ADVOKS GLOBAL · KENYA
The Capital Markets (Licensing Requirements) (General) Regulations
9. Self-regulation
Edition: 2023-10-06 · In force
9. Self-regulation
(1)Every securities exchange shall have—(a)a procedure and appropriate system of exercising self-regulation over its trading participants;(b)a code of conduct for its trading participants;(c)adequate trading surveillance and compliance capacity; and(d)a procedure for dispute resolution.(2)A securities exchange shall implement a system of self regulation with respect to its trading participants and shall ensure the day to day management of trading, settlement, delivery and all other activities of its trading participants are in accordance with—(a)the rules of the securities exchange approved by the Authority; and(b)laws, regulations and guidelines relating to securities issued by the Authority.(3)The rules of a securities exchange shall, where applicable, support the self-regulatory functions of the securities exchange and in particular shall be designed to—(a)promote investor protection;(b)promote fair treatment of its trading participants and any person who applies for admission as a trading participant;(c)exclude a person who is not fit and proper from being its trading participant or being appointed as its chief executive, director or officer;(d)promote proper regulation and supervision of its trading participants;(e)promote appropriate standards of conduct of its trading participants;(f)manage any conflict of interest which may arise between its interest and the interest of investors and the general public;(g)ensure that its trading participants and officers duly comply with the securities laws, regulations and guidelines issued by the Authority and where relevant, the rules of the securities exchange, or approved central depository;(h)require trading participants to report in a timely manner any breaches of applicable rules;(i)prevent the use of any information by its trading participants or officers which may result in such trading participants or officer making an unfair gain; expel, suspend, discipline or sanction a trading participant if a trading participant contravenes securities laws, regulations and guidelines issued by the Authority or where relevant, the rules of the securities exchange, or an approved central depository;(j)require a trading participant to report any action, restriction or limitation imposed on its operations by another securities exchange, central depository or the Authority; and(k)allow an aggrieved trading participant to appeal against any decision of the securities exchange acting in its capacity as a recognized self-regulatory organization.(4)An applicant shall, as a condition for approval to operate a securities exchange—(a)exercise self-regulatory responsibility over its trading participants; and(b)put in place independent management of and budgetary structures for the commercial and regulatory functions of the securities exchange.