WORKSHOP ON proposed CMA regulations Licensing &

Transcript:WORKSHOP ON proposed CMA regulations Licensing &:
WORKSHOP ON proposed CMA regulations Licensing & registration regulation September 2014 John Carson Lead Advisor to CMA Compliax Consulting Inc. Toronto, Canada Khalil Ghalayini Head of the Financial Control Unit CMA, Beirut Lebanon Agenda Background and purpose Securities business License requirements Application process Registered Persons – requirements RP application process Licensing & Registration 1 Background The CMA administers the Capital Markets Law (Law 161). All persons that carry on “securities business” must be licensed by CMA. A licensed institution is called an “Approved Institution” (AI). Only banks, financial institutions and financial intermediaries (brokers) can be AIs. CMA only regulates banks’ and FIs’ securities business. All AIs must comply with the Law, CMA regulations and other requirements AIs are supervised by CMA The main supervision tools are regular reporting, periodic inspections, market surveillance, and complaints. Licensing & Registration 2 Purpose of Licensing Regulation Defines the types of “securities business” that require a license Sets out exemptions from licensing requirement Establishes categories of license Sets out licensing requirements and approval process Defines the functions that must be performed by “registered persons” Sets out the registration requirements and approval process Only licensed AIs can market securities business Applies to foreign firms Securities advertisement - Verbal, electronic, broadcast or written communication made for purposes of securities business. Licensing & Registration 3 Securities Business “Securities business” means carrying on commercial activity in Lebanon in any of 5 types of securities business activity: Licensing & Registration 4 securities business 2 Must obtain approval for a license that covers each type of activity performed. Specific requirements apply to CIS managers and CIS custodians. See CIS Regulation. Licensing & Registration 5 Key Principles Must be “fit and proper” person to carry on the type of securities business Sufficient expertise, experience and resources for that business Commit to conducting business with honesty and integrity Establish adequate systems, policies and procedures covering corporate governance, finance, risk management, compliance, operations and controls Directors, officers & employees must have the qualifications, experience and integrity needed Ensure appropriate management of any conflicts of interest between the AI and its clients Similar principles apply to registered persons. Licensing & Registration 6 licensing requirements Must be a bank, financial institution or financial intermediary, or a subsidiary of a foreign financial firm licensed in a recognized jurisdiction Applicant demonstrates it meets the key principles Fit & proper criteria include suitability of controllers, persons with close links