The Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations
These Regulations may be cited as the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations.
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- Kenya
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- Legal Notice 60 of 2002
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Source attribution: Source: Kenya Law
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About this statute
These Regulations may be cited as the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations. Section does not have a material or pecuniary relationship with the company or related persons; Issuers seeking listing on the Growth Enterprise Market Segment must appoint a Nominated Adviser by written contract and keep a Nominated Adviser at all times; the Securities Exchange will suspend an issuer that ceases to have a duly appointed Nominated Adviser. A Nominated Adviser has multiple duties including advising on listing requirements, managing and ensuring completeness of listing documentation, ensuring accuracy of the listing statement, satisfying itself of the credentials of advisers, providing information to and advising the Securities Exchange, reviewing periodic financial disclosures, attending audit committee meetings, and ensuring directors complete the Directors Induction Programme (DIP) as required. Issuers must include the part of the Third Schedule that corresponds to the market segment when seeking a listing (Parts A, B, C, CC or D as applicable). The Authority may prescribe different disclosure requirements for entities listed on a foreign securities exchange seeking to list in Kenya. Prospectuses or listing statements must carry the specified front-page policy statement and must state the allotment procedure in case of oversubscription. An issuer with securities listed on a securities exchange must not issue (or authorize its registrar to issue or register) additional shares by capitalization, scrip dividend, rights issue or otherwise beyond the number previously authorized for listing, except where the disclosure requirements in the Fourth Schedule are followed.
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Provisions of The Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations
Showing 28 of 28
Part I
PRELIMINARY
- 1
PRELIMINARY - 1. Citation
AI-assisted research summary: These Regulations may be cited as the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations.
Section 1. Citation Section These Regulations may be cited as the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations. - 2
PRELIMINARY - 2. Interpretation
AI-assisted research summary: Section does not have a material or pecuniary relationship with the company or related persons;
Section 2. Interpretation Section does not have a material or pecuniary relationship with the company or related persons;
Part II
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS
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ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 10. Disclosure requirement for public issues
AI-assisted research summary: Issuers must include the part of the Third Schedule that corresponds to the market segment when seeking a listing (Parts A, B, C, CC or D as applicable). The Authority may prescribe different disclosure requirements for entities listed on a foreign securities exchange seeking to list in Kenya. Prospectuses or listing statements must carry the specified front-page policy statement and must state the allotment procedure in case of oversubscription.
Section 10. Disclosure requirement for public issues Section 10(1)(a) Part A of the Third Schedule where the issuer seeks to list in the Main Investment Market Segment; Section 10(1)(b) Part B of the Third Schedule where the issuer seeks to list in the Alternative Investment Market Segment; Section 10(1)(c) Part C of the Third Schedule where the issuer seeks to list in the Fixed Income Securities Market Segment; Section 10(1)(cc) Part CC of the Third Schedule where the issuer seeks to list on the Growth Enterprises Market Segment; and Section 10(1)(d) Part D of the Third Schedule where the issuer seeks to list on any segment of the market by way of Introduction. Section 10(1A) Notwithstandiing paragraph (1), the Authority may prescribe different disclosure requirements for entities listed on a foreign securities exchange recognised by the Authority that are seeking to list on a securities exchange in Kenya. Section 10(2)(a) contain the following statement on its front page– "As a matter of policy, the Capital Markets Authority assumes no responsibility for the correctness of any statements or opinions made or reports contained in this prospectus or listing statement, as the case may be. Approval of the issue and/or listing is not to be taken as an indication of the merits of the issuer or of the securities"; and Section 10(2)(b) state the allotment procedure to be applied in case of an over subscription for the securities to be issued pursuant to the prospectus. - 10A
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 10A. Nominated Advisors
AI-assisted research summary: Issuers seeking listing on the Growth Enterprise Market Segment must appoint a Nominated Adviser by written contract and keep a Nominated Adviser at all times; the Securities Exchange will suspend an issuer that ceases to have a duly appointed Nominated Adviser. A Nominated Adviser has multiple duties including advising on listing requirements, managing and ensuring completeness of listing documentation, ensuring accuracy of the listing statement, satisfying itself of the credentials of advisers, providing information to and advising the Securities Exchange, reviewing periodic financial disclosures, attending audit committee meetings, and ensuring directors complete the Directors Induction Programme (DIP) as required.
