Unclaimed Financial Assets Act

This Act may be cited as the Unclaimed Financial Assets Act.

This section provides definitions of terms used in the Act (for example: "apparent owner", "assets", "Authority", "holder", "unclaimed assets", and "utility").

Any sum a holder has been ordered by a court to refund that remains unclaimed by the owner for more than two years after it became payable is presumed abandoned, except to the extent a court orders otherwise.

An ownership interest is presumed abandoned if the owner has not claimed or communicated about dividends or similar payments for more than three years, or if the entity does not know the owner's whereabouts; returned notifications count as evidence.

Assets distributable during dissolution that remain unclaimed by the owner for more than two years after the date specified for final distribution are presumed abandoned.

Assets held in a fiduciary capacity are presumed abandoned unless the owner, within two years after they become payable or distributable, takes steps (increasing or decreasing principal, accepting payment, communicating about the assets, or otherwise indicating interest with a record by the fiduciary) to show continued interest.

Gift certificates, gift cards, and credit memos become presumed abandoned after five years of non-use or non-claim as described; what counts as a claim includes transaction processing activity, issuer-initiated fees don't count, owners are presumed recipients, and retail-issued certificates are excluded from the Act.

Wages and similar amounts that remain unclaimed by the owner for more than one year after becoming payable are presumed abandoned.

Assets kept in safe deposit boxes or other safekeeping repositories that remain unclaimed by the owner for more than two years after the lease or rental period has expired are presumed abandoned.

Assets held by a court or a Government department that remain unclaimed by the owner for more than one year after becoming payable or distributable are presumed abandoned.

The Cabinet Secretary may, by order in the Gazette, prescribe further classes of assets and further classes of holders to which this Act applies (subject to the Act).

Section 3 provides a condition about when the records of a holder do not reflect the identity of the person entitled to assets and includes parenthetical definitions of "holder" and "financial assets".

Sums payable in Kenya on travellers cheques or money orders outstanding for more than two years are presumed abandoned unless the owner communicates in writing with the issuer or otherwise indicates interest within two years, subject to subsection (4).

Sums payable in Kenya on cheques, drafts or similar instruments that have been outstanding for more than two years are presumed abandoned unless the owner has, within the immediately preceding two years, communicated in writing with the bank or otherwise indicated an interest evidenced by the bank's record.

Section 6 describes when demand, savings or matured time deposits and other financial assets are treated as described (including actions or indications by owners and communications with holders or banks) and defines related terms such as holder, owner, financial assets and the Authority.

Funds under a life or endowment insurance policy or annuity contract are presumed abandoned if unclaimed for more than two years after they became due; insurers must search for correct addresses when notices to an insured or owner in Kenya are undeliverable, and must take reasonable steps to pay proceeds to a beneficiary if the insurer learns of the insured’s death and the beneficiary has not communicated within sixty days.

Holders of unclaimed demutualization proceeds must file a one-time initial report within six months after this Act comes into force.

Deposits or advance payments for utility services that remain unclaimed by the owner for more than two years after termination are presumed abandoned.

Holders of assets to which the Act applies must make all reasonable efforts to locate and notify the owners of those assets.

Holders of assets presumed abandoned must report specified details about those assets and owners to the Authority, file an annual report by 1 November (covering the year to 30 June), and the Authority may extend the filing date for up to 60 days if estimated payment is made by the deadline.

The Authority may request information from a person it reasonably believes is a holder; that person must provide the information the Authority requires within any time or intervals specified in the request.

A person required to file the report under section 20 must, when filing, pay or deliver to (or hold to the order of) the Authority all abandoned assets reportable under that section or any balance owing if an earlier estimated payment was made.

The Unclaimed Assets Authority must assume custody and safekeeping of assets paid or delivered to it.

Section 24 authorises certain deductions in relation to abandoned financial assets and requires the Authority to ensure deducted costs are reasonable and reflect best market value; it also caps the subsection (1)(c) service charges at one per cent of the gross asset value.

An owner is entitled to receive from the Authority any dividends, interest, or other income realized or accruing on assets delivered to the Authority, at or before liquidation or conversion of the assets into money.

The Unclaimed Assets Authority must sell unclaimed financial assets (subject to reserve price) at public auction within three years of receipt, follow pre-sale notice rules, sell listed securities at exchange prices, may sell unlisted securities OTC or otherwise, should sell presumed abandoned securities within one year unless the Authority decides otherwise, purchasers take assets free of prior claims, and the Authority must execute transfer documents.

The Authority must, upon payment of an inspection fee it may determine, make available during business hours the owner's or apparent owner's name and a general description of the delivered assets for public inspection.

Claimants may file claims with the Unclaimed Assets Authority; the Authority must consider each claim within ninety days and give written notice of its decision; where a claim is allowed the Authority must pay or deliver the assets or amounts to the claimant or a designated person. Notices may be mailed to addresses stated in or associated with the claim.

