CMA grants Corporate Trustee Licenses to two firms to strengthen fiduciary oversight

• On May 28, 2026, the Capital Markets Authority (CMA) granted Corporate Trustee licenses to two new firms in Kenya.
• This action expands the number of licensed corporate trustees available in the market.
• The licenses were issued under the Capital Markets (Collective Investment Schemes) Regulations, 2023.
• The move aims to strengthen fiduciary oversight for Collective Investment Schemes and other regulated structures.
• This initiative supports enhanced investor protection and overall market integrity in Kenya.

This move by the CMA is explicitly designed to bolster investor protection, ensuring that the assets and interests of participants in these schemes are diligently safeguarded against mismanagement or malfeasance.

On May 28, 2026, the Capital Markets Authority (CMA) in Kenya announced a significant development for the nation's financial sector. The regulatory body confirmed it had issued Corporate Trustee licenses to two additional firms, a move that directly contributes to the expansion of the pool of entities authorized to provide crucial fiduciary services. This decision by the Capital Markets Authority Kenya licenses new players, thereby broadening the options available for various regulated structures requiring independent oversight.

This strategic issuance of CMA Kenya corporate trustee licenses underscores the Authority's proactive approach to enhancing the operational framework within the capital markets. By increasing the number of licensed corporate trustees, the CMA aims to foster a more robust and competitive environment for fiduciary services, which are integral to the sound functioning of investment schemes and other financial vehicles.

The recent licensing decisions were made pursuant to the comprehensive Capital Markets (Collective Investment Schemes) Regulations, 2023. These regulations form the bedrock for governing collective investment schemes (CIS) and other similar structures in Kenya, setting out stringent requirements for their operation, governance, and, critically, their fiduciary oversight. The framework established by the Kenya collective investment schemes regulations mandates that such schemes appoint a corporate trustee to safeguard investors' interests and ensure compliance with regulatory provisions.

Corporate trustees play an indispensable role in the capital markets ecosystem. Their primary function involves holding the assets of collective investment schemes in trust, independent of the scheme's fund manager, thereby providing an essential layer of protection for investors. This separation of duties is a cornerstone of good governance, designed to prevent conflicts of interest and ensure that all operations adhere strictly to the scheme's mandate and the prevailing legal framework. The 2023 regulations specifically empower the CMA to license and oversee these trustees, ensuring they meet the highest standards of integrity and capability.

The expansion of licensed corporate trustees is a direct measure aimed at strengthening fiduciary oversight across the Kenyan capital market. Enhanced oversight is paramount for maintaining investor confidence, as it provides an independent check on the management of collective investment schemes and other regulated financial products. This move by the CMA is explicitly designed to bolster investor protection, ensuring that the assets and interests of participants in these schemes are diligently safeguarded against mismanagement or malfeasance.

Furthermore, the increased capacity in fiduciary oversight Kenya market contributes significantly to overall market integrity. A robust system of checks and balances, facilitated by a sufficient number of qualified and licensed corporate trustees, helps to mitigate systemic risks and promotes transparency within the financial sector. This commitment to strengthening the regulatory infrastructure aligns with the CMA's broader mandate to foster a fair, efficient, and transparent capital market that can attract and retain both domestic and international investment.

For legal professionals advising Collective Investment Schemes or other regulated structures in Kenya, the expanded pool of CMA Kenya corporate trustee licenses presents new opportunities and considerations. The availability of more licensed entities may offer greater flexibility and choice when selecting a corporate trustee, potentially leading to more competitive service offerings and specialized expertise. Lawyers will need to guide their clients through the due diligence process, evaluating the capabilities and track record of these newly licensed firms alongside existing providers.

Compliance officers within regulated entities should also take note of this development. The Capital Markets Authority's continued focus on strengthening market integrity and investor protection under the Capital Markets (Collective Investment Schemes) Regulations 2023 signals an ongoing commitment to robust oversight. This may necessitate a review of existing trustee arrangements to ensure they remain optimal and compliant, or a thorough due diligence process for any new trustee appointments, ensuring alignment with the enhanced regulatory expectations. The Authority's actions reinforce the importance of strong governance and independent oversight as foundational elements of a healthy financial market.

Lawyers advising Collective Investment Schemes (CIS) or other regulated structures in Kenya should note the expanded pool of licensed corporate trustees, which may offer new options for fiduciary oversight. Compliance officers should be aware of the CMA's continued focus on strengthening market integrity and investor protection under the 2023 regulations, potentially requiring a review of existing trustee arrangements or due diligence for new ones.

Source: Original reporting via Capital Markets Authority Kenya.