ADVOKS GLOBAL · KENYA
The Capital Markets (Commodity Markets) Regulations
5. Considerations in granting a licence
Edition: 2022-12-31 · In force
5. Considerations in granting a licence
In considering an application for a licence to operate a commodity exchange an applicant shall be required to—(a)be a company limited by shares;(c)ensure that the clearing and other arrangements made, its clearing house and its members are such as to provide a reasonable assurance that all obligations arising out of contracts entered on the proposed commodity exchange will be met;(d)have a minimum authorized, issued and paid up equity share capital to support initial infrastructural investments and three years' operating capital;(e)satisfy all requirements relating to ownership and governance structure specified in these Regulations;(f)have its directors and shareholders determined as fit and proper persons as provided under section 24A of the Act;(g)satisfy the minimum liquid net-worth requirements specified in these Regulations;(h)have a minimum amount of money, as may be determined by the Authority from time to time by notice, in the settlement guarantee fund before the commencement of trading;(i)satisfy requirements relating to financial capacity, functional expertise and infrastructure to—(i)establish and operate a fair and efficient commodity exchange;(ii)meet contingencies or disasters including events such as technical complications occurring with automated systems, and(iii)provide adequate security arrangements on risk identification and mitigation, data protection and fail-safes on critical infrastructure;(j)have in its employment, sufficient number of persons with adequate professional and other relevant competencies and experience;(k)have measures in place to actively enforce compliance by its members with its rules and for the prevention of manipulation and excessive speculation;(l)have adequate provision to record and publish details of trading, including volume and open interest; and(m)comply with any other requirements as may be specified by the Authority.