Trading took place on a ‘gentleman's agreement.’[8] Standard commissions were charged with clients being obligated to honor their contractual commitments of making good delivery and settling relevant costs.

At that time, stock broking was a sideline business conducted by accountants, auctioneers, estate agents and lawyers who met to exchange prices over a cup of coffee.

He also approached the finance minister of Kenya, Sir Ernest Vasey, and impressed upon him the idea of setting up a stock exchange in East Africa.

In 1954 the Nairobi Stock Exchange was then constituted as a voluntary association of stockbrokers registered under the Societies Act.

[citation needed] Since Africans and Asians were not permitted to trade in securities, until after the attainment of independence in 1963, the business of dealing in shares was confined to the resident European community.

The NSE was rated by the International Finance Corporation (IFC) as the best performing market in the world with a return of 179% in dollar terms.

The NSE also moved to more spacious premises at the Nation Centre in July 1994, setting up a computerized delivery and settlement system (DASS).

The Central Depository System Act (CDS) and the amended CMA Act covering Collective Investment Schemes (CIS) were passed by parliament and affirmed by the president, paving the way for the full implementation of the CDS and for the introduction of collective investment schemes in the Kenyan market.

The CDSC being the legal entity that owns and runs the clearing, settlement, depository and registry system for securities traded in Kenya's capital markets.

[citation needed] In March 2003 the CDSC in collaboration with the NSE commenced the CDS Education Campaign in preparation for the market automation.

[14] The ATS was sourced from[Millennium Information Technologies (MIT) of Colombo, Sri Lanka, who are also the suppliers of the Central Depository System (CDS).

The NSE ATS solution was customized to uphold the spirit of the open outcry trading rules in an automated environment.

The MoU allowed listed companies in both exchanges to dualist, to facilitate growth and development of the regional securities markets.

A wide area network (WAN) platform was implemented in 2007; this eradicated the need for brokers to send their staff (dealers) to the trading floor to conduct business.

The Complaints Handling Unit (CHU) was launched in August 2009 to bridge the confidence gap with NSE retail investors and have any concerns processed and resolved.

The automated trading in government bonds marked a significant step in the efforts by the NSE and CBK towards creating depth in the capital markets by providing the necessary liquidity.

The change reflected the NSE's strategic plan to become a full service securities exchange supporting trading, clearing and settlement of equities, debt, derivatives and other associated instruments.

This allowed investors who sell their shares to get their money three days later, while buyers have their CDS credited at the same time.

[6] The exchange's CEO, Geoffrey Odundo, told the press in April 2022 that NSE.NR was looking to purchase stakes in additional bourses in Africa.

At the time, it was the fifth biggest bourse in Africa by market capitalization, and owned 5.9% in Tanzania's Dar es Salaam Stock Exchange.

[29] The shares of the Nairobi Securities Exchange are listed and traded on its own main board, under the symbol NSE.