Securities Act

Number of Act: 
8
Date of promulgation: 
29 October 2007
Link to Related Legislation: 
 

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CONSOLIDATED TO 30 JUNE 2012

 

LAWS OF SEYCHELLES

Act 8 of 2007

CHAPTER 208A

SECURITIES ACT

[29th October, 2007]

 

ARRANGEMENT OF SECTIONS

PART 1 – GENERAL PROVISIONS

1.              Short title

2.              Interpretation

PART 2 – SECURITIES AUTHORITY

3.              Purposes of the Securities Authority

4.              Duties of the Securities Authority

5.              Powers of the Securities Authority

6.              Consultation and co-operation

PART 3 – SECURITIES EXCHANGES

7.              Restriction on establishment of securities exchanges

8.              Application for securities exchange licence

9.              Grant of securities exchange licence

10.          Renewal, suspension and revocation of securities exchange licence

11.     Duties of holder of securities exchange licence

12.     Rules of securities exchange

13.     Amendment to rules of securities exchange

14.     Fixing of trading and position limits

15.     Power of Securities Authority to issue directions to securities exchange

16.     Power of Securities Authority to require amendment to rules

17.     Securities exchange to assist Securities Authority

18.     Disciplinary powers over members of securities exchange

19.     Closure of securities exchange in emergency

20.     Restriction on use of titles relating to exchanges, markets, etc

21.     Annual reports

PART 4 – CLEARING AGENCIES AND OTHER SECURITIES FACILITIES

22.     Interpretation

23.     Licensing of clearing agencies

24.     Application for clearing agency licence

25.     Grant of clearing agency licence

26.     Rules of clearing agency

27.     Approval of amendments to rules of clearing agency

28.     Alteration of facts disclosed in application

29.     General conditions

30.     Annual reports

31.     Revocation and suspension of licence

32.     Power of Securities Authority to issue directions

33.     Duty to assist Securities Authority

34.     Proceedings of clearing agency take precedence over laws of insolvency

35.     Duty to report on completion of default proceedings

36.     Net sum payable on completion of default proceedings

37.     Enforcement of judgments over property subject to market charge

38.     Participant to be party to certain transactions as principal

39.     Securities deposited with clearing agency

40.     Preservation of rights

41.     Other securities facilities

42.     Application for securities facility licence

43.     Grant of securities facility licence

44.     Application of section 28 to 33 to securities facilities

PART 5  – LICENSING OF MARKET PARTICIPANTS

45.     Licensing of securities dealers

46.     Grant of securities dealer licence

47.     Application for securities dealer licence

48.     Licensing of investment advisors

49.     Grant of investment of advisor licence

50.     Application for investment advisor licence

51.     Licensing of securities dealer’s representatives and investment advisor’s representatives

52.     Grant of securities dealer’s representative licence and investment advisor’s representative licence

53.     Accreditation of representatives

54.     Application for representative licence

55.     Power of Securities Authority to impose conditions and licence renewal

56.     Revocation and suspension of licences and other action

57.     Power of Securities Authority to issue directions to licensees

58.     Register of licences

59.     Notification of change in register particulars

60.     Ownership changes

61.     Name requirements

62.     Custodians of securities

63.     Offences under this Part

PART 6  – CONDUCT OF SECURITIES BUSINESS

64.     Standards of conduct

65.     Business conduct regulations

66.     Issue of contract notes

67.     Short selling

68.     Accounts to be kept by securities dealers

70.     Failure to comply with financial resources regulations

71.     Monitoring compliance with financial resources regulations

72.     Client’s property

73.     Insurance requirement

74.     Auditor to be appointed

75.     Audited accounts to be filed with Securities Authority

76.     Auditor to report to Securities Authority in certain cases

77.     Power of Securities Authority to appoint auditor

PART 7 – REGISTERS OF INTERESTS IN SECURITIES

78.     Application of this Part

79.     Register of Securities

80.     Notice of particulars to Securities Authority

81.     Production of register

82.     Particulars of financial journalists

83.     Extract of register

84.     Interest in securities

PART 8 – OFFERS TO PUBLIC OF CORPORATE SECURITIES

85.     Public offers of securities

86.     Publication of prospectus

87.     Content of prospectus

88.     Compensation for false or misleading prospectus

89.     Continuing disclosure obligations of issuers

PART 9  – REGISTRATION OF CORPORATE ISSUERS

90.     Registration statement

91.     Annual reports

PART 10  – INSIDER DEALING AND OTHER MARKET ABUSES

92.     Insiders

93.     Inside information

94.     Information “made public”

95.     Offence of insider dealing

96.     False trading

97.     Price rigging

98.     Market manipulation

99.     Use of deceptive statement as inducements

100.   Fraudulent transactions

101.   False or misleading statement inducing securities transactions

102.   Penalties for offences under sections 96 to 101

103.   Liability to pay damages

PART 11 – DISCLOSURE OF SHAREHOLDINGS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

104.   Interpretation

105.   Notification of interests of directors and substantial shareholders

106.   Change in director’s interest in securities

107.   Obligation to notify acquisition or change in substantial shareholding

108.   Extension to spouses and children

109.   Register of interests of directors and substantial shareholders

110.   Notification to securities exchange and Securities Authority

111.   Offences

PART 12 – INFORMATION, INSPECTION AND INVESTIGATION

112.   Power of Securities Authority to call for information

113.   Right to exchange information

114.   Information relating to transactions

115.   Power of Securities Authority to inspect

116.   Power of Securities Authority to investigate

117.   Power of Securities Authority to require production of records and documents concerning listed companies

118.   Remedy in cases of unfair prejudice by listed companies

119.   Destruction of documents

120.   Establishment of Disciplinary Committee

121.   Disciplinary offences

PART 13  – TAKEOVERS

122.   Takeover offers

123.   When companies deemed to be related

124.   Conduct of takeovers

PART 14  – MISCELLANEOUS

125.   Judicial review

126.   Immunity

127.   Offences and penalties

128.   Exemptions and concessions

129.   Orders of the Supreme Court

130.   Civil action

131.   Winding up orders

132.   Receiving orders

133.   Regulations

134    Rules

135.   Guidance notes

136.   Confidentiality

137.   Repeal and savings

SCHEDULE 1– Securities

SCHEDULE 2– Recognized Jurisdictions

SCHEDULE 3– Concessions and Exemptions for Securities Exchanges, Clearing Houses, Securities Facilities, Securities Dealers and Investment Advisors

SCHEDULE 4– Persons who may deal in Securities without a Securities Dealer’s Licence

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PART 1 – GENERAL PROVISIONS

1.     This Act may be cited as the Securities Act.

2.     (1)      In this Act, unless the context otherwise requires –

“accountant” means –

(a)            A person who has qualified as an accountant by examination of any one of the following bodies –

(i)         Instituteof Chartered Accountantsin England and Wales;

(ii)       Association of Chartered Certified Accountants (United Kingdom);

(iii)     Instituteof Chartered Accountantsin Ireland;

(iv)     Instituteof Certified PublicAccount-ants in Ireland;

(v)       Instituteof Chartered Accountantsin Scotland;

(vi)     Instituteof Chartered Accountantsin Australia;

(vii)   Instituteof Certified PublicAccount-ants in Singapore;

(viii)Hong Kong Institute of Certified Public Accountants;

(ix)     South African Institute of Chartered Public Accountants;

(x)       American Institute of Certified Public Accountants;

(xi)     Canadian Institute of Chartered Accountants; and

(b)      a member of any other accountancy body recognized by the Authority as such for the purposes of this Act,

and who is a current member in good standing of one of those bodies;

“auditor” means an accountant licensed by the Seychelles Licensing Authority or an accountant outside Seychelles who has been approved in writing by the Securities Authority;

“accredited” is construed in accordance with section 53;

“advertisement” includes every form of advertising, whether in a publication, or by the display of notices, signs, labels or showcards by means of circulars or other documents, by an exhibition of pictures or photographic or cinematographic films, by way of sound broadcasting or television, by the distribution of recordings, by internet or other computer or digital means, or in any other manner, and “advertising” shall be construed accordingly;

“bank” means any bank in Seychelles or a bank licensed and regulated as such outside  of Seychelles;

“bank in Seychelles” means a bank licensed under the Financial Institutions Act 2004;

“clearing agency” means a company whose business is the provision of services for the clearing and settlement of transactions in securities;

“company” means a company incorporated or other body corporate wherever incorporated or constituted, and shall include a limited partnership constituted under the Limited Partnerships Act 2003;

“Companies Act” means the Companies Act 1972;

“constitutional documents” means, in the case of a company, the certificate of incorporation and the memorandum and articles of association or other instrument of incorporation;

“Court”  means the Supreme Court of Seychelles;

“dealing in securities” is construed in accordance with section 45(5) to 45(6) and likewise “deal” shall be construed accordingly;

“Disciplinary Committee” means the Disciplinary Committee established under section 120;

“document” means a document in any form and includes ?

(a)            any writing on any material;

(b)           a book, graph, drawing or other pictorial representation or image;

(c)            information recorded or stored by any electronic or other technological means and capable with or without the aid of any equipment of being reproduced;

“exempt overseas securities dealer” has the meaning given in section 45(1)(b);

“investment advisor” means a person who carries on business giving advice on securities, or who holds himself out as conducting such business, within the meaning of section 48;

“investment advisor’s representative” means an individual in the employment of (including a director of), or acting for or by arrangement with, an investment advisor, who advises on securities on behalf of that investment advisor, whether that individual is paid a salary, wages, commission or otherwise;

“issuer” in relation to any securities, means the person by whom they have been or are to be issued;

“licensee” means a person licensed under Part 5;

“listed company” means a public company whose securities are listed and quoted on a securities exchange and “listed security” shall be construed accordingly;

“member” in relation to a securities exchange, means a licensee who is admitted to membership of the exchange;

“Minister” means the Minister responsible for finance;

“person” includes a company and an individual;

“prescribed” means prescribed by regulations made by the Minister on the recommendation of the Securities Authority;

“prospectus” means prospectus, notice, circular, advertise-ment or other communication or invitation, offering to the public for subscription or purchase any securities;

“public company” means a company whose shares (or any class of shares) are intended for distribution to the public and includes a listed company;

“recognized jurisdiction” means a country or territory as listed in Schedule 2;

“recognized overseas regulatory authority” means a regulatory authority which exercises one or more functions corresponding to the functions of the Securities Authority under this Act –

(a)            in a recognized jurisdiction; or

(b)           in such other country or territory outside Seychelles which the Securities Authority has declared by notice published in the Gazette to be recognized for the purposes of this Act;

“recognized overseas securities dealer” means a company, or a subsidiary or holding company of a company, which is licensed by a recognized overseas regulatory authority to deal in securities and is a member of a recognized overseas securities exchange;

“recognized overseas securities exchange” means ?

(a)      any duly licensed securities exchange located and regulated in a recognized jurisdiction; or

(b)      any other securities exchange which the Authority has declared by notice by the Minister published in the Gazette to be so recognized for the purposes of this Act;

“representative” means an accredited securities dealer’s representative or an investment advisor’s representative, as the case may be, licensed under section 52;

“restricted licence securities dealer” means a securities dealer licensed under section 46(3);

“securities” means –

(a)            securities as set out in Schedule 1;

(b)           any other instruments prescribed to be securities for the purposes of this Act,

but does not include –

(i)             bills of exchange;

(ii)           treasury bills with an original maturity of less than ninety days;

(iii)         promissory notes for less than two hundred and seventy days;

(iv)         certificates of deposit issued by a licensed financial institution; or

(v)           any other instrument prescribed, on the recommendation of the Securities Authority, not to be securities for the purposes of the Act;

“Securities Authority” means the Central Bank of Seychelles as established by the Central Bank of Seychelles Act 2004, and shall include any statutory successor to the Central Bank of Seychelles;

“securities business” means the business of dealing in securities;

“securities dealer” means a person who carries on the business of dealing in securities, or who holds himself out as conducting such business, within the meaning of section 45, and shall include a person who holds a restricted securities dealer licence issued under section 46(3);

“securities dealer’s representative” means an individual in the employment of (including a director of), or acting for or by arrangement with, a securities dealer, who deals in securities on behalf of that securities dealer, whether he is paid a salary, wages, commission or otherwise;

“securities exchange” means a market, exchange, place or facility which provides for bringing together on a regular basis purchasers and sellers of securities, and sets rules for the execution of securities transactions or for the negotiation or conclusion of sales and purchases of securities, but does not include –

(a)            the office or facilities of a member of a licensed   securities exchange; or

(b)           the office or facilities of a clearing agency or securities facility;

“securities facility” has the meaning given in section 41(1);

“Seychelles Securities Exchange” means a company operating in a market or other place in Seychelles at or on which securities are offered for sale, purchase or exchange and which is licensed by the Securities Authority in accordance with section 9 of this Act;

“underwriting” includes the purchase of newly issued securities for the purpose of public resale on behalf of the issuer, and the guaranteeing to an issuer that the unsold residue of the issuer’s public issue or sale will be taken up.

(2)      A company is –

(a)            a subsidiary of another company (its holding company) if that other company –

(i)         holds a majority of the voting rights in it;

(ii)    is a member of it and has the right to appoint or remove a majority of its board of directors; or

(iii)   is a member of it and controls alone, pursuant to an agreement with other shareholders, a majority of the voting rights in it;

(b)      deemed to be a subsidiary of another if the first mentioned company is a subsidiary of a company which is itself a subsidiary of that other company.

        (3)      In this Act, unless the context otherwise requires, any reference to a statute or a provision of a statute is a reference to that statute or provision as amended or consolidated or re-enacted at the relevant time.

PART 2 – SECURITIES AUTHORITY

3.     The purposes of the Securities Authority under this Act are to –

(a)            license persons engaged in securities-related business and to monitor and supervise the conduct of such business by licensees under this Act;

(b)           promote the confident and informed participation of investors in Seychelles’ securities markets, and to foster fair, efficient and transparent securities markets in Seychelles;

(c)            promote protection of investors in Seychelles’ securities though setting up and encouraging of the high standards of professional and other activities within the securities market;

(d)           maintain effective compliance and enforce-ment programme Supported by adequate statutory powers;

(e)            promote the growth and development of Seychelles capital markets;

(f)            suppress and prevent financial crimes and illegal practices;

(g)            carry out research, and collect, compile and disseminate data and information on the Seychelles’ securities industry.

4.     The duties* of the Securities Authority are to –

(a)            take all reasonable steps to ensure that this Act and any rules or regulations made under this Act are complied with;

(b)           license, supervise and regulate the activities of securities exchanges, clearing agencies and any securities facility;

(c)            set standards of competence for licensees whether by way of examination or otherwise;

(d)           approve the rules of securities exchanges, clearing agencies and securities facilities;

(e)            monitor and enforce rules for the conduct of business of licensees including suspension and revocation of licences in accordance with this Act;

(f)            promote and encourage high standards of investor protection and integrity amonglicensees, and to encourage the delivery by licensees of balanced and informed advice to their clients and to the public generally;

(g)            support the operation of an orderly, fair and properly informed securities market;

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 * The powers and duties conferred on the Securities Authority under sections 4 and 5 have been transferred to the Seychelles International Business Authority with effect from 11th January 2010. (S.I 2 of 2010)

 

(h)           regulate the manner of trading and the range of securities traded on securities exchanges;

(i)             take all reasonable steps to safeguard and protect the interest of investors in securities and to suppress illegal, dishonourable and improper practices in dealings in securities and in providing advice or other services relating to securities;

(j)             co-operate with and assist other regulatory authorities that are concerned with securities or with operations of companies;

(k)           exercise and perform such other duties as may be conferred or imposed upon it.

5.     (1)      For the attainment of its purposes* the Securities Authority may –

(a)            acquire and dispose of property of any description;

(b)           make contracts or enter into other agree-ments;

(c)            receive and expend money;

(d)           grant licences in accordance with the Act;

(e)            require the payment of fees;

(f)            prescribe such forms as it considers necessary for the purposes of this Act or any regulations made pursuant to this Act;

(g)            for the proper administration of this Act or any regulations made pursuant to this Act, issue directions, guidelines or codes, and any licensee to whom a direction has been given or guidelines or codes have been issued shall comply with the direction, guidelines or codes, as the case may be;

(h)           do all such other things as are required or incidental to the attainment of its purposes.

(2)    A function of the Securities Authority under or for the purposes of this Act may be carried out by an authorised officer of the Securities Authority.

(3)    The Securities Authority may engage the services of, or appoint any expert or other competent person for the purpose of performing any of its functions under this Act.

6.     (1)      The Securities Authority shall consult and co-operate with the Seychelles International Business Authority and any other body that exercises regulatory authority under any law over a financial institution or other person in order to minimize duplication of effort, to maximize the protection of investors and in the interest of the public.

(2)    The Securities Authority may co-operate with any agency of a foreign government in connection with the investigation of a contravention of the Act or any similar written overseas law.

(3)    The Securities Authority may co-operate in the work of national, regional or international organizations dealing with the regulation of securities markets.

PART 3 – SECURITIES EXCHANGE

7.     (1)      No person shall establish or operate a securities exchange in Seychelles, whether physically, electronically or otherwise, except under and in accordance with a securities exchange licence granted by the Securities Authority under this Act.

(2)      No person shall assist any other person in the operation of a securities exchange unless that other person is the holder of a securities exchange licence granted by the Securities Authority under this Act.

(3)      A person who contravenes subsection (1) or (2) commits an offence and is liable on summary conviction –

(a)            in the case of an individual, to a fine of US$100,000 or the equivalent in Sey-chelles rupees or to imprisonment for two years or to both;

(b)           in the case of a company, to a fine of US$200,000 or the equivalent in Sey-chelles rupees, and if the offence is a continuing offence, the individual or company is liable to a further fine not exceeding US$500 or the equivalent in Seychelles rupees, for every day that the offence continues after conviction.

(4)      A person convicted of an offence under this section shall, following an assessment by the Securities Authority, be liable to pay to the Securities Authority, any monies received or the monetary equivalent of any assets obtained as a result of carrying on securities business without a licence.

(5)      Securities listed on a recognized overseas securities exchange shall be eligible for listing on a Seychelles Securities Exchange, subject to the rules of the Seychelles Securities Exchange.

(6)      The following shall each be eligible for listing on a Seychelles Securities Exchange, subject to the rules of the Seychelles Securities Exchange ?

(a)            a licensed public fund (as defined in the Mutual Fund and Hedge Fund Act);

(b)           a licensed professional fund (as defined in the Mutual Fund and Hedge Fund Act);

(c)            an exempt foreign fund (as defined in the Mutual Fund and Hedge Fund Act); or

(d)           any other public or professional mutual fund (as defined in the Mutual Fund and Hedge Fund Act) registered and licensed in a recognised jurisdiction.

(7)      Notwithstanding anything contained in any other law subject to subsection (8), no dealing in a security listed in Seychelles shall take place in Seychelles except on the Seychelles Securities Exchange on which it is listed in accordance with this Act and any regulations or rules made hereunder.

(8)      Subsection (7) shall not apply to individuals who are trading in securities for his, her, or their own account or for the account of his or her spouse and children (or his or her spouse or children) under eighteen years of age.

8.     (1)      Only a company incorporated under the Companies Act whose sole activity is the operation of a securities exchange may apply to the Securities Authority for a securities exchange licence.

(2)      An application under subsection (1) shall be made in the prescribed form and accompanied by:

(a)            the prescribed fee;

(b)           certified true copies of the constitutional documents of the applicant; and

(c)            any other information the Securities Authority may require.

(3)      Any company desiring to be licensed as a Securities Exchange pursuant to this Act shall make arrangements acceptable to the Securities Exchange for a compensation fund for the protection of securities dealers and clients of security dealers who may suffer loss as a result of the insolvency or winding up of a securities dealer.

9.     (1)      Upon receipt of an application duly made under section 8, the Securities Authority may grant a securities exchange licence if it is satisfied that –

(a)            it is appropriate to do so in the public interest and for the proper regulation of markets in securities; and

(b)           the applicant satisfies the conditions specified in subsection (2).

(2)      The conditions to be satisfied by the applicant are that –

(a)            the applicant’s activities be limited to the operation of a securities exchange;

(b)           the applicant can provide and maintain, to the satisfaction of the Securities Authority, adequate and properly equipped facilities or systems for the conduct of the business of a securities exchange;

(c)            the applicant shall have not less than three members who are engaged in the business of dealing in securities independently of and in competition with each other;

(d)           the rules and practices proposed to be followed by the applicant must be such as will ensure that business conducted by means of its facilities or systems will be conducted in an orderly manner and so as to accord proper protection to investors;

(e)            the applicant has made such arrangements as the Securities Authority considers satisfactory for –

(i)     the clearing and settlement of dealings in securities to ensure the performance of transactions effected on the securities exchange, and for the recording and publication of such transactions;

(ii)    market surveillance;

(iii)   the effective monitoring and enforcement of compliance  with its rules, this Act and regulations made under this Act; and

(iv)   investigating complaints in respect of business transacted by any of its members;

(f)            the applicant must have default rules which, where a member of the securities exchange appears to be unable, or likely to become unable, to meet his obligations in respect of one or more market contracts, enable action to be taken to close out his position in respect of all unsettled market contracts to which he is a party;

(g)            at least 2 directors of the proposed securities exchange shall have experience in  the operations of listed companies and dealing with investors in securities.

