The Capital Markets Authority has ordered Cytonn Asset Managers Limited, the regulated arm of Cytonn Investments to change the name of its products.
The latest move from the markets watchdog is aimed at eliminating confusion between Cytonn’s regulated and the unregulated products in the eyes of the investing public.
“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’, said CMA Chief Executive Wyckliffe Shamiah.
At the same time, the CMA has stopped Cytonn from onboarding new clients to its regulated products for a period of 3 months to conform with the capital markets regulator directive.
The directive to stop onboarding clients will be in effect for a period of three 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, added CMA.
In July CMA told Parliament that since 2016 it has sent Cytonn several reminders and held meetings asking them to move their illegal businesses into the regulated space without success.
Cytonn operated two funds—Cytonn High Yield Solutions (CHYS) and Cytonn Project Notes (CPN)—promising high rates of return from their real estate investments but failed to pay investors when the funds matured.
Cytonn, however, countered saying CHYS was structured as a private offer within the meaning of Regulation 21 of the Capital Markets (Securities) Regulation after consultations with the regulator.
Currently, CMA has authorized Cytonn Asset Management Ltd as a fund manager for the schemes Cytonn Money Market Fund, Cytonn Balanced Fund, and Cytonn Equity Fund.
Others are Cytonn Africa Financial Services Fund, Cytonn Money Market Fund and Cytonn High Yield Fund all of which the CMA has given a clean Bill of health with respect to their management.