Stockbrokers in Kenya: A Practical Guide

Introduction

Stockbrokers are the intermediaries who help individuals and institutions buy and sell shares on the Nairobi Securities Exchange (NSE). In Kenya, you cannot trade listed equities directly without an intermediary. Stockbrokers provide access to the market, help manage trading accounts, and may offer research, investment ideas, and custody services. Your shares are typically held in a CDS account linked to your broker and the central depository for securities.

What is a stockbroker?

Stockbrokers act as licensed intermediaries that match buy and sell orders on behalf of clients. They can range from full‑service firms that provide research and advisory services to online platforms that let you trade on your own. Most brokers also handle account setup, funding, and the settlement of trades.

Roles and services

• Execute trades on your instructions
• Manage your trading and custody accounts
• Provide market research, data, and educational materials
• Offer trading platforms on web and mobile
• Handle clearing and settlement with the market infrastructure (for Kenya, through the CDSC and NSE)

How stockbrokers operate in Kenya

To begin, you open an account with a broker licensed by the regulator, typically linked to a CDS account for holding your shares. You fund the account, place orders for buying or selling listed securities on the NSE, and the broker executes and settles the trades. Fees are charged for execution, and you may access research and platform tools as part of the service.

Accounts and platforms

Most brokers offer a trading platform via web, desktop, and mobile apps. They may provide research notes, newsletters, and educational resources. The platform you use determines how you enter orders (market, limit, or other order types) and how you monitor positions.

Regulation and safety

Kenya’s Capital Markets Authority (CMA) regulates market participants, including stockbrokers, to promote fair, efficient, and transparent markets. The Nairobi Securities Exchange (NSE) operates the trading venue, and the CDSC (Central Depository for Securities) handles the safekeeping and settlement of shares held by investors.

CMA and NSE roles

CMA sets licensing, conduct standards, and reporting requirements. NSE provides the trading platform and market data. Brokers must comply with CMA rules and NSE trading rules, as well as ongoing KYC/AML obligations.

Investor protection and dispute resolution

Investors are protected through CMA’s regulatory framework, broker-level dispute mechanisms, and formal complaint processes. If you have a concern about a broker, you can start with their internal grievance process and, if needed, escalate to CMA or the market’s dispute resolution avenues.

Types of brokers in Kenya

Full-service brokers

Offer research, investment advice, and a broader range of services beyond trading. They may include retirement planning, portfolio commentary, and access to initial public offerings (IPOs).

Online discount brokers

Focus on low fees and self-directed trading. They typically provide a trading platform with essential tools and customer support for account setup and maintenance.

Robo-advisors and hybrid platforms

Some platforms combine automated investment advice with human support. Availability varies; check what services your chosen broker provides and whether they fit your needs.

How to choose a broker

Assess your needs

Define your investing goals, the level of research support you want, and how actively you plan to trade.

Check regulatory status

Confirm the broker is licensed by the CMA and that your CDS account can be linked through them.

Compare costs

Look at commissions, platform fees, custody charges, and any account maintenance costs. Also note any market or exchange fees.

Test the trading platform and tools

If possible, try a demo or compare mobile apps for ease of use, speed, and reliability. Ensure the platform supports the order types you plan to use.

Consider education and support

Good brokers provide educational resources, responsive customer support, and clear communications about risks and fees.

Costs and charges to expect

Brokerage commissions

Charged on trades, typically as a percentage of trade value or a fixed per-trade fee.

Other fees (custody, STL, etc.)

There may be custody or platform fees, and market-related charges such as the Securities Transaction Levy (STL) and settlement fees, depending on the broker and the trades.

Note: This is general information and not financial advice. Always verify current fees and regulatory requirements with your chosen broker and consider consulting a licensed adviser for your situation.

Getting started with a Kenyan broker

Required documents

You will typically need valid identification, proof of address, and tax-related information (such as a PIN) to open an account.

KYC and compliance

Brokers perform Know Your Customer (KYC) and anti-money laundering checks before approving accounts.

Funding and trading basics

You fund your account with a local bank transfer or other supported methods and begin trading via the broker’s platform.

Key terms to know

Securities Transaction Levy (STL)

A market charge on securities transactions collected by the exchange.

KYC/AML

Know Your Customer and anti-money laundering processes required by regulators.

CMA

Capital Markets Authority, Kenya’s regulator for capital markets.

NSE

Nairobi Securities Exchange, where listed securities trade.

CDSC/CDS

Central Depository for Securities and the related settlement system that holds investors’ share balances.