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[2008-08-28] NSE proposes changes to payment for shares Capital markets managers, smarting from investor outrage over Safaricom’s initial public offering refunds muddle, are proposing major changes to the way investors will pay for shares in the future.
The Nairobi Stock Exchange says it will be seeking changes to the capital markets regulations to allow investors to apply for shares and pay for only what they have been allocated to eliminate the refunds crisis.
This method of settlement, commonly known as delivery versus payment (DVP), has been in use in the Kenyan market since last year’s AccessKenya initial public offering (IPO).
Since the landmark KenGen flotation in May 2006, subsequent listings have been marred by refund hitches, leading to massive distortions in the money markets.
Thousands of investors who participated in the Safaricom IPO that closed in May have yet to receive their refunds nearly three months after the share started trading at the bourse.