(3)      A director of a securities exchange has a duty to act in the best interests of investors and, where there is a conflict between the interests of the investors and the interests of the securities exchange, the director shall give priority to the interests of the investors.

10.   (1)      A securities exchange licence granted under this Act shall be valid for a period of one year from the date of issue, subject to it not being revoked by the Securities Authority under the provisions of this Act.

(2)      Where a person is granted a securities exchange licence under this Act there shall be payable to the Securities Authority in respect of the period of one year from the date on which the licence is granted, an annual licence fee as prescribed from time to time by the Minister by regulations made under this Act.

(3)      A securities exchange licence granted under this Act shall be renewed annually, immediately on its expiration, upon –

(a)            payment of the annual licence fee; and

(b)           lodgment with the Securities Authority of a compliance certificate by the licensee in the prescribed form.

(4)      If an annual licence fee is not paid on or before the due date in each year, there shall be payable an additional fee equal to one twelfth of that annual licence fee for each month or part  thereof during which the annual licence fee and any additional fee imposed by this subsection remains unpaid.

(5)      The Securities Authority may, for good cause, waive any additional  fee  imposed by virtue of subsection (4).

(6)      The Securities Authority may suspend a securities exchange licence if the company –

(a)            temporarily ceases to operate the securities exchange;

(b)           goes into receivership;

(c)            contravenes a provision of this Act;

(d)           is operating in a manner detrimental to the public interest;

(e)            fails to provide the Securities Authority with information lawfully required;

(f)            fails to comply with a lawful direction of the Securities Authority;

(g)      fails to pay its annual licence fee as prescribed on or before the anniversary of the day of the grant of its licence.

(7)      The Securities Authority may revoke a securities exchange licence if the company –

(a)            ceases to operate the securities exchange;

(b)           is being wound up, compounds or compromises with its creditors;

(c)            contravenes a provision of this Act;

(d)           is operating in a manner detrimental to the public interest;

(e)            fails to continue to comply with the conditions specified in section 9(2);

(f)            fails to pay its annual licence fee as prescribed on or before the anniversary of the day of the grant of its licence; or

(g)            requests the Securities Authority to do so.

11.   (1)      A holder of a securities exchange licence shall ensure, so far as is reasonably practicable, an orderly, fair and transparent market in the securities that are traded through its facilities.

(2)      In performing its duties under subsection (1), the holder of a securities exchange licence shall –

(a)            act in the interest of the investing public;

(b)           ensure that such interests prevail where they conflict with any other interests the company is required to serve under any other law;

(c)            publish daily, on every trading day, and periodic information, indices and averages on its activities.

(3)      The holder of a securities exchange licence shall ensure that its members comply with its rules, this Act and regulations made under this Act.

(4)      The holder of a securities licence shall provide and maintain at all times to the satisfaction of the Securities Authority –

(a)            adequate and properly equipped premises for the conduct of its business;

(b)           competent personnel for the conduct of its business;

(c)            automated or other systems with adequate capacity, facilities to meet emergencies and security arrangements.

(5)      The holder of a securities exchange licence shall notify the Securities Authority immediately if it becomes aware –

(a)            that a member is unable to comply with any financial resources regulation made under section 69; or

(b)           of a financial irregularity or other matter which in the opinion of the holder of the securities exchange licence may indicate that the financial standing or integrity of a member is in question, or that a member may not be able to meet that member’s legal obligations.

(6)      No person  other than –

(a)            a securities dealer licensed under this Act; or

(b)           a recognized overseas securities dealer, which has obtained membership to deal on a Seychelles Securities Exchange may deal on such Seychelles Securities Exchange.

(7)      Subject to the provisions of Part 5, a Seychelles  Securities Exchange shall ensure that each of its members holding membership to deal in securities shall be either ?

(a)            a securities dealer licensed under this Act; or

(b)           a recognized overseas securities dealer.

12.   (1)      Subject to the approval of the Securities Authority, the holder of a securities exchange licence shall make rules for the proper and efficient regulation, operation, management and control of the securities exchange.

(2)      Without limiting the general effect of subsection (1), the holder of a securities exchange licence shall make rules –

(a)            for access to the securities exchange, including conditions relating to financial integrity and business ethics;

(b)           under which securities are to be traded on the securities exchange;

(c)            in respect of applications for listing on the securities exchange and the requirements for listing;

(d)           regarding agreements to be entered into between the securities exchange and other persons for listing securities and enforcing those agreements;

(e)            regarding the cancellation and withdrawal of the listing of securities and the suspen-sion of dealings in them;

(f)            obliging a person to observe specified standards of conduct or to perform, or refrain from performing, specified acts reasonably imposed for the listing or continued listing of securities; and

(g)            regarding the penalties and sanctions which the holder of the securities exchange licence may impose for a breach of the rules of the securities exchange;

(h)           concerning the buy–back of listed securities by companies whose securities are listed;

(i)             the admission and expulsion of recognized overseas securities dealers as members the securities exchange.

13.   (1)      A securities exchange that wishes to make any amendment to its rules shall submit a draft of the proposed amendment to the Securities Authority for approval.

(2)      The Securities Authority shall, within 30 days, of receipt of the proposed amendment by notice in writing to the holder of the securities exchange licence approve the amendment or disapprove the whole or any specified part of the amendment in question and until such notice is given the amendment shall not have force and effect.

14.   (1)      The Minister may, on the recommendation of the Securities Authority, make regulations prescribing limits on the amount of the trading which may be done, or positions which may be held, by a member of a securities exchange.

(2)      Subsection (1) does not prohibit the Minister on the recommendation of the Securities Authority from fixing different trading or position limits for different types of transactions, or from exempting specified transactions.

(3)      Without limiting the general effect of subsection (1), the Minister may, on the recommendation of the Securities Authority, make regulations to prohibit a person from –

(a)      directly or indirectly entering, during a prescribed period, into transactions of a specified class in excess of the prescribed amount; or

(b)      directly or indirectly holding or controlling positions of a specified class in excess of a prescribed position limit.

15.   Where the Securities Authority is satisfied that it is necessary for the protection of investors or for the proper regulation of a securities exchange, the Securities Authority may issue directions to the holder of a securities exchange licence with respect to –

(a)            trading on or through its facilities generally or with respect to the trading of a particular security;

(b)           the manner in which the securities exchange carries on any aspect of its business, including the manner of reporting off-market trades by members; or

(c)            any other matter that the Securities Authority considers necessary for the effective administration of this Act, and the holder of the securities exchange licence shall comply with the direction.

16.   Where the Securities Authority considers it necessary for the protection of investors, it may by notice in writing require the holder of a securities exchange  licence to make or to amend any rule and, on the Securities Authority specifying the amendments and the dates those amendments shall have force and effect, the securities exchange shall comply with the requirement in accord with any time-frame specified in such notice or, where no time-frame is specified, as soon as practicable after receipt of the notice from the Securities Authority.

17.  The holder of a securities exchange licence shall provide such assistance to the Securities Authority as the Securities Authority reasonably requires for the performance of its functions, including the furnishing of returns and providing information in respect of dealings in securities or any other specified information as the Securities Authority may require for the proper administration of this Act.

18.   (1)      Where a securities exchange reprimands, fines, suspends, expels or otherwise takes disciplinary action against a member in accordance with its rules, the securities exchange shall, within 7 days of taking such action, give to the Securities Authority in writing particulars of the name of the member, the reason for and nature of the action taken, the amount of any fine, and the period of any suspension.

(2)      Any action taken by a securities exchange under subsection (1) shall be without prejudice to the power of the Securities Authority to take such action as it sees fit with regard to the member or the licence held by the member.

19.   (1)      The Securities Authority may, after consulting the holder of a securities exchange licence, direct it to close its market for a period not exceeding 5 trading days.

(2)      The Securities Authority may give the direction under subsection (1) if it is of the opinion that the orderly transaction of business on the securities exchange is being, or is likely to be, prevented because –

(a)            of an impending emergency or natural disaster or where such emergency or disaster occurred in Seychelles; or

(b)           there exists an economic or financial crisis, whether in Seychelles or elsewhere, or any other circumstance, which is likely to prevent orderly trading on the securities exchange.

(3)      The Securities Authority may, in consultation with the Minister, extend the direction for further periods not exceeding 10 trading days.

20.   (1)      No person other than the holder of a securities exchange licence may take or use the title or description “stock  exchange”,  “stock market”, “securities exchange” or “securities market” or anything which so closely resembles any of them as to be calculated to deceive.

(2)      Subsection (1) shall not prevent any person from using any of the restricted terms in connection with an application, including an application for the formation of a company, to the Securities Authority for a licence.

(3)      A person who contravenes subsection (1) commits an offence.

21.   (1)      A securities exchange licensed under this Part shall file with the Securities Authority, within four months of its annual balance sheet date, an annual report which shall include –

(a)            a report on the corporate governance policy of the licensed securities exchange and any other information required by the Securities Authority;

(b)           audited financial statements of the licensed securities exchange; and

(c)            consolidated financial statements, where the person is a holding company or a subsidiary.

(2)      The annual balance sheet date referred to in subsection (1) shall, in the absence of written authorization to the contrary from the Securities Authority, be 31st December for each securities exchange licensed under this Act.

(3)      The financial statement to be included in an annual report under subsection (1), shall be audited in accordance with international accounting and auditing standards by an auditor approved by the Securities Authority.

(4)      The Securities Authority shall not approve an auditor under  subsection (3)  unless it  is satisfied that the auditor has adequate experience, expertise and resources to carry on such audit.

(5)      The Securities Authority may, at any time, instruct a licensed securities exchange to have its accounts audited and to submit them to the Securities Authority within such time as the Securities Authority specifies.

(6)      A licensed securities exchange shall ensure that an instruction given to it in accordance with subsection (5) is complied with within the specified time, and whoever contravenes this provision commits an offence.

PART 4  – CLEARING AGENCIES AND OTHER

SECURITIES FACILITES

22.   (1)      In this Part –

“default proceedings” means any proceedings or other action taken by a clearing agency under its default rules;

“default rules”, for a clearing agency, means the rules of the clearing agency required by section 26;

“defaulter” means a participant who is the subject of any default proceedings;

“market charge” means a charge, whether fixed or floating, granted in favour of a clearing agency –

(a)            over property, specified in subsection (2), held by or deposited with the clearing agency; and

(b)           to secure liabilities arising directly with the clearing agency facilitating the settlement of a market contract;

“market collateral” means property, specified in subsection (2),  held  by  or  deposited  with  a  clearing  agency to secure

liabilities arising directly with the clearing agency facilitating the settlement of a market contract;

“market contract” means a contract subject to the rules of a clearing agency entered into by the clearing agency with a participant under a novation which is both in accordance with those rules and for the purpose of the clearing and settlement of transactions in securities effected on, or subject to the rules of a securities exchange;

“participant” means a person who, under the rules of  a clearing agency, may participate in one or more of the services provided by the clearing agency in its capacity as a clearing agency;

“relevant office-holder” means –

(a)            the Official Assignee appointed under the Bankruptcy and Insolvency Act;

(b)           a person acting in relation to a company as its liquidator, provisional liquidator, receiver or manager;

(c)            a person acting in relation to an individual as his trustee in bankruptcy or interim receiver of his property; or

(d)           a person appointed under an order for the administration in bankruptcy of an insolvent estate of a deceased person;

“settlement”, in relation to a market contract, includes partial settlement;

(2)      Property which may be subject to a market charge, or provided as market collateral, is –

(a)            money, letters of credit, bankers’ drafts, certified cheques, and any similar instruments;

(b)           securities;

(c)            future contracts and other similar financial contracts.

(3)      Where a charge is granted partly for the purpose specified  in the definition of “market charge” and partly for other purposes, the charge shall be a market charge in so far as it has effect for that specified purpose.

(4)      Where collateral is granted partly for the purpose specified in the definition of “market collateral” and partly for other purposes, the collateral is market collateral in so far as it has been provided for that specified purpose.

(5)      References in this Part to the law on insolvency include references to every provision made by or under –

(a)            the Bankruptcy and Insolvency Act;

(b)           the Companies Act; and

(c)            any other enactment which is concerned with or in any way related to the insolvency of a person.

(6)      References in this Part to settlement in relation to a market contract are references to the discharge of the rights and liabilities of the parties to the contract, whether by performance, compromise or otherwise.

23.   (1)      No person shall establish or operate a clearing agency in Seychelles, whether physically, electronically or otherwise, except under and in accordance with a clearing agency licence granted by the Securities Authority under this Act.

(2)      No person shall assist any other person in the operation of a clearing agency unless that other person is the holder of a clearing agency licence.

(3)      Subject to the provisions of this Part, the Securities Authority may license a company to operate a clearing agency, which shall be the company’s sole activity, where it is satisfied that it is appropriate –

(a)            in the interests of the investing public; and

(b)           for the proper regulation of services for the clearing and settlement of transactions in securities contracts on a securities exchange.

24.   (1)      Only a company incorporated under the Companies Act may apply to the Securities Authority for a licence to operate a clearing agency.

(2)      An application made under subsection (1) shall –

(a)            be made in the form prescribed by the Securities Authority and shall be completed in accordance with any direction specified in the form;

(b)           be accompanied by certified true copies of the constitutional documents of the applicant and a copy of the applicant’s rules; and

(c)            be accompanied by particulars of the Seychelles Securities Exchange, together with a letter of confirmation from such securities exchange, with which the applicant proposes to make clearing arrange-ments.

(3)      At any time after receiving an application and before determining it the Securities Authority may require the applicant to furnish additional information.

(4)      Any information to be furnished to the Securities Authority  under  this  section  shall,  if  it  so  requires, be in such form or verified in such manner as the Securities Authority may specify.

25.   On receipt of an application duly made in accordance with section 24 the Securities Authority may grant a licence to operate a clearing agency if it is satisfied that –

(a)            it is appropriate to do so in the public interest;

(b)           the applicant has financial resources suffi-cient for the proper performance of its functions;

(c)            the applicant has adequate arrangements and resources for the effective monitoring and enforcement of compliance with its rules;

(d)           the applicant is able to provide clearing services which would enable a securities exchange to ensure the performance of transactions effected on the market; and the default rules of the applicant satisfy the requirements of section 26.

26.   (1)      For the purposes of this Part, the rules of a clearing agency shall include provisions –

(a)            where a participant appears to be unable, or likely to become unable, to meet the obligations in respect of one or more market contracts, to enable action to be taken to close out the participant’s position in relation to all unsettled market contracts to which the participant is a party;

(b)           where the clearing agency determines that the activity of a participant presents or is likely to  present  unreasonable risk to the clearance and settlement systems to cease to act for the participant;

(c)            to enable the settlement of all of the contracts by providing for there to be payable by or to the participant a sum of money in relation to each contract if that is required after taking into account all the rights and liabilities of the participants under or in respect of the contract concerned;

(d)           to enable all sums of money payable by or to the participant as determined in accordance with paragraph (b) to be aggregated or set-off so as to produce a net sum, if any, payable by or to the participant;

(e)            if any net sum referred to in paragraph (c ) is payable by the participant, to provide for that net sum to be set-off against all property of the participant which is either subject to a market charge or which has been  provided as market collateral, or set-off against the proceeds of the realization of such property, so as to produce a further net sum, if any, payable by or to the participant;

(f)            if any net sum referred to in paragraph (c) is payable to the participant, to provide that all property of the participant which is either subject to a market charge or which has been provided as market collateral shall cease to be subject to the market charge (but without prejudice to any other form of charge to which it may be subject) or to be market collateral (but without prejudice to its provision as any other form of collateral), as the case may be; and

(g)            to provide for the certification by the clearing agency of any net sum referred to in paragraph (c) payable to the participant, or of any further net sum referred to in paragraph (d) payable by or to the participant, as the case may be, or if there is no such sum, the certification by the clearing agency of that fact.

(2)      Where a clearing agency takes default proceedings, all subsequent action taken under its rules for settlement of market contracts to which the defaulter is a party are to be treated as taken under the default rules.

27.   (1)      A clearing agency shall submit to the Securities Authority –

(a)            all proposed rules and amendments to rules of the clearing agency; and

(b)           explanations of the purpose and likely effect, including the effect on the investing public of all proposed rules or amendments to rules, in sufficient detail to enable the Securities Authority to decide whether to approve such rules or refuse to approve them.

(2)      The proposed rules of a clearing agency or an amendment to its rules shall not have effect unless the Securities Authority has approved them in writing.

(3)      The Securities Authority shall, within 30 days after receiving the proposed rules or amendments for approval, give notice in writing to the clearing agency that –

(a)            it approves them; or

(b)           it refuses to approve them.

(4)      The Securities Authority shall not refuse a proposed rule or an amendment to a rule without first giving the clearing agency an opportunity of being heard.

28.   An applicant for a licence under this Part shall forthwith give written notice to the Securities Authority of –

(a)            any proposed alteration to, or

(b)           the occurrence of any event which it knows affects or may affect in a material respect, information supplied to the Securities Authority in relation to the application, being a proposal or event made or occurring while the application is pending a decision by the Securities Authority.

29.   It shall be a condition of every clearing agency licence granted under this Part that –

(a)            the licence is personal to the applicant and is not transferable;

(b)           the clearing agency shall forthwith give written notice to the Securities Authority of –

(i)       any proposed alteration to; or

(ii)      the occurrence of any event which it knows affects or may affect in a material respect, any matter in respect of which it was required to supply information to the Securities Authority;

(c)      the consent of the Securities Authority shall be obtained prior to the making of any change in the constitution or control of the clearing agency; and

(d)      the clearing agency shall not carry on, or hold itself out as carrying on, any business other than that of providing clearing and settlement services.

30.   (1)      A clearing agency licensed under this Part shall file within the Securities Authority, within 4 months of its annual balance sheet date, an annual report which shall include –

(a)            a report on the corporate governance policy of the clearing agency and any other information required by the Securities Authority;

(b)           audited financial statements of the clearing agency; and

(c)            consolidated financial statements, where the person is a holding company or a subsidiary.

(2)      The annual balance sheet date referred to in subsection (1) shall, in the absence of written authorization to the contrary from the Securities Authority, be 31st December for each securities exchange licensed under this Act.

(3)      The financial statements to be included in an annual report under subsection (1), shall be audited in accordance with international accounting and auditing standards by an auditor approved by the Securities Authority.

(4)      The Securities Authority shall not approve an auditor under subsection (3) unless it is satisfied that the auditor has adequate experience, expertise and resources to carry out such audit.

(5)      The annual report of a clearing agency shall also include an audited report on risk management procedures and their application and any other information required by the Securities Authority.

(6)      The Securities Authority may, at any time, instruct a licensed clearing agency to have its accounts audited and to submit them to the Securities Authority within such time as the Securities Authority specifies.

(7)      A licensed clearing agency shall ensure that an instruction given to it in accordance with subsection (6) is complied with within the specified time, and any person who contravenes this provision commits an offence.

31.   (1)      A clearing agency licence granted under this Act shall be valid for a period of one year from the date of issue, subject to it not being revoked by the Securities Authority under the provisions of this Act.

(2)      Where a person is granted a clearing agency licence there shall be payable to the Securities Authority in respect of the period of one year from the date on which the licence is granted, an annual licence fee as prescribed from time to time by the Minister by regulations made under this Act.

(3)      A clearing agency licence shall be renewed annually, immediately on its expiration, upon –

(a)            a payment of the annual licence fee; and

(b)          

 

lodgment with the Securities Authority of a compliance certificate by the licensee in the prescribed form.

(4)      If an annual licence fee referred to in subsection (3) is not paid on or before the due date in each year, there shall be payable an additional fee equal to one twelfth of that annual licence fee for each month or part thereof during which the annual licence fee and any additional fee imposed by this subsection remains unpaid.

(5)      The Securities Authority may, for good cause, waive any additional fee imposed by virtue of subsection (4).

(6)      The Securities Authority may at any time revoke or suspend a clearing agency licence if it appears to the Securities Authority that the holder of the clearing agency licence –

(a)            has ceased to operate a clearing agency;

(b)           has failed to comply with any obligation to which it is subject under this Act; or

(c)            is operating in a manner detrimental to the public interest.

(7)      Where the Securities Authority suspends a licence, the suspension may be for the period, or until the happening of an event, the Securities Authority considers appropriate.

(8)      The Securities Authority shall not revoke or suspend a clearing agency licence without first giving the holder of the licence an opportunity of being heard.

32.   Where the Securities Authority is satisfied that it is necessary for the protection of investors or for the proper regulation of a clearing agency, the Securities Authority may issue directions –

(a)            with respect to the manner in which the clearing agency carries on any aspect of its business; or

(b)           with respect to any other matter that the Securities Authority considers necessary for the effective administration of this Act, and the clearing agency shall comply with the direction.

33.   Notwithstanding any other law, a clearing agency shall provide such assistance to the Securities Authority as the Securities Authority reasonably requires from time to time for the performance of its functions, including the furnishing of returns and the provision of information in respect of securities transactions or any other specified information.

