New annual fee to hit small NSE investors badly
Small investors at the Nairobi Securities Exchange (NSE) have been spooked by the introduction of an annual Sh1,200 account maintenance fee.
The Central Depository and Settlement Corporation (CDSC), the company which offers clearing and settlement services at the NSE, says it will from mid-July start charging investors Sh100 a month.
The charges, which amount to Sh1,200 a year, will add to other charges, including transaction levy in what looks set to blunt the attractiveness of NSE investments by retail investors.
“Dear Investor, effective July 15, 2022, CDSC will introduce a CDS account maintenance fee of Sh100 per month payable annually,” said the company.
Introducing an account maintenance fee will, therefore, throw such shareholders off-balance, with many likely to spend more than what they earn from their investments
“The NSE should take over the CDSC and drop these proposed fees. We need to continue to reduce the costs of trading securities on the exchange. In our small market, the CDSC should be the back office of the trading floor,” said Mr Mbaru via his Twitter handle.
But NSE is set to benefit from the additional revenue raised by the CDSC given that it holds a 40.5 per cent stake in the entity whose revenue stood at Sh308 million in 2020.