Section 10A. Nominated Advisors Section 10A(1) An issuer seeking to be listed on the Growth Enterprise Market Segment shall appoint a Nominated Adviser by a written contract and shall ensure that it has a Nominated Advisor at all times. Section 10A(2) The Securities Exchange shall suspend an issuer from trading if the issuer, at any time, ceases to have a duly appointed Nominated Advisor. Section 10A(3)(a) advise and guide an issuer on the application of listing requirements of Growth Enterprise Market Segment; Section 10A(3)(b) manage the submission of the listing statement and all other documentation to the Securities Exchange and ensure its completeness and correctness before submission; Section 10A(3)(c) the issuer complies with all the conditions for listing as set out in the listing requirements for the Growth Enterprise Market Segment; Section 10A(3)(c)(i) the issuer complies with all the conditions for listing as set out in the listing requirements for the Growth Enterprise Market Segment; Section 10A(3)(c)(ii) the information contained in the listing statement is accurate and complete in all material aspects; Section 10A(3)(c)(iii) there are no other matters, the omission of which would make any statement in the listing statement false or misleading; Section 10A(3)(c)(iv) statements of fact and opinion expressed by the directors in the listing statement have been arrived at after due and careful consideration on the part of the directors founded on fair and reasonable bases and assumptions; and Section 10A(3)(c)(v) the directors of the applicant have made sufficient enquiries to enable them give the confirmations set out in the responsibility statement contained in the listing statement; Section 10A(3)(d) satisfy itself on the credentials of the reporting accountants, auditors, competent persons, valuers, providers of opinions and any other party responsible for a listing statement as required under paragraph A.02 of Part CC of the Third Schedule; Section 10A(3)(e) it is in compliance with the eligibility and disclosure requirements for listing on the Growth Enterprise Market Segment; and Section 10A(3)(e)(i) it is in compliance with the eligibility and disclosure requirements for listing on the Growth Enterprise Market Segment; and Section 10A(3)(e)(ii) there are no material matters, other than those disclosed in writing to the Securities Exchange, which should be taken into account by the Securities Exchange in considering the application; Section 10A(3)(f) provide the Securities Exchange with any information or explanation known to it in such form and within such time as the Securities Exchange may reasonably require for the purposes of verifying whether the Nominated Advisor or the issuer have complied with the listing requirements; Section 10A(3)(g) advise the Securities Exchange immediately if it is aware or have reason to suspect that any of its clients have or may have breached the listing requirements; Section 10A(3)(h) submit all documents to the Securities Exchange and ensure that where such documents or any announcements are required, that they are in compliance with the continuous listing obligations; Section 10A(3)(i) at least one third of the directors of the issuer have completed the Directors Induction Programme (DIP) prior to listing and the remainder complete the same within six months after the listing; and Section 10A(3)(i)(i) at least one third of the directors of the issuer have completed the Directors Induction Programme (DIP) prior to listing and the remainder complete the same within six months after the listing; and Section 10A(3)(i)(ii) all new appointments to the board of directors of the issuer complete the DIP within six months of appointment; Section 10A(3)(j) review with the issuer, prior to publication, all periodic financial information announcements, and any other documentation to ensure that the directors of the issuer, after due and careful consideration, understand the importance of accurately disclosing all material information to shareholders and the market; Section 10A(3)(k) ensure that at least one of its authorised representatives attends all board audit committee meetings of the issuer in an advisory capacity to ensure that the issuer conducts its meetings in compliance with the listing requirements and any applicable regulations; and Section 10A(3)(l) carry out any activities relating to company for which it is the Nominated Advisor as may be requested by the Securities Exchange, from time to time. Section 10A(4) A Nominated Adviser shall, in the discharge of its responsibilities under these Regulations, observe due care and skill and ensure, at all times, that its conduct or judgment does not impair the integrity and reputation of the Growth Enterprise Market Segment. [ L.N 61/2012 , r. 9.] - 11
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 11. Disclosure requirements for additional issues
AI-assisted research summary: An issuer with securities listed on a securities exchange must not issue (or authorize its registrar to issue or register) additional shares by capitalization, scrip dividend, rights issue or otherwise beyond the number previously authorized for listing, except where the disclosure requirements in the Fourth Schedule are followed.
Section 11. Disclosure requirements for additional issues Section An issuer whose securities are listed at a securities exchange shall not issue, or authorize its registrar to issue or register, by way of capitalization, scrip dividend, rights issue or additional shares of the class listed, to a greater amount than the number hitherto authorized for listing except in accordance with the disclosure requirements for additional listing prescribed in the Fourth Schedule. - 12
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 12. General duty of disclosure in prospectus
AI-assisted research summary: Persons responsible for a prospectus must include the information listed in paragraph (1) that they know or could reasonably obtain; the Authority and a Securities Exchange may require additional investor‑interest information in prospectuses, supplementary prospectuses, information memoranda or listing statements.
