NSE Listing Agreement (Kenya)

A NSE Listing Agreement in Kenya governs the relationship between the parties by fixing what each must do.

The Capital Markets Authority (CMA), established under Section 5 of the Capital Markets Act Cap. 485A, is the statutory regulatory body responsible for regulating and developing an orderly, fair, and efficient capital market in Kenya. The CMA licences the NSE as a securities exchange under Section 30A of the Act, approves NSE Listing Rules under Section 30C, and supervises compliance by all market participants — issuers, investment banks, stockbrokers, fund managers, and custodians. All securities listed on the NSE require prior CMA approval of the prospectus or information memorandum under the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002.

The Nairobi Securities Exchange (NSE), established in 1954 and incorporated as a public company in 2014, is the primary securities exchange in Kenya and one of the largest in Sub-Saharan Africa. NSE market segments accommodate different types of issuers: MIMS for large established companies with a minimum market capitalisation requirement; AIMS for small and medium-sized enterprises (SMEs) under the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations; and FISMS for government bonds, corporate bonds, commercial paper, and other fixed-income instruments issued under the Capital Markets (Fixed Income Securities) Market Segment Rules. The NSE also operates the Growth Enterprise Market Segment (GEMS) for early-stage companies.

The Companies Act No. 17 of 2015, which repealed and replaced the former Companies Act Cap. 486, governs the corporate law framework for all listed companies in Kenya. Listed companies must comply with both the Companies Act No. 17 of 2015 (particularly the provisions on directors' duties under Part XV, related party transactions, and shareholder rights) and the CMA's corporate governance guidelines. The Central Depository and Settlement Corporation (CDSC), incorporated under the Companies Act and licensed by the CMA, manages the Central Depository System (CDS) used for dematerialised settlement of NSE securities transactions.

The Kenya Revenue Authority (KRA) administers taxes relevant to capital markets transactions under the Income Tax Act Cap. 470 — including withholding tax on dividends (currently 5% for resident shareholders and 10% for non-residents), capital gains tax on transfer of listed securities (reintroduced at 5% under the Finance Act 2022), and stamp duty on share transfers under the Stamp Duty Act Cap. 480. The Income Tax Act Cap. 470 also provides specific tax exemptions for listed bonds and infrastructure bonds, making the NSE an attractive market for sovereign and corporate debt issuances.

An NSE Listing Agreement in Kenya is required as a mandatory contractual document in every initial listing of securities on the Nairobi Securities Exchange (NSE), representing the formal commitment by the issuer to the NSE's ongoing regulatory obligations as a condition of admission to the exchange.

An NSE Listing Agreement is required when a Kenyan company meeting the minimum financial and governance criteria — net assets, profit track record, minimum public float — prescribed by the NSE Listing Rules for the Main Investment Market Segment (MIMS) has received approval from the Capital Markets Authority (CMA) for its prospectus under the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002 and wishes to formally contract with the NSE for the admission of its ordinary shares to trading.

An NSE Listing Agreement is needed when a company seeking listing on the Alternative Investment Market Segment (AIMS) — designed for smaller, growth-oriented companies with less stringent minimum requirements than MIMS — has completed its CMA approval process and is ready to formalise its listing obligations. AIMS companies are subject to a Nominated Adviser (NOMAD) requirement under the AIMS rules, and the Listing Agreement records the appointment of the approved NOMAD.

An NSE Listing Agreement is required when a corporate issuer — a bank licensed by the CBK, an insurance company licensed by the Insurance Regulatory Authority (IRA), or a commercial company — proposes to list a corporate bond, commercial paper, or medium-term note on the Fixed Income Securities Market Segment (FISMS) of the NSE under the Capital Markets (Fixed Income Securities) Market Segment Rules, and the issuer must commit to continuous disclosure obligations and bondholder reporting requirements.

An NSE Listing Agreement is needed when the Government of Kenya through the National Treasury, or a county government, proposes to list a sovereign bond or infrastructure bond on the NSE's FISMS, formalising the government's obligations as an issuer under the Capital Markets Act Cap. 485A and the Public Finance Management Act No. 18 of 2012, including the obligation to maintain a registered transfer agent and to publish audited financial statements.

An NSE Listing Agreement is required when an already-listed company on the NSE proposes to issue and list additional classes of securities — for example, preference shares, convertible notes, or a rights issue of ordinary shares — and the supplementary listing must be formally approved by both the CMA and the NSE under the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002.

