The Capital Markets Authority (CMA) has unveiled a new licensing and fee structure targeting investment firms, brokers, and other financial market players in a move aimed at strengthening regulation and aligning costs with business size.
The revised framework, introduced under the Capital Markets (Licensing) Regulations, 2025, replaces the long-standing flat fee system with a tiered model that varies depending on the category and scale of the institution.
CMA Chief Executive Wyckliffe Shamiah said the changes are designed to make the regulatory environment more responsive and sustainable.
“This new structure reflects the diversity of players in the market and ensures fairness while maintaining strong regulatory oversight,” Shamiah said during a recent industry briefing.
Brokers, exchanges and banks face revised charges
Under the new structure, securities exchanges and central depositories will pay higher licensing and annual regulatory fees tied partly to their earnings, while investment banks will face adjusted capital and licensing requirements.
Broker-dealers and stockbrokers will now pay standardised application and licensing fees, alongside annual regulatory charges aligned to their operations. Over-the-counter platform providers and intermediary service platforms will also fall under the updated fee schedule.
The CMA says the goal is to create a balanced system that supports both large institutions and emerging market players without overburdening smaller firms.
Fund managers see tighter financial requirements
Fund managers are among those most affected by the changes, with annual regulatory fees now tied to assets under management. The new rules introduce minimum and maximum thresholds, significantly increasing compliance expectations.
Additionally, capital requirements for fund managers have been revised upward, effectively doubling the minimum shareholders’ funds required.
“A stronger capital base enhances investor confidence and safeguards the integrity of collective investment schemes,” Shamiah noted.
At the same time, investment banks will benefit from a reduced paid-up capital requirement, although they will be required to maintain higher levels of liquid capital.
What this means for Kenya’s financial market
The reforms are expected to reshape how financial institutions operate in Kenya, with analysts predicting a more structured and transparent investment environment.
Market observers say the tiered approach could encourage compliance while improving oversight, though smaller firms may feel pressure from increased operational costs.
“These changes could raise the cost of doing business in the short term, but they ultimately strengthen the market’s credibility and investor protection,” a Nairobi-based financial analyst said.
The CMA maintains that the reforms are necessary to keep pace with a growing and evolving capital market, especially as Kenya positions itself as a regional financial hub.
