An investment adviser licence from the Capital Markets Authority (CMA) is the authorisation a business needs before it advises others on securities in Kenya for a fee. The rules changed on 11 December 2025, when the Capital Markets (Licensing Requirements) (General) Regulations, 2025 (Legal Notice No. 197 of 2025) were published and replaced the 2002 licensing regime. This guide explains who needs the licence, who can apply, what the CMA expects to see, and what it costs under the new Regulations.
Who needs an investment adviser licence
Section 23(1) of the Capital Markets Act (Cap. 485A) says that no person may carry on business as an investment adviser, or hold themselves out as carrying on that business, without a valid licence from the CMA. Regulation 12(1) of the 2025 Regulations repeats the rule: a person may not engage in the business of an investment adviser, or hold out as one, unless licensed.
The Act defines an investment adviser as a person who, for remuneration, carries on the business of advising others concerning securities, or who, as part of a regular business, issues or promulgates analyses or reports concerning securities. The definition also covers a person who deals with long-term equity and debt financing and acts as adviser or underwriter on a public issue of securities, and anyone else the CMA prescribes.
Three points in that definition matter in practice:
- Remuneration and business. Occasional, unpaid comments are not caught. A paid advisory service offered as a line of business is.
- Securities. The advice must concern securities as defined in section 2 of the Act. That definition is wide, covering shares, debt securities, bonds, units in collective investment schemes, derivatives and asset-backed securities, but it also has express exclusions. Whether a particular instrument is a security is the first question to settle before assuming a licence is or is not needed.
- Holding out. Describing yourself as an investment adviser to the Kenyan market is itself caught, even before any advice is given.
Who is excluded
The definition does not cover a bona fide officer, director, trustee, advisory board member or employee of a company acting in that role. It also excludes banks as defined in the Banking Act, insurers registered under Part III of the Insurance Act, trust corporations, and an advocate, accountant or certified public secretary in practice whose advisory work is solely incidental to that profession. A licensed dealer whose advice is solely incidental to dealing is excluded, as is a newspaper proprietor who meets the conditions set out in the Act.
These exclusions are narrow. A consulting firm that sells investment advice as a service in its own right does not fit within the professional exclusion simply because some of its staff are accountants.
Who can apply
Regulation 13(a) of the 2025 Regulations requires the applicant to be a company or limited liability partnership incorporated or registered in Kenya. A foreign firm that wants to hold the licence therefore needs a Kenyan vehicle (see our guide to setting up a corporate finance boutique in Kenya). Our guide to CMA licensing in Kenya covers how the Regulations apply across all licence categories.
Regulation 13 also requires the CMA to be satisfied that:
- a director, chief executive officer or managing partner is fit and proper to hold the position;
- the representatives who give investment advice have at least three years’ experience in financial products, securities, or fund, asset or portfolio management, and are members of a professional body; and
- the applicant has the infrastructure to offer advisory services effectively.
Fitness and propriety is assessed under regulation 56 for each director, the chief executive officer and key personnel. The membership requirement links the CMA licence to professional bodies, which is why many advisory firms also look at registration with the Institute of Certified Investment and Financial Analysts (ICIFA).
What goes into the application
The application is made on Form 1 in the First Schedule. Under regulation 12(3) it must be accompanied by:
- proof of incorporation and the memorandum and articles of association;
- evidence of adequate financial resources to run the business;
- a business plan meeting the Second Schedule;
- details of the operating and information technology systems, where relevant;
- professional indemnity insurance of not less than KES 500,000;
- a registered office approved by the CMA;
- evidence of staff able to provide professional services, or that they will be available;
- the proposed independent auditor; and
- the fees set out in the Sixth Schedule.
The 2025 Regulations do not set a fixed minimum paid-up capital for investment advisers. The test is adequacy of financial resources, judged against the business plan. Applicants who plan to give automated, algorithm-driven advice must also meet regulation 14, which adds requirements on a principal bank account in Kenya, capital, platform security, risk management, client onboarding and data protection.
Fees and timing
The Sixth Schedule sets the investment adviser fees at KES 10,000 for the application, KES 100,000 for the licence and an annual regulatory fee of KES 100,000. Our article on ongoing obligations for licensed investment advisers covers what follows the grant.
Under regulation 49, the CMA may grant approval in principle once it receives a complete application that substantially meets the requirements. Approval in principle allows the applicant to set up facilities and recruit staff, but not to start operating. It is valid for six months, and an applicant that has not met the outstanding requirements in that time must apply again. The licence is granted under regulation 50 once all requirements are met and the fees are paid, and it may carry conditions.
Firms licensed before the 2025 Regulations took effect keep their licences, but under regulation 58(1) they must meet any new requirements within twelve months of commencement.
Consequences of advising without a licence
Contravening a provision of the Act is an offence under section 34(1)(a). Where no specific penalty applies, section 34A provides for a fine of up to KES 5 million or imprisonment of up to two years for an individual on a first offence, and a fine of up to KES 10 million for a company, in each case together with twice any gain made or loss avoided. Higher penalties apply to repeat offences.
Client-facing staff of a licensed adviser must also meet the CMA’s certification and CPD rules. See our article on CMA certification and CPD for capital markets staff.
How We Can Help
Clay & Associates Advocates advises advisory firms, fund managers and corporate finance boutiques on whether their work needs a CMA licence and prepares and manages investment adviser applications. Where a firm’s work goes beyond advice into arranging or executing transactions, our guide to investment bank licensing explains the heavier category. Contact our Regulatory & Compliance practice or see our work for the financial services sector.
Sources: Capital Markets Act (Cap. 485A), sections 2, 23, 34 and 34A; Capital Markets (Licensing Requirements) (General) Regulations, 2025 (LN 197 of 2025), regulations 12, 13, 14, 49, 50, 56 and 58 and the Sixth Schedule.
Frequently asked questions
Can an individual hold a CMA investment adviser licence?
Under regulation 13(a) of the 2025 Regulations, the applicant must be a company or limited liability partnership incorporated or registered in Kenya. An individual adviser would ordinarily operate through such a vehicle.
What is the minimum capital for an investment adviser in Kenya?
The 2025 Regulations set no fixed figure. The applicant must show adequate financial resources for its business plan and hold professional indemnity cover of at least KES 500,000.
Can we start advising once we have approval in principle?
No. Approval in principle allows you to set up and recruit, but operations may only begin once the final licence is issued.
Does a foreign advisory firm need a Kenyan licence?
It depends on whether it carries on, or holds itself out as carrying on, the business of an investment adviser in Kenya. Where it does, the licence must be held by a Kenyan company or limited liability partnership.
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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.
