The Capital Markets Authority (CMA) has distanced itself from the problems bedeviling Cytonn Asset Managers.
The firm is struggling to secure a new trustee to manage the fund following the resignation of Co-operative Bank.
In an affidavit filed in court yesterday, CMA said it had no role in the selection of a trustee – a banking institution that supervises investment decisions for a fund manager. Instead, the regulator said it was up to Cytonn to recruit a qualified trustee.
“…the respondent, as a regulator, plays no role in the appointment of a trustee, save for ensuring that such a trustee appointed by the fund manager or the resigning trustee is regulatory compliant and a qualified body,” said CMA.
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It added that part of the reason it barred Cytonn Asset Managers from bringing in new clients last month was to safeguard the wealth of prospective investors in Cytonn Unit Trust Fund.
It is part of a response to a petition filed by Cytonn boss Edwin Dande over the regulator’s notice barring recruitment of new investors. “…the directive by the respondent was meant to protect new clients that may be exposed by the lack of a performing trustee in place and unknowingly expose them to commercial risk,” said CMA.