Capital Markets Authority

19 November 2025

CMA takes Enforcement Action against Ernst & Young LLP (EY), the Reporting Accountant for the Uchumi Supermarkets Limited (USL) Rights Issue

Nairobi 19 November 2025…In line with its investor protection and oversight mandate, the Capital Markets Authority (CMA) has taken enforcement action against the EY, who were then the Reporting Accountant for the Uchumi Supermarkets Limited (USL) Rights Issue. This relates to the firm’s role as the Reporting Accountants during the USL Rights Issue in 2014 and the subsequent use of the proceeds.

Following the Notice Show Cause (NTSC) hearing conducted by the CMA Board and subsequent consideration of this matter by an Ad Hoc Committee of the Authority; pursuant to Section 25A as read together with Sections 11(3) (cc), 11(3)(w) and 34A of the Capital Markets Act, the Authority has imposed a financial penalty of Kshs.10,000,000.00 against EY.

The Authority also directed EY to ensure all employees involved with the audit of financial statements of issuers, companies listed on the Nairobi Securities Exchange (NSE) and licensees of the Authority undertake remedial training on areas highlighted in the NTSC for the next three (3) years. The training should be supervised by another EY member firm and submission of training reports to the Authority and the Institute of Certified Public Accountants of Kenya (ICPAK). Failure to do this could result in EY being barred from providing professional services to issuers, companies listed on the NSE and CMA licensees.

Further, it was recommended that ICPAK takes disciplinary action against EY, being the External Auditors and Reporting Accountants, and Mr. Michael Kimoni and Mr. Joseph Cheborbor, who were the EY engagement audit partners for the period 2010-2014. This is due to their failure to ensure adequate and accurate disclosure of material facts in the 2014 annual report and financial statements of USL in accordance with the applicable regulatory requirements.

In 2015, the Authority initiated an inquiry into the affairs of USL which revealed various regulatory violations regarding the Rights Issue in 2014. The Authority’s inquiry revealed serious misrepresentations in the financial statements of USL, which were included in Information Memorandum during the Rights Issue.

As a result, the Authority issued a NTSC to USL board members, some members of the senior management team, and its External Auditors and Reporting Accountants, EY. The Ad hoc CMA Board Committee was appointed to consider and make a determination on the allegations made against EY.

The Authority initiated administrative proceedings against EY by issuance of NTSC dated 31 August 2016. EY was required to respond to the allegations contained in the NTSC, relating to its role as External Auditors and Reporting Accountants of USL during the Rights Issue in 2014. EY filed a High Court Petition No. 385 of 2016, Ernst and Young LLP v CMA on 15 September 2016 seeking to stop the enforcement proceedings. The High Court issued conservatory orders restraining the Authority from continuing with the administrative action against EY until the matter was heard and determined. The Petition was heard, and judgement delivered on 7 March 2017 where the Court upheld the Authority’s mandate in undertaking the enforcement process.

EY appealed the judgment of the High Court to the Court of Appeal, upon which the Appeal was dismissed on 4 February 2022 upholding the High Court decision. Consequently, the Authority initiated the enforcement proceedings against EY leading to this determination.

The Authority has previously taken enforcement actions against former members of the Board and Senior Management of USL.

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BACKGROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair, and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence. CMA also regulates the commodity markets and online forex trading. The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors’ interest. For more information, please contact: Antony Mwangi, Manager Corporate Affairs & International Relations on amwangi@cma.or.ke

19 November 2025

CMA takes Enforcement Action against the former Chairperson and Senior Management of Chase Bank Kenya Limited (In Liquidation)

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Nairobi, 19 November 2025…In line with its investor protection and oversight mandate, the Capital Markets Authority (CMA) has taken enforcement action against the former Chairperson and Senior Management of Chase Bank Kenya Limited (CBKL-in liquidation). This relates to their role in the issuance of the Medium-Term Note (MTN) in 2015 and the use of proceeds.

