Central Depositories Act

Section 1. Short title Section This Act may be cited as the Central Depositories Act.

Section 2. Interpretation Section 2(1)(a) where securities are deposited and held in custody by, or registered in the name of, the company or its nominee company for depositors and dealings in respect of these securities are effected by means of entries in securities accounts without the physical delivery of certificates; or Section 2(1)(a)(i) where securities are deposited and held in custody by, or registered in the name of, the company or its nominee company for depositors and dealings in respect of these securities are effected by means of entries in securities accounts without the physical delivery of certificates; or Section 2(1)(a)(ii) which permits or facilitates the settlement or registration of securities transactions or dealings in securities without the physical delivery of certificates; and Section 2(1)(b) provides other facilities and services incidental thereto; Section 2(1)(a) the central equipment comprising hardware and software associated with that hardware, located at the premises of the central depository; and Section 2(1)(b) the terminals located at the premises of the users; Section 2(1)(a) any agreement for or with a view to acquiring, disposing of, subscrib...

Section 3. Restriction on establishment of central depository Section 3(1) No person shall establish, maintain or hold himself out as maintaining a central depository except with the prior written approval of the Authority given in accordance with section 5 . Section 3(2) A person who contravenes any of the provisions of subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding ten million shillings, or to imprisonment for a term not exceeding ten years, or to both.

Section 4. Establishment of a central depository Section 4(1) A company incorporated under the Companies Act ( Cap. 486 ) which proposes to operate a central depository shall apply to the Authority in writing to be licensed as such. Section 4(2)(a) the CDS rules made by the applicant in such manner and form as the Authority may prescribe; Section 4(2)(b) the prescribed fee; and Section 4(2)(c) such other information as the Authority may prescribe. Section 4(3) The Authority may require an applicant to provide such further information as it may consider necessary in relation to the application, in such form or verified in such manner as the Authority may direct. Section 4(4) A central depository which proposes to alter any particulars submitted under this section shall seek prior approval of the Authority before making such alterations. Section 4(5) The Authority shall, in considering an application under subsection (1), determine if the applicant is fit and proper for the purposes of this Act. [Act No. 38 of 2011 , s. 4.]

Section 5. Grant of a licence Section 5(1)(a) has and maintains at all times, such minimum paid-up capital as may be prescribed by the Authority from time to time; Section 5(1)(b) has a board of directors constituted in accordance with such criteria as the Authority may prescribe; Section 5(1)(c) shall provide, as far as is reasonably practical, fair, transparent and efficient arrangements for the deposit, registration and transfer of securities; Section 5(1)(d) shall manage any risks associated with its business and operations prudently; Section 5(1)(e) shall ensure the compliance of its rules by its agents; Section 5(1)(f) has made sufficient central depository rules to address the matters prescribed in section 5A ; Section 5(1)(g) to establish and operate a fair, transparent and efficient clearing facility; Section 5(1)(g)(i) to establish and operate a fair, transparent and efficient clearing facility; Section 5(1)(g)(ii) to meet contingencies, including events such as technical complications occurring with an automated system or disasters and its integration with any connected trading systems; and Section 5(1)(g)(iii) has provided adequate security arrangements. Section 5(2) Th...

Section 6. Amendment of CDS rules Section 6(1) The rules of an approved central depository, in so far as they have been approved by the Authority, shall not be amended, varied or rescinded without prior approval of the Authority. Section 6(2) Where the board of directors of an approved central depository intends to amend its rules, it shall forward the proposed amendments to the Authority for approval. Section 6(3) The Authority shall, within thirty days of receipt of a notice under subsection (2), notify the central depository of its decision regarding the proposed amendments, and where it does not approve the same, shall specify the reason for such decision. Section 6(4) A central depository which proposes to alter any particulars already furnished to the Authority, or to make any change in its state as specified in its application under section 4 , shall seek the prior approval of the Authority.

Section 7. Power of Authority to amend CDS rules Section Notwithstanding the provisions of any other written law, the Authority may from time to time, after consultation with the central depository, amend the CDS rules by written notice, specifying the amendments and the dates on which such amendments shall come into force.