34.   (1)      The following shall not be to any extent invalid at law for inconsistency with the law for distributing the assets of a person on insolvency, bankruptcy or winding up, or on the appointment of a receiver over any of the assets of a person –

(a)            a market contract;

(b)           the rules of a clearing agency for the settlement of a market contract;

(c)            proceedings or other action taken under the rules of a clearing agency for the settlement of a market contract;

(d)           a market charge;

(e)            the default rules of a clearing agency; or

(f)            default proceedings.

(2)      No person acting under the laws of insolvency, may exercise any power to prevent or interfere with –

(a)            the settlement of a market contract under the rules of a clearing agency; or

(b)           default proceedings.

35    (1)      A clearing agency shall, upon completion by it of default proceedings, make a report on such proceedings stating the respect of each defaulter –

(a)            the net sum, if any, certified by the clearing agency to be payable by or to the defaulter; or

(b)           that no sum is payable.

(2)      A clearing agency which has made a report pursuant to subsection (1) shall supply the report to –

(a)            the Securities Authority;

(b)           any relevant office-holder in relation to –

(i)     the defaulter to whom the report relates; or

(ii)    that defaulter’s estate; or

(c)      if there is no relevant office-holder referred to in subsection (b), the defaulter to whom the report relates.

(3)      Where the Securities Authority receives  pursuant to subsection (2) a report made pursuant to subsection (1), it may publish notice of that fact in such manner as it thinks appropriate to bring it to the attention of creditors of the defaulter to whom the report relates.

(4)      Where a relevant office-holder or defaulter receives pursuant to subsection (2) a report made pursuant to subsection (1), the office-holder or defaulter shall, at the request of a creditor of the defaulter to whom the report relates –

(a)            make the report available for inspection by the creditor;

(b)           on payment of such reasonable fee as the relevant office-holder or defaulter, as the case may be, determines, supply to the creditor all or any part of that report.

(5)      In subsection (2), (3) and (4), “report” includes a copy of a report.

36.   (1)      Where a receiving or winding up order has been made, or a resolution for voluntary winding up has been passed, any net sum shall, notwithstanding any of the provisions of the Bankruptcy and Insolvency Act or the Companies Act, be provable in the bankruptcy or winding up or, as the case may be, shall be payable to the relevant office-holder under the Bankruptcy and Insolvency Act or in the case of a winding up-up order under the Companies Act.

(2)      This section applies to any net sum certified under section 35(1)(a) by a clearing agency, upon the completion by it of any default proceedings, to be payable to or to a defaulter.

37.   (1)      Where property is subject to a market charge or has been provided as market collateral, no execution or other legal process for the enforcement of a judgment or order may be commenced or continued, and no distress may be levied, against the property by a person not seeking to enforce any interest in or security over the property, except with the consent of the clearing agency concerned.

(2)      Where by virtue of this section a person would not be entitled to enforce a judgment or order against any property, any injunction or other remedy granted with a view to facilitating the enforcement of any such judgment or order shall not extend to that property.

38.   Where a participant –

(a)            in his capacity as such enters into any transaction, including a market contract, with a clearing agency; and

(b)           but for this subsection, would be a party to that transaction as agent, then as between the clearing agency and any other person, including the participant and the person who is his principal in respect of that transaction, the  participant  is for all purposes, including any action, claim or demand either civil or criminal –

(i)       deemed not to be a party to that transaction as agent; and

(ii)      deemed to be a party to that transaction as principal, notwithstanding any other enactment or rule of law.

39.   (1)      An action, claim or demand, either civil or criminal, for a right, title or interest held by any person in securities deposited by a participant with a clearing agency in accordance with the rules of the clearing agency, does not lie, and may not be commenced or allowed, against the clearing agency or its nominees, notwithstanding any other enactment or rule of law.

(2)      The operation of subsection (1) in respect of securities deposited with a clearing agency is subject to any modifications and exclusions provided in the rules of the clearing agency.

40.   Except to the extent that it expressly provides, this Part does not operate to limit, restrict or otherwise affect –

(a)            a right, title, interest, privilege, obligation or liability of a person;

(b)           an investigation, legal proceeding or remedy in respect of the right, title, interest, privilege, obligation or liability.

41.   (1)      A person shall not establish or operate, or assist in the operation of, a securities registry business or a securities depository or provide any other services (not including clearing agency services licensed under sections 23 and 25 of this Act) which facilitate or are ancillary to the operations of a Seychelles  Securities  Exchange (any such service shall be referred to in this Act as a “securities facility”) without being licensed as a securities facility by the Securities Authority.

(2)      Subject to the provisions of this Part, the Securities Authority may license a company to carry on business as a securities facility where it is satisfied that it is –

(a)            in the interests of the investing public; and

(b)           the applicant will be able to competently operate as a securities facility.

(3)      A person who contravenes subsection (1) commits and offence.

42.   (1)      Only a company incorporated in Seychelles may apply to the Securities Authority for a licence to operate as a securities facility.

(2)      An application under subsection (1) shall –

(a)            be made in the form prescribed by the Securities Authority; and

(b)           be accompanied by the prescribed fee and any other information as may be required by the Securities Authority.

(3)      At any time after receiving an application the Securities Authority may require an applicant to furnish additional information.

(4)      Any information to be furnished to the Securities Authority under this section shall, if it so requires, be in such form or verified in such manner as the Securities Authority may specify.

43.   On receipt of an application duly made in accordance with section 41 the Securities Authority may grant a licence to operate a Securities Facility if it is satisfied  that  the applicant has financial resources sufficient for the proper performance of its functions.

44.   Sections 28 to 33 inclusive shall apply mutatis mutandis  to a licensed securities facility.

PART 5 – LICENSING OF MARKET PARTICIPANTS

45.   (1)      Subject to the provisions of this Part, no person shall carry on business in Seychelles dealing in securities, or hold himself out as carrying on that business, unless that person is –

(a)            licensed to do so by the Securities Authority under this Part; or

(b)           subject to sub-section (2), a recognized overseas securities dealer who holds current membership to deal on a Seychelles Securities Exchange (“an exempt overseas securities dealer”).

(2)      If an exempt overseas securities dealer provides services to residents of Seychelles or opens a place of business in Seychelles or otherwise becomes a resident of Seychelles, it shall cease to be an exempt overseas securities dealer and shall not carry on securities business in Seychelles unless it obtains a securities dealer’s licence under this Act.

(3)      Dealing by an exempt overseas securities dealer in securities listed on a Seychelles Securities Exchange will not, of itself, constitute a ground under subsection (2) to result in such person ceasing to be an exempt overseas securities dealer.

(4)      No licensed securities dealer shall operate other than in accordance with its licence.

(5)      A person is regarded as carrying on business dealing in securities if that person (whether acting as principal or agent) by way of business –

(a)            makes or offers to make an agreement with another person to enter into or offer to enter into an agreement, for or with a view to acquiring, disposing of, subscribing for or underwriting securities or in any way effects or causes to effect a securities transaction;

(b)           without limiting the generality of subsection (5)(a), causes any sale or disposition of or other dealing or any solicitation in respect of securities for valuable consideration, whether the terms of payment be on margin, installment or otherwise or any attempt to do any of the foregoing;

(c)            participates as a securities dealer in any transaction in a security occurring upon a securities exchange;

(d)           receives as a securities dealer under an order to buy or sell a security which is executed; or

(e)            manages a portfolio of securities for another person on terms under which the first mentioned person may hold property of the other person.

(6)      A person is not regarded as carrying on business dealing in securities, or as holding himself out as carrying on that business if that person –

(a)            is carrying out functions as a clearing agency;

(b)           is an investment advisor and, in a manner consistent with a licence granted to that person, manages a portfolio of securities for another person –

(i)     without holding property of the other person; and

(ii)    on terms which preclude that person from doing so; or

(c)      gives advice on securities as an incident to the person’s practice as a lawyer or professional accountant;

(d)      as an employer buys, sells, subscribes for or underwrites securities in connection with the operation of a share or pension scheme for the benefit of employees or former employees, or of their spouses, widows, widowers or children or step-children  under the age of eighteen;

(e)      as principal or agent buys, subscribes for or underwrites securities and such securities create or acknowledge indebtedness in respect of any loan, credit, guarantee or other similar financial accommodation or assurance which such person or his principal has made, granted or provided;

(f)            as a company, partnership or trust issues, and redeems or repurchases any of its own securities falling within paragraphs 1, 2, and 3 of Schedule 1;

(g)            buys, sells, subscribes for or underwrites securities for the purposes of or in connection with the disposal of goods or supply of services or a related disposal or supply by a supplier to a client and the supplier is acting –

(i)       as a principal; or

(ii)           as an agent, and the supplier does not hold himself out generally as engaging  in  the  buying, selling, subscribing for or underwriting of securities and does not regularly solicit members of the public to buy, sell, subscribe for or underwrite securities;

(h)           buys, sells, subscribes for or underwrites securities in the course of carrying on any profession or business not otherwise constituting dealing in securities and where such transaction is a necessary or incidental part of other services provided in the course of carrying on that profession or business and is not separately remunerated otherwise than as part of any remuneration received in respect of such other services.

(7)      For the purposes of subsection (5) and (6), “hold” in relation to property includes the control of its disposal but does not include the mere receipt and dispatch or delivery of a cheque or other order made payable to another person.

(8)      The persons specified in Schedule 4 do not require a securities dealer’s licence to deal in securities.

(9)      An exempt overseas securities dealer shall not carry on any securities business in Seychelles (unless it becomes licensed as a securities dealer under this Act) in the event that it (or, as the case may be, its holding company if it is a subsidiary or its subsidiary if it is a holding company) ?

(a)            ceases to be licensed by a recognized overseas regulatory authority to deal in securities; or

(b)           ceases to be a member of a recognized overseas securities exchange; or

(c)            ceases to be a member of a Seychelles Securities Exchange.

(10)    A Seychelles Securities Exchange shall –

(a)            ensure it has procedures and rules in place to verify that each recognized overseas securities dealer, who is or wishes to become a member of such Seychelles Securities Exchange is –

(i)       licensed by a recognized overseas regulatory authority to deal in securities;

(ii)      is a member of a recognized overseas securities exchange;

(b)           ensure that its rules provide for expulsion, as a member of such Seychelles Securities Exchange, of any recognized overseas securities dealer who ceases to be –

(i)       licensed by a recognized overseas regulatory authority to deal in securi-ties; or

(ii)      a member of a recognized overseas securities exchange.

(c)      in the event that it expels any member as contemplated under paragraph (b), imme-diately inform the Securities Authority of the name and address of the expelled person and the circumstances leading up to and including the expulsion.

(11)    Sections 57, 113, 114, 115, 116, 119 and 128 shall apply mutatis mutandis  to an exempt overseas securities dealer.

(12)    Without limiting the generality of the Securities Authority’s power  in  relation  to  exempt  overseas securities dealers under subsection (11), the Securities Authority may-

(a)            impose conditions in respect of the manner or extent to which an exempt overseas securities dealer may carry on securities business in Seychelles; or

(b)           prohibit an exempt overseas securities dealer from carrying on securities business in Seychelles in the event that such exempt overseas securities dealer:

(i)       has contravened this Act or the rules of any stock exchange of which it is a member;

(ii)      has, in the Security Authority’s opinion, acted in a manner detrimental to its clients or the public interest;

(iii)     has, in the Security Authority’s opinion, acted wrongfully, improperly or otherwise such as may bring the reputation of Seychelles into disrepute; or

(c)      require an exempt overseas securities dealer to apply for a security dealer’s licence under this Act.

(13)    A person who contravenes any of subsections (8), (9) or (12) commits an offence.

46.   (1)      The Securities Authority may grant a securities  dealer’s licence to a company which applies in the prescribed form and manner and accompanied by?

(a)            the prescribed fee;

(b)           certified true copies of the constitutional documents of the applicant; and

(c)            any other documents or information the Securities Authority may require.

(2)      A licence granted under this section shall specify the securities business activity that the securities dealer is permitted to undertake and shall be restricted to such business as so specified. If no restriction as to the type of securities the licensee may deal in is specified on a licence, the licensee shall be permitted to deal in any type of securities business.

(3)      The Securities Authority may grant a restricted securities dealer’s licence by –

(a)            limiting the number of  clients to whom the licensee may provide services; or

(b)           limiting the licensee to providing services only to the clients named in the licence or a schedule thereto; or

(c)            setting the minimum value of an indivi-dual client’s investment.

(4)      The Securities Authority shall not grant a securities dealer’s licence unless the applicant –

(a)            is a company incorporated under the Companies Act or under the laws of a recognized jurisdiction;

(b)           employs at least 2 natural person directors;

(c)            employs at least one individual who is licensed as a representative under section 52;

(d)           complies with any prescribed minimum paid-up capital requirement;

(e)            complies with the insurance requirement under section 73;

(f)            satisfies the Securities Authority that it is a fit and proper person to be licensed as a dealer;

(g)            will be able, if licensed, to comply with any financial resources regulations that may apply to it;

(h)           has specified premises under section 47(c) that are suitable for keeping records or other documents.

(5)      In considering whether an applicant is a fit and proper person to be licensed, the Securities Authority –

(a)            shall have regard to, in respect of each of its directors and officers –

(i)       his financial status;

(ii)      his educational or other qualifications or experience having regard to the nature of his application;

(iii)     his ability to perform his proposed function efficiently, honestly and fairly; and

(iv)     his reputation, character, financial integrity and reliability; and

(b)           may take into account any matter relating to–

(i)       any person who is or is to be employed by, or associated with, the applicant for the purposes of the business to which the application relates;

(ii)      any person who will be acting as a representative in relation to such business;

(iii)     any substantial shareholder, director or officer of the company, any other company in the same group of companies or to any director or officer of any such company.

(6)      For the purposes of this section, the Securities Authority may have regard to any information in its possession whether furnished by the applicant or not.

(7)      In subsection (5)(b)(iii), “substantial shareholder”, in relation to a company, means a person who has an interest in shares in the company –

(a)            The stated value of which is equal to or more than 10% of the issued share capital of the company; or

(b)      which entitles the person to exercise or control the exercise of 10% or more of the voting power at a general meeting of the company.

47.   An application for a securities dealer licence shall be made in the prescribed form and accompanied by the prescribed fees, and shall be accompanied by –

(a)            certified true copies of the constitutional documents of the applicant or such other proof as may be satisfactory to the Authority that the applicant is lawfully constituted under the laws of Seychelles or the laws of a recognized jurisdiction;

(b)           unless the Securities Authority receives proof  satisfactory  to  it  that  the  applicant company or its controlling shareholder or beneficial owner is a member of or listed on a recognised overseas securities exchange, a personal questionnaire, in such form as the Authority shall require from time to time, by each?

(i)       shareholder and beneficial owner of an applicant company;

(ii)      director of an applicant company;

(c)      particulars of the location of all premises at which the records or other documents of the business for which the application is made are to be kept;

(d)      any other documents or information as the Authority may require for the purpose of determining the application.

48.   (1)      Subject to the provisions of this Part, no person shall carry on business in Seychelles giving advice on securities, or hold himself out as carrying on that business, unless he is licensed under this Part as an investment advisor by the Securities Authority.

(2)      No licensed investment advisor shall operate other than in accordance with his licence.

(3)      A person is regarded as carrying on business of giving advice on securities if he, by way of business –

(a)            advises other persons concerning investment in securities;

(b)           issues, analyses or reports concerning specific securities; or

(c)            manages a portfolio of securities for another person –

(i)       without holding property of the other person; and

(ii)      on terms that preclude him from doing so.

(4)      A person is not regarded as carrying on business of giving advice on securities if that person –

(a)            is a securities dealer;

(b)           is a bank in Seychelles;

(c)            is a lawyer or a professional accountant who gives advice on securities as an incident of the practice of that person’s profession;

(d)           gives advice on securities only in a news-paper, magazine, journal or other periodical publication –

(i)       which is generally available to the public; and

(ii)      which does not have as its principal or only object the provision of advice, or the issue of analysis or reports, concerning securities.

49.   (1)      The Securities Authority may grant an investment advisor licence to an individual or a company who applies in the prescribed form and manner and accompanied by –

(a)      the prescribed fee;

(b)      certified true copies of the constitu-tional documents of the applicant; and

(c)      any other documents or information the Securities Authority may require.

(2)      A licence granted under this section shall specify the securities business activity or activities that the licensee is permitted to undertake and the licensee shall be restricted to such business as so specified.

(3)      The Securities Authority shall refuse to grant an investment advisor licence unless the applicant –

(a)            in the case of a company, employs at least one individual who is licensed as a representative under section 52;

(b)           complies with any prescribed minimum paid-up capital requirement;

(c)            complies with the insurance requirement under section 73;

(d)           satisfies the Securities Authority that the applicant is a fit and proper person to be licensed as an investment advisor;

(e)            will be able, if licensed, to comply with any financial resources regulations that may apply to it;

(f)            has specified premises under section 50(c) that are suitable for keeping records or other documents.

(4)      In considering whether an applicant is a fit and proper person to be licensed, the Securities Authority –

(a)            shall have regard to, in respect of an applicant who is an individual, and in the case of an applicant company in respect of each of its directors and officers –

(i)       his financial status;

(ii)      his educational or other qualifications or experience having regard to the nature of his application;

(iii)         his ability to perform his proposed function competently, honestly and fairly;

(iv)         his reputation, character, financial integrity and reliability; and

(v)           his satisfactory completion of any examination requirements as may be prescribed;

(b)           may take into account any matter relating to –

(i)     any person who is or is to be employed by, or associated with, the applicant for the purposes of the business to which the application relates;

(ii)    any person who will be acting as a representative in relation to such business; and

(iii)   where the applicant is a company, any substantial shareholder, director or officer of the company, any other company in the same group of companies or to any director or officer of any such company.

(5)      For the purposes of this section, the Securities Authority may have regard to any information in its possession whether furnished by the applicant or not.

(6)      In subsection (4)(b)(iii), “substantial shareholder’, in relation to a company, means a person who has an interest in shares in the company –

(a)      the stated value of which is equal to or more than 10% of the issued share capital of the company; or

(b)      which entitles the person to exercise or control the exercise of 10% or more of the voting power at a general meeting of the company.

50.   An application for an investment advisor licence shall be made in the prescribed form and accompanied by the prescribed fees, and shall be accompanied by –

(a)            such information as the Securities Autho-rity requires –

(i)       about the business which the applicant proposes to carry on and the services it proposes to provide to which the application relates; and

(ii)      to enable the Securities Authority to consider the matters referred to in subsection (3) and (4) of section 49; and

(b)           unless the Securities Authority receives proof satisfactory to it that the applicant company or its controlling shareholder or beneficial owner is a member of or listed on a recognized overseas securities exchange, a personal questionnaire, in such form as the Authority shall require from time to time, by each –

(i)       shareholder and beneficial owner of an applicant company;

(ii)      director of an applicant company;

(c)      particulars of the location of all premises at which the records or other documents of the business for which the application is made are to be kept;

(d)      any other supporting information or documents as the Securities Authority may require for the purpose of deter-mining the application.

51.   Subject to this Part, no person shall carry on business in Seychelles as a representative of a securities dealer or a representative of an investment advisor, or hold himself out as carrying on such business, unless he is licensed to do so by the Securities Authority under this Part.

52.   (1)      The Securities Authority may grant a licence to carry on business as a representative of a securities dealer or a representative of an investment advisor to an individual who applies in the prescribed form and manner and pays the prescribed fees together with any information the Securities Authority may require.

(2)      The Securities Authority shall refuse to grant a representative licence unless the applicant –

(a)            is an individual;

(b)           has sufficient educational or other qualifications or experience;

(c)            satisfies the Securities Authority that the applicant is a fit and proper person to be licensed as a representative;

(d)           supplies the Securities Authority with the information that it requires to assess whether the applicant is a fit and proper person.

(3)      In considering whether an applicant is a fit and proper person to be licensed the Securities Authority shall have regard to the applicant’s –

(a)            financial status;

(b)           educational or other qualifications or experience having regard to the nature of the application;

(c)            ability to perform his proposed function competently, honestly and fairly;

(d)           reputation, character, financial integrity and reliability; and

(e)            satisfactory completion of any examination requirements prescribed by the Securities Authority.

(4)      For the purposes of this section, the Securities Authority may have regard to any information in its possession whether furnished by the applicant or not.

53.   (1)      A representative is accredited to a securities dealer or investment advisor for the purposes of this Part only if –

(a)            the licence of the representative states that he is accredited to the licensee; and

(b)           the representative is recorded as being accredited in the register maintained under section 58.

(2)      The Securities Authority shall not issue a representative licence unless both the representative and the licensee have notified the Securities Authority in writing that he is, or is to be, accredited.

(3)      If a licensee or representative notifies the Securities Authority in writing that the accreditation of the representative has been terminated –

(a)            the Securities Authority may amend the register of licensees accordingly; and

(b)           the representative shall return his licence to the Securities Authority within 7 days of the Securities Authority requiring him to do so.

