ADVOKS GLOBAL · KENYA
The Capital Markets (Commodity Markets) Regulations
23. Establishment of a clearing house
Edition: 2022-12-31 · In force
23. Establishment of a clearing house
(1)A person intending to establish and operate a clearing house for a commodities exchange shall—(a)be a company or such other body corporate as approved by the Authority;(b)satisfy the commodity exchange as to its technical, financial and human resources, including fit and proper requirements set out in the Act; and(c)be approved by the Authority as a clearing house.(2)The Authority shall, in writing, approve an application to act as a clearing house, if it is satisfied that—(a)the applicant will ensure that that there are orderly, fair and expeditious clearing arrangements for transactions in spot commodity contracts;(b)the rules of the commodity exchange make satisfactory provision relating to guaranteeing to its members of the performance of spot commodity contracts made in a commodity market;(c)the interests of the public will be served by granting the application; and(d)all conditions imposed by the Authority on the applicant clearing house have been met.(3)A clearing house shall be exclusively engaged in its clearing business except only in respect of such other matters as are ancillary or incidental thereto as may be expressly permitted by the Authority.(4)Where the Authority proposes to impose a condition under this regulation, the Authority shall give reasons for its decision and shall give the applicant an opportunity to be heard before a final decision is made.