The Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023

These Regulations may be cited as the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023.

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Jurisdiction: Kenya
Instrument: Notice
Citation: Legal Notice 172 of 2023
Version: Undated source snapshot
Language: en

Source attribution: Source: Kenya Law

Statute overview

About this statute

These Regulations may be cited as the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023. Section 2 listsexamples of standards and policies: Green Bond Principles; Green Bond Standards including the Climate Bonds Standard; Government policies and guidelines including the Kenya National Policy on Climate Change and Green Economy Strategy; or any other standard acceptable to the Authority. Section 3 sets out the activities to which the section applies: offers or sales to the public in Kenya, listings by introduction (including crosslisting), offers/issues/listings of additional securities after a public offer, corporate actions by issuers of listed securities, and private offers. Establish fair, efficient and transparent capital markets. These Regulations apply to any offer of securities to the public in Kenya; the Authority is the competent authority to grant approval for public offers and listings; a person granted approval must state that on announcements; securities approved and admitted to listing are deemed listed on the exchange's communicated admission date, subject to exchange conditions.

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Provisions of The Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023

Showing 97 of 97

Part I

PRELIMINARY

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PRELIMINARY - 1. Citation

AI-assisted research summary: These Regulations may be cited as the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023.

Section 1. Citation Section These Regulations may be cited as the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023.
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PRELIMINARY - 2. Interpretation

AI-assisted research summary: Section 2 listsexamples of standards and policies: Green Bond Principles; Green Bond Standards including the Climate Bonds Standard; Government policies and guidelines including the Kenya National Policy on Climate Change and Green Economy Strategy; or any other standard acceptable to the Authority.

Section 2. Interpretation Section 2(1)(a) Green Bond Principles, as may be amended, issued and governed by the International Capital Markets Association; Section 2(1)(b) Green Bond Standards including the Climate Bonds Standard, as may be amended, issued and governed by the Climate Bonds Initiative; Section 2(1)(c) Government policies and guidelines including the Kenya National Policy on Climate Change and Green Economy Strategy, among other Government policies; or Section 2(1)(d) any other standard acceptable to the Authority; Section 2(1)(a) is not an executive director ; Section 2(1)(b) does not have a material or pecuniary relationship with the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") or related persons; Section 2(1)(c) is compensated through sitting fees or allowances; and Section 2(1)(d) does not own shares in the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") : Section 2(1)(a) a merger, acquisition or joint venture; Section 2(1)(b) the re-organization of the capital structure of the issuer ; Section 2(1)(c) earnings and dividends, whether scrip or cash, of an unusual nature; Section 2(1)(d) the acquisition or loss of a significant contract; Section 2(1)(e) a significant new product or discovery; Section 2(1)(f) a change in control or significant change in management; Section 2(1)(g) a call of securities for redemption; Section 2(1)(h) a public or private sale of a significant amount of additional securities; Section 2(1)(i) the purchase or sale of a significant asset; Section 2(1)(j) a significant labour dispute; Section 2(1)(k) a significant dispute or determination thereof in respect of the issuer ; Section 2(1)(l) establishment of a programme to make purchases of the issuer ’s own shares; Section 2(1)(m) a tender offer for another issuer ’s securities; Section 2(1)(n) significant alteration of the memorandum and articles of association of the issuer ; or Section 2(1)(o) any other peculiar circumstances that may prevail with respect to the issuer or the relevant industry;
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PRELIMINARY - 3. Application

AI-assisted research summary: Section 3 sets out the activities to which the section applies: offers or sales to the public in Kenya, listings by introduction (including crosslisting), offers/issues/listings of additional securities after a public offer, corporate actions by issuers of listed securities, and private offers.

Section 3. Application Section 3(1)(a) the offer or sale to the public in Kenya, of securities in any form, with or without listing ; Section 3(1)(b) the listing of securities by introduction, including crosslisting; Section 3(1)(c) the offer , issue or listing of additional securities by issuers who have made public offers, with or without listing ; and Section 3(1)(d) corporate actions by issuers of listed securities; Section 3(1)(e) private offers.
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PRELIMINARY - 4. Guiding principles

AI-assisted research summary: Establish fair, efficient and transparent capital markets.

Section 4. Guiding principles Section establish fair, efficient and transparent capital markets;

Part II

APPROVAL OF OFFERS OF SECURITIES AND LISTING

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APPROVAL OF OFFERS OF SECURITIES AND LISTING - 5. Approval for offers andlisting

AI-assisted research summary: These Regulations apply to any offer of securities to the public in Kenya; the Authority is the competent authority to grant approval for public offers and listings; a person granted approval must state that on announcements; securities approved and admitted to listing are deemed listed on the exchange's communicated admission date, subject to exchange conditions.

Section 5. Approval for offers andlisting Section 5(1) These Regulations shall apply to any offer of securities to the public in Kenya, whether or not the issuer is seeking a listing on a securities exchange in Kenya. Section 5(2) The Authority shall be the competent authority to grant approval for any public offer of securities to the public in Kenya, including a restricted public offer and listing of securities on a securities exchange in Kenya. Section 5(3) A person granted approval by the Authority to offer securities to the public or list the securities on a securities exchange shall state that fact on all announcements of the offer or listing . Section 5(4) Securities approved by the Authority for offer to the public in the primary market of a securities exchange with approval for listing and admission to listing having been issued shall, in respect to a decision to invest, be deemed to have been listed on the date the securities exchange communicates to the issuer its admission to listing : Provided that the issuer shall comply with any conditions or thresholds imposed by the securities exchange in respect to the listing of the securities.
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APPROVAL OF OFFERS OF SECURITIES AND LISTING - 6. Delegation of approval of offers andlisting

AI-assisted research summary: The Authority may delegate certain approval and listing functions to an approved securities exchange if satisfied of its capacity; delegations must be written and the exchange must notify the Authority of delegated approvals; the Authority may withdraw delegation on listed grounds and must give the exchange an opportunity to be heard.

Section 6. Delegation of approval of offers andlisting Section 6(1) The Authority may, upon application by a securities exchange approved as a self-regulatory organization, delegate to the securities exchange the functions set out in subregulation (2) if the Authority is satisfied that the securities exchange has the technical, human resource and financial capacity to carry out the delegated role. Section 6(2)(a) the information memorandum for an offer of securities on any segment of that securities exchange; Section 6(2)(b) a public offer and listing of securities on any segment of that securities exchange; Section 6(2)(c) a secondary issue and listing of securities of issuers on any segment of that securities exchange; Section 6(2)(d) any announcement, circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") or corporate action in relation to securities listed on any market segment of that securities exchange; or Section 6(2)(e) any other matter relating to any market segment of a securities exchange that the Authority may approve. Section 6(3) A delegation under subregulation (1) shall be in writing and may be upon such conditions as the Authority may impose. Section 6(4) A securities exchange to which a delegation has been made under this regulation shall notify the Authority of any approvals for public offers and listings granted by the securities exchange under the delegated authority. Section 6(5)(a) any authorization granted to a securities exchange to operate as a self-regulatory organization is cancelled or suspended; Section 6(5)(b) where the securities exchange breaches any of the conditions imposed by the Authority on such delegation; Section 6(5)(c) the securities exchange ceases to hold any qualifications which enabled the Authority to so delegate; or Section 6(5)(d) where, in the opinion of the Authority, it is in the interest of the public to withdraw the delegation. Section 6(6) The Authority shall give the securities exchange the opportunity to be heard before the withdrawal of a delegation under this regulation.
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APPROVAL OF OFFERS OF SECURITIES AND LISTING - 7. Listing of securities

AI-assisted research summary: A securities exchange must maintain an Official List for all securities listed on the exchange.

Section 7. Listing of securities Section 7(1) A securities exchange shall maintain an Official List in respect of all securities listed on the securities exchange. Section 7(2) The securities exchange shall enter into the Official List the particulars of all securities that have been approved for listing . Section 7(3)(a) the total minimum subscription of shares disclosed in the information memorandum approved by the Authority in respect of public offering and listing of securities; and Section 7(3)(b) the minimum subscribers prescribed for the respective market segment under these Regulations. Section 7(4)(a) the name of issuer ; Section 7(4)(b) the name of security; Section 7(4)(c) the International Securities Identification Number for the security; Section 7(4)(d) the total number of securities listed; Section 7(4)(e) the class of security; Section 7(4)(f) the type of security; Section 7(4)(g) the par value of the security; Section 7(4)(h) the listing date; Section 7(4)(i) the trading commencement date; and Section 7(4)(j) the redemption date.
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APPROVAL OF OFFERS OF SECURITIES AND LISTING - 8. Establishment of market segments

AI-assisted research summary: A securities exchange may, with the written approval of the Authority, establish and operate other market segments or change eligibility requirements for those segments within the market segments listed in regulation 11(1).

Section 8. Establishment of market segments Section A securities exchange may, with the written approval of the Authority, establish and operate other market segments within the market segments set out in regulation 11 (1) or prescribe or alter the eligibility requirements for such market segments so established.

Part III

PUBLIC OFFERS, ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS

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PUBLIC OFFERS, ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS - 10. Issue of securities to the public andlisting

AI-assisted research summary: Issue of securities to the public and listing; offer for subscription for new securities.

Section 10. Issue of securities to the public andlisting Section offer for subscription for new securities;
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PUBLIC OFFERS, ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS - 11. Eligibility to issue securities

AI-assisted research summary: An issuer must meet the eligibility requirements in Part A of the First Schedule to issue securities for listing on the Main Investment Market Segment.

Section 11. Eligibility to issue securities Section with respect to securities to be listed on the Main Investment Market Segment , the issuer meets the eligibility requirements prescribed in Part A of the First Schedule;
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PUBLIC OFFERS, ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS - 12. Issue by sovereign states

AI-assisted research summary: Issuance of securities by sovereign states or entities is outside these Regulations, but listing such securities requires the Authority's approval before listing.

Section 12. Issue by sovereign states Section 12(1) These Regulations shall not apply to the issuance of securities by sovereign states or entities. Section 12(2) Despite sub-regulation (1) , the listing of securities by sovereign states or entities shall require the approval of the Authority before listing .
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PUBLIC OFFERS, ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS - 13. Issue by national or county entities

AI-assisted research summary: The Authority may set different eligibility and disclosure requirements for national or county government entities when they issue and list securities to the public.

Section 13. Issue by national or county entities Section The Authority may prescribe different eligibility and disclosure requirements for the issue and listing of securities to the public by a national government entity, a county government or a county government entity.
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PUBLIC OFFERS, ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS - 14. Issuers not seekinglisting

AI-assisted research summary: Issuers that choose not to list must set up Authority‑approved mechanisms to allow trading and price discovery; issuers who made a public offer may list by introduction after one year from the end of the offer.

Section 14. Issuers not seekinglisting Section 14(1)(a) Small and Medium Enterprises Market Segment in the case of equities; and Section 14(1)(b) Small and Medium Enterprises Fixed Income Securities Market Segment in the case of debt securities. Section 14(2) An issuer who does not wish to list the securities on any market segment shall establish and maintain mechanisms approved by the Authority for facilitating trading and price discovery of the securities. Section 14(3) An issuer who has made a public offer in accordance with subsection (1) , may, after the expiry of one year since the securities ceased to be the subject of an offer to the public, list the securities by introduction.
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PUBLIC OFFERS, ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS - 15. Transfer to newmarket segment

AI-assisted research summary: An issuer with securities listed on a market segment may not transfer those securities to another market segment until one year after the date of first listing.

Section 15. Transfer to newmarket segment Section 15(1) An issuer whose securities are listed on a market segment of a securities exchange shall not be eligible to transfer the listed securities to another market segment before the expiry of one year from the date of the first listing . Section 15(2)(a) be subjected to the eligibility criteria of the new segment; Section 15(2)(b) comply with the disclosure requirements of the new segment; and Section 15(2)(c) be subjected to the approval of the securities exchange:
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PUBLIC OFFERS, ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS - 16. Dealing with additional issues of securities

AI-assisted research summary: An issuer with listed securities must not issue (or authorize its registrar to issue or register) additional listed shares beyond the number authorized for listing except under the Twelfth Schedule's additional listing disclosure requirements.

