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The Capital Markets Authority (CMA) has directed Cytonn Asset Managers Limited, a licensed fund manager, to immediately stop signing-up new clients until it changes the names of its business and its regulated products.
In a statement, CMA says the move seeks to enhance investor protection and promote investor confidence in the integrity of capital markets and is in line with the provisions of the Capital Markets Act section 11.
CMA CEO Wyckliffe Shamiah CMA said the change will effectively eliminate any confusion caused by the similar name used by the unlicensed entity Cytonn Investments Management Limited.
Shamiah added that the move will also enable the public to distinguish between the entity and products that are regulated by CMA, from the unlicensed entity offering unregulated products.
“This will enable the public to clearly distinguish between the entity and products that we regulate from the unlicensed entity offering unregulated products and thus facilitate better decision-making”
The directive to stop onboarding clients will be in effect for a period of 3 months or such a time when the fund manager will fully comply with the directive to change the names of its business and its regulated products.
This comes months after the Authority cautioned investors against investing through unlicensed and unapproved entities, specifically the Cytonn Investment Group.
In June, the Authority confirmed that Cytonn Investments had not been licensed, neither had it been approved to operate.
Shamiah, advised investors to only invest through licensed and approved entities that offer and promote regulated products, to enable them get protection offered by the Authority through the capital markets legal and regulatory framework.
“Investors who invest in unregulated products offered or promoted by unlicensed and unapproved entities risk loss of their investments with no recourse afforded to them under the capital markets regulatory framework,” he said.
At the time, Shamiah said the Authority through its Capital Markets Fraud Investigation Unit (CMFIU), which is the Police Unit attached to the Capital Markets Authority, had been investigating the issue for criminal violations for investors in the Cytonn High Yield Solutions (CHYS).
Licensed Cytonn products include Cytonn Asset Management Limited, which is licensed as a Fund Manager managing the following regulated funds: Cytonn Money Market Fund; Cytonn Balanced Fund; Cytonn Equity Fund; Cytonn Africa Financial Services Fund; Cytonn Money Market Fund (USD); and Cytonn High Yield Fund.
“So far CMA has not received any complaints on these regulated products,” the Authority said at the time. – capitalfm.co.ke