Kenya’s Capital Markets (Amendment) Act, 2025 has repealed the statutory 25% ownership cap that has governed stockbrokers, investment banks and fund managers for over a decade.
Previously, anyone holding more than 25% of shares, voting rights, board appointment rights or economic interest in these entities was barred from executive or senior management roles a rule embedded directly in the Capital Markets Act and changeable only through legislative amendment.
That rigidity is gone. A new section 29(3A) now empowers the Cabinet Secretary, in consultation with the CMA, to set ownership limits through regulations limits that can be tailored by category of licensed entity rather than applied uniformly.
For dealmakers, this means acquisitions of controlling or strategic stakes in licensed intermediaries are no longer constrained by the old blanket statutory cap, opening the door to more flexible deal structuring for local and foreign investors.
The catch: the regulations that will actually define the new thresholds haven’t been published yet. Existing licenses and shareholding structures are protected in the interim under a new section 40, but that protection isn’t permanent once the rules land, all existing structures will need to be reassessed for compliance.
A reform worth watching closely if you’re active in Kenya’s financial and capital markets sector, particularly around M&A, recapitalization and licensing strategy.
Faith Wamuyu, Associate, Corporate & Commercial Law at Cliffe Dekker Hofmeyr (CDH) Kenya
