Kenya’s Capital Markets Authority (CMA) has taken action to include robo-advisors and digital investment platforms in its licensing structure in response to a rise in app-based trading among young, tech-savvy Kenyans.
According to Daily Nation, the planned CMA’s licensing rules for 2025 are intended to standardize how these companies function and engage with investors.
The new permits tighten the digital environment in which FX and CFD brokers operate by placing robo-advisers and intermediary applications under direct CMA control, even though they do not change the license requirements for those companies.
It forces many online sites that direct young traders into trading platforms to comply with licensing requirements and increases the standard for how advice-like tools and portfolio-style features are portrayed.
The CMA broadens the definition of an investment advisor under the draft regulations to include digital platforms that offer algorithm-driven, automated financial advice with little to no human input. Robo-advisors are popular among young, passive investors who favor basic digital tools. They utilize algorithms to build and maintain investment portfolios, typically at a comparatively low cost.
Also, a new licensing category for “intermediary service platform providers” has been proposed by the Kenyan regulator. These are operators of digital applications that aggregate, market and distribute capital markets products and services, including many web- and mobile-based providers that currently rely on partnerships with existing licensees.
For the same operations, organizations who already have a CMA license won’t need to apply for an intermediary service platform license. The new structure will also require over-the-counter platforms to get CMA licenses. The 2025 Regulations also specify the licensing criteria for custodians and trustees.
The CMA’s recent licensing of Capital.com and XM as online forex brokers highlighted the changing rules pertaining to cross-border trading platforms and added two international brands to Kenya’s pool of authorized FX and CFD providers.
In January, Capital.com was granted permission to function as a Dealing Online Foreign Exchange Broker, which entails client onboarding, trade execution, and local assistance in accordance with CMA regulations.
