SECURITIES: SUBSIDIARY LEGISLATION
INDEX TO SUBSIDIARY LEGISLATION

Securities (Institutions Licensing) Regulations

Securities (Persons Operating a Securities Infrastructure Business) Regulations

SECURITIES (INSTITUTIONS LICENSING) REGULATIONS

(under section 59)

(31st March, 2017)

ARRANGEMENT OF REGULATIONS

REGULATION

 

   1.   Citation

   2.   Interpretation

   3.   Application of Regulations

   4.   Application for licence

   5.   Licence criteria

   6.   Additional applications

   7.   Processing applications

   8.   Fees

   9.   Period of validity of licence

   10.   Renewal of licence

   11.   Licence suspension and revocation

   12.   Conditions on licences

   13.   Duplicate licence

   14.   Offences and penalties

   15.   Transitional provisions

      SCHEDULES

S.I. 31, 2017.

 

1.   Citation

   These Regulations may be cited as the Securities (Institutions Licensing) Regulations.

 

2.   Interpretation

   In these Regulations, unless the context otherwise requires-

   “board” means-

   (a)   where the securities business is a company, the board of directors;

   (b)   where the securities business is a partnership, the partners; or

   (c)   where the securities business is conducted in another legal form, the persons registered with the Regulatory Authority as having responsibility for the conduct of the business; and

   “key person” or “key personnel” means the Chief Executive Officer, Director, Chief Financial Officer, company secretary, compliance officer and internal auditor or any person fulfilling a similar function with a different name or any other officer that the Regulatory Authority may deem to be a key person.

 

3.   Application of Regulations

   These Regulations shall apply to a person who wishes to establish or operate a securities institution and applies to the Regulatory Authority for a licence under section 3 of the Act.

 

4.   Application for licence

   (1) A person shall not establish or operate a securities institution unless that person has been issued with a licence in accordance with section 3 of the Act.

   (2) A person who wishes to apply for a licence to establish or operate a securities institution shall make an application to the Regulatory Authority in Form 1A set out in Schedule 1.

   (3) An applicant may apply to be an operator of more than one category of securities institution business and shall indicate, on the application form, which category or categories of securities institution business the applicant wishes to establish or operate.

   (4) Where the Regulatory Authority grants a licence to an applicant under section 3 of the Act, it shall-

   (a)   grant a single licence for the applicant stating the categories in the licence; and

   (b)   stipulate in the licence, a condition specifying the securities institution business the applicant is licensed to operate.

   (5) An application for a licence shall be accompanied by a non-refundable processing fee for the type of licence applied for as set out in the Schedule to the Non-Bank Financial Institutions Regulatory Authority (Supervisory Levies and Licensing Fees) Regulations and where the application is for more than one licensed activity, the applicant shall pay an application fee for each activity.

   (6) An application for a licence under subregulation (2) shall be accompanied by the information set out in Schedule 2.

   (7) An applicant shall supply such additional information and meet such additional requirements as the Regulatory Authority may direct.

   (8) An applicant shall complete a personal questionnaire, set out in Schedule 3, in respect of each of the key persons and controllers and the questionnaire shall not be considered complete unless signed and dated by the person to whom the questionnaire relates.

   (9) Where an applicant is a partnership, personal questionnaires shall be submitted by the partners and where the applicant is any other legal entity, the application shall be submitted by one of the key persons responsible for the conduct of the business.

   (10) Where a person, who is required to submit a personal questionnaire has already filed such a questionnaire with the Regulatory Authority, the applicant may supply the Regulatory Authority with a copy of that questionnaire giving details of any changes to the information contained in the questionnaire and including a declaration by the applicant and the person to whom the questionnaire relates that-

   (a)   the changes indicated are accurate; and

   (b)   in all other respects, the information in the questionnaire remains true and is not misleading.

   (11) An applicant may withdraw an application at any time and the application fee paid in respect of the application shall not be refundable.

   (12) Where, following submission of the application, the applicant becomes aware of a material change in any of the information supplied with the application, or any material event that may affect the application, the applicant shall notify the Regulatory Authority of the change or event, irrespective of whether the Regulatory Authority has considered the application or not.

 

5.   Licence criteria

   (1) The Regulatory Authority shall grant a licence, in accordance with section 4 of the Act only if the Regulatory Authority is satisfied that the applicant and the applicant’s key persons and controllers meet the requirements of these Regulations.

   (2) In respect of the applicant under subregulation (1), the Regulatory Authority shall, before granting such applicant a licence, be satisfied that-

   (a)   the corporate governance of the applicant is in compliance with the Non-Bank Financial Institutions Regulatory Authority (Securities Business Corporate Governance) Rules;

   (b)   the applicant has the capacity to comply with the Non-Bank Financial Institutions Regulatory Authority (Securities Business Corporate Governance) Rules;

   (c)   the applicant has the capacity to comply with-

      (i)   any licence condition that applies to it, and

      (ii)   any other regulatory requirement imposed under the Act or other financial services laws;

   (d)   the applicant’s key personnel possess the minimum qualifications set out in Schedule 4 in respect of the activity that the applicant proposes to undertake;

   (e)   the financial resources of the applicant are sufficient for the activity for which the applicant is applying for a licence as specified in the Non-Bank Financial Institutions Regulatory Authority (Financial Resource Requirements) Rules:

         Provided that where the applicant is proposing to undertake more than one activity, the financial resources required shall be the sum total specified in the Non-Bank Financial Institutions Regulatory Authority (Financial Resource Requirements) Rules of each of those activities or such other amount as the Regulatory Authority may require;

   (f)   the applicant’s proposed business plan submitted provides reasonable grounds for believing that the applicant will conduct business in compliance with the regulatory requirements, without becoming a risk to the stability of the Botswana capital markets;

   (g)   the applicant has not, at any time or in any jurisdiction-

      (i)   been subject to any insolvency or liquidation proceedings,

      (ii)   made any arrangement with creditors,

      (iii)   been the subject of a compulsory winding up, or

      (iv)   engaged in any other conduct,

      that may compromise the applicant’s ability to maintain the financial resource requirements applicable to the applicant;

   (h)   the applicant has not at any time, been subject to proceedings by a law enforcement authority or regulatory authority or any professional association, of a nature that would compromise the applicant’s integrity;

   (i)   there are no other factors that may compromise-

      (i)   the integrity, financial standing or professional skills of the applicant or its key personnel,

      (ii)   the integrity or financial standing of the applicant’s controllers,

      (iii)   the sustainability of the financial position of the applicant and its likely impact on the stability of the financial system in Botswana, or

      (iv)   the capacity of the applicant to meet its regulatory requirements and the relevant obligations which the applicant may be subject to in Botswana or elsewhere, imposed by law; and

   (j)   there are no factors that might impede the Regulatory Authority’s effective oversight of the securities institution business.

   (3) In respect of the applicant’s key person and controller, the Regulatory Authority shall before granting a licence to the applicant, be satisfied that-

   (a)   the applicant’s key person or controller has not been convicted of a criminal offence involving dishonesty;

   (b)   the applicant’s key person or controller has not been found guilty of misconduct or unprofessional conduct or other conduct that may compromise his or her integrity as a key person or controller, by a competent tribunal, board or body legally constituted, within or outside Botswana, for the purpose of adjudicating on matters of discipline and conduct;

   (c)   the applicant’s key person or controller, being a holder of a professional qualification, has not been suspended or barred from practising the profession, trade or skill within or outside Botswana;

   (d)   the applicant’s key person or controller has not been removed from any office of trust on account of misconduct, by any court within or outside Botswana;

   (e)   the applicant’s key person or controller has not, in any jurisdiction, been subject to termination by his or her employer, nor has he or she resigned from a position in circumstances where, but for the resignation there would likely have been an alternative sanction such as dismissal;

   (f)   the applicant’s key person or controller has not, at any time been subject to bankruptcy proceedings or made other arrangements or arrangements of a nature that might compromise his or her financial standing and the ability to maintain a sound financial position;

   (g)   the applicant’s key person or controller has not been involved as a director or controller, or any capacity with significant influence over the management of the organisation, in any entity, whether company, partnership or any legal form, that has been subject to any of the proceedings set out in subregulation (2) (h) unless the Regulatory Authority is satisfied that the circumstances do not compromise on the applicant’s key person’s or controller’s financial standing; and

   (h)   there are no other factors that might compromise his or her integrity, competence or financial standing.

   (4) Where the applicant is licensed by the Bank of Botswana, or where any key person or controller is an employee or director of a bank licensed by the Bank of Botswana-

   (a)   the Regulatory Authority may rely upon a certificate from the Bank of Botswana as to the integrity and financial standing of the applicant or its key person or controller; and

   (b)   notwithstanding paragraph (a), the Regulatory Authority shall make its own determination as to whether the Regulatory Authority’s requirements regarding the financial resources, skills, qualifications of the applicant and key person are met.

 

6.   Additional applications

   (1) A person operating a securities institution business may apply for an amendment to a licence to permit the undertaking of additional activities as set out in Form 1B of Schedule 1.

   (2) The Regulatory Authority shall approve the additional activities and amend the licence accordingly, only if it is satisfied that the applicant and the applicant’s key person and controller meet the requirements specified in these Regulations in respect of the additional activities.