Section 12. General duty of disclosure in prospectus Section 12(1)(a) the assets and liabilities, financial position, profits and losses, and prospects of the issuer of the securities; and Section 12(1)(b) the rights attaching to those securities. Section 12(2) The information to be included by virtue of these Regulations shall be such information as is referred to in paragraph (1) which is within the knowledge of any person responsible for the prospectus, or which it would be reasonable for him to obtain by making enquiries. Section 12(3) In determining what information is required to be included in a prospectus by virtue of these Regulations, regard shall be had to the nature of the securities and of the offeror of the securities. Section 12(4) The Authority may require additional information to be included in a prospectus if, in its opinion, it deems it in the interests of investors to be in a prospectus, supplementary prospectus or information memorandum. Section 12(5) A Securities Exchange may require additional information to be included in a listing statement if, in its opinion, it is in the interest of investors to be in a listing statement. [ L.N. 61/2012 , r. 10.] - 13
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 13. Supplementary prospectus
AI-assisted research summary: A supplementary prospectus is required when there is a significant change, a significant new matter, or a significant inaccuracy in the prospectus; "significant" is defined as material to making an informed assessment.
Section 13. Supplementary prospectus Section 13(1)(a) there is a significant change affecting any matter contained in the prospectus the inclusion of which was required by these Regulations; or Section 13(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 prospectus was prepared; or Section 13(1)(c) there is a significant inaccuracy in the prospectus, Section 13(2) In paragraph (1), the word "significant" means significant for the purpose of making an informed assessment of the matters mentioned in these Regulations. Section 13(3) Where a supplementary prospectus has been approved in respect of a public offer of securities, the preceding paragraphs of these Regulations shall have effect as if any reference to a prospectus were a reference to the prospectus originally registered and that supplementary prospectus, taken together. Section 13(4) The provisions of regulation 6 shall apply to a supplementary prospectus. - 13A
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 13A. Supplementary listing statement
AI-assisted research summary: A supplementary listing statement is required when there is a significant change to required contents, a significant new matter arises that would have required disclosure, or there is a significant inaccuracy in the listing statement.
Section 13A. Supplementary listing statement Section 13A(1)(a) there is a significant change affecting any matter contained in the listing statement the inclusion of which was required by these regulations; Section 13A(1)(b) a significant new matter arises the disclosure of which would have been required if it had arisen when the listing statement was prepared; or Section 13A(1)(c) there is a significant inaccuracy in the listing statement, Section 13A(2) For the purposes of this regulation, "significant" means material change for the purposes of making an informed assessment of the matters mentioned in these Regulations. [ L.N. 61/2012 , r. 11.] - 14
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 14. Power of Authority to extend, reopen or cancel
AI-assisted research summary: The Authority has the power to extend, reopen or cancel.
Section 14. Power of Authority to extend, reopen or cancel Section to issue a supplementary prospectus disclosing such additional information; or - 15
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 15. Exceptions
AI-assisted research summary: The Authority may allow leaving out information from a prospectus or supplementary prospectus if including it would harm the offeror's interests and would not harm investors.
Section 15. Exceptions Section The Authority may authorise the omission from a prospectus or supplementary prospectus 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 does not prejudice the interest of investors. - 15A
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 15A. Listing statement exceptions
AI-assisted research summary: The Securities Exchange may, after consulting the Authority, authorize omitting information from a listing statement when disclosure would be prejudicial to the issuer but would not prejudice investors.
Section 15A. Listing statement exceptions Section The Securities Exchange may, in consultation with the Authority, authorize the omission from a listing statement, information whose inclusion would otherwise be required by these Regulations if the Securities Exchange considers that the disclosure of that information would be prejudicial to the interests of the issuer but does not prejudice the interests of investors. [ L.N. 61/2012 , r. 12.] - 16
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 16. Advertisements etc. in connection with offer of securities
AI-assisted research summary: Issuers must disclose the number of prospectus copies printed to the Authority; the Authority or Securities Exchange may require amendments to advertisement materials.
