ADVOKS GLOBAL · KENYA
The Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023
2. Interpretation
Edition: 2023-12-15 · In force
2. Interpretation
(1)In these Regulations, unless the context otherwise requires—“adequate working capital” means an amount of working capital sufficient to meet operational requirements of the business concern under normal circumstances;“admission” means admission of securities to the Official List of a Securities Exchange;“aggregated portfolio basis” means the percentage of proceeds allocated to certain project categories due to a large number of underlying projects in green bond issuances;“associate” has the meaning assigned to it in the Act;“book building” means a process undertaken to elicit and assess demand and price of securities for purposes of the determination of the quantum or value or coupon of specified securities to be offered in accordance with these Regulations;“business combination”, in relation to a Special Purpose Acquisition Company, means a merger or amalgamation or acquisition of shares or assets of one or more companies having business operations;“Central Bank of Kenya” means the Central Bank of Kenya established under Article 231 (1) of the Constitution;"circular" means an information document issued to holders of listed securities in connection with proposed corporate action or transaction;"company" means a limited liability company wherever incorporated or otherwise established and includes a corporation;“compliance officer” means a person engaged by an issuer to ensure the compliance of the issuer with the obligations of an issuer under these Regulations and the Act;“corporate action” means an action or transaction undertaken or to be undertaken by an issuer which may affect the numbers, price, characteristics, value, status, classes and categories of the security, and shall include dividend, merger or take-over, consolidations and split of securities and additional issues;“cross listing” means the listing on a securities exchange in Kenya of securities that are already listed on another securities exchange;“days” means calendar days excluding Saturdays, Sundays and public holidays;"Directors Training Program" means an accredited training programme for training in relation to, among others, directors’ responsibilities, corporate governance, regulatory compliance and accountability, whether it is restricted to the Code or not;"dual listing" means the initial listing of securities listed on two or more securities exchanges;“distributable profits” has the meaning assigned to it under Section 423 of the Companies Act (Cap. 485);“East African Community Partner State capital markets regulator” means the regulator or government entity charged with the supervision of capital markets in an East African Community partner state;“East African Community partner state” means a state which is a member of the East African Community;“electronic offer” means a public offer that is conducted on the internet or by other electronic or automated means or media, wholly or partially, where investors subscribe to the offer of securities by submitting applications electronically or the applications and allotments are processed and completed electronically, wholly or partially;“eligible projects” means project categories in green bonds that contribute to environmental objectives including but not limited to climate change mitigation, climate change adaptation, natural resource conservation, biodiversity conservation, and pollution prevention and control;“executive director” means a member of a board of directors of a company who also serves as a manager in the company;“founding shareholder”, in relation to a special purpose acquisition company, means persons who founded, initially financed or sponsored the establishment of the special purpose acquisition company;“green bond” means a fixed income instrument, either unlisted or listed on a securities exchange, approved by the Authority, whose proceeds are used to finance or refinance new or existing projects that generate climate or other environmental benefits that conform to green guidelines and standards;“green guidelines and standards” means guidelines and standards including—(a)Green Bond Principles, as may be amended, issued and governed by the International Capital Markets Association;(b)Green Bond Standards including the Climate Bonds Standard, as may be amended, issued and governed by the Climate Bonds Initiative;(c)Government policies and guidelines including the Kenya National Policy on Climate Change and Green Economy Strategy, among other Government policies; or(d)any other standard acceptable to the Authority;“green shoe option” or “over-allotment option” means, in relation to an offer, the right reserved by an issuer to allot up to a specified number of securities in excess of the number of the relevant securities declared as the securities on offer and available under the offer;“green washing” means deceptive or misleading practices by the issuers of securities to the public or any other person or entity licensed or approved by the Authority that create a false or exaggerated impression of environmental responsibility or sustainability efforts by the issuer, person or entity;“ISA” means International Standards on Auditing as issued by the International Auditing and Assurance Standards Board or its successor;“IFRS” means International Financial Reporting Standards as developed and issued by the International Accounting Standards Board or its successor;“independent director” means a member of a board of directors who–(a)is not an executive director;(b)does not have a material or pecuniary relationship with the company or related persons;(c)is compensated through