ADVOKS GLOBAL · KENYA
The Capital Markets (Collective Investments Schemes) Regulations, 2023
75. Removal and replacement of a custodian
Edition: 2023-12-15 · In force
75. Removal and replacement of a custodian
(1)A custodian shall be removed immediately in writing upon the happening of any of the following events—(a)liquidation of the custodian;(b)if 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 to carry out or satisfy any duty imposed on the custodian in accordance with their agreement; or(b)the participants, 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)The fund manager shall notify the trustee and the Authority in writing of the termination of the services of the custodian giving reasons for such termination.(4)A custodian may resign by giving a three months’ notice in writing to that effect to the board of directors or the fund manager, as the case may be and the Authority giving reasons for the resignation.(5)The fund manager shall appoint within two months after the date of a notice under subregulation (4) some other qualified person as the new custodian upon approval by the Authority and enter into an agreement with the new custodian.(6)If a fund manager is unable to appoint a new custodian within the period of two months following the notice of resignation—(a)the custodian shall be entitled to appoint an eligible person to be the new custodian subject to approval by the fund manager, trustee or the board of directors as the case maybe and the Authority; or(b)the trustee shall hold the assets for three months with the approval of the Authority and within that timeframe cause an extra-ordinary general meeting of participants to be held to either to dissolve or transfer the unit holders to another fund.(7)Within twenty days from the termination of the agreement, the custodian shall submit to the trustee, fund manager and Authority an audit report indicating the assets, liabilities and an inventory of the assets under management which have been handed over, transferred and delivered to the new custodian.Division D — Intermediary Service Platform Providers