   (3) An application under subregulation (1) shall be accompanied by the processing fee corresponding to the licence application as set out in the Non-Bank Financial Institutions Regulatory Authority (Supervisory Levies and Licensing Fees) Regulations and-

   (a)   where the application is for more than one licensed activity, the applicant shall pay the application fee for each activity; and

   (b)   the fees shall be payable to the Regulatory Authority in such form or manner as it may direct.

   (4) A securities institution shall not appoint a new key person, nor shall a person become a controller of a securities institution unless the Regulatory Authority has granted its approval in writing.

   (5) The Regulatory Authority shall grant its approval under subregulation (4) only if the Regulatory Authority is satisfied that the new key person or controller, as the case may be, meets the requirements specified in these Regulations.

   (6) A licensed securities institution that wishes to appoint a new key person shall make an application to the Regulatory Authority using Form 1C of Schedule 1.

   (7) Where a person wishes to become a controller or a partner in a securities institution, the securities institution shall submit an application to the Regulatory Authority, using Form 1C of Schedule 1 and the application shall be accompanied by a personal questionnaire signed and dated by the person who is to be the controller or partner.

   (8) An application for approval of new key persons or controllers shall be accompanied by the processing fee corresponding to the licence application as set out in the Non-Bank Financial Institutions Regulatory Authority (Supervisory Levies and Licensing Fees) Regulations and the fees shall be payable to the Regulatory Authority in such manner as it may direct.

   (9) Where the Regulatory Authority becomes aware that a key person has been appointed by the securities institution without the approval of the Regulatory Authority, the Regulatory Authority may-

   (a)   impose a penalty not exceeding P50 000 against the securities institution and direct the securities institution to submit the appropriate application; or

   (b)   direct the securities institution to dismiss the key person.

   (10) Where the Regulatory Authority becomes aware that a new person has become a controller of the securities institution without the approval of the Regulatory Authority, the Regulatory Authority may-

   (a)   impose a penalty not exceeding P50 000 against the securities institution and direct the securities institution to submit the appropriate application;

   (b)   direct the securities institution to dismiss the controller; or

   (c)   direct the person to dispose of his or her interest in the securities institution.

   (11) Where the Regulatory Authority becomes aware that a key person has been appointed by the securities institution without the approval of the Regulatory Authority, the Regulatory Authority may-

   (a)   impose a penalty not exceeding P10 000 against the person; or

   (b)   direct the securities institution to dismiss the key person.

 

7.   Processing applications

   (1) Where the Regulatory Authority receives an application from a person in accordance with regulation 5 or 6, the Regulatory Authority-

   (a)   shall acknowledge receipt of the application in writing;

   (b)   may require additional information from the applicant or any of the key personnel or controllers; and

   (c)   shall, where the information is not supplied, decline the application.

   (2) Where the Regulatory Authority considers that the licensing criteria are not met, it shall-

   (a)   inform the applicant, in writing, of its intention to decline the application and giving reasons;

   (b)   allow the applicant one month in which to make representations; and

   (c)   consider any representation made within that period and may-

      (i)   confirm the decision to decline the application,

      (ii)   approve the application, or

      (iii)   seek further information from the applicant.

   (3) Where the Regulatory Authority intends to approve an application, with conditions, it shall-

   (a)   inform the applicant in writing, giving reasons;

   (b)   allow the applicant one month in which to make representations; and

   (c)   consider the representations received within that period and may-

      (i)   confirm the decision to impose conditions,

      (ii)   approve the application with any conditions, in which case regulation 8 shall apply in relation to the licence fees, or

      (iii)   reject the application, in which case subregulation (2) shall apply.

   (4) Where the Regulatory Authority intends to approve an application or an application for an extension of licensed activities, it shall-

   (a)   inform the applicant in writing of the approval giving reasons; and

   (b)   inform the applicant in writing, the date from which approval takes place where an annual licence fee has been paid.

   (5) Notwithstanding any other provision of the Regulations, where the Regulatory Authority approves an application, it shall give the applicant written notice and the approval shall take effect from the date specified by the Regulatory Authority.

 

8.   Fees

   (1) A person operating a securities business shall pay to the Regulatory Authority, in accordance with the Non-Bank Financial Institutions Regulatory Authority (Supervisory Levies and Licensing Fees) Regulations-

   (a)   a licence renewal fee; and

   (b)   a supervisory levy, in such form and manner as the Authority may direct.

   (2) The first supervisory levy shall be paid immediately after the Regulatory Authority has issued a licence.

   (3) Where the Regulatory Authority has issued a licence, after 1st April the supervisory levy shall be reduced by one twelfth for every complete month that has passed.

 

9.   Period of validity of licence

   All licences that are issued by the Regulatory Authority, unless provided for under the Act, shall be valid for a period of three years.

 

10.   Renewal of licence

   (1) An application for the renewal of a licence shall be made to the Regulatory Authority at least three months before the licence expires in Form 1D set out in Schedule 1.

   (2) Where an application for renewal is made after the period of three months referred to in subregulation (1), the Regulatory Authority may renew the licence subject to payment of a penalty fee of P350 per day during the period that the securities institution does not renew its licence.

   (3) Where a period exceeding three months from the date that the licence expired has elapsed, a securities institution shall re-apply for a licence, and the Regulatory Authority shall treat the re-application as a new application for a licence.

   (4) An application for the renewal of a licence under subregulation (3) shall be accompanied by the information set out in Schedule 2.

   (5) An applicant shall supply such additional information and meet such additional criteria as the Regulatory Authority may direct.

 

11.   Licence suspension and revocation

   (1) The Regulatory Authority may suspend or revoke a licence issued under the Act, or employ any of the other powers available to it under the Act when-

   (a)   the securities institution makes such a request;

   (b)   any information supplied to the Regulatory Authority by the securities institution, its key persons or controllers (including information supplied in a licence application) is false or misleading;

   (c)   the Regulatory Authority is no longer satisfied that the conditions justifying the granting of a licence continue to exist;

   (d)   the securities institution or any financial group of which it is a part, has breached any requirement of the Act or rules;

   (e)   the securities institution has breached a condition on the licence;

   (f)   the Regulatory Authority has reasonable grounds for believing that the securities institution or its key persons or its controllers are not fit and proper persons; or

   (g)   the securities institution has not commenced business within a period of 12 months from the date of a licence being granted to it.

   (2) Where a securities institution decides to withdraw from a regulated activity, it shall-

   (a)   notify the Regulatory Authority and each of its clients of its decision;

   (b)   ensure, to the satisfaction of the Regulatory Authority, that any such business which is outstanding is properly transferred to another securities institution; or

   (c)   arrange for the orderly winding down of the business subject to any conditions that the Regulatory Authority may specify.

 

12.   Conditions on licences

   (1) The Regulatory Authority shall impose the following conditions on any licence granted by it under the Act-

   (a)   a licence issued under the Act shall not be transferable;

   (b)   a licence holder shall undertake only the Non-Bank Financial Institutions activities specified in the licence;

   (c)   a director of a securities institution shall not be a director or partner of, or have any direct or indirect interest in any other securities broker or dealer; and

   (d)   a security broker or dealer shall be manned at all times by an officer who is an agent, partner, director or employee who-

      (i)   has the requisite skills set out in Schedule 4, and

      (ii)   has the right to execute orders on a securities exchange.

   (2) The Regulatory Authority may vary the conditions of a licence where it is concerned that the securities institution may not have the necessary financial, human or other resources to continue to operate.

   (3) The Regulatory Authority may suspend or restrict the activities of the securities institution in any way it considers appropriate under the circumstances.

 

13.   Duplicate licence

   Where the Regulatory Authority is satisfied that a licence issued under the Regulations is lost, destroyed or defaced, the Regulatory Authority may upon a payment of P1 000 by the licensee, issue a duplicate licence.

 

14.   Offences and penalties

   (1) A person who, without reasonable cause, fails to comply with these Regulations commits an offence and is liable to a fine not exceeding P200 000 or to imprisonment for a term not exceeding five years, or to both.

   (2) In the case of a continuing contravention of the provisions of regulation 15, such person shall be liable to a further fine not exceeding P350 for every day during which the contravention continues:

   Provided that the total amount for the further fine shall not exceed P200 000.

   (3) In addition, the administrative penalties that may be imposed by the Regulatory Authority in the event of a contravention of these Regulations shall include-

   (a)   a written warning to the person or a notice published in a newspaper of general circulation directing the person to-

      (i)   do a specified act or refrain from doing a specified act,

      (ii)   remedy the effects of the contravention,

      (iii)   compensate any person who has suffered loss because of the contravention, or

      (iv)   ensure that the person does not commit further contraventions of the Act; or

   (b)   variation, suspension or revocation of a licence.

   (4) Before taking action in terms of subregulation (3), the Regulatory Authority shall give the person written notice of the proposed action, specifying the grounds for the action and the facts supporting those grounds and allow the person to request for a hearing within 21 days of giving the notice.

   (5) Where a person requests for a hearing under subregulation (4), the Regulatory Authority shall hold a hearing before taking any action, and such hearing shall be held in camera, unless the person consents to the hearing being held in public.

 

15.   Transitional provisions

   (1) A securities institution that has been licensed under the Act shall be entitled to continue to conduct business as a securities institution:

   Provided that-

   (a)   it has commenced operations by the time these Regulations come into force;

   (b)   it complies with these Regulations and any other applicable regulatory requirements within one year of these Regulations coming into effect; and

   (c)   it makes an application under these Regulations within one year of these Regulations coming into effect and the Regulatory Authority has not made a decision on the application.

