In a groundbreaking move, the Capital Markets Authority of Kenya (CMA) has granted approval to First Future Holdings Ltd to initiate trials of a revolutionary technology that enables Kenyans to buy and sell shares listed on the Nairobi Securities Exchange (NSE) using SMS. This regulatory green light is poised to democratize stock market investing, fostering accessibility for a wider demographic.
The innovative technology leverages Unstructured Supplementary Service Data (USSD), a menu-driven system widely utilized in Kenya for accessing mobile banking and various services. Through this system, investors can seamlessly execute orders to buy or sell shares, monitor their portfolios, and stay informed with real-time market updates—all through their mobile phones.
Currently undergoing evaluation in the regulatory sandbox of the CMA, a designated space for testing new financial products and services, the technology is expected to receive final approval in the upcoming months.
The introduction of SMS-based share trading is anticipated to usher in a host of benefits for Kenya’s capital markets. By eliminating geographical and technological barriers, it is set to simplify investing, particularly for individuals in rural areas and those less familiar with computers or smartphones. This inclusive approach is expected to broaden participation in the stock market and, concurrently, boost trading volume on the NSE.
The CMA remains steadfast in its commitment to the expansion and development of Kenya’s capital markets, actively encouraging the use of financial technology (FinTech) to achieve this objective. The regulatory sandbox, a key component of this initiative, not only facilitates innovation but also serves as a catalyst for financial inclusion, aligning with the broader vision of propelling Kenya’s financial landscape into the future.
[Photo/capitalfm business]
By: Delino Gayweh
Serrari Financial Analyst
23rd, November 2023
