| (2) |
The depository rules— |
| (a) |
must provide for equitable criteria for the acceptance and expulsion of a participant and for such acceptance and expulsion to be in the interests of issuers and clients; |
| (b) |
if applicable, must provide for arrangements for certificated securities to be converted to uncertificated securities and for issuers to issue uncertificated securities; |
| (c) |
must provide for adequate steps to be taken by the central securities depository, or a person to whom the central securities depository has delegated its investigative and disciplinary functions, to investigate and discipline a participant or officer or employee of a participant who contravenes or fails to comply with this Act, the depository rules, the interim depository rules or the directives and must require a report on the disciplinary proceedings to be furnished to the registrar within 30 days after the completion of such proceedings; |
| (d) |
must provide for the manner in which a participant who is believed to— |
| (i) |
be able to furnish any information on the subject of any investigation; or |
| (ii) |
have in that participant’s possession or under that participant’s control any document, which has bearing upon that subject, |
may be required to appear before a person conducting an investigation, to be interrogated or to produce such document;
| (e) |
must provide for requirements in respect of a participant’s financial soundness and valid financial cover that the participant must hold in respect of— |
| (i) |
the participant’s actual and potential liabilities; |
| (ii) |
conditional and contingent liabilities to the central securities depository; |
| (iii) |
liabilities which existed before or accrue after a person has ceased to be ,a participant; |
| (i) |
dividends paid and other payments made by issuers in respect of securities are paid by issuers to participants or clients and, if applicable, by participants to clients; |
| (ii) |
all notices regarding rights and other benefits accruing to the owners of securities deposited with the central securities depository are conveyed to participants and clients; and |
| (iii) |
the rights of participants or clients are not in any way diminished by the fact that securities held by them or on their behalf are held collectively in a central securities repository as provided for by this Chapter; |
| (g) |
must require that where a participant agrees, or is otherwise required, to— |
| (i) |
receive monies in respect of securities on behalf of clients from a central securities depository or issuer, such monies are paid to the clients concerned; |
| (ii) |
convey to clients all information regarding rights and other benefits accruing to the securities held on behalf of such clients, such information is, in fact, conveyed; and |
| (iii) |
give effect to the lawful instructions of clients with regard to voting rights and other matters, the necessary action is taken; |
| (h) |
must require that a participant, on written request from a client to withdraw securities or an interest in securities held in a securities repository or central securities repository, deliver a certificate or written instrument evidencing the same number of securities, or securities of the same nominal value and of the same kind, as the securities held on behalf of that client in the securities repository or central securities repository, as long as the client has a sufficient unencumbered credit balance of those securities with the participant concerned; |
| (i) |
must require that a participant’s central securities accounts do not show a debit balance; |
| (j) |
may provide that a central securities depository may refuse to accept securities issued by any particular issuer with due regard to the clearing and settlement arrangements of an exchange for transactions in those securities; |
| (i) |
the duty of a client to disclose to a participant, and the duty of a participant to disclose to a central securities depository, information about a beneficial, limited or other interest in securities deposited by a client with a participant or by a participant with a central securities depository, as the case may be; and |
| (ii) |
the manner, form and frequency of such disclosure; |
| (l) |
must provide for the manner in which a central securities depository or a participant must keep records of clients, or owners or beneficial owners of securities and limited or other interests in securities; |
| (m) |
must provide for the manner in which participants must give instructions to a central securities depository; |
| (n) |
if the central securities depository is appointed as a clearing house by an exchange, may regulate, consistent with the exchange rules, the clearing and settlement functions to be performed by participants in the clearing and settlement process; |
| (o) |
must provide for the purposes for which a central securities depository may issue directives; |
| (p) |
must provide for the manner in which a participant must hold and administer securities; and |
| (q) |
must provide for the approval by the central securities depository of a nominee of a participant, or any other nominee who has an account with a participant, which nominee holds securities in a securities repository or central securities repository. |
| (3) |
A central securities depository may, with the approval of the registrar, make depository rules on matters additional to those listed in subsection (2). |
| (4) |
A depository rule made under this section is binding on the central securities depository, a participant, an issuer of securities deposited with the central securities depository and their officers and employees, and clients. |
Older Persons Act, 2006