   (2) The Regulatory Authority, on approving the application of a securities institution that meets the requirements of subregulation (1), may impose conditions requiring the securities institution to take any action necessary to bring it into compliance with these Regulations.

   (3) Where the Regulatory Authority decides that an application from a securities institution under subregulation (1) does not meet the application criteria in these Regulations, the Regulatory Authority may grant an exemption from the requirement to have a licence, for a period not exceeding three months, so as to provide the securities institution time to wind down its business in an orderly manner as directed by the Regulatory Authority.

SCHEDULE 1

Form 1A

(reg. 4)

APPLICATION FOR A LICENCE TO ESTABLISH OR OPERATE A SECURITIES INSTITUTION

Please answer every question, writing “not applicable” if appropriate. If there is insufficient space, please continue on a separate sheet, identifying, on the separate sheet, the question for which the additional information is supplied.

   (1) Name of applicant (Please give the name of the applicant for a licence)

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   (2) Name and capacity of the person submitting this form (Please note that this form shall be submitted by the chief executive officer or another executive director or partner)

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   (3) Current Registered Office Address (Please give the full physical address. A Postal address is not acceptable)

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   (4) Other addresses used by the applicant (Please give the head office address, if different from the registered office, and any other addresses used by the applicant)

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   (5) Nature of business to be conducted (Please indicate which of the activities described below you wish to undertake. Tick all that apply.)

   Asset manager

   Custodian

   Investment adviser

   Market maker

   Participant

   Securities broker or dealer

   Transfer agent or a transfer secretary

   (6) Previous regulatory history (Please give details of any regulatory authority that has exercised financial services supervisory authority over the applicant in the past 7 years)

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   (7) Name and address of the key person or controller

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   (8) Position the key persons are to take up

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   ...........................................................................................................................

   (9) Declaration (Please answer “Yes” or “No” to each of the following questions. If the answer is “Yes”, please give full details on a separate sheet of paper.)

   (a)   Is the applicant, for any reason, precluded in any way from carrying on (fully or partially) the services which the applicant proposes to offer?

YES/NO

   (b)   Has the applicant ever been convicted of any offence in any jurisdiction?

YES/NO

   (c)   Has the applicant ever been the subject of any disciplinary, legal, other investigations or other comparable proceedings, by any law enforcement, regulatory, or professional body in any jurisdiction, whether or not there were any sanctions or other findings as a result?

YES/NO

   (d)   Has the applicant, ever, in any jurisdiction, been subject to liquidation, insolvency proceedings, or compulsory winding up, as the case may be, or made other agreements with creditors?

YES/NO

   (e)   Has the applicant ever been refused a licence or equivalent authorisation to carry on a business activity in any jurisdiction?

YES/NO

   (f)   Has any key person or controller been convicted of any offence by any court in any jurisdiction? (If the answer is yes, please cross refer to the relevant personal questionnaire)

YES/NO

   (g)   Has any of the key person or controller ever been subject, in any jurisdiction to investigations, disciplinary proceedings, or termination by an employer, or ever resigned from any position in any jurisdiction in circumstances where, but for the resignation, there would likely have been an alternative sanction such as dismissal? (If the answer is yes, please cross refer to the relevant personal questionnaire)

YES/NO

   (h)   Is the applicant engaged in any litigation in any jurisdiction?

YES/NO

   (i)   Are you aware of any other matter that may be material to an assessment, by the Regulatory Authority of the balance of skills available to, the integrity of or the financial soundness of the applicant?

YES/NO

   (j)   Have you supplied all the information specified in Schedule 2 of the Securities (Institution Licensing) Regulations?

YES/NO

   (10) Certification

   I certify that the above information and all information supplied with this application is complete and correct to the best of my knowledge. I undertake to advise the Regulatory Authority of any material change that occurs at any time after this form is submitted and until such time as the applicant ceases to conduct the licensed activity.

   I authorise the NBFIRA to contact any person named herein to verify the contents of this form. In so doing the Regulatory Authority may refer to the application.

Name: ..................................................................................

Position: ...............................................................................

Signature .................................. Date ..................................

Form 1B

(reg. 6 (1))

APPLICATION FOR AN AMENDMENT TO A LICENCE TO PERMIT THE UNDERTAKING OF ADDITIONAL ACTIVITIES

Please answer every question, writing “not applicable” where appropriate. If there is insufficient space, please continue on a separate sheet, identifying, on the separate sheet, the question for which the additional information is supplied.

(1) Name of applicant (Please give the name of the licensed securities institution)

   ........................................................................................................................

   ........................................................................................................................

   ........................................................................................................................

(2) Name and capacity of the person submitting this form (Please note that this form shall be submitted by the chief executive officer or another executive director or partner)

   ........................................................................................................................

   ........................................................................................................................

   ........................................................................................................................

(3) Current Registered Office Address (Please give the full physical address. Postal address is not acceptable)

   ........................................................................................................................

   ........................................................................................................................

   ........................................................................................................................

(4) Nature of additional business to be conducted (Please indicate which of the activities described below the applicant wishes to undertake in addition to those currently undertaken. Show all that apply with a tick alongside the activity. If the applicant wishes to discontinue any of the activities currently undertaken please state which are to be discontinued):

   Asset manager

   Custodian

   Investment adviser

   Market maker

   Participant

   Securities broker or dealer

   Transfer agent or a transfer secretary

   ........................................................................................................................

   ........................................................................................................................

   ........................................................................................................................

1. Name and addresses of any additional key persons or controllers

   ........................................................................................................................

   ........................................................................................................................

   ........................................................................................................................

2. Positions key persons are to take up

   ........................................................................................................................

   ........................................................................................................................

   ........................................................................................................................

3. Please provide any amendments to the information provided for the previous application that is relevant to the new services (Please refer to Schedule 2 and provide any additional information such as a revised business plan):

   ........................................................................................................................

   ........................................................................................................................

   ........................................................................................................................

(8) Declaration (please answer “yes” or “no” to each of the following questions. If the answer is “yes”, please give full details on a separate sheet of paper.)

   (a)   Is the applicant, for any reason, precluded in any way from carrying on (fully or partially) the additional services which the applicant proposes to offer?

YES/NO

   (b)   Has any of the key persons or controllers ever been convicted of any offence by any court in any jurisdiction? (If the answer is yes, please cross refer to the relevant personal questionnaire)

YES/NO

   (c)   Has any of the key persons or controllers ever been subject, in any jurisdiction to investigations, disciplinary proceedings, or termination by an employer, or resigned from a position in any jurisdiction, in circumstances where, but for the resignation, there would likely have been an alternative sanction such as dismissal? (If the answer is yes, please cross refer to the relevant personal questionnaire)

YES/NO

(9) Certification

   I certify that the above information and all information supplied with this application is complete and correct to the best of my knowledge. I undertake to advise the Regulatory Authority of any material change that occurs at any time after this form is submitted and until such time as the applicant ceases to conduct the licensed activity.

   I authorise NBFIRA to contact any person named herein to verify the contents of this form. In so doing the Regulatory Authority may refer to the application.

Name: ...........................................................................................

Capacity: ......................................................................................

Signature ......................................... Date ....................................

Form 1C

(regs. 6 and 7)

APPLICATION FOR THE APPOINTMENT OF A NEW KEY PERSON OR CONTROLLER

Please answer every question, writing “not applicable” if appropriate. If there is insufficient space, please continue on a separate sheet, identifying, on the separate sheet, the question for which the additional information is supplied. The term “controller” includes a partner. A partner or controller may also be a key person.

(1) Name of applicant (Please give the name of the licensed securities institution)

   .................................................................................................................

   .................................................................................................................

   .................................................................................................................

(2) Name and capacity of the person submitting this form (Please note that this form shall be submitted by the chief executive officer or another executive director or partner)

   ..................................................................................................................

   ..................................................................................................................

   ...................................................................................................................

(3) Current Registered Office Address (Please give the full physical address. Postal address is not acceptable)

   .................................................................................................................

   .................................................................................................................

   .................................................................................................................

(4) Name and addresses of any additional key persons or controllers

   .................................................................................................................

   .................................................................................................................

   .................................................................................................................

(5) Positions key persons are to take up (Controllers who are not key persons shall state that this question is not applicable)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(6) Explanation how the skills and experience relate to the position (Controllers who are not key persons shall state that this question is not applicable)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(7) Assessment of how the new appointment will affect the balance of skills available to the securities institution (Controllers who are not key persons shall state that this question is not applicable)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(8) Declaration (please answer “yes” or “no” to each of the following questions. If the answer is “yes”, please give full details on a separate sheet of paper)

   (a)   Has any of the key persons or controllers ever been convicted of any offence by any court in any jurisdiction? (if the answer is yes, please cross refer to the relevant personal questionnaire)

YES/NO

   (b)   Has any of the key persons or controllers ever been subject in any jurisdiction, to investigations, disciplinary proceedings, or termination by an employer, or resigned from a position in any jurisdiction, in circumstances where, but for the resignation, there would likely have been an alternative sanction such as dismissal? (if the answer is yes, please cross refer to the relevant personal questionnaire)

YES/NO

   (c)   Are you aware of any other matter that may be material to an assessment by the Regulatory Authority of the balance of skills available to the integrity of or the financial soundness of the applicant?

