ADVOKS GLOBAL · KENYA
Capital Markets Act
31. Transactions in securities
Edition: 2025-12-11 · In force
31. Transactions in securities
(1)No licensed person, broker or dealer shall transfer listed securities outside the securities exchange in which he or she is a trading participant except as provided for by the Authority in rules or as authorised by the Authority on a case by case basis, and on payment of a prescribed fee.(1A)The Authority may authorise the transfer of a listed security outside the securities exchange if the Authority is satisfied that—(i)the transaction is a private transaction as prescribed by the Authority;(ii)the security trades over the counter and such trade is reported in accordance with the rules prescribed by the Authority; or(iii)it would be in the interest of the holders of ordinary shares of the company having regard to the prevailing conditions and all factors which are relevant in the circumstances to so authorise.(2)No licensed person, broker or dealer shall trade in listed securities in contravention of such rules as the Authority shall prescribe with respect to the clearance, settlement, payment, transfer or delivery of securities.(3)No licensed person, broker or dealer shall effect any transaction in a margin account in a manner contrary to requirements adopted by the Authority.(4)No licensed person, broker or dealer shall lend or arrange for the lending of any securities carried for the account of any customer without the customer’s written consent, or borrow, or arrange to borrow, using the securities, carried for the account of any customer, as collateral, without the customer’s written consent.(5)No licensed person, broker or dealer shall effect any transaction in, or induce or attempt to induce the purchase or sale of, any listed security by means of any manipulative deception, or other fraudulent device or contrivance.(6)No person holding shares in a public company listed on an approved securities exchange, shall sell or transfer such shares except in compliance with the trading procedures adopted by such securities exchange.(7)No person shall, directly or indirectly, in connection with the purchase or sale of any security—(a)employ any device, scheme or artifice to defraud;(b)engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person;(c)make any untrue statement of a material fact; or(d)omit to state a material fact necessary in order to make the statements made in light of the circumstances under which they were made, not misleading.(8)A person who contravenes this section commits an offence.