The Capital Markets Authority (CMA) has announced a proposal that money‑market funds (MMFs) and the firms that manage them obtain independent risk ratings.

The fund rating would examine asset composition, default risk, return volatility, foreign‑currency exposure and the ability to liquidate holdings without heavy discounts, while the manager rating would look at senior‑management track records and operational controls.

CMA chief executive Wycliffe Shamiah said the authority receives daily queries from investors who cannot easily judge a fund’s safety, prompting the need for an independent review.

The proposal is voluntary, mirroring practices in the United States and the European Union where external credit ratings are encouraged but not mandated, unlike Nigeria where ratings are compulsory for all MMFs.

The Fund Managers Association welcomed the draft, noting that ratings could complement existing due‑diligence processes and enhance credibility without replacing internal assessments.

The CMA cautioned that a rating does not guarantee returns or eliminate investment risk, and that the usefulness of any rating will depend on the independence of the rating agency and the transparency of its methodology.

As of June 2026, 4.14 million Kenyans hold units in collective investment schemes worth KES 948.7 billion, with money‑market funds accounting for the largest share of assets.

The CMA has not yet issued final rules; the proposals remain under consultation, and investors are advised to continue reviewing fund disclosures and remain cautious of unusually high returns.