Section 16. Advertisements etc. in connection with offer of securities Section 16(1) An advertisement, notice, poster or documents including a bridge prospectus announcing a public offer or listing of securities for which a prospectus or a listing statement 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 a prospectus or a listing statement is or will be published, as the case may be, and gives an address in Kenya from which it can be obtained or will be obtainable. Section 16(2) The advertisements, notices, posters or documents referred to in paragraph (1) shall be submitted to the Authority or Securities Exchange in the case of listing on the Growth Enterprise Market Segment not later than forty-eight hours prior to publication, and the Authority or the Securities Exchange may require such amendments thereto as it may consider necessary. Section 16(3) Every application form for subscription of the securities offered in a prospectus shall state, in a conspicuous position, where the prospectus may be obtained, and the issuer shall disclose to the Authority the number of copies of the prospectus printed. Section 16(4)(a) a summary of balance sheet and profit and loss accounts for the three years immediately preceding the issue; Section 16(4)(b) the broad shareholding structure prior to the issue and the anticipated structure after the issue; Section 16(4)(c) important highlights of the issue; and Section 16(4)(d) any other information on the issue considered essential by the issuer. - 17
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 17. Persons responsible for prospectus
AI-assisted research summary: Lists persons who are responsible for a prospectus (issuer; directors of issuer; named prospective directors; persons who accept responsibility; offerors; directors of offeror in certain cases; others who authorised contents) and sets conditions limiting or specifying that responsibility.
Section 17. Persons responsible for prospectus Section 17(1)(a) the issuer of the securities to which the prospectus or supplementary prospectus or a listing statement or a supplementary statement relates; Section 17(1)(b) where the issuer is a body corporate, each person who is a director of that body corporate at the time when the prospectus or supplementary prospectus or a listing statement or a supplementary statement is published; Section 17(1)(c) where the issuer is a body corporate, each person who has given his consent to be named and is so named in the prospectus or supplementary prospectus or a listing statement or a supplementary statement as a director or as having agreed to become a director of that body corporate either immediately or at a future time; Section 17(1)(d) each person who accepts, and is stated in the prospectus or supplementary prospectus or a listing statement or a supplementary statement as accepting, responsibility for, or for any part of, the prospectus or supplementary prospectus; Section 17(1)(e) the offeror of the securities, where the offeror is not the issuer; Section 17(1)(f) where the offeror is a body corporate, but is not the issuer and is not making the Offer in association with the issuer, each person who is a director of that body corporate at the time when the prospectus or supplementary prospectus or a listing statement or a supplementary statement is published; and Section 17(1)(g) each person not falling within any of the foregoing paragraphs who has authorised the contents of, or of any part of, the prospectus or supplementary prospectus or a listing statement or a supplementary statement. Section 17(2)(a) under subparagraphs (1)(a), (b) or (c), unless the issuer has made or authorized the offer in relation to which the prospectus or supplementary prospectus or a listing statement or a supplementary statement is published; or Section 17(2)(b) under subparagraph (1)(b), if such prospectus or supplementary prospectus or a listing statement or a supplementary statement is published without his knowledge or consent and on becoming aware of its publication, he forthwith gives reasonable notice to the public and to the Authority that the prospectus or supplementary prospectus was published without his knowledge or consent. Section 17(3) Where a person has accepted responsibility for, or authorised, only part of the contents of any prospectus or supplementary prospectus or a listing statement or a supplementary listing statement, he shall be responsible under paragraph (1)(d) or (g) only for that part and only if it is included or substantially included in the form and context to which he has agreed. [ L.N. 61/2012 , r. 14.] - 18
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 18. Underwriting requirements
AI-assisted research summary: Issuers must get professional financial advice on whether underwriting is needed; underwriting arrangements require the Authority's prior approval; related underwriters must undertake to dispose of shares within an issuer‑predetermined and Authority‑approved period; the Authority may extend that period; if extended the issuer must publicly announce the extension and its conditions.
Section 18. Underwriting requirements Section 18(1) Every issuer shall seek professional financial advice to determine whether or not underwriting of the public offer of securities is deemed necessary and any underwriting arrangement shall be subject to the prior approval of the Authority. Section 18(2) Where the underwriter is a person related or associated to the issuer, the underwriter shall undertake to the Authority to dispose off any shares arising from the underwriting agreement within a period predetermined by the issuer and approved by the Authority. Section 18(3) The Authority may extend the period referred to in paragraph (2) if satisfied that such extension would be in the best interest of the holders of ordinary shares of the company, having regard to the prevailing market conditions and any other factors that are relevant in the circumstances. Section 18(4) Where the Authority extends the period referred to in paragraph (2) in accordance with paragraph (3), the issuer shall make a public announcement disclosing the period of such extension, any conditions attached to the extension and the circumstances necessitating the extension, in at least two daily newspapers of wide circulation. - 3
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 3. Application
AI-assisted research summary: The Authority must approve public offers and listings; issuers approved for listing must pay prescribed listing fees; approved issuers or persons must state approval on announcements.
