ADVOKS GLOBAL · KENYA
The Capital Markets (Investment-Based Crowdfunding) Regulations
20. Crowdfunding transaction
Edition: 2022-12-31 · In force
20. Crowdfunding transaction
(1)The issuer shall determine and disclose in the offering document—(a)the period in which the offer shall remain open; and(b)the threshold amount for the offer to be deemed a successful offer.(2)Where an issuer is unable to meet the prescribed minimum threshold for the targeted amount, the offer shall be withdrawn and the crowdfunding platform operator shall effect a refund of the monies to the investors within forty-eight hours and the costs for such refunds shall be fully borne by the issuer.(3)Where an offer is withdrawn under sub regulation (2), the issuer may only commence a fresh crowdfunding offering not earlier than ninety days after the said withdrawal.(4)Where the crowdfunding transaction is successful, the crowdfunding platform operator shall make the funds available to the issuer within five business days after the close of the offer.(5)The crowdfunding offer by the issuer shall include a contractual right of a cooling off period allowing the investor to withdraw an offer or agreement to purchase the investment instrument by delivering a notice in the manner prescribed by the crowdfunding platform operator within forty-eight hours from the date of investments subscription, but no withdrawal shall be made after the close of the offer period.(6)The crowdfunding platform operator shall ensure that any changes made to the offering documents prior to the close of the offer, must be communicated to the investors and the investors shall be given an opportunity to withdraw the investments within forty-eight hours of such communication.(7)Where an investor cancels the offer or agreement to purchase investment instruments, all funds of the investor shall be refunded or released within forty-eight hours of the request to cancel.(8)A crowdfunding platform operator who does not comply with the timelines provided in sub-regulations (5) will be liable to the penalties specified under section 25A of the Act.