ADVOKS GLOBAL · KENYA
The Capital Markets (Commodity Markets) Regulations
24. Duties of a clearing house
Edition: 2022-12-31 · In force
24. Duties of a clearing house
(1)A clearing house shall ensure that—(a)there is orderly, fair and expeditious clearing and settlement arrangements for any transactions in spot commodity contracts through its facilities; and(b)the risks associated with its business and operations are managed prudently.(2)In discharging its duty, a clearing house shall—(a)act in the interest of the public; and(b)ensure that where the interest of the public conflicts with its interest, the interest of the public prevails.(3)A clearing house shall—(a)operate its facilities in accordance with the established commodity exchange rules relating to clearing and settlement;(b)formulate and implement appropriate procedures to ensure that commodity brokers comply with commodity exchange rules;(c)preserve confidentiality on all information in its possession concerning its commodity brokers and their clients, subject to disclosure of such information when required in writing to do so by the Authority, a commodity exchange or if it is ordered by court to do so; and(d)have efficient procedures and arrangements to address investor complaints.(4)A clearing house shall immediately notify the Authority if it becomes aware—(a)that any of its agents are unable to comply with any rule of the clearing house or a commodity exchange; and(b)of a financial irregularity or any other matter which in the opinion of the clearing house may indicate that—(i)the financial standing or integrity of a commodity broker or warehouse operator is in question; or(ii)a commodity broker or warehouse operator may not be able to meet its legal obligations.(5)A clearing house shall provide and maintain at all times—(a)adequate and properly equipped premises;(c)automated systems with adequate capacity and facilities to meet contingencies or emergencies,(d)security arrangements; and(e)technical support for the conduct of its business.