Section 8. Duties of a central depository Section 8(1)(a) establish and operate facilities for the handling of securities centrally; Section 8(1)(b) ensure that facilities under paragraph (a) provide fair, transparent and efficient depository, clearing and settlement arrangements for securities deposited and any transactions relating to securities cleared or settled through its facilities; Section 8(1)(c) ensure safe custody of certificates and other documents deposited with the central depository; Section 8(1)(c)(i) ensure safe custody of certificates and other documents deposited with the central depository; Section 8(1)(c)(ii) guard against falsification of the records or accounts required to be kept or maintained under the Act; and Section 8(1)(c)(iii) ensure a proper and efficient system for the tracing, verification, inspection, identification and recording of all transactions with the central depository; Section 8(1)(c)(iv) seek approval for any fees proposed to be levied in respect of the services it renders; and Section 8(1)(c)(v) ensure that the risks associated with its business and operations are managed prudently. Section 8(2) A central depository shall, in discharging...

Section 9. Central depository agents Section 9(1) No person shall act or hold himself out as a central depository agent unless such person is duly appointed as such in accordance with this section. Section 9(2)(a) any trading participant of a securities exchange for which it is its central depository; or Section 9(2)(b) a non-bank subsidiary of any bank or financial institution licensed under the Banking Act ( Cap. 488 ); or Section 9(2)(c) any institutional investor; or Section 9(2)(d) any body corporate of a type prescribed by the Authority, to be its central depository agent. Section 9(3) A central depository agent appointed under this section shall perform all or any functions approved by the central depository under the CDS rules. Section 9(4) In the performance of its functions under this Act, a central depository agent shall, when so required, produce or make available to the central depository or to the Authority, any information or document relating to a securities account. Section 9(5) Subject to this Act, the Authority may make such rules as may be necessary to regulate the appointment of a central depository agent and the imposition of duties, obligations and sanctions...

Section 10. Regulation of dealings in securities Section 10(1) A central depository shall do all such things as are necessary to ensure orderly dealings in immobilised or dematerialised securities. Section 10(2) A central depository may, in performing its function under subsection (1), give to an issuer of any security or a central depository agent directions to do a particular act or thing or to refrain from doing a particular act or thing and the issuer or central depository agent shall comply with such directions. Section 10(3) An issuer or central depository agent who fails to comply with any direction given by a central depository under subsection (2) commits an offence and shall, on conviction, be liable to a fine not exceeding five million shillings, or to imprisonment for a term not exceeding five years, or to both.

Section 11. Central depository agents, issuers, etc., to comply with CDS rules Section 11(1) Any person who is a central depository agent, an issuer, a depositor, or a user shall comply with, enforce or give effect to the CDS rules to the extent to which those rules apply to such person. Section 11(2) For the purposes of this section, "CDS rules" includes any direction given, from time to time, by a central depository to any person pursuant to any provision of this Act.

Section 12. Central depository to provide assistance to the Authority Section 12(1) A central depository shall provide such assistance to the Authority as is reasonably required for the performance by the Authority of its functions and duties under this Act. Section 12(2) The Authority shall be entitled at all reasonable times to full and free access to any part of the premises of a central depository for the purpose of ensuring compliance with this Act.

Section 10A. Property deposited with central depository Section Where a central depository agent deposits any property as a market collateral with a central depository in accordance with its rules, no action, claim or demand, either civil or criminal, in respect of any right, title or interest in such property shall lie, or be commenced or allowed against a central depository or its nominees, notwithstanding any other provision of the law. [Act No. 38 of 2011 , s. 10.]

