CMA licensing checklists for Kenyan advisers
What Kenya's Capital Markets Authority licensing checklists cover for investment advisers and fund managers, and what else to register before trading.
By Achekam · · 4 min read · For Financial services businesses in Kenya
Setting up an investment advisory or fund management business in Kenya means dealing with a regulator before you deal with a single client. The Capital Markets Authority (CMA) licenses the intermediaries that operate in Kenya's capital markets, and founders often start by downloading the relevant licensing checklist and working down it line by line.
That is a good place to start, as long as you understand what the checklist is and what it is not. This article explains which businesses the CMA's checklists cover, how much weight to give them, the data protection registration that sits alongside a licence application, and how to have the firm's own books in order before the application goes in. It is general guidance; a Kenyan capital markets lawyer should review your application.
Who the checklists are for
The CMA publishes licensing checklists summarising application requirements for approval as a market intermediary, an approved institution or an issuer of securities. According to its licensing page, the categories include:
- investment advisers;
- fund managers;
- stockbrokers and dealers;
- custodians and trustees;
- investment banks;
- online forex brokers.
Pick the checklist that matches the activity you will actually carry on. A firm that plans to give advice and also manage client portfolios on a discretionary basis should look at both the investment adviser and fund manager checklists and take advice on which licence, or licences, it needs.
A guide, not the law
The CMA is direct about the limits of its own checklists. It says they are only a simplified guide, and that the Regulations under the Capital Markets Act are the only conclusive statement of the requirements.
In practice, that means two things for an applicant:
- Use the checklist to organise, the Regulations to decide. The checklist is a convenient way to gather documents. Where a question arises about what exactly is required, read the Regulations themselves, or ask your lawyer to.
- Expect follow-up questions. The CMA also reserves the right to request any additional information during its review of an application. Plan for that: keep the people who prepared each part of the application available, and keep your working files organised so an extra request can be answered quickly.
The CMA's licensing checklists page lists the checklists by category, with the CMA's note on how they relate to the Regulations, and is the page to bookmark while you prepare.
Data protection registration comes too
An investment adviser handles exactly the kind of personal information Kenya's Data Protection Act is concerned with: identity documents, income, assets, family details and investment goals. As published on Kenya Law, the Act says no person may act as a data controller or data processor unless registered with the Data Commissioner, subject to thresholds for mandatory registration that the Data Commissioner sets.
Small businesses sometimes expect to fall under a small-entity exemption from registration. For a financial services firm, the registration regulations close that door: they say the small-entity exemption does not apply to controllers or processors that process personal data for purposes that include financial services. Hospitality, health care, education and direct marketing are on the same list.
So a new advisory firm should treat registration with the Data Commissioner as part of its set-up, alongside the CMA application, not as something to do once it has clients.
Your own books, ready before you apply
Whatever the checklist for your category asks about the firm itself, a new intermediary is better placed if its own financial records are in order from the first shilling. A regulator, a bank opening a business account, and a potential partner will all want to see figures they can rely on.
Three practical steps:
- Open the books on day one. Record capital introduced, set-up costs and professional fees as they happen, rather than reconstructing them later from bank statements.
- Be able to produce a statement of the firm's position on request. An income statement and a balance sheet at a given date should be something you can print on the day someone asks.
- Appoint your accountant or auditor early. Before you choose one, it is worth checking their professional standing, as explained in checking your Kenyan auditor's ICPAK credentials.
Tax standing matters to many counterparties as well; getting and keeping a Kenyan tax compliance certificate explains how that certificate is obtained and kept current.
Setting up a Kenyan workspace on Achekam
A new firm can register its Achekam workspace as Kenyan at sign-up. That makes the Kenya pack its default and, on activation, sets the shilling (KES) and the Africa/Nairobi time zone unless they are already set, so the books start in the right currency and dates fall on the right day.
From there, the firm's management accounts show an income statement for a chosen period beside the period before, and a balance sheet at period end, both added up from the firm's own journals and exportable as PDF or CSV. One detail to know: the year-to-date preset starts on 1 January, not on the firm's own year start, so a firm with a different financial year should choose its dates directly.
The firm can also appoint its accounting firm through Achekam, by the firm's Achekam address or firm code, as accountant, auditor, tax practitioner, payroll provider or adviser, with an access level. The accounting firm accepts or declines. Once accepted, the accountant works in the same books the firm keeps, rather than in a copy sent by e-mail.
Achekam does not prepare or submit CMA applications, and it does not register anyone with the Data Commissioner. Those remain the founders' tasks, with their advisers.
Before you submit
Download the checklist for each licence category you need, and mark each item against the Regulation it comes from. Register with the Data Commissioner. Make sure the firm's books can produce a balance sheet today, and that your accountant or auditor is appointed and has access. Then submit, and keep the team ready for the CMA's questions.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