Section 16. Dealing with additional issues of securities Section An issuer whose securities are listed at a securities exchange shall not issue, or authorize its share registrar to issue or register, by way of capitalization, scrip dividend, additional rights issue or additional shares of the class listed to a greater amount than the number authorized for listing except in accordance with the disclosure requirements for additional listing prescribed in the Twelfth Schedule.
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PUBLIC OFFERS, ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS - 9. Meaning of “public offer”

AI-assisted research summary: Defines “public offer” to include: (a) an initial offer of securities to the public by an issuer; (b) a further, secondary or additional offer of securities to the public by an issuer; (c) an offer for sale of securities to the public by an existing shareholder or shareholders; and states an offer is to the public in Kenya if it is not a private offer under regulation 17; also defines an offer to the public as a communication presenting information on transferable securities and their terms designed to, or that could, reach at least one hundred persons.

Section 9. Meaning of “public offer” Section 9(1)(a) an initial offer of securities to the public by an issuer ; Section 9(1)(b) a further or secondary or additional offer of securities to the public by an issuer ; or Section 9(1)(c) an offer for sale of securities to the public by an existing shareholder or shareholders. Section 9(2) A person offers securities to the public in Kenya if such offer is not a private offer as provided in regulation 17 . Section 9(3) For the purposes of this Part, there is an offer of securities to the public if there is a communication to any person which presents information on the transferable securities to be offered, and the terms on which they are offered to enable the offeree to decide whether or not to buy or subscribe for the securities in question and that communication is designed to, or could, reach at least one hundred persons. Section 9(4) The onus will be on the offeror to demonstrate that any offer said to not to be a public offer is a private offer .

Part IV

PRIVATE OFFERS

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PRIVATE OFFERS - 17. Private offers

AI-assisted research summary: Private offers: rules restricting who may receive private securities offers, recordkeeping, a prohibition on public advertising, and Authority powers to require investor lists.

Section 17. Private offers Section 17(1)(a) the securities are offered to not more than one hundred persons who are specifically identified and the offer shall remain open for a continuous period not exceeding twelve months, and the offer shall not be repeated with wholly or partially different persons by the same entities or related parties, or ultimately for a common purpose, within a period of twenty-four months from the date of the first offer ; Section 17(1)(b) the securities are offered to the members of a club or association (whether or not incorporated) by or on behalf of that club or association, and the members can reasonably be regarded as having a common interest with each other and the club or association in its affairs and in what is to be done with the proceeds of the offer : Section 17(1)(c) the securities are offered in connection with a valid invitation to enter into an underwriting agreement with respect to the securities; Section 17(1)(d) shareholders or employees of the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ; or Section 17(1)(d)(i) shareholders or employees of the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ; or Section 17(1)(d)(ii) members of the families of any such shareholders or employees; Section 17(1)(e) the securities are of an unlisted public company and are offered by that company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") to shareholders of the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ; Section 17(1)(f) the securities are offered to a restricted circle of persons whom the offeror reasonably believes to be sufficiently knowledgeable to understand the risks involved in accepting the offer and the number of such persons does not exceed one hundred; Section 17(1)(g) the securities are offered to the controlling shareholders, substantial shareholders or directors of the issuer or the issuer ’s parent or subsidiary companies or associates; Section 17(1)(h) the securities result from the conversion of convertible securities in respect of which the Authority had already approved an information memorandum; or Section 17(1)(i) the securities of a listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") are offered in connection with a take-over scheme approved by the Authority. Section 17(2) For the purposes of subregulation (1)(d)(ii) , the members of a person's family include a spouse, son, adopted son, step-son, son-inlaw, daughter, adopted daughter, step-daughter, daughter-in-law, father, step-father, father-in-law, mother, step-mother, mother-in-law, brother, step-brother, brother-in-law, sister, step-sister, sister-in-law, grandchild or spouse of a grandchild of that person, and any trustee (acting in his or her capacity as such) of a trust the principal beneficiary of which is the person or any of the person’s relatives. Section 17(3) An offer made under this regulation shall be made only to a person whose name is recorded by the offeror prior to the invitation to subscribe, and that such person shall receive the offer by name, and that a complete record of any such offerees shall be kept by the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") and submitted to the Authority on demand. Section 17(4) The Authority may require the issuer in a private offer to submit a list of the targeted investors. Section 17(5) An issuer offering securities under this regulation shall not issue any public advertisements or utilize any media, marketing or distribution channels or agents to inform the public, or capable of informing the public, about such an offer . Section 17(6) An offer or invitation which does not comply with the provisions of this Part shall be a public offer , or a restricted public offer , as the case may be, and the provisions of these Regulations relating to public offers or restricted public offers shall apply to that offer or invitation.

Part IX

SHELF PROSPECTUSES

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SHELF PROSPECTUSES - 37. Issuing of shelf prospectuses

AI-assisted research summary: Issuers meeting regulation 38 may submit a shelf prospectus to the Authority that must state a validity period not exceeding two years; once issued, later offers during that validity need no new prospectus, and the issuer must publish supplementary offering notes of material changes and refund subscription payments within fifteen days if an applicant withdraws after notification.

Section 37. Issuing of shelf prospectuses Section 37(1) An issuer who satisfies the criteria set out in regulation 38 may submit to the Authority a shelf prospectus for approval which shall indicate a period not exceeding two years as the period of validity of such prospectus commencing on the date of opening of the first offer of securities under the prospectus and, in respect of a second or subsequent offer of such securities issued during the period of validity of the prospectus, no further prospectus shall be required. Section 37(2) An issuer who has submitted a shelf prospectus under subregulation (1) shall be required to publish a supplementary offering note containing all material changes in the business and financial position of the issuer occurring between the first offer of securities or the previous offer of securities and the succeeding offer of securities and such other changes as may be prescribed, within the prescribed time, prior to the issue of a second or subsequent offer of securities under the shelf prospectus: Provided that where an issuer or any other person has received an application for the allotment of securities and advance payments of subscription before the making of any such change, the issuer or that other person shall notify the changes to such an applicant and if the applicant notifies the issuer or that other person a desire to withdraw the application, the issuer or that other person shall refund the payments received as subscription within fifteen days after the notification. Section 37(3) Where a supplementary offering note is published, each time an offer of securities is made under this regulation, the supplementary offering note and the shelf prospectus shall be deemed to be the shelf prospectus.
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SHELF PROSPECTUSES - 38. Qualification to issue shelf prospectuses

AI-assisted research summary: Each shelf prospectus must comply with the disclosure requirements for public offers of securities for the relevant market segment under these Regulations.

Section 38. Qualification to issue shelf prospectuses Section 38(1)(a) that has net assets of at least five hundred million shillings as at the date of the last audited balance sheet; Section 38(1)(b) that has a consistent track record of distributable profit for the preceding three years; Section 38(1)(c) that has no regulatory action pending against it before any regulatory authority including the Authority, Central Bank of Kenya or Insurance Regulatory Authority ; and Section 38(1)(d) that is not in default of any material obligation including the payment of debts as they fall due and payment of dividends or repayment of any loans, and has not been in such default in the preceding three financial years. Section 38(2) Each shelf prospectus shall comply with the disclosure requirements for public offers of securities for the relevant market segment under these Regulations. Section 38(3) Not more than five issuances of securities may be made through a single shelf prospectus.

Part V

REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE

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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 18. Requirement for information memorandum

AI-assisted research summary: A person must not offer securities to the public unless they publish an information memorandum approved by the Authority or a securities exchange; the issuer must comply with registration rules and make the memorandum available free during the offer period, using prescribed publication methods.

Section 18. Requirement for information memorandum Section 18(1) A person shall not make an offer of securities to the public unless that person publishes an information memorandum in respect of the offer approved by the Authority or by a securities exchange in exercise of delegated authority. Section 18(2) The issuer shall comply with any requirements of any law, including the Companies Act ( Cap. 486 ), regarding the registration of an information memorandum. Section 18(3) The issuer shall, during the offer period and for such additional period as may be prescribed by the Authority, make the information memorandum available to the public or to the section of the public to whom the offer is made free of charge. Section 18(4)(a) publishes the information memorandum on its official website; Section 18(4)(b) publishes the information memorandum in a newspaper with a nation-wide circulation; Section 18(4)(c) delivers the information memorandum to the respective electronic mail addresses of the offerees; Section 18(4)(d) publishes the information memorandum in such other digital platform as may be approved by the Authority; or Section 18(4)(e) publishes the information memorandum in any other manner as may be prescribed or approved by the Authority. Section 18(5) An issuer shall deliver a copy of the approved and published information memorandum to the Authority and the securities exchange on or before the first day of the offer .
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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 19. Content of information memorandum

AI-assisted research summary: The issuer must include specified content in the information memorandum, including a reporting accountant's report, the issuer's legal status, licences and consents, evidence of ownership of key assets, relevant agreements, material litigation, material contracts, capital conformity and other material legal information.

Section 19. Content of information memorandum Section 19(1)(a) a reporting accountant ’s report confirming that the issuer has complied with the financial disclosures prescribed under these Regulations with respect to the relevant market segment : Section 19(1)(b) the legal status of the issuer ; Section 19(1)(b)(i) the legal status of the issuer ; Section 19(1)(b)(ii) whether all licences and consents required to carry on the business or proposed business of the issuer have been duly obtained; Section 19(1)(b)(iii) the validity of evidence of ownership of land, plant and equipment and other important and relevant assets of the issuer ; Section 19(1)(b)(iv) any agreements or contracts regarding the proposed issue of securities including underwriting contracts or contracts with any securities exchange, registrar and trustees of bonds, debentures or other credit securities; Section 19(1)(b)(v) any material litigation, prosecution or other civil or criminal legal action in which the issuer or any directors of the issuer is involved; Section 19(1)(b)(vi) any contracts which have a material impact on the issuer ’s business and the public offer and listing of the issuer ’s securities; Section 19(1)(b)(vii) whether the existing capital of the issuer and any proposed changes thereto conforms with applicable laws and has received all necessary authorizations; and Section 19(1)(b)(viii) any other material information regarding the legal status of the issuer and the proposed issue.
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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 20. Signing of information memorandum

AI-assisted research summary: Specifies who must sign an information memorandum (directors and proposed directors for corporate issuers; authorised officials for government/state entities; the offering individual if the offeror is an individual but not the issuer) and requires the information memorandum to be published in English.

Section 20. Signing of information memorandum Section 20(1)(a) where an issuer which is a corporation, by each director or equivalent person of the issuer and each person who is named in the information memorandum as a proposed director or an equivalent person of the issuer ; Section 20(1)(b) where the issuer is the Government, state corporation or an entity duly established in Kenya by an official of the Government, state corporation or duly established entity who are duly authorized to sign the information memorandum; or Section 20(1)(c) where the person making the offer is an individual but is not the issuer , by that person. Section 20(2) The information memorandum shall be published in the English language.
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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 21. Electronic offers

AI-assisted research summary: Issuers may make offers electronically, notify the Authority and exchange when obtaining approval, the Authority may approve electronic offerings if satisfied with the technology, and issuers must disclose the information memorandum in the same form and content approved by the Authority.

Section 21. Electronic offers Section 21(1) An issuer may, when obtaining approval of an offer , notify the Authority, and, where applicable, the securities exchange, that the offer shall be made electronically and include that fact in the information memorandum. Section 21(2) The Authority may approve an electronic offering if satisfied that the technology to be used for such offer affords sufficient opportunity for each application to be treated fairly or equitably. Section 21(3) The issuer in an electronic offer shall ensure that the information memorandum is disclosed in the same form and content approved by the Authority. Section 21(4) The results of an electronic offer shall be published in the same manner as the information memorandum was published.
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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 22. Allocation policy

AI-assisted research summary: Issuers of securities must establish and disclose a fair and equitable allocation policy in the information memorandum; must establish investor sensitization mechanisms; and must notify the Authority (and, if listed, the securities exchange) at least twenty-four hours before publishing the offer result.

Section 22. Allocation policy Section 22(1) An issuer of securities shall establish and disclose in the information memorandum a fair and equitable allocation policy for the allocation of the securities in a public offer . Section 22(2) An issuer of securities shall establish mechanisms for sensitization of investors to invest in the issue of the issuer ’s securities. Section 22(3) An issuer shall notify the Authority and, where there is a listing , the securities exchange at least twenty-four hours before the publication of the result of the offer .
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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 23. Form and content of information memorandum

AI-assisted research summary: The Authority may set different disclosure requirements for certain listings; every information memorandum must include a front-page disclaimer about the Authority and Exchange not assuming responsibility for statement correctness.