Section 12A. Disciplinary action and review of a disciplinary action Section 12A(1) A central depository may reprimand, fine, suspend, expel or otherwise take any disciplinary action against a central depository agent in accordance with its rules. Section 12A(2) A central depository shall, within seven days of any action taken under subsection (1), notify the Authority, in writing, giving particulars including the name of the person, the reason and the nature of the action taken. Section 12A(3) The Authority may, on its own motion or on application by an aggrieved person, review any disciplinary action taken under subsection (1), and may affirm, modify or set aside the decision of a central depository after giving the central depository and the central depository agent an opportunity to be heard. Section 12A(4) Nothing in this section shall preclude the Authority, in any case where a central depository fails to act against a central depository agent, from suspending, expelling or otherwise taking disciplinary action against a central depository agent: Provided that the Authority shall give the central depository and the central depository agent an opportunity to be heard. Section 1...

Section 2A. Functions of the Authority Section take such measures as are necessary to ensure that the provisions of this Act are complied with;

Section 4A. Determination of fit and proper Section 4A(1)(a) financial status or solvency of that person; Section 4A(1)(b) educational or other qualifications or experience of the person, having regard to the nature of the functions which, if the application is granted, the person shall perform; Section 4A(1)(c) status of any other regulatory licence or approval granted to the person by any other financial services regulator; Section 4A(1)(d) ability of the person to carry on the regulated activity competently, honestly and fairly; and Section 4A(1)(e) in case of a natural person, that individual person; or Section 4A(1)(e)(i) in case of a natural person, that individual person; or Section 4A(1)(e)(ii) in case of a company, the company, its directors, chief executive, management and any substantial shareholder of the company. Section 4A(2)(a) has contravened the provision of any law, in Kenya or elsewhere, designed for the protection of members of the public against financial loss due to dishonesty or incompetence, or malpractice by persons engaged in transacting with marketable securities; Section 4A(2)(a)(i) has contravened the provision of any law, in Kenya or elsewhere, designe...

Section 5A. Rules of a central depository Section 5A(1)(a) deposit, registration and transfer of securities; Section 5A(1)(b) settlement of transactions involving securities; Section 5A(1)(c) the proper regulation and efficient operation of the clearing facility which it operates; Section 5A(1)(d) its default process; Section 5A(1)(e) the establishment of a settlement guarantee fund; Section 5A(1)(f) the qualifications for appointment of central depository agents; Section 5A(1)(g) the proper regulation and supervision of its agents; Section 5A(1)(h) the exclusion from participation as central depository agents of persons who are not fit and proper; Section 5A(1)(i) the expulsion, suspension or disciplining of a central depository agent; Section 5A(1)(j) the carrying on of the business of a central depository, having regard to the interests and protection of the investing public; and Section 5A(1)(k) such other matters as the Authority may direct. Section 5A(2) A central depository shall submit the rules made under subsection (1) to the Authority for approval. Section 5A(3) A licensed central depository shall not amend, vary or rescind its rules without prior approval of the Authori...

Section 5B. Default process rules Section 5B(1)(a) enable the settlement of all the defaulter’s contracts; Section 5B(1)(b) provide, for the purpose of paragraph (a), such sum of money payable by or to the defaulter, in relation to each contract, if this is required after taking into account all the rights and liabilities of the defaulter under or in respect of the contracts in question; Section 5B(1)(c) enable all sums of money payable by or to the defaulter as determined in accordance with paragraph (b) to be aggregated or set-off to produce a net sum, if any, payable by or to the defaulter; Section 5B(1)(d) provide, if any, the net sum referred to in paragraph (c), is payable to the defaulter, that all property of the defaulter which is either subject to a market charge or which has been provided as market collateral shall cease to be subject to the market charge, without prejudice to any other form of charge to which it may be subject, or to be market collateral, without prejudice to its provision as any other form of collateral, as the case may be; and Section 5B(1)(e) provide for the certification by the central depository, of any net sum referred to in paragraph (c) payable...

Section 5C. Net sum payable on completion of default measures Section 5C(1) This section shall apply to any net sum certified by a central depository as payable by or to a defaulter, upon the completion of default measures. Section 5C(2)(a) provable in bankruptcy or winding up proceedings; and Section 5C(2)(b) taken into account for the purpose of any rule of law relating to set-off. Section 5C(3) For the purposes of subsection (2), a certificate of a central depository on the amount of the net sum payable, shall be sufficient proof of the net sum payable. [Act No. 38 of 2011 , s. 7.]