YES/NO

(9) Certification

   I certify that the above information and all information supplied with this application is complete and correct to the best of my knowledge. I undertake to advise the Regulatory Authority of any material change that occurs at any time after this form is submitted and until such time as the applicant ceases to conduct the licensed activity.

   I authorise NBFIRA to contact any person named herein to verify the contents of this form. In so doing the Regulatory Authority may refer to the application.

Name: ..................................................................................

Capacity ...............................................................................

Signature ..................................... Date ...............................

Form 1D

(reg. 10 (1))

APPLICATION FOR RENEWAL OF LICENCE OF A SECURITIES INSTITUTION

Please answer every question, writing “not applicable” if appropriate. If there is insufficient space, please continue on a separate sheet, identifying, on the separate sheet, the question for which the additional information is supplied.

(1) Name of applicant (Please give the name of the licensed securities institution)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(2) Name and capacity of the person submitting this form (Please note that this form shall be submitted by the chief executive officer or another executive director or partner)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(3) Current Registered Office Address (Please give the new physical address. A Postal address is not acceptable)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(4) Details of licence being renewed:

   (a)   Licence No. ................................................................................

   (b)   Date of issue .............................................................................

   (c)   Place of issue ............................................................................

   (d)   Date of expiry .............................................................................

(5) Please provide any amendments to the information provided for the previous application that is relevant (Please refer to Schedule 2 and provide any additional information such as a revised business plan. Please give full details on a separate sheet of paper):

   ............................................................................................

   ............................................................................................

   ............................................................................................

Certification

   I certify that the above information and all information supplied with this application is complete and correct to the best of my knowledge. I undertake to advise the Regulatory Authority of any material change that occurs at any time after this form is submitted and until such time as the applicant ceases to conduct the licensed activity.

   I authorise NBFIRA to contact any person named herein to verify the contents of this form. In so doing the Regulatory Authority may refer to the application.

Name: ................................................................................................

Capacity: ...........................................................................................

Signature .......................................... Date .......................................

COMPANY SEAL

SCHEDULE 2

(regs. 4 (6) and 10 (4))

 

1. Information to accompany a licence application

   (1) General licence application requirements

   (a)   An application for a licence in the form set out in Schedule 1, together with any relevant attachments shall be enclosed in a sealed envelope and filed with the Regulatory Authority. There shall be further submissions through the electronic medium as advised by the Regulatory Authority.

   (b)   An application shall be accompanied by personal questionnaires signed and dated by each key person or controller.

   (2) Information to be supplied by applicants for a licence-

   (a)   Each applicant shall supply a description of business it seeks to undertake and the licence category for which it is applying.

   (b)   Each applicant, unless it is a newly formed business, shall supply copies (certified by the director, partner, as the case may be) of the last balance sheet, the last profit and loss account, the last cash flow statement and a statement of changes in equity, incorporating the results of its last financial year, and which have respectively been audited by a qualified auditor (including every document required by law to be attached). The copies of the financial statements shall be accompanied by a copy of the report of the auditors thereon (certified as aforesaid).

   (c)   Where the audited accounts are for a period that ends more than 6 months before the date of application, the applicant, unless it is a newly formed business, shall supply unaudited accounts for a period ending not earlier than 6 months prior to the date of application (which shall also be certified by a director or partner, as the case may be, as being a true and fair reflection of the company’s financial position to the best knowledge of the applicant).

   (d)   Each applicant shall supply a business plan containing the particulars of-

      (i)   the names and addresses of the key persons or controllers,

      (ii)   the names of the key person (of which there shall be at least two) who shall be registered with the Regulatory Authority as being responsible for the conduct of the business, and

      (iii)   where the applicant is a company, the shareholding structure which shall disclose-

         (aa)   whether any of the shareholders will have an executive role to oversee the day to day operations of the business, or

         (bb)   where controllers are incorporated, the full group structure,

         (cc)   where the applicant is a partnership, the names and addresses of the partners and information as to which of the partners will have an executive role to oversee the day to day operations of the business,

         (dd)   the qualifications, experience and expertise of key person and an explanation of how those qualifications individually and collectively will be sufficient for the business to be undertaken,

         (ee)   the financial projections for three years, together with the key assumptions on which the business plan is based,

         (ff)   one bank reference from the applicant’s current bank, or, if the applicant has yet to establish a bank account, the applicant should supply a bank reference for at least two of the directors or partners,

         (gg)   two business references relating to the applicant or, if the applicant has yet to commence business, references relating to at least two of the directors or partners,

         (hh)   the proposed premises suitably located and equipped to provide satisfactory service to clients in the field of activity to which the licence relates or evidence acceptable to the Regulatory Authority that such premises will be available, and

         (ii)   the human and technology resources available to the securities institution that will be capable of providing professional services to clients in the field of activity to which the licence relates or evidence acceptable to the Regulatory Authority that such resources will be available, and

         (jj)   the proposed independent auditor.

   (e)   Each applicant shall give an overview of its proposed corporate governance arrangements, which shall include-

      (i)   the legal form of the applicant and if-

         (aa)   it is a company, its documents of incorporation,

         (bb)   it is a partnership, its partnership agreement, or

         (cc)   it takes any other legal form, details of that legal form and accompanying verification documents,

      (ii)   particulars of the Board and Board Committees (if any),

      (iii)   particulars of any procedures, codes or protocols that the Board may have adopted at the time of the application and an overview of the procedures, codes and protocols that the applicant intends that the Board shall adopt by the time business commences,

      (iv)   particulars of the management and organisation structure, providing an organisation chart with brief descriptions of the powers and duties of the posts,

      (v)   an overview of the applicant’s assessment of risks and policies to mitigate those risks,

      (vi)   an overview of the applicant’s proposed internal controls, including inter alia-

         (aa)   an explanation of how the controls mitigate the risks to which the applicant is subject, and

         (bb)   a copy of the procedures manual designed to implement internal controls, or

         (cc)   an overview of the proposed contents of such a manual, and

         (dd)   an undertaking that such a manual will be completed by the time the applicant commences licenced activities, and

      (vii)   the applicant’s code of conduct for staff, which shall include, inter alia-

         (aa)   the provisions regarding the holding or trading of securities,

         (bb)   other measures for avoiding staff conflicts of interest,

         (cc)   confidentiality provisions, or

         (dd)   the measures to be taken in the event of any breach of the code, and

      (viii)   where the applicant seeks to use agents or other third parties to provide the services for which it will be responsible, the applicant should provide details of the agents or other third parties and should supply a copy of the contract and, where appropriate and available, the service level agreement.

   (f)   Each applicant shall provide evidence that it has the minimum financial resources required for the activities it proposes to undertake as specified in Financial Resources Requirements Rules.

   (g)   Each applicant shall provide evidence that it has the required insurance policies in place as specified in Financial Resources Requirements Rules.

   (3) Additional information requirements for applicants for a licence to act as securities brokers or dealers.

   In addition to the general application requirements specified in paragraph 2, an applicant for a licence who proposes to be a securities broker or dealer shall provide the following information-

   (a)   details of the securities exchanges, over the counter markets, central securities depositories with which it proposes to transact business;

   (b)   the identity of the person or persons who have the right to execute trades on the securities exchange;

   (c)   details of the proposed information technology and access to the trading network in compliance with the trading, clearing, delivery and settlement requirements of the securities exchange, central securities depository and central counterparty with which the applicant intends to transact business; or

   (d)   a declaration that no person is a director or holds a beneficial interest either directly or indirectly in more than one member of a securities exchange.

   (4) Additional information requirements for applicants for a licence to act as investments advisers and asset managers-

   (a)   An applicant for a licence that proposes to be an investment adviser or asset manager shall inform the Regulatory Authority of the nature and scope of advice that is to be given or the assets that are to be managed, as the case may be. The information shall include-

      (i)   the categories of investment (whether collective investment undertakings or direct investment),

      (ii)   the asset classes (whether bonds, equities, derivatives, commodities or other asset classes),

      (iii)   the geographic scope (whether the securities institution shall be confined to investments in Botswana or in other countries and if the latter which countries),

      (iv)   the types of mandate (discretionary or non-discretionary), and

      (v)   the potential clients.

   (b)   The applicant shall also provide information on the terms by which the nature and scope of the advice shall be disclosed.

 

2. Information to accompany a licence renewal application

   (1) Updated business plan which shall include-

   (a)   list of controllers;

   (b)   shareholding structure and group structure if any;

   (c)   organisational structure; and

   (d)   latest audited financial statements.

   (2) Particulars of Board and Board Committees.

   (3) Updated internal control procedures which shall include-

   (a)   the manual and/or other policies setting out the procedures for the conduct of business and day to day operations;

   (b)   risk management policy;

   (c)   AML/CTF Policy; and

   (d)   complaints procedure.

   (4) Staff code of conduct which shall include-

   (a)   provisions regarding the holding or trading of securities;

   (b)   measures in place to avoid staff conflicts of interest;

   (c)   confidentiality provisions; and

   (d)   disclosures of non-public information.

SCHEDULE 3

(reg. 4 (8))

PERSONAL QUESTIONNAIRE

Please answer every question, writing “not applicable” if appropriate. If there is insufficient space, please continue on a separate sheet, identifying on the separate sheet the question for which the additional information is supplied.