Section 23. Form and content of information memorandum Section 23(1)(a) Sixth Schedule, where the issuer seeks to raise capital and list in the Main Investment Market Segment ; Section 23(1)(b) Seventh Schedule, where the issuer seeks to list on the Main Investment Market Segment by way of introduction; Section 23(1)(c) Eighth Schedule, where the issuer seeks to list and raise capital on the Small and Medium Enterprises Market Segment ; Section 23(1)(d) Ninth Schedule, where the issuer seeks to list on the Small and Medium Enterprises Market Segment by introduction; Section 23(1)(e) Tenth Schedule, where the issuer seeks to list in the Main Fixed Income Securities Market Segment ; Section 23(1)(f) Eleventh Schedule, where the issuer seeks to list securities on the Small and Medium Enterprises Fixed Income Securities Market Segment; and Section 23(1)(g) such other requirements as the Authority may prescribe or approve with respect to any other market segment or issue of securities for which the Authority has jurisdiction. Section 23(2) Despite subregulation (1) , the Authority may prescribe different disclosure requirements for an entity listed on a foreign securities exchange recognized by the Authority that is seeking to cross-list on a securities exchange in Kenya. Section 23(3) Every information memorandum shall contain the following statement on its front page— “As a matter of policy, the Capital Markets Authority [and the Securities Exchange] assumes no responsibility for the correctness of any statements or opinions made or reports contained in this information memorandum. Approval of the issue or listing is not to be taken as an indication of the merits of the issuer or of the securities.”
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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 24. Additional information in an information memorandum

AI-assisted research summary: Persons responsible for an information memorandum must include specified financial information and the rights attached to the securities when that information is within their knowledge or reasonably obtainable; the Authority and securities exchange may require additional information if it is in investors' interests.

Section 24. Additional information in an information memorandum Section 24(1)(a) the assets, liabilities, financial position, profits, losses and prospects of the issuer of the securities; and Section 24(1)(b) the rights attaching to the securities being offered. Section 24(2) The additional information under subregulation (1) shall be such information as is within the knowledge of any person responsible for the information memorandum or which it would be reasonable for him or her to obtain by making diligent enquiries. Section 24(3) In determining what information is required to be included in an information memorandum under this regulation, regard shall be had to the nature of the securities and offeror of the securities. Section 24(4) The Authority and securities exchange may require additional information to be included in an information memorandum if it is in the interests of investors for such information to be in the information memorandum.
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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 25. Supplementary information memorandum

AI-assisted research summary: A supplementary information memorandum must be issued when there is a significant change, a significant new matter, or a significant inaccuracy in the information memorandum; approved supplementary information memoranda are read together with the original information memorandum; regulation 28 applies to supplementary information memoranda.

Section 25. Supplementary information memorandum Section 25(1)(a) there is a significant change that affects any matter contained in the information memorandum the inclusion of which was required by these Regulations; Section 25(1)(b) a significant new matter arises the inclusion of information in respect of which would have been so required if it had arisen when the information memorandum was first prepared; or Section 25(1)(c) a significant inaccuracy in the information memorandum, is discovered, Section 25(2) Where a supplementary information memorandum in respect of a public offer has been approved, these Regulations shall have effect as if any reference to an information memorandum is a reference to the information memorandum originally published and that supplementary information memorandum , taken together. Section 25(3) The provisions of regulation 28 shall apply to a supplementary information memorandum .
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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 26. Change of basis of approval

AI-assisted research summary: Provision requires issuing a supplementary information memorandum disclosing additional information in relation to a change of basis of approval.

Section 26. Change of basis of approval Section to issue a supplementary information memorandum disclosing such additional information;
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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 27. Omission of certain information

AI-assisted research summary: The Authority may, on application by the issuer, authorize omitting information from an information memorandum when disclosure would be prejudicial to the offeror, provided the omission does not prejudice investors.

Section 27. Omission of certain information Section The Authority may, upon application by the issuer , authorize the omission from an information memorandum of information whose inclusion would otherwise be required by these Regulations if the Authority considers that the disclosure of that information would be prejudicial to the interest of the offeror, but its omission does not prejudice the interest of investors.
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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 28. Abridged information memorandum

AI-assisted research summary: Issuers must publish an abridged information memorandum in the same manner as the information memorandum; issuers must disclose to the Authority how many physical copies of the information memorandum have been printed.

Section 28. Abridged information memorandum Section 28(1) An advertisement, notice, poster or document including an abridged information memorandum announcing a public offer or listing of securities for which an information memorandum is or will be required under these Regulations shall not be issued to or caused to be issued to the public in Kenya unless it states that an information memorandum is or will be published and provides a website or other electronic location or an address in Kenya where the information memorandum can be obtained. Section 28(2) An advertisement, notice, poster or document referred to in subregulation (1) shall be submitted to the Authority and securities exchange not later than forty-eight hours before the proposed publication, and the Authority or securities exchange may require such amendments to be made to the information memorandum as may be necessary. Section 28(3) Each application form for subscription of the securities offered in an information memorandum shall state, in a conspicuous position, where the information memorandum may be obtained, and the issuer shall disclose to the Authority the number, if applicable, of physical copies of the information memorandum that have been printed. Section 28(4) Each issuer shall publish an abridged information memorandum in the same manner as the issuer publishes the information memorandum. Section 28(5)(a) a summary of the balance sheet, and profit and loss accounts for the three years immediately preceding the issue or such shorter period as may apply with respect to a particular market segment ; Section 28(5)(b) the broad ownership structure of the issuer before the issue and anticipated structure after the issue; Section 28(5)(c) the particulars of the issue; and Section 28(5)(d) any other material information regarding the issue.
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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 29. Short form prospectus

AI-assisted research summary: A person intending to make a restricted public offer must submit a short-form prospectus to the Authority for approval.

Section 29. Short form prospectus Section 29(1) A person who intends to make a restricted public offer shall submit a short-form prospectus to the Authority for approval. Section 29(2)(a) the name of issuer ; Section 29(2)(b) a summary of description of business; Section 29(2)(c) a summary of description of issue; Section 29(2)(d) a disclosure of documents incorporated by reference in relation to the financial affairs of the entity or any significant matter as required for a full prospectus; Section 29(2)(e) the number, price and type of securities; Section 29(2)(f) conditions of the issue, if any; Section 29(2)(g) a detailed schedule of use of the proceeds; Section 29(2)(h) a description of securities and rights thereto; Section 29(2)(i) completed and ongoing acquisitions in the preceding two years; Section 29(2)(j) a description of any underwriting arrangement and if the underwriter has any conflict of interest; Section 29(2)(k) any other material information ; and Section 29(2)(l) any other information that the Authority may direct.
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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 30. Information notice

AI-assisted research summary: Information notice must follow the form in the Fifteenth Schedule; the Authority may exempt certain offers from issuing an information memorandum or a short-form prospectus; the maximum amount that may be raised under an offer of securities is five hundred million shillings or such other amounts as may be prescribed by the Authority; the Authority may prescribe denominations or currency for securities.

Section 30. Information notice Section 30(1)(a) in the case of any issue or offer , other than a private offer , that may be exempted by the Authority from issuing an information memorandum or a short-form prospectus; or Section 30(1)(b) the maximum amount which may be raised under the offer of securities is five hundred million shillings or such other amounts as may be prescribed by the Authority; or Section 30(1)(b)(i) the maximum amount which may be raised under the offer of securities is five hundred million shillings or such other amounts as may be prescribed by the Authority; or Section 30(1)(b)(ii) the securities are denominated in such an amount or currency as the Authority may prescribe, Section 30(2) The information notice shall be in the form set out in the Fifteenth Schedule.
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REQUIREMENTS FOR PUBLISHING INFORMATION MEMORANDUM, SHORT FORM PROSPECTUS AND INFORMATION NOTICE - 31. Persons responsible for the information memorandum

AI-assisted research summary: Lists the persons who are responsible for an information memorandum, including the issuer, certain directors/members, persons who accept responsibility, offerors (and their directors when applicable), and any person who authorised the contents; includes a requirement that a person in (1)(b) who discovers publication without their consent must give reasonable notice to the public and the Authority.

Section 31. Persons responsible for the information memorandum Section 31(1)(a) the issuer of the securities to which the information memorandum relates; Section 31(1)(b) where the issuer is a legal entity , each person who is a director or member of the relevant governing body of that legal entity at the time when the information memorandum is published; Section 31(1)(c) where the issuer is a legal entity , each person who has given consent to be named and is so named in the information memorandum as a director or member of the relevant governing body of that legal entity at the date of the information memorandum or at a specified time in the future; Section 31(1)(d) each person who accepts, and is stated in the information memorandum as having accepted, responsibility for any part of the information memorandum; Section 31(1)(e) the offeror of the securities, where the offeror is not the issuer ; Section 31(1)(f) where the offeror is a body corporate, but is not the issuer and whether or not making the offer in association with the issuer , each person who is a director or member of the governing body of that body corporate at the time when the information memorandum is published; and Section 31(1)(g) any other person who has authorised the contents of, or any Part of, the information memorandum. Section 31(2)(a) under subregulation (1) (a) , (b) or (c) , unless the issuer has made or authorized the offer in relation to which the information memorandum is published; or Section 31(2)(b) under subregulation (1) (b) , if such information memorandum is published without that person’s knowledge or consent and on becoming aware of its publication, the person gives reasonable notice to the public and the Authority that the information memorandum was published without that person’s knowledge or consent. Section 31(3) Where a person has accepted responsibility for, or authorised, part of the contents of an information memorandum, that person shall be responsible under subregulation (1) (d) or (g) only for that part and only if it is included substantially in the form and context that the person has agreed.

Part VI

TRANSACTION ADVISORS AND COMPLIANCE OFFICERS

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TRANSACTION ADVISORS AND COMPLIANCE OFFICERS - 32. Transaction advisors

AI-assisted research summary: Entities offering or listing securities must appoint a transaction advisor; transaction advisors must avoid conflicts of interest, and only investment banks or investment advisers licensed by the Authority are eligible; appointed advisors must ensure offers and listings comply with the Act and these Regulations.

Section 32. Transaction advisors Section 32(1) An entity proposing to offer securities to the public or list securities in any market segment shall appoint a transaction advisor . Section 32(2) A transaction advisor shall take all reasonable and effective measures to avoid or deal with any conflicts of interest that may arise in the discharge of the transaction advisor ’s duties. Section 32(3) A person is not eligible for appointment as a transaction advisor unless such a person is an investment bank or an investment adviser licenced by the Authority. Section 32(4) A transaction advisor appointed under subregulation (1) shall be responsible for ensuring that the offer of securities and listing is made in accordance with the Act and these Regulations.
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TRANSACTION ADVISORS AND COMPLIANCE OFFICERS - 33. Compliance officers

AI-assisted research summary: After issuance or listing, an issuer must appoint, engage or designate a compliance officer; the compliance officer must carry out specified continuing disclosure and board-support functions and transaction advisers and compliance officers must observe due care, skill and the highest level of integrity.

Section 33. Compliance officers Section 33(1) An issuer shall, after the issuance or listing of the issuer ’s securities, appoint, engage or designate a person to be the issuer ’s compliance officer . Section 33(2)(a) support the issuer to comply with the Act, these Regulations and any relevant written law during the period that the issuer ’s securities are listed; Section 33(2)(b) review, before publication, all financial information announcements, and any other documentation to ensure that the announcements or documentation accurately disclose all material information to shareholders and the market; Section 33(2)(c) submit all required documents to the securities exchange and ensure that the documents comply with the continuing disclosure obligations; Section 33(2)(d) take all reasonable steps to brief the members of the board of directors of the issuer as to the nature of the directors’ responsibilities under the continuing disclosure obligations, other applicable regulations and general nature of the directors’ obligations in relation to holders of securities; Section 33(2)(e) ensure that all new appointments to the board of directors of the issuer are complete; Section 33(2)(f) ensure that the members of the board of directors of the issuer undertake training in corporate governance and the Directors Training Programme within six months after being appointed; Section 33(2)(g) attend all board audit committee meetings of the issuer in an advisory capacity to ensure that the issuer conducts its meetings in compliance with the continuing listing obligations; and Section 33(2)(h) carry out any activities relating to the issuer as may be requested by the securities exchange. Section 33(3) Each transaction adviser and compliance officer shall, in the discharge of their responsibilities under these Regulations, observe due care and skill and ensure that they observe the highest level of integrity in their conduct and judgment.

