Kenya - Obtain Central Depository License

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Procedure

Apply In-Person:

1. To apply for a central depository license in Kenya, the applicant has to contact the Capital Markets Authority (CMA) offices to make the application.
2. Here the applicant will be given an application form by a licensing officer to fill and submit.
3. Fill in the application and attach the required documents. A list of the can be found under the "Required Documents" section of this page.
4. Submit the filled in application form and required documents to the licensing officer and pay the required application fees.
5. Details of the application fees to be paid can be found under the "Fees" section of this page. Kindly note that the application fee of Kshs 2500 and should be submitted to the Authority by way of a company cheque
6. The authority will review the application regarding any areas of noncompliance with the license requirements which the applicant is required to address.
7. In addition, the authority conducts a premise inspection to ensure that the applicant has adequate technical and administrative capacity to carry out the business for which the license is sought.
8. In the review of license application, the Authority conducts due diligence to ensure that the directors and key personnel of a prospective licensee are fit and proper to hold their respective positions.
9. The application is considered by the Board of the Authority for a final determination of the application.
10. Upon successful review and approval of the application the applicant will be advised accordingly and required to settle the requisite license approval fee. Details of the license fee can be found on the Fes” section on this page.
11. The authority will advise the applicant when the License Certificate is available for collection.
12. The processing time is usually 25 days to obtain the license.

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Required Documents

• Duly completed application Application form 1 in duplicate
• Certified copy of Certificate of Incorporation.
• Memorandum and Articles of Association (with objects that authorize the company to carry out the business for which the license is sought).
• Accounts (6 months unaudited +2 years where relevant).
• Business plan.
• Two (2) letters of business reference .
• One (1) letters of bank reference .
• Submission of a board charter that confirms its responsibility for adoption of strategic Clear separation of roles and responsibilities of the chairman and chief executive.
• Policy for appointment of employees
• A Risk Management framework in place
• Comprehensive Curriculum Vitae of Directors and Head of Custodial Services
• Duly filled and executed Fit & Proper Form for directors and Head of Custodial Services
• Valid certified copies of Police Clearance Certificates for the Directors and Head of Custodial Services
• Application Fees
• AUTHORIZED DEPOSITORIES CHECKLIST

Office Locations & Contacts

Capital Markets Authority - Head Office
Embankment Plaza, 3rd Floor
Longonot Road, off Kilimanjaro Avenue, Upperhill
P.O Box 74800 - 00200
Nairobi
Kenya
Tel: +254 20 2264000/ 2264900 / 2221869
Cell: +254 722 207767
Email: [email protected]
Website link

Eligibility

• Individual/ companies wishing to operate a central depository in Kenya is eligible to make the application.

Fees

• Application fee - Kshs. 2,500.
• Licence fee - Kshs. 100,000.

Validity

• The license is valid for one year.

Documents to Use

• Application for Approval to Operate a Central Depository

Sample Documents

Please attach sample completed documents that would help other people.

Processing Time

• The processing time is 25 days.

Related Videos

Videos explaining the procedure or to fill the applications.
Attach videos using the following tag <&video type="website">video ID|width|height<&/video&> from external websites.
Please remove the "&" inside the tags during implementation.
Website = allocine, blip, dailymotion, facebook, gametrailers, googlevideo, html5, metacafe, myspace, revver,
sevenload, viddler, vimeo, youku, youtube
width = 560, height = 340, Video ID = Can be obtained from the URL of webpage where the video is displayed.
e.g In the following url "http://www.youtube.com/watch?v=Y0US7oR_t3M" Video ID is "Y0US7oR_t3M".

Instructions

• Applications should be submitted to the Authority by way of a hard copy submission.
• The Application Form is to be submitted to the Authority in support of a License Application. Kindly note that the application fee of Kshs 2500 should be submitted to the Authority by way of a company cheque.
• Upon submission of the application, the Authority will review the same and revert to applicants regarding any areas of noncompliance with the license requirements which the applicant is required to address. In addition, the Authority conducts a premise inspection to ensure that the applicant has adequate technical and administrative capacity to carry out the business for which the license is sought.
• In the review of license applications the Authority conducts due diligence to ensure that the directors and key personnel of a prospective licensee are fit and proper to hold their respective positions. For more information on the due diligence documentation required by the Authority in this regard, please see below.
• The application is considered by the Board of the Authority for a final determination of the application.
• In the review process the Authority always reserves the right to request for any additional information that may be required to adequately evaluate the application. The Authority may also convene meetings with the applicant's technical team to facilitate progression of the application if need be.

Required Information

• Name of company
• Registered office
• Date of incorporation
• Location, address and telephone number of principal office
• Location, address and telephone number of branch offices and Nominee companies
• Details of capital structure
  • Nominal capital (KSh.)
  • Number of shares
  • Paid-up capital (KSh.)
• Shareholders details
• Directors details
• Chief Executive and other key personnel details
• Particulars of shares held by directors in other companies
• Particulars of two business referees of the applicant
• List the office facilities of the applicant

Need for the Document

• One needs a license issued by the CMA to operate a central depository in Kenya.
• No person shall establish, maintain or hold himself out as maintaining a central depository in Kenya except with the prior written approval of the Authority.
• A person who establishes, maintains or hold himself out as maintaining a central depository without an approval and license 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.

Information which might help

• The Authority shall close any applications that remain outstanding for a period of six (6) months from the date of submission of the application to the Authority.
• Upon approval of the application the applicant is advised accordingly and required to settle the requisite license approval fee.
• In addition, the Authority will advise the applicant when the License Certificate is available for collection.
• "Central depository" means a company licensed by the Authority to-
• establish and operate a system for central handling of securities –
• 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.
• which permits or facilitates the settlement or registration of securities transactions or dealings in securities without the physical delivery of certificate.
• provides other facilities and services incidental.

Other uses of the Document/Certificate

Please explain what are other uses of obtaining this document/certificate.
e.g. Birth Certificate can be used as proof of identity.

External Links

• CMA site
• Central Depositories Act
• Capital Market Act
• CMA Service Charter

Others

Due Diligence Documentation

• The Authority is required to ensure that every person who is, or is to be, a director, chief executive, manager and key personnel of a licensee is fit and proper to hold the particular position that he holds or is to hold.
• In determining the fitness and probity of the directors, chief executive, managers and key personnel of a proposed licensee the Authority requires applicants to submit the following documentation.
• A certified copy of the appointees national identity card/passport, Comprehensive CV of the directors or key personnel ( as defined under Regulation 53(2) of the Capital Markets (License Requirements)(General) Regulations, 2002; Certified copies of their Police Clearance Certificates from the Criminal Investigations Department (or its equivalent in other jurisdictions); and The Duly completed Fit and Proper form. (This can be downloaded within this section of the website.)