Capital Markets Authority Licensing in Kenya: Licences, Requirements and Process

Capital Markets Authority licensing in Kenya is the gateway for anyone who wants to run a securities business, manage other people’s money in a pooled scheme, or advise on investments. The Capital Markets Authority (CMA) is the statutory regulator under the Capital Markets Act (Cap. 485A), and the licensing rules changed at the end of 2025. This guide explains who needs a licence, what the new regulations require, and the penalties for operating without one.

Who Needs a CMA Licence

Section 23(1) of the Capital Markets Act provides that no person may carry on business as a stockbroker, derivatives broker, REIT manager, trustee, dealer, investment adviser, fund manager, investment bank, central depository, authorised securities dealer, authorised depository, online forex broker, commodity dealer or commodity broker, or hold themselves out as doing so, without a valid licence. Section 23(2) separately requires CMA approval before anyone operates as a securities exchange, commodities exchange or derivatives exchange, a registered venture capital company, a collective investment scheme or a credit rating agency.

The wording “holds himself out” matters. A business does not have to trade to be caught; presenting itself to the market as a fund manager or adviser is enough to need the licence.

The 2025 Licensing Regulations

The Capital Markets (Licensing Requirements) (General) Regulations, 2025 (Legal Notice 197 of 2025) are dated 11 December 2025. Regulation 59 revokes the 2002 licensing regulations, which older guides still describe. The 2025 Regulations are organised by licence type, with separate Parts for:

• securities exchanges and over-the-counter platforms;
• investment advisors, including provisions on algorithm-driven investment advice;
• investment banks;
• broker-dealers;
• stockbrokers;
• dealers;
• intermediary service platform providers;
• fund managers;
• custodians; and
• trustees.

Each Part sets eligibility, financial requirements, authorised functions and reporting obligations for that category. The minimum capital figures differ by category and are set out in the relevant Part, so check the Part for your licence type before preparing a business plan.

Transition for existing licensees and platforms

Under regulation 58, licences in force when the Regulations took effect continue until revoked. Where the new Regulations impose additional requirements, the licensee must meet them within twelve months of commencement. A person operating an over-the-counter platform or intermediary service platform must apply to the CMA within one year of commencement. Measured from 11 December 2025, that points to a deadline in December 2026, so existing licensees and platform operators should be planning their compliance now.

The Application Process

Section 24 of the Act governs applications. An application for a licence or renewal is made to the CMA in the prescribed form with the prescribed fee. The CMA may call for further information, and it may grant a licence only if the applicant meets, and continues to meet, the minimum financial and other requirements the CMA prescribes. It may also attach conditions and vary them later by written notice. For a renewal, the application may be made within three months but not later than one month before the licence expires, so diarise the expiry well ahead.

The Regulations also contain a fit and proper provision (regulation 56) and a duty to furnish information to the CMA (regulation 57). In practice, expect to provide incorporation documents, a business plan, governance and compliance documentation, and details of directors, significant shareholders and key personnel. Complete, well-prepared applications are processed faster than those that need repeated requests for information.

Ongoing Compliance and Sanctions

Licensees must keep meeting their financial requirements, report to the CMA as each licence Part requires, and stay within the scope of the licensed activity. Under section 26, the CMA may suspend or revoke a licence for specified reasons, including liquidation or a winding-up order, carrying out activity outside the licensed scope, and ceasing the licensed business for more than thirty days without approval. Section 33A allows the CMA to intervene in the management of a licensee.

Penalties for Operating Without a Licence

Section 34(1)(a) makes it an offence to contravene any provision of the Act, which includes carrying on a licensable business without a licence. Where no specific penalty applies, section 34A sets the penalty on conviction:

• first offence, individual: a fine of up to KES 5 million or imprisonment of up to two years, plus two times any gain made or loss avoided;
• first offence, company: a fine of up to KES 10 million, plus two times any gain made or loss avoided;
• subsequent offence, individual: a fine of up to KES 10 million or imprisonment of up to five years, plus three times any gain made or loss avoided.

Foreign Fund Managers and Cross-Border Activity

Section 23 turns on carrying on, or holding yourself out as carrying on, a licensable business. A foreign manager that actively markets pooled products to Kenyan investors, or takes Kenyan mandates, should take advice on whether it needs a CMA licence or must work through a locally licensed manager before it accepts instructions.