DownloadCapital Markets (Investment-Based Crowdfunding) Regulations – Summary through Q&A

The Republic of Kenya, through one of its regulatory agencies, the Capital Markets Authority (CMA), is in the process of regularising crowdfunding through the draft Capital Markets (Investment Based Crowdfunding) Regulations, 2021. The regulation is timely if well-thought-out.

There has been a grey area concerning whether corporate crowdfunding by a private limited company resulted in a model of soliciting funds beyond the scope of a private placement, which turns the status of a corporate entity from a private limited company to a public limited company. The Capital Markets Act and Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002 provide more regulatory aspects of a private placement.

The activities that go on during crowdfunding result in interacting with various areas of law; hence, the need to look into how the regulation is going to affect crowdfunding activities – the implication not only affects the businesses but also how Software as a Service (SaaS) or Platform as a Service (PaaS) will be developed. In that regard, we share our Q&A, subject to our terms and conditions, on the draft Capital Markets (Investment Based Crowdfunding) Regulations, 2021.

Domain Name plays an essential role in many businesses – and scammers – today. The purpose of the domain may include online presence, trademark, custom email address, public relations, control on possible domain misuse by third parties, domain hoarding/squatting, domain hijacking, phishing, among others. Practices like hoarding or hijacking are prevalent in many developed countries and slowly creeping into developing countries, either effected by people in developed states or ingenious people in developing countries.

Kenya citizens, among other African citizens, need to understand how to interact with a domain name – while the remark might seem to look down upon African citizens, it is essential to note that the developed countries are equally facing similar challenges regardless of the developed infrastructure and communication channels. As a result, Ong’anya Ombo Advocates LLP will provide 101 Guide Note on interacting with domains and related fields.

The Office of the Data Protection Commissioner, under its first officeholder Immaculate Kassait, prepared Regulations that will effect the purpose of the Data Protection Act, 2019 of the laws of Kenya. The Data Protection Regulations are Data Protection: (General) Regulations, (Registration of Data Controllers and Data Processors) Regulations, and (Compliance and Enforcement) Regulations, 2021. We have gone through the proposed Data Regulations and share our comments for purposes of enabling the Data Protection Commissioner to have any easy way to implement the Data Regulations in Kenya.

On 27th August 2010, the current Constitution of Kenya was promulgated, hence, repealing the previous Constitution (also referred to as the Independence Constitution). The purpose of the Constitution was to protect, guide, address or provide mechanisms that the State and its citizens should interact, not to mention addressing historical activities that breached or violated other people’s rights, and, in this case, matters falling under acquisition and use of land. The Constitution is prospective in nature but in certain instances, it applies retrospectively more so when addressing issues of land injustices.

The ideology of establishing Bitcoin (read cryptocurrency) has been in place prior to the year 2008 when the first stable cryptocurrency was conceptualized by the mysterious person or group of persons known as Satoshi Nakamoto. However, in this paper, the bone of contention is what impact does cryptocurrency has on the implementation of laws or regulations in various countries. As a result of cryptocurrencies, there have been ample questions arising from the Securities/ Capital Markets oriented bodies, Central Banks, and or Government Tax authorities. It is imperative to note that the aspect of Blockchain Technology and Cryptocurrencies pose startling questions towards Governments that have been reluctant to catch up with the Technological and Innovation trends that are taking place day-in-day-out.

In an Employer-Employee Relationship (EER), there are undoubted possibilities of termination of the EER for various reasons, which include:
• Poor Performance
• Gross Misconduct
• Insolvency of the Company
• Restructuring of the Company
• Social Factors
• Political Factors

The Guide focuses on GDPR and Cybercrimes Act

The Competition Act No. 12 of 2010 (the “Act”) promotes and safeguards various entities or individuals in the Republic of Kenya. Considering that, the operation of the Act, through its respective governing body, is expected to protect consumers from unfair and misleading market conduct. In this newsletter, we are addressing Restrictive Trade Practices as projected by the Act.