54.   (1)      An application for a representative licence shall be made in the prescribed form and accompanied by the prescribed fees, and shall give the Securities Authority the information it requires –

(a)            about the services which the applicant will hold himself out as being able to provide if the application is allowed;

(b)           about the business which the applicant’s company proposes to carry on and to which the application relates; and

(c)            to enable the Securities Authority to consider the matters referred to in subsections (2) and (3) of section 52.

(2)      The Securities Authority may require an applicant to provide it with such further documents or information as the Securities Authority thinks necessary.

55.   (1)      Any licence granted by the Securities Authority may contain such reasonable conditions it considers necessary and the licensee shall comply with any such conditions.

(2)      Conditions may be of general or special application and may make different provision for different cases or classes of cases.

(3)      Without limiting the generality of subsections (1) and (2) and without prejudice to section 46(3), the conditions which the Authority may impose on a licensee may include conditions –

(a)            limiting the nature and scope of the business which may be carried on by the licensee, including as to the type of securities the licensee may deal in;

(b)           specifying whether or not the licensee may hold clients’ assets; and

(c)            requiring the licensee or a senior officer or manager of the licensee to acquire and maintain membership of a recognized overseas securities exchange.

(4)      The Securities Authority may, by written notice to the holder of the licence, amend or cancel any of the conditions or attach new conditions provided that, in the case of proposed new conditions, the Securities Authority shall not impose them without first giving the licensee an opportunity of being heard.

(5)      A person to whom a licence is granted shall not, when conducting business for which a licence is required, use a name other than the name specified in the licence.

(6)      A licence granted under this Part shall be valid for a period of one year from the date of issue, subject to it not being revoked by the Securities Authority under the provisions of this Act.

(7)      Where a person is granted a licence under this Part there shall be payable to the Securities Authority in respect of the period of one year from the date on which the licence is granted, an annual licence fee as prescribed from time to time by the Minister by regulations made under this Act.

(8)      A licence granted under this Part shall be renewable annually, immediately on its expiration, upon –

(a)            payment of the annual licence fee; and

(b)           lodgment with the Securities Authority of a compliance certificate by the licensee in the prescribed form.

(9)      If an annual licence fee referred to in subsection (8) is not paid on or before the due date in each year, there shall be payable an additional fee equal to one twelfth of that annual licence fee for each month or part thereof during which the annual licence fee and any additional fee imposed by this subsection remains unpaid.

(10)    The Securities Authority may, for good cause, waive any additional fee imposed by virtue of subsection (9).

56.   (1)      The Security Authority may take any action specified in subsection (2) if it is satisfied that –

(a)            a corporate licensee enters into liquidation or is ordered to be wound up or is or is likely to become unable to meet its debts as they fall due;

(b)           a receiver or manager of all or a substantial part of the property of a corporate licensee is appointed;

(c)            a corporate licensee ceases to carry on the business for which it is licensed;

(d)           it has reason to believe that a corporate licensee, or any of its directors or employees, has not performed its or his duties honestly and fairly;

(e)            the direction and management of the business of a licensee has not been conducted in a fit and proper manner;

(f)            a person holding a position as a licensee is not a fit and proper person to hold the respective position;

(g)            a corporate licensee contravenes or fails to comply with any condition applicable in respect of the licence;

(h)           a corporate licensee is in breach of this Act or any regulation made under this Act;

(i)             where applicable, a corporate licensee does not continue to employ at least one person who holds the appropriate representative licence granted under this Act;

(j)             a natural person licensee is mentally or physically incapable of performing the activities to which the licence relates;

(k)           a natural person licensee is adjudged a bankrupt, in Seychelles or elsewhere;

(l)             a licensee is convicted, whether in Seychelles or elsewhere, of fraud or any other offence involving dishonesty;

(m)         a licensee is convicted of an offence under this Act or regulations made under this Act;

(n)           a  licensee  fails  to  pay its annual licence fee as prescribed on or before the anniversary of the day of the grant of its licence;

(o)           a licensee is carrying on or attempting to carry on the business in a manner that is prejudicial to its clients or creditors; or

(p)           by reason of any other circumstances, a licensee is no longer a fit and proper person to hold a licence.

(2)      For the purpose of subsection (1), the actions the Security Authority may take in respect of a licensee are to –

(a)            revoke any licence which the licensee holds;

(b)           impose conditions or further conditions on a licensee’s licence and amend or revoke those conditions;

(c)            require the replacement of any officer of a licensee;

(d)           appoint a person to advise a licensee on the proper conduct of its licensed business;

(e)            appoint a person to assume control of the affairs of a licensee relating to its licensed business; or

(f)            suspend a licence granted under this Act for a period of time, or until the happening of an event, as the Securities Authority considers appropriate.

(3)      If the Securities Authority takes an action under subsection (2), the Securities Authority may apply to the Court for an order to take such other action as it considers necessary to protect the interests of the clients and creditors of the relevant licensee or former licensee.

(4)      A person appointed under the subsection (2)(d) or (e) is appointed at the expense of the relevant licensee, and any expenses incurred by the Securities Authority by virtue of the appointment shall be an amount due and payable to the Securities Authority by the licensee.

(5) A person appointed under subsection (2)(e) has all the powers necessary, to the exclusion of any other person (other than a liquidator or receiver), to administer the affairs of the licensee relating to its licensed business under this Act in the best interest of the licensee’s clients and creditors.

(6)      The powers referred to in subsection (5) include the power to terminate the business of the licensee in so far as it relates to its licensed business under this Act.

(7)      A person appointed in respect of a licensee under subsection (2)(d) or (e) shall –

(a)            when requested to do so by the Securities Authority, supply the Securities Authority with such information in respect of the licensee’s licensed business as is specified by the Securities Authority;

(b)           within 3 months of his appointment, or within such other period as the Securities Authority may specify, prepare and supply to the Securities Authority a report on the licensee’s licensed business making, where appropriate, recommendations in respect of the licensee or its licensed business; and

(c)            if his appointment is not terminated after supplying the report referred to in subsection 7(b) subsequently supply to the Securities Authority such other information, reports and recommendations as the Securities Authority specifies.

(8)      If a person appointed under subsection (2)(d) or (e)–

(a)            fails to comply with an obligation under subsection (7); or

(b)          

 

in the Security Authority’s opinion, is not carrying out his obligations in respect of the licensee satisfactorily, the Security Authority may revoke the appointment and appoint some other person in his place.

(9)      On receipt of any information or a report under subsection (7) in respect of a licensee, the Security Authority may –

(a)            require the licensee to reorganize its affairs in a manner specified by the Security Authority; or

(b)           if the licensee is a company, apply to the Court for the company to be wound up by the Court, and may take such action in respect of the appointment of the person appointed under subsection (2)(d) or (e) as the Security Authority considers appropriate.

(10)    If the Security Authority takes action under subsection (9), the Security Authority may apply to the Court for an order to take such other action as it considers necessary to protect the interest of the licensee’s clients or creditors.

(11)    The Securities Authority may revoke a licence at the request of the licensee.

(12)    A person whose licence is revoked or suspended under this Act shall be notified accordingly by the Securities Authority and shall, for the purpose of this Act, be deemed not to be licensed from the date of notification of revocation or suspension, as the case may be.

(13)    The suspension or revocation of a licence under this Part does not operate so as to –

(a)            avoid or affect any agreement, transaction or arrangement relating to a dealing in securities entered into by the person whose licence has been suspended or revoked, whether the agreement, transaction or arrangement was entered into before or after the suspension or revocation of the licence, except that the licensee shall not be allowed to retain any benefit charges or payable thereto; or

(b)           affect any right, obligation, or liability arising under any such agreement, transac-tion or arrangement.

57.   (1)      The Securities Authority may by notice in writing give a licensee a direction under this section where it appears to the Securities Authority that –

(a)            it is desirable for the protection of investors; or

(b)           the licensee is contravening, has contra-vened or is about to contravene, or has failed to comply with any provision of or requirement under this Act or regulations made under this Act, or, in purported compliance with any such provision or requirement has furnished the Securities Authority with information that is false, inaccurate or misleading.

(2)      A direction under this section may contain all or any of the following prohibitions or requirements –

(a)            require a licensee to cease and desist from the contravention;

(b)           prohibit a licensee from entering into transactions of a class or description specified in the notice or entering into them otherwise than in circumstances so specified or to an extent so specified;

(c)            prohibit a licensee from soliciting business from a person of a class or description so specified or from persons other than persons of such a class or description; or

(d)           prohibit a licensee from carrying on business in a specified manner or otherwise than in a specified manner;

(e)            as regards any assets whether in Seychelles or elsewhere and whether they are the assets of the licensee or not –

(i)       prohibit a licensee from disposing of such assets or prohibit the licensee from dealing with them in a manner specified in the notice; or

(ii)           require a licensee to deal with such assets in, and only in, a manner specified in the notice;

(f)            require a licensee to maintain in Seychelles assets of such value as appears to the Securities Authority to be desirable with a view to ensuring that the licensee will be able to meet its liabilities in respect of its licensed securities business;

(g)            require a licensee to transfer control of assets of a specified class or description to a trustee approved by the Securities Authority.

(3)      A licensee shall comply with a direction of the Securities Authority under this section.

(4)      A direction under this section shall be for such specified period as the Securities Authority considers necessary (which may be extended as deemed necessary), except that a direction issued by the Securities Authority containing any prohibition or requirement under paragraphs  (e), (f) or (g) of subsection (2) shall be for a period not exceeding 60 days.

(5)      A licensee who fails to comply with a direction of the Securities Authority commits an offence.

(6)      The Securities Authority may, by written notice either of its own motion or on the application of a licensee on whom a prohibition or requirement has been imposed under this section, rescind or vary the prohibition or requirement if it appears to the Security Authority that it is no longer necessary for the prohibition or requirement to take effect or continue in force or, as the case may be, that it should take effect or continue in force in a different form.

58.   (1)      The Securities Authority shall maintain a register of persons holding licences granted under this Part in the form it considers most appropriate.

(2)      For each licensed securities dealer or investment advisor, the register maintained under subsection (1) shall record –

(a)            the name and address of the licensee;

(b)           the date on which the licence was granted;

(c)            the type of securities business permitted by the licence;

(d)           any conditions attached to the licence;

(e)            the name and address of every accredited representative;

(f)            where the licensee is a company, the name and address of every director, company secretary and shareholder;

(g)            the location of the premises at which the records or other documents of the licensed business are kept;

 

(h)           any disciplinary action against the licensee;

(i)             any order of suspension or revocation; and

(j)             such other particulars as the Securities Authority considers necessary in the interest of the investing or general public.

(3)      For each licensed representative, the register shall record –

(a)            his name and address;

(b)           the date on which the licence was granted;

(c)            the name and address of the principal to whom he is accredited;

(d)           any order of revocation or suspension; and

(e)            such other particulars as the Securities Authority considers desirable in the interest of the investing or general public.

(4)      The registers kept by the Securities Authority under subsections (1), (2), and (3) shall be open to public inspection during ordinary office hours on payment of a fee as may be prescribed from time to time by the Minister by regulations made under this Act.

(5)      Any person, on payment of a fee as prescribed may request the authority for a certificate of official search under the seal of the Authority in respect of any licensee, which shall contain the information set out in the registers kept by the Securities Authority under subsections (1), (2) and (3).

59.   (1)      A licensee shall as soon as is practicable and in any event within 7 days give notice in writing to the Securities Authority where –

(a)            the licensee is a securities dealer or investment advisor and ceases to carry on the business to which its licence relates;

(b)           a representative ceases to be a representative of the licensee to whom the representative is accredited; or

(c)            a change occurs in any matter particulars of which are required by section 58 to be entered in the register of licensees.

(2)      A licensee who fails to comply with subsection (1) commits an offence.

60.   (1)      No shares in a licensee which is a company shall be issued, and no issued shares shall be voluntarily transferred or disposed of, without the proper approval of the Securities Authority.

(2)      Notwithstanding subsection (1), the Securities Authority may exempt from the provisions of this section a licensee whose shares or interests are publicly traded on a Seychelles Securities Exchange or a recognized overseas securities exchange, and any such exemption –

(a)            shall be subject to a condition that the licensee shall, as soon as reasonably practicable, notify the Securities Authority of –

(i)       any change in control of the licensee;

(ii)      the acquisition by any person or group of persons of shares representing more than 10% of the licensee’s issued share capital or total voting rights; or

(iii)     the acquisition by any person or group of persons of shares representing more than 10% of the issued share capital or total voting rights of the licensee’s parent company;

(b)           shall be subject to a condition that the licensee shall, as soon as reasonably practicable, provide such information   to the Securities Authority, and within such period of time, as the Securities Authority may require for the purpose of enabling an assessment as to whether persons acquiring control or ownership of the licensee in the circumstances set out in paragraph (a) are fit and proper persons to have such control or ownership; and

(c)            shall be subject to such other terms and conditions as the Securities Authority may deem necessary.

(3)      In subsection (1), the reference to shares or interests being transferred or disposed of includes the transfer or disposal of the legal or the beneficial interest in the shares or interests. 

(4)      In the event of shares in a company which is licensed under this Act vesting involuntarily or through process of law in  a person, the company, as soon as it becomes aware of such vesting, shall inform the Securities Authority of the number of shares and the identity of the person in whom they have vested, and  the  company and  the  person  in  whom  they have vested shall comply with any instructions as to the licence or the business of the company as may be given by the Securities Authority.

61.  The Securities Authority may require a licensee with a name which –

(a)            is identical with that of another person, whether within Seychelles or not, or which  so nearly resembles that name as to be likely to deceive;

(b)      in the opinion of the Securities Authority connotes, falsely, the patronage of or connection with a person whether within Seychelles or not;

(c)      in the opinion of the Securities Authority connotes, falsely, that it has a special status in relation to or derived from the Government, or has the official backing of or acts on behalf of the Government or of any of its departments or officials;

(d)      in the opinion of the Securities Authority is liable to mislead investors, or constitute a misrepresentation; or

(e)      includes any prescribed word or expression, immediately to change its name, and in default of compliance within 3 calendar months of the receipt of notice from the Securities Authority of its requirements, the Securities Authority may revoke its licence.

62.   (1)      Except as provided for in the Mutual Fund and Hedge Fund Act, no person shall  carry on business as a custodian of securities, including the taking of securities into custody for safe keeping or holding himself out as carrying on that business, except for –

(a)            a bank; or

(b)           a company licensed to provide trustee services under the International Corporate Service Providers Act 2003; or

(c)            a licensed clearing agency which undertakes custodial services as an incident of its business; or

(d)           such other person in Seychelles or elsewhere as may be approved in writing by the Securities Authority, including a securities dealer  who meets such conditions relating to storage and safety of physical securities as may be specified by the Securities Authority or prescribed.

(2)    A person who contravenes subsection (1) commits and offence.

63.   (1)      Any person who carries on business requiring the grant of a licence under this Part without holding such a licence, or other than in accordance with his licence, commits an offence and is liable on summary conviction –

(a)            in the case of an individual, to a fine of UD$100,000 or the equivalent in Seychelles rupees or to imprisonment for two years or to both;

(b)           in the case of a company, to a fine of US$200,000 or the equivalent in Seychelles rupees, and if the offence is a continuing offence, the individual or company is liable to a further fine not exceeding US$500 or the equivalent in Seychelles rupees for every day that the offence continues after conviction.

(2)      A person convicted of an offence under this section shall, following an assessment by the Securities Authority, be liable to pay to the Securities Authority, any monies received or the monetary equivalent of any assets obtained as a result of carrying on securities business without a licence.

PART 6  – CONDUCT OF SECURITIES BUSINESS

64.            In the conduct of securities business, a licensee shall at all times act according to the principles of the best practice and, in particular, shall –

(a)      observe a high standard of integrity and fair dealing;

(b)      act with due skill, care and diligence;

(c)      observe high standards of market conduct;

(d)      seek from clients information about their circumstances and investment objectives which might reasonably be expected to be relevant in enabling the licensee to fulfil the licensee’s responsibilities to the client;

(e)      take reasonable steps to give every client the licensee advises, in a comprehensible way, any information needed to enable the client to make a balanced and informed investment decision;

(f)      avoid any conflict of  interest with clients and, where  such a conflict unavoidably arises, ensure fair treatment to the client by  complete disclosure or by declining to act;

(g)      ensure that the interests of the licensee are not unfairly placed above those of the client;

(h)      protect by way of segregation and identification, those client assets for which the licensee is responsible;

(i)       maintain adequate financial resources to meet the securities business commitments of the licensee and withstand the risks to which the business is subject;

(j)       organize and contro1 internal  affairs in a responsible manner;

(k)      keep proper records;

(l)       have adequate arrangements to ensure that all staff employed are suitable, adequately trained and properly supervised and establish and maintain well defined compliance procedures; and

(m)     deal with  the Securities Authority in an open and cooperative manner.

65.   (l)       The Minister may, on the recommendation of the Securities Authority, make regulations prescribing the manner in which licensees are required to conduct their business.

(2)      Where any contract for the sale or purchase of securities is entered into in contravention of a regulation made under this section, the contravention is actionable at the suit of any client who suffers loss as a result of the contravention.

66.   (1)      A securities dealer shall, in respect of every contract for the purchase, sale or exchange of securities entered into by it, whether as principal or agent, not later than the end of the next trading day after the contract was entered into, make out a contract note which complies with subsection (2) and –

(a)            where the contract was entered into  by the  licensee as agent, deliver the original contract note to the person on whose behalf it entered into the contract; or

(b)           where the contract was entered into by the licensee as principal, retain the contract note for itself.

(2)      The contract note shall state whether it is in respect of a purchase, sale or exchange of securities and shall include –

(a)            the name of the licensee and the address of the principal place at which it carries on business;

(b)           where the licensee is acting as principal, a statement that it is so acting;

(c)            the name and address of the person, if any to whom the licensee is required to give the contract note and, where different, the name of the person for whom the transaction was undertaken;

(d)           the date of the contract, and the date on which the contract note is made out;

(e)            the quantity and description of the securities that are the subject of the contract;

(f)            the price per unit of the securities;

(g)            the amount of consideration under the contract or, in the case of an exchange, sufficient particulars of the securities exchanged to identify them;

(h)      the rate or amount of commission or other fee payable in respect of the contract;

(i)       the amount of tax or duty (if any), payable in connection with the contract and, where applicable, in respect of the transfer;

(j)       the date of settlement;

(k)      such other information as may be prescribed to ensure that there is a complete audit trail for the execution of client instructions and the settlement of market transactions.

67.   (l)       Except in accordance with regulations made by the Minister, on the recommendation of the Securities Authority, a person shall not sell any listed securities which that person or that person's principal does not own either for that person’s own account or for the account of another person.

(2)      For the purpose of subsection (l) a person who sells securities includes a person who –

(a)        purports to sell the securities;

(b)       offers to sell the securities;

(c)        holds himself out as entitled to sell the securities; or

(d)       instructs a broker to sell the securities.

(3)      For the purposes of subsection (1), a person is treated as owning securities only if that person –

(a)            or his agent is legally entitled to the securities;

(b)           has purchased the securities, or has entered into an unconditional contract to purchase the securities, even if he does not yet have title to them;

(c)            owns other securities convertible into or exchangeable for the securities and has tendered the other securities for conversion or exchange;

(d)           has an option to acquire the securities and has exercised the option; or

(e)            has rights or warrants to subscribe to the securities and has exercised the rights or warrants, and that person or that person’s agent has received or will receive a fixed or currently ascertainable amount of the securities at a fixed or currently ascertainable price.

(4)      A person who contravenes subsection (l) commits an offence and is liable on summary conviction –

(a)            in the  case of an  individual, to a fine of US$l00,000 or the equivalent in Seychel1es rupees or to imprisonment for three years or to both; 

(b)      in the case of a company, to a fine of US$200,000 or the equivalent in Seychelles rupees.

68.   (l)       Each licensed securities dealer and each licensed investment advisor shall keep such accounting and other records as will explain the transactions and financial position of all business relating to its licence and enable true and fair profit and loss accounts and balance sheets to be prepared from time to time, and shall keep those records in such manner and form as to enable them to be  conveniently and properly audited.

(2)      Without limiting the generality of subsection (1), a securities dealer and an investment advisor shall each maintain such accounts and other records, and file such financial statements and reports, as may be prescribed.

(3)      The accounting and other records required to be maintained under this section shall at all reasonable times be open to inspection by the Securities Authority or by an auditor appointed by the Securities Authority.

(4)      A licensee to whom the financial resources regulations made under section 69 apply shall keep its records in sufficient detail to establish readily whether or not the financial resources regulations are being complied with.

69.   (1)      The Minister may, on the recommendation of the Securities Authority, make regulations requiring licensees to have and maintain, in respect of the securities business for which they are licensed, the financial resources set by the regulations.

(2)      Financial resources regulations may –

(a)            impose requirements which are absolute or which vary from time to time by reference to factors which either are specified in, or are to be determined in accordance with, the regulations;

(b)           impose requirements which apply differently to different classes of business for which licensees are licensed, and which take account of a business carried on by the licensee with, or in addition to, business referred to in subsection (1);

(c)            provide for the assets, liabilities and other matters to be taken into account under the regulations to determine a person’s financial resources and the extent to which, and the manner in which, they are to be taken into account for that purpose;

(d)           require licensees to submit to the Securities Authority, at intervals set out in the regulations a return of their financial resources in a form set by the Securities Authority.