Part VII

UNDERWRITING AND VALUATION OF SECURITIES

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UNDERWRITING AND VALUATION OF SECURITIES - 34. Underwriting of offers to the public

AI-assisted research summary: Issuers must disclose underwriting arrangements to the Authority and in the information memorandum; related underwriters must undertake to dispose of securities within an issuer‑determined and Authority‑approved period; the Authority may extend that period and the issuer must publicly disclose any extension and its conditions.

Section 34. Underwriting of offers to the public Section 34(1) Where an issuer decides to have its public offer underwritten, it shall disclose the underwriting arrangement to the Authority before entering into the arrangement. Section 34(2) The issuer shall disclose the facts and particulars of the underwriting arrangement in the information memorandum. Section 34(3) Where the underwriter is a person related or associated with the issuer , the underwriter shall undertake to the Authority to dispose of any securities arising from the underwriting agreement within a period determined by the issuer and approved by the Authority. Section 34(4) The Authority may extend the period referred to in subregulation (3) if such extension is in the best interest of the holders of the securities of the issuer , having regard to the prevailing market conditions and any other factors that are relevant in the circumstances. Section 34(5) Where the Authority extends the period in accordance with subregulation (4) , the issuer shall publicly disclose the period of such extension, any conditions attached to the extension and the circumstances necessitating the extension, in the same manner as the information memorandum was published.
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UNDERWRITING AND VALUATION OF SECURITIES - 35. Valuation of securities

AI-assisted research summary: Persons proposing a public offer may use book-building or International Valuation Standards to set the offer price; the issuer must disclose the valuation methodology to the Authority when applying to issue the securities.

Section 35. Valuation of securities Section 35(1) A person who proposes to make a public offer may use a book-building process in accordance with the Sixteenth Schedule to determine the price of the securities. Section 35(2) Despite subregulation (1) , a person who proposes to make a public offer may also determine the price of the securities in accordance with International Valuation Standards. Section 35(3) The issuer shall disclose to the Authority the valuation methodology used to determine the price of securities in a public offer at the time of the application to the Authority to issue the securities.

Part VIII

GREEN SHOE OPTION

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GREEN SHOE OPTION - 36. Green Shoe options

AI-assisted research summary: Sets requirements and procedures for green shoe (stabilization) options: issuer authorization, stabilizing agent appointment and responsibilities, account handling, allotment for shortfalls, reporting and register retention.

Section 36. Green Shoe options Section 36(1)(a) the issuer has been authorized to include the green shoe option by a resolution passed in a duly constituted meeting of members of the issuer , which resolution shall specify the purpose for the green shoe option ; Section 36(1)(b) the maximum number of securities, in number and as a percentage of the proposed issue size, proposed to be over-allotted by the issuer ; Section 36(1)(b)(i) the maximum number of securities, in number and as a percentage of the proposed issue size, proposed to be over-allotted by the issuer ; Section 36(1)(b)(ii) the maximum increase in the equity share capital of the issuer and the shareholding pattern, post-issue, in case the issuer is required to allot further equity shares to the extent of over-allotment in the issue; Section 36(1)(b)(iii) the maximum amount of funds to be received by the issuer in case of further allotment, and the use of the additional funds shall be disclosed in the offer document; Section 36(1)(b)(iv) the name of the stabilizing agent; Section 36(1)(b)(v) the period for which the issuer proposes to avail of the stabilization mechanism; Section 36(1)(b)(vi) the details of the agreement or arrangement entered into by the stabilizing agent with the promoters or shareholders to borrow equity shares from the latter including the name of each promoter or shareholder, their existing shareholding in the issuer , the number and percentage of equity shares to be lent by them and other important terms and conditions including rights and obligations of each party; and Section 36(1)(b)(vii) the number of equity shares to be allotted pursuant to the public issue, stating separately the number of equity shares to be borrowed from each promoter or shareholder and over-allotted by the stabilizing agent and the percentage of such equity shares in relation to the total issue size; and Section 36(1)(c) the issuer has appointed an investment bank or an underwriter as a stabilizing agent, who shall be responsible for the price stabilization process; Section 36(1)(c)(i) the issuer has appointed an investment bank or an underwriter as a stabilizing agent, who shall be responsible for the price stabilization process; Section 36(1)(c)(ii) before lodging the offer documents with the Authority, the issuer and the stabilizing agent shall have entered into an agreement, stating the terms and conditions relating to the green shoe option including fees charged and expenses to be incurred by the stabilizing agent for discharging its responsibilities, and such agreement shall have been delivered to the Authority; Section 36(1)(c)(iii) before lodging the offer documents with the Authority, the stabilizing agent shall have entered into an agreement with the promoters or pre-issue shareholders or both for borrowing specified securities from them in accordance with paragraph (vi) ; Section 36(1)(c)(iv) the agreement shall specify the maximum number of specified securities that may be borrowed for the purpose of allotment or allocation of specified securities in excess of the issue size (over-allotment), which shall not exceed thirty per cent of the issue size; Section 36(1)(c)(v) subject to paragraph (iii) , the transaction adviser, in consultation with the stabilizing agent, shall determine the amount of specified securities to be over-allotted in the public issue; Section 36(1)(c)(vi) in the case of an initial public offer pre-issue shareholders and promoters, and in case of a further public offer pre-issue shareholders holding more than five per cent of specified securities, and promoters may lend specified securities to the extent of the proposed over-allotment; and Section 36(1)(c)(vii) the specified securities borrowed shall be in dematerialized form and allocation of the securities shall be made pro-rata to each successful applicant. Section 36(2) For the purpose of the stabilization of the post- listing price of the securities, the stabilizing agent shall determine the relevant aspects including the timing of buying or selling such securities, quantity to be bought or sold and the price at which such securities may be bought or sold in the market. Section 36(3) The stabilization process shall be available for a period of not more than thirty days from the date on which trading in the securities in the secondary market of the securities exchange commences. Section 36(4) The stabilizing agent shall open a special account with a licensed bank for crediting any monies received for the over-allotment and a special account with a central depository agent for crediting specified securities to be bought from the market during the stabilization period out of the monies credited in the special bank account. Section 36(5) On expiry of the stabilization period, if the stabilizing agent has not been able to buy specified securities from the market to the extent of such securities over-allotted, the issuer shall allot specified securities at issue price to the extent of the shortfall to the special account with the central depository agent. Section 36(6) The allotment in subregulation (5) shall be done within five days after the date of the closure of the stabilization period. Section 36(7) The specified securities referred to in subregulation (5) shall be returned to the promoters or pre-issue shareholders by the stabilizing agent in lieu of the specified securities borrowed from them and the account with the central depository agent shall be closed thereafter. Section 36(8) The issuer shall make a listing application in respect of the further specified securities allotted under subregulation (9) , to the relevant securities exchange where the specified securities allotted in the public issue are listed. Section 36(9) The stabilizing agent shall remit the monies with respect to the specified securities allotted under subregulation (7) to the issuer from the special bank account. Section 36(10) Any monies left in the special bank account after remittance of monies to the issuer under subregulation (11) and deduction of expenses incurred by the stabilizing agent for the stabilization process shall be transferred to the Investor Compensation Fund established under the Act and the special bank account shall be closed soon thereafter. Section 36(11)(a) the name of the issuer ; Section 36(11)(b) the name of the stabilizing agent; Section 36(11)(c) the issue size being number of equity shares; Section 36(11)(d) the issue open date; Section 36(11)(e) the issue closure date; Section 36(11)(f) over-allotment in issue expressed as a percentage; Section 36(11)(g) the date of commencement of trading; Section 36(11)(h) the amount in the Green Shoe Option Bank Account in shillings; Section 36(11)(i) the details of each promoter from whom shares were borrowed (name and number of shares borrowed); Section 36(11)(j) the date on which the stabilization period ended; Section 36(11)(k) the number of shares bought during the stabilization period; Section 36(11)(l) the date on which issuer allotted further shares to the extent of shortfall; Section 36(11)(m) the date when the shares were returned to each promoter; Section 36(11)(n) the date when the money in the Green Shoe Option Bank Account was remitted to the issuer ; Section 36(11)(o) the name of the central depository agent; Section 36(11)(o)(i) the name of the central depository agent; Section 36(11)(o)(ii) the account number; Section 36(11)(o)(iii) the number of shares purchased and the dates of the purchases; and Section 36(11)(o)(iv) the number of shares taken out and the date they were taken out; Section 36(11)(p) the details of amount transferred to the Investor Compensation Fund in shillings; and Section 36(11)(q) such other information as the Authority may require to be included in the report. Section 36(12) The stabilizing agent shall maintain a register for at least three years from the date of the end of the stabilization period containing particulars including the price, date and time in respect of each transaction effected in the course of the stabilization process, the details of allotment made by the issuer on expiry of the stabilization process, and any other information that the Authority may prescribe. Section 36(13) In this regulation, “stabilizing agent” means an entity, in most cases a transaction advisor , specifically appointed by the potential initial public offer issuer to stabilise post-initial-public- offer share prices by way of purchasing under-priced shares and selling overpriced shares.

Part X

SPECIAL PURPOSE ACQUISITION COMPANIES

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SPECIAL PURPOSE ACQUISITION COMPANIES - 39. Incorporation status

AI-assisted research summary: A special purpose acquisition company that intends to be listed must be a body corporate incorporated or registered under the Laws of Kenya; it must not carry on commercial or business operations before applying to the securities exchange for listing.

Section 39. Incorporation status Section 39(1) The special purpose acquisition company that intends to be listed shall be a body corporate that is duly incorporated or registered under the Laws of Kenya. Section 39(2) A special purpose acquisition company shall not carry on any commercial or business operation before applying to the securities exchange for listing .
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SPECIAL PURPOSE ACQUISITION COMPANIES - 40. Qualitative and Quantitative criteria

AI-assisted research summary: An issuer applying to list equity securities on the Main Investment Market Segment or the Small and Medium Enterprises Market Segment must be suitable for listing and is not permitted to adopt a dual class share structure at an initial public offer.

Section 40. Qualitative and Quantitative criteria Section 40(1) An issuer applying for listing of its equity securities on the Main Investment Market Segment or Small and Medium Enterprises Market Segment must be suitable for listing and is not permitted to adopt a dual class share structure at an initial public offer . Section 40(2)(a) the business objective and strategy of the issuer ; Section 40(2)(b) the profile including the track record and repute of the founding shareholders, and experience and expertise of the management team of the issuer ; Section 40(2)(c) the alignment of interests of the founding shareholders and management team with the interests of other shareholders, including potential losses and returns to the founding shareholders and the management team, and other shareholders; Section 40(2)(d) enable the issuer to have an identifiable core business with sufficient size and scale; and Section 40(2)(d)(i) enable the issuer to have an identifiable core business with sufficient size and scale; and Section 40(2)(d)(ii) offer reasonable returns to shareholders based on the equity capital employed; Section 40(2)(e) the proportion of rewards to be enjoyed by the founding shareholders and management team as compared to the expected and timing of shareholder value creation; Section 40(2)(f) the quantum of discount to the special purpose acquisition company initial public offering issue price at which securities of the issuer are issued to the founding shareholders and the management team, if any; Section 40(2)(g) the intended use of the special purpose acquisition company initial public offering proceeds that have not been placed in the escrow account; Section 40(2)(h) the dilutive features and events which may impact shareholders, and whether there is any mitigation for such dilution; and Section 40(2)(i) the escrow arrangements governing the funds in the escrow account. Section 40(3) For avoidance of doubt, the discount contemplated in subregulation (1) (f) shall not result in a price that is lower than the nominal value of the securities or a price lower than fifty per cent of the price of the securities issued to the other shareholders.
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SPECIAL PURPOSE ACQUISITION COMPANIES - 41. Special purpose acquisitioncompanyinitial public offering proceeds and escrow requirements

AI-assisted research summary: Issuers of SPACs must place at least ninety per cent of IPO gross proceeds in an escrow account with an independent escrow agent and maintain the escrow until termination; escrow agent must be independent; issuers must hold assets in permitted investments and account to shareholders and the Authority upon completion of a business combination.