sitting fees or allowances; and(d)does not own shares in the company:Provided that after six years of continuous service as such director, such person shall no longer be considered as an independent director;“Independent Verifier” in relation to a green bond means an entity, independent of an issuer, its directors, senior management and advisers, compliant with the International Capital Markets Association’s Guidelines for External Reviewers or accredited under the Climate Bonds Standards and Certification Scheme, or any other professional body acceptable to the Authority, appointed by the issuer to confirm the green status of the Green Bond;“initial public offer” means an offer of specified securities by an unlisted issuer to the public for subscription and includes an offer for sale of specified securities to the public by any existing holders of such specified securities in an unlisted issuer;“Insurance Regulatory Authority” means the Insurance Regulatory Authority established under the Insurance Act (Cap. 487) and any successor regulator;“International Securities Identification Number” is a twelve-digit alphanumeric code that uniquely identifies a specific security and issued by the body duly authorized by the Association of National Numbering Agencies or its successor;“issuer”, in relation to any securities, means the person who has issued or is to issue securities to the public or a section thereof in Kenya, whether or not such securities are subject of an application for listing on a securities exchange or have been admitted to listing;“key personnel” means the officers or personnel of the issuer who are members of its core management team (excluding non-executive board members) and includes any other person whom the issuer may declare as a key managerial personnel and includes management team;“legal entity” means any entity established or recognized under the laws of Kenya as a body corporate including a limited liability company and a limited liability partnership;“listing” means admission of a security to the Official List of a securities exchange and the terms “list” and “listed” shall be construed accordingly, and listing shall be deemed to occur, for purposes of determining whether purchase of securities in a public offering was of listed securities, when the securities exchange communicates in writing its admission of such security;“listing by introduction” means the initial listing of securities that are publicly held other than as a result of an immediately preceding public offer;“listed issuer” means an issuer any of whose securities are listed on a recognized securities exchange;“Main Fixed Income Securities Market Segment” means a market segment for the listing of debt securities of issuers including but not limited to government and corporate bonds and debentures the initial offer size of which is over four hundred million shillings or such higher amount as the Authority may set from time to time;“Main Investment Market Segment” means a market segment for the listing of equity securities meeting the criteria set out in the First Schedule;“market segment” means a segment, defined in these Regulations or established by a securities exchange with the approval of the Authority, for the listing of securities that meet, or the securities of an entity that meets, a respective prescribed criteria;“material information” means any information relating to an issuer that may ordinarily affect the price of an issuer’s securities or influence investment decisions of investors and includes, without limitation, information on—(a)a merger, acquisition or joint venture;(b)the re-organization of the capital structure of the issuer;(c)earnings and dividends, whether scrip or cash, of an unusual nature;(d)the acquisition or loss of a significant contract;(e)a significant new product or discovery;(f)a change in control or significant change in management;(g)a call of securities for redemption;(h)a public or private sale of a significant amount of additional securities;(i)the purchase or sale of a significant asset;(j)a significant labour dispute;(k)a significant dispute or determination thereof in respect of the issuer;(l)establishment of a programme to make purchases of the issuer’s own shares;(m)a tender offer for another issuer’s securities;(n)significant alteration of the memorandum and articles of association of the issuer; or(o)any other peculiar circumstances that may prevail with respect to the issuer or the relevant industry;“material contract” means any contract or other arrangement to which a company or any of its subsidiaries is a party (other than the loan documents) for which breach, non-performance, cancellation or failure to renew could have a material adverse effect;“non-executive director” means a member of a board of a company who is not an executive director and is not an executive director or employee of a related entity;“offer” means an offer for subscription or purchase of securities in an issuer which, if accepted, would give rise to a contract for the issue or sale of the securities and, except where the context otherwise requires, “offer” and “offeror” shall be construed accordingly;“offer period” means a period of up to ten working days, or such longer period as the Authority may approve, during which an offer to the public remains open;“official list” means the list of securities listed on a securities exchange as maintained by a securities exchange, and updated from time to time;“off-market purchase” means the purchase of listed securities made outside the securities exchange, or on a securities exchange without having to comply with the trading rules of the exchange for exchange transactions;“on-market purchase” means the purchase