The former CBKL Chairperson, Mr. Zafrullah Khan, was fined Kshs.5 million and disqualified from being director or key personnel of any issuer, licensed or approved person in the capital market for ten (10) years. The CMA Board Ad Hoc Committee established that Mr. Khan, being a CBKL Board Chairperson, failed to exercise effective oversight over the management of CBKL leading to preparation and publication of false and misleading financial statements disclosed in the published Information Memorandum (IM). Mr. Khan failed to cause disclosure of material information of his bonus payment in a supplementary IM, since the IM had already been published, and was conflicted in chairing and participating in the approval of his own bonus without declaring the conflict.

The former CBKL General Manager Finance, Mr. Makarios Agumbi, was fined Kshs.3.5 million and disqualified from being a director or key personnel of any issuer, licensed or approved person in the capital markets for five (5) years. The Ad Hoc Committee established that Mr. Agumbi, in his capacity as the General Manager, Finance of CBKL, facilitated the preparation of false and misleading 2014 financial statements as published in the IM. Further, he unprocedurally paid the bonus in lumpsum to Mr. Khan, contrary to the Resolution by the Board of Directors.

The former CBKL General Manager Corporate Assets, Mr. James Mwaura, was fined Kshs.2.5 million and disqualified from being a director or key personnel of any issuer, licensed or approved person in the capital markets for two (2) years. The Ad Hoc Committee established that Mr. Mwaura, in his capacity as the General Manager, Corporate Assets of CBKL facilitated the preparation of false and misleading 2014 financial statements as published in the IM, which contained misclassification and misrepresentation with respect to non-disclosure of related party loans and advances (Musharakah Investments). Further, in his capacity as the General Manager Corporate Assets of CBKL, he unprocedurally facilitated the payment of the bonus in lumpsum to Mr. Khan contrary to the Resolution by the Board of Directors.

Mr. Khan, Mr. Agumbi and Mr. Mwaura were also directed to attend corporate governance training to be eligible for consideration for appointment as a board member or key personnel of any issuer, licensed or approved person in the capital markets in Kenya.

CMA approved CBKL’s application to issue a Kshs.10 billion medium-term bond in 2015. The first tranche raised Ksh4.8 billion and was listed at the Nairobi Securities Exchange on 22 June 2015. On 7 April 2016, Central Bank of Kenya (CBK) appointed the Kenya Deposit Insurance Corporation (KDIC) as a receiver for Chase Bank for twelve months. This led to the suspension of trading of the Chase Bank Bond at NSE on 8 April 2016.

CMA conducted an inquiry to establish if there were any breaches of the capital markets regulatory framework, which may have led to the collapse of CBKL. Following the inquiry, the Authority flagged several issues including; the preparation of false and misleading financial statements; failure to disclose material information; and conflict of interest.

As a result, the Authority issued Notices to Show Cause (NTSC) to CBKL board members and some members of the senior management team and its reporting accountants. An Ad hoc CMA Board Committee was appointed to hear and determine the allegations.

Out of the twelve NTSC recipients, nine appeared before the Committee. However, Mr. Khan, Mr. Agumbi and Mr. Mwaura filed a case at the Capital Markets Tribunal (Khan & 2 others v Capital Markets Authority (Appeal 2 of 2022) to stop the Ad hoc Committee from conducting enforcement hearings against them. The Tribunal rendered its ruling on 2 February 2024 and ordered the trio to appear before the Ad hoc Committee to conclude its administrative proceedings. After the conclusion of the administrative hearings on 17 November 2025, the Ad hoc Committee determined that Mr. Khan, Mr. Agumbi and Mr. Mwaura breached the capital markets regulatory framework regarding the use of funds raised during the issuance of the MTN in 2015.

