29 2011 Unclaimed Financial Assets No 40 LAWS

29 2011 unclaimed financial assets no. 40 ======= laws of kenya ============= ======= the unclai

29
2011 Unclaimed Financial Assets No. 40


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LAWS OF KENYA
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The Unclaimed Financial Assets
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Act, 2011
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No. 40 of 2011
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Published by the National Council for Law Reporting
with the Authority of the Attorney-General
www.kenyalaw.org
THE UNCLAIMED FINANCIAL ASSETS ACT, 2011
No. 40 of 2011
Date of Assent: 2nd December, 2011
Commencement: 16th December, 2011
ARRANGEMENT OF SECTIONS
Section
Part 1—Preliminary
1—Short title.
2—Interpretation.
Part II— Determination of Unclaimed Assets
3—Unclaimed assets general requirements.
4—Travellers cheques, money orders, etc.
5—Cheques, drafts, or similar instruments.
6—Demand, savings or matured time deposits.
7—Life or endowment insurance policy or annuity contract.
8—Demutualization of insurance company, etc.
9—Deposit for utility services.
10—Determination or order by court of refund by holder.
11—Ownership interest, etc.
12— Assets from dissolved business entity.
13—Assets held in fiduciary capacity.
14—Gift certificate or credit memo.
15—Unpaid wages.
16—Assets held in safe deposit box or repository.
17—Assets held by court or Government department.
18—Cabinet Secretary to prescribe further classes of assets, etc.
Part III—Dealing With Unclaimed Assets, Duties of Holders and Certain
Powers of the Authority, etc
19—Duty to locate and notify owners of assets.
20—Report of presumed abandoned assets; duties of assets holder.
21—Authority may request for information.
22—Payment or delivery of abandoned assets to Authority.
23—Authority to assume custody; rights of assets holder, etc.
24— Authorised deductions by the Authority.
25—Dividends, interest or other income.
26—Sale of unclaimed assets.
27—Availability of information to the public.
28—Claims on assets.
29—Action to establish claim in court.
30—Expiration of time period specified by contract, statute, or court
order.
31—Report of unclaimed assets; examination of records, etc.
32—Maintenance of records; required time periods.
33—Failure to pay or deliver assets and penalties.
34— Assets deemed unclaimed before this Act came into force.
35—Duty to locate and notify owners of assets.
36—Unclaimed assets database.
37—Responsibility of regulatory authorities.
38—Access to information and retention of records by the Authority.
Part IV—The Unclaimed Financial Assets Authority
39—Establishment of the Unclaimed Financial Assets Authority.
40—Composition of the Board.
41—Objects and functions of the Authority.
42—Appointment of chief executive officer, etc.
43—Exemption from stamp duty.
Part V—The Unclaimed Financial Assets Trust Fund
44—Establishment of the Trust Fund.
45—Payment of claims.
46—Accounts and audit.
47—Penalties payable to the Fund.
48—Investment of funds.
Part VI—Miscellaneous
49—Authority to appoint agents, etc.
50—Authority may institute proceedings in court.
51—Powers of the Authority to enter, etc.
52—Offences and penalty.
53—Regulations.
THE UNCLAIMED FINANCIAL ASSETS ACT, 2011
No. 40 of 2011
AN ACT of Parliament to provide for the reporting and dealing with
unclaimed financial assets; to establish the Unclaimed Financial
Assets Authority and the Unclaimed Financial Assets Trust Fund and for
connected purposes
ENACTED by the Parliament of Kenya, as follows—
PART I—PRELIMINARY
Short title.
1. This Act may be cited as the Unclaimed Financial Assets Act, 2011.
Interpretation.
2. In this Act, unless the context otherwise requires—
“apparent owner” means the person whose name appears on the records of
the holder as the person entitled to assets held, issued, or owing by
the holder;
"assets" means financial assets to which this Act applies and includes
any income, dividend or interest thereon;
"Authority" means the Unclaimed Assets Authority established by
section 39;
"bank" has the meaning assigned to it in the Banking Act Cap. 488;
"Board" means the board of the Authority;
"Cabinet Secretary" means the Cabinet Secretary for the time being
responsible for matters relating to finance;
"chief executive officer" means the chief executive officer of the
Authority appointed under section 42;
"financial institution" has the meaning assigned to it in the Banking
Act Cap. 488;
"Fund" means the Unclaimed Assets Trust Fund established by section
44;
"holder" means any entity who, in respect to assets to which this Act
applies, holds such assets on behalf of an owner, is in possession of
assets belonging to another, is indebted to another on an obligation
or is a trustee;
"insurance company" has the meaning assigned to it in the Insurance
Act Cap. 487;
"last known address" means a description of the location of the
apparent owner sufficient for the purpose of the delivery of mail;
"owner" means a person having a legal or equitable interest in assets
subject to this Act and includes the legal representative of the
owner;
"unclaimed assets" means assets that—
(a) have been presumed abandoned and have become unclaimed assets
under the provisions of this Act;
(b) have been transferred to the Authority as unclaimed assets under
this Act;
(c) have been deemed under any other law to be unclaimed assets and
payable to the Authority,
and includes all income, dividend or interest thereon but excludes any
lawful charges thereon; and
"utility" means a person who carries on, the business of transmission,
sale, delivery, or supply of electricity, water or other utility
services.
PART II—DETERMINATION OF UNCLAIMED ASSETS
Unclaimed assets general requirements.