Section 41. Special purpose acquisitioncompanyinitial public offering proceeds and escrow requirements Section 41(1) The issuer shall, immediately upon listing on the securities exchange, place at least ninety per cent of the gross funds raised from the initial public offer in an escrow account opened with and operated by an independent escrow agent and which is part of a financial institution licensed and approved by the Central Bank. Section 41(2) The amount placed in the escrow account under subregulation (1) shall not be drawn down except for the purpose of the business combination , or liquidation of the issuer , or such other circumstances as specified in these Regulations. Section 41(3) The escrow agent appointed under subregulation (1) shall be independent of the founding shareholders, management team, and associates of the founding shareholders and management team. Section 41(4) The issuer shall secure and maintain the escrow arrangement at all times over the funds in the escrow account until the termination of the escrow account in accordance with subregulation (6) . Section 41(5) The issuer shall hold its assets in permitted investments until completion of a business combination that meets the Authority’s requirements. Section 41(6)(a) the termination of the escrow account and release of the escrowed funds on a pro rata basis to shareholders who exercise their redemption rights and the remaining escrowed funds to the issuer , if the issuer completes a business combination within the permitted time frame; and Section 41(6)(b) the termination of the escrow account and distribution of the escrowed funds to shareholders (other than the founding shareholders, management team, and associates of shareholders and management team in respect of all equity securities owned or acquired by them prior to or pursuant to the initial public offering). Section 41(7)(a) as payment for administrative expenses incurred by the issuer in connection with the initial public offer ; Section 41(7)(b) for general working capital expenses; and Section 41(7)(c) for the purpose of identifying and completing a business combination . Section 41(8) The issuer shall be required to account to the issuer ’s shareholders and Authority on the use of the special purpose acquisition company initial public offering proceeds upon the completion of the business combination .
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SPECIAL PURPOSE ACQUISITION COMPANIES - 42. Issuer of convertible securities

AI-assisted research summary: An issuer of convertible securities may have only one class of convertible securities at a time.

Section 42. Issuer of convertible securities Section only one class of convertible securities shall be permitted at a time;
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SPECIAL PURPOSE ACQUISITION COMPANIES - 43. Authority may permitissuerto raise additional funds

AI-assisted research summary: The Authority may permit an issuer to raise additional funds provided specified conditions are met (pro rata issuance, at least 90% of gross proceeds in escrow, proceeds used for financing the business combination or related administrative expenses).

Section 43. Authority may permitissuerto raise additional funds Section 43(1)(a) the issuance is made on a pro rata basis and in accordance with the requirements of this Part; Section 43(1)(b) at least ninety per cent of the gross proceeds raised are placed in escrow; and Section 43(1)(c) the proceeds raised are for the purpose of financing the business combination or related administrative expenses: Section 43(2)(a) funds in the escrow account shall not be used as collateral or subject to encumbrance for the debt financing; and Section 43(2)(b) funds drawn down from the debt financing shall be applied towards the financing of the business combination or related expenses. Section 43(3) A credit facility may be entered into before the completion of a business combination and, if so entered into, shall be drawn down simultaneously with, or after completion of, a business combination . Section 43(4) For the purposes of this regulation, “debt financing” does not include short term trade or accounts payables in the ordinary course of business.
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SPECIAL PURPOSE ACQUISITION COMPANIES - 44. Security-based compensation arrangements not permitted

AI-assisted research summary: The Authority must not allow the issuer to adopt any security-based compensation arrangement before completing a business combination.

Section 44. Security-based compensation arrangements not permitted Section The Authority shall not permit the issuer to adopt any security-based compensation arrangement prior to the completion of a business combination .
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SPECIAL PURPOSE ACQUISITION COMPANIES - 45. Additional continuinglistingrequirements before completion ofbusiness combination

AI-assisted research summary: Rules for special purpose acquisition companies (SPACs) requiring completion of a business combination within 24 months of listing, procedures when multiple acquisitions are involved, permitted forms of business combination, rules and approvals for extension of time up to 12 months, exclusions for escrow calculations, and voting independence rules.

Section 45. Additional continuinglistingrequirements before completion ofbusiness combination Section 45(1) The issuer shall be required to complete a business combination within twenty-four months from the date of listing of the special purpose acquisition company initial public offering. Section 45(2) Where the business combination comprises of more than one acquisition, the issuer shall be required to complete the acquisitions simultaneously on or around the same day, and each of the acquisitions shall be in separate and inter-conditional resolutions. Section 45(3) A business combination under this regulation may be in the form of a merger, share exchange, asset acquisition, share purchase, reorganization, or such other similar business combination , in accordance with the business strategy and acquisition mandate disclosed in the prospectus issued in relation to the special purpose acquisition company initial public offer . Section 45(4) The issuer may apply to the Authority for an extension of time, which may not exceed twelve months, to complete the business combination and specifically obtain the approval of a majority of at least seventy-five per cent of the votes cast by independent shareholders at a general meeting to be convened. Section 45(5) An extension of time under subregulation (4) may be permitted under exceptional circumstances and any application for the extension of time shall be submitted to the Authority at least one month before the expiry of the permitted time frame. Section 45(6) For the purpose of voting on the extension of time to complete the business combination , the founding shareholders, the management team, and their associates, shall not be considered to be independent of one another. Section 45(7) The Authority may reject an application for extension of time if the Authority determines that there is no reasonable justification for the application or it is in the interests of the public to do so. Section 45(8) The initial business or asset acquired pursuant to the business combination shall have a fair market value of at least eighty per cent of the amount in the escrow account at the time of entry into the binding agreement for the business combination transaction, but shall not include any amount held in the escrow account representing deferred underwriting fees and any taxes payable on the income earned on the escrowed funds.
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SPECIAL PURPOSE ACQUISITION COMPANIES - 46. Multiple concurrent acquisitions or mergers

AI-assisted research summary: If a special purpose acquisition company enters multiple concurrent acquisitions or mergers as part of a business combination, it must have at least one initial acquisition whose fair market value is at least eighty per cent of the escrow amount at entry into the binding agreements, and the concurrent transactions must be inter-conditional and completed simultaneously within the permitted time frame.

Section 46. Multiple concurrent acquisitions or mergers Section Where the special purpose acquisition company concludes multiple concurrent acquisitions or mergers as part of the business combination , there must be at least one initial acquisition which satisfies the requirement of having a fair market value constituting at least eighty per cent of the amount held in the escrow account at the time of entry into the binding agreements for the business combination transactions, and such concurrent transactions must be inter-conditional and completed simultaneously within the permitted time frame.
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SPECIAL PURPOSE ACQUISITION COMPANIES - 47. Issuer to appoint advisors and valuers

AI-assisted research summary: The issuer must appoint advisors and valuers.

Section 47. Issuer to appoint advisors and valuers Section 47(1)(a) a transaction advisor , who is an issue manager, to advise on the business combination ; and Section 47(1)(b) a competent and independent valuer to value the business or asset to be acquired under the business combination . Section 47(2) A valuation under subregulation (10)(b) shall be conducted in accordance with International Valuation Standards and a summary valuation report shall be included in the shareholders’ circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") in relation to the business combination .
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SPECIAL PURPOSE ACQUISITION COMPANIES - 48. Business combination to result in identifiable core business

AI-assisted research summary: Business combinations must leave the issuer with an identifiable core business under majority ownership or management control.

Section 48. Business combination to result in identifiable core business Section 48(1) The business combination shall result in the issuer having an identifiable core business of which it has a majority ownership or management control. Section 48(2) The Authority may consider a business combination involving an acquisition of a minority stake in the business or asset, where the issuer can demonstrate that it has management control of such business or asset. Section 48(3) The business combination must be respectively approved by a majority of independent directors, and an ordinary resolution passed by independent shareholders at a general meeting to be convened. Section 48(4) For the purpose of voting on the business combination under subregulation (3) , the founding shareholders, management team, and their associates, shall not considered to be independent of each other. Section 48(5) The shareholders’ circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") in relation to the business combination must contain an opinion from an independent financial adviser stating that the terms of the transaction are on normal commercial terms and are not prejudicial to the interest of the issuer and its minority shareholders. Section 48(6) Each independent shareholder (other than the founding shareholders, the management team, and their respective associates and independent shareholders who vote for the business combination ) voting against the business combination shall be entitled to redeem their ordinary shares, on a pro rata basis, of the amount in the escrow account at the time of the business combination vote, provided that the business combination is approved and completed within the permitted time frame. Section 48(7) The redemption amounts with respect to the shares to be redeemed pursuant to subregulation (6) shall be paid to the electing independent shareholder as soon as practicable upon completion of the business combination , and shares tendered in exchange for cash shall be cancelled. Section 48(8) Any convertible securities attached to redeemed shares shall cease and become null and void.
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SPECIAL PURPOSE ACQUISITION COMPANIES - 49. Business combinations

AI-assisted research summary: If, before completing a business combination, a material change occurs in the profile of founding shareholders or the management team that may be critical to founding the issuer or completing the combination, the issuer must seek approval from independent shareholders of at least 75% of votes cast at a convened general meeting for continued listing.

Section 49. Business combinations Section 49(1) Before completion of the business combination , in the event a material change occurs in relation to the profile of the founding shareholders or the management team which may be critical to the successful founding of the issuer or successful completion of the business combination , the issuer shall seek approval of a majority of at least seventy-five per cent of the votes cast by independent shareholders at a general meeting to be convened for the continued listing of the issuer on the Securities Exchange. Section 49(2) For the purpose of voting on the continued listing of the issuer under subregulation (1) , the founding shareholders, management team, and their associates, shall not be considered to be independent of each other. Section 49(3) The Authority may declare a circumstance to be a material change under this regulation. Section 49(4)(a) fails to complete a business combination within the permitted time frame; Section 49(4)(b) fails to obtain specific shareholders’ approval; or Section 49(4)(c) is directed to delist by the Authority before the completion of a business combination . Section 49(5) The amount held in the escrow account at the time of the liquidation distribution and such other accounts held by the issuer , net of taxes payable and direct expenses related to the liquidation distribution, shall be distributed to shareholders on a pro rata basis as soon as practicable, as permissible by the relevant laws and regulations. Section 49(6) Any interest, income derived and deferred underwriting commissions accrued in the escrow account will form part of the liquidation distribution. Section 49(7) The founding shareholders, management team, and their associates shall waive their right to participate equally in the liquidation distribution in respect of all equity securities owned or acquired by them prior to or pursuant to the special purpose acquisition company initial public offering and shall only be entitled to participate in such distribution only after the other shareholders have received their relevant share of the liquidation proceed. Section 49(8) The underwriters of the special purpose acquisition company initial public offering shall waive their rights to any deferred underwriting commissions deposited in the escrow account in the event the issuer liquidates prior to completion of the business combination .
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SPECIAL PURPOSE ACQUISITION COMPANIES - 50. Liquidation of special purpose acquisition companies

AI-assisted research summary: Liquidation applies if a special purpose acquisition company does not complete a business combination within the permitted time frame.

Section 50. Liquidation of special purpose acquisition companies Section complete a business combination within the permitted time frame; or
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SPECIAL PURPOSE ACQUISITION COMPANIES - 51. Delisting of special purpose acquisition companies for failure to complete business combinations

AI-assisted research summary: The Authority must decide if a post‑combination issuer should remain listed and may suspend trading, start liquidation distribution and delist the issuer’s securities before the business combination is completed.

Section 51. Delisting of special purpose acquisition companies for failure to complete business combinations Section The Authority shall determine whether the continued listing of the resulting issuer after completion of the business combination will be in the best interests of the Authority, securities exchange and public, and may suspend, direct the commencement of the liquidation distribution and delist the issuer ’s securities before the completion of the business combination .
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SPECIAL PURPOSE ACQUISITION COMPANIES - 52. Authority to consider whether continuedlistingis in the best interest of the authority and public

AI-assisted research summary: When a special purpose acquisition company seeks to list or seeks shareholders' approval for a business combination, the offering memorandum, introductory document, or shareholders' circular must comply with disclosure requirements prescribed by the Authority.

