ADVOKS GLOBAL · KENYA
The Capital Markets (Investment-Based Crowdfunding) Regulations
3. Application
Edition: 2022-12-31 · In force
3. Application
(1)These Regulations shall apply to an investment-based crowdfunding platform established, maintained or operated in Kenya.(2)A person shall be considered to be operating, providing or maintaining an investment-based crowdfunding platform in Kenya where—(a)the platform is established in Kenya;(b)the platform is located outside Kenya but actively targets Kenyan investors as provided for under sub-regulation (3); or(c)the key components of the platform when taken together are physically located in Kenya even if any of its component parts, in isolation, is located outside Kenya.(3)For purposes of these Regulations, a crowdfunding platform operator located outside Kenya shall be considered as actively targeting investors in Kenya if the operator, or the operator’s representative, promotes crowdfunding activities either directly or indirectly in Kenya.(4)A crowdfunding platform operator deemed to be actively targeting investors in Kenya for purposes of these Regulations shall be required to obtain a license from the Authority.(5)In deciding whether there is direct or indirect promotion of the crowdfunding activity, the Authority may take into consideration the following activities—(a)advertising the crowdfunding platform, investment instruments that are subject to the crowdfunding or the issuer hosted on the platform in any publication or electronic media in Kenya;(b)sending direct mail to a Kenyan address or electronic message to a person domiciled in Kenya marketing or promoting the crowdfunding platform or activity; or(c)direct or indirect solicitation through agents.(6)Notwithstanding subregulations (1), (2), (3), (4) or (5), in determining whether a crowdfunding platform is targeting investors in Kenya, the Authority shall assess all relevant facts and circumstances while taking into account the protection of investors and the integrity of Kenya’s capital markets.