Section 5D. Central depository to prepare and submit report Section 5D(1)(a) action taken against the defaulter; and Section 5D(1)(b) net sum, if any, certified by the central depository to be payable by or to the defaulter. Section 5D(2)(a) Authority; Section 5D(2)(b) any relevant securities exchange; and Section 5D(2)(c) defaulter to whom the report relates. Section 5D(3) The Authority may publish, in such manner as it may consider appropriate, the contents of a report received under subsection (2) for the attention of creditors. Section 5D(4)(a) avail the report to the creditor for inspection within two days from the receipt of such request; or Section 5D(4)(b) supply to the creditor, on payment of a prescribed fee, all or any part of the report as requested.

Section 13. Prescription of securities for immobilisation Section 13(1) Subject to subsection (2), a securities exchange may, from time to time, after consultation with a central depository, prescribe that any security listed or quoted or proposed to be listed or quoted on the securities exchange be immobilised by depositing such security with the central depository. Section 13(2) A securities exchange shall, in respect of securities listed or quoted on the securities exchange, give notice to the public in the manner prescribed in the CDS rules of all eligible securities prescribed by it to be immobilised with a central depository. Section 13(3) For the purposes of this Act, the deposit by a person of any eligible security with an agent of a central depository shall be deemed to be a deposit of such security with that central depository.

Section 14. Verification of certificates and transfer to a central depository or nominee company Section 14(1) After the deposit by any person of a certificate representing an eligible security and the instrument of transfer in respect of that security, if any, a central depository or its agent, as the case may be, shall lodge the certificate and instrument with the issuer within the period prescribed in the CDS rules. Section 14(2) Subject to subsection (3), the issuer shall, on receipt of the certificate and instrument, forthwith do all such acts as are necessary to register the transfer of the security in respect of such certificate in the name of the central depository or its nominee company. Section 14(3)(a) the certificate is not a genuine certificate or is a certificate that was reported lost or destroyed; or Section 14(3)(b) there has been a duplication in the issuance of the certificate representing that security; or Section 14(3)(b)(i) there has been a duplication in the issuance of the certificate representing that security; or Section 14(3)(b)(ii) such certificate is a certificate issued in excess of the issued share capital of the issuer; or Section 14(3)(c) it has bee...

Section 15. Transitional provisions relating to trading of eligible securities Section 15(1) This section shall apply to all trading in eligible securities during the period beginning on the day immediately following the notification date and ending on the immobilisation date (in this section and in section 16 referred to as "the transitional period"). Section 15(2) A central depository or a central depository agent, as the case may be, shall accept any certificate representing an eligible security to be immobilised for the purpose of settlement of any trade on the securities exchange during the transitional period in accordance with the CDS rules. Section 15(3) No person shall trade in any eligible security on a securities exchange without having a securities account. Section 15(4) The provisions of sections 14 (2) to 14(8) shall apply to all central depository agents and the issuers with whom the documents referred to in subsection (2) of this section have been lodged.

Section 16. Dealer in eligible securities to hold securities account Section No person shall, after the transitional period, trade or transfer any eligible security on a securities exchange unless such person holds a securities account.

Section 17. Restriction of trade in eligible securities Section 17(1) No person shall, after the immobilisation date, trade any eligible security on a securities exchange unless such security has been deposited with a central depository. Section 17(2) Notwithstanding subsection (1), an eligible security may, at any time after the immobilisation date, be deposited by a depositor with the central depository subject to such additional fees, if any, as may be imposed under the CDS rules.

Section 18. Receipt of certificates of eligible securities for safe custody Section 18(1) A central depository may, by notice, prescribe a date following which no member of a securities exchange may receive a certificate representing an eligible security merely for safe custody. Section 18(2) A central depository shall give notice to the public of the date prescribed in subsection (1).

