ADVOKS GLOBAL · KENYA
The Capital Markets (Collective Investment Schemes) Regulations
39. Removal of a custodian
Edition: 2022-12-31 · In force
39. Removal of a custodian
(1)A custodian shall be removed in writing immediately on the happening of any of the following events, that is if—(a)a court of competent jurisdiction orders its liquidation, except a voluntary liquidation for the purpose of reconstruction or amalgamation approved by the Authority; or(b)a statutory manager or a receiver is appointed over any of its assets; or(c)the custodian ceases to carry on business as a bank or financial institution.(2)A custodian shall be removed by three months notice in writing given by the fund manager to the custodian if—(a)the custodian fails or neglects after reasonable notice from the fund manager, trustee or board of directors as the case may be, to carry out or satisfy any duty imposed on the custodian in accordance with the agreement; or(b)the holders, by extra ordinary resolution resolve that such notice be given, and the fund manager appoint as custodian some other qualified institution with the approval of the Authority.(3)In the event of a termination of the agreement provided for under Regulation 38(4), or from the date of a winding up order issued by a competent court against the custodian, the custodian shall immediately hand over, and deliver all assets, documents and funds including those from the bank accounts of the collective investment scheme held by such custodian to the custodian appointed in writing by the board of directors, fund manager or trustee, as the case may be, and approved by the Authority, within thirty days from the date of such termination.(4)Within twenty days from the termination of the agreement, the custodian shall submit to the Authority an audit report indicating the assets, liabilities and an inventory of the scheme fund, securities and title documents of the scheme assets which have been handed over, transferred and delivered to the appointed custodian.(5)A copy of the notice given to the custodian for termination of services by the fund manager shall be given to the trustee and the board of directors.(6)In the event of any disagreement between the fund manager, the trustee or the board of directors as the case may be and the custodian, notification shall be made to the Authority by the fund manager giving reasons for the termination of services of the custodian.UMBRELLA SCHEMES AND INVESTMENT COMPANIES