3. Unless otherwise provided in this Act or by any other law, assets
shall be subject to the custody of the Authority as unclaimed assets,
if the conditions raising a presumption of abandonment under sections
4 to 18 are satisfied and one or more of the following requirements
are met—
(a) the records of the holder do not reflect the identity of the
person entitled to the assets;
(b) the holder has not previously paid or delivered the assets to the
apparent owner or other person entitled to the assets;
(c) the last known address, as shown on the records of the holder, of
the apparent owner is in a country that does not provide by law for
the escheat or custodial taking of the assets or its escheat or
unclaimed assets law is not applicable to the assets and the holder is
domiciled in Kenya.
Travellers cheques, money orders, etc.
4. (1) Subject to subsection (4), any sum payable in Kenya on a
travellers cheque that is outstanding for more than two years after
its issuance is presumed abandoned unless the owner, within the two
years, has communicated in writing with the issuer concerning it or
otherwise indicated an interest as evidenced by a record prepared by
the issuer.
(2) Subject to subsection (4), any sum payable in Kenya on a money
order or similar written instrument that is outstanding for more than
two years after its issuance is presumed abandoned unless the owner,
within two years, has communicated in writing with the issuer
concerning it or otherwise indicated an interest as evidenced by a
record prepared by the issuer.
(3) A holder shall not deduct from the amount of a travellers cheque
or money order any charge imposed by reason of the failure to present
the instrument for payment unless—
(a) the issuer regularly imposes such charges and does not regularly
reverse or otherwise cancel them; and
(b) there is an enforceable written contract between the issuer and
the owner of the instrument under which the issuer may impose a
charge.
(4) A sum payable in Kenya on a travellers cheque, money order, or
similar written instrument may not be subjected to the custody of the
Authority as unclaimed assets unless one or more of the following
requirements are met—
(a) the records of the issuer show that the travellers cheque, money
order or similar written instrument was purchased in Kenya;
(b) the issuer has its principal place of business in Kenya and the
records of the issuer do not show the country in which the travellers
cheque, money order, or similar written instrument was purchased;
(c) the issuer has its principal place of business in Kenya.
Cheques, drafts or similar instruments.
5. (1) Any sum payable in Kenya on a cheque, draft, or similar
instrument, on which a bank or financial institution is directly
liable, including a banker's cheque, which is outstanding for more
than two years after it was payable or after its issuance if payable
on demand, is presumed abandoned, unless the owner, within the
immediately preceding two years, has communicated in writing with the
bank or financial institution concerning it or otherwise indicated an
interest as evidenced by a record prepared by the bank or financial
institution.
(2) A holder may not deduct from the amount of any instrument subject
to this section any charge imposed by reason of the failure to present
the instrument for payment unless—
(a) the issuer regularly imposes such charges and does not regularly
reverse or otherwise cancel them; and
(b) there is an enforceable written contract between the issuer and
the owner of the instrument under which the issuer may impose a
charge.
Demand, savings or matured time deposit.
6. (1) Any demand, savings, or matured time deposit with a bank or
financial institution, including a deposit that is automatically
renewable, and any funds paid toward the purchase of a share, a mutual
investment certificate, or any other interest in a bank or financial
institution is presumed abandoned unless the owner, within the
immediately preceding five years, has met one or more of the following
requirements—
(a) in the case of a deposit, increased or decreased its amount or
presented the passbook or other similar evidence of the deposit for
the crediting of interest;
(b) communicated, in writing, with the bank or financial institution
concerning the assets;
(c) otherwise indicated an interest in the assets as evidenced by a
record prepared by the bank or financial institution;
(d) had another relationship with the bank or financial institution
concerning which the owner has met one or more of the following
requirements—
(i) communicated, in writing, with the bank or financial institution;
(ii) otherwise indicated an interest as evidenced by a memorandum or
other record on file prepared by the bank or financial institution and
unless the bank or financial institution communicates in writing with
the owner with regard to the assets that would otherwise be abandoned
under this subsection at the address to which communications regarding
the other relationship regularly are sent.
(2) A holder may not impose with respect to assets described in
subsection (1) any charge due to dormancy or inactivity or cease
payment of interest unless—
(a) the holder regularly imposes such charges or ceases payment of
interest and does not regularly reverse or otherwise cancel them or
retroactively credit interest with respect to the assets; and
(b) there is an enforceable written contract between the holder and
the owner of the assets providing that the holder may impose a charge
or cease payment of interest.
(3) Any assets described in subsection (1) that are automatically
renewable are matured for purposes of subsection (1) seven years after
the expiration of its initial time period, but in the case of any
renewal to which the owner consents at or about the time of renewal by
communicating in writing with the bank or financial institution or
otherwise indicating consent as evidenced by a record prepared by the
holder, the assets is matured upon the expiration of the last time
period for which consent was given.
(4) Where, at the time provided for delivery to the Authority under
section 22, a penalty or forfeiture in the payment of interest would
result from the delivery of the assets, the time for delivery shall be
extended until the time when no penalty or forfeiture would result.
Life or endowment insurance policy or annuity contract.
7. (1) Funds held or owing under any life or endowment insurance
policy or annuity contract that has matured or terminated are presumed
abandoned if unclaimed for more than two years after the funds became
due and payable as established from the records of the insurance
company holding or owing the funds.
(2) Where a person other than the insured or annuitant is entitled to
the funds referred to in subsection (1) and the address of the person
is not known to the insurance company or it is uncertain from the
records of the insurance company who is entitled to the funds, it
shall be presumed that the last known address of the person entitled
to the funds is the same as the last known address of the insured or
annuitant according to the records of the insurance company.