70.   (1)      If a licensee becomes unable to comply with financial resources regulations that are made under section 69 and are applicable to it, the licensee shall –

(a)            notify the Securities Authority of such inability; and

(b)           cease conducting business for which it is licensed otherwise than for the purpose of giving effect to an agreement or arrangement permitted under its licence and entered into before the time when it became aware of such inability.

(2)      The duties of a licensee under subsection (1) shall arise as soon as it becomes aware, or should, with the exercise of reasonable diligence, have become aware, of its inability to comply with the financial resources regulations and in relation to paragraph (a) of subsection (1), must be exercised within twenty-four hours after such awareness.

(3)      A licensee that is a company is deemed to be aware of an inability to comply with the financial resources regulation if a director or officer of it is so aware or would, with the exercise of reasonable diligence, have been aware of the inability.

(4)      Where the Securities Authority becomes aware of an inability by a licensee to comply with financial resources regulations the Securities Authority may, whether or not notice has been given under subsection (1) –

(a)            suspend the licence; or

(b)           permit the licensee to carry on business on the conditions, if any, the Securities Authority imposes.

(5)      A licensee who contravenes subsection (1) commits an offence.

71.  The Securities Authority or a person authorized by the Securities Authority may appoint in writing an auditor to examine, audit, and report, either generally or in relation to any matter, on the books, accounts and records of the licensee, and on money, securities or other property held on account of any other person by the licensee or by a nominee appointed by the licensee.

72.   (1)      The Minister may, on the recommendation of the Securities Authority make regulation with respect to the segregation and safekeeping of clients’ money or securities held by the licensees on behalf of clients.

(2)      Without limiting the general effect of subsection (1) such regulations may-

(a)            make provision with respect to the opening and keeping of clients' bank accounts, including provision as to the circumstances in which money other than clients’ money may be paid into such accounts and the circumstances in which and the persons to whom money held in such accounts may be paid out;

(b)           require clients' money to be paid forthwith into a segregated client bank account the title of which contains the word “client”;

(c)            require the keeping of accounts and records in respect of clients’ money or securities; and

(d)           require the accounts and records to be examined by an accountant and require the accountant to report to the Securities Authority whether in his opinion the provisions of the regulations have been complied with and on such other matters as may be specified in the regulations.

(3)      A licensee, who is accountable for securities, that are the property of another person and that the licensee or a nominee controlled by it holds, shall –

(a)            hold and account for them in the manner prescribed;

(b)           not dispose of, assign or lend the securities or deposit them as security for loans or advances except as may be prescribed.

(4)      Money or other property he1d by a  licensee on account of a client shall not be available for  payment of the debts of the licensee or liable to be paid or taken in execution under the order or the process of any court against the licensee.

(5)      A payment made in contravention of subsection (4) is void from the outset, and  a person to whom the money is paid does not obtain any title to it notwithstanding any other law to the contrary. ­

73.   Every licensee, other than an accredited representative, shall, to the satisfaction of or on terms prescribed by the Securities Authority, effect and maintain an appropriate policy of insurance on such terms and conditions as may be determined by the Securities Authority for the purpose of indemnifying such licensee against any liability that may be incurred as a result of any act or omission by the licensee or any of its officers or employees in the conduct of the licensee’s securities business.

74.   (1)      Within 30 days after becoming licensed under this Act a licensee, other than an accredited representative, shall appoint an auditor who is acceptable to the Securities Authority.

(2)      An auditor shall not be eligible for appointment under subsection (1) if he is –

(a)            a director, officer, employee, shareholder or partner of the licensee; or

(b)           a partner or employee of such person.

(3)      A licensee shall, within 7 days of the appointment of an auditor, notify the Securities Authority in writing of the name and address of the auditor.

(4)      A licensee shall within 7 days of the removal or resignation of an auditor, notify the Securities Authority in writing.

75.   (1)      A licensee, other than an accredited representative, shall –

(a)            in respect of the first financial year or part thereof, ending on 31st December or such other date as may be approved by the Securities Authority, during which it commences  carrying on securities business; and

(b)           for each subsequent financial year,

submit to the Securities Authority within 4 months after the end of the financial year or such later date as may be approved by the Securities Authority in writing, audited financial statements prepared in accordance with international accounting standards, and which contain such additional information as may be prescribed.

(2)      A licensee who contravenes subsection (1) commits an offence.

(3)      The Securities Authority may, at any time, instruct a licensee to have its accounts audited and to submit them to the Securities Authority within such time as the Securities Authority specifies.

(4)      A licensee shall ensure that an instruction given to it in accordance with subsection (3) is complied with within the specified time, and any person who contravenes this provision commits an offence.

76.  If, during the performance of his duties as auditor for a licensee, an auditor –

(a)            becomes aware of any matter which in his opinion adversely affects the financial position of the licensee to a material extent; or

(b)           discovers evidence of a contravention of section 68, 69 or 72 he shall as soon as is practicable, and in any event within 7 days, report it in writing to the Securities Authority and to the licensee.

77.             Where the Securities Authority is satisfied that –

(a)            the licensee has failed to file an auditor’s report under section 75;

(b)           the Securities Authority has received a report under section 76; or

(c)            there is evidence of a contravention of section 68, 69 or 72;

it may appoint in writing an auditor to examine, audit, and report, either generally or in relation to any matter, on the books, accounts and records of the licensee, and on money, securities or other property held on account of any other person by the licensee or by a nominee appointed by the licensee. 

PART 7– REGISTERS OF INTERESTS IN SECURITIES

78.   (1)      This Part applies to-

(a)            a securities dealer;

(b)           a securities dealer’s representative;

(c)            an investment advisor;

(d)           an investment advisor’s representative; and

(e)            a financial journalist.

(2)      In this Part, “financial journalist” means a person who regularly contributes advice concerning securities or prepares analyses or reports concerning securities for publication in a newspaper or periodical.

(3)      In this Part, a reference to securities is a reference to securities which are listed on a securities exchange licensed by the Securities Authority.

79.   (1)      A person to whom this Part applies shall maintain a register, in the prescribed form, of the securities in which that person has an interest.

(2)      Particulars of these securities in which a person to whom this Part applies has an interest and particulars of the person’s interest in those securities shall be entered in the register within 7 days of the acquisition of the interest.

(3)      Where, there is a change in the interest in securities of a person to whom this Part applies that person shall, within 7 days  after  the  day of  the  change  enter in the register full particulars of the change including the date of the change and the circumstances by reason of which that change has occurred.

(4)      For the purposes of subsection (3) where a person acquires or disposes of securities there shall be deemed to be a change in the interest of that person.

80.   (1)      A person to whom this Part applies shall give notice to the Securities Authority in the prescribed form containing such particulars as are prescribed by the Securities Authority including the place at which he will keep the register of his interests in securities.

(2)      The notice shall be given –

(a)            In the case of a person who is required by this Act to hold a licence, as part of his application for the licence; or

(b)           In the case of any other person, if the person becomes a person to whom this Part applies within 7 days after becoming such a person.

(3)      A person who ceases to be a person to whom this Part applies shall, within 7 days of his so ceasing, give notice of the fact to the Securities Authority.

(4)      A person who fails or neglects to give notice as required by this section commits an offence.

81.   (1)      The Securities Authority or  any person  authorized by it in that behalf may require any person to whom this Part applies to produce for inspection the register required to be kept pursuant to section 79 and the Securities Authority or any person so authorized may make extracts from the register.

(2)      Any person who fails to produce a register for inspection or fails to allow any person authorized under subsection (1) to make a copy of or make extracts from the register commits an offence.

82.   (1)      The Securities Authority or any person authorized by it in that behalf may, where the Securities Authority is satisfied that it is necessary for the protection of investors  or in the  public interest, by notice in writing require the proprietor or publisher of a newspaper or periodical to supply him with the name and address of the financial journalist who has regularly contributed any advice or prepared any analysis or report that has been published in a newspaper or periodical owned or published by that proprietor or publisher or with names and addresses of all the financial journalists who have regularly contributed any such advice or prepared any such analysis or report within a period specified in the notice.

(2)      A proprietor or publisher of a newspaper or periodical who, without reasonable excuse, fails to comply with a notice under subsection (1) commits an offence.

83.   The Securities Authority may supply a copy of the extract of a register obtained of register pursuant to section 81  to any person who in the opinion  of the Securities Authority, should, in the public interest be informed of the dealing in securities disclosed in the register.

84.   (1)      A person shall be deemed to have an interest in a security where a body corporate has an interest in a security and –

(a)            the body corporate is, or its directors are,  accustomed or under  an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of that person in relation to that security;

(b)           that person has a controlling interest in the body corporate; or

(c)      that person is or the associates of that person or that person  and his associates are entitled to exercise or control the exercise of not less than 15  % of the votes attached to the voting shares in the body corporate.

(2)      For the purposes of subsection (l)(c),  a person is an associate of another person if the first-mentioned person is –

(a)            a company which, by virtue of section 123, is deemed to be related to that other person;

(b)           a person in accordance with whose directions,  instructions or wishes that other person is accustomed or is under an obligation, whether formal or informal, to act in relation to the security referred to in subsection (1);

(c)            a person who is accustomed or is under an obligation, whether formal or informal, to act in accordance with the directions, instruc-tions or wishes of that other person in relation to that security;

(d)           a body corporate which is, or the directors of which are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of that other person in relation to that security; or

(e)            a body corporate in accordance with the directions, instructions or wishes of which, or of the directors of which, that other person is accustomed  or  under  an obligation, whether formal or informal, to act in relation to that security.

(3)      A person shall be deemed to have an interest in  a security in any one or more of  the following circumstances where that person –

(a)            has entered into a contract to purchase a security;

(b)      has a right, otherwise than by reason of having an interest under a trust, to  have a security transferred to himself or to his order, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not; or

 

 

(c)      where he is entitled, otherwise than by reason of his having been appointed a proxy or representative to vote at a meeting of members of a body corporate or of a class of its members, to exercise or control the exercise of a right attached to a security, not being a security of which he is the registered holder.

(4)      A person shall be deemed to have an interest in a security if that security is held jointly with another person.

(5)      Where any property held in trust consists of or includes securities in which a person knows, or has reasonable grounds for believing, that he has an interest, he shall be deemed to have interest in those securities.

(6)      The following shall not constitute an interest in a security for the purpose of this Part –

(a)            an interest in a security if the interest is that of a person who holds the security as bare trustee;

(b)           an interest in a security of a person whose ordinary business includes the lending of money if he holds the interest only by way of security for the purposes of a transaction entered into in the ordinary course of business in connection with the lending of money; and

(c)            an interest of a person in a security being an interest held by him by reason of his holding a prescribed office; and

(d)           a prescribed interest in a security being an interest of such person, or of the persons included in such class of persons, as is prescribed.

PART 8 – OFFERS TO PUBLIC OF CORPORATE

SECURITIES

85.   (1)      This Part shall not apply to –

(a)            securities which are offered by the Central Bank of Seychelles;

(b)           an offer of securities that are made or guaranteed by the Government of Seychelles;

(c)            an offer of securities determined by the Securities Authority to be a private placement;

(d)           or in respect of a licensed public fund or licensed professional fund or an exempt foreign fund under the Mutual Fund and Hedge Fund Act.

(2)      For the purposes of this Part, a person offers securities if that person invites another  to enter into an agreement for or with a view to subscribing for or otherwise acquiring or underwriting any securities, or that person invites another person to make such an offer.

(3)      Subject to the provisions of this Part, no person shall make a public offer of securities unless the issuer or offeror of the securities has submitted for approval to the Securities Authority a prospectus which complies with this Act, and the Securities Authority has approved the prospectus.

(4)      The Securities Authority shall not be liable to any action in damages suffered as a result of any prospectus approved by the Securities Authority.

(5)      A prospectus approved by the Securities Authority shall be valid only for a period of up to 12 months from the date of such approval.

(6)      The Minister may, on the recommendation of the Securities Authority, exempt issuers or offerors from the prospectus requirement in particular cases or classes of cases.

(7)      The Minister may, on the recommendation of the Securities Authority, make regulations allowing a draft prospectus to be published in advance of its approval by the Securities Authority.

(8)      Upon the commencement of this Act, sections, 40, 41, 42, 43, 44, 45, 46, 47, 48 and 49 inclusive and the Fourth Schedule of the Companies Act 1972 shall be repealed.

(9)      A person who contravenes subsection (3) commits an offence and is liable on summary conviction –

(a)            in the case of an individual, to a fine of U$$100,000 or the equivalent in Seychel1es rupees or to imprisonment for three years or to both;

(b)           in the case of a company, to a fine of US$200,000 or the equivalent in Seychelles rupees,

and  if  the offence is a continuing offence, the individual or company is liable to a further fine  not exceeding US$500 or the equivalent in Seychelles rupees or every day that the offence continues after conviction.

86.   (1)      Where a  public offer of securities is to be made in Seychelles the offeror shall publish a prospectus by making it available to the public, free of charge, at an address in Seychelles, from the time the securities are first offered until the end of the period during which the offer remains open.

(2)      The offeror shall, not less than 30 days before the proposed date of publication of the prospectus, submit a copy to the Securities Authority for approval.

(3)      No person shall publish a prospectus until it has been approved by the Securities Authority.

(4)      No person shall issue an advertisement, other than a prospectus, announcing a public offer of securities for which a prospectus is required under this Part unless a prospectus has been published and the advertisement gives an address in Seychelles from which it can be obtained.

(5)      A person who contravenes subsection (3) or (4) commits an offence and is liable on summary conviction –

(a)            in the case of an individual to a fine of US$l00,000 or the equivalent in Seychelles rupees or to imprisonment for two years or to both;

(b)           in the case of company, to a fine of  US$200,000 or the equivalent in Seychelles rupees and if the offence is a continuing offence, the individual or company is liable to a further fine not exceeding US$500 or the equivalent in Seychelles rupees for every day that the offence continues after conviction.

87.   The Securities Authority may approve a prospectus only if –

(a)            it contains all such information as investors and their professional advisors would reason-ably require, and reasonably expect to find there, for the purpose of making an informed assessment of –

(i)             the assets and liabilities, financial position, profits and losses, and prospects of the issuer of the securities; and

(ii)           the rights attaching to those securities;

(b)           it contains in addition such other information and particulars, and complies with such other requirements, as may be prescribed.

88.  Every offeror, issuer, director of an offeror or issuer shall be liable to pay compensation to any person who acquires any of the securities, in reliance upon the prospectus, to which the prospectus relates and suffers loss in respect of them as a result of any untrue or misleading statement in the prospectus or the omission from it of any matter required to be included by or under section 87.

89.   (1)      Every issuer of securities that are the subject of a public offer, or which are publicly traded, shall keep the Securities Authority, members of the issuer, other holders of its securities and the general public informed as soon as reasonably practicable of any information relating to the issuer and its subsidiaries, if any, that –

(a)            is necessary to enable them and the public to appraise the financial position of the issuer and of its subsidiaries;

(b)           is necessary to avoid the establishment of a false market in its securities; or

(c)            might reasonably be expected materially to affect the price of its securities.

(2)      For the purposes of this section, securities are publicly traded if, irrespective of when issued –

(a)            They are traded on a licensed securities exchange; or

(b)           The Securities Authority so determines, having regard to the volume or frequency of trading in such securities.

(3)      Without limiting the general effect of subsection (1), the issuer shall also comply with such further obligations and requirements as may be prescribed.

PART 9 – REGISTRATION OF CORPORATE

ISSUERS

90.   (1)      From the commencement of this Act, all public companies will become reporting issuers and shall, within 90 days from the date, or within such other period as the Securities Authority may specify, file with the Securities Authority a registration statement in the form specified by the Securities Authority.

(2)      A company which proposes to issue securities to the public shall register with the Securities Authority as a reporting issuer and file a registration statement in the form and within the period specified by the Securities Authority.

(3)           A reporting issuer shall amend its registration statement annually so that the information contained is current as at the end of its most recent financial year.

(4)      Where a reporting issuer ceases to be a public company, it shall forthwith automatically cease to be a reporting issuer.

(5)      The provisions of this section shall not apply to a licensed mutual fund or exempt foreign fund under the Mutual Fund and Hedge Fund Act.

91.   (1)      A reporting issuer shall, within 4 months after the end of its financial year –

(a)            file with the Securities Authority a copy of its annual report containing such information as the Securities Authority may specify; and

(b)           forward to each holder of its securities such financial statements as the Securities Authority may specify.

(2)      A reporting issuer shall file with the Securities Authority such other reports in such form as the Securities Authority may specify.

(3)      Unless specifically authorized by the Securities Authority to the contrary, where a material  change occurs in the affairs of a reporting issuer that is likely to have a significant influence on the value of the market price of  its securities; the reporting issuer shall, as soon as practicable but in any event no later than 7 days after the change occurs, issue a press release, to be filed with the Securities Authority, authorized by a director of the issuer that discloses the nature and substance of the change.

(4)      Without limiting what amounts to a material change referred to in subsection (3), the following changes shall require disclosure under this section –

(a)            any distribution of securities in Seychelles or in any other jurisdiction;

(b)           any change in the beneficial ownership of the issuer’s securities that affects or is likely to affect the control of the issuer;

(c)            any reorganization in capital, merger or amalgamation;

(d)           a takeover bid on its own securities or made on the securities of another issuer or issuer bid; or

(e)            any significant acquisition or disposition of assets, property or joint venture interests.

(5)      For the purposes of subsection 4(e), an acquisition or disposition is significant when the value of the asset, property or interest acquired or disposed of exceeds 10 per cent of the net asset of the reporting issuer.

(6)      A reporting issuer may choose not to issue a press release where –

(a)            the information concerns an incomplete proposal or negotiation;

(b)      the information comprises matters of supposition or is insufficiently definite such that it would be misleading to the market for it to be disclosed;

(c)      the  information  is a trade secret.

(7)      The exemption of subsection (6) shall not apply where the board of the issuer reasonably believes that transactions in the securities have taken place or are likely to take place based on undisclosed information.

(8)      Where the exemption in subsection (6) applies, the reporting issuer shall issue the press release under subsection (1) as soon as circumstances that justify non-disclosure end.

PART 10 – INSIDER DEALING AND OTHER

MARKET ABUSES

92.   (1)      For the purposes of this Part, an individual has information as an insider if –

(a)            it is inside information, and that individual knows that it is inside information; and

(b)           that individual has the information, and knows that he or she has the information, from an inside source.

(2)      For the purposes of subsection (1), an individual has information from an inside source if –

(a)            the individual has it through –

(i)         being a director, employee or share-holder of an issuer of securities; or

(ii)       having access to the information by virtue of that individual’s employment, office or profession; or

(b)           the direct or indirect source of the individual’s information is a person referred to in paragraph (a).

93.  For the purposes of this Part –

(a)            “inside information” means information which-

(i)            

 

relates to particular securities or to a particular  issuer of securities and not to securities generally or to issuers of securities generally;

(ii)           is specified or precise;

(iii)         has not been made public; and

(iv)         if it were made public would be likely to have a significant effect on the price of any securities;

(b)           securities are “price-affected securities” in relation to inside information, if the information would, if made public, be likely to have a significant effect on the price of the securities.

94.   (l)       For  the purposes of section 93, “made public”, in relation to information, shall be construed in accordance with the following provisions of this section, but these provisions shall not be exhaustive as to the meaning of that expression.

(2)      Information is made public if –

(a)            it is published in accordance with the rules of a securities exchange for the purpose of informing investors and their professional advisors;

(b)           it is contained in records which by virtue of any enactment are open to inspection by the public;

(c)            it can be readily acquired by those likely to deal in any securities –

(i)                   to which the information relates; or

(ii)           of an issuer to which the information relates; or

(d)           it is derived from information which has been made public.

95.   (1)      An individual who has information as an insider commits the offence of insider dealing if that individual –

(a)      deals in securities that are price-affected in relation to that information;

(b)      encourages another person to deal in securities that are, whether or not that other person knows it, price-affected securities in relation to the information, knowing or having reasonable cause to believe that the dealing would take place; or

(c)      discloses the information, otherwise than in the proper performance of the functions of that individual’s employment, office or profession, to another person.

(2)      An individual who commits an offence under subsection (1) is liable on summary conviction –

(a)            to a fine of US$200,000 or the equivalent in Seychelles rupees or to imprisonment for four years or to both; and

(b)           the court may make an order imposing on the convicted person a penalty, payable to the Securities Authority, of an amount not exceeding 3 times the amount of any profit gained or loss avoided by any person as a result of the insider dealing.

(3)      In addition to the penalty stated in subsection (2) an individual who is convicted of an offence under this section shall be –

(a)            liable to compensate any person for any direct loss incurred by that person as a result of the insider dealing unless the other person was a party to the insider dealing;

(b)           accountable to the company for any direct benefit or advantage received or receivable as a result of the insider dealing.

(4)      No contract shall be void or unenforceable by reason only of an offence under this section.

