ADVOKS GLOBAL · KENYA
The Capital Markets (Conduct of Business) (Market Intermediaries) Regulations
12. Conflict of interest
Edition: 2022-12-31 · In force
12. Conflict of interest
(1)A market intermediary shall—(a)identify and document the conflicts of interest that are likely to occur in the course of its regulated activity;(b)adopt and document appropriate policies to minimize those conflicts by identifying the instances where it would refuse to act and, where this is not necessary, making arrangements to minimize the risk of any loss to the client;(c)avoid any conflict of interest between itself and a client and where such a conflict exists, decline to act, or if it considers that the conflict can be managed, disclose it to the client and follow the policies developed to minimize damage to the client and to put the client’s interests ahead of its own.(2)A market intermediary shall not take advantage of information it obtained from providing services to a client for its own benefit or the benefit of its employees or the benefit of another client, and where such an eventuality is likely to occur, the market intermediary shall—(a)adopt and document procedures, including the erection of information barriers, barriers between information technology systems, physical barriers or even separate office locations, to minimize the possibility of information from one client being used for the benefit of another client, its employees or the market intermediary;(b)train employees in matters relating to the conflict of interest and the procedures developed to avoid them;(c)obtain undertakings from employees that they will not use information gained from the clients for their personal benefit.(3)Where a market intermediary has a material interest in a transaction to be entered into with or for a client, or a relationship which gives rise to a conflict of interest, the market intermediary shall not, knowingly, advise, or exercise discretion, in relation to that transaction unless it has—(a)disclosed the material interest or relationship that may give rise to a conflict, as the case may be, to the client; or(b)taken reasonable steps to ensure that neither the material interest nor relationship would adversely affect the interests of the client.(4)A market intermediary shall take reasonable steps to ensure that neither it nor any of its employees or agents offers or gives, or solicits or accepts, any inducement that is likely to conflict with any of the duties owed to clients.