Prospectus Disclaimer Notice (Kenya)
PROSPECTUS DISCLAIMER NOTICE
Capital Markets Act Cap. 485A s.31 | Companies Act No. 17 of 2015 | CMA Public Offers Regulations 2002
Issuer: [Issuer Name] (BRS No.: [Issuer BRS Number])
Registered office: [Issuer Address]
Date of Prospectus: [Prospectus Date]
Offer type: [Offer Type]
Securities: [Securities Description]
Offer period: [Offer Open Date] to [Offer Close Date]
1. CAPITAL MARKETS AUTHORITY APPROVAL
1.1 This Prospectus has been approved by the Capital Markets Authority (CMA) of Kenya pursuant to Section 31 of the Capital Markets Act Cap. 485A and the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002.
1.2 CMA Approval Reference: [CMA Approval Reference]. CMA Approval Date: [CMA Approval Date].
1.3 CMA APPROVAL DOES NOT CONSTITUTE THE CMA'S RECOMMENDATION OR ENDORSEMENT OF THE ISSUER OR THE SECURITIES DESCRIBED HEREIN, NOR DOES IT GUARANTEE THE ACCURACY OR COMPLETENESS OF THE INFORMATION IN THIS PROSPECTUS. THE CMA ACCEPTS NO RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS OR FOR ANY STATEMENT MADE OR PURPORTED TO BE MADE IN CONNECTION WITH THE OFFER.
1.4 Where the securities are to be listed, the Nairobi Securities Exchange (NSE) has admitted the securities to trading on the [NSE Listing Segment]. Admission to trading on the NSE does not constitute the NSE's recommendation, endorsement, or guarantee of the Issuer's performance.
2. DIRECTORS' RESPONSIBILITY STATEMENT
2.1 The directors of [Issuer Name], whose names appear in this Prospectus — [Directors List] — accept individual and collective responsibility for the accuracy and completeness of the information contained in this Prospectus.
2.2 To the best of the knowledge and belief of the directors (having taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information.
2.3 This responsibility statement is made pursuant to Section 39 and the Third Schedule to the Companies Act No. 17 of 2015 and the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002.
3. FORWARD-LOOKING STATEMENTS
3.1 Certain statements in this Prospectus constitute "forward-looking statements". Forward-looking statements include all statements that are not historical facts and include, without limitation, statements regarding the Issuer's future plans, business strategies, projected revenues, earnings forecasts, capital expenditure programmes, market share targets, and expansion objectives.
3.2 Forward-looking statements involve known and unknown risks, uncertainties, and other factors — many of which are outside the Issuer's control — that may cause the Issuer's actual results, performance, or achievements to differ materially from any future results, performance, or achievements expressed or implied by the forward-looking statements.
3.3 FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE. PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS.
3.4 The Issuer undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this Prospectus, except to the extent required by the Capital Markets Act Cap. 485A or the NSE Listing Requirements.
4. INVESTMENT RISK WARNING
4.1 INVESTMENT IN SECURITIES INVOLVES RISK. THE VALUE OF SECURITIES CAN FALL AS WELL AS RISE. INVESTORS MAY LOSE SOME OR ALL OF THEIR INVESTED CAPITAL. PAST PERFORMANCE OF THE ISSUER IS NOT A RELIABLE INDICATOR OF FUTURE RESULTS.
4.2 Prospective investors should carefully read the entire Prospectus, including the Risk Factors section, before making an investment decision. If in doubt, prospective investors should seek independent financial, legal, or investment advice from a CMA-licensed investment adviser.
4.3 This Prospectus does not constitute financial or investment advice and should not be relied upon as such.
5. RESTRICTED DISTRIBUTION
5.1 This Prospectus is issued and approved for distribution to persons in Kenya pursuant to the Capital Markets Act Cap. 485A and the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002.
