Central Depositories Act
Central Depositories Act 2000
This is an Act of Parliament formed to facilitate the establishment, operation and regulation of central depositories, to provide for the immobilization and eventual dematerialization of, and dealings in, securities deposited therewith in Kenya and connected purposes.
It therefore outlines the mandate of a central depository giving the scope in which it operates.
It is in 9 parts:
This gives the mandate of a central depository and gives definition of terms used therein.
2. Central Depository
This part defines a central depository and how one is constituted. It also gives information about who can form a central depository and the powers conferred on it. It goes on to define a Central Depository Agent, Issuers and their requirements so as to comply with the Act.
3. Provisions Relating to immobilized securities
In this section, the following processes are defined:
- Immobilization of securities
- Withdrawal of immobilized securities
- Dematerialization of securities
4. Securities accounts and records
This section deals with among others the duty of a central depository to keep records, and how an audit of records and accounts can be carried out.
5. Securities transactions, entries and miscellaneous
This is a mixture of different processes carried out in the CDS which would include public offer of securities, securities in or under suspense.
6. Secrecy provisions
Central depository agents and central depository employees are mandated to observe secrecy and the restrictions on disclosure of information is laid down. Permitted disclosures are also outlaid and so is the regulation of access to the computer system.
7. Offences and Penalties
The types of offenses that can be committed by the central depository agents or central depository employees are outlined. The penalties that accompany the offenses are also outlined.
Outlined herein is the power of the Authority to require production of records by the central depository during investigations. Also outlined amongst others is the power of the court to make certain orders concerning investigations etc..
This section encompasses other issues that affect a central depository directly or indirectly. These include the CMA rules, power of Authority to compound offenses, prosecution, etc..
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