96.   (1)      A person commits an offence if that person, in Seychelles or elsewhere, creates, or does anything that is intended or the person knows is likely to create, a false or misleading appearance –

(a)            of active trading in securities on a licensed securities exchange; or

(b)           in the price of securities traded on a licensed securities exchange.

(2)      Without limiting the general nature of what constitutes a false or misleading appearance of active trading under subsection (1), a false or misleading appearance of active trading insecurities is created for the purpose of this section if a person –

(a)            carries out, either  directly or indirectly, a sale or purchase of  securities that does not involve a change in the beneficial ownership  of  them, or offers to  do so;

(b)           offers to sell securities at a price that is substantially the same as the price at which that person has made or proposes to make, or knows that an associate of his has made or proposes to make, an offer to buy the same or substantially the same number of them; or

(c)      offers to buy the securities at a price that is substantially the same as the price at which that person has made or proposes to make, or knows that an associate of his has made or proposes to make, an offer to sell the same or substantially the same number of them.

97.  A person commits an offence if that person maintains, increases, reduces, or causes fluctuations in, the market price of securities by means of purchases or sales that do not involve a change in the beneficial ownership of those securities or by fictitious transactions or devices.

98.   A person commits an offence if that person enters into or carries out, whether in Seychellesor elsewhere, either directly or indirectly, a transaction in securities that either directly or indirectly, by itself or in conjunction with another transaction –

(a)            increases, or is likely to increase, their market price with the intention of inducing other persons to sell or to purchase, or to refrain from selling or purchasing, securities issued by the same company or a related company;

(b)           reduces, or is likely to reduce, their market price with the intention of inducing other persons to sell or purchase, or to refrain from selling or purchasing, securities issued by the same company or a related company;

(c)            stabilizes, or is likely to stabilize, their market price with the intention of inducing other persons to sell or purchase, or refrain from selling or purchasing, securities by the same company or by a related company.

99.   A person commits an offence if that person induces or attempts to induce another person to deal in securities –

(a)            by making or publishing any statement, promise or forecast that that person knows to be misleading, false or deceptive;

(b)           by any dishonest concealment of material facts; or

(c)            by recklessly making or publishing any statement, promise or forecast that is false or misleading.

100.A person commits an offence if that person, directly or indirectly, in connection with any transaction with any other person involving the purchase, sale or exchange of securities –

(a)      employs any device, scheme or artifice to defraud that other person; or

(b)      engages in any act, practice or course of business which operates as a fraud or deception, or is likely to operate as a fraud or  deception, on that other person.

101.A person commits an offence if that person, directly or indirectly, for the purpose  of inducing the sale or purchase of the securities by any other person of any company, or to raise, lower or stabilize the market price of that company's securities, makes with respect to those securities, or with respect to the operations orthe past, or future performance of the company –

(a)            any statement which is, at the time and in  light of the circumstances in which it is made, false or misleading with respect to any material fact and which that person knows or has reasonable grounds to believe to be false or misleading; or

(b)      any statement which is, by reason of the omission  of  a material fact, rendered false or misleading, and which that person knows  or has reasonable grounds to believe is rendered false or misleading by reason of omission of that fact.

l02. A person who commits an offence under section 96, 97, 98,99,100 or 101 is liable on summary conviction –

(a)            in the case of an individual to a fine of US$100,000 or the equivalent in Seychelles rupees or to imprisonment for three years or to both;

(b)           in the case of a company, to a fine of US$200,000 or the equivalent in Seychelles rupees.

l03.  (1)      A person who is convicted of an offence under section 96, 97, 98, 99, 100 or 101 shall, in addition to criminal liability for the offence, be liable, at the suit of any person who has sustained pecuniary loss as a result of having purchased or sold securities at a price affected by the act or transaction which comprises or is the subject of the offence, to an action for damages in respect of the loss concerned.

(2)    Nothing in subsection (1) limits or diminishes any civil liability which any person may incur under any other law.

PART II – DISCLOSURE OF SHAREHOLDINGS OF

DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

104.           In this Part –

"associated person” shall be construed in accordance with section 84(2);

“director” includes –

(a)            a person occupying the position of a director (by whatever name called); and

(b)           a person in accordance with whose directions or instructions, not being advice given in a professional capacity, the directors are accustomed to act;

“interest in securities” shall be construed in accordance with section 84;

“securities” means securities which are listed on a Seychelles Securities Exchange;

“substantial shareholder”, in relation to an issuer, means a person who has an interest in shares of the issuer –

(a)            the stated value of which is more than 10% of the issued share capital of the issuer; or

(b)           which entitles the person to exercise or control the exercise of more than 10% of the voting power at a general meeting of the issuer.

105.Where, on the commencement of this Act, a director or substantial shareholder of an issuer is interested in securities of that issuer or another issuer that is an associated person, he shall notify the issuer within 14 days in writing of his interest in such securities giving particulars of the number of securities of every class.

106.(1)      A director shall notify the issuer of which he is a director within 14 days of the occurrence of –

(a)            any event in consequence of which he becomes or ceases to be interested in securities of the issuer or of an associated person;

(b)           the entering into by him of a contract to buy or sell any such securities;

(c)            the  assignment  by him of a right granted to him or to any member of his family by the issuer to subscribe  for securities  of the issuer;

(d)           the grant to him by an associated company of the issuer to subscribe for securities of that associated person, that exercise or the assignment of such a right, stating the number or amount and class of securities involved.

(2)      Where a director is granted the right to subscribe for the securities of a company under subsection (1)(d), the director shall notify the issuer of –

(a)            The date on which the right is granted;

(b)           The period  during which or the time at which the right is exercisable;

(c)      the consideration for the grant; and

(d)      in the case of the exercise of the right, the  number of securities in respect of which it is exercised, and the name in which such securities are registered.

107.(1)      Any person who –

(a)            not previously being a shareholder of an issuer, acquires an interest in shares so as to become a substantial shareholder of that issuer;

(b)           being a shareholder of an issuer, acquires an interest in further shares so as to become a substantial shareholder;

(c)            being a substantial shareholder of an issuer –

(i)                   acquires an interest in additional shares of the issuer;

(ii)           reduces his number of shares of the issuer but remains a substantial shareholder; or

(iii)         ceases to be a substantial share-holder of the issuer,

shall notify the issuer in writing of the occurrence of the event resulting in his change of interest within fourteen days of the date on which it occurred, and the number of shares in which he has become interested or ceased to be interested.

108.(1)      For the purposes of section 105, 106 and 107, an interest in securities of the spouse and minor child (such child not being a director) of a director or substantial shareholder of an issuer shall be treated as being the director’s or substantial shareholder’s interest, as the case may be.

(2)      In this section “child” includes a step-child, an adopted child and a child born out of wedlock.

109.(1)      An issuer shall keep, in the form and manner specified by the Securities Authority, a register of directors’ and substantial shareholders’ interests.

(2)      The register shall be held at the issuer’s registered office and shall, during usual office hours, be open to inspection free of charge to members of the public.

(3)      The register shall be produced at the commencement of the issuer’s annual general meeting and be kept open and available throughout the meeting to any person attending.

110.(1)      Where an issuer is notified by a director or substantial shareholder of any matter relating to securities of which the issuer is required to give notice under this Part, or enters in its register any matter relating to securities required to be entered under this Part, the issuer shall inform the securities exchange on which the securities of the issuer are listed, and the Securities Authority, before the end of the day following the day of the notification or entry, as the case may be.

(2)      The securities exchange or the Securities Authority may publish, in such manner as it may determine, any information it receives under this section.

111.           A person who contravenes any provision of this Part, or who –

(a)            makes a  statement which that person knows to be false;

(b)           recklessly makes a statement which is false; or

(c)            fails to supply any particulars which that person is required to supply,

commits an offence.

PART 12 – INFORMATION, INSPECTION AND

INVESTIGATION

112.(1)      The Securities Authority may, by notice in writing, require a licensee to furnish it with such information as it may reasonably require for the exercise of its functions within such reasonable time and verified in such manner as it may specify.

(2)      The duty to supply information under this section applies notwithstanding any other enactment or rule of law in Seychelles.

113.(1)      The Securities Authority, a securities exchange, a clearing agency and any other body which exercises a regulatory function over any person involved in securities business or operations shall have the right to supply each other with information about their securities business and –

(a)            in the case of a securities exchange, information on the securities business of any of its members; and

(b)           in the case of a clearing agency, informa-tion on the securities business of any of its participants.

(2)      The Securities Authority  may by written notice require a securities exchange or clearing agency to supply it with the information the Securities Authority reasonably requires for the performance of its functions under this Act, including information in the possession, or under the control, of a securities exchange or clearing agency relating to –

(a)            in the case of a securities exchange the securities business of any of its members; and

(b)           in the case of a clearing agency, the securities business of any of its partici-pants.

(3)      The right to exchange and the duty to supply information under this section apply notwithstanding any other enactment of law in Seychelles.

114.(l)       The Securities  Authority or a person authorized in writing by the Securities Authority for the purpose of this section may require –

(a)            a person registered as the holder of securities;

(b)           a person whom the Securities Authority or the person authorized has reasonable grounds to believe –

(i)                   holds securities;

(ii)           has a beneficial interest in securities;

(iii)         has acquired or disposed of securities directly or through a nominee, trustee or agent, and whether as beneficial owner, nominee, trustee, agent or otherwise;

(c)      A Licensee,

to disclose to the Securities Authority or the person authorised by the Securities Authority the information  referred to in subsection (2) in relation to an acquisition, disposal or holding  of securities.

(2)      The information that may be required under subsection (1) is –

(a)            the  name, address, telephone number and occupation of the person, or other particulars that are capable of establishing the identity of the person, from, to or through whom, or on whose behalf, the securities were acquired, disposed of or were or are held;

(b)           the quantity of securities so required, disposed of or held; and

(c)            the instructions given to or by the person referred to in (a) in relation to the securities.

(3)      A person commits an offence if that person –

(a)            without  reasonable excuse fails to disclose to the Securities Authority or the authorized person information required to be disclosed under this section and which is in his possession or under his control; or

(b)           furnishes to the Securities Authority or the authorized person in purported compliance with the requirement of disclosure under this section information which the person knows to be false or misleading in a material particular, where the Securities Authority or an authorized person requires information under subsection (1).

115.(1)      For the purpose of ascertaining whether a person who is, or at any time has been, a licensee is complying or has complied with any provision of a requirement under this Act, regulations made under this Act or the terms and conditions of his licence, the Securities Authority may inspect any document or other record or property relating to the business to which the licence applies.

(2)      The Securities Authority may appoint any person (hereinafter referred to as the “authorized person”) to exercise the powers of the Securities Authority under this section.

(3)      In the exercise of his powers under this section, an authorized person may –

(a)            enter the licensee’s premises or any other place where the licensee has records and documents or other property;

(b)      require the licensee, or any other person whom he reasonably believes is in possession of or has under his control any record or other document referred to in subsection (1), to produce it to him;

(c)      inspect and make copies, or take extracts from, and where necessary in an appropriate case take possession of such records or other documents.

(4)      For the purpose of an inspection under this section, the licensee or other person mentioned in subsection (3) shall afford an authorized person access to the records or other documents as may be reasonably required for the inspection, and shall produce to the authorized person such records or other documents as he may reasonably require.

(5)      Any person who, without reasonable excuse, contravenes subsection (4) commits an offence.

116.(1)      Where  the Securities Authority has reasonable grounds to believe that –

(a)            an offence under this Act or regulations made under this Act has been committed; or

(b)           a person may have committed a breach of trust, fraud or misconduct –

(i)             I     n dealing in securities;

(ii)           in the management of investment in securities; or

(iii)         in giving advice as regards the acquisition, disposal, purchase or sale, or otherwise investing in, and security; or

(c)      the manner in which a person has engaged or is engaging in any of the activities referred to in paragraph (b) is not in the interest of the investing public or the public interest,

the Securities Authority may in writing appoint a person (hereinafter referred to as “the investigator”) to investigate any matter referred to in paragraphs (a) to (c) and to report the results of the investigation to the Securities Authority.

(2)      Any person who is reasonably believed or suspected by the investigator to have in his possession or under his control any record or other document which contains, or which is likely to contain, information relevant to an investigation under this section, or who is so believed or suspected of otherwise having such information in his possession or under his control, shall –

(a)            produce to the investigator, with such time and at such place as he may reasonably require, any document specified by the investigator which is, or may be, relevant to the investigation, and which is  in his possession or under his control;

(b)      if so required by the investigator, give to him such explanation or further particulars in respect of a document produced in compliance with a requirement under paragraph (a) as the investigator shall specify; and

(c)      attend before the investigator at such time and place as the investigator may reasonably require in writing, and answer truthfully and to the best of his ability under oath, which oath the investigator is hereby empowered to administer, such questions relating to the matters under investigation as the investigator may put to him.

(3)      A person commits an offence if, without reasonable cause, that person –

(a)      fails to produce a record or other document which that person is required to produce under subsection (2)(a);

(b)      fails to give an explanation or particulars required under subsection (2)(b);

(c)      fails to comply with a requirement under subsection (2)(c) to attend before the investigator; or

(d)      fails to answer a question put to him by the investigator under subsection (2)(c), or in answering the question says anything which that person knows to be false or misleading in a material particular or who in so answering recklessly makes a false statement.

117.(1)      Where it appears to the Securities Authority that there are circumstances suggesting that –

(a)      the business of a company, which is or was at the relevant time listed, has been or is being conducted with intent to defraud its creditors, or the creditors of another person;

(b)      a company was formed for a fraudulent or unlawful purpose;

(c)      the persons concerned with the formation of a company or the management of its affairs have in relation to the formation or management been guilty of fraud, misfeasance or other misconduct towards it or its members; or

(d)      the members of a company have not been given all the information with respect to its affairs that they might reasonably expect, the Securities Authority may give directions to –

(i)                   the company;

(ii)           a subsidiary of the company;

(iii)         a company that is substantially under the control of the same person as is the company,

requiring it, at the time and place specified in the directions to produce the records and documents specified in the directions.

(2)      The Securities Authority may, when acting under subsection (1), authorize a person, on producing evidence of his authority, to require a company referred to in subsection (1) to produce to him records and documents specified by him.

(3)      Where the Securities Authority or authorized person require production of records and documents from a company under this section, the Securities Authority or authorized person may also require production of those records and documents from a person who appears to the Securities Authority or authorized person to be in possession of them.

(4)      A power under this section to require a company or other person to produce records and documents includes the power –

(a)            if the records and documents are produced –

(i)                   to take copies of them or extracts from them; and

(ii)           to require that person, or any other person who is a present or past officer of the company, or is or was at any time employed by the company, to provide an explanation of any of the records or documents; or

(b)           if the records and documents are not produced, to require the person who was required to produce them to state, to the best of his knowledge and belief, where they are.

(5)      If a requirement to produce records or provide an explanation or make a statement which is imposed under this section is not complied with, the company or other person on whom the requirement was so imposed commits an offence.

118.(1)      If it appears to the Securities Authority from any information, record or other document obtained under this Part, that the affairs of a listed company are being or have been conducted in a manner unfairly prejudicial to the interest of its members generally or of some part of the members, the Securities Authority may make an application to the Supreme Court for an order under this section.

(2)      If on an application under this section the Supreme Court is of the opinion that the company’s affairs are being or have been conducted in a manner unfairly prejudicial to the interests of its members generally or of some part of the members, whether or not the conduct consists of an isolated act or a series of acts, the Supreme Court may, with a view to bringing to an end the matters complained of –

(a)            make an order restraining the carrying out of the act or conduct;

(b)           order that the company shall bring in its name the proceedings the Supreme Court thinks fit against the persons, on the terms, the Supreme Court orders;

(c)            appoint a receiver or manager of the whole or a part of the company’s property or business and may specify the powers and duties of the receiver or manager and fix his remuneration;

(d)           make any other order it thinks fit, whether for regulating the conduct of the company’s affairs in future, or for the purpose of the shares of any members of the company by other members of the company or by the company and, in the case of a purchase by the company, for the reduction accordingly of the company’s capital, or otherwise.

(3)      Where an order under this section makes an alteration in or an addition to the constitution of a company, the company shall not have power without the leave of the Supreme Court to make any further alteration in or addition to the constitution inconsistent with the order.

119.          A person who destroys, falsifies, conceals or disposes of, or causes or permits the destruction, falsification, concealment or disposal of, any document which he knows or ought to know is relevant to an inspection made under section 115 or an investigation under section 116, commits an offence and is liable on summary conviction –

(a)            in the case of an individual, to a fine of US$50,000 or  the equivalent in Seychelles rupees or to imprisonment for one year or to both;

(b)      in the case of a company, to a fine of U$$100,000 or the equivalent in Sey-chel1es rupees .

120.(1)      The Securities Authority may establish a Disciplinary Committee and the composition of that committee shall be as prescribed.

(2)      The Disciplinary Committee  may, where it is satisfied after due enquiry that a licensee is in contravention of the provisions of this Act or any regulations made under this Act, exercise in relation to that licensee any one or more of the following sanctions as it deems appropriate in the circumstances?

(a)            issue a private warning or reprimand;­

(b)           issue a notice of public censure;

(c)      issue an order requiring the licensee to cease and desist from the activity or non-activity causing the licensee to be in contravention;

(d)      issue an order debarring the licensee from carrying on securities business whilst the contravention subsists;

(e)            impose a fine in such amount as may be prescribed.

121.A licensee who contravenes any provision of this Act, or any regulation made under this Act, is liable to disciplinary proceedings irrespective of any other action, whether criminal or civil, that may be taken against him by any person in respect of the same conduct.

PART13  – TAKEOVERS

122.(1)      This Part shall only apply to listed companies.

(2)      In this Part "takeover offer” means an offer to acquire, by or on behalf of a company or individual (hereinafter referred to as “the offeror”) –

(a)            all the shares, or all the shares of  any class, in a company (hereinafter  referred to as ''the offeree company”)  other than shares which at the date of the offer are already held by the offeror; or

(b)           such shares in the offeree company which will result in the offeror acquiring effective control of the offeree company.

(3)      For the purposes of subsection (2), “acquiring effective control" means the acquiring of shares in an offeree company which together with shares, if any, already held by the offeror or by any other person that is deemed by virtue of section 123  to be related to the offeror, carry the  right to exercise, or control the exercise of, more than 50% of the rights attached to the voting shares of the offeree company.

123.Where a company –

(a)            is the holding company of another company;

(b)            is the subsidiary of another company; or

(c)      is a subsidiary of the holding company of another company,

that first-mentioned company and that other company shall for the purposes of this Part be deemed to be related to  each other.

l24.  (1)      The Minister may, on the recommendation of the Securities Authority, make regulations with respect to the making and conduct of takeover offers.

(2)      Where the Minister has made regulations under subsection (1), no person shall make or pursue a takeover offer except in accordance with such regulations.

PART 14– MISCELLANEOUS

125.           Any decision of the Securities Authority may be challenged by judicial review before the Supreme Court, including a decision –

(a)            to suspend any licence under this Act;

(b)           to revoke any licence under this Act;

(c)            to refuse to grant or renew any licence under this Act.

126.          The Securities Authority, members, officers and employees of the Securities Authority shall not be liable to any action in damages for anything done or omitted to be done in the exercise or performance of any power or duty conferred or imposed by or under this Act.

l27.  (1)      A person who commits an offence under section 20(3), 41(3), 57(5), 59(2), 62(2), 70(5), 75(2), 74(4), 80(4), 82(2), 11, 114(3), 115(5), 116(3) or 117(5) is liable on summary conviction –

(a)            in the case of an individual, to a fine of US$50,000 or the equivalent in Seychelles rupees, or to imprisonment for one year or to both;

(b)           in the case of a company, to a fine of US$100,000 or the equivalent in Seychelles rupees, and if the offence is a continuing offence, the individual or company is liable to a further fine not exceeding US$250 or the equivalent in Seychelles rupees, for failing to supply any particulars which that person is required to supply, for every day that the offence continues after conviction.

(2)      A person who contravenes or fails to comply with any other provision of this Act, where the provision does not expressly create an offence or provide for a penalty, commits an offence and is liable on summary conviction –

(a)            in the case of an individual, to a fine of US$50,000 or the equivalent in Seychelles rupees;

(b)           in the case of a company, to a fine of US$100,000 or the equivalent in Seychelles rupees.

128.(1)      Subject  to subsection (2), the laws specified in column 1 of Schedule 3 shall to the extent specified in column 2 of Schedule 3 not apply to licensed securities exchanges, clearing agencies, securities facilities, securities dealers, representatives of securities dealers and investment advisors.

(2)      An exempt overseas securities dealer shall be exempt from –

(a)            taxation under the Business Tax Act on its Seychelles sources income and from withholding taxes under Part IV of the Business Tax Act;

(b)           the Goods and Services Tax Act on fees charged by it as an exempt overseas securities dealer; and

(c)            the Stamp Duty Act in relation to any dealings  in  securities  it  has  in Seychelles, provided that an exempt overseas securities dealer shall by virtue of this Act not be exempt from stamp duty in respect of transfers or other dealings in immovable property.

(3)      The exemptions and concessions granted under subsections (1), (2) and by Schedule 3 shall remain in force and be irrevocable for a period of 20 years from the date of commencement of this Act, and shall automatically continue in force thereafter unless or until specifically repealed or altered by  a written law.