of listed securities on a securities exchange in compliance with the trading rules of a securities exchange;“performance indicators and metrics” in relation to a green bond, means qualitative performance measures as may be prescribed in the green guidelines and standards;“permitted investments”, in relation to a SPAC, means investment in government bonds or treasury bills with maturity periods of not more than eighteen months;“private company” has the meaning ascribed to it under the Companies Act (Cap. 486);“private offer” means an offer of securities as defined in regulation;“private transaction” means a transfer of a listed security outside a securities exchange authorized by the Authority from one security holder to another whether or not it involves any consideration or change of beneficial interest or is otherwise authorized by the Authority under section 31;“public company” has the meaning ascribed to it under the Companies Act (Cap. 486);“public offer” means an offer which is not a private offer, and as more specifically described in regulation 9;“regional fixed income securities” means fixed income securities issued under regulation 9 (1)11;“Registrar of Companies” has the meaning assigned to it in the Companies Act (Cap. 486);“related entity” means in relation to a natural person, any person who is related to that person by marriage, affinity or consanguinity or who is a partner or employee of that person; and in relation to a company any entity which is its holding company, subsidiary of its holding company, or any person who controls that company whether alone or with such person’s related parties;“reporting accountant” means an accountant who holds a current practicing certificate issued by the Institute of Certified Public Accountants of Kenya in accordance with the Accountants Act (Cap. 531) and performs such functions of a reporting accountant as are set out in these Regulations;“restricted public offer” means a public offer restricted to sophisticated investors or such category or number of persons as the issuer shall prescribe in the short form prospectus;“resulting issuer”, in relation to a Speacial Purpose Acquisition Company, means the resultant combined entity whose securities trade on a securities exchange upon the completion of a business combination;“rights issue” means an offer of specified securities by a listed issuer to the shareholders of the issuer as on the records date fixed for that purpose;“secondary issue” means the issuance of securities by an issuer restricted to existing shareholders or holders of renounced rights, other than transactions at the initial public offering, and includes capitalization, rights issue, scrip dividend or bonus issue;“SME Fixed Income Securities Market Segment” means a market segment for the listing of debt securities the initial offer size of which is below four hundred million shillings or such higher amount as the Authority may set from time to time and meeting the criteria set out in the Third Schedule;“Small and Medium Enterprises Market Segment” means a market segment for the listing of equity securities issued by entities meeting the criteria set out in the First Schedule;“share buyback” means the purchase by a listed company of its own shares from shareholders;“shares registrar” means the person appointed by an issuer to maintain a register of the securities holding records of the issuer as required under any written law or the issuer’s rules;“shelf prospectus" means a prospectus in respect of securities or class of securities which are to be offered for subscription in one or more tranches over a specified period of time;“special purpose acquisition company” means a company with no prior operating history, no operating and revenue-generating business or asset at the point of the initial public offer, and which raises proceeds for the sole purpose of undertaking a business combination in accordance with the business strategy and acquisition mandate disclosed in the information memorandum issued in relation to the initial public offer by a special purpose acquisition company;“Special Purpose Acquisition Company IPO” means an Initial Public Offer in respect of a special purpose acquisition company;“sophisticated investor” has the meaning assigned to it under the Act; and also includes an individual, company, partnership, association or a trustee on behalf of a trust which, either alone or with any associates on a joint account who subscribes for securities with an aggregate issue price of not less than one million shillings or such high amount as the Authority may determine from time to time;“supplementary information memorandum” means the information memorandum referred to in regulation 25;“supranational body” means any global or regional body, institution or organization the members or constituents of which are governments, inter-governmental organizations or governmental organizations or agencies;“suspension” with respect to securities listed on a securities exchange, means a trading stoppage of more than one trading session;“trading halt” means a temporary suspension of trading of not more than one trading session at a time for a particular security or securities on a securities exchange;“transaction advisor” means a person appointed to carry out the responsibilities set out under regulation 32;“treasury shares” means the shares of a listed company that have been bought back by a listed company from the company’s shareholders and have not been cancelled or re-issued; and“valuation” means the assessment and determination of the value of a security including business combinations or assets of a business by the relevant professionals in accordance with International Valuation Standards.