ADVOKS GLOBAL · KENYA
Central Depositories Act
8. Duties of a central depository
Edition: 2023-12-11 · In force
8. Duties of a central depository
(1)A central depository shall—(a)establish and operate facilities for the handling of securities centrally;(b)ensure that facilities under paragraph (a) provide fair, transparent and efficient depository, clearing and settlement arrangements for securities deposited and any transactions relating to securities cleared or settled through its facilities;(c)ensure adequate measures to prevent and mitigate fraud or any other system manipulation mechanisms are established to—(i)ensure safe custody of certificates and other documents deposited with the central depository;(ii)guard against falsification of the records or accounts required to be kept or maintained under the Act; and(iii)ensure a proper and efficient system for the tracing, verification, inspection, identification and recording of all transactions with the central depository;(iv)seek approval for any fees proposed to be levied in respect of the services it renders; and(v)ensure that the risks associated with its business and operations are managed prudently.(2)A central depository shall, in discharging its duty under subsection (1), act in the interest of the investors and the public.(3)A central depository shall operate its facilities and perform its duties in accordance with the rules approved by the Authority under section 5A.(4)A central depository shall formulate and implement appropriate procedures to ensure that the agents it appoints under section 9 comply with its rules.(5)A central depository shall, in the conduct of its business, at all times, maintain—(a)adequate and properly equipped premises;(b)competent personnel; and(c)automated systems with adequate capacity and facilities, security arrangements and technical support to meet contingencies or disasters, approved by the Authority.(6)A central depository shall preserve confidentiality with regard to the information in its possession concerning its central depository agents and their customers:Provided that such information may be disclosed to the Authority when requested to do so in writing, or upon written request of a securities exchange, for which it is a central depository, or is required to do so by any law.(7)A central depository shall, immediately notify the Authority if it becomes aware—(a)of the inability of any of its central depository agents, to comply with any rule of the central depository;(b)of a financial irregularity or other matter which, in the opinion of the central depository, may indicate that the financial standing or integrity of a central depository agent is questionable; or(c)of the likelihood of a central depository agent not being able to meet its legal obligations.(8)A central depository shall be entitled to charge such fees for its services and facilities as may be approved by the Authority.(9)The Authority may, from time to time, prescribe such other duties to be performed by a central depository as it considers appropriate.