ADVOKS GLOBAL · KENYA
The Capital Markets (Licensing Requirements) (General) Regulations
31. Records to be maintained
Edition: 2023-10-06 · In force
31. Records to be maintained
(1)Every investment adviser and fund manager shall maintain and preserve for a period of seven years, the following records—(a)journals, including cash receipts and disbursement records and any other records or original entry, forming the basis of entries in any ledger;(b)general and auxiliary ledgers, or other comparable records reflecting assets, liabilities, reserves, capital, income and expense accounts;(c)a record or memorandum of each order given by the investment adviser or fund manager for the purchase or sale of securities, or any instruction received by the investment adviser or fund manager from the client concerning the purchase, sale, receipt or delivery of a particular security and of any modification or cancellation or any such order or instruction, and the record shall—(i)show the terms and conditions of the order, instruction, modification or cancellation;(ii)identify the person connected with the investment adviser or fund manager who recommended the transaction to the client and the person who placed such order;(iii)show the account for which the order was entered, the date of entry, and the stockbroker by or through whom the order was executed, where appropriate; and(iv)show orders entered pursuant to the exercise of discretionary power on account of management of investment portfolios in which case a record of details of such contracts with clients, constituents of the portfolio, transaction fees agreed with the client and value of the portfolio shall be included;(d)all cheque books, bank statements, cancelled cheques and cash reconciliation of the investment adviser or fund manager;(e)all bills, statements or copies thereof, paid or unpaid relating to the business of the investment adviser or the fund manager;(f)originals of all written communication received from clients and copies of all written communication sent by the investment adviser or fund manager relating to—(i)any recommendations made or proposed to be given;(ii)any receipts, disbursement or delivery of funds or securities; and(iii)the placing or execution of any order to purchase or sell any security; provided, that if the investment adviser or fund manager sends any notice, circular or other advertisement offering any report, analysis, publication or other investment advisory services to more than ten persons, the investment adviser or fund manager shall not be required to keep a record of the names and addresses of the persons to whom it was sent except that if such notice, circular or advertisement is distributed to persons named on any list, the investment adviser or fund manager shall retain a copy of such notice, circular or advertisement, a record or memorandum describing the list and the source thereof;(i)all written agreements or copies thereof entered into by the investment adviser or fund manager with any client or otherwise relating to the investment adviser’s or fund manager’s business;(j)a copy of each notice, circular, advertisement, newspaper article, investment letter, bulletin or other communication recommending the purchase or sale of a specific security, which the investment adviser or fund manager circulates or distributes, directly or indirectly, to ten or more persons, and if such notice, circular, advertisement, newspaper article, investment letter, bulletin or other communication does not state the reasons for such recommendation, a memorandum from the investment adviser or fund manager (as the case may be) indicating the reasons thereof; all advertisements by the investment adviser or fund manager and all records, worksheets and calculations necessary to form the basis for performance data in such advertisements;(k)a record of every transaction in a security in which the investment adviser or fund manager or any of the investment adviser or fund manager’s employees acquire any direct or indirect beneficial ownership; the record shall state the title and amount of the security involved, the date, whether the transaction was a purchase or sale or other acquisition or disposition, the price at which it was effected, and the name of the stockbroker with or though whom the transaction was effected; and(l)a copy of each written statement, the amendment or revision thereof, given or sent to any client or prospective client of such investment adviser or fund manager and a record of the dates that the same was given or offered to be given;(m)any other records as may be determined by the Authority.(2)The records specified under paragraph (1) shall be subject to inspection from time to time and without notice, by the Authority.(3)Each investment adviser and fund manager shall preserve and maintain clients’ records of securities or funds and if required produce for inspection by the Authority such books, records and ledgers, or other accepted accounting and additional records as may be required by the Authority for a period of seven years and shall—(a)notify the Authority of the custodian appointed; and(b)segregate the securities of each client and mark such securities to identify the particular client having the beneficial interest therein.