ADVOKS GLOBAL · KENYA
The Capital Markets (Derivatives Markets) Regulations
66. Segregation of clients' funds
Edition: 2025-02-14 · In force
66. Segregation of clients' funds
(1)A derivatives broker shall maintain strict segregation between its own funds and each individual clients' funds without any co-mingling between—(a)Its own funds and clients' funds; and(b)individual clients' funds.(2)A derivatives broker shall establish a Client Group Account with the designated clearing bank of the derivatives exchange of which that derivatives broker is a derivatives member.(3)A derivatives broker shall ensure that all deposits and withdrawals on behalf of clients are only made through the Client Group Account established under subregulation (2).(4)A derivatives broker shall only accept a deposit towards initial margins, special margins, delivery margins, variation margins or fees by way of—(c)online bank transfer or via mobile banking transfer from a client designated account.(5)A derivatives broker shall immediately deposit any deposits under subregulation (4) in the Client Group Account maintained by the derivatives broker with the derivatives exchange designated clearing bank for onward transfer and credit to each individual clients' account at the clearing house of the derivatives exchange.(6)Any withdrawals requested by a client shall be processed by transferring funds from the individual clients' account maintained at the clearinghouse of the derivatives exchange to the Client Group Account maintained by the derivatives broker at the designated clearing bank of a derivatives exchange.(7)A withdrawal under subregulation (6) shall be settled either by a cheque drawn on the Client Group Account of the derivatives broker, by online bank transfer or by mobile banking transfer, to a designated client account, from the same account maintained at the designated clearing bank of a derivatives exchange.(8)A derivatives broker shall undertake and complete reconciliation on a daily basis between—(a)the Client Group Account maintained at the designated clearing bank of a derivatives exchange;(b)the Client Group Account at the clearing house of a derivatives exchange; and(c)individual clients’ account maintained at the clearing house of a derivatives exchange.(9)A derivatives broker shall not accept cash from or pay cash to a client for a transaction under these Regulations.(10)A derivatives broker shall maintain a record of transactions with the banks including clients deposits and withdrawals from the client group account maintained with the derivatives exchange designated clearing bank.