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Nicholas Nesbitt, EBS
FORMER BOARD CHAIR – THE CMA
Nicholas Nesbitt (Nik, as he is fondly referred to) is the former Chairman of the Board of the Capital Markets Authority (CMA), a position he is proud to report that he handled exceptionally well during his short yet impactful tenure, in painting the firm’s vision of being the ‘Heart of Capital Markets Financing in Africa’ into reality.
Appointed Chair in late 2021, Nik, guided by the firm’s stakeholders, steadily drove the CMA to get its day-to-day operations right, simplify its regulations, push through legal and policy challenges, and encourage innovation in new sectors.
The CMA was rated the top performer in the public sector in the development and implementation of policies and programmes that promoted National Values in 2021. It moved up two positions to being ranked eighth in the ABSA African Financial Markets (AFMI) Index, driven by reforms in the sustainability financing space, including the development of the Nairobi Securities Exchange Environmental Social and Governance (ESG) Manual and the approval of two Green Real Estate Investment Trusts by Acorn LLP.
One of Nik’s greatest achievements as Chair was ensuring the CMA’s reinstitution as a regulator within the agricultural sector in February 2023. This has permitted the CMA to appoint coffee marketing brokers who can represent the farmers and cooperatives regionally, and sell those entities directly to the Nairobi Coffee Exchange (NCE), effectively cutting out unnecessary middlemen. It has also allowed for a direct settlement system, which enables fast and transparent settlement of trades at the NCE.
In addition to working with elected officials and the courts in the commodities industry to help the CMA effectively execute its mandate, Nik returned to his private sector friends, signing memorandums of understanding (MOUs) with various institutions and associations to promote the development of the capital markets, including the Kenya Private Sector Alliance (KEPSA), Kenya Development Corporation (KDC) and Kenya Pension Funds Investment Consortium (KEPFIC).
The CMA team, led by Nik, drafted numerous regulations, including the Capital Markets Collective Investment Schemes Regulations, which seeks to achieve multiple targets, such as attracting more retail investors to grow the Assets Under Management (AUM) from KES 155 billion to KES 187 billion by end of the Financial Year (FY) 2023.
In addition, the CMA incorporated new business models, technologies and service providers, increasing the range of funds that may be established. This, in turn, inspired confidence in the fund management industry by enhancing the reporting and disclosure requirements to ensure that investors are able to make informed decisions.
Furthermore, the CMA overhauled and submitted the Draft Capital Markets Alternative Investment Funds Regulations, which has enabled the structuring of alternative funds: instrumental in financing infrastructure projects and plugging Kenya’s infrastructure financing deficit estimated at KES 270 billion annually.
In support of economic development and financial inclusion promotion, the CMA submitted a draft of the Capital Markets Investment Based Crowdfunding Regulations, which allows Kenyan‑registered micro, small and medium entrepreneurs (MSMEs) to raise funds from investors through licensed crowdfunding platforms operating in the country.
To enhance investor protection and market integrity in the conduct of business of companies and market intermediaries, the CMA introduced the Whistle-blower Regulations, which were gazetted in April 2022.
During his term, Nik pushed hard for diversity, innovation and additional competition in the capital markets space. Consequently, the Board approved 23 new and diverse capital markets licences in 2022 alone. These licences cover eight fund managers, three coffee brokers, three non-dealing online foreign exchange brokers, three investment advisers, two investment banks, an authorised depository, a stockbroker, a money manager, and an authorised securities dealer.
There has been significant growth in several Capital Markets’ performance and soundness indicators since the Covid-19 pandemic. In 2022, AUM rose by about 20 percent, the number of licensed fund managers increased by 30 percent, and the number of funds under the Collective Investment Scheme (CIS) grew by almost 50 percent. In addition, seven new firms were entered into the regulatory Sandbox (where new and innovative ideas for the capital markets are tested and co-created by the companies and the CMA), new Real Estate Investment Trust (REITs) were approved and are preparing for listing, and corporate bonds worth more than KES 25 billion have been raised on the market.
Nik’s dedication and fervour towards how he handles his appointed roles have earned him numerous invitations to various boards. For instance, he was Chair of the KEPSA Board (2017-2021) and Chair of the East African Business Council (EABC) Board (2018-2022). Furthermore, Nik has sat on the boards of the Central Bank of Kenya (CBK), the American Chamber of Commerce, AMREF Flying Doctors, Kenya School of Monetary Studies (KSMS), Multimedia University (MMU) and Gateway Insurance. Nesbitt is also an active member of the Young Presidents Organisation (YPO), a global organisation supporting leading CEOs in each country.
Ever since Nik returned to Kenya from the United States of America (USA) about 17 years ago, he has been on a mission to raise Kenya’s stature on the world’s business stage.
He began with founding his first business in Kenya, the award-winning call centre business process outsourcing (BPO) company, KenCall, which generated great acclaim locally and internationally for its business model. KenCall illustrated to the rest of the world how Kenyans working at home could compete with the best service providers globally in providing the highest levels of sales and service support to clients around the world.
In his subsequent position as General Manager (GM) of International Business Machines (IBM) Eastern Africa, Nik worked hard to serve regional banking, telecom and government clients with the latest and most appropriate technology. His research team at the IBM research laboratory worked very closely with the government to address the challenges raised in the World Bank’s Ease of Doing Business rankings, and helped to move Kenya from position 138 to position 58 in under four years.
For Nik’s diligence and exemplary contribution to the country, he has been decorated with two prestigious awards. In 2008, HE President Mwai Kibaki awarded him the Order of the Grand Warrior (OGW), and in 2021, HE President Uhuru Kenyatta honoured him with the Elder of the Order of the Burning Spear (EBS).
There’s no doubt in Nik’s mind as he moves from challenge to challenge, as a Chair or otherwise, that he continues to rely on his extensive education “on the ground” in Kenya and from his formal education in the USA. At Dartmouth College, where he honed his problem-solving skills both as an undergraduate and as a master’s student in electrical engineering, and at Stanford University where he earned his Master of Business Administration (MBA) degree, Nik took away invaluable lessons about how to use technology to drive innovation and employ incumbent corporate thinking and operating models.
Both his theoretical and practical experience, coupled with this unique blend of cultures have granted Nik a sober, focused and yet imaginative mind that he uses in great form to bring out the best in the teams that he manages, and in the boards that he leads.
