CMA announces the roadmap for the closure of the compensation process for Discount Securities Ltd Investors
Nairobi, March 20, 2015…The Capital Markets Authority (CMA) announced today the roadmap for the closure of the compensation process for investors who lost their money when Discount Securities Limited (DSL) was put under statutory management. This final period of compensation is expected to last three months with effect from April 1, 2015.
The exercise will also address the transfer of shares to other Central Depository Agents (CDAs) for investors who still have their shares under the custody of DSL. CMA Acting Chief Executive Mr. Paul Muthaura, noted ”CMA procured the services of Co-operative Bank of Kenya in February 2012 to process and disburse funds to investors. We also transferred all details of share accounts to them to enable investors initiate the transfer process at any bank branch nearest to them.”
The Authority has stressed that investors who will not have submitted claims by June 30, 2015 will forfeit their claims. Further, those who would not have transferred their shares by June 30 this year will have their securities deemed as unclaimed and these may be transferred to the Unclaimed Financial Assets Authority.
Mr. Muthaura observed that there are over 10,000 investors who are yet to lodge their claims for compensation. He added: ”We launched the first phase of compensation to investors in February 2012 and since then, 4,324 investors have been compensated. We have paid out a total of Kshs84 million, which translates to 26 percent of the total creditors of DSL.”
Compensation of investors is done through the Investor Compensation Fund, established for compensating investors who suffer pecuniary loss resulting from the failure of a licensed stockbroker or dealer to meet their contractual obligations. An investor can receive up to a maximum compensation amount of Kshs50,000 as provided for under the law
In order to receive compensation, genuine claimants are expected to visit Co-operative Bank with identification documents, Central Depository Account Statements, and evidence of claims against Discount Securities Limited in order to lodge a complete claim.
ENDS
BACKROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY
The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence.
The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors’ interest. For more information, please contact Antony Mwangi on amwangi@cma.or.ke<;mailto:amwangi@cma.or.ke>; or on telephone: 2264204
