ADVOKS GLOBAL · KENYA
The Capital Markets (Collective Investment Schemes) Regulations
78. Broad investment guidelines
Edition: 2022-12-31 · In force
78. Broad investment guidelines
(1)All investments of a collective investment scheme made by the fund manager shall—(a)be consistent with the objectives of the scheme;(c)have a ready price or value; and(d)have adequate proof of title or ownership to allow proper custodial arrangements to be made.(2)The book value of the investments of a collective investment scheme portfolio shall not exceed the following limits—(a)securities listed on a securities exchange in Kenya - 80%;(b)securities issued by the Government of Kenya — 80%;(c)immovable property — 25%(d)other collective investment schemes including umbrella schemes — 25%;(e)any other security not listed on a securities exchange in Kenya — 25%;(f)off-shore investments - 10%:Provided that:—(i)no limits shall apply to investment of the collective investment scheme portfolio in an interest bearing account, product or financial instrument of or issued by a bank or financial institution as defined by the Banking Act; or and insurance company as defined in the Insurance Act (Cap. 487);(ii)the book value of an investment in an interest bearing account, financial product or instrument of or issued by any single bank or financial institution or insurance company or a combination of any such investment in a single bank, financial institution or insurance company shall not in aggregate exceed 25 % of the collective investment scheme portfolio and net asset value;(iii)the book value of a collective investment scheme's holding of securities relating to any single issuer shall not exceed twenty five per cent of the collective investment scheme's properties net asset value; and(iv)a collective investment scheme established for the investment of retirement benefits schemes shall comply with the investment guidelines prescribed under the Retirement Benefits Act;(v)subregulation 78(2)(c) and (e) shall not apply to a collective investment scheme established as an investment company(3)A fund manager shall not apply any part of the collective investment scheme portfolio in the acquisition of any investments which are for the time being, partly paid or otherwise in the opinion of the trustee likely to involve the trustee in any liability contingent or otherwise.(4)The limits and restrictions in this Part shall be complied with at all times based on the most up-to-date value of the collective investment scheme portfolio, but a five percent allowance in excess of any limit or restriction shall be permitted where the limit or restriction is breached through the appreciation in value of the collective investment scheme portfolio.