ADVOKS GLOBAL · KENYA
Capital Markets Act
25A. Imposition of additional sanctions and penalties
Edition: 2025-12-11 · In force
25A. Imposition of additional sanctions and penalties
(1)Without prejudice to any other provision of this Act, the Authority may impose the following sanctions or levy financial penalties in accordance with this Act, for the breach of any provisions of this Act, the regulations, rules, guidelines, notices or directions made thereunder, or the rules of procedure of a securities, commodities or derivatives exchange, by a licensed or approved person, issuer, employee or a director of a licensed or approved person or employee director of a issuer as provided under section 11(3)(cc)—(a)with respect to a licensed person, issuer, securities, commodities or derivatives exchange or other approved person—(ii)suspension in the trading of an issuer’s securities, commodities or derivatives for a specified period;(iii)suspension of a licensed person from trading for a specified period;(iv)restriction on the use of a licence;(v)recovery from such person of the benefit accrued from the breach and an amount equivalent to two times the amount of the benefit accruing to such person by virtue of the breach;(vi)the levying of financial penalties not exceeding ten million shillings;(vii)revocation of the licence of such person;(b)with respect to an employee of a licensed or approved person, including a securities, commodities or derivatives exchange—(i)require the licensed or approved person to take disciplinary action against the employee;(ii)disqualification of such employee from employment in any capacity by any licensed or approved person or employee issuer for a specified period;(iii)recovery from the employee the benefit accrued from the breach of a licensed or approved person an amount double the benefit accruing to such person be reason of the breach;(iv)the levying of financial penalties not exceeding five million shillings;(c)with respect to a director of a issuer or a licensed or approved person, including a securities, commodities or derivatives exchange—(i)disqualification of such person from appointment as a director of an issuer or licensed or approved person including, a securities, commodities or derivatives exchange;(ii)the recovery from such person of the benefit accrued from the breach an amount equivalent to two times the amount of the benefit accruing to the person by reason of the breach;(iii)the levying of financial penalties in such amounts as may be prescribed.(1A)The financial penalties and recoveries set out under paragraphs (1)(a)(v) and (vii), (1)(b)(iii) and (iv), (1)(c)(ii) and (iii), (2) and (6) shall be recoverable summarily by the Authority as civil debts.(2)In addition to any other sanction or penalty that may be imposed under this section, the Authority may make orders for restitution, subject to the provisions of subsection (3).(3)The Authority shall make orders under subsection (2) where the breach of the provisions of this Act or the regulations made under the Act results in a loss to one or more aggrieved persons, but subject to the following conditions—(a)that the amount of the loss is quantified and proved to the Authority by the person making the claim; and(b)that notice is served by the Authority on the person expected to make the restitution, containing details of the amount claimed and informing them of their right to be heard.(4)The Authority shall, in its annual report, publish the names of persons against whom actions has been taken by the Authority under this Part.(5)For the purposes of this Act, an act, omission or failure of an agent, employee or any other person acting on behalf of a licensed person shall be considered to be the act, omission or failure of the licensed person as well as of the agent, employee or any other person acting as such.(6)The financial penalties with respect to—(a)a breach of trading rules of a securities exchange by a licensed person shall be double the brokerage commission payable to the licensed person on the relevant trade, or double the annual fees, whichever is higher;(b)failure to comply with a reporting requirement by an issuer or a licensed person shall be double the applicable prescribed annual listing fee or license fee, whichever is higher, for every calendar quarter during which the reporting requirement remains outstanding; and(c)failure on the part of the securities exchange to enforce and ensure compliance with this Act and the rules of the exchange as approved by the Authority, shall be equal to the annual license fee of the securities exchange.