129.(1)      Where, on the application of the Securities Authority, it appears to the Supreme Court that a person has contravened this Act or the conditions of any licence, or is about to do an act with respect to dealing in securities that, if done, would be such a contravention, the Supreme Court may, without prejudice to any order it would be entitled to make otherwise than pursuant to this section, make one or more of the following orders –

(a)      an order restraining a person from acquiring, disposing of, or otherwise dea1ing with any securities specified in the order;

(b)      in relation to a securities dealer or investment advisor, an order appointing a person to administer its property;

(c)      an order declaring the contract, if any, relating to any securities to be void or voidable;

(d)      for the purpose of securing compliance with any other order under this section, an order directing a person to do or refrain from doing a specified act; or

(e)      any ancillary order which it considers necessary in consequence of the making of any other order under this section.

(2)      The Supreme Court shall, before making an order under this section, satisfy itself, so far as it reasonably can, that the order would not unfairly operate to the detriment of any other person.

(3)      The Supreme Court may, before making an order under subsection (1), direct that notice of the application be given to such persons as it thinks fit or direct that notice of the application be published in such manner as it thinks fit, or both.

(4)      The Supreme Court may reverse, vary, or discharge an order made by it under this section or suspend the operation of such an order.

130.Without prejudice to any other provision of this Act, a contravention of this Act or regulation made under this Act shall be actionable at the suit of a person who suffers pecuniary loss as a result of the contravention.

131.          If, in the case of a company licensed under this Act, it appears to the Securities Authority that it is necessary for the protection of investors that the company should be wound up under the Companies Act, the Securities Authority may present a petition for it to be wound up under that Act on the ground that it is just and equitable that it should be wound up.

132.          If it appears to the Securities Authority that it is necessary for the protection of investors to do so, the Securities Authority may present a petition for a receiving order in accordance with the Bankruptcy and Insolvency Act against an individual licensed under this Act if the individual has committed an act of insolvency within the meaning of that Act, and that Act shall, with any necessary modifications, apply in relation to any such petition as it applies in relation to a petition presented by a creditor.

133.(1)      Without limitation to specific provisions in this Act enabling the Minister to make regulations, the Minister may make regulations, on the recommendation of the Securities Authority, for or with respect to –

(a)            applications for licences, the issue of licences and incidental matters;

(b)           the display of licences and the issue of duplicate licences;

(c)            the qualifications, experience and training required of licensees, the examinations that applicants for licences may be required to take, and the circumstances in which they may be excused from such requirements;

(d)           the making of annual or other regular returns to the Securities Authority by licensees;

(e)            the conditions subject to which securities may be listed and the circumstances in which dealings in listed securities shall be suspended;

(f)            insider dealings and market manipulations;

(g)            the particulars to be recorded in relation to accounts to be kept for the purposes of this Act, and the particulars to be recorded in profit and loss accounts and balance sheets;

(h)           the information to be contained in auditors’ reports required to be filed under this Act; 

(i)             the form and content of advertisements relating to securities business, and restrict who may issue such advertisements;

(j)             the licensing and supervision of clearing agencies and persons providing securities facilities;

(k)           any matter which this Act provides is to be, or may be, prescribed;

(l)             the better carrying out of the purposes and provisions of this Act.

(2)      The regulations may provide that a contravention of  any specified provision shall be an offence and may provide financial penalties not exceeding –

(a)            in the case of an individual, US$100,000 or the equivalent in Seychelles rupees;

(b)           in the case of case of a company, US$200,000 or the equivalent in Seychelles rupees and if the offence is a continuing offence, the individual or company is liable to a further fine of  US$500 or the equivalent in Seychelles rupees for every day that the offence continues after conviction.

(3)      The regulations may be of general or special application and may make different provision for different cases or classes of cases

(4)      Regulations, whether made under this or any other section, may provide for the exercise of discretion in particular cases.

134.           The Securities Authority may make rules for procedural and implementation matters –

(a)            where the Act or regulations provide that they are to be, or may be, prescribed by the Securities Authority;

(b)      for the better carrying out of the purposes and provisions of this Act and any regulations made under this Act.

135.The Securities Authority may issue such guidance notes, bulletins, advice or other regulatory statements as it may consider necessary or desirable for the administration of this Act.

136.(1)      Subject  to subsection (2), neither the Securities Authority nor any agent of the Securities Authority shall disclose to any third party any information or documents acquired in the performance of its duties under this Act,  including in respect of any licensees.

(2)      Subsection (1) shall not apply to any disclosure –

(a)            lawfully required by any court of competent jurisdiction in Seychelles;

(b)           in respect of the affairs of any licensee or other person, with the consent of such person, as the case may be, which consent has been voluntarily given;

(c)            where the information disclosed is in statistical form or is otherwise disclosed in such a manner that does not enable the identity of any licensee or other person to which the information relates to be ascertained; or

(d)           pursuant to any lawful disclosure required under the Mutual Assistance in Criminal Matters Act or the Anti-Money Laundering Act 2006 or the Prevention  of  Terrorism Act 2004 or any other Seychelles law.

137.(1)      Upon the commencement of this Act, the Securities Industry Act 1995 is hereby repealed.

(2)      Notwithstanding subsection (1) any subsidiary legislation made under the repealed Act shall continue to have effect until repealed or revoked by subsidiary legislation made under this Act.

(3)      To the extent of any inconsistency with this Act, this Act shall prevail over the Companies Act, the Bankruptcy and Insolvency Act and the Acts specified in Column 1 of Schedule 3.

________________________________

SCHEDULE 1

(Section 2(1))

SECURITIES

1.     Any of the following securities –

(a)            shares and stock of any kind in the share capital of a company in Seychelles or elsewhere;

(b)           shares or other units of participation in a mutual fund as defined in the Mutual Fund and Hedge Fund Act.

2.     Debentures, debenture stock, loan stock, bonds, certificates of deposit and any other instruments creating or acknowledging indebtedness other than –

(a)            any instrument acknowledging or creating indebtedness for, or for money borrowed to defray, the consideration payable under a contract for the supply of goods or services;

(b)           a check or other bill of exchange, a bankers draft or a letter of credit;

(c)            a bank note, a statement showing a balance in a current, deposit or savings account, a lease or other disposition of property;

(d)           a contract of insurance;

(e)            any instrument creating or acknowledging indebtedness in respect of money raised by the Government of Seychelles or any public authority created thereby; and

(f)            an instrument creating or acknowledging indebtedness and creating security for that indebtedness over land.

3.          Warrants and other instruments entitling the holder to subscribe for securities falling within paragraph 1 or 2.

4.          Certificates or other instruments which confer contractual or proprietary rights –

(a)            in respect of any security falling within paragraph 1, 2 or 3 being a security held by a  person other than the person on whom the rights are conferred by the certificate or instrument; and

(b)           the transfer of which may be effected without the consent of that person.

5.     Options to acquire or dispose of –

(a)            a security falling in any other paragraph of this Schedule;

(b)           any currency;

(c)            any precious metal; or

(d)           an option to acquire or dispose of a security falling within this paragraph by virtue of subparagraph (a), (b) or (c ) of this paragraph.

FUTURES

6.     Rights under a contract for the disposal of a commodity or property of any other description under which delivery is to be made at a future date and at a price agreed upon when the contract is made other than a contract made for commercial and not investment purposes.

(a)            A contract is to be regarded as made for investment purposes if it is made or traded on a Seychelles Securities Exchange or recognized overseas securities exchange or made otherwise than on a Seychelles Securities Exchange or recognized overseas securities exchange but is expressed to be as traded on  such an exchange or on the same terms as those on which an equivalent contract would be made on such an exchange.

(b)           A contract not falling within paragraph 7 is to be regarded as made for commercial purposes if under the terms of the contract delivery is to be made within seven days.

(c)            The following are indications that a contract not falling within paragraph 7 or 8 is made for commercial purposes and the absence of them is an indication that it is made for investment purposes –

(i)             one or more of the parties is a producer of  the  commodity  or other property or uses it in his business; or

(ii)           the seller delivers or intends to deliver the property or the purchaser takes or intends to take delivery of it.

(d)           It is an indication that a contract is made for commercial purposes that the prices, the lot, the delivery date or other terms are determined by the parties for the purposes of the particular contract and not by reference (or not solely by reference) to regularly published prices, to standard lots or delivery dates or to standard terms.

(e)            The following are indications that a contract is made for investment purposes –

(i)             it is expressed to be as traded on a securities exchange;

(ii)           Performance of the contract is ensured by a securities exchange or a clearing house; or

(iii)         There are arrangements for the payment or provision of margin.

7.     For the purposes of paragraph 6, a price is to be taken to be agreed on when a contract is made –

 

(a)            notwithstanding that it is left to be determined by reference to the price at which a contract is to be entered into on a market or exchange or could be entered into at a time and place specified in the contract; or

(b)           in a case where the contract is expressed to be  by  reference to a standard lot and quality,

notwithstanding that provision is made for a variation of the price to take account of any variation in quantity or quality on delivery.

CONTRACTS FOR DIFFERENCES

8.     Rights under –

(a)            a contract for differences; or

(b)      any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in –

(i)             the value or price of property of any description; or

(ii)           an index or other factor designated for that purpose in that contract other than- 

(A)          Rights under a contract if the parties intend that the profit is to be secured or the loss is to be avoided by one or more of the parties taking delivery of any property to which the contract relates; or

(B)          Rights under a contract under which money is received by way of deposit on terms that any interest or other return to be paid on the sum deposited will be calculated by reference to fluctuations in an index or other factor.

______________

SCHEDULE 2

(Section 2(1))

RECOGNISED JURISDICTIONS

Austria

Australia

Belgium

Bahamas

Bahrain

Burmuda

British Virgin Islands

Canada

Cayman Islands

Cyprus      

Denmark

France

Germany

Gibraltar

Guernsey

Holland

Hong Kong

Isle of Man

Ireland

Japan

Jersey

Luxembourg

Malaysia (including Labuan)

Mauritius

New Zealand

Singapore

South Africa

Switzerland

United Arab Emirates

United Kingdom

United States of America

_______________

SCHEDULE 3

(Section 128)

EXEMPTIONS AND CONCESSIONS APPLICABLE TO LICENSED SECURITIES EXCHANGES, CLEARING AGENCIES, SECURITIES FACILITIES, SECURITIES DEALERS, INVESTMENT ADVISORS AND REPRESENTATIVES OF DEALERS AND INVESTMENT ADVISORS

Column 1                                 Column 2

Law                             extent  of exemption and  non-applicability

1            Business Tax Act        1.(a)     The  rate   of   tax  payable  by   a Licensee  shall  be  (one  and a  half  percent)  of  assessable (gross) income;

1.(b)     The  rates  of withholding tax

payable by a licensee under Part IV of the Business Tax Act shall be nil.

2      Immovable Property    2.         Section  4,  in  so  far  it

        (Transfer Restriction) Act        prohibits  a  non-

Seychellois from leasing im-movable property in Seychelles or entering into an agreement to lease im-movable property.

3      Social Security Act      3.         The   whole  Act   in   respect

of a licensee which has no staff in Seychelles.

In respect of a licensee which has staff in Seychelles, the licensee shall pay employer’s social security contribution at the fixed rate of 5% of each employee’s emoluments for the first 10 years of the licensee carrying on licensed business in Seychelles and at the fixed rate of 10% thereafter.

4      Stamp Duty Act           4.         The   following   shall   be

exempt from the payment of stamp duty:

(a)                All instruments evidencing a transfer or other transaction in respect of an equity interest or debt obligation in respect of a licensee;

(b)               All transfers of other property to or by a licensee;

(c)                All instruments constituting, evidencing or related to securities or transfer of or other dealings in listed companies or other listed securities;

(d)               All instruments constituting evidencing or related    to   loan    or   loan  security in respect of a licensee or a listed company:

Provided that the exemptions granted under this paragraph shall not include exemption from stamp duty in respect of transfers or other dealings in immovable property.

5       Trades Tax Act            5.         All furniture, stationery and equipment imported for the exclusive use in an office of a licensee and used only for the licensed activity shall be liable to trades tax at the rate of nil (0%).

6.     Goods and Services     6.(a)     All   furniture,    stationery   and

        Tax Act                                    equipment imported for the exclusive use in an office of a licensee and used only for the licensed activity shall be liable to a rate of nil (0%);

6.(b)      All fees charged by the licensee shall be exempted from taxation under the Goods and Services Tax Act.

7       Immigration Decree    7.         A  licensee  shall  be  entitled  to employ expatriate employees comprising up to 50% of its total number of Seychelles resident employees; and the gainful occupation permit fee in respect of expatriate employees shall be R375 per person per month.

8      Foreign Exchange Act  8.         The whole Act.

9      Companies Act 1972   9.         A licensee shall be

exempted from all fees in respect of any increase in its authorized share capital.

_______________

SCHEDULE 4

(section 45(8))

 

1.     A company within a group of companies carrying on securities business exclusively for one or more companies within the same group.

2.     A person participating in a joint enterprise (and where that  person is a company any other company which is part of the same group of companies as that person) with the person carrying on the business where the activities constituting such securities  business are to be carried on for the purposes of or in connection with that joint enterprise.

3.     The following persons –

(a)            a Seychelles Securities Exchange;

(b)           the Security Authority; or

(c)            the Government of Seychelles or any public authority created by it.

4.    In respect of dealings in the equity interests in a mutual fund – operators of mutual fund and any fund administrator licensed under the Mutual Fund and Hedge Fund Act 2007 or any exempt foreign administrator.

5.    A person dealing in securities only in the course of acting in any of the following capacities –

(a)            a director;

(b)           a partner;

(c)            a liquidator (including a provisional liqui-dator);

(d)           a trustee in bankruptcy;

(e)            a receiver of an estate or company; of

(f)            an executor or administrator of an estate; or

(g)            a trustee acting together with co-trustees in their capacity as such, or acting for a beneficiary under the trust, provided that in each case such person –

(i)      is not separately remunerated for any of the activities which constitute the carrying on of such investment business otherwise than as part of any remuneration such person receives for acting in that capacity; and

(ii)     does not hold himself out as carrying on securities business other than as a necessary or incidental part of performing functions in that capacity, or

(iii)    is acting on behalf of a company, partnership or trust that is otherwise licensed or exempted from licensing under this law.

6.    A person who carries on a business of dealing in securities only through the holder of a dealer’s licence for the person’s own account;

7.     A financial institution licensed to carry on business under the Financial Institutions Act if any dealing in securities by the financial institution is by way of –

(a)            making or offering to make with any person an agreement for or with a view to the underwriting of securities;

(b)           making an invitation to persons to subscribe for securities or to purchase securities on the first sale thereof;

(c)            issuing any document which is or is deemed to be a prospectus under this Act;

(d)           acquiring or disposing of securities only through  the holder of a dealer’s licence; or

(e)            such other way as the Securities Authority may from time to time decide.

8.     An investment advisor whose dealing in securities is solely incidental to carrying on the business of managing a portfolio of securities on behalf of a client.

________________

LAWS OF SEYCHELLES

CHAPTER 208

SECURITIES ACT

SUBSIDIARY LEGISLATION

S.I. 42 of 2008

SECTION 133

SECURITIES (CONDUCT OF BUSINESS) REGULATIONS

[14th July 2008]

 

ARRANGEMENT OF REGULATIONS

PART 1 – PRELIMINARY

1.          Citation and application

2.          Interpretation

3.          Contravention

PART 2 – CODE OF BUSINESS CONDUCT

4.          Independence

5.     Material interest

6.     Inducement

7.     Fair and clear communication

8.     Client’s understanding of risk

9.     Information about the licensee

10.   Representatives of licensee

11.  Client agreement

12.  Client’s rights

13.  Suitability

14.  Charges

15.  Confirmation and periodic information

16.   Client order

17.   Timely execution

18.    Best execution

19.  Timely allocation

20.   Fair allocation

21.    Front running

22.    Insider dealing

23.    Safeguarding of client investments

24.   Complaints

25.  Compliance

26.  Supervision

27.   Client confidentiality

28.   Cessation of business

PART 3 – CLIENT MONEY

29.   Application

30.   Client money

31.   Client bank accounts

32.   Accounting for and use of client money

33.   Payment out of client bank account

_____________

PART 1 – PRELIMINARY

1.     (1)      These regulations may be cited as the Securities (Conduct of Business) Regulations.

(2)      These regulations are of general application to all licensed securities business provided that, where a regulation applies only in particular circumstances, that regulation will apply to a licensee only if those circumstances are relevant to the type of the securities business undertaken by that licensee. 

2.    In these regulations –

“Act” means the Securities Act 2007;

"approved bank" means a bank licensed under the Financial Institutions Act or such other bank outside of Seychelles which is approved by the Authority for the purposes of these regulations;

 "Authority" means the Security Authority;

"client bank account" means a bank account established for the purposes of regulation 31; and

"money"  includes any form of money, whether represented by a cheque or other payable order, or otherwise;

3.     If a licensee contravenes any provision of these regulations the licensee commits a disciplinary offence under the Act.

PART 2 – CONDUCT OF BUSINESS

4.     If a licensee is advising or acting for a client the licensee shall-

(a)      not claim it is independent or  impartial if it is not; and

(b)      ensure that any claim it makes as to its independence or impartiality adequately includes any limitation that there may be on either.

5.     If a licensee has a material interest in a transaction to be entered into with or for a client, or a relationship which gives rise to a conflict of interest in relation to the transaction, the licensee shall not knowingly either advise, or deal in the exercise of discretion, in relation to that transaction unless the licensee has -­

(a)            fairly disclosed that material interest or relationship, as the case may be, to the client; or

(b)           taken reasonable steps to ensure that neither the material interest nor relationship adversely affect the interests of the client.

6.          A licensee must take reasonable steps to ensure that neither it nor any of its employees or agents either offers  or gives, or solicits or accepts, any inducement that is likely to conflict with any duties owed to its clients.

7.         (1)      A licensee may make a communication with another person that is designated to promote the provision of securities business services only if it can show that it believes on reasonable grounds that the communication is fair and not misleading.

(2)      A licensee shall take reasonable steps to ensure that any agreement, written communication, notification or information that it gives or sends to clients to whom it provides securities investment business services is presented fairly and clearly.

8.     A licensee shall not –

(a)            recommend a transaction  to a client, or effect a discretionary transaction with or for the client, unless it has taken reasonable steps to enable the client to understand the risks involved;

(b)           mislead a client as to any advantages or disadvantages of a contemplated transaction.

9.     A licensee must take reasonable steps to ensure that a client to whom it provides securities business services is given adequate information about its identity and business address and the identity and status within the licensee's firm of employees and other relevant representatives with whom the client has contact.

10.   (1)      A licensee shall satisfy itself on reasonable grounds and on a continuing basis that it has appointed a representative who is a fit and proper person to act for it in that capacity.

(2)      A licensee shall satisfy itself on reasonable grounds and on a continuing basis that it has adequate resources to monitor and enforce compliance by its representatives with high standards of business conduct.

11.   (1)      A licensee shall not provide to a client any business services relating to –

(a)          the discretionary management of  a portfolio; or

(b)         any other type of business that may be specified by the Authority,

except under a written agreement signed by the client and returned to the licensee.

(2)      The agreement shall set out in adequate detail the basis on which those services are provided.

(3)      The Authority may prescribe special procedures relating to the operation of discretionary accounts and every licensee shall follow the special procedures or ensure that they are followed.

(4)      A court of competent jurisdiction may, if it considers it just and equitable to do so, by order set aside or vary an agreement entered into in contravention of this regulation, but the order shall not affect any dealing or transaction entered into or carried out by the licensee on behalf of the client.

12.   (1)      A licensee shall not, in any written communication or agreement, seek to exclude or restrict –

(a)          any duty or liability to a client which it has under any law or under any rules made by the Authority;

(b)     any liability owed to a client for failure to exercise the degree of skill, care and diligence that may reasonably be expected of it in the provision of securities business services.

(2)      A purported exclusion or restriction prohibited by this regulation shall be void and of no effect.

13.   (1)      A licensee must take all reasonable steps to ensure that it does not give securities business advice to, nor effect a discretionary transaction with or for, a client unless that advice or transaction is suitable for the client having regard to the facts disclosed by that client and other relevant facts about the client of which the licensee is or ought reasonably to be aware.

(2)      A licensee must not recommend a security to a client unless the licensee has adequate current information in its possession to enable it to form a basis for the recommendation.

14.   (1)      A licensee's charges must not be unfair in their incidence or unreasonable in their amount having regard to all relevant circumstances.

(2)      A licensee must before it provides securities business services to a client disclose to the client -­

(a)     the basis or a amount of its charges for the provisions of those services; and 

(b)     the nature and amount or any other remuneration receivable by it and attributable to the client.

15.   (1)      When a licensee causes a sale or purchase of securities with or for a client, it must ensure that within twenty-four  hours  or  as  soon  as  practicably possible the client is sent a contract note containing the essential details of the transaction.

