Stockbrokers are pushing for a revision of the licence fees imposed by the capital market regulator, Capital Market Authority (CMA), saying that the new proposed fee of Rwf100m could kick them out of business.

The move to increase the fee from the current Rwf10m is contained in the new regulation proposal for stockbrokers that is still subject to approval by the Board of Directors of CMA.

It comes in face of few listed stocks on the nascent stock exchange with stockbrokers saying that they would need more volume to offset the costs. They are presently entitled to a commission of 1.5 per cent of any transaction they make. 

"We are only eight stockbrokers in the country and the capital market is very small at the moment with only Bralirwa and Bank of Kigali on the market,” Simon Karenzi, the CEO of Dyer and Blair said yesterday during a validation workshop, where they reviewed the proposed regulations.

Karenzi who doubles as the Chairman of the Stockbrokers Association argues that although government plans to have one IPO per annum, the capital market is still small

"If we are to invest a huge capital of Rwf100m…we might be pushed out of business.”

He added that: "Capital requirements must be lowered to a moderate fee; may be as the market grows, the fee can also increase accordingly.”

The Executive Director of CMA, Robert Mathu, said that the amount would certainly be revised, but urged the brokers to brace themselves for a more competitive capital market due to regional integration.

"We are going to consider it obviously; a figure was put in the draft to get responses from the brokers, so we are likely to revise,” Mathu said in an interview with, Business Times.

He added that: "The best way to protect investors and uphold the integrity of our capital market is to ensure that they are informed and the best way to keep them informed is if regulators are trustworthy, creditworthy and well informed.”

If brokers demonstrate interest to invest in skills, a vital aspect, Mathu says that CMA will consider a lower capitalisation that matches the volume of business.

Mathu added for its sustainability, Rwanda’s young capital market is better off with well trained and skilled professionals than having a lot of capital.

"The capital market is growing fast but it is not yet that high for now. So, by the time brokers are required to comply by the law, in one year or so, it can be assessed to see if it is appropriate to increase their capitalisation.

The regulations will be effective after the capital market law is in place, which currently awaits the Prime Minister’s order.

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