The Nairobi Securities Exchange and Kenya Association of Stock Brokers and Investment Banks have reached a surprising détente as tensions over a bid to oust CEO Frank Mwiti ease, signaling a strategic pause in what had threatened to escalate into a protracted leadership crisis.
The stand-off emerged after brokers who also hold minority stakes in the bourse mobilized to remove Mwiti, accusing him of poor leadership, unilateral decision-making, undisclosed board actions, and spearheading contentious initiatives without full shareholder or board approval.
Central to the ire was the controversial Direct Market Access (DMA) initiative, set to allow individual investors direct access to trading, bypassing traditional brokerage channels. Brokers viewed this as a threat to their commission-based revenues and an erosion of their intermediary role.
They also cited what they termed unprocedural conduct at recent annual general meetings, claiming key decisions weren’t appropriately disclosed or ratified.
Facing mounting pressure and potential reputational damage, NSE leadership moved to defuse the situation. Talks between the NSE board and broker representatives resulted in a mutual decision to temporarily shelve the no-confidence motion and commission an independent governance review.
This review will examine decision-making processes, board and shareholder communication protocols, and the implementation of key strategic initiatives like DMA.
The truce offers space for both sides to pause and recalibrate. For NSE, the primary objective remains to expand the market by attracting millions more retail investors through direct access, digital apps, and product diversification.
Proponents argue that such modernization is essential to boost market depth, liquidity, and long-term growth. In contrast, brokers are pushing for assurances that their role will continue to be recognized, advising on client needs, market guidance, and compliance, rather than being sidelined by technology.
Analysts suggest this resolution may lead to a more collaborative model where brokers act as facilitators of investor engagement under DMA, with safeguards to preserve advisory roles and safeguard industry revenues.
The proposed governance review will be tasked with creating a roadmap that aligns the NSE’s reform ambitions with broker interests and regulatory best practice.
With the executive standoff temporarily defused, attention now turns to the outcome of the governance audit.
Its findings will likely shape future governance reforms at the NSE, define broker involvement in emerging digital initiatives and either restore confidence or lay the groundwork for renewed conflict. The peaceful pause also offers a chance for the NSE to revitalise growth, bridge trust gaps, and fortify governance as it moves toward an increasingly tech-driven future.
Written By Ian Maleve