(3) For purposes of this Act, a life or endowment insurance policy or
annuity contract not matured by actual proof of the death of the
insured or annuitant according to the records of the insurance company
shall be deemed matured and the proceeds due and payable if one or
more of the following requirements are met—
(a) the insurance company knows that the insured or annuitant has
died;
(b) the insured has attained, or would have attained if he were
living, the limiting age under the mortality table on which the
reserve is based;
(c) the policy was in force at' the time the insured attained, or
would have attained, the limiting age; and neither the insured nor any
other person appearing to have an interest in the policy within the
preceding two years, according to the records of the insurance
company, has assigned, readjusted, or paid premiums on the policy,
subjected the policy to a loan, corresponded in writing with the,
insurance company concerning the policy, or otherwise indicated an
interest as evidenced by a record prepared by the insurance company.
(4) For purposes of this Act, the application of an automatic premium
loan provision or other non-forfeiture provision contained in an
insurance policy shall not prevent a policy from being matured or
terminated under this section if the insured has died or the insured
or the beneficiary of the policy otherwise has become entitled to the
proceeds of the policy before the depletion of the cash surrender
value of the policy by the application of those provisions.
(5) Where any law or the terms of the life insurance policy require
the insurance company to give notice to the insured or owner that an
automatic premium loan provision or other non-forfeiture provision has
been exercised and the notice, given to an insured or owner whose last
known address according to the records of the insurance company is in
Kenya, is undeliverable, the insurance company shall make a reasonable
search to ascertain the policyholder's correct address to which the
notice shall be delivered.
(6) Notwithstanding any other law, where the insurance company learns
of the death of the insured or annuitant and the beneficiary has not
communicated with the insurance company within sixty days after the
death of the insured or annuitant, the insurance company shall take
reasonable steps to pay the proceeds to the beneficiary.
(7) Every change of beneficiary form issued by an insurance company
under any life or endowment insurance policy or annuity contract to an
insured or owner who is a resident of Kenya shall request all of the
following information—
(a) the name of each beneficiary, or if a class of beneficiaries is
named, the name of each current beneficiary in the class;
(b) the address of each beneficiary;
(c) relationship of each beneficiary to the insured;
(d) a copy of at least one identification document of each
beneficiary, including a national identity card or passport.
Demutualization of insurance company, etc.
8. (1) Assets distributable in the course of the demutualization of an
insurance company shall be presumed abandoned where—
(a) in the case of any funds, two years after the date of the
demutualization, the funds remain unclaimed and the owner has not
otherwise communicated with the holder or its agent regarding the
assets as evidenced by a record with the holder or its agent.
(b) in the case of any stock, two years after the date of the
demutualization, instruments or statements reflecting the distribution
are either mailed to the owner and returned as undeliverable or not
mailed to the owner because of an address on the books and records of
the holder that is known to be incorrect and the owner has not
otherwise communicated with the holder or its agent regarding the
assets as evidenced by a memorandum or other record on file with the
holder or its agent.
(2) A holder of unclaimed assets described in s section (1) shall file
an initial one-time report of unclaimed demutualization proceeds not
later than-six months after this Act comes into force.
(3) In this section, "demutualization" means the payment of
consideration for the relinquishment of a mutual membership interest
in a mutual insurance company, whether or not undertaken in
conjunction with a plan of demutualization, liquidation, merger, or
other form of reorganization.
Deposit for utility services.
9. A deposit made by a subscriber with a utility to secure provision
of services or any sum paid in advance for utility services to be
furnished, that remains unclaimed by the owner for more than two years
after termination of the services for which the deposit or advance
payment was made shall be presumed abandoned.
Determination or order by court of refund by holder.
10. Except to the extent otherwise ordered by a court, any sum that a
holder has been ordered to refund by a court that remains unclaimed by
the owner for more than two years after it became payable in
accordance with the final determination providing for the refund,
whether or not the final determination requires any person entitled to
a refund to make a claim for the refund, is presumed abandoned.
Ownership interest, etc.
11. (1) Any stock, share, or other intangible ownership interest in a
business entity, the existence of which is evidenced by records
available to the entity, is presumed abandoned and, with respect to
the interest, the entity is the holder, if both of the following
apply—
(a) the interest in the entity is owned by a person who for more than
three years has not claimed a dividend, distribution, or other sum
payable as a result of the interest, or who has not communicated with
the entity regarding the interest or a dividend, distribution, or
other sum payable as the result of the interest, as evidenced by a
memorandum or other record on file with the entity prepared by the
entity;
(b) the entity does not know the whereabouts of the owner at the end
of the three year period.
(2) The return of official shareholder notifications or communications
as undeliverable is evidence that the entity does not know the
location of the owner.
(3) This section applies to both the underlying stock, share, or other
intangible ownership interest of an owner, and any stock, share, or
other intangible ownership interest of which the business entity is in
possession of the certificate or other evidence or indication of
ownership, and to the stock, share, or other ownership interest of
dividend and non-dividend paying business entities whether or not the
interest is represented by a certificate.
(4) At the time an interest is presumed abandoned under this section,
any dividend, distribution, or other sum then held for or owing to the
owner as a result of the interest, and not previously presumed
abandoned, shall be presumed abandoned.
Assets from dissolved business entity.
12. Assets distributable in the course of dissolution of a business
entity that remain unclaimed by the owner for more than two years
after the date specified for final distribution is presumed abandoned.
Assets held in fiduciary capacity.