5.2 This Prospectus does not constitute an offer to sell or an invitation to subscribe for securities in any jurisdiction in which such offer or invitation would be unlawful. Recipients of this Prospectus in jurisdictions outside Kenya are responsible for compliance with applicable local securities laws. [Issuer Name] makes no representations regarding the lawfulness of the securities offer in any other jurisdiction.
5.3 This Prospectus may not be reproduced or distributed to any person without the prior written consent of [Issuer Name] and the transaction adviser [Transaction Adviser], except as permitted by the Capital Markets Act Cap. 485A.
6. TRANSACTION ADVISERS
Lead transaction adviser / sponsoring stockbroker: [Transaction Adviser]
Legal adviser (Kenyan counsel): [Legal Adviser]
Reporting accountants / auditors: [Auditors Name]
Share registrar / paying agent: [Registrar Name]
6.1 The advisers named above have given, and have not withdrawn, their consents to the inclusion of their names in this Prospectus in the capacities stated.
6.2 No adviser named above accepts any responsibility for the accuracy or completeness of any information in this Prospectus other than in respect of the specific reports or opinions attributed to that adviser in the body of the Prospectus.
7. SUPPLEMENTARY PROSPECTUS
7.1 Pursuant to Section 33 of the Capital Markets Act Cap. 485A, the Issuer will publish a supplementary prospectus if any significant new matter arises, or if a material inaccuracy in this Prospectus is discovered, between the date of CMA approval and the closing of the offer period.
7.2 Investors who have subscribed before the supplementary prospectus is published will have the right to withdraw their subscription within the period prescribed by the CMA after publication of the supplementary prospectus.
This Disclaimer Notice forms part of the Prospectus dated [Prospectus Date] and must be read in conjunction with the full Prospectus.
Director (on behalf of the Board)
________________
Signature
Director
________________
Signature
Company Secretary
________________
Signature
What Is a Prospectus Disclaimer Notice (Kenya)?
A Prospectus Disclaimer Notice in Kenya sets out the grounds, deadline and required response for the matter it raises.
The Capital Markets Act Cap. 485A defines a prospectus as any document described as a prospectus, notice, circular, advertisement, or invitation that offers any securities for subscription or purchase to the public. The Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002 — made under the Capital Markets Act — set out the detailed form and content requirements for prospectuses, including mandatory disclaimer language addressing forward-looking statements, investment risk, reliance on information, and the role of the Capital Markets Authority in reviewing the prospectus.
The Capital Markets Authority (CMA) of Kenya, established under Section 5 of the Capital Markets Act Cap. 485A, is the statutory regulator responsible for licensing and supervising capital market participants, approving public offers of securities, regulating the Nairobi Securities Exchange (NSE) under the Capital Markets (Securities Exchange) Regulations 1994, and enforcing compliance with capital markets legislation. The CMA must approve a prospectus before it is published, and no person may issue an approved prospectus without the CMA's prior written consent endorsed on the document.
The Companies Act No. 17 of 2015 supplements the Capital Markets Act by imposing additional prospectus obligations on public companies incorporated in Kenya. Section 39 and the Third Schedule to the Companies Act No. 17 of 2015 prescribe the contents of a prospectus issued by a Kenyan company, including statements of directors' responsibilities, audited financial statements, and disclosure of material contracts. The Prospectus Disclaimer Notice addresses directors' responsibility for the accuracy of the information in the prospectus and limits reliance on forward-looking projections.
The Nairobi Securities Exchange (NSE) Listing Requirements — made under the Capital Markets Act and the NSE Rules — impose additional obligations on companies seeking to list securities on the Main Investment Market Segment (MIMS), the Growth Enterprise Market Segment (GEMS), or the Fixed Income Securities Market Segment (FISMS). Companies listing on the NSE must publish an approved prospectus or equivalent listing document, and the Prospectus Disclaimer Notice must comply with both the CMA regulations and the NSE Listing Requirements. The NSE Listings Committee reviews prospectuses before granting admission to trading.
