Financial Markets Act, 2012 (Act No. 19 of 2012)Chapter IV : Custody and Administration of SecuritiesDuties of participant32. Duties of participant |
| (1) | A participant must conduct its business in a fair and transparent manner with due regard to the rights of its clients. |
| (2) | A participant— |
| (a) | must, if securities are deposited with the participant, deposit them with a licensed central securities depository; |
| (b) | must maintain a securities account for a client in respect of securities deposited; |
| (c) | must reflect the number or nominal value of securities of each kind deposited in a securities account; |
| (d) | must administer and maintain a record of all securities deposited with it in accordance with the depository rules; |
| (e) | must record all securities of the same kind deposited with it in an uncertificated securities register if so required by the depository rules; |
| (f) | must disclose to clients and issuers the fees and charges required by it for its services; which disclosure must give the specific monetary amount for each service rendered; or if such amount is not pre-determinable, the basis of the calculation; |
| (g) | must notify a client in writing or as otherwise agreed to by the client of an entry made in the client’s securities account; |
| (h) | must on request disclose to— |
| (i) | the Authority information about the securities recorded in a securities account; |
| (ii) | an issuer information about the securities issued by that issuer and recorded in a securities account in accordance with the depository rules; |
| (i) | must have a central securities account with a licensed central securities depository, and may— |
| (i) | deposit securities with or withdraw securities from that central securities depository; or |
| (ii) | transfer, attach, pledge, cede or give effect to any other lawful instruction in respect of a security or an interest in securities through that central securities depository; |
| (j) | must exercise the rights in respect of securities deposited by it with a licensed central securities depository in its own name on behalf of a client when so instructed by the client; |
| (k) | must balance and reconcile the aggregate of the securities accounts with the central securities accounts on a daily basis; |
| (l) | must correct discrepancies which are revealed in the reconciliation of the aggregate of its securities accounts with the central securities depository, and the participant must make good or provide any reconciled shortfall for which there are reasonable grounds for concluding that the participant is responsible; |
| (m) | must deposit securities held by it for its own account and those held for or on behalf of its clients in separate securities accounts and must ensure that securities held for or on behalf of its clients are segregated and identifiable as belonging to a specific person; |
| (n) | must, on a daily basis, ensure that its securities accounts and central securities accounts do not show a debit balance; |
| (o) | may not alienate, invest, pledge, hypothecate, encumber or otherwise make use of securities held for or on behalf of its clients, except with the client’s express consent; |
| (p) | must make adequate arrangements for the safeguarding of clients’ ownership rights, including, but not limited to insolvency proceedings; |
| (q) | must notify the Authority and central securities depository as soon as it commences an insolvency proceeding or an insolvency proceeding is commenced against it; and |
| (r) | may perform securities services to the extent necessary to perform the duties referred to in this subsection. |