Kenya’s Capital Markets Authority has barred Cytonn Asset Managers Ltd (CAML) from onboarding new investors until it changes the names of its business and its regulated products.
CMA says the move aims to ” to enhance investor protection and promote investor confidence in the integrity of capital markets”.
The directive to CAML will be in effect for three months or until the fund manager complies.
This is in line with the Capital Markets Act section 11 (1)(d) read together with section 11 (3)(cc) (ii), and 11 (3)(w).
“The change of the name of the licensed fund manager and the regulated products it offers to the public will effectively eliminate any confusion caused by the similar name used by the unlicensed entity Cytonn Investments Management Limited,” Capital Markets Authority (CMA) Chief Executive Wyckliffe Shamiah said in a statement.
“This will enable the public to clearly distinguish between the entity and products that we regulate from the unlicensed entity offering unregulated products and thus facilitate better decision-making.”
CAML is regulated by both CMA and the Retirement Benefits Authority (RBA).
The funds managed by the entity under the approved Collective Investment Schemes are; Cytonn Money Market Fund; Cytonn Balanced Fund; Cytonn Equity Fund; Cytonn Africa Financial Services Fund; Cytonn Money Market Fund (USD); and Cytonn High Yield Fund.
In July, CMA opened investigations into Ksh Sh13.5 billion Cytonn High Yield Solutions and Cytonn Project Notes. The two products are unregulated.
In 2019, Cytonn Investments launched a Collective Investment Scheme (CIS) Cytonn High Yield Fund that gives a 15 per cent rate of return annually.
This was Kenya’s first regulated fund seeking to raise KSh30 billion for constructing 6,000 housing units under the Affordable Housing Programme.
However, Cytonn Investments obtained a temporary injunction from the High Court barring the CMA from probing or suing it.
High Court Judge, Wilfrida Okwany directed that the matter be heard in private, citing a need to “to protect the integrity of interested parties from public spite and ridicule”.