The Kenya Information and Communications Act Cap. 411A and the Computer Misuse and Cybercrimes Act No. 5 of 2018 impose obligations on digital distribution of prospectuses — an issuer that publishes a prospectus on a website or distributes it by electronic means must confirm the digital disclaimer is clearly displayed and cannot be bypassed without acknowledgment.
The Securities and Investment Services Act provisions under the Capital Markets (Licensing Requirements) (General) Regulations 2002 require investment banks, stockbrokers, fund managers, and investment advisers licensed by the CMA to conduct suitability assessments before recommending securities to retail investors. A Prospectus Disclaimer Notice must therefore include a statement that the prospectus does not constitute personalised investment advice and that investors should seek advice from a CMA-licensed investment adviser before subscribing. The CMA's Investor Education and Public Awareness Guidelines encourage issuers to use plain language in disclaimer notices so that retail investors — including those accessing the Nairobi Securities Exchange (NSE) for the first time — can understand the risks involved.
The Competition Act No. 12 of 2010 administered by the Competition Authority of Kenya (CAK) may be relevant where a public offer or merger involves market concentration in a sector with competition sensitivity. Where a merger or acquisition requires CMA and CAK approval, the prospectus must disclose the regulatory status of each approval — whether granted, pending, or subject to conditions — and the Prospectus Disclaimer Notice should note that the offer is conditional on the receipt of all required regulatory approvals. Investors should be made aware that the offer may lapse or be modified if regulatory conditions are not met within the offer period.
The Data Protection Act No. 24 of 2019 administered by the Office of the Data Protection Commissioner (ODPC) imposes obligations on issuers and their advisers who collect personal data from investors in connection with a public offer — including names, identity numbers, KRA PINs, bank account details, and contact information submitted on application forms. The Prospectus Disclaimer Notice should include a data protection statement explaining how investor personal data will be processed, who will have access to it, how long it will be retained, and investors' rights under the Data Protection Act No. 24 of 2019 to access, correct, and request deletion of their personal data held by the issuer or share registrar.
When Do You Need a Prospectus Disclaimer Notice (Kenya)?
A Prospectus Disclaimer Notice in Kenya is required in every document that constitutes a prospectus or an offering document under the Capital Markets Act Cap. 485A, whether issued in connection with a public offer, a rights issue, a bond or sukuk issuance, or a listing on the Nairobi Securities Exchange.
A Prospectus Disclaimer Notice is needed when a Kenyan company makes a public offer of shares for the first time — an Initial Public Offering (IPO) — and issues a prospectus inviting the public to subscribe for shares. Section 31 of the Capital Markets Act Cap. 485A and the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002 require the prospectus to include prescribed disclaimer language approved by the Capital Markets Authority (CMA).
A Prospectus Disclaimer Notice is required when an already-listed company on the Nairobi Securities Exchange (NSE) issues new shares to existing shareholders through a rights issue and publishes a Rights Issue Circular or Information Memorandum. The NSE Listing Requirements and the CMA Public Offers Regulations apply to rights issue documents in the same way as IPO prospectuses.
A Prospectus Disclaimer Notice is needed when a company, county government, or the National Treasury issues corporate bonds, infrastructure bonds, or government securities to the public through a public offer document. The Capital Markets (Debt Securities) Regulations and the Public Finance Management Act No. 18 of 2012 govern the disclosure framework for debt securities issued to Kenyan investors.
A Prospectus Disclaimer Notice is required when a fund manager licensed by the CMA under the Capital Markets (Collective Investment Schemes) Regulations 2001 issues an Information Memorandum or Offer Document for a unit trust, money market fund, or real estate investment trust (REIT) regulated under the Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations 2013.
A Prospectus Disclaimer Notice is needed when a start-up or growth company raises capital through a private placement that is not a public offer but where the offering document contains forward-looking financial projections, market forecasts, or investment return estimates that could be misleading if not properly qualified by appropriate disclaimer language consistent with CMA guidance on investor protection.