Section 3. Application Section 3(1) These Regulations shall apply to all offers of securities to the public in Kenya whether or not the issuer is seeking a listing on any securities exchange in Kenya. Section 3(2) The Authority shall be the competent authority to grant approval for all public offers and listing of securities on any securities exchange in Kenya. Section 3(2A)(i) that security is not offered to the public; and Section 3(2A)(ii) the listing is by way of introduction. Section 3(3)(a) obtained a letter of approval from the Authority for the listing of securities confirming that the issuer has satisfied the eligibility requirements prescribed under regulation 7(1) and the disclosure requirements prescribed under regulation 10(1) with respect to the market segment in which the securities are to be listed; and Section 3(3)(b) total minimum subscription of shares as disclosed in the approved prospectus by the Authority in respect of public offering and listing of securities; Section 3(3)(b)(i) total minimum subscription of shares as disclosed in the approved prospectus by the Authority in respect of public offering and listing of securities; Section 3(3)(b)(ii) minimum shareholders prescribed for the respective market segment under regulation 7(1)(a) and (b); and Section 3(3)(c) with respect to additional issue and listing of securities of the same class as those already listed, obtained a letter of approval from the Authority confirming that the issuer satisfied the requirements for additional issues prescribed under regulation 11. Section 3(4) Every issuer of securities approved for listing by the Authority at a securities exchange shall pay the listing fees prescribed under the Sixth Schedule, to the securities exchange at which its securities are listed. Section 3(4A) An issuer of securities approved for listing by a securities exchange shall pay the listing fees as set out in the Seventh Schedule. Section 3(5) Every person whose securities have been approved by the Authority for a public offer or listing shall state that fact on all announcements of the public offer or listing. Section 3(6) A person whose securities have been approved by a Securities Exchange for listing shall state that fact on all announcements of the listing. [ L.N. 30/2008 , r. 3, L.N. 61/2012 , r. 3.] - 4
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 4. Meaning of "offer of securities"
AI-assisted research summary: Defines "offer of securities" as where "he makes an offer" which, if accepted, would create a contract for the issue or sale of the securities by him or by another person with whom he has arranged the issue or sale.
Section 4. Meaning of "offer of securities" Section he makes an offer which, if accepted, would give rise to a contract for the issue or sale of the securities by him or by another person with whom he has made arrangements for the issue or sale of the securities; or - 5
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 5. Meaning of "offer to the public"
AI-assisted research summary: Defines when securities are offered to the public in Kenya and states that issuers applying for a listing are bound by obligations arising from public offers; issuers applying to list on the Growth Enterprise Market Segment are bound by obligations for listing in that market.
Section 5. Meaning of "offer to the public" Section 5(1) A person offers securities to the public in Kenya if, to the extent that the offer is made to persons in Kenya, it is made to the public and for this purpose, an offer which is made to any section of the public, whether selected as members or debenture holders of a body corporate, or as clients of the person making the offer, or in any other manner, is to be regarded as made to the public; and the terms "public offer" and "public offering" shall be construed accordingly. Section 5(2) An issuer applying for a listing shall be bound by all the obligations arising in respect of a public offer of securities in so far as the obligations apply. Section 5(3) An issuer applying for a listing on the Growth Enterprise Market Segment shall be bound by all the obligations arising in respect of listing in such market. [ L.N. 30/2008 , r. 4, L.N. 61/2012 , r. 4.] - 5A
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 5A. Appointment of transaction advisor
AI-assisted research summary: Companies proposing public offers must appoint a transaction advisor; that advisor must ensure the offer complies with the Act and regulations; a person is ineligible to be appointed unless licensed as an investment bank or approved by the Authority.
Section 5A. Appointment of transaction advisor Section 5A(1) Any company proposing to offer its securities to the public or a section of the public shall appoint a transaction advisor. Section 5A(2) A transaction advisor appointed under paragraph (1) shall be responsible for ensuring that the offer of securities is made in accordance with the provisions of the Act and regulations issued thereunder. Section 5A(3) A person shall not be eligible for appointment as a transaction advisor unless such person is licensed as an investment bank or is approved by the Authority to act as a transaction advisor for the particular offer of securities. [ L.N. 101/2009 , r. 2.] - 6
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 6. Issuer to publish prospectus
AI-assisted research summary: When securities are offered to the public in Kenya the issuer must publish an information memorandum/prospectus, obtain the Authority's approval before publication and deliver a copy to the Registrar; the prospectus and allotment rules include specific electronic distribution, disclosure and local-investor reservation requirements.
