The Nairobi Securities Exchange (NSE), as of 18th September 2025, issued a notice that highlighted their move to increase initial margin requirements covering several single stocks and index futures, in a bid to enhance risk management within its derivatives market (NEXT). This is to take effect from Friday 19 September 2025.
The increase in initial margin requirements will be applicable to all open and new contracts from December 2025 to September 2026. According to the arrangement, NSE will either offer margin refunds to traders with open positions or instruct them to adjust their accounts to meet the new margin required. This move enables traders to cover potential losses since the arrangement provides them with sufficient funds.
Some contracts including; Safaricom, Kenya power, KCB Group, British American Tobacco and Equity Bank saw significant increases while firm like Liberty Kenya Holdings and Britam Holdings saw marginal reductions in their margin requirements. The NSE also reviewed Index futures which saw the margin of NSE 25 Share Index increase from KES 23900 in December 2025 to KES 31800 in September 2026.
The NSE derivatives market (NEXT) main objective is to augment Kenya`s capital market by enabling hedging, speculation and portfolio diversification.
About NSE derivatives market. (NEXT)
It was launched in July 2019 as the first regulated platform in East Africa. The market offers trade in Equity Index Futures and Single Stock Futures. These two contracts are standardized with different sizes to enable smooth trading. There is also a provision for leveraging the contracts, which enables traders to control a larger position with a smaller upfront cash outlay, amplifying both potential profits and losses.
Implications of increased margins.
Increased margins by the NSE derivatives market creates stability for traders because of the enhanced risk management structure. On the other hand, having higher margins may potentially discourage small traders to trade hence reducing trading activities.