13. (1) Assets held in a fiduciary capacity for the benefit of another
person are presumed abandoned unless the owner, within two years after
they have become payable or distributable, has increased or decreased,
the principal, accepted any payment in respect thereof, communicated
concerning the assets, or otherwise indicated any other interest as
evidenced by a record prepared by the fiduciary.
(2) For the purposes of this Act, a person who is deemed to hold
assets in a fiduciary capacity for a business entity alone is the
holder of the assets only insofar as the interest of the business
entity in the assets is concerned, and the business entity is the
holder of the assets insofar as the interest of any other person in
the assets is concerned.
Gift certificate or credit memo.
14. (1) Except as provided in subsection (4), a gift certificate, gift
card, or credit memo is presumed abandoned if either of the following
apply—
(a) the certificate, card, or memo is not claimed or used for a period
of five years after becoming payable or distributable;
(b) the certificate, card, or memo was used or claimed one or more
times without exhausting its full value, but subsequently was not
claimed or used for an uninterrupted period of five years.
(2) For purposes of subsection (1), a gift certificate or gift card is
considered to have been claimed or used if there is any transaction
processing activity on the gift certificate or gift card including,
but not limited to, redeeming, refunding, or adding value to the
certificate or card.
(3) Activity initiated by the issuer of the certificate or card,
including, but not limited to, assessing inactivity fees or similar
service fees, does not constitute transaction processing activity for
purposes of subsection (2).
(4) In the case of a gift certificate or gift card, the owner is
presumed to be a recipient of the gift certificate or gift card, and
the amount presumed abandoned is the price paid by the purchaser
for-the gift certificate or gift card, less the total of any purchases
or fees assessed a 'fist the certificate or card.
(5) In the case of a credit memo, the amount presumed abandoned is the
amount credited to the recipient of the memo.
(6) This Act does not apply to a gift certificate that is issued for
retail goods or services by a person engaged in the retail sale of
goods or services.
Unpaid wages.
15. Unpaid wages including wages represented by unpresented payroll
cheques, allowances, bonuses and terminal benefits owing in the
ordinary course, of the holder's business that remain unclaimed by the
owner for more than one year after becoming payable are presumed
abandoned.
Assets held in safe deposit box or repository.
16. Assets that by their nature may lawfully be sold, held in a safe
deposit box or any other safekeeping repository in Kenya in the
ordinary course of the holder's business, and proceeds resulting from
the sale of the assets, that remain unclaimed by the owner for more
than two years after the lease or rental period on the box or other
repository has expired, are presumed abandoned.
Assets held by court or Government department.
17. Assets held for the owner by a court or a Government department
that remains unclaimed by the owner for more than one year after
becoming payable or distributable is presumed abandoned.
Cabinet Secretary to prescribe further classes of assets etc.
18. (1) Subject to this Act, the Cabinet Secretary may by order in the
Gazette prescribe such further class of assets and such further class
of holders to be assets and holders respectively to which this Act
applies.
(2) The order referred to subsection (1) shall include such other
requirements as the Cabinet Secretary may deem necessary, including
the period after which assets referred to in subsection (1) may be
presumed abandoned and deemed unclaimed assets.
PART III—DEALING WITH UNCLAIMED ASSETS, DUTIES OF HOLDERS AND CERTAIN
POWERS OF THE AUTHORITY, ETC.
Duty to locate and notify owners of assets.
19. (1) A holder of assets to which this Act applies shall make all
reasonable efforts to locate the owner and to notify the owner about
those assets.
(2) The reasonable efforts required under subsection (1) shall be made
in such manner and within such period as the Authority may prescribe.
(3) Without prejudice to the generality of subsections (1) and (2),
within a period not less than sixty days and not more than one year
before filing the report required by section 20, the holder in
possession of assets presumed abandoned and subject to the Authority's
custody as unclaimed assets under this Act shall send written notice
to the apparent owner at his last known address informing him that the
holder is in possession of assets subject to this Act where the holder
has in its records an address of the apparent owner.
Report of presumed abandoned assets; duties of assets holder.
20. (1) A person holding assets presumed abandoned and subject to the
custody of the Authority as unclaimed assets under this Act shall make
a report concerning the assets to the Authority as provided in this
section.
(2) The report referred to in subsection (1) shall be certified by the
chief executive officer of the holder and shall include all of the
following—
(a) the name, if known, and last known address, if any, of each person
appearing from the records of the holder to be the owner of assets
presumed abandoned under this Act;
(b) in the case of unclaimed assets held or owing under any life or
endowment insurance policy or annuity contract, the full name and last
known address of the insured or annuitant and of the beneficiary
according to the records of the insurance company holding or owing the
assets;
(c) in the case of the contents of a safe deposit box or other
safekeeping repository or of other tangible assets, a description of
the assets and the place where they are held and may be inspected by
the Authority and any amounts owing to the holder;
(d) the nature and identifying number, if any, or description of the
assets and the amount appearing from the records to be due;
(e) the date the assets became payable, demandable, or returnable, and
the date of the last transaction with the apparent owner with respect
to the assets;
(f) other information the Authority may lawfully require.
(3) Where the person holding assets presumed abandoned and subject to
the Authority's custody as unclaimed assets under this Act is a
successor to other persons who previously held the assets for the
apparent owner, or the holder has changed its name while holding the
assets, the holder shall file with the report all known names,
addresses and any other particulars of each previous holder of the
assets.
(4) Except as otherwise provided in this section, the report referred
to in subsection (1) shall be filed on or before the first day of
November of each year for the twelve-month period ending on the
immediately preceding thirtieth day of June.
