The Investment and Financial Analysts Act (Cap. 542) defines practice as an investment and financial analyst broadly enough to reach most people who handle investments for a living. One provision keeps the bulk of the industry outside it: the salaried employee exemption in section 21(2). Knowing exactly what that exemption covers, and where it stops, decides whether an analyst on a payroll needs a practising certificate from the Institute of Certified Investment and Financial Analysts (ICIFA).
The wording
Section 21(1) says a person practises as an investment and financial analyst if, for remuneration or other benefits, they engage in investment and financial analysis or hold themselves out as entitled to, or offer or perform services involving investment advice or financial decisions, investment transactions, books, accounts or records, or the verification or certification of investments.
Section 21(2) then provides that a salaried employee of the Government or of any other person does not practise as an investment and financial analyst by reason only of doing, in their capacity as such employee, any of the acts in section 21(1).
Three elements must all be present: the person is a salaried employee; the work is done in their capacity as that employee; and the employment is the only reason the work would otherwise count as practice.
Who the exemption clearly covers
The plain case is an in-house analyst. An investment officer at a pension scheme, a treasury analyst at a bank, or a research analyst at an asset manager, paid a salary and doing the work their employer hired them to do, falls squarely within section 21(2). They are not practising for the purposes of the Act merely by doing their job, and so the offence in section 20(1) is not engaged by that work alone.
The Capital Markets Act (Cap. 485A) takes a similar approach. Its definition of an investment adviser excludes a bona fide officer, director, trustee, advisory board member or employee of a company acting in that capacity. Our guide to the investment adviser licence under the 2025 CMA Regulations covers that definition.
Where the exemption runs out
Consultants and contractors. The exemption is for salaried employees. A consultant on a retainer, a self-employed analyst paid per assignment, or an associate engaged under a services agreement is not a salaried employee in the ordinary sense, whatever the engagement letter calls them. Whether a given arrangement is employment is a question of substance under Kenyan employment law, not of labels, so firms that rely on contractors to deliver investment work should check the position for each arrangement.
Side work. The work must be done in the person’s capacity as an employee. An employed analyst who also advises private clients in their own name, for their own fees, is doing that work outside their employment. The exemption does not follow them into it.
Holding out. Section 21(1)(a) treats holding oneself out to the public as entitled to practise as a form of practice. An employee who markets their own services to the public, or describes themselves as a certified analyst when they are not, moves beyond work done only as an employee.
Named senior roles. Since the 2020 amendments, section 20(1A) requires a Chief Investment Officer or head of an investment department or function in a firm investing public funds, or in a firm in the practice of investment and financial analysis, to be registered and to hold both a practising certificate and an annual licence. Sections 20(1B) and (1C) do the same for people who verify, certify and advise on the investment of funds in those firms or a public entity, or who verify investment returns those firms declare. These provisions are framed as standalone requirements. They do not depend on whether the person practises under section 21, so the salaried employee exemption does not obviously answer them. Our article on heading an investment function under section 20(1A) looks at those roles in detail.
The professional exemption is different
Section 21(3) deals with a separate group. It allows an advocate, a professional secretary, a professional accountant, or a person authorised by another written law, to undertake the work of an investment consultant, investment adviser or financial consultant only in the course of practising their own profession. That provision is about other professions, not employment. An accountant employed by a company may rely on section 21(2) for work done as an employee; an accountant in practice relies on section 21(3), and only for advice given in the course of accountancy practice.
Practical steps for employers
- Map who does investment work and on what basis: salaried staff, contractors, secondees, or group-company employees.
- Identify anyone in a role named in section 20(1A) to (1C) and check that they hold both a practising certificate and a current annual licence.
- Set a policy on outside advisory work by employees, so that side practice is either prohibited or done with the right registration.
- Check marketing materials and staff profiles for descriptions such as “certified investment analyst” that are not backed by registration.
How We Can Help
Clay & Associates Advocates advises employers, fund managers and investment teams on how the Investment and Financial Analysts Act applies to their staff and contractors, and drafts employment and consultancy terms that reflect it. See our overview of when ICIFA registration is needed, or contact our Regulatory & Compliance practice.
Sources: Investment and Financial Analysts Act (Cap. 542), sections 20 and 21; Capital Markets Act (Cap. 485A), section 2.
Frequently asked questions
Does an in-house investment analyst need an ICIFA practising certificate?
Not for work done as a salaried employee in that capacity (section 21(2)), unless they hold one of the senior roles named in section 20(1A) to (1C).
Are consultants covered by the salaried employee exemption?
Section 21(2) refers to salaried employees. A consultant or contractor engaged on a services basis is generally outside it, so their position needs to be assessed separately.
Can an employed analyst advise private clients on the side?
Work done outside the employment is not covered by section 21(2). Paid advice to the analyst’s own clients is likely to be practice in its own right.
Is the employee exemption the same as the exemption for accountants and advocates?
No. Section 21(3) covers members of other professions acting in the course of their own practice, which is a separate test from employment.
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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.
