Staff of firms licensed by the Capital Markets Authority (CMA) who deal with clients cannot simply be hired and put to work. Since 2016, the CMA has required them to pass a two-stage market certification programme, and since 2020 to complete continuing professional development (CPD) every year. The rules sit mainly in CMA circulars rather than in the Act itself, which is why they are often missed by firms new to the Kenyan market. This article explains where the requirement comes from, who it covers and how firms can comply.
The legal basis
The Capital Markets (Corporate Governance) (Market Intermediaries) Regulations, 2011 (Legal Notice No. 144 of 2011) apply to market intermediaries, defined as companies licensed under Part IV of the Capital Markets Act (Cap. 485A). Part IV contains section 23, so it covers stockbrokers, dealers, investment advisers, fund managers, investment banks and the other licence categories listed there.
Regulation 19 deals with employees. Under regulation 19(2), management must determine and document the experience and qualifications for each post and meet any relevant requirements of the CMA. Under regulation 19(3), management must ensure that all employees have and document an appropriate training programme based on the needs of the intermediary and the requirements of the CMA.
The CMA has used regulation 19(3) to set market-wide standards by circular, starting with Circular CMA/MRT/001/2015 of 6 November 2015 on market certification and competency standards.
Who must be certified
The CMA’s CPD Policy Guidelines describe “target employees” as staff of market intermediaries licensed under Part IV who deal directly with clients, trade on clients’ behalf, or advise or influence clients directly or indirectly. The CMA’s certification FAQs confirm that staff who deal with clients only on an administrative or clerical basis do not need to be certified.
The two stages
- Stage One: the Introduction to International Securities and Investments (Kenya) module, which covers international and local aspects of finance and capital markets.
- Stage Two: the Regulations and Market Practice (Kenya) module, which covers Kenyan regulation and conduct of business in detail.
Under CMA Circular No. 10/2016 of 17 October 2016, the original compliance deadlines were 4 January 2017 for Stage One and 21 August 2017 for Stage Two. Staff joining today must meet the requirement before they take on client-facing work.
Exemptions
Circular No. 10/2016 provides that holders of the Chartered Financial Analyst (CFA) charter, the Financial Risk Manager (FRM) qualification and the Institute of Certified Investment and Financial Analysts (ICIFA) qualification are exempt from Stage One. They must still sit and pass Stage Two, because it covers Kenya-specific regulation and conduct of business. The circular also exempted from the whole programme individuals who could show ten years’ experience before 4 January 2017, subject to CPD. That transitional exemption does not help new entrants. Our article on joining ICIFA as a CFA charterholder covers the ICIFA side of the CFA question.
Continuing professional development
CMA Circular No. 1 of 2019, dated 7 August 2019, introduced mandatory CPD with full implementation in the 2020 calendar year. Certified target employees, including those who were grandfathered or exempted, must complete at least 35 hours of CPD a year, of which at least 24 must be structured CPD through programmes accredited by the CMA. The remaining 11 hours may be unstructured.
The consequence of falling short is practical rather than abstract. Under the CMA’s CPD Policy Guidelines, target employees who do not meet their CPD requirements are suspended from involvement in prescribed aspects of the business until they catch up, which in practice takes them off client work.
How this fits with licensing
Certification sits alongside, not inside, the licensing rules. Under regulation 13(c) of the Capital Markets (Licensing Requirements) (General) Regulations, 2025, an investment adviser’s representatives must have at least three years’ relevant experience and be members of a professional body. The CMA’s fit and proper assessment of key personnel under regulation 56 also looks at qualifications and membership of relevant professional institutions. A licence application that names client-facing staff who are not yet certified invites questions. Our guide to the investment adviser licence covers the licensing side.
A compliance checklist for licensed firms
- Identify every role that deals with clients, trades for them or advises them.
- Record each person’s certification status, exemptions claimed and supporting evidence.
- Make Stage Two completion a condition of client-facing work for new hires, including CFA and ICIFA holders.
- Track structured and unstructured CPD hours for each person against the annual 35-hour requirement.
- Keep the training records required by regulation 19(3), since that is the regulation the CMA relies on.
How We Can Help
Clay & Associates Advocates advises CMA licensees and applicants on staffing, certification and CPD compliance, and on how these requirements affect licence applications and ongoing CMA obligations. Contact our Regulatory & Compliance practice.
Sources: Capital Markets (Corporate Governance) (Market Intermediaries) Regulations, 2011 (LN 144 of 2011), regulations 2 and 19; CMA Circular No. 10/2016 and Certification FAQs; CMA Circular No. 1 of 2019; CMA Kenya CPD Policy Guidelines; Capital Markets (Licensing Requirements) (General) Regulations, 2025, regulations 13 and 56.
Frequently asked questions
Who needs CMA certification in Kenya?
Staff of Part IV licensees, including investment advisers, who deal directly with clients, trade for them, or advise or influence them. Purely administrative staff are not covered.
Are CFA charterholders exempt from CMA certification?
They are exempt from Stage One under Circular No. 10/2016, but must still pass Stage Two, the Regulations and Market Practice (Kenya) module.
How many CPD hours are required each year?
At least 35 hours, of which at least 24 must be structured CPD through CMA-accredited programmes (Circular No. 1 of 2019).
What happens if CPD is not completed?
Under the CMA’s CPD Policy Guidelines, the employee is suspended from prescribed aspects of the business until the requirement is met.
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This article is general information on Kenyan law as at its publication date, not legal advice. Reading it does not create an advocate and client relationship.