A Prospectus Disclaimer Notice is needed when a county government or a county government-owned enterprise issues an infrastructure bond to Kenyan retail and institutional investors to finance capital projects — roads, water systems, or public housing — under the Public Finance Management Act No. 18 of 2012. The offer document must comply with CMA disclosure requirements and include a disclaimer addressing the county government's fiscal capacity to service the bond and the risks associated with county government debt under the Public Finance Management (County Governments) Regulations 2015.
A Prospectus Disclaimer Notice is required when a Kenyan company undertaking a secondary offering — selling existing shares held by major shareholders rather than issuing new shares — publishes an offer for sale document inviting the public to purchase those shares. The CMA treats an offer for sale document as equivalent to a prospectus for regulatory purposes, and the full disclaimer framework under Section 31 of the Capital Markets Act Cap. 485A applies.
A Prospectus Disclaimer Notice is needed when a real estate developer registers a development REIT (D-REIT) or an income REIT (I-REIT) under the Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations 2013 and issues units to the public. The CMA requires the REIT's Information Memorandum to contain full prospectus-standard disclosures including the disclaimer, the trustee's acceptance of responsibility for the trust deed, and the independent property valuation report prepared by a VRB-registered valuer under the Valuers Act Cap. 532.
What to Include in Your Prospectus Disclaimer Notice (Kenya)
A Kenya Prospectus Disclaimer Notice compliant with the Capital Markets Act Cap. 485A s.31 and the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002 must contain the following essential elements.
CMA Approval Statement: A clear statement that the prospectus has been approved by the Capital Markets Authority (CMA) of Kenya pursuant to the Capital Markets Act Cap. 485A and the applicable regulations. The CMA approval reference number and the date of approval must be stated. The disclaimer must note that CMA approval does not constitute the CMA's endorsement of the issuer or the securities, nor does it guarantee the accuracy of the information in the prospectus.
Nairobi Securities Exchange Admission: Where the securities are to be listed on the Nairobi Securities Exchange (NSE), a statement that the NSE has admitted the securities to trading on the relevant market segment — MIMS, GEMS, or FISMS — and that admission to trading does not constitute NSE's endorsement of the investment.
Directors' Responsibility Statement: A statement signed by the issuer's directors (or their duly authorised representatives) accepting collective and individual responsibility for the accuracy and completeness of the information in the prospectus, as required by Section 39 and the Third Schedule to the Companies Act No. 17 of 2015. Directors confirm they have taken all reasonable care to confirm the prospectus contains no material misstatement or omission.
Forward-Looking Statements Disclaimer: A clearly delineated disclaimer that statements in the prospectus about the issuer's future plans, projections, expected revenue, earnings forecasts, market share targets, or expansion strategies are forward-looking statements that involve known and unknown risks, uncertainties, and other factors outside the issuer's control. Forward-looking statements are not guarantees of future performance and actual results may differ materially. Investors are cautioned not to place undue reliance on these statements.
Investment Risk Warning: A prominent risk warning — consistent with CMA investor protection guidance — stating that investment in securities involves risk, that the value of securities can fall as well as rise, that past performance is not a reliable indicator of future results, and that investors may lose some or all of their capital. For bonds and fixed-income securities, a statement that the issuer's ability to service interest and principal obligations depends on its financial condition, which may change adversely.
Restricted Distribution Notice: A statement specifying the jurisdictions in which the prospectus is authorised for distribution. The Capital Markets Act Cap. 485A applies to offers made to persons in Kenya. Where securities are offered to persons outside Kenya, the disclaimer must note that the prospectus does not constitute an offer in any jurisdiction where the offer would be unlawful, and that recipients in foreign jurisdictions are responsible for compliance with local securities laws.
No Reliance on Third-Party Information: A disclaimer that the issuer does not accept responsibility for information in the prospectus sourced from third parties — including market research firms, industry bodies, government agencies, and publicly available data — other than to state it has been accurately reproduced from the stated sources. Investors should conduct their own due diligence.