Section 19. Liability of central depository for loss, damage, etc., of certificates Section 19(1) A central depository and its agent shall be liable to a depositor for any loss, damage or liability suffered or incurred by a depositor in respect of any disappearance, loss or destruction of any certificate deposited by the depositor with the central depository or such agent due to any wilful act, omission, neglect or default on the part of the central depository or its central depository agent. Section 19(2) Notwithstanding subsection (1), a central depository agent shall not be liable for any loss, damage or liability suffered or incurred by any person in respect of any certificate the transfer of which is not capable of registration under section 14 : Provided that the provisions of this subsection shall not operate to relieve a central depository agent from any obligation imposed on it by the rules of a securities exchange in its capacity as a member of such securities exchange to effect any buying in, whether directly or otherwise, following a refusal to register a transfer under that section.

Section 20. Deeming provisions

Section 21. Withdrawal of immobilised security Section 21(1) Subject to section 22 and the provisions of this section, a depositor may, on application to the central depository, withdraw an immobilised security standing to the credit of his securities account. Section 21(2)(a) the certificate representing the security; and Section 21(2)(b) the instrument of transfer duly executed by the central depository or its nominee company, as the case may be, Section 21(3)(a) complete and hold ready for delivery to the depositor, the appropriate certificate registered in the name of such depositor and any other document in connection with the security, if any; and Section 21(3)(b) unless otherwise instructed by the depositor, send or deliver the completed certificate and such other documents, if any, to the depositor. Section 21(4) Nothing in subsection (3) shall operate to relieve a central depository or its central depository agent from any obligation imposed under any written law or under the rules of a securities exchange to notify the securities exchange of such transfer. [Act No. 19 of 2015 , s. 127.]

Section 22. Trading of securities withdrawn from central depository Section 22(1) No person shall trade any security withdrawn from a central depository on a securities exchange unless such security is redeposited in a central depository. Section 22(2) A security which is redeposited with a central depository shall not be capable of being utilised to settle a transaction which took place on a securities exchange prior to the redeposit of that security. Section 22(3) The provisions of section 14 relating to eligible securities shall apply in respect of a redeposited security.

Section 23. Withdrawal of prescribed securities prohibited Section 23(1) No person shall withdraw any security which is prescribed as a dematerialised security under this Act from a central depository. Section 23(2) A securities exchange may, from time to time, after consultation with the Authority, restrict or prohibit the withdrawal of any immobilised security or class of immobilised securities which is listed or quoted for such period and in such manner as it considers appropriate. Section 23(3)(a) inform the central depository of such decision; and Section 23(3)(b) the book-entry securities the withdrawal of which is restricted or prohibited; and Section 23(3)(b)(i) the book-entry securities the withdrawal of which is restricted or prohibited; and Section 23(3)(b)(ii) the period of such restriction or prohibition.

Section 24. Prescription of dematerialised securities Section 24(1) A central depository may, from time to time, after consultation with an issuer, prescribe an immobilised security, or class of securities, as a dematerialised security in accordance with the selection process laid down under the CDS rules. Section 24(2) Notwithstanding subsection (1), a central depository may, from time to time, after consultation with an issuer, prescribe any security proposed to be listed or quoted on a securities exchange, as a dematerialised security. Section 24(3)(a) give notice to the public that such security shall, on the dematerialisation date, become a dematerialised security; and Section 24(3)(b) do all such things as are necessary to amend its deed of establishment, trust deed, constitution or articles of association, as the case may be, to give effect and comply with this Act and CDS rules within one hundred and twenty days of the notice. Section 24(4) A notice under subsection (3) shall identify the security to be dematerialised and shall specify a dematerialisation date, not being less than one month from the date of publication of the notice, on or before which that security shall b...

Section 25. Central depository to maintain official record of depositors Section 25(1)(a) surrender the physical register of members or debenture holders, as the case may be, to the central depository; and Section 25(1)(b) provide information to the central depository of any member or debenture holder who appears in the appropriate register as a holder of a certificate not already immobilised by the central depository. Section 25(2)(a) every depositor with an immobilised security credited to a securities account held by such depositor; and Section 25(2)(b) where the prescribed security is issued by a listed company, every member or debenture holder whose name would, save for this section, Section 25(3)(a) contains information in computerised record form; Section 25(3)(b) is not distinguished by means of a share number; and Section 25(3)(c) contains such other information as may be required under the CDS rules. Section 25(4) The provisions of this section shall not apply to any bearer security. Section 25(5) Nothing in this section shall be construed as making the central depository an agent of the issuer for the purposes of providing registration services. [Act No. 19 of 2015 , s....

