Updated 1 November 2026
Fund managers in Kenya who run money market funds and other unit trusts work under the Capital Markets (Collective Investment Schemes) Regulations, 2023: they cannot collect money from the public without Capital Markets Authority (CMA) approval, cannot be related to the trustee or custodian who watches over them, cannot lend the fund’s money, and cannot pay themselves anything beyond a disclosed periodic fee. These rules are why your MMF money is held by a separate custodian and overseen by a trustee. Here are ten, with the regulation behind each.
Updated November 2026. Source: Capital Markets (Collective Investment Schemes) Regulations, 2023, Kenya Gazette special issue, published on cma.or.ke. Regulation numbers are as they appear in the gazetted text.
What fund managers in Kenya can’t do
1. Collect money from the public without CMA approval
Regulation 20 says a collective investment scheme shall not pool funds from the public, or a section of it, unless CMA has approved it. Any “investment club” or app pooling cash for returns without approval is breaking this rule.
2. Operate without a fund manager licence
Under regulation 50, no one may perform the functions of a fund manager of a collective investment scheme without a CMA fund manager licence. Check any manager against CMA’s register of licensees, the same way you would check a forex broker on the CMA register.
3. Be related to the trustee or custodian
Regulation 49(3) says the fund manager shall not be related to the trustee or the custodian of the scheme. The three roles are separated so that the people who invest your money are not the ones holding it or policing it.
4. Let the fund manager police itself
Regulation 44 says a trustee shall not delegate to the fund manager any function of oversight in respect of the fund manager.
5. Reuse your fund’s assets
Regulation 41(1) bars a trustee or custodian, or anyone they delegate custody to, from reusing the scheme’s assets for their own account, except in narrow cases the regulation allows.
6. Lend out the fund’s money
Regulation 106 says a collective investment scheme shall not lend any of the money in its property. Buying a debenture, or placing money on deposit or in a current account, does not count as lending.
7. Charge you hidden fees
Under regulation 54, the only payment the fund manager may take from the scheme’s assets for its services is a periodic charge, and only where it is authorised and calculable in an objective, fair and transparent way set out in the scheme documents. The manager may waive or rebate fees but must report this to the trustee.
8. Hype returns with theoretical numbers
The performance-reporting rules (regulation 122) bar a fund manager from linking actual performance to historical, theoretical or prospective performance, or presenting performance information that is false or misleading. Managers must report actual returns and one, three and five-year annualised returns where available.
9. Sell you units without the annual report
Regulation 130 says a fund manager shall not sell units to anyone until it has made the most recent annual report available at its principal office during working hours, or sent a copy on request.
10. Trade units during a suspension
If issue and redemption are suspended, the fund manager shall not buy or sell units as agent of the trustee or on its own account (regulation 157), and must tell CMA before resuming. The manager also cannot change its auditor without CMA approval, and an auditor may serve for at most four consecutive years (regulation 60).
What this means for MMF investors
- Your money sits with a custodian (usually a bank), not in the fund manager’s own accounts.
- A trustee independent of the manager checks that the fund follows its rules.
- Returns can still fall: regulation 53 says the manager is not liable for market losses unless caused by its fraud or negligence. A money market fund is not a bank deposit.
Compare funds with the money market fund calculator and fund profiles such as the CIC Money Market Fund and Old Mutual Money Market Fund.
Frequently asked questions
Who regulates fund managers in Kenya?
The Capital Markets Authority licenses fund managers and approves collective investment schemes, under the Capital Markets (Collective Investment Schemes) Regulations, 2023.
Can a fund manager run off with my MMF money?
The rules make this hard: assets are held by a custodian that cannot be related to the manager, and a separate trustee oversees the fund. Fraud is still possible, so use only CMA-approved funds.
Can a money market fund lose money?
Yes, though rarely. The manager is not liable for market falls unless caused by its fraud or negligence. MMFs are not insured like bank deposits.
What fees can a fund manager charge?
Only a periodic management charge that is authorised and set out in the scheme documents. Check the fund’s information memorandum for the rate.
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