|
Article (47)
|
A-
|
No person may engage in any of the activities below unless licensed by the Board in accordance with the regulation issued for this purpose:
|
| |
|
1. |
Financial Broker. |
| |
|
2. |
Dealer. |
| |
|
3. |
Investment Trustee. |
| |
|
4. |
Investment Manager. |
| |
|
5. |
Financial Advisor. |
| |
|
6. |
Underwriter. |
| |
|
7. |
Custodian. |
| |
|
8. |
Any other activities relating to securities determined by the Board. |
| |
B- |
No natural person may serve as a Registered Person of any of the entities referred to in Paragraph (A) of this Article unless registered with the Commission. |
| |
C- |
The regulation issued for this purpose shall determine the nature of the activities referred to in Paragraph (A) of this Article, the licensing requirements for each, the registration requirements for Registered Person, and level of training, experience, and competence for such. The issued regulation may require the applicant to apply for an examination or any other method to ensure his fulfillment of the required standards. |
| |
|
|
|
| Article (48) |
A- |
An application for a license for any of the activities referred to in Paragraph (A) of Article (47) shall be filed in writing with the Commission in line with the form prescribed thereby, enclosed therewith a statement attesting to the accuracy of the information in the application signed by the applicant. |
| |
B- |
The Commission may require additional information from the applicant including information relating to his biography, record and relation with other companies, as it may deem necessary to ensure his professional reputation. |
| |
C- |
The Commission may take the necessary measures to verify the information filed in the application. |
| |
D- |
The application for registration shall be filed with the Commission in accordance with the regulation issued for this purpose. |
| |
E- |
The Board shall issue its decision granting or rejecting the license or registration within sixty days as of the date of filing a complete application therewith satisfying all the terms and conditions. |
| |
|
|
|
| Article (49) |
The Board may approve petitions to modify licenses due to changes in any information related to the company employees, owners, managers or directors of any Financial Broker, Dealer, Investment Manager, Financial Services Company, Investment Trustee or Underwriter, provided this is made in a written application setting forth the information and facts with respect to such change. |
| |
|
|
|
| Article (50) |
The Board may require the Licensed Person to provide unconditional bank guarantees or any other acceptable guarantees so as to secure the Licensed Person’s obligations to its clients dealing in securities and ensure its compliance with the provisions of this Law and the regulations, instructions and decisions issued pursuant thereto. The Board may liquidate and dispose of the guarantees shall the Licensed Person violate the provisions of this Law and the regulations and instructions issued pursuant thereto. |
| |
|
|
|
| Article (51) |
No person shall, at the same time, serve both as an Investment Manager and as an Investment Trustee for the same account or for the same client. |
| |
|
|
|
| Article (52) |
The names and addresses of all Licensed and Registered Persons, as well as all provisions pertaining thereto, shall be recorded in a register of Licensed or Registered Persons which shall be kept at the Commission and made accessible to the public. |
| |
|
|
|
| Article (53) |
A- |
The Board shall issue the instructions and decisions specifying the records to be maintained and kept by the Licensed Persons and such Person’s obligation to submit any copies thereof requested by the Commission. |
| |
B- |
The Commission employees authorized by the Chairman may at any time inspect and view the records mentioned in Paragraph (A) of this Article periodically or whenever necessary to protect the investors and ensure public interest. |
| |
C- |
Licensed Persons must maintain accounting records in accordance with accepted accounting standards. |
| |
|
|
|
| Article (54) |
Notwithstanding what is stated in any other legislation: |
| |
A- |
The Licensed Person shall segregate client’s moneys and securities that are considered a deposit therewith from its own moneys and securities, in accordance with the conditions specified by the Board which should be included in the agreements concluded with the clients.
|
| |
B- |
Except where otherwise determined by the Board pursuant to the instructions issued thereby, moneys and assets that belong to clients and held by a Licensed Person shall not, under any circumstances, be available to distribute to the creditors of the Licensed Person in the event of the Licensed Person’s insolvency or default.
|
| |
C- |
The basis for naming the accounts and the requirements for the segregation and custody of clients’ moneys and assets shall be specified in accordance with instructions or decisions issued by the Board.
|
| |
|
|
|
| Article (55) |
A- |
The Financial Broker shall not finance the buying of shares on behalf of his clients unless licensed to undertake the businesses of margin finance in accordance with the provisions of this Law and the regulations, instructions and decisions issued for this purpose.
|
| |
B- |
Margin finance shall mean the financing by a Financial Broker of a percentage of the value of securities he buys for his client in accordance with the instructions and decisions issued by the Commission and in accordance with an agreement organizing the relation between them. |
| |
C- |
The ownership of securities financed by margin shall be considered an ownership that entitles the margin financed Licensed Person to have priority over all creditors of the client to allow the Licensed Person to take his rights over the securities financed by him prior to all other creditors regardless of such creditors’ rights being of a specific or general priority lien. |
| |
D- |
A margin finance Licensed Person may determine his rights relevant to securities of any of his clients without referring to such client in any of the following cases: |
| |
|
1. |
The death of the client. |
| |
|
2. |
The issuance of a decision to liquidate or to announce bankruptcy of, or to sequester the client. |
| |
|
3. |
The issuance of an order from a competent authority to place lien on the client’s securities. |
| |
E- |
Upon the occurrence of any of the cases referred to in Paragraph (D) of this Article, the margin finance Licensed Person shall notify the Commission and the Center in a written statement of the client’s name, description of the case that required determining his rights, the amount and type of securities his client possess and the amount of the cash account relevant to securities funded within a period not exceeding the next working day from the date of his knowledge of the occurrence of such a case. He may afterward sell securities he funded with the amount sufficient to fulfill his rights without a need to have an authorization to do so.