(5) The Authority may extend the filing date provided for in
subsection (4) for up to sixty days after the deadline if an estimated
payment is paid on or before the deadline for the twelve-month period
ending on the immediately preceding thirtieth of June.
(6) A request for extension of time to file the report shall not be
deemed a request for an extension of time to remit payments.
(7) The Authority shall determine how estimated payments are to be
remitted to it by a holder under this Act.
Authority may request for information.
21. For the purposes of this Act, the Authority may request a person
who the Authority reasonably believes is a holder of assets to provide
such information to the Authority as the Authority may require, within
such time or at such intervals as may be specified in the request.
Payment or delivery of abandoned assets to Authority.
22. A person who is required to file a report under section 20 shall
at the time of filing the report pay or deliver to, or hold to the
order of the Authority all abandoned assets that are required to be
reported under that section or any balance owing if an estimated
payment was earlier made to the Authority.
Authority to assume custody; rights of assets holder, etc.
23. (1) Upon the payment or delivery of assets to the Authority, the
Authority shall assume custody and responsibility for the safekeeping
of the assets.
(2) A person who pays or delivers assets to the Authority in good
faith shall be relieved of all liability to the extent of the value of
the assets paid or delivered for any claim then existing or which may
arise or be made in respect to the assets after the payment or
delivery to the Authority.
(3) Where the holder pays or delivers assets to the Authority in good
faith and another person claims the assets from the holder or another
country claims the money or assets under its laws relating to escheat
or abandoned or unclaimed assets, the Authority, upon written notice
of the claim, shall defend the holder against the claim and indemnify
the holder against any liability on the claim.
(4) For the purposes of this section, "good faith" means—
(a) that payment or delivery was made in a reasonable attempt to
comply with this Act;
(b) that the person delivering the assets was not a fiduciary then in
breach of trust in respect to the assets and had a reasonable basis
for believing, based on the facts then known to him, that the assets
was abandoned for the purposes of this Act; and
(c) that there is no indication that the records under which the
delivery was made did not meet reasonable commercial standards of
practice in the industry.
(5) Assets removed from a safe deposit box or other safekeeping
repository shall be received by the Authority subject to the holder's
right under this subsection to be reimbursed for the actual cost of
the opening and to any valid lien or contract providing for the holder
to be reimbursed for unpaid rent or storage charges.
(6) The Authority shall reimburse or pay the holder out of the
proceeds remaining after deducting the Authority's selling cost of an
asset under this Act.
Authorised deductions by the Authority.
24. (1) Before making any deposit to the credit of the Fund, the
Authority may deduct any of the following—
(a) costs in connection with the sale of abandoned assets;
(b) costs of mailing and publication in connection with any abandoned
assets;
(c) reasonable service charges;
(d) costs incurred in examining records of holders of assets and in
collecting the assets from those holders.
(2) The Authority shall ensure that the costs and charges deducted
pursuant to subsection (1) are reasonable and in accordance with the
best market value available.
(3) Notwithstanding subsection (2), the charges deducted under
subsection (1) (c) shall not exceed one per cent of the gross value of
the asset in question.
Dividends, interest or other income.
25. Where assets other than money is delivered to the Authority under
this Act, the owner shall be entitled to receive from the Authority
any dividends, interest, or other income realized or accruing on the
assets at or before liquidation or conversion of the assets into
money.
Sale of unclaimed assets.
26. (1) Except as provided in this section, the Authority, not later
than three years after the receipt of the abandoned assets referred to
in section 25, shall sell such assets, subject to a reserve price, to
the highest bidder at a public auction.
(2) Any sale held under this section shall be preceded by at least one
publication of notice, at least three weeks in advance of sale, in at
least one newspaper of national circulation.
(3) Securities listed on a stock exchange shall be sold by the
Authority at prices prevailing at the time of sale on the exchange.
(4) Securities not listed on a stock exchange may be sold over the
counter at prices prevailing at, the time of sale or by any such other
method as the Authority may consider appropriate.
(5) Unless the Authority considers it to be in the best interest of
the Fund to do otherwise, all securities presumed abandoned under this
Act and delivered to the Authority shall be sold within one year of
the receipt of the securities.
(6) The purchaser of assets at a sale conducted by the Authority under
this Act shall take the assets free of all claims of the owner or
previous holder of the assets and of all persons claiming through or
under the owner or previous holder.
(7) The Authority shall execute all documents necessary to complete
the transfer of ownership to the purchaser.
Availability of information to the public.
27. The Authority shall, upon payment of such inspection fee as the
Authority may from time to time determine; make available for public
inspection at all business hours, only the name of the owner or
apparent owner and a general description of the assets delivered to it
under this Act.
Claims on assets.
28. (1) A person claiming an interest in any assets paid or delivered
to the Authority under this Act, may file with the Authority a claim
on such form as may be prescribed for that purpose by the Authority.
(2) The Authority shall consider each claim referred to subsection (1)
within ninety days after it is filed and shall give written notice to
the claimant of its decision.
(3) The notice under subsection (2) may be given by mailing it to the
last address, if any, stated in the claim as the address to which
notices are to be sent.
(4) Where no address for notices is stated in the claim, the notice
may be mailed to the last address, if any, of the claimant as stated
in the claim.
(5) Where a claim is allowed, the Authority shall pay over or deliver
to the claimant the assets or the amount the Authority actually
received or the net proceeds if it has been sold by the Authority.
Action to establish claim in court.
29. (1) A person who is aggrieved by a decision of the Authority or
whose claim has not been acted upon within ninety days after its
filing may bring an action in court against the Authority.
