Kenya’s Capital Markets Authority (CMA) has gazetted new licensing regulations that scrap the long-standing flat annual fee for fund managers and replace it with a variable charge tied directly to the size of assets under management (AUM).
The rules, published as Legal Notice 197 of 2025 on 11 December 2025, are already in force.
How the new fee structure works
Under the Sixth Schedule of the Capital Markets (Licensing Requirements)(General) Regulations, 2025, fund managers now pay an annual regulatory fee calculated as follows:
- Collective Investment Schemes(CIS): 0.05% of AUM, subject to a minimum of Ksh 100,000 and a maximum of Ksh 15,000,000
- Non-CIS managers (excluding pension funds): 0.01% of AUM, capped at Ksh 15,000,000
The old flat fee of Ksh 150,000 is gone.
What this means in practice
Small fund managers could actually pay less than before, the new minimum of Ksh 100,000 sits below the previous flat rate. But for larger players, the numbers climb steeply. A CIS manager running Ksh 10 billion in AUM, for example, would owe Ksh 5 million annually. At Ksh 30 billion and above, the Ksh 15 million cap kicks in.
The shift deliberately ties regulatory cost to commercial scale. The bigger you grow, the more you contribute.
The broader licensing picture
The fee change sits within a sweeping overhaul of capital markets licensing in Kenya. The new regulations consolidate requirements for every major market participant; securities exchanges, investment banks, broker-dealers, stockbrokers, custodians, trustees, investment advisers, and a newly recognised category: Intermediary Service Platform Providers, which covers digital aggregator platforms that distribute capital markets products.
For context, here is how annual regulatory fees compare across licence categories under the new rules:
| Licence Type | Annual Regulatory Fee |
| Securities Exchange | 1% of gross earnings |
| Investment Bank | Ksh 250,000 |
| Broker-Dealer | Ksh 200,000 |
| Stockbroker | Ksh 100,000 |
| Dealer | Ksh 100,000 |
| Fund Manager (CIS) | 0.05% of AUM (min Ksh 100k / max Ksh 15mn) |
| Fund Manager (Non-CIS) | 0.01% of AUM (max Ksh 15mn) |
| Investment Adviser | Ksh 100,000 |
| Custodian | Ksh 100,000 |
| Trustee | Ksh 100,000 |
| Intermediary Service Platform | Ksh 50,000 |
What existing licensees need to know
The regulations include a transitional provision giving current licence holders twelve months to comply with any new requirements introduced by the rules. Operators of over-the-counter platforms and intermediary service platforms that are not yet licensed must apply to the CMA within one year of the regulations coming into effect.
One important detail: annual licence fees are non-refundable and non-proratable. If a licence is revoked, surrendered or withdrawn mid-year, no portion of the fee already paid comes back.
For the fund management industry, this is the most consequential fee change in years. Boutique managers with lean portfolios may breathe easier. Large asset managers, particularly those running collective investment schemes, should model the impact now and factor it into their cost structures before the next billing cycle arrives.