The growth and reputation earned by the Capital Markets Authority (CMA) of Kenya led to the CMA working towards opening its bourse to other countries across the globe. Initially, prior to making this step, the Republic of Kenya had established a Memorandum of Understanding between itself and the Eastern African Countries as the East African Securities Regulatory Authorities on matters pertaining to cross-listing. In this write-up, the focus will be on the recently adopted Guidelines that will be used for purposes of companies in the Republic of Kenya that wish to cross-list in foreign bourse and foreign companies that would like to tap into the Kenyan market by cross-listing. All these have been made possible as a result of the Policy Guidance Note on Global Depositary Receipts and Global Depositary Notes in Kenya (Policy Guide Note/ PGN) that came into effect in 2017.

Party Primary refers to the process undertaken by a political party to elect or select its candidates for an election. Essentially, a political party has the liberty to elect or select a candidate who will run for a particular public office. Also, during the party nomination of party lists, a political party elects or selects its candidate for party lists. Party primaries and nominations of party list must be conducted in a democratic, free, and fair; provide equal opportunities for all eligible candidates; not discriminate against any qualified candidate; inclusive and participatory; open, transparent and accountable; credible; and peaceful. It is important to remember that Regulation 2 provides that a political party may opt to select its candidate for an election or party lists.

The Government of Kenya regulates gambling activities through the Betting, Lotteries, and Gaming Act as the primary legislation. There is a proposed legislation known as Gaming Bill, 2019 that will repeal the BLGA, if it becomes law. The Gaming Bill, 2019 will have immense impact in the gambling industry

The Companies Act, 2015, as amended in 2017, requires that companies owned through a nominee shareholder disclose the beneficiaries to the Registrar of Companies. The Companies (Amendment) Act No. 28 of 2017 defines a beneficial owner as a natural person who ultimately owns or controls a legal person or arrangements or the natural person on whose behalf a transaction is conducted, and includes those persons who exercise ultimate effective control over a legal person or arrangement.

FIFA: Football – or also known as soccer in other parts of the world – is a special and most followed sports activity that has a rich history and developed progressively to appreciate modern factors that influence its trajectory. Therefore, like any other sound activity to human beings, there was – and remains to be a need – to regulate football affairs pertaining to the organization and management of the activity. In this Special Issue, the Fédération Internationale de Football Association (FIFA) Regulations on the Status and Transfer of Players will be partly addressed herein.

Information Communication Technology is a result of continuous innovation that has resulted in a need to access immense data for purposes of companies or individuals conducting both legal and illegal activities. All over the world, there has been an intensive focus on how data is being harvested and used, which has resulted in various laws, directives, or regulations. Recently, the European Union implemented the General Data Protection Regulations (GDPR); California, USA, has the California Consumer Privacy Act; the Republic of Kenya has Data Protection Act, 2019, among others. In this discussion, the content will be about the Data Protection Act, 2019 (DPA) that was assented to law by President Uhuru Muigai Kenyatta on November 08, 2019. The DPA actualises Article 31 (c) and (d) of the Constitution for purposes of protecting the data of the persons whom the laws of Kenya apply. The DPA adopts an immense character from the GDPR, which has had tremendous traction since it was approved on April 27, 2016, and came to effect on May 25, 2018, and the repealed Data Protection Directive 95/46/EC.

It is imperative to note the DPA stretches to adopt practices based on Commission Decision 2000/520/EC (popularly known as the Safe Harbour Regulations) that was succeeded by the Privacy Shield before being rendered nugatory by the GDPR.

For purposes of this Question & Answer, focus will be towards the Functions of the Data Commissioner, Part II; Registration of Data Controllers and Data Processors, Part III; Principles and Obligations of Personal Data Protection, Part IV; Grounds for Processing of Sensitive Personal Data, Part V; Transfer of Personal Data, Part VI; Exemptions, Part VII; and Enforcement Provisions, Part VIII.

