The Capital Markets Authority (CMA) has announced that it will allow listed companies on the Nairobi Securities Exchange (NSE) to pay dividends without holding annual general meetings (AGMs).
This is among a raft of measures that CMA has launched to ensure business continuity in light of the COVID-19 crisis.
Industry players have collaborated to mitigate disruption in capital markets by ensuring that the trading and settlement systems continue functioning to support transactions.
The CMA Acting Chief Executive, Mr. Wyckliffe Shamiah, explained the Authority is allowing the progression of some of the activities usually sanctioned during Annual General Meetings (AGMs) for listed companies. Mr. Shamiah said, ‘’given the need to postpone AGMs, to help eligible shareholders access dividends during these difficult circumstances, the respective Boards of issuers of securities have been allowed to proceed to declare and pay the dividends to their shareholders. This will be subject to the companies’ dividend policies, procuring all other relevant internal approvals, and making available the audited financial statements to CMA, Nairobi Securities Exchange (NSE) and the public in the prescribed channels as explained in an earlier guidance’’. The Boards of listed companies have also been allowed to progress the appointment and remuneration of auditors. Board decisions on these matters will need to be tabled at the AGMs, once convened, for ratification.
CMA has also suspended the requirement by companies to publish their financial results in two newspapers of national circulation until 30 June 2020. Companies are directed to use online platforms to publish their financial results in the meantime. However, listed companies that do not have any challenges publishing their financial statements as normal in the newspapers are encouraged to do so.
To ensure normal operations continue at the Nairobi Securities Exchange (NSE), the NSE Chief Executive, Mr. Geoffrey Odundo, said the business continuity plan of the Exchange has been operationalized to support online and mobile trading with a URL available on NSE’s website. Mr. Odundo added that the URL leads investors directly to the trading participants online or mobile portals for ease of trading from the comfort of their home. Additionally, market players have successfully been working remotely with trading systems accessed via Virtual Private Networks.
The Central Depository and Settlement Corporation (CDSC) Chief Executive, Mr. Nkoregamba Mwebesa, added that through its Business Continuity Plan, CDSC has ensured settlement continues through secure remote links with all settlement participants. Investors are also able to check their portfolios using the CDSC Mobile App, and their various queries are being addressed through the social media platforms. Mr. Mwebesa added that CDSC is still offering all other depository services to Central Depository Agents and other stakeholders. These measures are aimed at ensuring that investors have remote access to the market through various channels, with the ability to easily buy or sell their securities with minimal physical movement and contact in line with the Ministry of Health Directives.