The Fund Managers Association (FMA) is seeking powers to police players in the industry and has begun the pursuit of a self-regulatory organisation licence from the Capital Markets Authority.
The 18-year-old coalition, which promotes professional standards and industry development, currently composed of 19 fund managers, has partnered with the specialist development agency, FSD Africa, which will provide financial and technical support in its quest for the regulatory nod.
A self-regulatory organisation (SRO) is a non-government institution with powers to create and enforce stand-alone industry and professional regulations and standards of its own.
Financial sector SROs mostly serve to protect investors by establishing rules, regulations and setting standards/procedures promoting ethics, equality and professionalism.
The drive for licensing as an SRO comes amid the rapid growth of fund management services, anchored largely by the rise of collective investment schemes (CIS) or unit trusts whose assets under management (AUM) reached Sh851.7 billion in March 2026 from Sh756.3 billion in December last year as per CMA data.
“Over the past 18 years, FMA has evolved into a respected voice for the fund management industry. Pursuing SRO status represents a natural progression in our institutional development and demonstrates our commitment to raising standards, strengthening accountability and supporting the continued growth of Kenya’s capital markets,” said Nicholas Ithondeka, Chair of the FMA Council.
Safeguarding investors
FMA has a current membership of 19, but the number of fund managers has exploded to 49 in recent years, with the growth of CISs anchoring the expansion in the number of players.
Upon licensing as an SRO, all fund managers would be obligated to be members of the FMA.
Fund managers are market professionals who promulgate analysis and research on capital market securities and advise investors on such securities at a commission.
The fund managers also manage portfolios of securities on behalf of clients pursuant to a contract.
The FMA expects fund managers to abide by a set of rules upon its licensing as an SRO, including a code of conduct.
The players are also expected to make standardized disclosures to clients, including returns/performance, marketing and asset allocation.
The FMA as an SRO is seen as an added layer of security to safeguard investors whose main interaction with the professionals is through collective investment schemes/unit trusts.
Fund managers also oversee investments in retirement benefit schemes and pension funds, including the National Social Security Fund.
“Part of it is to complement the work of the regulator. In other jurisdictions where this has happened, a regulator like CMA becomes an oversight body, but we become the first point of contact because we are the closest to the players,” said Fred Mburu, FMA Chief Executive.
“I think the advantage is that they will be an added layer of responsibility with members holding each other to account.”
Mandate of SROs
The FMA estimates that its current members, which include players like GenAfrica Asset Management, Nabo Capital and CIC Asset Management, collectively manage approximately Sh3.1 trillion ($24 billion) in assets on behalf of pension funds, insurance companies’ collective investment schemes and other institutional and retail investors.
Kenya currently has two licensed SROs; the Nairobi Securities Exchange (NSE), which sets standards and rules for publicly listed companies, and EABX Plc, the regional fixed-income exchange.
The NSE was granted SRO status in July of 2016 after successfully separating the management structures for its commercial and regulatory functions.
Its mandate as an SRO includes admission to listing new offers, monitoring the compliance of obligations set by companies looking to raise capital in the market, admission of trading participants, and oversight of the market’s trading participants.
In the US, SROs include the New York Stock Exchange and the Financial Industry Regulatory Authority.