Updating Obligation: A statement of the issuer's obligation to publish a supplementary prospectus under Section 33 of the Capital Markets Act Cap. 485A if any significant new matter arises — or a material inaccuracy in the original prospectus is discovered — between the date of approval and the closing of the offer.
Governing Law: The disclaimer is governed by the laws of Kenya, including the Capital Markets Act Cap. 485A, the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002, and the Companies Act No. 17 of 2015. The forms-legal.com Kenya Prospectus Disclaimer Notice template incorporates all mandatory CMA and NSE compliance elements required for a public offer or listing in the Kenya capital markets.
Data Protection Statement: A statement complying with the Data Protection Act No. 24 of 2019 explaining how investor personal data collected via application forms will be processed by the issuer, share registrar, and transaction advisers; the legal basis for processing; data retention periods; and investors' rights under the Data Protection Act to access, rectify, and erase their data. The Office of the Data Protection Commissioner (ODPC) enforces compliance with the Act and may impose penalties for unlawful processing of investor data.
Offer Conditions and Minimum Subscription: A clear statement of the conditions to which the offer is subject — including minimum subscription levels (typically 80%–100% of the offer size for the offer to proceed), regulatory approvals required, and the consequences of the offer not reaching the minimum subscription. The CMA's Public Offers Regulations require the issuer to refund subscription monies within a specified period if the offer lapses due to under-subscription. The forms-legal.com Kenya Prospectus Disclaimer Notice template incorporates all CMA-mandated disclaimer elements for IPOs, rights issues, bond offers, and collective investment scheme offer documents under the Capital Markets Act Cap. 485A.
Under the Companies Act No. 17 of 2015, the Registrar of Companies at the Office of the Attorney General maintains the register of Kenyan companies. Section 3 of the Law of Contract Act (Cap. 23) governs contractual obligations. The Competition Authority of Kenya (CAK) enforces the Competition Act No. 12 of 2010. The Kenya Revenue Authority (KRA) administers corporate tax under the Income Tax Act (Cap. 470). The High Court of Kenya has unlimited original jurisdiction under Article 165 of the Constitution of Kenya 2010.
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}Frequently Asked Questions
The Capital Markets Authority (CMA) of Kenya, established under Section 5 of the Capital Markets Act Cap. 485A, is the statutory regulator responsible for reviewing and approving prospectuses before any public offer of securities in Kenya. Under Section 31 of the Capital Markets Act Cap. 485A and the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002, no person may issue a prospectus or equivalent offering document to the Kenyan public without first obtaining the CMA's written approval. The CMA's review process focuses on ensuring that the prospectus makes adequate disclosure of all material information relevant to investors' decision-making — including audited financial statements for at least three financial years, details of material contracts, directors' biographies and shareholdings, use of proceeds, risk factors, and the terms of the securities offered. CMA approval confirms regulatory compliance with the disclosure framework but does not constitute the CMA's recommendation or endorsement of the issuer or the investment. The approved prospectus must bear the CMA approval stamp, reference number, and approval date before publication.
Issuing a misleading or fraudulent prospectus in Kenya carries serious civil and criminal consequences under the Capital Markets Act Cap. 485A, the Companies Act No. 17 of 2015, and the Penal Code Cap. 63. Under Section 34 of the Capital Markets Act Cap. 485A, any person who makes a false or misleading statement in a prospectus with intent to induce another person to subscribe for or purchase securities commits an offence punishable by imprisonment of up to seven years or a fine of up to KES 1,000,000, or both. Directors who signed the prospectus are personally liable under the Companies Act No. 17 of 2015 for losses suffered by investors who subscribed in reliance on materially false or misleading statements or omissions, unless the directors can prove they had reasonable grounds to believe the statements were true. The CMA has power under Section 12 of the Capital Markets Act Cap. 485A to investigate, impose civil penalties, and revoke licences of capital market participants involved in prospectus fraud. Investors who suffered losses may sue for rescission of the subscription agreement and return of subscription funds, or for damages under the general law of tort for deceit or negligent misrepresentation.