|
| |
F- |
1. |
Notwithstanding what is stated in Paragraph (F) of Article (79) of this Law, lien restriction on securities funded by margin finance shall not be placed prior to the settlement of the relevant right related to such securities in accordance with the specified measures in this Law, the instructions and decisions issued pursuant thereto. |
| |
|
2. |
Liquidation of the owner of the securities, or the announcement of his bankruptcy or sequestration or death, or issuance of a decision to place lien on his securities shall not deter the right of the margin finance Licensed Person to commence selling his client’s securities to fulfill his rights. The Licensed Person shall be held liable to guarantee the damages incurred by his client or others in the case of misusing the right provided according to the provisions of this Article. |
| |
|
|
|
| Article (56) |
A Licensed or Registered Person shall be deemed in violation of the Law if it carries out any of the following: |
| |
A- |
Misdirect, misapply or otherwise misuse funds entrusted by clients or by shareholders. |
| |
B- |
Practice Deception, Misrepresentation or Prohibited Acts. |
| |
C- |
Individually or in collusion with others, adversely affect competition, by manipulating the commissions or service fees charged to clients, or limiting the types of services provided thereto. |
| |
D- |
Individually or in collusion with others, adversely affect or attempt to adversely affect the capital market or otherwise. |
| |
|
|
|
| Article (57) |
While carrying out their activities, Licensed and Registered Persons, and their employees, shall abide by the rules of professional conduct in accordance with the instructions issued by the Board. This shall include acting with loyalty and dedication so as to maximize their clients’ interests, and realize their investment objectives, without discrimination between them or charging them excessive commissions and service fees, or guaranteeing or promising clients definite amounts of profits, or otherwise engaging in fraudulent and deceptive practices.
|
| |
|
|
|
| Article (58) |
The Board may deny the license application of any person or revoke the license granted to any person if it finds that the person’s Board of Directors, chief executive officers, directors or managers in a position of responsibility has violated the licensing requirements of this Law or the regulations, instructions and decisions issued pursuant thereto. |
| |
|
|
|
| Article (59) |
Any Licensed or Registered Person shall continue to comply with all the licensing and registration requirements provided for by this Law and specified in the instructions issued pursuant thereto, subject otherwise to revoking the license or registration. |
| |
|
|
|
| Article (60) |
A- |
The Board may deny, suspend or revoke the license or registration of any person, as the case may be, if after notice and hearing it finds that this person has carried out any of the following: |
| |
|
1. |
Violated any provision of this Law or the regulations or instructions or decisions issued pursuant thereto. |
| |
|
2. |
Filed false information in the application for license or registration. |
| |
|
3. |
Committed a Prohibited Act. |
| |
|
4. |
Demonstrated incompetence to perform the business as a Licensed or Registered Person. |
| |
B- |
In cases of violations against a Registered Person and in addition to the notice given to him, the Board shall also issue a notice thereof to the person employed by the Registered Person. |
| |
C- |
Pending the hearing, the Board may suspend the license or registration, provided it states the cause for such suspension. |
| |
D- |
Until the entry of a final order, the suspension of a license or registration, though binding upon the persons notified thereof, shall be deemed confidential, and shall not be published, unless it shall appear that the order of suspension has been violated after notice, provided that the noticed persons shall abide with the order |
| |
E- |
The final order of the Board refusing, suspending, or revoking a license, together with its findings, shall be entered in the record of Licensed and Registered Persons. The suspension or revocation of the license of a Licensed Person shall legally deem the registration of all its Registered Persons suspended or revoked. |
| |
|
|
|
| Article (61) |
Any Licensed Person that decides to discontinue carrying out any of its licensed activities shall promptly inform the Commission about its decision. In such a case, the license shall be revoked upon the fulfillment of the Licensed Person of all the requirements set by the Commission for the settlement of all claims and matters related to the activity being discontinued. |
| |
|
|
|
| Article (62) |
A- |
The liquidation of any Licensed Person, whether voluntary or compulsory, shall be carried out under the Commission’s supervision and follow up, this provision shall not apply to banks with respect to their banking assets. |
| |
B- |
The Board may take any legal necessary measures to announce the bankruptcy of a Licensed Person who is a natural person, or refer a Financial Services Company for compulsory liquidation. |
| |
C- |
The money and securities belonging to the clients of a Financial Services Company shall not be subject to the procedures of lien, sequestration, liquidation or bankruptcy to which the Financial Services Companies is subject. |
| |
|
|
|
| Article (63) |
A- |
The relationship between the client and the Licensed Person shall be governed by a written agreement that is consistent with the provisions of this Law, the regulations, and instructions issued pursuant thereto. |
| |
B- |
Every Licensed or Registered Person, when contracting with its clients or dealing in securities for their interests, shall certify the validity of its clients’ signatures after verifying their identities and capacities for contracting, provided that the Licensed or Registered Person shall be responsible for the validity of the said signatures. |
| |
C- |
Any Licensed or Registered Person that sells or disposes of any securities without authorization from its owner or a written agreement pursuant to the provisions of the instructions issued by the Board to which the sale or disposition is authorized shall be deemed to have committed forgery and fraud. |
| |
|
|
|
