance with the applicable regulatory framework,” the CEO stated.
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