Section 52. Authority to consider whether continuedlistingis in the best interest of the authority and public Section Where a special purpose acquisition company seeks to list on a securities exchange, or is seeking shareholders’ approval for a business combination , the offering memorandum or the introductory document or the shareholders’ circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") shall comply with the disclosure requirements as may be prescribed by the Authority.
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SPECIAL PURPOSE ACQUISITION COMPANIES - 53. Continuing obligations for special purpose acquisition companies

AI-assisted research summary: The continuing obligations listed in the Thirteenth Schedule apply to a special purpose acquisition company issuer after the date of the business combination.

Section 53. Continuing obligations for special purpose acquisition companies Section The continuing obligations set out in the Thirteenth Schedule shall apply to a special purpose acquisition company issuer after the date of the business combination .

Part XI

SHARE BUYBACKS

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SHARE BUYBACKS - 54. Scope

AI-assisted research summary: A listed company that intends to buy back its shares must comply in full with the Companies Act (Cap. 486), the Capital Markets Act (Cap. 485A) and these Regulations.

Section 54. Scope Section 54(1) This Part sets out the requirements that apply to a listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") that intends to undertake a share buyback . Section 54(2) A listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") that intends to buy back its shares shall comply in full with the provisions of the Companies Act ( Cap. 486 ), Capital Markets Act ( Cap. 485A ) and these Regulations.
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SHARE BUYBACKS - 55. Listedcompanymay buy back shares

AI-assisted research summary: A listed company may buy back its shares only if its Articles of Association permit share buybacks; the buyback proposal must be recommended by the board and approved by shareholders, circulated via a circular specifying terms, and approved by the Authority and submitted to the securities exchange.

Section 55. Listedcompanymay buy back shares Section 55(1) A listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") may only buy back its shares if the Articles of Association of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") provide for share buybacks. Section 55(2) A proposal to buy back the shares of a listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") shall be recommended by a resolution of the board of directors and approved by a resolution of shareholders of the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") in a general meeting of shareholders before the share buyback is undertaken. Section 55(3) A proposal to the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ’s shareholders to buy back shares under subregulation (2) shall be through a circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") which shall specify the terms and conditions of the proposal Section 55(4)(a) it shall have been approved by the Authority in accordance with these Regulations; and Section 55(4)(b) it shall have been submitted to the securities exchange on which the share buyback transactions shall be undertaken.
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SHARE BUYBACKS - 56. Shareholders’ resolution

AI-assisted research summary: The listed company is authorised to buy back a specified number or percentage of its shares and to describe the classes of those shares.

Section 56. Shareholders’ resolution Section the number of shares or percentage of shares, and description and classes of the shares which the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") has been authorised to buy back;
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SHARE BUYBACKS - 57. Shareholders’circular

AI-assisted research summary: Where shares bought back are to be held in treasury, the listed company must disclose the current and future treatment of those treasury shares.

Section 57. Shareholders’circular Section 57(1) The shareholders’ circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") on a share buy-back proposal shall disclose all material information that the shareholders of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") and the shareholders’ professional advisers would reasonably require or expect to be informed about in order to make an informed decision on the proposed share buy-back transaction. Section 57(2)(a) a heading drawing attention to the importance of the circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") and advising holders of shares to consult appropriate independent advisers regarding the proposal; Section 57(2)(b) a statement that the Authority or securities exchange, as the case may be, is not responsible for the contents of the circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") , makes no representation as to the accuracy or completeness of the circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") , and is not liable for any loss howsoever arising from or in reliance on the whole or any Part of the contents of the circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") ; Section 57(2)(c) the reasons for the share buyback ; Section 57(2)(d) the class and number of shares that are intended to be bought back; Section 57(2)(e) through open market repurchase programmes executed through tender offers or over a period of time; or Section 57(2)(e)(i) through open market repurchase programmes executed through tender offers or over a period of time; or Section 57(2)(e)(ii) through on-market (exchange) or off-market purchases; Section 57(2)(f) whether or not the shares bought back shall be held in treasury or shall be cancelled; and Section 57(2)(f)(i) whether or not the shares bought back shall be held in treasury or shall be cancelled; and Section 57(2)(f)(ii) where the shares that have been bought back are intended to be held in treasury, the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") shall disclose the current and future treatment of those treasury shares ; Section 57(2)(g) the price-per-share intended to be paid by the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") , specifying the maximum and minimum prices of the shares, and a detailed explanation supporting the prescribed price including valuation reports; Section 57(2)(h) the mode of financing the share buyback either being the proceeds from a fresh issue of shares or out of distributable profits of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ; Section 57(2)(i) whether or not consent for the share buyback has been obtained from other relevant parties including bondholders, regulators and creditors; Section 57(2)(j) the assets of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") are fairly valued; Section 57(2)(j)(i) the assets of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") are fairly valued; Section 57(2)(j)(ii) the assets of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") are equal to or exceed the liabilities of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ; and Section 57(2)(j)(iii) the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") shall be able to pay its debts as they come due in the ordinary course of business for a period of twelve months following the share buyback ; Section 57(2)(k) the potential impact of the proposed share buyback on the shareholding structure of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ; Section 57(2)(l) the risk factors and assumptions of the share buyback transaction; Section 57(2)(m) any related party transaction or director’s interest in the share buyback transaction; Section 57(2)(n) the impact of the share buyback on the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ’s financial position; Section 57(2)(o) the number of shares held directly and indirectly by the directors and substantial shareholders; Section 57(2)(p) the direct and indirect interests of the directors and major shareholders and any person connected with the directors or major shareholders in the proposed purchase of shares or resale of treasury shares ; Section 57(2)(q) the potential advantages and disadvantages of the proposed share buyback to the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") and its shareholders; Section 57(2)(r) a statement by the board of directors that the proposal is in the best interest of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") and reasons thereof; Section 57(2)(s) the period during which the shareholders’ approval for the share buyback shall be valid; and Section 57(2)(t) any other relevant information regarding the proposed share buyback transaction.
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SHARE BUYBACKS - 58. Off-market purchases to be approved by Authority

AI-assisted research summary: Off-market purchases to be approved by Authority

Section 58. Off-market purchases to be approved by Authority Section the draft share buyback contract in line with the requirements for private transactions; and
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SHARE BUYBACKS - 59. Publication of notices

AI-assisted research summary: Listed companies intending to buy back shares must publish a public announcement within 24 hours of the boards approving resolution, with the Authoritys approval; submit that announcement to the securities exchange which must publish it on its website; and the announcement must state that the company will provide shareholders with an Authority-approved circular seeking approval.

Section 59. Publication of notices Section 59(1) A listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") that intends to buy back its shares shall publish, within twenty-four hours after the board’s resolution approving the share buy-back, and with the approval of the Authority, a public announcement of the intended share buyback in accordance with Part XIV of these Regulations. Section 59(2) The listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") shall submit the published public announcement to the securities exchange and the exchange shall publish the announcement on its website. Section 59(3)(a) the method of effecting the share buyback (on-market (exchange) purchase or off-market purchase ); Section 59(3)(b) the minimum and maximum prices of the shares to be bought back; Section 59(3)(c) the treatment of shares by the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") after they are bought back; Section 59(3)(d) the percentage of the shares to be bought back as a proportion of the issued share capital of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ; and Section 59(3)(e) the transaction advisers advising the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") in the share buyback transaction. Section 59(4) The announcement under subregulation (1) shall contain a statement that the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") shall provide the shareholders with a circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") on the proposed share buyback seeking the shareholders’ approval after the circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") on the share buy-back has been approved by the Authority.
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SHARE BUYBACKS - 60. On-market (exchange) purchases

AI-assisted research summary: The maximum price for on-market share buybacks must be ten per cent above the thirty-day weighted average price before the board resolution approving the buyback.

Section 60. On-market (exchange) purchases Section the maximum share buyback price of the shares to be purchased shall be ten per cent above the weighted price average of the shares during the period of thirty days before the day of the board resolution approving the share buyback ; and
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SHARE BUYBACKS - 61. Minimum capital and free float requirement

AI-assisted research summary: A listed company must not propose a share buyback that would reduce or contravene the minimum capital and free float requirements for continued listing.

Section 61. Minimum capital and free float requirement Section A proposal by a listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") to buy back its shares shall not reduce or contravene the minimum capital and free float requirement for continued listing of the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") in the respective market segment under these Regulations and any other additional free float requirements that may be introduced by the Authority.
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SHARE BUYBACKS - 62. Class of shares and treatment oftreasury shares

AI-assisted research summary: A listed company may not buy back more than ten per cent of the issued shares of any class in a financial year (the Authority may waive this), treasury shares held must not exceed ten per cent of that class, and before selling or transferring treasury shares the company must seek shareholder and Authority approval.

Section 62. Class of shares and treatment oftreasury shares Section 62(1) If a proposal to buy back shares relates to a class of shares of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") , the shares to be bought back by the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") shall not exceed ten per cent of the total issued shares of that class in a given financial year: Provided that the Authority may waive this limit on the written application of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") . Section 62(2) If a listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") opts to keep the shares bought back in treasury, the treasury shares shall not exceed ten per cent of the total issued shares of that class. Section 62(3) Where a listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") proposes to sell treasury shares , including any transfer to an employee share ownership scheme of the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") , the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") shall, before selling or transferring the treasury shares , seek the approval of the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ’s shareholders and Authority in accordance with these Regulations.
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SHARE BUYBACKS - 63. Volume of shares to be purchased in a share buy-back transaction

AI-assisted research summary: A listed company must not buy back on any single day more than twenty-five per cent of the issuer's total trading volume (or another limit the Authority prescribes); the volume calculation is based on average daily trading volume for the four calendar weeks preceding the week of purchase and the buy-back must not significantly adversely affect liquidity; buy-backs are prohibited during the pre-open session.

Section 63. Volume of shares to be purchased in a share buy-back transaction Section 63(1) The volume of the shares bought back by a listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") on any single day in a share buy-back transaction shall not exceed twenty-five per cent of the total trading volume of the issuer or such other limit as may be prescribed by the Authority by notice. Section 63(2)(a) shall be based on the liquidity of the shares in the market of the average daily trading volume for the four calendar weeks preceding the week of the purchase; and Section 63(2)(b) shall not be executed as to significantly adversely affect the liquidity of the shares in question. Section 63(3) The share buyback shall not be effected during the pre-open session of the trading of the shares of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") .
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SHARE BUYBACKS - 64. Disclosure to the securities exchange

AI-assisted research summary: A listed company that buys back its shares must promptly disclose details of the buy-back to the securities exchange and publish the disclosure on the exchange’s website; the disclosure must state the company, number of shares bought back, price per share, and percentage of free float after the buy-back.

Section 64. Disclosure to the securities exchange Section 64(1) A listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") that undertakes a share buy-back shall disclose to the securities exchange the details of the buy-back transaction immediately after buying back the shares and such disclosure shall be published on the security exchange’s website. Section 64(2) The disclosure under subregulation (1) shall include information on the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") , number of shares that have been bought back, price per share of the shares that have been bought back, and percentage of the free float after the shares have been bought back.
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SHARE BUYBACKS - 65. Duration of buyback programme

AI-assisted research summary: Complete the share buyback within eighteen months from the date of the shareholder resolution approving the share buyback proposal.

Section 65. Duration of buyback programme Section complete the share buyback within eighteen months from the date of the shareholder resolution approving the share buyback proposal; and
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SHARE BUYBACKS - 66. Appointment of stockbrokers

AI-assisted research summary: A listed company that wants to buy back or resell treasury shares may appoint stockbrokers, must make all dealings through those stockbrokers, and must immediately notify the securities exchange and open a designated "Share Buyback Account" with the stockbrokers.

Section 66. Appointment of stockbrokers Section 66(1) A listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") intending to purchase its own shares or resell treasury shares on the securities exchange may appoint one or more stockbrokers for that purpose. Section 66(2) The listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") must ensure that all dealings in the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ’s shares or treasury shares are made through the stockbrokers appointed under subregulation (1) . Section 66(3) A listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") shall lodge a notice of the appointment of the stockbrokers concerned with the securities exchange immediately and open one securities account in the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ’s name with such stockbrokers which shall be designated as “Share Buyback Account” used solely for the purchase of the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ’s own shares or resale of treasury shares .
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SHARE BUYBACKS - 67. Prohibition, cancellation orsuspension

AI-assisted research summary: A limited liability company must not conduct a buyback during specified periods or when aware of undisclosed material information that could affect its share price.