(1) Name of Respondent (Please give the name of the person completing the questionnaire, i.e. the key person or controller)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(2) Previous Names Change of name(s)/Surname(s); (Please list all previous name(s)/surname(s) and reasons for the change of name)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(3) Name of Applicant (please give the name of the entity that is either a licensed market intermediary or an applicant for a licence)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(4) Proposed Capacity in which the Respondent is completing this questionnaire (e.g. key person or controller etc.)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(5) Current Private Address (Please give the full physical address and postal address)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(6) Date and Place of Birth (Please give the city and country)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(7) Passport/Identity Card Number (Please delete as appropriate)

   ..........................................................................................................

   ..........................................................................................................

(8) Nationality and Citizenship (if different from nationality)

..........................................................................................................

(9) Contact Numbers (Please list your contact numbers and email address)

   ..........................................................................................................

   ..........................................................................................................

(10) Current Membership of professional bodies and year of admission (Please give name and address of the body, the nature of the membership and the date of admission)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(11) Present Occupation or employment (Please give the name and address of the employer, the nature of the employer’s business, the position held and the date of appointment to the position)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(12) All other positions (Please state all the other occupations or positions that will continue to be held concurrently with the appointment as key person or controller of the market intermediary. Please state in each case the name, address and business of the entity with which the position is held, the nature of the position and the date of appointment)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(13) Shareholding (Please provide details of any other entities in which you are a shareholder, including the percentage of shareholding and the company’s country of incorporation)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(14) Duties (Please describe the specific duties and responsibilities that you will assume, indicating whether you will be acting on the directions or instructions of any other person(s))

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(15) Full Curriculum Vitae, (Please attach full CV, which gives the details requested at question 9 for each post or occupation and identify the posts or other occupations that were in the financial services sector and which are regarded as relevant experience for the proposed appointment. The CV should include the address of the company or companies which you have worked for, indicate the reason for leaving employment and include a minimum of 1 referee)

   ..........................................................................................................

(16) Relevant Qualifications or Skills (Please give for qualifications, the name and address of the awarding body, the nature of the qualification and the date of the award)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(17) Bank details (Please provide the name and address of your main bank and state how long you have been a customer of that bank)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(18) Previous regulatory history (Please give details of any regulatory authority that has exercised financial services supervisory authority over you or an entity with which you have been associated in the past 7 years. Include the company name, positions held and time period spent with the company)

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

   ..........................................................................................................

(19) Declaration (Please answer “Yes” or “No” to each of the following questions. If the answer is “Yes”, please give full details on a separate sheet of paper.)

   (a)   Are you, through any previous or current occupation, employment or otherwise, precluded in any way from carrying on (fully or partially) the services which the company (identified in 1 above) offers?

YES/NO

   (b)   Have you at any time been convicted of any offence by any court in any jurisdiction?

YES/NO

   (c)   Have you ever been criticised, censured, suspended, fined or been the subject of any other disciplinary action by any banking supervisory or financial regulatory authority, professional body, government agency or stock exchange?

YES/NO

   (d)   Have you or any entity with which you are or have been associated ever been the subject of any disciplinary, legal, other investigations or other comparable proceedings, by any law enforcement, regulatory or professional body in any jurisdiction, whether or not there were any sanctions or other findings as a result?

YES/NO

   (e)   Have you or any entity with which you are or have been associated ever been refused or have withdrawn any authorisation, licence, membership or equivalent authorisation to carry on a business activity in any jurisdiction?

YES/NO

   (f)   Have you ever been subject to investigations, disciplinary proceedings or termination by an employer in any jurisdiction, or have you ever resigned from a position in any jurisdiction in circumstances where but for the resignation, there would likely have been an alternative sanction such as dismissal?

YES/NO

   (g)   Have you or any entity with which you have been associated with ever been subject in any jurisdiction to bankruptcy, liquidation, insolvency proceedings or compulsory winding up as the case may be, or made other agreements or arrangements with creditors?

YES/NO

   (h)   Are you engaged in any personal litigation in any jurisdiction with respect to the management of any business entity?

YES/NO

   (i)   Are you aware of any other matter that may be material to an assessment by the Regulatory Authority of your competence, integrity or financial standing?

YES/NO

(20) Certification

   I certify that the above information is complete and correct to the best of my knowledge. I undertake to advise the Regulatory Authority of any material change that occurs at any time after this form is submitted and until such time as I am no longer connected to the applicant entity.

   I authorise the Regulatory Authority to contact any person named herein to counter-verify the contents of this form. In so doing the Regulatory Authority may refer to the application.

Name of Respondent .................................................................................

Signature ................................................. Date ..........................................

SCHEDULE 4

(regs. 5 and 12 (1))

MINIMUM QUALIFICATIONS FOR KEY PERSONS

Securities Institution

Minimum Qualifications

Asset Manager

 

Chief Executive Officer, Directors, partners or registered key personnel with responsibility for the conduct of the business
Compliance officer, Internal auditor

CEO, compliance officer and internal auditor, directors or any person carrying out similar functions

 

• A degree or diploma or certificate offered by an institution of higher educational learning

• A foreign qualification similar to qualifications above

• An industry or specific qualification

• Financial examination approved by Regulatory Authority

• An industry or professional/special qualifications (e.g. regulatory examinations) offered through a professional body recognised by the regulator or an accredited provider

Compliance Officer additional

• Hold a legal or business diploma or degree recognised by the Regulatory Authority and/or have the relevant experience

• Have attained any specific financial services industry or compliance related certificate, diploma or degree recognised by the Regulatory Authority and/or have the relevant experience or

• Be an accredited member of any organisation recognised by the Regulatory Authority as being appropriate for this purpose and/or have the relevant experience

• At least have 3 years’ experience in compliance or risk management function in the financial services industry

Internal Auditor additional

• Hold a legal or business diploma or degree recognised by the Regulatory Authority and/or have the relevant experience

• Have attained any specific financial services industry or accounting related certificate, diploma or degree recognised by the Regulatory Authority and/or have the relevant experience or

• Be an accredited member of any organisation recognised by the Regulatory Authority as being appropriate for the purpose and/or have the relevant experience

• At least have 5 years’ experience in internal auditing or risk management function in the financial services industry

Custodian

CEO, compliance officer and internal auditor, directors or any person carrying out similar functions

Chief Executive Officer
Directors
Compliance Officer
Internal Auditor

• A degree or diploma or certificate offered by an institution of higher education/learning

• A foreign qualification similar to qualifications above

• An industry or specific qualification

• Financial examination approved by the Regulatory Authority

• An industry or professional/special qualification (e.g. regulatory examinations) offered through a professional body recognised by the regulator or an accredited provider

Compliance Officer Additional

• Hold a legal or business diploma or degree recognised by the regulator, and/or have the relevant experience

• Have attained any specific financial services industry or compliance related certificate, diploma or degree recognised by the regulator as being and/or have the relevant experience

• Be an accredited member of any organisation recognised by the regulator as being appropriate for this purpose, and/or have the relevant experience

• At least have 3 years of experience in compliance or risk management function in the financial services industry;

Internal auditor additional

• Hold a legal or business diploma or degree recognised by the regulator and/or have the relevant experience

• Have attained any specific financial services industry or accounting related certificate, diploma or degree recognised by the regulator and/or have the relevant experience or

• Be an accredited member of any organisation recognised by the Regulatory Authority as being appropriate for this purpose and/or have the relevant experience

• At least have 5 years of experience in internal auditing or risk management function in the financial services industry.

Investment Advisor

CEO, compliance officer and internal auditor, directors or any person carrying out similar functions

Chief Executive Officer
Directors, partners or registered key personnel with responsibility or the conduct of the business
Compliance Officer
Internal Auditor

• A degree or diploma or certificate offered by an institution of higher education/learning

• A foreign qualification similar to qualifications above

• An industry or specific qualification

• Financial examination approved by the Regulatory Authority

• An industry or professional/special qualification (e.g. regulatory examinations) offered through a professional body recognised by the regulator or an accredited provider

Compliance Officer Additional

• Hold a legal or business diploma or degree recognised by the regulator, and/or have the relevant experience

• Have attained any specific financial services industry or compliance related certificate, diploma or degree recognised by the regulator as being and/or have the relevant experience

• Be an accredited member of any organisation recognised by the regulator as being appropriate for this purpose, and/or have the relevant experience

• At least have 3 years of experience in compliance or risk management function in the financial services industry

Internal auditor additional

• Hold a legal or business diploma or degree recognised by the regulator and/or have the relevant experience

• Have attained any specific financial services industry or accounting related certificate, diploma or degree recognised by the regulator and/or have the relevant experience or

• Be an accredited member of any organisation recognised by the regulator as being appropriate for this purpose and/or have the relevant experience

• At least have 5 years of experience in internal auditing or risk management function in the financial services industry.