(2) The action shall be brought within ninety days after the decision
of the Authority or within one hundred and eighty days after the
filing of the claim where the Authority has failed to Act on a claim.
Expiration of time period specified by contract, statute of court
order.
30. The expiration, before or after the commencement of this Act, of
any period of time specified by contract, statute, or court order,
during which a claim for assets can be made or during which an action
or proceeding may be commenced or enforced to obtain payment of a
claim' for money or to recover assets, shall not prevent the assets
from being presumed abandoned or affect any duty to file a report or
to pay or deliver abandoned assets to the Authority as required by
this Act and such assets shall be delivered to the Authority and dealt
with as unclaimed assets under this Act.
Report of unclaimed assets; examination of records, etc.
31. (1) The Authority shall have powers to require a person who has
not filed a report as required by section 20 or a person who the
Authority believes has filed an incomplete, or false report, to file a
certified report in a form specified by the Authority.
(2) The report under section (1) shall state whether the person is
holding any unclaimed assets reportable or deliverable under this Act,
describe unclaimed assets not previously reported or as to which the
Authority has made inquiry, and specifically identify and state the
amounts of assets that may be in issue.
(3) The Authority shall have powers to, at reasonable times and upon
reasonable notice, examine the records of a person to determine
whether the person has complied with this Act.
(4) The Authority shall have powers to conduct the examination
referred to in subsection (3) whether or not the person believes he or
she is not in possession of any assets reportable or deliverable under
this Act.
(5) The Authority shall have powers to enter into contract with any
other person to conduct the examination under this section on behalf
of the Authority.
(6) Where an examination of the records of a person results in the
disclosure of assets reportable and deliverable under this Act, the
Authority shall have powers to assess the cost of the examination
against the holder at such daily rate as the Cabinet Secretary may
determine provided that the charges shall not exceed the value of the
assets found to be reportable and deliverable.
(7) The cost of examination made pursuant to subsection (3) shall be
imposed only against the holder.
(8) Where after this Act comes into force, a holder fails to maintain
the records required by section 31 and the records of the holder
available for the periods subject to this Act are insufficient to
permit the preparation of a report, the Authority shall have powers to
require the holder to report and pay an amount as may reasonably be
estimated from any available records.
Maintenance of records; required time periods.
32. (1) A holder required to file a report under section 20, as to any
assets for which it has obtained the last known address of the owner,
shall maintain a record of the name and last known address of the
owner for ten years after the assets becomes reportable, except to the
extent that a shorter time is provided in subsection (2) or by the
Authority.
(2) An entity that sells in Kenya its travellers cheques, money
orders, or other similar written instruments on which the business
entity is directly liable, or that provides those instruments to
others for sale in Kenya, shall maintain a record of those instruments
while they remain outstanding, indicating the country and date of
issue for three years after the date the assets are reportable.
Failure to pay or deliver assets and penalties.
33. (1) A person who fails to pay or deliver assets within the time
prescribed by this Act shall pay to the Authority interest at the
current monthly rate of one percentage point above the adjusted prime
rate per annum per month on the assets or value of the assets from the
date the assets should have been paid or delivered.
(2) The adjusted prime rate shall be based on the Central Bank of
Kenya average rate during the twelve-month period ending on thirtieth
day of September.
(3) The resulting current monthly interest rate based on the
twelve-month period ending thirtieth day of September shall become
effective on the first day of January of the following year.
(4) A person who willfully fails to render any report or perform other
duties required under this Act shall be liable to pay penalty of seven
thousand shillings but not more than fifty thousand shillings for each
day the report is withheld or the duty is not performed.
(5) A person who willfully fails to pay or deliver assets to the
Authority as required under this Act shall be liable to pay a penalty
equal to twenty-five percent of the value of the assets that should
have been paid or delivered.
(6) A penalty payable under subsections (1), (4) and (5) of this
section shall be recoverable as civil debt summarily.
Assets deemed unclaimed before this Act came into force.
34. (1) This Act shall, on coming into force, apply to all assets that
would, but for the absence of this Act, be deemed unclaimed assets
under the provisions of this Act as if this Act had been in force at
that earlier date on which the assets would have become unclaimed
assets under this Act.
(2) The initial report filed under this Act for assets that are
subject to this Act shall include all assets that would have been
presumed abandoned before this Act came into force as if this Act had
been in effect during that period and such assets shall be dealt with
under the provisions of this Act.
Duty to locate and notify owners of assets.
35. (1) The Authority shall make reasonable efforts to locate the
owner of assets in the custody of the Authority and notify him in
accordance with this Act.
(2) In notifying an owner as required by subsection (1), the Authority
shall determine the most cost effective manner of making the
notification depending on the respective value of the assets
concerned.
Unclaimed assets database.
36. The Authority shall—
(a) maintain an electronic or other database of all unclaimed assets
submitted to it under this Act;
(b) include in the database the prescribed particulars for each
unclaimed asset;
(c) make the database available to the public, subject to any
restrictions imposed for purposes of protecting the privacy of owners.
Responsibility of regulatory authorities.
37. (1) Any regulatory authority responsible for the supervision of a
holder shall assist the Authority in the enforcement of the provisions
of this Act and generally ensure that the objectives of this Act are
achieved.
(2) Subject to section 3, where there is conflict between the
provisions of this Act and the provisions of any other law on any
matter concerning unclaimed assets, the provisions of this Act shall
prevail.
Access to information and retention of records by the Authority.
