The Capital Markets Authority has suspended plans penalise dormant Central Depository and Settlement accounts holders.
The accounts are used by investors keen or buying or selling stocks and shares at the Nairobi Securities Exchange.
The Sh1,200 or Sh100 monthly fee was introduced by the Central Depository and Settlement Corporation (CDSC) and was to be effective from July 15.
Yesterday, CMA said the fee has been suspended pending discussions from the stakeholders and approval from the regulator.
The announcement was made by Regulatory Policy and Strategy Director Luke Ombara, while releasing CMA's 2022 quarter two Soundness Report.
“That remains suspended though they have officially come back to us and indicated that they are going to subject the same to stakeholders over the next thirty days," Ombara said.
He said based on the feedback, CMDA will come back to the regulator and discuss whether the matter can proceed.
CDSC had indicated that the new fee was necessary to boost its revenue which has dropped yet in continues to incur high maintenance costs for 1.6 million accounts, majority of which are idle.
If approved, the corporation which facilitates holdings of shares in electronic accounts and manages the process of transferring shares traded at the Nairobi bourse will earn at least Sh1.92 billion.
The corporation's financial statement for the year ended December 31, 2021 shows it earned slightly above Sh300 million from managing accounts with maintenance taking up to 60 per cent of the revenue.
Its main revenue streams remains earnings from transaction levy upon completion of equity and bond transactions in the Central Depository System. This increased marginally by three per cent last year to Sh245 million compared toSh238 million earned the previous year.
It charges each investor 0.08 per cent per transaction plus 0.01 per cent for the CDSC guarantee fund.
According to CDSC, at least 97 per cent of total accounts have been idle for the past two years, most of which were opened during the issuance of major Initial Public Offers (IPOs).
''The majority remained muted after Safaricom's IPO of 2008, which brought nearly one million new investors to market and that KenGen in 2006,'' an audit released in February shows.
At the same time, CMA renewed calls to privatise some government institutions as a way of improving listings at the Nairobi bourse.
Some of government agencies and institutions targeted for privatisation include the Kenya Port Authority, Kenya Railways Corporation and several state owned sugar firms including Nzoia Sugar, Chemilil and Muhoroni.
This, the regulator says will help end a decade listing dry spell in the country, with the major Initial Public Offer (IPO) undertaken almost 14 years ago.
In May, the country was ranked the worst performance nations in terms of IPO, by business advisory firm, PricewaterhouseCoopers (PwC).
The Africa Capital Markets Watch 2021 report showed that South Africa topped the list with 16 IPOs since 2017 followed by Egypt at 15 and Namibia with four, raising $4.14 billion (Sh472 billion), $1.22 billion (Sh139.7 billion) and $232 million (Sh26.4 billion) respectively.
