The Capital Markets Authority (CMA) has announced the approval of eight new Collective Investment Schemes and several sub-funds.
In a statement on Wednesday, November 26, the authority said the approvals were fully aligned with existing laws and regulations governing the sector.
"The Capital Markets Authority (CMA) has granted approvals for the establishment of eight new Collective Investment Schemes (CIS) and sub-funds, in line with the Capital Markets Act and the Capital Markets (Collective Investment Schemes) Regulations, 2023," the statement read.
CMA explained that the decision is part of a strategy to expand the range of investment opportunities available to the public while boosting the overall stability of the market.
"The approvals are part of the Authority's ongoing efforts to enhance product diversification, strengthen investor protection, and deepen Kenya's capital markets through the expansion of regulated collective investment vehicles," the statement added.
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The newly approved schemes and sub-funds include the Swala Capital Unit Trust Funds, which comprise the Swala Money Market Fund, Swala Balanced Fund, and Swala Equity Fund.
They also include the Lofty Corban Unit Trust Scheme, which has introduced the Lofty-Corban Private Debt Special Fund and the Lofty-Corban Global Assets Special Fund.
Additionally, the Sanlam Unit Trust Funds have added a new sub-fund named the Sanlam Multi-Asset Special Kenya Shilling Fund.
Further approvals include the XENO Unit Trust Scheme, which consists of the XENO Kenya Money Market Fund (USD), the XENO Kenya International Equity Special Fund (USD), and the XENO Kenya Bond Fund (USD).
The Globetec Unit Trust Scheme has been cleared to operate several sub-funds, including the Globetec Money Market Fund, Globetec Equity Fund, Globetec Fixed Income Fund, Globetec Dollar Fixed Income Fund, Globetec Multi-Asset Special Fund, and Globetec Dollar Multi-Asset Special Fund.
On the other hand, the Tradiam Unit Trust Scheme has been approved to run the Wekeza Money Market Fund.
Additionally, the Capital A Rejesha Umbrella Collective Investment Scheme has received approval for multiple sub-funds, namely the Capital A Rejesha Money Market Fund (USD), Capital A Rejesha Money Market Fund (KES), Capital A Rejesha Balanced Fund (KES), Capital A Rejesha Balanced Fund (USD), Capital A Rejesha Equity Fund (KES), Capital A Rejesha Equity Fund (USD), Capital A Rejesha Fixed Income Fund (KES), and Capital A Rejesha Fixed Income Fund (USD).
CMA noted that this expansion significantly increases the number of regulated unit trust products in Kenya.
"The new schemes bring the total number of approved collective investment schemes in Kenya to fifty seven (57) contributing to the diversification of investment options available to retail and institutional investors in the market," the statement further read.
CMA Chief Executive Officer Wyckliffe Shamiah welcomed the development, describing it as a milestone in efforts to promote a stronger investment culture across the country.
"The expansion of Collective Investment Schemes is a key driver in promoting savings and investment in the country. We have witnessed a continued appetite for CIS funds which have now crossed the Ksh600 billion mark in terms of Assets Under Management.
"These approvals reflect the Authority's commitment to facilitating market development while ensuring robust investor protection and regulatory compliance," he said.
This comes a week after CMA imposed hefty penalties on former top executives of the collapsed Chase Bank Kenya Limited, citing serious breaches in financial reporting, governance, and disclosure during the bank’s issuance of a Medium-Term Note (MTN) programme in 2015.
In a statement on Wednesday, November 19, the regulator said the enforcement action targets the lender’s former chairperson and senior management.
According to CMA, their decisions and omissions contributed to misleading financial disclosures made to investors ahead of the bank’s collapse in 2016.
"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 statement read.
According to the statement, former Chairperson Zafrullah Khan was fined Ksh5 million and issued with a ten-year ban.
The CMA Board Ad Hoc Committee found major breaches in oversight and disclosure under his leadership.
"The former CBKL Chairperson, Zafrullah Khan, was fined Ksh5 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 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)," the statement added.
Also penalised was former General Manager Finance, Makarios Agumbi, who was found to have played a key role in preparing misleading accounts.
The committee noted that Agumbi facilitated the financial misrepresentations highlighted in the information memorandum.
"The former CBKL General Manager Finance, Mr. Makarios Agumbi, was fined Ksh3.5 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 statement continued.
Former General Manager Corporate Assets, James Mwaura, was also sanctioned for his role in misrepresenting key financial information.
The committee found that he contributed to concealing related-party transactions and other misclassifications.
"The former CBKL General Manager Corporate Assets, Mr. James Mwaura, was fined Ksh2.5 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 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)," the statement read.