38. (1) Subject to any other written law to the contrary, the
Authority shall have the right to any information that is in the
custody or control of a public body if that information can reasonably
be expected to assist the Authority in locating the owner, or
determining the correct owner, of an unclaimed asset for the purposes
of this Act.
(2) A public body that has custody or control of information to which
the Authority is entitled under subsection (1) shall disclose that
information to the Authority on request.
(3) Each public body shall meet the standards, as may be set by
regulation, with respect to—
(a) the collection and recording of information concerning any assets
that become unclaimed assets; and
(b) retention of records containing that information.
PART IV—THE UNCLAIMED FINANCIAL ASSETS AUTHORITY
Establishment of the Unclaimed Financial Assets Authority.
39. (1) There shall be an authority to be known as the Unclaimed
Financial Assets Authority.
(2) The Authority is a body corporate with perpetual succession and a
common seal and shall, in its corporate name, be capable of—
(a) suing and being sued;
(b) taking, purchasing or otherwise acquiring, holding, charging or
disposing of movable and immovable property;
(c) borrowing money or making investments;
(d) entering into contracts; and
(e) doing or performing all other acts or things for the proper
performance of its functions under this Act which may lawfully be done
or performed by a body corporate.
(3) The Authority shall perform the functions assigned to the
Authority under this Act.
Composition of the Board.
40. (1) The Board of the Authority shall comprise—
(a) five persons not being public officers appointed by the Cabinet
Secretary of whom—
(i) one shall be appointed by virtue of his knowledge and experience
in matters relating to banking and investment;
(ii) one shall be appointed by virtue of his knowledge and experience
in matters relating to insurance;
(iii) one shall be appointed by virtue of his knowledge and experience
in matters relating to accounting and auditing, law, corporate or
business management and,
(iv) one shall be appointed by virtue of his knowledge in matters
relating to unclaimed assets
(v) one shall be appointed to represent the interest of consumers of
financial services;
(b) the permanent secretary to the Treasury;
(c) the chief executive officer.
(2) The members of the Board shall, at their first meeting, elect a
chairperson from amongst the members of the Board appointed under
subsection (1) (a).
(3) No person shall be appointed as a member of the Board under
subsection (1) (a) if such person-
(a) has been convicted of an offence by a court of competent
jurisdiction and sentenced to imprisonment for a term of six months or
more;
(b) is adjudged bankrupt or has entered into a composition scheme or
arrangement with his creditors; or
(c) is disqualified under the provisions of any other written law from
appointment as such.
(4) A member of the Board shall hold office for a period of three
years, but shall be eligible for re-appointment.
(5) A member of the Board under subsection (1)(a) may—
(a) at any time resign from office by notice in writing to the Cabinet
Secretary; or
(b) be removed from office by the Cabinet Secretary if the member—
(i) has been absent from three consecutive meetings of the Board
without justifiable cause or the permission of the chairperson;
(ii) is adjudged bankrupt or enters into a composition scheme or
arrangement with his creditors; or
(iii) is convicted of an offence involving dishonesty or fraud;
(iv) subject to paragraph (iii), is convicted of a criminal offence
and sentenced to imprisonment for a term of six months or more;
(v) is incapacitated by prolonged physical or mental illness; or
(vi) is otherwise unable or unfit to discharge his functions.
(6) The quorum for any meeting of the Board shall be three.
(7) All questions proposed at a meeting of the Board shall be decided
by a majority of the votes of the members present and voting, and in
the event of equality of votes, the chairperson or the person
presiding shall have a casting vote in addition to the deliberative
vote.
(8) The Board may act notwithstanding any vacancy among the
membership.
(9) Subject to this Act, the Board may make rules for regulating the
procedure at its meetings.
(10) The seal of the Authority shall be authenticated by the signature
of the chairperson of the Board and the Chief Executive Officer and
any document not required by law to be under seal and all decisions of
the Board may be authenticated by the chairperson and the Chief
Executive Officer:
Provided that the Board shall, in the absence of either the
chairperson or the Chief Executive Officer, in any particular case or
for any particular matter, nominate one of their own, in the
particular case or matter in respect of which he is nominated,
authenticate the seal of the Board on behalf of either the chairperson
or the Chief Executive Officer.
Objects and functions of the Board.
41. The objects and functions of the Authority shall be to—
(a) enforce, and generally administer, the provisions of this Act;
(b) act as the Trustee to the Fund in accordance with Part V of this
Act;
(c) receive all payments required by this Act to be made to the Fund;
(d) make payments out of the Fund to the rightful owners in accordance
with the provisions of this Act;
(e) manage and invest the funds of the Authority;
(f) advise the Cabinet Secretary on the national policy to be followed
with regard to unclaimed assets and to implement all government
policies relating to it; and
(g) perform such other functions as are conferred on it by this Act or
by any other written law.
Appointment of the chief executive officer, etc.
42. (1) The Board shall, through a competitive process, appoint a
chief executive officer who shall hold office on such terms and
conditions of service as may be specified in the instrument of
appointment.
(2) The Chief Executive Officer shall be the managing trustee of the
Fund.
(3) The Chief Executive Officer shall be responsible to the Board for
the management of the day to day affairs of the Authority.
(4) The Board shall have power to appoint on such terms and conditions
of service as it may determine, such other officers, servants and
agents of the Fund as may be necessary for the efficient
administration of the Fund and the Board shall exercise disciplinary
control over such officers, servants and agents.
(5) The Board may, subject to such Conditions as the Board may think
fit, by directions in writing, delegate any of its powers under
subsection (4) to any one or more of the members of the Board or to
the Chief Executive Officer or other officer of the Fund.