Not all securities offerings in Kenya require a full CMA-approved prospectus under the Capital Markets Act Cap. 485A. The Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002 exempt certain offers from the full prospectus regime, including: offers made exclusively to institutional investors (such as commercial banks, insurance companies, fund managers, pension funds, and SACCOs with prescribed minimum assets); offers to a limited number of sophisticated investors (typically fewer than 100 persons); offers of securities with a minimum denomination of USD 10,000 or equivalent in KES, targeting high-net-worth individuals; rights issues to existing shareholders of listed companies following simplified disclosure procedures; and offers of government securities (Treasury Bills and Treasury Bonds) issued by the National Treasury under the Public Finance Management Act No. 18 of 2012, which are administered by the Central Bank of Kenya as fiscal agent. Even where a full prospectus is not required, an offering memorandum or term sheet must still contain appropriate disclaimer language consistent with CMA investor protection principles to limit the issuer's liability for forward-looking statements and to satisfy anti-fraud provisions of the Capital Markets Act.
A private placement of securities in Kenya — defined as an offer to a limited number of sophisticated or institutional investors, rather than the general public — does not require a full CMA-approved prospectus under the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002. However, the offering document used in a private placement — commonly called an Information Memorandum or Private Placement Memorandum (PPM) — must still contain adequate risk disclosures, financial information, and disclaimer language to protect the issuer from liability under the anti-fraud and misrepresentation provisions of the Capital Markets Act Cap. 485A and the common law of misrepresentation as applied by the High Court of Kenya. The Capital Markets Authority (CMA) has issued guidance on private placements, and issuers are required to notify the CMA of a private placement within a prescribed period of completing the offer. The Prospectus Disclaimer Notice, properly adapted for a private placement context, reduces the risk that sophisticated investors can later claim they were misled by forward-looking projections or market forecasts that did not materialise.
For an Initial Public Offering (IPO) in Kenya, the issuing company must comply with both the Capital Markets Act Cap. 485A and the Companies Act No. 17 of 2015, which operate concurrently with overlapping prospectus disclosure requirements. The Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002 — made under the Capital Markets Act — prescribe the CMA-specific disclosure requirements for a public offer. The Companies Act No. 17 of 2015, specifically Section 39 and the Third Schedule, prescribes additional mandatory prospectus contents including: audited financial statements for at least the three financial years preceding the offer; details of material contracts and intellectual property; directors' interests and remuneration; details of any litigation or contingent liabilities; and the company's capital structure before and after the offer. The CMA review process effectively integrates both sets of requirements, and a prospectus approved by the CMA is treated as compliant with the Companies Act prospectus requirements. The Nairobi Securities Exchange (NSE) Listing Requirements add a third layer of disclosure obligations for companies seeking to list following the IPO, addressing corporate governance, free float requirements, minimum capital thresholds, and ongoing disclosure obligations after admission to trading.
A supplementary prospectus in Kenya is required under Section 33 of the Capital Markets Act Cap. 485A where, after a prospectus has been approved and published but before the closing of the offer period, the issuer becomes aware of a significant new matter that has arisen, or a material inaccuracy in the original prospectus, that would have been required to be disclosed in the original prospectus if it had been known at the time of approval. The supplementary prospectus must: state clearly that it is a supplement to the original approved prospectus; identify the specific new information or correction being disclosed; explain the significance of the new information for investors' investment decision; reproduce or incorporate by reference the original disclaimer and directors' responsibility statement, updated to cover the supplementary information; and obtain CMA approval before publication. Investors who subscribed or committed to subscribe before the supplementary prospectus was published have the right to withdraw their subscription within a prescribed period after the supplementary prospectus is published, and the issuer must notify subscribers of this withdrawal right. Failure to publish a supplementary prospectus when required exposes the issuer and its directors to civil liability for losses suffered by investors who subscribed without knowledge of the material new information.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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