Section 67. Prohibition, cancellation orsuspension Section 67(1)(a) during the period of fourteen days before the publication of the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ’s half-yearly or annual financial statements; or Section 67(1)(b) after it has become aware of any material information which has not been made public which, if disclosed, could affect the price of the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") ’s shares. Section 67(2)(a) material information is announced during the period of fourteen days before the buyback being conducted; or Section 67(2)(b) if the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") deems it fit in the circumstances. Section 67(3) The cancellation or suspension of a buyback transaction shall be done within a reasonable time before the effective date of the buyback transaction.
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SHARE BUYBACKS - 68. Reporting and disclosures

AI-assisted research summary: A listed company that undertakes a share buy-back must submit a daily report to the Authority or securities exchange about that day's buy-backs (including price, volume, treasury sales and cancellations) and must disclose such buy-backs and their treatment in its annual report.

Section 68. Reporting and disclosures Section 68(1) A listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") that undertakes a share buy-back transaction shall submit to the Authority or securities exchange, as the case may be, once in each day a report on the share buy-back transaction undertaken during that day and the treatment of the shares acquired by the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") including a report on the price and volume of shares bought back, treasury shares sold and cancellation of the shares, where applicable. Section 68(2) A listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") that undertakes a share buyback transaction shall disclose in its annual report any share buyback transaction undertaken in the year to which the report relates and the treatment by the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") of the shares bought back.
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SHARE BUYBACKS - 69. De-listingand conversion toprivate company

AI-assisted research summary: Directors of the listed company and any person acting in concert with them are not independent and are not entitled to vote on the shareholders' meeting to approve the share buyback proposal.

Section 69. De-listingand conversion toprivate company Section the directors of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") and any person acting in concert with the directors shall not be considered to be independent and shall not be entitled to vote at the meeting of shareholders convened to approve the share buyback proposal; and
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SHARE BUYBACKS - 70. Takeovers and mergers

AI-assisted research summary: If a share buy-back triggers percentage shareholding limits that may lead to a takeover of the listed company, the Capital Markets (Takeovers and Mergers) Regulations, 2002 shall apply.

Section 70. Takeovers and mergers Section If a share buy-back transaction triggers the percentage shareholding limits that may lead to a takeover of the listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") , the Capital Markets (Takeovers and Mergers) Regulations, 2002, shall apply.
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SHARE BUYBACKS - 71. Compliance with applicable laws and Regulations

AI-assisted research summary: A listed company must comply with corporate governance, listing obligations and all relevant written laws and regulations of Kenya during a share buyback, and must not commit offences relating to market abuse or insider dealing during the buyback.

Section 71. Compliance with applicable laws and Regulations Section 71(1) A listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") shall comply with the corporate governance requirements, listing obligations and all relevant written laws and Regulations of Kenya as may be applicable during the share buyback process. Section 71(2) A listed company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") undertaking a share buyback shall ensure that it, its directors, shareholders, connected persons, and persons acting in concert with the company ("a limited liability company wherever incorporated or otherwise established and includes a corporation;") or its directors, do not commit any offences relating to market abuse or insider dealing during the share buyback .

Part XII

TRADING HALT, SUSPENSION AND DELISTING

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TRADING HALT, SUSPENSION AND DELISTING - 72. Trading halt

AI-assisted research summary: Securities exchanges may halt or suspend trading of listed securities with the Authority's approval, may do so at issuer request or Authority direction (but are not obligated to honour issuer requests), may convert halts to suspensions with Authority approval, and must halt or suspend or close the market if the Authority gives a written direction.

Section 72. Trading halt Section 72(1) A securities exchange may, at any time, with the approval of the Authority, grant a trading halt or suspend trading of the listed securities of an issuer . Section 72(2) A trading halt or suspension of trading of listed securities may also be granted at the request of the issuer or at the direction of the Authority: Provided that where the request is made by the issuer , the securities exchange shall not be obligated to honour the request. Section 72(3)(a) shall not exceed one trading session at any one time; and Section 72(3)(b) may, with the approval of the Authority, be changed to a suspension by a securities exchange at any time. Section 72(4) A securities exchange shall, at the written direction of the Authority, halt or suspend the trading of all securities on the market or close the market before the normal close of the trading session.
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TRADING HALT, SUSPENSION AND DELISTING - 73. Suspension

AI-assisted research summary: A securities exchange may not suspend or de-list a security without the Authority's prior written approval; the Authority approves the suspension period; issuers must continue to comply with listing obligations during suspension; specified conditions for suspension are listed.

Section 73. Suspension Section 73(1) No security shall be suspended or de-listed by a securities exchange without the prior written approval of the Authority. Section 73(2)(a) a decision has been made or is imminent that will lead to the placing of the issuer of such securities under statutory management, receivership, liquidation or voluntary winding up; Section 73(2)(b) there is a significant restructuring involving the listed securities including a restructuring during the process of an acquisition, merger or takeover; Section 73(2)(c) a recommendation has been made by the directors to the shareholders to have the securities suspended and where the holders of such securities through a special resolution at which a minimum of seventy-five per cent of such security holders are represented without objection to the proposed suspension from at least ten per cent of the holders of securities resolve to have the securities suspended; or Section 73(2)(d) the issuer is in material default of the issuer ’s continuing listing obligations. Section 73(3) The suspension of securities shall be for such period as the Authority may approve or direct. Section 73(4) During the period of the suspension , the issuer shall continue to comply with the continuous listing obligations and relevant rules of the securities exchange on which the issuer is listed.
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TRADING HALT, SUSPENSION AND DELISTING - 74. Delisting

AI-assisted research summary: The Authority may require suspension or delisting of an issuer to protect investors; when a security is suspended or delisted the securities exchange must publish information on its website and as the Authority directs; grounds for delisting are listed in subsection (1).

Section 74. Delisting Section 74(1)(a) the issuer of such securities has been placed under statutory management, receivership or liquidation or voluntary winding up; Section 74(1)(b) the issuer of such securities has continued to be in material default of continuing listing obligations for at least one year following suspension from trading of its securities; Section 74(1)(c) as a result of restructuring involving the listed securities, the issuer ceases to exist; or Section 74(1)(d) a recommendation has been made by the directors to the shareholders to have the securities delisted and where the shareholders of such securities through a special resolution at which a minimum of seventy-five per cent of such security holders are represented without objection to the proposed de listing from at least ten per cent of the holders of securities resolve to have the securities delisted. Section 74(2) Despite the provisions of subregulations 72 and 73, the Authority may require the suspension or delisting of an issuer in any other circumstances, which in the opinion of the Authority, is for the protection of the interests of investors. Section 74(3) Where a security has been suspended or de-listed, the securities exchange shall publish such information on its website and in such other manner as the Authority may direct. Section 74(4)(a) absolve an issuer , the issuer ’s directors or officers from any liability for any default which may have led to such suspension or delisting; or Section 74(4)(b) terminate any proceedings against such issuer , directors or officers commenced before the suspension or delisting.
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TRADING HALT, SUSPENSION AND DELISTING - 75. Resumption proposals

AI-assisted research summary: The securities exchange may delist an issuer if (a) no resumption proposals enabling trading to resume have been submitted within twelve months after suspension, or (b) resumption proposals have not been implemented within the six months specified in subregulation (1)(b); delisting is subject to approval by the Authority; the regulation does not apply to suspensions arising from regulation 73(2)(b).

Section 75. Resumption proposals Section 75(1)(a) submit to the Authority a resumption proposal with a view to resuming trading in the securities within twelve months after the date of suspension ; and Section 75(1)(b) implement the resumption proposals within three months from the date the Authority indicates that it has no objection to the resumption proposals. Section 75(2) If no resumption proposals have been submitted to the Authority to enable trading to resume within twelve months after the date of suspension , the securities exchange may delist the issuer upon approval by the Authority. Section 75(3) If the resumption proposals have not been implemented within the six months specified in subregulation (1)(b) , the securities exchange may de list the issuer upon approval by the Authority. Section 75(4) This regulation shall not apply to suspension arising from regulation 73(2)(b) .
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TRADING HALT, SUSPENSION AND DELISTING - 76. Exitofferin delisting

AI-assisted research summary: Section 76 refers to an exit offer in delisting and states that the section be "fair and reasonable".

Section 76. Exitofferin delisting Section be fair and reasonable; and
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TRADING HALT, SUSPENSION AND DELISTING - 77. Recovery list

AI-assisted research summary: Section 77. Recovery list Section 77(1) A securities exchange may place an issuer on the recovery list on the direction or approval of the Authority if the issuer fails to meet any of the continuing listing obligations or for any other

Section 77. Recovery list Section 77(1) A securities exchange may place an issuer on the recovery list on the direction or approval of the Authority if the issuer fails to meet any of the continuing listing obligations or for any other reason which, in the opinion of the Authority, is likely to prejudice the interests of the investors or market integrity. Section 77(2) The issuer placed on the recovery list under subregulation (1) shall have the right to be heard by the Authority and securities exchange on which it is listed before being placed on the recovery list. Section 77(3) On the depletion of shareholder funds resulting in a net liability position for the third and subsequent consecutive financial year based on audited full-year consolidated financial statements, an issuer shall be required to announce the fact through its website and in at least one newspaper with national circulation and provide the information prescribed by the Authority. Section 77(4) Subregulation (3) shall not apply to an issuer that has been placed on the recovery list. Section 77(5)(a) immediately announce the fact through its website and in a daily newspaper with nationwide circulation; Section 77(5)(b) within the prescribed time after being placed on the recovery list, provide a restructuring plan approved by its members to the Authority and the securities exchange on which it is listed; Section 77(5)(c) implement the restructuring plan within the prescribed time following the submission to the Authority and securities exchange; and Section 77(5)(d) for the period during which it remains on the recovery list, provide the market, including the Authority and securities exchange on which it is listed, with an update once in every three months on its efforts and progress made in meeting the exit criteria of the recovery list, including its financial situation, future direction, level of compliance with the continuing obligations or other material development that may have a significant impact on its compliance position: Section 77(6) An issuer on the recovery list may apply to the Authority to be removed from the recovery list if it complies with net assets and solvency requirements or such other requirements as may have been imposed by the Authority. Section 77(7)(a) delist the issuer ; or Section 77(7)(b) suspend trading of the listed securities of the issuer with a view to de listing the issuer . Section 77(8) During the period an issuer remains on the recovery list, trading in its securities shall continue, unless a trading halt or a suspension is, or has been, effected.
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TRADING HALT, SUSPENSION AND DELISTING - 78. Rules for the administration of the recovery list

AI-assisted research summary: A securities exchange must prepare and submit to the Authority for approval rules for administering its recovery list, including rules to set up a recovery board.

Section 78. Rules for the administration of the recovery list Section A securities exchange shall prepare and submit to the Authority for approval the rules for the administration of the recovery list maintained by the securities exchange pursuant to this Part including rules on the setting up of a recovery board on which securities of issuers which are on the recovery list may be traded.

Part XIII

PUBLIC ANNOUNCEMENTS, CIRCULARS AND ELECTRONIC COMMUNICATIONS

79
PUBLIC ANNOUNCEMENTS, CIRCULARS AND ELECTRONIC COMMUNICATIONS - 79. Submission of circulars for approval

AI-assisted research summary: An issuer must submit a draft circular to the Authority for approval when proposing to issue a circular to shareholders or the public relating to securities or transactions requiring shareholder approval.

Section 79. Submission of circulars for approval Section Where an issuer proposes to issue a circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") to its shareholders or to the public in relation to an issue of securities or a transaction where shareholder approval is required, the issuer shall submit a draft of the circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") to the Authority for approval.
80
PUBLIC ANNOUNCEMENTS, CIRCULARS AND ELECTRONIC COMMUNICATIONS - 80. Review of circulars

AI-assisted research summary: The Authority may issue a circular prescribing minimum content for issuers to provide in lieu of approvals under subregulations (1) and (2).

