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Kenya: Pension schemes get go ahead to invest in derivatives

23.02.2017

Pension schemes can now invest in all exchange traded derivatives and Reits.

Kenya's Retirement Benefits Authority (RBA) has given approval to pension schemes to invest in derivatives which include income-earning real estate securities (Reits), private bonds and commercial papers approved by the Capital Markets Authority (CMA).

In a statement, the RBA Chief Executive Edward Odundo, said "retirement schemes can now invest in all exchange traded derivatives contracts and all listed Reits incorporated in Kenya as long as they are registered with CMA.

"The Retirement Benefits (forms and fees) Regulations investment guidelines... explicitly include real estate investment trust (Reits), exchange traded derivatives, and the separation of listed and unlisted corporate bonds and commercial paper approved by the Capital Markets Authority," he added.

This new development will unlock new opportunities for Kenya's pension schemes with a view to generate higher returns to retirees.