Exemption from stamp duty.
43. No duty shall be chargeable under the Stamp Duty Act Cap. 480 in
respect of any instrument executed by any person on behalf of or in
favour of the Fund or in respect of the payment of any benefit or the
refunding of any amount under this Act in any case where, but for this
exemption, the Fund or any person acting on behalf of the Authority.
PART V—THE UNCLAIMED FINANCIAL ASSETS TRUST FUND
Establishment of the Trust Fund.
44. (1) There shall be a Fund known as the Unclaimed Assets Trust Fund
which shall vest in, and be operated and managed by, the Authority.
(2) There shall be paid—
(a) into the Fund, all moneys that become or are deemed to be
unclaimed assets and other payments required by this Act or by any
other written law to be paid into the Fund; and
(b) out of the Fund—
(i) payment due and payable to owners out of the Fund under the Act;
(ii) such amounts as may be approved by the Cabinet Secretary to
defray costs associated with the administration of the Authority and
performance of its functions under this Act.
Payment of claims.
45. (1) Where the Authority is satisfied that a person is the owner of
all or part of the assets that became unclaimed assets and paid into
the Fund, the Authority may pay out of the Fund to the owner an amount
equal to the value of that assets or part of that assets as the case
may be.
(2) No interest or other earning accrues or is payable to an owner in
respect of the period after assets becomes unclaimed assets and
delivered to the Authority under this Act.
(3) A payment under this section to an owner shall discharge the
Authority from liability to the owner in respect of the assets that
became unclaimed assets and were actually paid into the Fund.
Accounts and audit.
46. (1) The Authority shall cause to be kept all proper books of
account and other books and records in relation to the Fund and to all
the undertakings, funds, investments, activities and property of the
Fund as the Authority may deem necessary.
(2) Within a period of three months after the end of each financial
year, the Authority shall prepare, sign and transmit to the
Auditor-General or to an auditor appointed under subsection (3)—
(a) a balance sheet showing in detail the assets and liabilities of
the Fund;
(b) a statement of income and expenditure of the Fund; and
(c) such other statements of account as the Authority may deem
necessary.
(3) The accounts of the Fund shall be audited and reported upon in
accordance with the Public Audit Act No. 12 of 2003, by the
Auditor-General, or by an auditor appointed by the Authority under the
authority of the Auditor-General.
(4) The Authority shall cause the audited accounts of the Fund to be
published in the Gazette and in at least two newspapers with national
circulation.
Penalties payable to the Fund.
47. (1) The Court before whom any person is convicted of an offence
under this Act may, without prejudice to any civil remedy, order such
person to pay to the Fund the amount of any other sum, together with
any interest or penalty thereon, found to be due from such person to
the Fund, and any sum so ordered shall be recoverable as a fine and
paid into the Fund.
(2) All sums due to the Fund shall be recoverable as debts due to the
Authority and without prejudice to any other remedy shall be a civil
debt recoverable summarily.
Investment of funds.
48. (1) All moneys in the Fund which are not for the time being
required to be applied for the purposes of the Fund shall be invested
in such investments, being investments in which any trust fund (or
part thereof) is permitted by the Trustee Act Cap. 167 to be invested,
as may be determined by the Authority with the approval of the Cabinet
Secretary.
(2) All investments made under this section shall be held for and on
behalf of the Fund in the name of the Authority.
PART VI—MISCELLANEOUS
Authority to appoint agents, etc.
49. The Authority may appoint or license such agents and service
providers as it may deem necessary for the carrying out of the objects
of this Act and may in that respect and without prejudice to the
foregoing appoint custodians, fund managers and reunification agents
to assist in the reunification of the assets with the owners.
Authority may institute proceedings in court.
50. All criminal and civil proceedings under this Act may, without
prejudice to any other power in that behalf, be instituted by
Authority and, where the proceedings are instituted or brought in a
court, an officer of the Authority authorised by the Board in that
behalf may prosecute or conduct the proceedings.
Powers of the Authority to enter, etc.
51. (1) The Authority shall, for the purpose of ascertaining whether
this Act is being or has been complied with by any person, have power
to enter any premises or place at all reasonable times.
(2) An institution liable to inspection under this Act, and any
employee, shall furnish the Authority all such information and produce
for inspection all such documents as the Authority may reasonably
require for the purpose of performing its functions under this Act.
Offences and penalty.
52. (1) A holder who—
(a) fails to maintain a record required under this Act or the
Regulations made thereunder;
(b) in a record required or submitted, or in information provided,
under this Act or the Regulations, makes a statement that—
(i) is false or misleading with respect to a material particular; or
(ii) omits to state a material fact, the omission of which makes the
statement false or misleading, commits an offence.
(2) A person is not guilty of an offence under subsection (1) (b) if
the person did not know that the statement was false or misleading
and, with the exercise of reasonable diligence, could not have known
that the statement was false or misleading.
(3) Where a body corporate commits an offence under this section, an
employee, officer, director or agent of the corporation who
authorises, permits or acquiesces in the commission of the offence
commits an offence.
(4) Subsection (3) shall apply whether or not the body corporate is
prosecuted for the offence.
(5) A person who wilfully refuses after written demand by the
Authority to pay or deliver assets to the Authority as required under
this Act commits an offence.
(6) A person Convicted of an offence under this section shall be
liable to a fine of not less than fifty thousand shillings and not
more than one million shillings or to imprisonment for not more than
one year, or to both.
Regulations.
53. The Cabinet Secretary may, on the recommendation of the Board,
make regulations necessary to carry out the provisions of this Act.