CMA Targets Digital Investment Apps, Robo-Advisors, in New Regulatory Framework

Kenya’s Capital Markets Authority (CMA) is expanding its regulatory framework to cover robo-advisors and digital investment platforms following an explosion in app-based trading among young, tech-savvy Kenyans 

Under the proposed Capital Markets (Licensing Requirements) General Regulations, 2025, currently before Parliament, the regulator will formally license firms that provide automated investment advice or operate digital applications that connect investors to financial products.

The reforms come amid a surge in app-based investing in Kenya, where mobile trading platforms and algorithm-driven investment tools are attracting a new generation of retail investors seeking low-cost portfolio management and easy access to global financial markets.

New licence category for digital investment platforms

A key element of the new regulations is the introduction of a licence category for “intermediary service platform providers.”

These are operators of web and mobile-based platforms that aggregate, market and distribute capital markets products, including applications that channel users into trading platforms or investment services.

Many such platforms currently operate through partnerships with already licensed firms, but the new rules will require them to obtain direct approval from the CMA.

The regulator has also expanded the definition of investment advisors to include digital platforms that provide automated, algorithm-driven financial advice with minimal human input.

These platforms, commonly known as robo-advisors, use algorithms to construct and manage investment portfolios, typically offering lower fees than traditional human advisers.

The CMA says bringing these platforms into the licensing framework will ensure that investors using digital tools receive advice and investment recommendations under the same regulatory standards applied to traditional financial intermediaries.

Responding to growth in digital investing

The regulatory shift reflects broader changes in Kenya’s financial landscape, where mobile technology and fintech innovation have reshaped how people invest.

Digital investment applications have become increasingly popular among younger investors who prefer simplified platforms offering automated portfolio management and instant access to global assets.

However, regulators have expressed concern that many of these platforms operate in a grey regulatory area, exposing investors to risks such as misleading investment advice, a lack of disclosure, and limited accountability.

By requiring licensing and regulatory compliance, the CMA aims to ensure that such services meet minimum standards for transparency, conduct and investor protection.

Online forex trading moves onshore

The expansion of digital regulation also coincides with the CMA’s efforts to formalise Kenya’s online foreign exchange and contracts-for-difference (CFD) trading market.

In recent months, the regulator has approved several global trading platforms to operate locally under Kenyan supervision.

Global fintech firm Capital.com received authorisation in January to operate as a Dealing Online Foreign Exchange Broker, allowing it to onboard Kenyan clients, execute trades and provide local support under CMA rules.

Another global broker, XM, was licensed in February, enabling it to serve Kenyan traders through a locally regulated platform.

These approvals add to a growing list of regulated brokers in Kenya, including Exness, IC Markets, FP Markets and FXPesa, signalling a shift from largely offshore trading to a more formal domestic regulatory structure.

Wider reforms to capital markets regulation

The proposed 2025 regulations also introduce several additional reforms aimed at modernising Kenya’s capital markets licensing regime.

Among them is a new broker-dealer licence, which will allow firms to combine traditional stockbroking services with dealer operations and underwriting activities.

Over-the-counter trading platforms will also be required to obtain CMA licences, bringing more financial market activities under regulatory supervision.

The regulations further outline licensing requirements for custodians and trustees, strengthening oversight of institutions that safeguard investor assets.

Legal experts note that the new framework effectively replaces the older licensing regime and reflects the rapid digital transformation of financial services.

Strengthening investor protection

The reforms represent a broader effort to align regulation with technological innovation in financial markets for CMA.

As Kenya’s capital markets increasingly integrate with global digital trading platforms, regulators say stronger oversight is necessary to maintain market integrity and protect retail investors.

The move is also expected to support the continued growth of Kenya’s fintech ecosystem while ensuring that new digital investment services operate within clear regulatory boundaries.

With the proposed regulations currently under legislative review, industry players expect the framework to reshape how digital investment platforms operate in Kenya, potentially ushering in a more transparent and regulated era for online trading.

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