Section 228 Investments and Securities Act

Section 228 of the Investments and Securities Act 2025 is about Responsibilities of a commodities exchange. It is under Part XV (Commodities Exchange and Warehouse Receipts) of the Act. It provides as follows:

(1) A commodities exchange shall —
(a) conduct its business in a fair and transparent manner with regard to the rights of license holders and their clients;

(b) ensure compliance with this Act by license holders and issuers of commodities listed, quoted or admitted on its exchange and report any noncompliance to the Commission;
(c) develop and enforce rules, listing requirements and such other regulations pertaining to trading of commodities on its exchange;

(d) notify the Commission and other stakeholders in the case of an entity as soon as it commences an insolvency proceeding or when such proceeding is commenced against it, or when it has received a notification regarding insolvency proceedings against a license holder;
(e) notify the Commission of any matter that may pose a systemic risk to the financial markets as soon as it becomes aware of such matter;

(f) not facilitate trade in any financial instrument or product except as approved by the Commission;
(g) limit its role to the facilitation of trade between buyers and sellers, and shall not provide custodial, depository, and clearing and settlement services, except through a duly registered subsidiary or duly registered third party; and
(h) do such other things as are necessary for, incidental, or conducive to the proper operation of an exchange.

(2) A commodities exchange shall perform regulatory functions including regulatory oversight, inspection, examination, and maintenance of adequate surveillance systems on the trading activities of its license holders and any other function as may be prescribed by the Commission.

(3) A commodities exchange, shall at the end of every quarter file a detailed report on its surveillance and enforcement activities with the Commission.

(4) The Commission may, in order to achieve the objectives of this Act, assume responsibility of one or more of the regulatory or supervisory functions referred to in subsection (1).

(5) Nothing in this section shall preclude the Commission from carrying out inspections or conducting enquiries or audit of any license holder of a commodities exchange.