The Capital Markets (Investment-Based Crowdfunding) Regulations
2. Interpretation
2. Interpretation
In these Regulations, unless the context otherwise requires—"Act" means the Capital Markets Act;"Authority" means the Capital Markets Authority established under section 5 of the Act;"cooling off period" means a contractual period within which an investor can withdraw from a crowdfunding transaction without any restrictions;"crowdfunding" means the act of raising money from many individuals or entities to either finance a project or business through a crowdfunding platform;"crowdfunding platform" means a website, internet based portal or such other technological application, which facilitates interactions between investors and issuers and other related interactions;"crowdfunding platform operator" means an entity licensed by the Authority to facilitate transactions involving the offer or sale of investment instruments through a crowdfunding platform;"custodian" means a bank licensed under the Banking Act (Cap. 488) and appointed by the Crowding Platform Operator to receive and hold funds raised through the crowding platform;"investment-based crowdfunding" means crowdfunding in exchange for shares, debt securities or any other investment instruments approved by the Authority;"investor" means any person or entity that seeks to make, or has made an investment through a crowdfunding platform;"investment instruments" means securities as defined under the Act;"issuer" means a company which issues the security or investment instrument, which is hosted on the crowdfunding platform for purposes of crowdfunding;"key personnel" has the meaning assigned to it under the Act;"liquid capital" means part of an entity’s assets that it holds as cash or assets that can easily be converted into cash;"medium enterprise" means a company whose annual turnover ranges between five million and fifty million Kenya shillings and employs between fifty to three hundred employees;"micro enterprise" means a company registered as such under the Micro and Small Enterprises Act (Cap. 499C);"retail investor" means an investor who is not a sophisticated investor;"small enterprise" means a company registered as such under the Micro and Small Enterprises Act (Cap. 499C);"sophisticated investor" has the meaning assigned to it under the Act;"start-up" means a company incorporated in Kenya that is newly established or has not been in existence for more than ten years, which is established for the sole purpose of developing an innovative and scalable product or service;"trading facility" means system that facilitates the exchange of crowdfunded investment instruments between parties; and"trust account" means a bank account opened in trust by the Crowdfunding Platform Operator for the benefit of the issuers and investors and managed and monitored by the Custodian.Source: Kenya Law