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BACKGROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

5 November 2025

CMA Issues Four New Licenses to Strengthen and Diversify Kenya’s Capital Markets

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Nairobi, 5 November 2025 — The Capital Markets Authority (CMA) has approved four new licenses, underscoring its continued commitment to deepening and diversifying Kenya’s capital markets through structured and transparent institutions.

The Authority has granted a Real Estate Investment Trust (REIT) Manager License to Africa Logistics Properties Limited (ARML). The license paves way for the establishment of a REIT to facilitate investment in Kenya’s logistics and industrial real estate sector, in alignment with the Government’s Affordable Housing Agenda and efforts to promote real estate development through capital market financing.

In a bid to foster financial inclusion, CMA has approved the application by Cinemark Consult Limited for an Authorised Securities Dealer (ASD) license. The firm targets underserved market segments, including retail investors, diaspora clients, and high-net-worth individuals.

In addition, the Authority has granted a Coffee Broker License to Wareng Coffee Marketing Agency Limited under the Capital Markets (Coffee Exchange) Regulations, 2020. The company is owned by the Uasin Gishu Coffee Farmers’ Co-operative Union Limited and will trade coffee on behalf of farmers in Uasin Gishu and neighbouring counties. The licensing of Wareng Coffee Marketing Agency is expected to enhance value chain efficiency and empower coffee farmers through a transparent and regulated coffee trading framework.

Further, CMA has approved Victoria Wealth Management Limited for a Wealth Manager License. The firm will offer a range of wealth management services, including treasury bond and bill trading, access to unit trusts through partnerships with licensed fund managers, offshore open-ended funds, and portfolio management. Its target clientele includes high-net-worth individuals and institutional investors, with the objective of expanding access to investment opportunities and improving client service within Kenya’s evolving financial landscape.

Speaking on these approvals, the Chief Executive Officer, FCPA Wyckliffe Shamiah, stated:

“The Authority remains committed to facilitating innovation, diversification, and market deepening in Kenya’s capital markets. The approval of these licenses demonstrates our focus on enabling new products and participants that expand access to investment opportunities, enhance transparency and strengthen investor confidence. By supporting these entities, the Authority continues to advance the national agenda of mobilizing capital for development while safeguarding investor interests through robust regulation.”

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BACKGROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

23 September 2025

CMA Issues Four New Licenses to various Capital Market Players

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Nairobi, 22 September 2025 — The Capital Markets Authority (CMA) has granted four new licenses as part of efforts to expand the scope of licensed players in the capital markets.

Fund Managers’ licenses have been granted to Kenya Climate Ventures Limited and EDC Asset Management (Kenya) Limited, further expanding the diversity and depth of Kenya’s asset management sector. This brings the number of licensed fund managers to forty seven (47). This represents a growing interest in the pooled funds segment with assets under management in Collective Investment Schemes rising to Ksh596 billion as of 30 June 2025.

Kenya Climate Ventures Limited focuses on providing both financial and technical assistance to gender-inclusive, climate-smart enterprises. It aims to establish and manage specialized Climate Impact Funds to accelerate investments in projects that promote gender inclusivity, climate change adaptation, and mitigation.

CMA has also licensed EDC Asset Management (Kenya) Limited to provide fund management, investment advisory, and segregated portfolio management services.

Licenses have been granted to Jalia Advisers & Intermediaries Limited and Cooperative Bank, further strengthening Kenya’s capital markets by expanding the range of licensed market participants and service providers.

Jalia Advisers & Intermediaries Limited has been licensed as an Investment Adviser. The firm seeks to deliver well-researched, customized, and sustainable investment solutions, supporting wealth creation and financial inclusion across the country.

A Corporate Trustee License has been granted to Co-operative Bank of Kenya Limited. The bank has extensive experience in the capital markets, serving as a licensed custodian, REIT Trustee, and a listed entity. It currently provides trustee services to several Real Estate Investment Trusts and unit trust schemes.