Section 6. Issuer to publish prospectus Section 6(1) When securities are to be offered to the public or a section of the public in Kenya the issuer shall publish an Information Memorandum by making it available to the public or the section of the public, free of charge at an address in Kenya, during the offer period or for such period prior to Listing as prescribed by the Authority. Section 6(2) The issuer shall, before the time of publication of the information memorandum, obtain approval of the Authority that the information memorandum complies with these Regulations and shall deliver a copy thereof to the Registrar for registration. Section 6(3)(a) an accountant's report confirming compliance by the issuer of the financial disclosures prescribed under regulation 10(1); and Section 6(3)(b) whether all licences and consents required to perform the business or proposed business of the issuer have been duly obtained; Section 6(3)(b)(i) whether all licences and consents required to perform the business or proposed business of the issuer have been duly obtained; Section 6(3)(b)(ii) the validity of evidence of ownership of land, plant and equipment and other important and relevant assets of the issuer; Section 6(3)(b)(iii) any agreements or contracts with respect to the proposed issue of securities, including, where applicable but not limited to, underwriting contracts, agreements or contracts with any securities exchange, registrar and trustees of bonds, debentures or other credit securities; Section 6(3)(b)(iv) any material litigation, prosecution or other civil or criminal legal action in which the issuer or any of its director is involved; Section 6(3)(b)(v) whether the existing capital of the issuer and any proposed changes thereto is in conformity with applicable laws and has received all necessary authorizations; and Section 6(3)(b)(vi) any other material items with regard to the legal status of the issuer and the proposed issue, Section 6(4) The prospectus shall be published in the English language and shall be in black and white except for the issuer's logo. Section 6(5) No person shall offer any securities to the public through an electronic form, unless on the basis of a prospectus approved by the Authority. Section 6(6) Any person offering securities through an electronic form which has been approved by the Authority shall state in the prospectus whether the application for subscription of such securities may be made in an electronic form and in that regard, the procedure and process of facilitating subscription and payment shall be disclosed in the prospectus. Section 6(7) An issuer may distribute a prospectus to prospective investors through electronic form provided such prospectus shall be in the form and content as approved by the Authority. Section 6(8) Where securities are offered through an electronic form the results of the subscription including the allocation process shall be posted on the issuer's website which shall disclose the broad classification of the allottees into individuals, local institutional investors and foreign investors. Section 6(9) Allotment of securities offered to the public shall be made on the basis of the allotment policy disclosed in the prospectus unless the results of the subscription make such policy impractical and in such a case an amendment of the allotment policy shall be made with the approval of the Authority: Provided where such amendment has been approved by the Authority the issuer shall announce the fact within twenty four hours of the grant of approval. Section 6(9A) When developing an allocation policy, an issuer or offeror shall ensure that the policy reserves at least forty per centum of the ordinary shares that are subject to an initial public offering and subsequent listing for investment by local investors. Section 6(9B) Where the per centum reserved for local investors is not fully subscribed for by local investors, the issuer or offeror may, with the prior written approval of the Authority allocate the shares remaining to foreign investors. Section 6(10) No person shall publish the results of the allotment of the public offer without notifying the Authority of the results at least twenty four hours prior to the date on which the allotment results are to be released to the public. [ L.N. 30/2008 , r. 5.] - 6A
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 6A. Issuing on growth Enterprise Market Segment
AI-assisted research summary: Issuers and exchanges must follow specific publication and approval steps before listing on the Growth Enterprise Market Segment: issuers must publish a listing statement in Kenya, obtain Securities Exchange approval before publishing, and a Securities Exchange must send the Authority a copy and confirmation at least seven days before approving a listing statement.
Section 6A. Issuing on growth Enterprise Market Segment Section 6A(1) A person who intends to issue securities on a Growth Enterprise Market Segment shall publish a listing statement by making it available to the public or to a section of the public, free of charge at an address in Kenya, for such period prior to listing as prescribed by the Securities Exchange. Section 6A(2) The issuer shall, before the time of publication of the listing statement, obtain approval of the Securities Exchange that the listing statement complies with these Regulations. Section 6A(3) A Securities Exchange shall, at least seven days prior to granting any approval of a listing statement, submit to the Authority a copy of the listing statement it is considering for approval with a confirmation that the listing statement is in compliance with these Regulations. [ L.N. 61/2012 , r. 5.] - 6B
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 6B. Book building
AI-assisted research summary: A person proposing to offer securities to the public (or a section of the public) may use a book building process to determine the offer price, subject to the Eighth Schedule requirements.
