Business Type: Corporate trustees are entities licensed under Regulation 31 of the Capital Markets (Collective Investment Schemes) Regulations, 2023, to provide oversight and governance for collective investment schemes such as unit trusts, mutual funds, and other pooled investment vehicles. Corporate trustees play a critical role in safeguarding investors’ interests by ensuring that fund managers operate in compliance with scheme documents, trust deeds, and regulatory requirements. They hold scheme assets in trust for unitholders and provide independent oversight of fund operations. As of 2025, the CMA has licensed several banks and specialized trust companies as corporate trustees to support the growing CIS market, which has exceeded KES 596 billion in assets under management.
Licensing Requirements: Must be a bank licensed under the Banking Act or a trust company incorporated under the Companies Act, provide certificate of incorporation and memorandum and articles of association, submit detailed business plan outlining trustee services, demonstrate financial capacity and operational infrastructure, have experienced management with expertise in trust and fiduciary services, provide evidence of professional indemnity insurance, meet fit-and-proper criteria for directors and key management, and comply with all requirements under the Capital Markets (Collective Investment Schemes) Regulations, 2023.
Government Fees: Application fees are approximately KES 100,000 to KES 150,000 for banks and financial institutions, with annual renewal fees of around KES 80,000 to KES 100,000.
Timeline: The approval process typically takes 60 to 75 days for established banks and financial institutions with existing regulatory relationships with the CMA.
Limitations: Corporate trustees must maintain independence from fund managers, ensure compliance with scheme documents and trust deeds, monitor fund manager activities and investment decisions, safeguard scheme assets for unitholders, provide independent oversight and report breaches to the CMA, maintain adequate systems for custody and reconciliation, and avoid conflicts of interest.
Penalties: Violations may result in loss of corporate trustee license, financial penalties and fines, investor compensation claims for losses arising from trustee negligence, public censure and reputational damage, and prosecution for gross negligence or breach of fiduciary duties.
Enforcement: The CMA conducts regular reviews of corporate trustee activities, monitors compliance with the Capital Markets (Collective Investment Schemes) Regulations, 2023, ensures proper oversight of fund managers, reviews trustee reports and disclosures, and takes enforcement action against trustees who fail to fulfill their obligations.