Securities and Capital Markets Law in Kenya: A Guide to CMA Compliance

Capital markets law in Kenya is built on the Capital Markets Act (Cap 485A), administered by the Capital Markets Authority (CMA). Anyone who raises capital from the public, lists securities, or acts as a market intermediary needs to understand the Act and the two sets of regulations that now sit beneath it: the licensing regulations that took effect on 11 December 2025 and the public offers regulations that took effect on 15 December 2023.

Capital markets law in Kenya: who needs a licence or approval

Section 23(1) of the 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, unless they hold a valid licence issued under the Act.

Section 23(2) uses a different mechanism for another group. A securities exchange, commodities exchange, derivatives exchange, registered venture capital company, collective investment scheme or credit rating agency must be approved by the Authority. Under section 23(3), a person who is approved must comply with the Authority’s requirements and pay an annual fee. The distinction matters in practice: the label on your business model does not decide which route applies, the statutory list does.

The 2025 licensing regulations

The Capital Markets (Licensing Requirements) (General) Regulations, 2025 (Legal Notice 197 of 2025) revoke the earlier licensing regulations under regulation 59 and introduce several concepts that businesses must now classify themselves against.

The regulations define a broker-dealer, and they define an intermediary services platform as a digital application that facilitates the aggregation, marketing and distribution of capital markets products and services. They also extend the meaning of investment adviser to include digital platforms that give automated, algorithm-driven advice with little or no human supervision. A robo-adviser is therefore captured by definition. Custodians are defined as persons licensed by the Authority to hold funds, securities, financial instruments or documents of title on behalf of local, East African or foreign investors. Among the activities an investment bank may now carry on is market making.

Two procedural rules deserve attention. First, regulation 49 creates an approval-in-principle stage. Where an application substantially satisfies the prescribed requirements, the Authority may grant approval in principle. The applicant may then set up operating facilities and systems and recruit staff, but it must not commence operations until the licence is finally issued. The approval-in-principle is valid for six months, and an applicant that has not met the requirements by then must apply for a new licence.

Second, regulation 58 sets the transition. Licences in force when the regulations took effect continue until revoked, but a licensee must meet any new requirements within twelve months from commencement. A person operating an over-the-counter platform or an intermediary service platform must apply to the Authority within one year of the regulations taking effect. Measured from 11 December 2025, both periods end on 11 December 2026, so existing licensees and platform operators should already be well into their gap analysis.

Public offers, listings and disclosure

Offers of securities to the public and applications for listing are governed by the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023 (Legal Notice 172 of 2023), which took effect on 15 December 2023.

The regulations provide for two listing segments for equity securities: the Main Investment Market Segment and the Small and Medium Enterprises Market Segment. Eligibility criteria for each are set out side by side in the First Schedule, with Part A covering the main segment and Part B covering the SME segment. An issuer should check the schedule against its own track record before choosing a segment. A parallel SME fixed income segment exists for debt securities.

Regulation 97 requires every issuer of securities to appoint or designate a compliance officer within one year of the effective date of the regulations. That deadline fell on 15 December 2024. An issuer that has not yet made the appointment is already outside the time the regulation allows.

Anyone relying on capital markets law in Kenya to raise money from investors should treat the Schedule criteria as the starting point of their timetable, not a box to tick at the end. Sponsors, transaction advisers and the issuer’s own board all need to work from the same reading of the regulations before documents are filed with the Authority.

Challenging a decision of the Authority

Section 35(1) of the Act gives a right of appeal to the Capital Markets Tribunal to a person aggrieved by a decision of the Authority that refuses a licence, imposes limitations or restrictions on a licence, or suspends or revokes a licence. The same right extends to a refusal to approve a public offer of securities, a refusal to admit a security to the official list of a securities exchange, a suspension of trading in a security, and a requirement to remove a security from the official list.

The appeal must be brought within fifteen days from the date the decision was communicated. Section 35(2) allows the Tribunal to require the Authority to show cause for its decision and to affirm it or set it aside after hearing the Authority. The Tribunal itself is established by section 35A. Because of the short window, a decision letter should be diaried the day it arrives.

Practical steps for businesses

Under capital markets law in Kenya, early classification saves the most time and cost. For an existing licensee, the first task is a gap analysis against the 2025 regulations before the twelve-month period ends. Check whether your licence category still fits, whether your business now falls within a defined activity such as an over-the-counter platform, and whether your systems and governance meet the new requirements.

For a fintech or digital distribution business, the first question is classification. If your product aggregates, markets or distributes capital markets products, or gives automated investment advice, you may be an intermediary services platform or an investment adviser under the new definitions. Operating without the licence the Act requires is the outcome to avoid, so seek advice before launch, not after.

For an issuer, appoint the compliance officer, choose the listing segment against the First Schedule criteria, and build the disclosure timetable backwards from the date you want to offer securities. Where a securitisation or asset-backed structure is under consideration, our article on raising capital through securitisation in Kenya covers the structuring questions.