Energy & Oil Law: The Energy Act No. 01 of 2019 defines energy as any source of electrical, mechanical, hydraulic, pneumatic, chemical, nuclear, or thermal power for any use; and includes electricity, petroleum, coal, geothermal, biomass, and all its derivatives, municipal waste, solar, wind and tidal wave power. Energy & Oil Law, in the twenty-first century, attracts a number of topical issues that touch on climate change, models of revenue distributions, the expectation of positive development, and how it will affect the locals, County and National Governments, at least as per the structure of the Republic of Kenya (Kenya). The Government of Kenya (the Government) passed and assented the Energy Act No. 01 of 2019 (Energy Act) that consolidates all the laws relating to energy in Kenya. Energy & Oil Law Lawyer

Energy & Oil Law: The Constitution, under the Fourth Schedule, provides for functions of the County and National Government. The National Government has priority rights on matters about energy. Besides, while the exploration of various energy resources might result in revenue generation for the National Government, there is the need for equitable distribution of the revenue or benefits emerging from the exploration of the energy resources. Recently, in Save Lamu & 5 others v National Environmental Management Authority (NEMA) & another [2019] eKLR, the Petitioners raised various issues, including the aspect of how the project would negatively impact the environment. Importantly, the decision was in favour of the Petitioners. As a result, it is evident that energy exploration not only
results in economic growth but can also ruffle a person’s feathers. Energy & Oil Law Law Frim

Energy & Oil Law: The content herein is a summary of the Energy Act, which is meant to give relevant highlights on the new developments in regulating energy and to what extent does the Energy Act applies.

The Domain Name System (DNS) enables human beings to access the internet. Disputes in domain names may arise between registrants and third parties who believe that they have rights over the domain, similarity of the domain with another person’s registered trademarks, cybersquatting, combosquatting, or using the domain name in a manner that disrupts another person’s business with the intention of profiting from someone’s trademark.

The Internet Corporation for Assigned Names and Numbers, (ICANN) is a private non-profit organisation, formed to control web domain name, registration, and management. Specifically, it plays a very important role in the internet infrastructure. It is responsible for Internet Protocols (the “IP”) address space allocation, Domain Name System (DNS) management, protocol parameter assignment, address space allocation and root server system management functions. It also helps in coordinating the Internet Assigned Numbers Authority (IANA) whose functions are vital to the continued operations of the DNS as well as overseeing a dispute resolution mechanism over domain names.

The disputes are resolved using the Uniform Domain Name Dispute Resolution Policy (UDRP) which is applicable across all generic Top-Level Domains (the “gTLDs”) and in some country code Top-Level Domains (the “ccTLD”) as well as the traditional domain names such as .com, .net, .org. That is, if for instance, a dispute arises regarding a domain name, the resolution of the dispute is accomplished through proceedings conducted under the UDRP by the ICANN. These proceedings are referred to as UDRP Proceedings.

The UDRP process was mainly developed to provide an efficient international means to resolve disputes through a stream-lined complaint decision format.

Corporate Structuring for Local and Foreign New Entrants
• Limited Liability Company
• Public Limited Company
• Unlimited Liability Company
• Limited Liability Guarantee
• Limited Liability Partnership
• Community-Based Organisations
• Branch
• Sole Proprietorship
• Non-Governmental Organisations
• Trusts
• Societies
General Information on Corporate Structures

Corporate Tax & Dividends Tax
Indirect Taxes
Holding Company Structures
Internal Financial Relationships
Licenses, Permits, and Approvals
Foreign Direct Investment

Ong’anya Ombo Advocates LLP is a full-service law firm providing dedicated and curated legal services to Kenyan and International Clients. Some of our key areas of practice are Corporate Law, Corporate Immigration, Individual Immigration, Tax Law, and Cross-Border Practice. The sub-categories under these fields include corporate (re)structuring, tax (re)structuring, development of an international network of companies, transfer pricing, intellectual property, fintech, among others.

Foreign Companies – New Entrants (NE) – looking forward to investing in Kenya need to understand the new environment that the investors’ will be interacting with for several years before securing some of the services rendered by professional service providers. In that regard, we provide information on such essential details that may matter to an investor.