Section 6B. Book building Section A person proposing to offer its securities to the public or a section of the public may use a book building process to determine the price for the offer of securities in accordance with the requirements set out in the Eighth Schedule to these Regulations. [ L.N. 113/2013 , r. 3.] - 7
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 7. Eligibility to issue securities
AI-assisted research summary: Issuers must meet the specific eligibility requirements for each market segment (Main Investment Market, Alternative Investment Market, Growth Enterprise Market, Fixed Income Securities Market, and regional East African Community fixed income market). Any person who fails to receive the minimum number of subscriptions in a public offering may not make another public offering for one year from the date of approval of the previous offering.
Section 7. Eligibility to issue securities Section 7(1)(a) with respect to securities to be listed on the Main Investment Market Segment, the issuer complies with the eligibility requirements prescribed in Part A of the First Schedule; Section 7(1)(b) with respect to securities to be listed on the Alternative Investment Market Segment, the issuer complies, with the eligibility requirements prescribed in Part B of the First Schedule; Section 7(1)(bb) with respect to securities to be listed on the Growth Enterprise Market Segment, the issuer complies with the eligibility requirements as set out in Part C of the First Schedule; Section 7(1)(c) with respect to securities to be listed on the Fixed Income Securities Market Segment, the issuer complies with the eligibility requirements prescribed in the Second Schedule; Section 7(1)(d) with respect to regional fixed income securities to be issued within the East African Community, the issuer complies with the eligibility requirements as set out in Part B of the Second Schedule. Section 7(2) Any person who does not receive the minimum number of subscriptions in a public offering shall not be eligible to make another public offering before the expiry of one year from the date of approval of the previous public offering. [ L.N. 30/2008 , r. 6, L.N. 61/2012 , r. 6, L.N. 113/2013 , r. 4.] - 8
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 8. Issuers not seeking listing
AI-assisted research summary: Issuers not seeking to list must follow the eligibility and disclosure requirements for the Alternative Investment Market Segment for public offers of shares, or for the Fixed Income Securities Market Segment for public offers of debt or other fixed income securities; an issuer who made such an offer may list those securities by introduction after at least one year since they ceased to be offered to the public.
Section 8. Issuers not seeking listing Section 8(1) An issuer who does not wish to list on any market segment of a securities exchange shall comply with the eligibility and disclosure requirements prescribed for the Alternative Investment Market Segment in the case of an offer of shares to the public or for the Fixed Income Securities Market Segment in the case of an offer of debt securities or other fixed income security to the public. Section 8(2) An issuer who has made a public offer in accordance with subsection (1), may, after the expiry of not less than one year since the securities in question ceased to be the subject of an offer to the public, list those securities by introduction. [ L.N. 30/2008 , r. 7.] - 9
ELIGIBILITY, DISCLOSURE AND GENERAL REQUIREMENTS FOR PUBLIC OFFERS - 9. Transfer to other market segment
AI-assisted research summary: Issuers may not transfer shares between market segments until one year has passed since listing on the original segment; any transfer requires the Authority's approval and compliance with eligibility and disclosure requirements.
Section 9. Transfer to other market segment Section 9(1) An issuer whose shares are listed on the any market segment of a Securities Exchange shall not be eligible to transfer such securities to the other market segment before the expiry of one year from the date of listing on the first mentioned market segment. Section 9(2) A transfer of shares from or to the any market segment of a Securities Exchange shall be subject to the approval of the Authority and compliance with the eligibility and disclosure requirements prescribed under these Regulations. [ L.N. 61/2012 , r. 7.]
Part III
CONTINUING OBLIGATIONS AND MISCELLANEOUS PROVISIONS
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CONTINUING OBLIGATIONS AND MISCELLANEOUS PROVISIONS - 19. Continuing obligations
AI-assisted research summary: Issuers whose securities are offered to the public or listed must comply with continuing obligations in the Fifth Schedule, immediately disclose material information, disclose required information within 24 hours, state whether consent is needed and, where needed, apply for consent within seven days; failure to comply may incur a penalty prescribed by the Authority.