A person aggrieved by the Authority's decision, or whose claim was not acted on within ninety days of filing, may bring an action in court against the Authority.

The expiration of a time period specified by contract, statute, or court order does not stop assets from being presumed abandoned and does not affect duties to report or to pay or deliver abandoned assets to the Authority; such assets shall be delivered to the Authority and dealt with as unclaimed assets under this Act.

Section 31 gives the Unclaimed Assets Authority powers to require certified reports, examine records (with reasonable notice and times), contract others to examine, assess and recover examination costs from holders (subject to a cap), and to require holders to report and pay estimated amounts where records are insufficient.

Holders who must file a report under section 20 must keep the owner's name and last known address for ten years after the assets become reportable; entities selling certain traveller instruments in Kenya must keep records of those instruments for three years after they become reportable.

Persons who fail to pay or deliver assets as required must pay interest to the Unclaimed Assets Authority and may incur specified penalties for willful failures.

Holders of assets must disclose and deliver undeclared assets to the Unclaimed Assets Authority.

Establishes a 12‑month Voluntary Unclaimed Financial Assets Disclosure Programme from commencement allowing holders to disclose unclaimed financial assets to the Unclaimed Assets Authority to obtain relief from penalties and interest; applies to assets held up to 30 June 2022, and holders who disclose within 12 months will not be liable for penalties or interest under sections 33(1),(4) and (5).

When this Act comes into force it applies to assets that would previously have been deemed unclaimed, treating those earlier dates as if the Act had already been in force.

The Unclaimed Assets Authority must try to find and notify owners of financial assets in its custody and, when notifying, choose the most cost-effective method based on the assets' value.

Maintain an electronic or other database of all unclaimed assets submitted under this Act.

Regulatory authorities that supervise holders must assist the Unclaimed Assets Authority in enforcing this Act and must generally ensure the Act's objectives are achieved.

The Unclaimed Assets Authority is entitled to information held by public bodies to help locate or determine the owner of unclaimed assets, and public bodies must disclose such information to the Authority on request.

Establishes the Unclaimed Financial Assets Authority and lists powers including suing and being sued, acquiring and disposing of property, borrowing and investing, entering into contracts, and performing acts necessary for its functions.

Key governance rules for the Authority's Board: members elect a Chairperson at their first meeting; a member holds office for three years and may be re-appointed; the Chairperson (or presiding person) has a casting vote if votes are equal; the Board may act despite vacancies and may make meeting procedure rules; the seal must be authenticated by the Chairperson and Chief Executive Officer.

The Board's objects and functions include enforcing and generally administering the provisions of the Act.

The Board must appoint a chief executive officer through a competitive process; the CEO is the managing trustee and responsible to the Board for day-to-day management. The Board may appoint other officers, exercise disciplinary control and may delegate powers under subsection (4).

The Fund and persons acting on behalf of the Authority are exempt from stamp duty for instruments executed for the Fund and for payments or refunds under this Act.

Establishes the Unclaimed Assets Trust Fund and provides that it shall vest in, and be operated and managed by, the Authority.

The Authority may pay to an owner from the Unclaimed Assets Trust Fund an amount equal to the value of the assets (or part of them) that became unclaimed and were paid into the Fund; no interest accrues after the assets become unclaimed and are delivered to the Authority; a payment discharges the Authority from liability in respect of those assets.

The Authority must keep full books and records for the Unclaimed Assets Trust Fund; the Fund's accounts must be audited under the Public Audit Act by the Auditor‑General or an auditor the Authority appoints; and the Authority must publish the audited accounts in the Gazette and in at least two national newspapers.

The Court may order a convicted person to pay sums found due to the Fund, and any sum so ordered is recoverable as a fine and paid into the Fund; sums due to the Fund are recoverable as civil debts due to the Authority and recoverable summarily.

Investments of the Fund must be in investments permitted by the Trustee Act as determined by the Authority with the approval of the Cabinet Secretary; such investments shall be held for and on behalf of the Fund in the name of the Authority.

The Unclaimed Assets Authority may appoint or license agents and service providers, including custodians, fund managers and reunification agents, to carry out the Act's objects and to assist in reuniting assets with their owners.

The Unclaimed Assets Authority may institute criminal and civil proceedings under the Act, and an officer authorised by the Board may prosecute or conduct those proceedings in court.

The Unclaimed Assets Authority may enter premises at reasonable times to check compliance, and institutions liable to inspection and their employees must provide requested information and documents.

Section 52 creates several offences including (1) wilfully refusing after written demand by the Authority to pay or deliver specified assets to the Authority and (2) where a body corporate commits an offence, employees, officers, directors or agents who authorise, permit or acquiesce in the offence also commit an offence; conviction carries a fine between fifty thousand and one million shillings or up to one year imprisonment, or both.

The Cabinet Secretary may make regulations, on the recommendation of the Board, to carry out the provisions of this Act.