Section 26. Issuer not to issue certificates in respect of dematerialised securities Section No issuer shall, after the dematerialisation date issue any certificate in respect of a dematerialised security.

Section 27. References to the Companies Act (Cap. 486) Section 27(1)(a) a register of members, or of debenture holders, (including branch registers) kept by a company under the Companies Act (Cap. 486) is taken to be a reference to the record of depositors maintained by the central depository; Section 27(1)(b) a transfer of shares or debentures from a transferee under the Companies Act (Cap. 486) is taken to be a reference to a book-entry transfer performed by the central depository; and Section 27(1)(c) any certificate, instrument of transfer or any movable property representing any security that is used as evidence of ownership of the security is taken to be a reference to a statement of account issued by the central depository. Section 27(2) Section 505 of the Companies Act (Cap. 486) does not apply to a dematerialised security. [Act No. 19 of 2015 , s. 129.]

Section 28. Application to collective investment schemes Section a register of any collective investment scheme, shall be deemed to be a reference to the record of depositors maintained by the central depository;

Section 29. CMA rules in respect of dematerialised securities Section to effect the replacement of physical registers with book-entry records where the dematerialised security to be prescribed is a security other than a share or debenture under the Companies Act (Cap. 486) or an interest in a collective investment scheme; and

Section 30. Dealer in book-entry securities to hold securities account Section 30(1) No person shall deal in book-entry securities unless such person holds a securities account. Section 30(2) A central depository may establish different types of securities accounts for different classes of persons or securities. Section 30(3) A securities account opened with a central depository shall be in the name of the beneficial owner, legal owner or authorized nominee. Section 30(4) A person who opens a securities account shall declare in the manner prescribed in the CDS rules whether the person is the beneficial owner of the deposited securities or the legal owner. Section 30(5) A person who contravenes the provisions of this section commits an offence and shall, on conviction, be liable to a fine not exceeding ten million shillings or to imprisonment for a term not exceeding ten years or both. [Act No. 8 of 2021 , s. 74.]

Section 31. Issuance of statements of accounts Section 31(1) A central depository shall issue to all depositors statements of account in respect of all book-entry securities held in custody by, or registered in the name of, the central depository or its nominee company for the depositors at such time and in such manner as may be prescribed under this Act. Section 31(2) Notwithstanding the provisions of subsection (1), a depositor may, at any time, by written notice, require the central depository to issue to him a statement of account in respect of all or any of the book-entry securities for the time being held in custody by, or registered in the name of, the central depository or its nominee company on behalf of the depositor. Section 31(3) A central depository shall, on receipt of a written notice under subsection (2) and upon payment of any charges which may be imposed under the CDS rules, issue to the depositor the statement of account so required. Section 31(4) A statement of account issued under this section shall be prima facie evidence of the truth of the matters specified in the statement of account.

Section 32. Duty of central depository to keep records Section all transfer of book-entry securities to and from a securities account;

Section 33. Audit of records and accounts Section 33(1)(a) a verification of the accuracy of the details shown in such records or accounts; and Section 33(1)(b) a stock count of all certificates held by the central depository. Section 33(2)(a) a copy of the report of the audit conducted under subsection (1), duly certified by the auditors; Section 33(2)(b) a description of the activities undertaken by the central depository in that financial year; Section 33(2)(c) the resources, including financial, technological and human resources which the central depository had available, and used, in order to ensure compliance with its obligations; and Section 33(2)(d) an analysis of the extent to which the central depository considers that the activities undertaken, and resources used, have resulted in full compliance of its obligations. Section 33(3) A central depository shall, at the end of each financial year, subject its operations to an independent audit. Section 33(4) A central depository shall appoint an independent auditor for the purposes of subsection (3). Section 33(5) A central depository shall inform the Authority of the appointment of an auditor under subsection (4). Section 33(...

