How to start an Investment Bank in Kenya


An investment bank is a non-deposit taking institution licensed by the Authority to advise on offers of securities to the public or a section of the public, take-overs, mergers, acquisitions, corporate restructuring involving companies listed or quoted on a securities exchange, privatization of companies listed or to be listed on a securities exchange or underwriting of securities issued or to be issued to the public, and to engage in the business of a stockbroker or dealer.

Investment banking involves the raising of debt and equity securities for corporations and governments which involves origination, underwriting, and placement of securities in money and capital markets for corporates or government issuers. Investment banking also includes corporate finance activities such as advising on mergers and acquisitions as well as advising on the restructuring of existing corporations.

The typical services offered by the investment banking firms in Kenya

The main purpose of an investment bank is advisory work. To advice companies on the right way to raise money: sell part of their company (equity) for cash, take on debt, sell an asset, or most commonly, buy another company or merge with it. Some part trading public securities (stocks & debt instruments) on behalf of clients. Some may manage money on behalf of clients, investing it and taking a share of the assets and/or gains as a management fee. But it’s the advisory piece that’s the core of the bank. Typical services include:

  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 specialised services.


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

  1. The Kenyan Capital Markets Act Cap 485 and its corresponding regulations and guidelines.
  2. Part V of the Capital Markets (Licensing Requirements) (General) Regulations, 2002
  3. The Capital Markets (Corporate Governance)(Market Intermediaries) Regulations, 2011
  4. Guidelines on Corporate Governance Practices by Public Listed Companies
  5. Guidelines on Financial Resource Requirements for Market Intermediaries
  6. Central Bank of Kenya Act
  7. The Banking Act cap 488

The Capital Markets Authority (CMA) is a statutory agency under the Capital Markets Act Cap 485A that establishes it and its functions also. It regulates and develops an order and efficiency in capital markets in Kenya with the view to promoting market integrity and investor confidence.

It regulates among other functions; licensing and supervising all the capital market intermediaries; compliance with the legal and regulatory framework by all market participants; public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting investor education and public awareness; and Protecting investors’ interest.

Important matters to consider before starting an investment bank

  1. Requirements for obtaining of licences 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 such as preparing the Memorandum, Share Capital requirements, Business name, Registered office premises, Directors and Secretary details among others.
  3. Identifying sources of starting capital-  The funds required to start an investment bank are Kenya Shillings 250 Million in shareholders’ funds and liquid capital of Kenya Shillings 30 Million or 8% of liabilities (whichever is higher). Therefore some of the options one can explore when sourcing for start-up capital could be;
  4. personal savings and sale of personal stocks and properties
  5. investors and business partners
  6. Sell shares to interested investors
  7. loan from your bank/banks, saccos, other financial institution
  8. applying for business grants and seed funding from donor organizations and angel investors
  9. Source for soft loans from your family members and your friends.
  • Choosing a Suitable Location for your Investment Banking Firm- a location that is prone to both human and vehicular traffic and a location that is at the epicenter of a business district if indeed you want to attend to loads of clients and maximize profits from the business.
  • Preparing a Business Plan with the 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.
  • Hiring competent staff to run and manage the business Chief Executive Officer or President, an Admin and Human Resource Manager, Fund Manager/Portfolio Manager, Risk Manager, Chief Financial Officer (CFO)/Chief Accounting Officer (CAO), Business Development Executive/marketing Executive, Customer Service Officer or Front Desk Officer, and Accountant.
  • Carrying out feasibility studies and market research- An analysis of the existing investment banks in the region, economic analysis, niche areas, level of competition.
  • Broad knowledge in the financial services industry- banking, wealth management services, security dealing among others.
  • Professionalism, integrity, diligence and a good grasp of how investment works on a global platform.
  1. Identifying possible threats and challenges you will face when starting an investment banking and securities dealing services business. These may be a general damaged reputation on investment banking such as mortgage defaults, training and competence of employees and management, contraction of investment banking activities, financial stability of the region and market indiscipline of investors and competition.
  1. Considering the best legal entity and official name to register – whether a general partnership, or limited liability company.
  1. Selecting a good insurance policy cover especially one with financial reinsurance, general insurance, risk, credit, deposit, health, liability, lenders mortgage and payment protection.
  2. Acquiring necessary professional certification to run an investment bank eg. CIB, CFA, MBA
  1. Acquisition of necessary infrastructure and technology such as an office space, computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves), customized investment banking and securities dealing services software and social media management software applications and other financial related software apps.
  1. Marketing and advertising strategies to attract corporate clients and business dealings. Also create a compelling personal and company’s profile. Prepare engaging brochures, advertise in financial magazines, media, investment expos, seminars, business fairs, official website, banners and billboards.

The Requirements for obtaining the licence to start an Investment Bank in Kenya- CMA CHECKLIST


  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 (Objects)
  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 that-   
    1. confirms the board responsibility for adoption of strategic plans, monitoring, operational performance, the determination of policies and processes that ensure the intermediary’s risk management and internal controls.
    1. reserves specific powers to itself and delegates other matters to the management of a market intermediary
    1. provides a code of conduct that addresses conflict of interest relating to directors and management which shall be regularly reviewed and updated as necessary;
    1. identifies the key risk areas that require regular monitoring.
  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- the chief executive officer, chief financial officer, chief compliance officer, secretary to the Board, chief internal auditor or any manager
  14. Duly filled and executed Fit & Proper Form for directors and key personnel
  15. Valid certified copies of the Police Clearance Certificate for directors and key personnel
  16. An Insurance Policy
  17. Application Fees (Kshs. 2,500)

Examples of Investment banks


JP Morgan

What is criteria of suitability CMA considers in determining whether to grant a licence?

  • The financial status or solvency of the person
    • Academic or other qualifications or experiences that are relevant to the functions that the person shall perform
    • The status of any other licence or approval granted to the person by any financial sector regulator
    • A person’s ability to carry on the regulated activity competently, honestly and fairly
    • That reputation, character, financial integrity and reliability of an individual or in the case of a company, its chairperson, directors, chief executive, management and all other personnel including all duly appointed agents, and any substantial shareholder of the company.

If you would like to start an Investment Bank in Kenya, please contact us on or by phone +2547097474555.

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