These approvals demonstrate CMA’s continuous efforts to broaden the diversity of licensed intermediaries, expand investment advisory services, and enhance governance in collective investment schemes, thereby contributing to the Authority’s mandate of developing, regulating, and protecting Kenya’s capital markets.

The licensing of Kenya Climate Ventures Limited and EDC Asset Management (Kenya) Limited demonstrates the Authority’s commitment to fostering a diverse and resilient asset management industry. These approvals bring together impact-driven climate finance and global investment expertise, both of which are vital in driving inclusive growth, sustainable development, and investor confidence in Kenya’s capital markets.

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BACKGROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

23 September 2025

CMA Issues Four New Licenses to Deepen Capital Markets

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Nairobi, 23 September 2025 — The Capital Markets Authority (CMA) has granted four new licenses to deepen the capital markets, further diversifying players in Kenya’s capital markets.

CMA has licensed TPXM Global Kenya Limited as a non-dealing Online Foreign Exchange Broker; Point Forty Investment Advisory Limited as an Authorised Securities Dealer (ASD); Silverhouse Capital Limited as an Investment Adviser; and Enwealth Impact Debt Fund Limited as an Alternative Investment Fund (AIF).

TPXM Global Kenya Limited has been licensed to provide online trading services in foreign exchange, commodities, equities, and contracts for differences (CFDs) on underlying assets.

As an ASD, Point Forty Investment Advisory Limited will provide bespoke investment solutions across Government securities (Treasury bonds and bills) and listed equities on the Nairobi Securities Exchange targeting institutional, high-net-worth, and retail investors.

Etica Capital Limited, a licensed Fund Manager, has been granted approval to register the Etica Special Multi-Asset Fund (KES) under the Etica Unit Trust Funds.

The Authority has also approved applications from Etica Capital Limited, Acorn Build-to-Rent Development Real Estate Investment Trust (D-REIT), and Myxeno Investment Management Limited, reinforcing its commitment to broadening investment products available to Kenyan investors.

CMA has also granted authorization to Acorn Build-To-Rent Development Real Estate Investment Trust (REIT). The REIT, managed by Acorn Investment Management Limited, is designed to expand Kenya’s affordable rental housing market, enabling investors to participate in large-scale, professionally managed rental property developments.

The Authority reiterates its dedication to promoting robust regulatory oversight while encouraging innovation and new market entrants that strengthen investor protection and contribute to the growth of Kenya’s financial sector.

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BACKGROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

22 September 2025

Kenya Financial Sector Stability Reports

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16 July 2025

CMA Licenses Two New Investment Advisors to Broaden Market Access

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Nairobi 16 July 2025…… The Capital Markets Authority (CMA) has granted licenses to two investment advisory firms, reinforcing its commitment to deepen investor access to professional financial services and promote informed investment decisions in Kenya’s capital markets.

Rock Advisors Limited has been licensed as an investment advisor, with a focus on providing responsible and tailored financial advice to institutional clients across the country. The firm aims to support strategic investment planning and enhance portfolio management practices for its clients.

In addition, the Authority has licensed Legatum Capital Advisory Limited as an investment advisor. The firm intends to offer a diverse range of investment advisory services to clients, promoting capital preservation, wealth creation and sustainable investment practices.

These approvals are in line with CMA’s regulatory mandate to ensure a robust, fair, and transparent financial advisory framework that enhances investor protection and confidence.

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BACKGROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

15 July 2025

CMA Licenses New Authorised Securities Dealer and Corporate Trustee to Deepen Market Development

lydia Press Release

Nairobi, 15 July 2025…… The Capital Markets Authority has granted two new licenses aimed at enhancing investor confidence and promoting capital markets development in Kenya.

To support efforts in improving liquidity within the fixed income market, the Authority has licensed Fintrust Securities Limited as an Authorised Securities Dealer (ASD). As an ASD, Fintrust will be permitted to buy and sell fixed-income securities on behalf of clients, quote bid and offer prices for various instruments, and provide advisory services—contributing to greater price discovery and trading efficiency.

