ADVOKS GLOBAL · KENYA
The Capital Markets (Registered Venture Capital Companies) Regulations
2. Interpretation
Edition: 2022-12-31 · In force
2. Interpretation
In these Regulations, unless the context otherwise requires—"affiliate" means any subsidiary or holding company of such registered venture capital company and any subsidiary of such holding company;"captive fund" means a fund which draws all its investment capital from the parent company of the registered venture capital company holding that fund and invests such capital for the interests of that parent company, or a fund that has such other comparable structure acceptable to the Authority;"close relation" means a spouse, parent, sibling, child, father-in-law, son-in-law, daughter-in-law, mother-in-law, brother-in-law, sister-in-law, grand child or spouse of a grandchild;"day" means any calendar day excluding Saturdays, Sundays and public holidays;"fund" means the pool of capital held by a registered venture capital company for investment in venture capital, in accordance with a specifically declared investment policy;"fund manager" means a company that manages the funds and investments of a registered venture capital company;"fund of funds" means a fund (as defined) that exclusively invests in other venture capital companies;"Income Tax Rules" means the Income Tax (Venture Capital Company) Rules (sub. leg);"independent director" means a director who—(i)is not and has not been in the employment of the registered venture capital company in an executive capacity within the five year period preceding the date of application;(ii)is not associated to an adviser or consultant to the registered venture capital company or a member of the registered venture capital company's senior management or a significant customer or supplier to the registered venture capital company or with an entity that receives significant contributions from the registered venture capital company or a venture capital enterprise in which the registered venture capital company is invested or within a period of five years preceding the date of the application, has not had any business relationship with the registered venture capital company (other than service as a director);(iii)has no personal service contract(s) with any of the shareholders, directors, or members of the senior management of the registered venture capital company;(iv)is not employed by a company at which an executive officer of the registered venture capital company serves as a director; or(v)is not a close relation of any person described above."independent fund" means a fund which draws its investment funds from investors generally and is independently invested and managed or a fund that has such other comparable structure acceptable to the Authority;"mid-stage financing" means investment by a registered venture capital company in an eligible venture capital enterprise in the form of—(a)capital expenditure or working capital to support and promote commercialization of technology or product;(b)additional capital expenditure or working capital to increase production capacity, marketing or product development; or(c)funding for an eligible venture capital enterprise expecting to be listed on a stock exchange;"registered venture capital company" means a venture capital company registered as such by the Authority;"seed-capital financing" means financing provided by a registered venture capital company for the purpose of research assessment and development of an initial concept or prototype for product development and initial marketing;"semi-captive fund" means a fund which draws its investment capital from both the parent of the registered venture capital company holding it and other investors, but invests primarily in line with the interests of that parent or that has such other comparable structure acceptable to the Authority;"small and medium size business" means a business enterprise which at the time of first investment by the registered venture capital company has assets with a market value or annual turnover of less than five hundred million shillings;"start-up financing" means financing provided by a registered venture capital company for the purpose of commencing operations, production or implementation of a concept or prototype where a venture capital enterprise has completed the seed stage of development;"subsidiary financing" means financing provided for the purchase by one registered venture capital company of the entire or part of the equity interests of another registered venture capital company in an eligible venture capital enterprise to allow for total or partial exit by the latter;"substantial interest" means a cumulative of both direct and indirect holding of twelve and one half percent or more in the equity of a venture capital enterprise;"venture capital company" means a company incorporated under the Companies Act with the primary objective of providing substantial risk capital to small and medium size businesses in Kenya through equity, quasi-equity investments or other instruments whether convertible into equity or not as well as managerial or technical expertise to such business entities;"venture capital enterprise" means a small or medium sized business entity incorporated under the Companies Act which is in need of venture capital investment for purposes of financing a new product or for expansion of the business entity;