The capital markets Investor Compensation Fund (ICF) grew by Sh1 billion to Sh6.84 billion in the year to June 2025, on higher income from government securities and transaction fees from trades at the Nairobi bourse.
The fund, which was established in 1995, compensates stock market investors for losses of up to Sh200,000 in the event of a failure of a licenced broker.
Disclosures by the Capital Markets Authority (CMA) in its 2024/2025 annual report show that the fund’s interest income from investments such as bonds and Treasury bills grew by 25 percent to Sh845.96 million in the period.
The interest income was the biggest source of new funds into the ICF in the year, ahead of transaction fees from trades at the Nairobi Securities Exchange (NSE) that grew to Sh195.2 million from Sh104.6 million in June 2024.
The ICF also banked Sh19 million from financial penalties levied on licenced entities by the CMA, and a Sh31.6 million gain on its investment in the stock exchange.
The bulk of the income was invested in Treasury bills, raising the holdings of the short term securities from Sh1.12 billion to Sh2.17 billion.
Investments held in the form of Treasury bonds grew marginally from Sh4.59 billion to Sh4.61 billion, and that in equities at the NSE from Sh51.3 million to Sh78.9 million.
In addition to the financial penalties and interest income from government securities, the ICF is also entitled to hold interest accruing funds received from subscribers to public issues such as IPOs between the day of closing an issue and making refunds.
From the trading at the NSE, the fund is paid a commission of 0.01 percent per equities trade, and 0.004 percent on a bonds trade. The ICF has now grown five-fold in the past decade -from Sh1.3 billion in 2015- reflecting the lack of withdrawals in a period when the market has not seen a failure of a stockbroker.