ADVOKS GLOBAL · KENYA
The Capital Markets (Coffee Exchange) Regulations
5. Rules and obligations of a coffee exchange
Edition: 2022-12-31 · In force
5. Rules and obligations of a coffee exchange
(1)An applicant seeking approval to operate as a coffee exchange shall develop its rules, which shall provide for—(a)the clear demarcation of roles and responsibilities of the board, chief executive officer and the committees of the board;(b)the appointment of directors and a fair representation of persons in the selection of members of the board and administration of its affairs including the professions relevant to coffee industry;(c)the powers of the chief executive officer including in emergency situations;(d)the qualifications for membership;(e)the exclusion from membership of persons who do not meet the minimum criteria on integrity;(f)the expulsion, suspension or disciplinary action against members for conduct inconsistent with just and equitable principles relating to trading in coffee, or for a contravention of the rules of the coffee exchange;(g)specify qualifications for applicants for membership and provisions for accepting applicants as trading participants, imposing conduct and other requirements on them;(h)provide for the governance of the conduct activity of participants, including their responsibility to act with integrity and in the interests of maintaining a proper market, paying such fees and charges as may be applicable and abiding by the rules of the clearing house;(i)prohibit market abuse practices;(j)provide mechanisms for effectively investigating breaches of the rules, enforcing the rules and providing for appeals;(k)make default provisions for the taking of proceedings or other action if a clearing member has failed, or appears to be unable, or likely to become unable, to meet his obligations for any unsettled or open market contracts to which he is a party;(l)specify qualifications for trading membership, imposing conduct and other requirements on them and, where appropriate, for the procedure for their removal as trading members;(m)the making of reports to the Authority by the exchange whenever it rejects any application for membership, where it suspends or expels a member or where it suspends trading;(n)procedures for developing warrants and receipts to be traded on the exchange;(o)the terms and conditions under which coffee or contracts may be traded;(p)an audit system relating to proprietary trading by members;(q)the standard coffee grades that may be traded by members and the terms and conditions governing trading by members;(r)fair and properly supervised trading practices;(s)measures to prevent market abuse in its coffee market;(t)preventing the excessive use of credit by way of initial or maintenance margin in respect of the purchase or carrying of any coffee;(u)the recording and publishing of details of trading, clearing and settlement;(v)dues, fees and other charges levied by the exchange and its other sources of revenue;(w)internal procedures to ensure the proper handling of complaints and to ensure that any appropriate remedial action on those complaints is promptly taken;(x)the resolution of disputes and provision for appeal;(y)the carrying on the business of the coffee exchange generally, including the development of a regional exchange, with due regard to the interests and protection of growers and investors; and(z)any other provisions specified by the Authority.(2)The rules established and adopted by the exchange under paragraph (1) shall be approved by the Authority before being applied by the exchange.(3)The rules of a coffee exchange shall apply to the officers of the exchange, members and employees of the members of the exchange and the member shall be responsible to ensure their employees' compliance with the rules.(4)The Authority may require a coffee exchange to comply with such additional requirements as may be imposed on a commodities exchange under any written law.