Section 80. Review of circulars Section 80(1) A circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") submitted to the Authority for approval shall not be circulated or made available publicly until the Authority advises that it has no objection to the issuance of the circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") . Section 80(2) Each public announcement and advertisement to holders of securities or the public shall be factual and shall be submitted to the Authority or the securities exchange, where applicable, for approval before distribution or publication: Provided that the Authority or the securities exchange, where applicable, may require the inclusion of such additional information which in is relevant to the shareholders, investors or public. Section 80(3) The Authority, in lieu of the approval required under subregulations (1) and (2) , may issue a circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") prescribing the minimum content to be provided by an issuer for purposes of any relevant circular ("an information document issued to holders of listed securities in connection with proposed corporate action or transaction;") , public announcement or advertisement to be made to the shareholders, investors or public. Section 80(4) An announcement or advertisement made or issued under subregulation (3) shall, on publication, be submitted simultaneously to the Authority.
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PUBLIC ANNOUNCEMENTS, CIRCULARS AND ELECTRONIC COMMUNICATIONS - 81. Content of circulars

AI-assisted research summary: Circulars must contain the information necessary to allow the holders of the securities to make an informed decision or to be properly informed.

Section 81. Content of circulars Section contain the information necessary to allow the holders of the securities to make an informed decision or to be properly informed;
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PUBLIC ANNOUNCEMENTS, CIRCULARS AND ELECTRONIC COMMUNICATIONS - 82. Electronic communications

AI-assisted research summary: An issuer may send documents (including notices, circulars and annual reports) to a holder of its securities by electronic communications if the holder has given express consent or if the issuer's Articles of Association, constitution or issue documents permit.

Section 82. Electronic communications Section 82(1) An issuer may send documents, including notices, circulars and annual reports, using electronic communications to a holder of its securities if there is express consent from the holder of the secuities or if the Articles of Association or the constitution or issue documents of an issuer permit. Section 82(2) In this regulation, “electronic communications” includes the transmission of any communication through electronic and telecommunications media including websites, email and text messaging.
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PUBLIC ANNOUNCEMENTS, CIRCULARS AND ELECTRONIC COMMUNICATIONS - 83. e-IPOs.

AI-assisted research summary: The Authority may permit electronic issuance and subscription of securities in public offers; public offers may include electronic information memoranda and electronic subscription processes; public offers must comply (with necessary modification) with other provisions on public offers.

Section 83. e-IPOs. Section 83(1) The Authority may permit the issuance by an issuer and the subscription of securities in a public offer through electronic means. Section 83(2) A public offer under subregulation (1) may include the issuance of electronic information memorandum and subscription of securities through electronic means whether or not on a first-come firstserved basis of subscription and allocation until the available securities are fully subscribed or purchased. Section 83(3) A public offer under this regulation shall comply, with necessary modification, with the provisions relating to public offers set out in these Regulations.

Part XIV

TRANSACTIONS OF LISTED SECURITIES OUTSIDE A SECURITIES EXCHANGE

84
TRANSACTIONS OF LISTED SECURITIES OUTSIDE A SECURITIES EXCHANGE - 84. Nature of transactions

AI-assisted research summary: Names "the transfer in the form of a gift" as a nature of transaction.

Section 84. Nature of transactions Section the transfer in the form of a gift;
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TRANSACTIONS OF LISTED SECURITIES OUTSIDE A SECURITIES EXCHANGE - 85. Brokerage commissions

AI-assisted research summary: Private transactions: no brokerage commission is payable on a private transaction, except for a fee prescribed by the Authority; private transfers under regulation 84(a) are subject to the prevailing prescribed brokerage commission.

Section 85. Brokerage commissions Section Where a private transaction has been authorized no brokerage commission shall be payable on the transaction, except a fee prescribed by the Authority: Provided that a private transfer under regulation 84 (a) shall be subject to the prevailing prescribed brokerage commission.
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TRANSACTIONS OF LISTED SECURITIES OUTSIDE A SECURITIES EXCHANGE - 86. Approval of aprivate transaction

AI-assisted research summary: Sets procedures and approvals for private transfers of listed securities: a central depository agent must submit applications; the central depository must notify agents within seven days whether it objects; the securities exchange or central depository must approve and notify the Authority; approvals for custodian/fund-manager-initiated transfers vary by security type; exchanges and the central depository must submit guidelines to the Authority; the Authority may delegate approval to an exchange.

Section 86. Approval of aprivate transaction Section 86(1) Where it is intended to effect a private transaction of a listed security under regulation 84 (a) , (b) or (e) , a central depository agent representing the proposed transferee, shall assess, endorse and submit a written application with the required information and supporting documents to the Central Depository where the securities held. Section 86(2) Where an application is made under regulation 84 (a) or (b) , the central depository, shall notify the central depository agent within seven days after receiving the application whether the central depository objects to the private transaction or not, after examining and satisfying itself that the proposed transfer is eligible for consideration as a private transaction in accordance with these Regulations. Section 86(3) The securities exchange or central depository, as the case may be, shall, upon determination of any application made under regulation 84 (a) , (b) or (e) , approve and simultaneously notify the Authority that the application complies with regulation 84 (a) , (b) or (e) . Section 86(4) A private transfer application emanating from a change of custodian or fund manager shall be approved by the Central depository, in the case of equities and corporate debt securities and the securities exchange in the case of government debt securities. Section 86(5) The securities exchange and central depository shall jointly submit to the Authority, guidelines for approval in respect of the processing requirements of a private transfer under regulation 84 (a) and (b) . Section 86(6) The guidelines stipulated under subregulation (5) shall apply to all stockbrokers. Section 86(7) The Authority may delegate to a securities exchange the approval of private transactions.
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TRANSACTIONS OF LISTED SECURITIES OUTSIDE A SECURITIES EXCHANGE - 87. Approval fees

AI-assisted research summary: Approval fees for transactions in listed securities carried out outside a securities exchange must be at the rate prescribed by the Authority.

Section 87. Approval fees Section The approval fee for any transaction of a listed securities outside a securities exchange shall be at the rate prescribed by the Authority.
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TRANSACTIONS OF LISTED SECURITIES OUTSIDE A SECURITIES EXCHANGE - 88. Private transactions

AI-assisted research summary: An applicant must publicly announce its intention to apply to the Authority for approval of the proposed transfer, give reasons, and submit a copy of the transfer form to the Authority with the application.

Section 88. Private transactions Section 88(1)(a) the name and address of the applicant; Section 88(1)(b) the date of incorporation; Section 88(1)(c) the particulars of core activities, directors, management and major shareholders; Section 88(1)(d) the details of any agreements entered or proposed to be entered into and the cost; Section 88(1)(e) a statement by the transaction adviser managing the transaction that to the best of its knowledge and belief the application constitutes full and true disclosure of all material facts about the offer and issuer and where appropriate it has satisfied itself that the profit forecasts have been stated by the directors after due and careful inquiry; Section 88(1)(f) the details of any proposed merger, takeover, acquisitions, share swap, reorganization or restructure scheme and the relevant shareholders or board resolutions; Section 88(1)(g) a declaration by the directors of the applicant in the following form— Section 88(1)(h) any other matters as may be required by the Authority. Section 88(2) The applicant shall make a public announcement of its intention to apply to the Authority for approval of the proposed transfer and reasons therein and a copy of the transfer form for the proposed transaction shall be submitted to the Authority together with the application.

Part XV

CONTINUING OBLIGATIONS

89
CONTINUING OBLIGATIONS - 89. Continuing obligations.

AI-assisted research summary: Issuers whose securities are offered to the public and listed must comply with continuing obligations in the Thirteenth Schedule and must promptly disclose material information; limited exceptions apply and specified disclosure deadlines and procedures exist.

Section 89. Continuing obligations. Section 89(1) Each issuer whose securities have been offered to the public, including special purpose acquisition vehicles, and listed on any market segment shall comply with the continuing obligations specified in the Thirteenth Schedule. Section 89(2) In relation to the continuing obligation to disclose information, an issuer shall make immediate public disclosure of information which might reasonably be expected to have a material effect on market activity and the price of its securities. Section 89(3)(a) information is of confidential nature; Section 89(3)(b) the information concerns an incomplete proposal or negotiation or matters of supposition or which is insufficiently definite to warrant disclosure; Section 89(3)(c) information is for internal management purposes; or Section 89(3)(d) the information is a trade secret: Section 89(4) The information required to be disclosed under these Regulations shall be disclosed within twenty-four hours after the event simultaneously to the Authority, the securities exchange at which the issuer ’s securities are listed, if applicable, and to the public during non-trading hours of the relevant market segment . Section 89(5) The announcement shall state whether the consent of the Authority or securities exchange or other person is necessary and where necessary, the issuer shall apply for such consent. Section 89(6) An issuer shall publish, by way of a cautionary announcement, information which could lead to material movements in the ruling price of its securities if at any time the necessary degree of confidentiality cannot be maintained, or that confidentiality has or may have been breached. Section 89(7) An issuer who fails to comply with any continuing obligation within the prescribed time shall be liable to pay a default fine at the rate prescribed by the Authority for the continuing time of default, such fine to be imposed notwithstanding that the Authority may have on request, extended time for compliance.

Part XVI

LISTING FEES AND OTHER CHARGES

90
LISTING FEES AND OTHER CHARGES - 90. Listing fees

AI-assisted research summary: Listing fees are payable to the Authority as prescribed in Part A of the Seventeenth Schedule.

Section 90. Listing fees Section to the Authority such fees and charges as prescribed in Part A of the Seventeenth Schedule; and
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LISTING FEES AND OTHER CHARGES - 91. Waiver of fees

AI-assisted research summary: The Authority or a securities exchange may waive any fee or charge or part of it.

Section 91. Waiver of fees Section The Authority or securities exchange may waive any fee or charges or part thereof.

Part XVII

REPEAL AND TRANSITIONAL PROVISIONS

92
REPEAL AND TRANSITIONAL PROVISIONS - 92. Revocation

AI-assisted research summary: Revokes the Capital Markets (Securities) (Public Offers, Listings and Disclosures) Regulations, 2002.

Section 92. Revocation Section The Capital Markets (Securities) (Public Offers, Listings and Disclosures) Regulations, 2002 are revoked.
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REPEAL AND TRANSITIONAL PROVISIONS - 93. Other transitional provisions

AI-assisted research summary: If issuers qualify to be listed on the main investment market segment, they may transition either to the main investment market segment or to the small and medium enterprises market segment; this is at their discretion and to be communicated within ninety days.

Section 93. Other transitional provisions Section if the issuers qualify to be listed on the main investment market segment , transition to the main investment market segment , or at their discretion to be communicated within ninety days , to small and medium enterprises market segment ; or
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REPEAL AND TRANSITIONAL PROVISIONS - 94. Fixed income securities transition

AI-assisted research summary: Requires listing on the Fixed Income Securities Market Segment if the issue value was more than four hundred million shillings.

Section 94. Fixed income securities transition Section if the issue value was more than four hundred million shillings be listed on the Fixed Income Securities Market Segment; or
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REPEAL AND TRANSITIONAL PROVISIONS - 95. Savings provisions

AI-assisted research summary: Any application for approvals for offers, listing or any corporate action which has been commenced but for which no approval has been obtained before the effective dates shall be assessed under the Capital Markets (Securities) (Public Offers, Listings and Disclosures) Regulations, 2002.

Section 95. Savings provisions Section Any application for approvals for offers, listing or any corporate action which has been commenced but for which no approval has been obtained before the effective dates shall be assessed under the Capital Markets (Securities) (Public Offers, Listings and Disclosures) Regulations, 2002.
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REPEAL AND TRANSITIONAL PROVISIONS - 96. Alignment of other rules

AI-assisted research summary: A securities exchange must amend its listing, trading or other trading rules to align with these Regulations and submit them for approval by the Authority within ninety days of the Regulations' effective date.

Section 96. Alignment of other rules Section A securities exchange shall amend its listing , trading or any rules in place governing trading of securities in its exchange to align with these Regulations and submit them for approval by the Authority not later than ninety days from the effective date of these Regulations.
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REPEAL AND TRANSITIONAL PROVISIONS - 97. Compliance with requirements oncompliance officer

AI-assisted research summary: Issuers of securities must appoint or designate a compliance officer within one year of the Regulations' effective date.

Section 97. Compliance with requirements oncompliance officer Section Every issuer of securities shall comply with the requirement to appoint or designate a compliance officer within one year of the effective date of these Regulations.

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