Securities broker or dealer

CEO, compliance officer and internal auditor, directors or any person carrying out similar functions

Chief Executive Officer
Directors, partners or registered key personnel with responsibility for the conduct of the business
Compliance Officer
Internal Auditor

• A degree or diploma or certificate offered by an institution of higher education/learning

• A foreign qualification similar to qualifications above

• An industry or specific qualification

• Financial examination approved by the Regulatory Authority

• An industry or professional/special qualification (e.g. regulatory examinations) offered through a professional body recognised by the regulator or an accredited provider or

Compliance Officer Additional

• Hold a legal or business diploma or degree recognised by the regulator, and/or have the relevant experience

• Have attained any specific financial services industry or compliance related certificate, diploma or degree recognised by the regulator as being and/or have the relevant experience

• Be an accredited member of any organisation recognised by the regulator as being appropriate for this purpose, and/or have the relevant experience

• At least have 3 years of experience in compliance or risk management function in the financial services industry

Internal auditor additional

• Hold a legal or business diploma or degree recognised by the regulator and/or have the relevant experience

• Have attained any specific financial services industry or accounting related certificate, diploma or degree recognised by the regulator and/or have the relevant experience or

• Be an accredited member of any organisation recognised by the regulator as being appropriate for this purpose and/or have the relevant experience

• At least have 5 years of experience in internal auditing or risk management function in the financial services industry.

SECURITIES (PERSONS OPERATING A SECURITIES INFRASTRUCTURE BUSINESS) REGULATIONS

(under section 59)

(31st March, 2017)

ARRANGEMENT OF REGULATIONS

REGULATION

 

PART I
Preliminary

   1.   Citation

   2.   Interpretation

   3.   Application

 

PART II
Requirements for application for licence

   4.   Application for licence

   5.   Licence criteria

   6.   Additional applications for key persons

   7.   Additional applications for controllers

   8.   Application to be self-regulatory organisation

   9.   Processing of applications

   10.   Duration of licence

   11.   Revocation of licence

   12.   Renewal of licence

   13.   Conditions of licence

 

PART III
Obligations of persons operating securities infrastructure business

   14.   Supervisory levy

   15.   Minimum financial requirements

   16.   Technological resources

   17.   Accounts and audit

   18.   Conduct of person operating securities infrastructure business

   19.   Rules of securities infrastructure business

   20.   Complaints

   21.   Relations with Regulatory Authority

   22.   Conflict of interest

   23.   Confidentiality

 

PART IV
General provisions relating to persons operating securities exchange

   24.   Establishment of proper markets by securities exchange

   25.   Rules of securities exchange

 

Part V
General provisions relating to settlement operators

   26.   Conduct of settlement operator

   27.   Clearing and settlement rules

 

PART VI
Offences and penalties

   28.   Offences and penalties

 

      SCHEDULES

SI 32, 2017.

PART I
Preliminary

 

1.   Citation

   These Regulations may be cited as the Securities (Persons Operating a Securities Infrastructure Business) Regulations.

 

2.   Interpretation

   In these Regulations, unless the context otherwise requires-

   “key person” means Chief Executive Officer, Director, Chief Financial Officer, company secretary, compliance officer, internal auditor, and any other person fulfilling a similar function but with a different name, and the term “key personnel” shall be construed accordingly; and

   “settlement operator” means a person operating a central securities depository, other clearance and settlement system, or a central counterparty.

 

3.   Application

   These Regulations shall apply to a-

   (a)   person who wishes to operate a securities infrastructure business and who seeks to apply to the Regulatory Authority for a licence under section 3 of the Act; and

   (b)   securities business infrastructure whose place of business is in Botswana.

PART II
Requirements for application for licence

 

4.   Application for licence

   (1) A person shall not operate a securities infrastructure business unless that person has been issued with a licence in accordance with section 3 of the Act.

   (2) A person who wishes to apply for a licence to operate a securities infrastructure business shall make an application to the Regulatory Authority in Form 1 set out in Schedule 1.

   (3) An applicant referred to in subregulation (2) may apply to be an operator of more than one category of securities infrastructure business and shall indicate on the application form, the category or categories of the securities infrastructure business the applicant wishes to operate.

   (4) Notwithstanding subregulation (3), the Regulatory Authority shall grant a single licence to an applicant and shall provide in the licence, the category or categories of the securities infrastructure business that the applicant is licensed to operate.

   (5) An application for a licence shall be accompanied by a non-refundable fee specified in the Non-Bank Financial Institutions Regulatory Authority (Supervisory Levies and Licensing Fees) Regulations , and where an application is for more than one category of securities infrastructure business, the applicant shall pay an application fee for each category of securities infrastructure business.

   (6) An applicant shall, in addition to an application for a licence and a non-refundable fee, submit to the Regulatory Authority the-

   (a)   additional information specified in Schedule 2; and

   (b)   questionnaire set out in Schedule 3 for each of the key persons and controllers of a securities infrastructure business, which shall be signed and dated by the person who is its subject.

   (7) Where a questionnaire has been submitted to the Regulatory Authority prior to the submission of an application for a licence, the applicant may submit a copy of the questionnaire to the Regulatory Authority, giving details of any changes to the information contained in the questionnaire, including a declaration by such applicant and the person to whom the questionnaire relates that-

   (a)   the changes indicated, if any, are accurate; and

   (b)   in all other respects, the information in the questionnaire remains true and is not misleading.

   (8) If after submitting an application, an applicant becomes aware of a material change in any of the information submitted with the application, or any material event that may affect such application, the applicant shall notify the Regulatory Authority of the changes or the event, irrespective of whether the Regulatory Authority has considered the application or not.

   (9) An applicant may, after submitting an application, withdraw the application at any time.

 

5.   Licence criteria

   (1) The Regulatory Authority shall, where an applicant and the applicant’s key person and controller satisfy the requirements specified in subregulation (2), grant the applicant with a licence in accordance with section 4 of the Act.

   (2) An applicant shall, before the applicant is granted a licence in accordance with section 4 of the Act, satisfy the Regulatory Authority that-

   (a)   the securities infrastructure business to be established by the applicant has the ability to contribute to the development of the financial market and the protection of the interests of the investor and the public;

   (b)   the corporate governance of the applicant is in compliance with the Non-Bank Financial Institutions Regulatory Authority (Securities Business Corporate Governance) Rules;

   (c)   the applicant has the capacity and the intention to comply with any-

      (i)   condition of a licence that applies to such applicant, and

      (ii)   other requirement imposed under the Act, these Regulations, rules or other applicable financial services law;

   (d)   the skills and experience available to the applicant are sufficient for the category or categories such applicant proposes to undertake;

   (e)   the financial resources of the applicant are sufficient for the category or categories for which such applicant is seeking a licence as specified in Non-Bank Financial Institutions Regulatory Authority (Financial Resource Requirement) Rules:

         Provided that where such applicant wishes to undertake more than one category of securities infrastructure business, the financial resources required shall be the total sum specified in the Non-Bank Financial Institutions Regulatory Authority (Financial Resource Requirement) Rules for each of the category, or such other amount as the Regulatory Authority may require;

   (f)   the applicant has the appropriate technology resources required under regulation 16;

   (g)   the applicant meets the requirements on conduct of a person operating a securities infrastructure business in accordance with regulation 18;

   (h)   where the applicant seeks to operate a-

      (i)   securities exchange, such applicant meets the requirements under Part IV, or

      (ii)   central securities depository or clearance and settlement system, such applicant meets the requirements under Part V;

   (i)   the business plan submitted by the applicant demonstrates that such applicant has the ability to conduct business in compliance with the requirements under these Regulations, without being a risk to the stability of the capital market;

   (j)   the applicant has not, at any time or in any jurisdiction-

      (i)   been subject to any insolvency or liquidation proceedings,

      (ii)   made any arrangement with any creditor,

      (iii)   been the subject of a compulsory winding up of a securities institution,

      (iv)   engaged in any other conduct, and

      (v)   entered into any other agreement,

that might compromise such applicant’s ability to maintain the financial resource requirements applicable to the applicant;

   (k)   the applicant has not, at any time, been found guilty of misconduct or unprofessional conduct or other conduct that may compromise such applicant’s integrity as an applicant, by a competent tribunal, board or body legally constituted within or outside Botswana, for the purpose of adjudicating on matters of discipline and conduct;

   (l)   there are no factors that might compromise the-

      (i)   integrity, financial standing or professional skills of the applicant or such applicant’s key person or controllers,

      (ii)   sustainability of the financial position of the applicant and its likely impact on the stability of the financial system, or

      (iii)   capacity of the applicant to meet requirements under these Regulations and the obligations to which such applicant may be subject to in Botswana or elsewhere, whether imposed by statute or other lawful means; and

   (m)   there are no factors that might impede the Regulatory Authority’s effective oversight of the securities infrastructure business.

   (3) An applicant shall, in respect of each of the applicant’s key person, satisfy the Regulatory Authority that the key person has the skills and experience appropriate to such key person’s position as set out in Schedule 5.

   (4) In respect of an applicant’s key person and a controller, the applicant shall, before the applicant is granted a licence, satisfy the Regulatory Authority that such key person or controller, as the case may be, has-

   (a)   not been convicted of a criminal offence involving dishonesty;

   (b)   not been found guilty of misconduct or unprofessional conduct or other conduct that may compromise his or her integrity as a key person or controller, by a competent tribunal, board or body legally constituted within or outside Botswana, for the purpose of adjudicating on matters of discipline and conduct;

   (c)   not, at any time, being a holder of a professional qualification, been suspended or barred from practising the profession, trade or skill within or outside Botswana;

   (d)   not been removed from any office of trust on account of misconduct, by any court within or outside Botswana;

   (e)   not been the subject of termination of employment by an employer, or of resignation from a position, in circumstances where there would likely have been an alternative sanction such as dismissal;

   (f)   not, at any time, been subject to bankruptcy proceedings or made other arrangements with creditors or any other person of a nature that might compromise the financial resources of the applicant and their ability to maintain a sound financial position;

   (g)   not been involved, as a director or controller, or in any capacity with significant influence over the management of an entity, of any such entity whether a company, partnership or any other legal form, that has been the subject of any investigations referred to in subregulation (2) (k), unless the Regulatory Authority is satisfied that the circumstances are such that they do not compromise their financial resources; and

   (h)   no other factors that might compromise the integrity, competence or financial resources of the applicant.