In line with Regulation 31 of the Capital Markets (Collective Investment Schemes) Regulations, 2023, Stanbic Bank Kenya Limited has been licensed as a corporate trustee. In this role, Stanbic Bank will be responsible for the oversight of collective investment schemes, ensuring compliance, governance, and investor protection.

These approvals reflect CMA’s ongoing commitment to strengthening market infrastructure, enhancing investor safeguards, and fostering a more vibrant and resilient capital markets ecosystem.

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BACKGROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

Promoting investor education and public awareness; and Protecting investors’ interest. For more information, please contact: Antony Mwangi, Manager Corporate Affairs & International Relations on amwangi@cma.or.ke

14 July 2025

CMA Approves New Collective Investment Schemes and Sub-Funds

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Nairobi, 14 July 2025…… The Capital Markets Authority has granted approvals to several market players for the establishment of new collective investment schemes and sub-funds, in a move aimed at deepening Kenya’s capital markets and enhancing product diversity for investors.

Sanlam Investments East Africa has received approval to establish a new sub-fund under its existing structure, the Sanlam Special GBP Fixed Income Fund. This unit portfolio will be denominated in Great Britain Pounds (GBP), providing investors with exposure to fixed income securities in foreign currency.

In a separate development, ALA Capital Limited has been approved to register the ALA Capital Collective Investment Scheme (ALA CIS), comprising six sub-funds: ALA Balanced Fund, ALA Multi-Asset Special Fund, ALA Equity Fund, ALA Fixed Income (KES) Fund, ALA Money Market Fund (USD), ALA Money Market Fund (KES)

In addition, VCG Asset Management Limited has received approval to register three funds under the VCG Offshore Opportunities Special Funds umbrella. These include:VCG Offshore Money Market Fund (KES), VCG Offshore Money Market Special Fund (USD), VCG Offshore Fixed Income Special Fund (KES).

The CMA Chief Executive Officer, FCPA Wyckliffe Shamiah, welcomed the approvals, noting the continued growth in demand for collective investment schemes, which have now surpassed Ksh. 500 billion in total assets under management.

“These approvals reflect growing investor confidence and increased appetite for diversified investment options, including foreign currency-denominated and offshore funds,” said Mr. Shamiah.

The Authority remains committed to supporting the development of innovative capital markets products that enhance investor choice and contribute to economic growth.

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BACKGROUND INFORMATION ON THE CAPITAL MARKETS AUTHORITY

21 May 2025

CMA licenses three new corporate trustees

lydia Press Release

Nairobi, 21 May 2025… The Capital Markets Authority (CMA) has licensed three new corporate trustees to support the growing Collective Investment Schemes (CIS) market in Kenya. These trustees will provide oversight for investment vehicles such as unit trusts, mutual funds, and other collective investment structures.

The newly licensed entities are;

MTC Trust & Corporate Services Limited, which offers a broad range of fiduciary and trustee services to private entities. The firm also provides security trustee services and manages specialized structures.

Standard Chartered Bank Kenya, which has now expanded into corporate trustee services. The bank has been a major player in custody services since 2010 and currently holds the largest market share in that segment.

NCBA Group Plc, which has been licensed to offer corporate trustee services as part of its broader custody solutions. The bank aims to deepen its investment services offering by incorporating CIS trustee functions into its portfolio.

The licensing of these trustees comes at a time when demand for Collective Investment Schemes continues to rise, crossing the Ksh.400 billion mark. This is mainly driven by both retail and institutional investors seeking professionally managed, diversified investment options. Corporate trustees play a critical role in safeguarding investors’ interests by ensuring that fund managers operate in compliance with scheme documents and regulatory requirements.

The move underscores CMA’s commitment to strengthening investor protection and supporting the growth of a robust, transparent capital markets ecosystem in Kenya.

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BACKGROUND INFORMATION