Section 19. Continuing obligations Section 19(1) Every issuer whose securities have been offered to the public or listed shall comply with the continuing obligations specified in the Fifth Schedule with respect to the relevant market segment. Section 19(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 in and prices of, its securities. Section 19(3) The information required to be disclosed under these Regulations shall be disclosed within twenty-four hours of 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 19(4) The announcement shall state whether the consent of the Authority or the securities exchange or other person is necessary and where necessary, the issuer shall apply for such consent within seven days of the announcement. Section 19(5) An issuer who fails to comply with any continuing obligation within the prescribed time shall be liable to pay a penalty at the rate prescribed by the Authority. [ L.N. 61/2012 , r. 15.] - 20
CONTINUING OBLIGATIONS AND MISCELLANEOUS PROVISIONS - 20. Exceptions
AI-assisted research summary: The Authority must consider an issuer's ability to meet financial obligations and may approve securities issues by certain corporates subject to conditions; exemptions include government-issued securities and private offers.
Section 20. Exceptions Section 20(1)(a) securities issued by or on behalf of the Government of Kenya or a body corporate established under any written law in Kenya other than the Companies Act ( Cap. 486 ); and Section 20(1)(b) private offers. Section 20(2) In considering the issue and listing of securities by a body corporate falling under subparagraph (a) of paragraph (1), the Authority shall take into account the issuer's ability to meet all financial obligations arising out of the issue and approve the issue subject to such conditions as may be necessary for the protection of investors or the public interest. - 21
CONTINUING OBLIGATIONS AND MISCELLANEOUS PROVISIONS - 21. Meaning of private offers
AI-assisted research summary: Section 21 lists the specific scenarios that count as "private offers" for securities, including offers to limited numbers or defined groups, family members, club members, knowledgeable persons, underwriting invitations, certain conversions, takeover-related offers for listed companies, and offers that are not freely transferable.
Section 21. Meaning of private offers Section 21(1)(a) the securities are offered to not more than one hundred persons; Section 21(1)(b) the securities are offered to the members of a club or association (whether or not incorporated) and the members can reasonably be regarded as having a common interest with each other and with the club or association in the affairs of the club or association and in what is to be done with the proceeds of the offer; Section 21(1)(c) 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; Section 21(1)(d) the securities are offered in connection with a bona fide invitation to enter into an underwriting agreement with respect to them; Section 21(1)(e) members or employees of the company; Section 21(1)(e)(i) members or employees of the company; Section 21(1)(e)(ii) members of the families of any such members or employees; or Section 21(1)(e)(iii) 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; Section 21(1)(f) the minimum subscription for securities per applicant is not less than Kenya Shillings one hundred thousand (Kshs.100,000); Section 21(1)(g) the securities result from the conversion of convertible securities and a prospectus relating to the convertible securities was approved by the Authority and published in accordance with these Regulations; Section 21(1)(h) the securities of a listed company are offered in connection with a take-over scheme approved by the Authority; or Section 21(1)(i) the securities are not freely transferable. Section 21(2) For the purposes of paragraph (e)(ii) the members of a person's family are the person's husband or wife, widow or widower and children (including stepchildren) and their descendants, and any trustee (acting in his capacity as such) of a trust the principal beneficiary of which is the person himself or herself, or any of those relatives. - 22
CONTINUING OBLIGATIONS AND MISCELLANEOUS PROVISIONS - 22. Suspension and de-listing
AI-assisted research summary: Securities exchanges must not suspend or de-list a security without the prior approval of the Authority; the Authority may require suspension or de-listing to protect investors and may predetermine suspension timing; where a security is suspended or de-listed the securities exchange must publish the information in at least two national English dailies.
Section 22. Suspension and de-listing Section 22(1) No security shall be suspended or de-listed by a securities exchange without the prior approval of the Authority. Section 22(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 22(2)(b) there is a significant restructuring involving the listed securities such as in the process of acquisition, mergers or takeovers; or Section 22(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 75% of such security holders are represented without objection to the proposed suspension from at least 10% of the holders of securities resolve to have the securities suspended. Section 22(3) The suspension of securities shall be subject to such time as predetermined by the Authority. Section 22(4)(a) the issuer of such securities has been placed under statutory management, receivership or liquidation or voluntary winding up; Section 22(4)(b) as a result of restructuring involving the listed securities, the issuer ceases to exist; or Section 22(4)(c) a recommendation has been made by the directors to the shareholders to have the securities de-listed and where the shareholders of such securities through a special resolution at which a minimum of 75% of such security holders are represented without objection to the proposed withdrawal from at least 10% of the holders of securities resolve to have the securities de-listed. Section 22(5) Notwithstanding the provisions of paragraphs (2) and (4), the Authority may require the suspension or de-listing of an issuer in any other circumstances, which in the opinion of the Authority, serves to protect the interest of the investors. Section 22(6) Where a security has been suspended or de-listed, the securities exchange shall publish such information in at least two local English dailies of national circulation.
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The Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations
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