   (5) Where an applicant for a licence to operate as a settlement operator has not obtained a Certificate of Recognition as required by regulation 26-

   (a)   the applicant shall submit a copy of its application for a Certificate of Recognition, if any, to the Regulatory Authority; and

   (b)   the licence, if granted, shall contain a condition stipulating that the Regulatory Authority shall cancel the licence if the application for a Certificate of Recognition is not successful.

 

6.   Additional applications for key persons

   (1) A person who operates a securities infrastructure business shall not appoint a key person for the operation of the securities infrastructure without the approval of the Regulatory Authority.

   (2) A person who operates a securities infrastructure business, who wishes to appoint a key person shall make an application in Form 2 set out in Schedule 1.

   (3) An application in accordance with subregulation (2) shall be accompanied by a questionnaire set out in Schedule 3 which shall be completed, signed and dated by the person appointed as the key person.

   (4) The Regulatory Authority shall, if it is satisfied that a key person meets the requirements under these Regulations, give approval for a person to be appointed as a key person by an applicant.

   (5) Where a person who operates a securities infrastructure business appoints a key person without the approval of the Regulatory Authority, the Regulatory Authority may impose a penalty not exceeding-

   (a)   P50 000 against the securities infrastructure business; or

   (b)   P10 000 against the person appointed as the controller, and may direct the securities infrastructure business to dismiss the key person.

 

7.   Additional applications for controllers

   (1) A person who operates a securities business infrastructure shall not appoint a controller for the operation of the securities business infrastructure without the approval of the Regulatory Authority.

   (2) A person who operates a securities infrastructure business, who wishes to appoint a controller shall make an application in Form 2 set out in Schedule 1.

   (3) An application made in accordance with subregulation (2) shall be accompanied by a questionnaire set out in Schedule 3 which be signed and dated by the person appointed as the controller.

   (4) Where an application referred to in subregulation (2) is for the appointment of a new controller, such application shall be accompanied by a fee specified in the Non-Bank Financial Institutions Regulatory Authority (Supervisory Levies and Licensing Fees) Regulations.

   (5) The Regulatory Authority shall, if it is satisfied that a controller meets the requirements set out in these Regulations, give approval for a person to be appointed as a controller.

   (6) Where a person who operates a securities infrastructure business appoints a controller without the approval of the Regulatory Authority, the Regulatory Authority may impose a penalty not exceeding-

   (a)   P50 000 against the securities infrastructure business; or

   (b)   P10 000 against the person appointed as the controller and may direct such person to ensure that he or she immediately disposes of his or her interest in the securities infrastructure business.

 

8.   Application to be self-regulatory organisation

   (1) A person who operates a securities infrastructure business who wishes to obtain a declaration that the securities infrastructure business shall be a self-regulatory organisation, shall-

   (a)   make such declaration on the application for a licence in Form 1 set out in Schedule 1;

   (b)   provide an overview of the responsibilities the securities infrastructure business he or she wishes to undertake;

   (c)   indicate how its rules, if any, shall be enforced;

   (d)   indicate whether its rules, if any, are consistent with its responsibilities under these Regulations; and

   (e)   enter into an agreement with the Regulatory Authority that shall be reviewed annually.

   (2) A declaration made in accordance with subregulation (1) (a) shall be accompanied by a non-refundable fee specified in the Non-Bank Financial Institutions Regulatory Authority (Supervisory Levies and Licensing Fees) Regulations.

   (3) If after submitting an application with a declaration referred to in subregulation (1), an applicant becomes aware of a material change in any of the information supplied in relation to the declaration, or any material event that may affect such declaration, the applicant shall inform the Regulatory Authority of the change, irrespective of whether the Regulatory Authority has considered the application or not.

   (4) The Regulatory Authority shall, after considering an application, recommend the approval of the application to the Minister and in doing so the Regulatory Authority shall consider whether the applicant has the capacity and intention to-

   (a)   incorporate in the rules of the securities infrastructure business, the obligations for which such applicant is responsible;

   (b)   enforce the requirements for which such applicant is responsible;

   (c)   enter into an arrangement and cooperate with the Regulatory Authority in implementing the regulatory regime for which it is responsible; and

   (d)   accept the oversight of the Regulatory Authority over the self-regulatory organisation responsibilities.

 

9.   Processing of applications

   (1) The Regulatory Authority may, after receipt of an application for a licence to operate a securities infrastructure business, require additional information from the applicant, key person or controller.

   (2) Where the Regulatory Authority has required additional information in accordance with subregulation (1), the applicant, key person or controller shall provide such information within 14 days.

   (3) The Regulatory Authority may, where additional information is not supplied in accordance with subregulation (1), decline to process the application.

   (4) The Regulatory Authority shall, where an applicant does not meet the requirements to operate as a securities infrastructure business or to be recommended to the Minister to be declared a self-regulatory organisation-

   (a)   inform the applicant of its decision and the reasons for that decision, in writing and give its opinion and reasons;

   (b)   allow the applicant to make representations within a period of 30 days after being informed of the Regulatory Authority’s decision in accordance with paragraph (a); and

   (c)   consider any representations that may be made and either-

      (i)   confirm its decision to reject the application, or refuse to recommend the applicant to be declared a self-regulatory organisation to the Minister, as the case may be,

      (ii)   approve the application, or

      (iii)   request further information from the applicant.

   (5) Where the Regulatory Authority intends to recommend to the Minister to declare that a securities infrastructure business should be declared a self-regulatory organisation, the Regulatory Authority shall, in accordance with the Non-Bank Financial Institutions Regulatory Authority Act , enter into an arrangement with the securities infrastructure business for the performance by such securities infrastructure business, of regulatory or supervisory functions.

   (6) After entering into the arrangement referred to in subregulation (5) has been concluded, the Regulatory Authority shall forward its recommendation that the securities infrastructure business should be declared a self-regulatory organisation to the Minister.

   (7) Where the Regulatory Authority intends to approve a licence application with conditions, it shall-

   (a)   inform the applicant of its decision and give reasons;

   (b)   give the applicant 30 days notice within which such applicant shall make its representations to the Regulatory Authority; and

   (c)   consider any representations that may be made and either-

      (i)   confirm its decision to impose conditions,

      (ii)   approve the application without conditions, and subregulation (8) shall apply,

      (iii)   reject the application, and subregulation (4) shall apply, or

      (iv)   request further information from the applicant.

   (8) Where the Regulatory Authority intends to approve a licence application without conditions-

   (a)   it shall inform the applicant of its intention; and

   (b)   the applicant shall, in accordance with regulation 14 (2), pay the first supervisory levy.

   (9) The Regulatory Authority shall, after the applicant has paid the first annual supervisory levy in accordance with subregulation (8) (b), approve the application and inform such applicant of the date the approval shall take effect.

   (10) Where the Regulatory Authority approves a licence application with conditions-

   (a)   it shall give written notice to the applicant of the approval;

   (b)   the approval of such application shall take effect from a date specified by the Regulatory Authority; and

   (c)   the applicant shall, in accordance with regulation 14 (2), pay the first supervisory levy.

 

10.   Duration of licence

   (1) A licence issued under the Act shall, unless previously renewed or revoked, expire at the end of three years from the date of issue.

   (2) Notwithstanding subregulation (1), a licensee shall pay an annual licence fee specified in the Non-Bank Financial Institutions Regulatory Authority (Supervisory Levies and Licensing Fees) Regulations at least 30 days before the elapse of every 12 months of the duration of the licence referred to in subregulation (1).

 

11.   Revocation of licence

   The Regulatory Authority may revoke a licence, recommend that the Minister revokes a self-regulatory organisation declaration or exercise its powers under any other financial services law to revoke a licence, where-

   (a)   the licensee so requests;

   (b)   it has been ascertained that any information given to the Regulatory Authority by the licensee, its key person or controller, for the purpose of obtaining the licence, was false at the time when the information was given;

   (c)   the licensee has, without reasonable excuse, failed to comply with a term or condition of the licence or requirement under these Regulations;

   (d)   the licensee has been convicted of an offence under the Act or any other financial services law; or

   (e)   the Regulatory Authority has reasonable grounds to believe that either the licensee, its key person or controller, is not a fit and proper person to continue with the business.

 

12.   Renewal of licence

   (1) An application for the renewal of a licence shall be made to the Regulatory Authority by the licensee in Form 1 or 2 set out in Schedule 1 and such application shall be accompanied by a fee specified in the Non-Bank Financial Institutions Regulatory Authority (Supervisory Levies and Licensing Fees) Regulations.

   (2) An application referred to in subregulation (1) shall be made six months prior to the date of the expiry of the licence.

