ADVOKS GLOBAL · KENYA
The Capital Markets (Collective Investment Schemes) Regulations
111. Requirements for ESOPS
Edition: 2022-12-31 · In force
111. Requirements for ESOPS
An ESOP Unit Trust shall comply with the following requirements—(a)application and registration for an ESOP Unit Trust shall be accompanied with the following information and documents—(i)proposed trust deed and scheme rules;(ii)names of the proposed trustees;(iii)board of directors resolution approving the establishment of ESOP Unit Trust and the appointment of the proposed trustees;(iv)shareholders' approval for the establishment of the ESOP Unit Trust and the terms of the trust deed (where already obtained); and(v)any other information that the Authority may require.(b)every trust deed to an ESOP Unit Trust shall include the following particulars—(i)parties to the trust deed;(ii)interpretation of terms used in the trust deed;(iii)declaration of trust;(iv)appointment and removal procedures for trustees;(v)procedure for creation and issuance of units;(vi)method of pricing and valuation of units;(vii)procedure for repurchase of units:(viii)procedure for income distribution:(ix)apportionment of unit holders' entitlements in respect of dividends, rights and capitalization issues;(x)company's and trustees covenants;(xi)restrictions on the trustees;(xii)trustees fees and charges;(xiii)liability of the trustees;(xiv)register of unit holders and records of trust fund charges and commissions;(xv)audit and periodic reports;(xvi)procedures for winding up:(xviii)procedure for variation of trust deed;(xix)procedure for settlement of disputes.(c)Every ESOP Unit Trust shall have scheme rules which shall include the following:—(i)eligibility for membership;(ii)procedure for saving and/or acquisition and repurchase of units;(iii)maximum individual holding;(iv)employee rights in respect to units;(v)pricing and valuation of units;(vi)in case of an options scheme there shall be a procedure for granting options, maximum limit, executive rights in respect to units and entitlement in the event of reconstruction or winding up.