The Capital Markets Authority (CMA) has directed Cytonn Asset Managers Limited, a licensed fund manager, to stop signing new clients immediately.
This is until it changes the names of its business and related products. The regulator says the move seeks to enhance investor protection and confidence in the integrity of the capital markets.
The Authority said the change of name of the licensed fund manager and the regulated products it offers to the public will eliminate confusion caused by similar products provided by the unlicensed Cytonn Investments Management Limited.
According to CMA Chief Executive Wycliffe Shamiah, the directive has been taken to enable the investing public to distinguish between regulated products and those from the unregulated entity.
@CMAKenya has directed Cytonn Asset Managers Ltd (a licensed fund manager) @cytonnasset to change its business name and the name of the regulated products or stop signing up any new clients. Read the full statement here: https://t.co/86sK7pohAo
— Capital Markets Authority Kenya (@CMAKenya) August 6, 2021
The period for Cytonn Asset Managers to stop onboarding clients will be in effect for three months or when the fund manager will fully comply with the directive to change names of the business and its regulated products.
According to Abubakar Hassan, CMA’s Director of Market Operations, investigations on Cytonn revealed that the whole activity it was involved in resembles fund management.
“They have an entity that does real estate and another one that collects money from the public to fund the real estate business. There is a mismatch because cash collected from the public is short-term ( six months to one year) while real estate investment is long term,” said Hassan in a recent interview.