A survey of the need for a regulatory framework on electronic trading at the Nairobi Stock Exchange

Abstract

The objectives of this study were, first, to survey the need for a regulatory framework on electronic trading in Kenya and to highlight measures that need to be taken to minimize risks associated with electronic trading in the Nairobi Stock Exchange. The involved analysis of primary data derived from responses from questionnaires administered on 60 stakeholders of the Nairobi Stock Exchange. A stratified random sampling technique was used to select the right representatives from the stakeholders of NSE excluding investors. The representatives selected as respondents were senior managers of the stakeholder firms and mainly serving in legal, reporting and/or compliance departments in their respective firms. The analysis of the data was undertaken using descriptive statistics with the help of the Statistical Package for Social Sciences (SPSS) and Factor Analysis. Tables and graphs were used extensively for data presentation to paint a clear picture of the shape of the distribution of data and general impression of values that could be seen as common or average. The research concludes that there is extreme need for a new regulatory framework on electronic trading in Kenya. Further, the study concludes that there is need to implement measures to minimize risks associated with electronic trading in the Nairobi Stock Exchange. In essence, the study finds that there is need for a new regulatory framework for electronic trading in Kenya in order to hedge technology, operational, legal and political risks in the Nairobi Stock Exchange.