An investment bank is a non-deposit taking institution licensed by the Capital Markets Authority to advise on offers of securities to the public, take-overs, mergers, and acquisitions, corporate restructuring involving companies listed or quoted on a securities exchange. The following are some of the services offered by Investment banks and are as follows;

1. Advising on corporate finance services such as raising of finance, bonds and equity, private equity, restructuring of real estate financing, project finance among others.
2. Advice corporate restructuring (financial, management and business restructuring), mergers, acquisitions and takeovers,
3. Acting as financial intermediaries in capital markets, trading, information producing.
4. Evaluating performance of entrepreneurs projects on matters such as alignment with the strategy, possibility to influence development, matters management, profit taking point and exit points options.
5. Advising on public private partnerships.
6. Underwriting of securities and other specialized services.

Applicable Laws

The laws that govern investment banks and its functions in Kenya include:

• The Kenyan Capital Markets Act Cap 485.
• Part V of the Capital Markets (Licensing Requirements) (General) Regulations, 2002.
• The Capital Markets (Corporate Governance) (Market Intermediaries) Regulations, 2011.
• Guidelines on Corporate Governance Practices by Public Listed Companies.
• Guidelines on Financial Resource Requirements for Market Intermediaries.
• Central Bank of Kenya Act.
• The Banking Act cap 488.

Matters to Consider When Starting an Investment Bank

1. Requirements for obtaining of licenses to operate as an investment bank, obtained from the Regulating Authority.
2. Registering and incorporating a company to carry out the business of investment banking and the necessary requirements of incorporating a company.
3. Identifying the sources of starting capital required which is 250 Million in shareholders’ funds and liquid capital of 30 Million or 8% of liabilities (whichever is higher). 

Requirements For Obtaining The Licence To Start An Investment Bank In Kenya

1. Application form- duly filled and executed in duplicate (Form 1)
2. Certified copy of the Certificate of Incorporation.
3. Certified Copy of the Memorandum and Articles of Association.
4. Relevant accounts and funding- paid up share capital, liquid capital, shareholders’ funds.
5. Evidence of financial capability or investment capital of a minimum of Kshs. 250 Million in cash or portfolio of securities and listed shares.
6. Business Plan with details of the management structure; directors, chairman, company secretary; shareholding structure as stipulated under section 29(5) of the Act; Directors Declaration; name and competencies of the chief executive, 3 years financial projections, operating IT system, external auditor, details of premises, details of staff.
7. A Board Charter 
8.  Clear separation of roles and responsibilities of the chairman and chief executive.
9. Have a policy for appointment of employees

   10.  A Risk Management framework in place

    11. Two (2) letters of business reference

    12. One (1) letter of bank reference

    13. Comprehensive Curriculum Vitae for directors and key personnel

     14. Duly filled and executed Fit & Proper Form for directors and key personnel

     15. Certified copies of the Police Clearance Certificate for directors and personnel

     16. An Insurance Policy

     17. Application Fees

How We Can Help

As Imperial Registrars we shall be pleased to assist you or your company in the registration and undertaking relevant compliance measures with respect to starting an Investment Bank in Kenya. Kindly get in touch with us via (info@imperialregistrars.co.ke) for further assistance.