   (3) Where an application for renewal is made after a period not exceeding 12 months after the expiry of the licence, the Regulatory Authority may renew such licence subject to the payment of a fee for the late renewal of licence specified in the Non-Bank Financial Institutions Regulatory Authority (Supervisory Levies and Licensing Fees) Regulations.

   (4) An application for the renewal of a licence that expired 12 months or more prior to the application for renewal shall be-

   (a)   treated as an application for a new licence and the provisions of regulations 5, 6, 7, 8, 9 and 10 shall apply; and

   (b)   accompanied by a penalty for failure to renew of P2 500 for every day during which such failure continues, but such penalty shall not exceed P50 000.

 

13.   Conditions of licence

   (1) A licence issued under the Act shall not be transferable.

   (2) A licensee shall undertake the securities infrastructure business specified in the conditions of a licence.

PART III
Obligations of persons operating securities infrastructure business

 

14.   Supervisory levy

   (1) A person who operates a securities infrastructure business levy shall pay a supervisory levy to the Regulatory Authority in accordance with the Non-Bank Financial Institutions Regulatory Authority Act.

   (2) The first supervisory levy shall be payable when the Regulatory Authority has indicated its intention to approve a licence application.

   (3) Where the Regulatory Authority indicates its intention to approve a licence application on a date other than the 1st April of every year, the first supervisory levy shall be reduced by one twelfth for every month that passes after 1st April.

 

15.   Minimum financial requirements

   (1) A person who operates a securities infrastructure business shall ensure that the business maintains the minimum financial requirements specified in the Non-Bank Financial Institutions Regulatory Authority (Financial Resources Requirements) Rules, or such other amount as the Regulatory Authority may specify.

   (2) Notwithstanding subregulation (1), the Regulatory Authority may increase the minimum financial requirements as it may deem necessary depending on the risk profile of the securities infrastructure business.

   (3) Notwithstanding the minimum financial requirements that the Regulatory Authority may impose under this regulation, a person operating a securities infrastructure business shall ensure that such business has the additional financial resources as are necessary having regard to the nature, size and complexity of its business for the purposes of guarding against the risk of failure to fulfil the business’ liabilities as they fall due.

 

16.   Technological resources

   (1) A person who operates a securities infrastructure business shall ensure that the business has the necessary technological resources to conduct such a business.

   (2) For purposes of subregulation (1) the resources shall be-

   (a)   used for the maintenance of records and the operation of the securities infrastructure business;

   (b)   reliable;

   (c)   regularly evaluated to ensure that they are operating as intended;

   (d)   maintained to an appropriate standard, with appropriate safeguards against failure;

   (e)   maintained by the skilled personnel; and

   (f)   secure, in order to protect the confidentiality of the data contained in the resources.

 

17.   Accounts and audit

   (1) A person operating a securities infrastructure business shall keep and maintain proper books of accounts and records of accounts in respect of every financial year relating to the assets, liabilities, income and expenditure of the business, and shall prepare in each financial year, a statement of such accounts.

   (2) The accounts of the securities infrastructure business in respect of each financial year shall, within three months of the end thereof, be audited by an independent auditor appointed by the person who operates a securities infrastructure business.

   (3) A person operating the securities infrastructure business shall not appoint an independent auditor under this regulation without the approval of the Regulatory Authority.

   (4) Where a person operating a securities infrastructure business stops an auditor from executing his or her duties as such, the business and the auditor shall inform the Regulatory Authority and the Regulatory Authority may request for an explanation, if any, from such business and the auditor.

   (5) In default of the appointment of an independent auditor under subregulation (2), the Regulatory Authority shall appoint an independent auditor.

   (6) An independent auditor appointed under subregulation (2) shall report in respect of the accounts for each financial year, in addition to any other matter on which the auditor considers it necessary to comment on, whether or not the-

   (a)   auditor has received all information and explanations which, to the best of the auditor’s knowledge and belief, were necessary for the performance of the auditor’s duties;

   (b)   accounts and related records of the securities infrastructure business have been properly kept;

   (c)   securities infrastructure business has complied with all the financial provisions of these Regulations with which it is its duty to comply; and

   (d)   statement of accounts prepared by the securities infrastructure business was prepared on the basis consistent with that of the preceding year and represents a true and fair view of the transactions and financial affairs of such business.

   (7) The report of the auditor and a copy of the audited accounts shall, within 14 days of the completion thereof, be forwarded to the securities infrastructure business and the Regulatory Authority.

   (8) A person operating a securities infrastructure business shall, as soon as possible but not later than 90 days after receipt of the annual report, publish in a local newspaper, such report which shall include such business’ audited financial statements and the audit report for a every financial year to which the statements relate.

 

18.   Conduct of person operating securities infrastructure business

   (1) A person who operates a securities infrastructure business shall-

   (a)   act with integrity;

   (b)   exercise due care, skill and diligence in maintaining the integrity of the market;

   (c)   observe high standards of conduct;

   (d)   treat all similarly situated market participants consistently and fairly; and

   (e)   perform a duty of care to any person who uses the facilities of the securities infrastructure business either directly or through other securities institutions.

   (2) A person who operates a securities infrastructure business shall not conduct any business, other than that permitted by the licence, without the permission of the Regulatory Authority.

   (3) A person operating a securities infrastructure business shall include in its assessment of a risk associated with the operation of the business, any factor that may-

   (a)   inhibit the fair, transparent, orderly and efficient functioning of the markets;

   (b)   adversely affect the interests of market users; or

   (c)   arise from conflicts of interest, and shall implement measures and procedures designed to mitigate the risk.

   (4) Without derogating from the generality of subregulation (3), the measures and procedures that the person may use to mitigate the risk associated with the operation of a securities infrastructure business shall include-

   (a)   a surveillance programme with respect to a participant’s or issuer’s compliance with the rules of the business, including any rules imposed by such business where the business is declared a self-regulatory organisation, and shall include-

      (i)   a risk assessment of each participant subject to such rules, which shall be submitted to the Regulatory Authority,

      (ii)   a requirement from a member or participant to make a financial report, operations report and any other report to the person operating the securities infrastructure business, which reports shall, where possible, be in accordance with the requirements of the Regulatory Authority,

      (iii)   an on-site inspection programme based on a risk assessment, accompanied by the appropriate report and action plan, which shall be disclosed to the Regulatory Authority as the Regulatory Authority may require,

      (iv)   a facility to initiate an investigation where there is suspicion of a breach of the rules by the participant or issuer,

      (v)   the procedure to be followed for imposing sanctions, where appropriate, subject to section 32 of the Act, and

      (vi)   an annual review of compliance with its rules; and

   (b)   a formal agreement with any other person who operates a securities infrastructure business, in order to provide for the appropriate co-operation.

   (5) Where a person operating a securities infrastructure business creates a structure that, in the opinion of the Regulatory Authority, creates a risk to such business, the Regulatory Authority may require the person to take measures to mitigate that risk.

   (6) A person operating a securities infrastructure business shall ensure that, where its facilities provide for the safeguarding and administration of assets which belong to the market participants-

   (a)   satisfactory arrangements are made for that purpose;

   (b)   clear terms of an agreement exist between the market participants and the securities infrastructure business; and

   (c)   the assets of the participants are clearly separated from those of the securities infrastructure business.

   (7) A person who operates a securities infrastructure business shall ensure that the-

   (a)   rules of the business are accessible to the public; and

   (b)   fees set by the business are published in a local newspaper.

   (8) Where a person operating a securities infrastructure business permits access to its facilities by a participant of another country, that person shall-

   (a)   require the participant to be licensed or approved by the Regulatory Authority by concluding a memorandum of understanding with the regulatory authority of such participant, who is responsible for the regulation of the activity the participant proposes to conduct with the business;

   (b)   commission, or where it is available, consult an updated analysis of any material differences between the legislation on market abuse to which the participant is subject in its country and that which applies in Botswana, and where necessary, refuse to accept a participant from a country that do not have adequate legislation that prohibits market abuse;

   (c)   require the participant to arrange for a bank based in Botswana, subject to supervision by the Bank of Botswana, to guarantee any financial obligations of the participant;

   (d)   restrict membership or participation in the business to an entity of another country that is licensed by the regulatory authority of that country to conduct the business it proposes to conduct with the securities infrastructure business; and

   (e)   conclude an agreement with the regulatory authority of the participant that-

      (i)   gives such person operating the securities infrastructure business the right to make on-site inspections of such participant, and

      (ii)   includes the responsibility to inspect, investigate and impose sanctions in order to monitor and enforce the applicable rules.

 

19.   Rules of securities infrastructure business

   (1) A person who operates a securities infrastructure business shall ensure that the business has clear and fair rules that-

   (a)   are consistent with such a business;

   (b)   encompass any regulatory responsibility that the business has as a self-regulatory organisation;

   (c)   operate as a contract between any member or participant and such business;

   (d)   permit the business, where it is a self-regulatory organisation, to issue directives within the framework of these Regulations where such directives are necessary to meet the obligations of such business;

   (e)   are legally enforceable; and

   (f)   are published and made available to the public.

   (2) Where the rules are binding on, or intended to guide a member or participant, a person operating a securities infrastructure business shall adopt a procedure for consulting any market user when adopting rules for trading, clearing, settlement or any other matter.

   (3) A person who operates a securities infrastructure business shall, with the approval of the Regulatory Authority in writing-

   (a)   make rules for the business; and

   (b)   amend or vary any rule of the business.

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