Guarantee fund- Clearing and settlement services
The guarantee fund is a fund set up to ensure financial integrity in the securities market. It is a mechanism managed by CDSC to ensure that trades will be settled among CDAs (i.e. the selling CDA will deliver the securities and the buying CDA will effect payment). The fund is made up of:
A contribution of Kenya Shillings five million put up by Central Depository Agents (or such higher amount as the central depository may from time to time, in consultation with the Authority and the Nairobi Stock Exchange, determine)
All penalties and fines imposed by the central depository
Money accrued from interest and profits from investing the Fund's moneys
A levy for every transaction through the securities exchange as approved by the Authority
Contribution from the revenue of CDSC as its Board may from time to time determine
Funds hitherto constituting the Nairobi Stock Exchange Investor Compensation Fund
Such other funds as the Board of CDSC, with the approval of the Authority may determine.
Rules and requirements
Only persons prescribed under section 9 of the Central Depositories Act 4 of 2000 and part II of the Central Depositories Operational Rules shall be eligible for appointment as a CDA.
Rules and procedures
Central Depository (Operational) Rules 2003 of the CDSC Ltd.