In a bid to reshape the landscape for unquoted securities, the Nairobi Securities Exchange (NSE) PLC introduces the Unquoted Securities Platform (USP), a cutting-edge automated solution designed for the issuance and trading of securities of unquoted companies.
The USP, a brainchild of NSE LLP, a fully owned subsidiary of NSE PLC, promises to bring efficiency, accessibility, and transparency to the trading of unquoted securities.
Platform Dynamics:
The NSE LLP Governance:
Governed by a Management Committee appointed by the Board of the NSE PLC, the USP operates under the careful oversight of senior representatives of the NSE PLC. This ensures that the daily operations of the platform align with industry standards and regulatory requirements.
Technology Backbone:
Escrow Financial Services Limited takes the helm as the technology provider for the USP. Leveraging its expertise in FinTech solutions, Escrow Financial Services Limited ensures that the USP is equipped with a versatile and robust technological infrastructure.
Operational Guidelines:
The USP is guided by a set of operational guidelines that delineate the framework for issuers, trading participating agents, and other stakeholders. These guidelines, enforceable by the NSE LLP through the Management Committee, provide a comprehensive set of rules governing the conduct of various parties within the platform.
Benefits of the USP:
For Issuers:
- Access to Long-Term Capital: The USP facilitates access to long-term capital through private placements, offering a valuable avenue for enterprises seeking funding.
- Wider Investor Pool: Companies can tap into a broader pool of domestic and international investors who previously lacked access to unquoted securities.
- Flexible Listing and Compliance: Enjoy flexible listing options and simplified regulatory compliance.
- Automated Trading Infrastructure: Issuers benefit from an automated trading infrastructure, reducing time and costs associated with facilitating trades.
- Price Discovery: Gain insights into the true value of the company through price discovery.
For Investors:
- Cost-Effective Transfer: Investors can conveniently and cost-effectively transfer unquoted securities.
- Increased Liquidity: Quoted companies experience enhanced liquidity and faster execution of trades.
- Efficient Entry and Exit: Investors enjoy an efficient entry and exit mechanism.
- Transparency: Daily reports with bid-offer prices provide increased transparency.
- Settlement Assurance: Settlement delays and failures are minimized as funds are held by a custodian, ensuring availability before settlements.
- Automated Transactions: Automated processing reduces the risk of human errors associated with manual processing.
- Surveillance: The platform allows surveillance by the exchange and the regulator, simplifying reporting for market participants.
- Registrar Management: An independent registrar manages the register of investors, safeguarding it against possible manipulation.
For Quoted Companies:
- Enhanced Liquidity: Quoted companies benefit from enhanced liquidity through an integrated system.
- Access to Multiple Agents: Access to a wider array of trading participating agents, expanding market reach.
- Professional Transactions: Issuers engage professional parties, streamlining trading transactions.
The Unquoted Securities Platform emerges as a transformative force in the financial markets, poised to redefine how unquoted securities are issued, traded, and managed. With a focus on accessibility, efficiency, and transparency, the USP marks a significant stride towards a more inclusive and dynamic financial ecosystem.