Section 30A. Appointment of authorized nominees Section 30A(1) A beneficial owner or legal owner may appoint, in writing, a person to be the authorized nominee for the purpose of opening a securities account or, in the case of more than one beneficial or legal owner, an omnibus account in the name of the beneficial or legal owner or owners, as the case may be. Section 30A(2) An authorized nominee appointed under subsection (1) may deposit securities in the securities account or omnibus account on behalf of the beneficial or legal owners, as the case may be. Section 30A(3) The authorized nominee shall declare in the manner prescribed in the CDS rules the beneficial or legal owner of the securities deposited under subsection (2). Section 30A(4) A person who contravenes the provisions of this section commits an offence and shall, on conviction, be liable to a fine not exceeding ten million shillings or to imprisonment for a term not exceeding ten years or both. [Act No. 8 of 2021 , s. 75.]

Section 30B. Duties of authorized nominees Section 30B(1) An authorized nominee shall keep and maintain records on beneficial owners, legal owners, securities accounts or omnibus accounts in respect of the securities deposited in the securities or omnibus account in the manner prescribed in the CDS rules. Section 30B(2) An authorized owner shall, on request, furnish the central depository with such information as may be required on the beneficial owners, legal owners, securities accounts or omnibus accounts in respect of the securities deposited in the securities or omnibus account. Section 30B(3) A person who contravenes the provisions of this section commits an offence and shall, on conviction, be liable to a fine not exceeding ten million shillings or to imprisonment for a term not exceeding ten years or both. [Act No. 8 of 2021 , s. 75.]

Section 61. Preservation of records and accounts Section A central depository and its central depository agents shall preserve all records and accounts for a period of seven years, whether or not they cease to carry on their business before the end of the seventh year.

Section 62. Power of Authority to compound offences Section if such person pays such amount to the Authority within fourteen days after the order, proceedings shall not be taken against him in relation to the offence; or

Section 63. Prosecution Section The Director of Public Prosecutions may on the request of the Authority appoint any officer of the Authority or advocate of the High Court to be a prosecutor in respect of any offence under this Act. [Act No. 2 of 2002 , Sch., Act No. 19 of 2023, Sch.]

Section 64. Indemnity Section No officer, employee or agent of the central depository shall be sued in any court for any act or matter done, or ordered to be done, or omitted to be done, by him in good faith and in the intended exercise of any power or performance of any duty, conferred or imposed on him by or under this Act.

Section 65. CMA rules Section 65(1) The Authority may, from time to time, make such CMA rules as may be necessary or expedient for carrying out or achieving the objects and purposes of this Act. Section 65(2)(a) prescribing fees to be paid in respect of any matter or thing required for the purposes of this Act; Section 65(2)(b) prescribing the circumstances when a book-entry security in a securities account may be specified by a central depository as being in suspense under section 43 ; Section 65(2)(c) regulating the appointment of central depository agents and nominee companies and the imposition of duties, obligations and sanctions on such agents and companies; Section 65(2)(d) regulating the setting-up and operation of the computer system including computer terminals which form part of such system; Section 65(2)(e) regulating the manner in which immobilised book-entry securities shall be kept for safe custody by a central depository; Section 65(2)(f) regulating the manner in which book-entry securities shall be immobilised or dematerialised by a central depository; Section 65(2)(g) regulating the replacement of physical registers with book-entry records where the dematerialised...

Section 66. Reference to allottee in the Companies Act (Cap. 486) Section For purposes of the application of the Companies Act (Cap. 486) in relation to any book-entry security, a reference to an allottee in that Act shall be construed as a reference to a depositor who, by virtue of section 37 of this Act, is deemed to be a member or debenture holder of the company which makes the allotment. [Act No. 19 of 2015 , s. 132.]

Section 67. Publication of notice Section Where notice is required under Part III of this Act, it shall be given in not less than three daily newspapers of national circulation, one of which shall be in Kiswahili and two in the English language, once a week for three consecutive weeks.