An NSE Listing Agreement is needed when a foreign company incorporated outside Kenya — for example, a company incorporated in Mauritius, Rwanda, or Uganda — wishes to seek a secondary listing on the NSE under the East African Community Capital Markets Infrastructure (EACMI) framework, enabling cross-border listing within the East African Community (EAC) member states pursuant to the EAC Common Market Protocol.

An NSE Listing Agreement in Kenya under the Capital Markets Act Cap. 485A and the NSE Listing Rules must address the following essential obligations and structural elements.

Identification of the Issuer: Full legal name of the issuer (public company registered under the Companies Act No. 17 of 2015), Business Registration Service (BRS) registration number, registered office address, names of directors, and company secretary. The issuer must confirm that its memorandum and articles of association (or equivalent constitutional documents) are consistent with the NSE Listing Rules and the Capital Markets Act Cap. 485A, and that all relevant board resolutions approving the listing have been duly passed and are in force.

Description of Securities to be Listed: Precise description of the class, number, nominal value, and International Securities Identification Number (ISIN) assigned by the CDSC of the securities to be admitted to listing. For equity securities, state the total authorised and issued share capital, the par value per share, and the minimum public float percentage as required by the applicable NSE market segment rules.

CMA Approval and Prospectus: Reference the CMA approval letter and the date of approval of the prospectus or information memorandum under the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002. The issuer warrants that the prospectus is accurate, complete, and not misleading in any material respect, and that all CMA approval conditions have been or will be satisfied before the commencement of trading.

Continuous Disclosure Obligations: The issuer undertakes to comply with its ongoing disclosure obligations under the NSE Listing Rules and the Capital Markets (Disclosure Requirements) (General) Regulations 2002. These include: immediate notification of price-sensitive information and material events to both the NSE and the CMA; publication of quarterly, half-year, and annual financial statements in the approved format; immediate disclosure of changes in shareholding by directors and substantial shareholders (those holding 3% or more of the issued share capital) under Section 30 of the Capital Markets Act Cap. 485A; and filing of annual reports with the NSE, the CMA, and the Registrar of Companies within the prescribed deadlines.

Corporate Governance Compliance: The issuer commits to maintaining the standards of corporate governance prescribed by the CMA's Code of Corporate Governance Practices for Issuers of Securities to the Public 2015, including: a board with a minimum number of independent non-executive directors as prescribed (typically one-third of the board); a functioning audit committee with an independent chair; an established risk management framework; and a board charter and conflict of interest policy compliant with the Companies Act No. 17 of 2015.

Transfer Agent and CDSC Registration: The issuer undertakes to maintain a registered share transfer agent approved by the CDSC and to confirm that all securities in the listed class are dematerialised and credited to the Central Depository System (CDS). This obligation is fundamental to the NSE's electronic clearing and settlement system, and the issuer must execute a CDSC Registrar Services Agreement as a parallel agreement.

Suspension and Delisting: The Listing Agreement acknowledges the NSE's and CMA's powers to suspend trading in the issuer's securities or to delist the securities in the event of a material breach of the Listing Agreement or the NSE Listing Rules under Section 31 of the Capital Markets Act Cap. 485A. Suspension does not relieve the issuer of its disclosure obligations to existing security holders.

Fees and Annual Listing Charges: The issuer commits to paying the initial admission fee and annual listing fees to the NSE at the rates published in the NSE schedule of charges, and to paying all regulatory levies due to the CMA under the Capital Markets (Fees) Regulations from time to time in force. The forms-legal.com Kenya NSE Listing Agreement template provides a thorough, CMA-compliant framework covering all mandatory obligations of an issuer under the Capital Markets Act Cap. 485A and the NSE Listing Rules.

Under the Companies Act No. 17 of 2015, the Registrar of Companies at the Office of the Attorney General maintains the register of Kenyan companies. Section 3 of the Law of Contract Act (Cap. 23) governs contractual obligations. The Competition Authority of Kenya (CAK) enforces the Competition Act No. 12 of 2010. The Kenya Revenue Authority (KRA) administers corporate tax under the Income Tax Act (Cap. 470). The High Court of Kenya has unlimited original jurisdiction under Article 165 of the Constitution of Kenya 2010.