(2)      If a licensee acts as an investment manager for a client, it must ensure that the client is sent at suitable intervals -

(a)          a report stating the value of the portfolio or account at the beginning and the end of the period;

(b)     its composition at the end of the period; and

(c)     in the case of a discretionary portfolio of account, changes in its composition between the  beginning and the end of the period.

16.   A licensee shall deal with its client and own account orders fairly and in due turn.

17.   A licensee shall effect or arrange the execution of an order as soon as is reasonably practicable after it has agreed or decided in its discretion to effect or arrange a client order.

18.   A licensee must take reasonable steps to find and deal on the terms which are the best available to the client when dealing with or for a client.

19.   A licensee must ensure that a transaction it executes is promptly allocated.

20.   If a licensee aggregates an order for a client transaction with an order for an own account transaction, or with an order for another client transaction, then in the subsequent allocation – 

(a)            it shall not give unfair preference to itself or to any of those for whom  it dealt; and

(b)      where all orders cannot be satisfied,  it shall give priority to  satisfying orders for client transactions. 

21.  If a licensee intends to publish to clients a price-sensitive recommendation or research or analysis, it must not knowingly effect an own account transaction in the investment concerned or in any related investment until the clients for whom the publication was principally intended have had, or are likely to have had, a reasonable opportunity to react to it.

22.  A licensee shall not knowingly profit or seek to profit, either for its own account, the account of a client or any third party, from inside information in the hands of any of its officers, employeesor agents, or assist anyone with such information to make a profit for itself.

23.   A licensee who has custody of a client's securities in connection with or with a view to securities business shall–

(a)            keep safe, or arrange for the safekeeping of, any documents evidencing title, relating to them; and

(b)           ensure that any securities that it buys or holds for a client are properly registered in the client’s name or, with the consent of the client, in the name of an appropriate nominee.

24.   (1)      A licensee must have internal procedures to ensure the proper handling of complaints from clients and to ensure that any appropriate remedial action on those complaints is promptly taken.

(2)      A licensee shall maintain a client complaints file that contains copies of all client complaints.

25.   (1)      A licensee must disclose, in every transaction, whether it is dealing with a client in its capacity as an agent or on its own account.

(2)      A licensee and its clients shall have a fiduciary relationship and the licensee must treat and conduct its business in full observance of this obligation.

(3)      A licensee must, take reasonable steps, including the establishment and maintenance of procedures, to ensure that-

(a)          its officers, employees and other representatives, are aware of their obligations under the Act and its regulations, and that they act in conformity with them; and        

(b)         sufficient information is recorded and retained about its securities business in compliance with the Act and its regulations.

(4)      A licensee must keep and maintain all necessary books and records of its business including -­

(a)          client account statements;

(b)     records of transactions;

(c)     order tickets;

(d)     confirmations; and

(e)     stock ledgers,

for a period of not less than seven years, for inspection by any person duly authorized by the Authority.

26.   A licensee must establish and maintain procedures –­

(a)            for the supervision of each of its officers, employees and other representatives; and

(b)      for ensuring that the persons referred to in paragraph (a) do not give advice or provide services of a nature that is beyond their competence to give or to provide.

27.   (1)      Subject to sub-regulation (2), all information in the possession of a  licensee relating to a client must be kept confidential by it.

(2)      A licensee may disclose information relating to a client when properly required to do so by the Authority, a clearing house or the market supervision department of a securities market of which it is a member, or if it is ordered to do so by a court of competent jurisdiction or otherwise required by any other law, including the Anti-Money Laundering Act 2006.

28.   If a licensee withdraws from securities business it shall­–

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

(b)           ensure to the satisfaction of the Authority that any  outstanding business is properly completed or transferred to another licensee.

PART 3 – CLIENT MONEY

29.   This Part applies to any client money held or received by a licensee in the course of carrying on its securities business. 

30.   (1)      For the purposes of these regulations "client money" means money of any currency which, in the course of carrying on its securities business, a licensee holds or receives on behalf of a client which it owes to a client.

(2)      Client money shall be held by the licensee on trust for and on behalf of the respective clients for whom that client money is received or held according to their respective shares in it.

(3)      Client money shall not form part of the assets of the licensee for any purpose and shall not be available in any circumstances for payment of  any debt of the licensee.

31.   (1)      A licensee that receives or holds client money shall open one  or more client bank accounts with an approved bank.

(2)      A client bank account must be kept segregated from any account holding money belonging to the licensee.

(3)      A licensee must immediately pay into a client bank account all client money coming into its hands for or from a client.

(4)      A licensee must keep records of –

(a)          all amounts paid into a client bank account kept by the licensee, specifying the persons on whose behalf the amounts are held and the dates on which they were paid into the account;

(b)         all withdrawals from a client bank account, the dates of those withdrawals, and the names of the persons on whose behalf the withdrawals are made; and

(c)          any other particulars that may be determined by the Authority. 

32.  A licensee must account properly and promptly for client money and, in particular, must ensure that –

(a)     client money and other money do not become mixed;

(b)     the licensee can at all times be sure how much client money stands to the credit of each client; and 

(c)     money belonging to one client is not used for another client.

33.   (1)      Subject to sub-regulation (2), money may be withdrawn from a client bank account only if –

(a)          it is not client money;

(b)     it is properly required for payment to or on behalf of a client; or

(c)     it is properly transferred to another client bank account or into a bank account in the client's own name.

(2)      A licensee may withdraw money from a client bank account for or towards payment of its own fees or commission only if the fees or commission accord with the arrangements agreed with the client.

_____________

SECTION 133

 

S.I. 43 of 2008

SECURITIES (FORMS AND FEES) REGULATIONS

[14th July 2008]

 

ARRANGEMENT OF REGULATIONS

PART 1 – PRELIMINARY

1.          Citation

2.          Interpretation

PART 2 – LICENCES

3.          Applications and notices and other forms

4.          Directions

5.          Manner of application for licence

6.          Alteration of facts disclosed in applications

7.          Grant of licence

8.          General conditions

9.          Renewal of licence

10.      Replacement of licence

11.      Display of licence

12.      Change of employer

PART 3 – OTHER LICENCES AND FEES

13.      Securities exchange licence fee

14.      Proposed rule change fee

15.      Clearing agency licence fee

16.      Securities facility fee

17.      Advertisement filing fee

18.      Registration of corporate issuers fee

19.      Waiver of fees

SCHEDULE 1 – FORMS

SCHEDULE 2 – FEES

________________________________

PART 1 – PRELIMINARY

1.    These regulations may be cited as the Securities (Forms and Fees) Regulations.

2.     In these regulations –

"Act" means the Securities Act 2007;

"Authority" means the Securities Authority;

"financial year" means the calendar year ending on 31 December unless, in the case of a licensee, the Authority has approved in writing another financial year period;

"licence" in relation to Parts l and 2 of these regulations, means a licence issued under Part 5 of the  Act and "licensee" shall be construed accordingly.

PART 2 – LICENCES

3.     An application, notice or other form applicable under these regulations are as set out under Schedule 1.

4.     A form set out in Schedule 1 must be completed in accordance with any directions specified in the form.

5.     (1)      An application for a licence shall  be submitted to the  Authority in such form  as the Authority may provide for such purpose in accordance with the minimum content prescribed for such form in Schedule 1, together with such supporting documents or information as shall be required by the prescribed form and may otherwise be requested by the Authority.

(2)      The Authority may refuse to accept a licence application if it is not accompanied by the application fee set out in Schedule 2.

6.     An applicant for a licence shall forthwith give written notice to the Authority of –

(a)      any proposed alteration to, or

(b)      the occurrence of any event which the applicant knows affects or may affect in a material respect,

information supplied by the applicant to the Authority in relation to theapplication, being a proposal or event made or occurring while the application is pending a decision by the Authority.

7.     The Authority on approval of an application for a licence, shall grant a licence to the applicant on payment by the applicant of the licence fee as set out in Schedule 2.

8.     It shall be a condition of every licence that –

(a)      the licence shall be personal to the applicant and shall not be transferable;

(b)      the applicant shall forthwith give written notice to the Authority of -

(i)       any proposed alteration to, or

(ii)      the occurrence of any event which the applicant knows affects or may affect in any material respect,

any matter in respect of which the applicant was required to supply information to the Authority in the course of the application for that licence;

(c)      the consent of the Authority shall be obtained prior to -

(i)       the implementation of any alteration of the kind referred to in paragraph (b)(i);or

(ii)      the taking of action resulting from any event of the kind referred to in paragraph (b)(ii); and

(d)      a licensee only carries on the securities business permitted by the licence.

9.    On application for renewal of a licence, the Authority, if satisfied that the applicant has complied with the provisions of the Act and these regulations,  may grant the renewal on –

(a)      payment by the applicant of the annual licence fee set out in Schedule 2;

(b)      lodgment with the Authority of a compliance certificate by the licensee in the form specified in Form 10 in Schedule 1.

10.   If the Authority is satisfied that a licence has been lost, destroyed or defaced, the Authority may replace the licence on payment by the licensee of the applicable fee set out in Schedule 2.

11.   Every holder of a licence granted under the Act shall display the licence at its principal place of business.

12.   A representative shall not change the employer in relation to which the licence was issued unless a notice in accordance with Form 9 set out in Schedule 1 is lodged with the Authority.

PART 3 – OTHER LICENCES AND FEES

13.   (1)      A company applying to the Authority for a securities exchange licence under the Act shall pay the application fee set out in Schedule 2.

(2)      If the Authority is satisfied that the applicant has complied with the provisions of the Act it may grant a securities exchange licence on payment by the applicant of the licence fee set out in Schedule 2.

(3)      On application for renewal of a securities exchange licence the Authority may, if satisfied that the applicant has complied with the provisions of the Act, grant the renewal on payment by the applicant of the annual renewal licence fee set out in Schedule 2 and on lodgment with the Authority of a compliance certificate by the applicant in the form specified in Schedule 1.

14.  A securities exchange shall, on submission to the Authority of a draft proposed amendment to its rules in accordance with the provisions of the Act, pay the fee set out in Schedule 2.

15.   (1)      A person applying to the Authority for a clearing agency licence under the Act shall pay the application fee set out in Schedule 2.

(2)      If the Authority is satisfied that the applicant has complied with the provisions of the Act, it may grant a clearing agency licence on payment by the applicant of the licence fee set out in Schedule 2.

(3)      On application for renewal of a clearing licence the Authority may, if satisfied that the applicant has complied with the provisions of the Act, grant the renewal on payment by the applicant of the annual renewal licence fee set out in Schedule 2 and on lodgment with the Authority of a compliance certificate by the applicant in the form specified in Schedule 1.

16.   (1)      A person applying to the Authority for a securities facility licence under the Act shall pay the application fee set out in Schedule 2.

(2)      If the. Authority is satisfied that the applicant has complied with the provisions of the Act, it may grant a securities facility licence on payment by the applicant of the licence fee set out in Schedule 2.

(3)      On application for renewal of a securities facility licence the Authority may, if satisfied that the applicant has complied with the provisions of the Act, grant the renewal on payment by the applicant of the renewal licence fee set out in Schedule 2 and on lodgment with the Authority of a compliance certificate by the applicant in the form specified in Schedule 1.

17.   A licensee or authorised person shall when sending a copy of an advertisement to the Authority pursuant to the Act and its regulations, pay the advertisement filing fee set out in Schedule 2.

18.   (1)      An existing public company required to file a registration statement with the Authority under the provisions of the Act, shall pay the registration fee set out in Schedule 2.

(2)      A company which proposes to issue securities to the public and is required to file a registration statement with the Authority under the provisions of the Act, shall pay the registration fee set out in Schedule 2.

19.   (1)      If the Authority considers it appropriate in the exceptional circumstances of a particular case, the Authority may in its discretion waive payment of all or part of the fee which would otherwise be payable under these Regulations.

(2)      If it appears to the Authority that, owing to the exceptional circumstances of a particular case, the retention by the Authority of a fee which has been paid would be inequitable, the Authority may in its discretion refund all or part of the fee.

________________________________

SCHEDULE 1

  (regulation 3)

FORMS

FORM 1

APPLICATION FOR SECURITIES DEALER LICENCE

Notes:

(1)    If space is insufficient to provide details, please attach annexure, and the annexure should be identified as such and signed by the signatory to this application.

(2)    This application must be accompanied by -

(i)      if the applicant was not incorporated within the last 12 months, audited financial statements of the applicant for the last 2 years;

(ii)     the last audited financial statements of the controlling owners of the applicant;

(iii)    Personal Questionnaire (in the form issued by the Authority) completed by  each  director, shareholder and beneficial owner of the applicant company;

(iv)    Note – Personal Questionnaires (refer (iii) above) are not required if the Authority receives satisfactory proof that the applicant company or its controlling shareholder or beneficial owner is a member of or listed on a recognized overseas securities exchange.

______________

Part 1 - INFORMATION ON THE APPLICANT

1.     (a)      Name of applicant

(b)      Registered office

(c)      Place of incorporation

(d)      Full address and telephone number of the principal place at which the business of the applicant is to be carried on 

(e)      The authorized and paid-up capital of the applicant, including the types of shares issued

(f)      Details of shareholders of the applicant, including the name, address, amount of shares being held and date of acquisition

(g)      Address of place at which applicant’s register under section 79 of the Act will be kept

(h)      State the location of all premises at which records or other documents of the business for which the application is made are to be kept

(i)             Set out as an annexure to this application details of each director and senior officer showing the full name, residential address, date of birth, academic qualifications and experience, office held and date of appointment

(j)             Set out an annexture to this application, details of each (prospective) representative showing full name, date of birth, residential address, academic qualifications and expe-rience.

2.     State the nature of the principal business of the applicant.

3.     (a)     State in detail the activity and the manner in which the applicant proposes to conduct the business for which the applicant requires a licence (including details of the services which the applicant will hold itself out as being able to provide if the application is allowed.

(b)     The type of clients with whom the applicant proposes to do business

(c)     Describe the organizational structure and internal control procedures which the applicant has adopted or proposes to adopt for its proposed business

4.     Name and address of auditors or proposed auditors

5.     Name and address of lawyers or proposed lawyers

6.          Name and address of bankers or proposed bankers

7.     If the company is a subsidiary of another company, give the name, address, nature of business of parent company

8.     Give the name and address of subsidiaries, if any, of the company or any enterprise in which it has a shareholding or similar interest; give details and nature of business pursued

9.          Set out the name and address of each person who, directly or indirectly, exercises or has power to exercise a controlling influence over the management and policies of the applicant other than those shown as directors

(For questions 10 to 12, answer "Yes" or "No" in the space provided. If "yes", please provide full particulars below or by an annexure)

10.      Has the applicant or any director, other officer or representative of the applicant within the past 10 years –

(a)      been licensed or registered in any place under any law which requires licensing or registration in relation to securities business?

(b)      been refused the right or restricted in its or his right to carry on any securities-related business for which a specific licence, registration or other authority is required by law in any place?

(c)      been the subject of suspension,  cancellation or revocation of  its registration, licence or other authorization to carry on securities-related business by any authority in any jurisdiction?

(d)      been subject to regulatory or enforcement action by any authority in any jurisdiction?

(e)      been a member or partner in a member firm of any securities exchange?

(f)      been suspended from membership of any securities exchange or otherwise disciplined by a securities exchange? 

(g)      been refused membership of any securities exchange?

(h)      been known by any name other than the name or names shown in this application?

11.   Has any judgment or order or conviction been made or are any legal proceedings, actions or other claims pending against the applicant or any of its directors, whether civil or criminal in nature, involving alleged or proven:

(a)           fraud or dishonesty or theft or  misrepresentation or misappropriation or similar conduct?

(b)         fraud or dishonesty or theft or misrepresentation or misappropriation or similar conduct arising out of or relating to dealings in securities or securities or investment related business or activities?

12.   Has any director, other officer or representative of the applicant had any experience in performing the functions in relation to the proposed activity of the applicant referred to in question 3?

13.   Set out any additional information (including any formal qualifications or training and experience of the directors, other officers and representative of the applicant) considered relevant to this application.

14.   State the name, address and occupation of two persons (who must not be related to the applicant, and neither of whom has any interest in the success or otherwise of this application), with whom each director of the applicant has had regular contact over the past 4 years and of whom the Authority may enquire regarding their character and reputation. 

(a)     Name, address and occupation of character referee

(b)     Name of Director, other officer or representative in respect ofwhom enquiries may be made

PART 2 – DECLARATION

We declare that all information given in this application and in any annexures, and supporting documents or other information provided is complete and accurate to the best of our knowledge and belief.

 

Dated this ___________  day of ________

 

Signature ____________

Signed by or on behalf of the applicant:

Name:

Position/capacity:

Applicant:

 

Witness: ____________

Name:

Address:

Occupation:

 

FORM 2

APPLICATION BY AN INDIVIDUAL (NATURAL PERSON) FOR INVESTMENT ADVISOR LICENCE

Application for an investment advisor licence under the Act is made as follows–

Notes:

(1)       If space is sufficient to provide details, please attach annexure, and the annexures should be identified as such and signed by the signatory to this application.

(2)    This application must be accompanied by-

(a)     A detailed statement of the applicant’s assets and liabilities and shall be signed by the applicant; and

(b)     A Personal Questionaire (in the form issued by the Authority) completed by the applicant.

 

 

1.          Personal particulars of the applicant

(a)          Name of applicant

(b)     Full address and telephone number of the principal place at which the business of the applicant is or is to be carried on

(c)     Residential address

(d)     Address of place at which applicant’s register under section 79 of the Act will be kept

(e)     State the location of all premises at which records or other documents of the business for which the application is made are to be kept

2.          (a)     Indicate area of proposed business for which the applicant requires an investment advisor licence–

(i)           advises others concerning securities;

(ii)         issues or promulgates analyses or reports concerning securities;

(iii)       pursuant to a contract or arrangement with a customer, undertakes on behalf of the customer (whether on a discretionary authority granted by the customer or otherwise) the management of a portfolio of securities for the purpose of investment;

(iv)       Other (please specify).

(b)         For each indicated area of proposed business, state in detail the manner in which the business will be conducted and the experience of the applicant and the management staff in that business.

(c)          Describe the organizational structure and internal control procedures which the applicant has adopted or proposes to adopt in the conduct of the business.

3.          The type of customers with whom the applicant proposes to do business.

4.          Is the business of investment advisor the principal business carried on by the applicant? (Answer “Yes” or “No”. If “No”, give details of the applicant’s principal business.)

5.          Does the applicant have an interest in one or more shares in any company the shares of which are quoted on a securities exchange, the aggregate of the nominal amount of which constitutes not less than 10% of the aggregate of the nominal amount of all the issued shares of the company?

(Answer “Yes” or “No”. If “Yes”, give full details of the interest including names of the companies and percentage of interest.)

6.          Has the applicant within the past 10 years:

(a)          been licensed or registered in any place under any law which requires licensing or registration in relation to dealing in securities or acting as an investment advisor?

(b)         been  refused the right or restricted in its or his right to carry on any securities-related business for which a specific licence, registration or other authority is required by law in any place?

(c)          been the subject of suspension, cancellation or revocation of his registration, licence or other authorization to carry on securities-related business by any authority in any jurisdiction?

(d)         been subject to regulatory or enforcement action by any authority in any jurisdiction?

(e)          been a member or partner in a member firm of a securities exchange?

(f)          been suspended from membership of any securities exchange or otherwise disciplined by a securities exchange?

(g)          been refused membership of any securities exchange?

(h)         carried on business under any name other than the name or names shown in this application?

7.          Set out below details of the applicant's employment and business activities during the previous 10 years:

(a)          Name and address of employer (if self-employed, so state)

(b)     Nature of business

(c)     Description of duties in relation to the employment or activity

(d)     Period of employment or activity (give exact dates)

8.          State the name, address and occupation of two persons (who must not be related to the applicant, and neither of whom has any interest in the success or otherwise of this application) with whom the applicant has had regular contact over the past 4 years and of whom the Authority may enquire regarding the applicant’s character and reputation.

9.          Set out any additional information (including any formal qualifications or training and experience of the directors, other officers and representative of the applicant)considered relevant to this application.

I declare that all information given in this application and in any anexures and supporting documents or other information provided is complete and accurate to the best of my knowledge and belief.

 

Dated this __________ day of ____________

Signature _________________

Signed by the applicant:

Name:

Applicant:

 

Witness: ________________

Name:

Address:

Occupation:

 

FORM 3

APPLICATION BY A COMPANY FOR INVESTMENT ADVISOR LICENCE

Application for an investment advisor licence under the Act is made as follows?

Notes:

(1)       If space is, insufficient to provide details, where necessary, please attach annexure, and the annexure must be identified as such and signed by the signatory to this application.

(2)    This application must be accompanied by ?

(i)      if the applicant was not incorporated within the last 12 months, last audited financial statements of the applicant;

(ii)     the last audited financial statements of the controlling owners of the applicant;

(iii)    Personal Questionnaire (in the form issued by the Authority) completed by each director, shareholder and beneficial owner of the applicant company;

(iv)    Personal Questionnaires (refer (iii) above) are not required if the Authority receives satisfactory proof that the applicant company or its controlling shareholder or beneficial owner is a member of or listed on a recognized overseas securities exchange.

 

 

 

Part 1 - INFORMATION ON THE APPLICANT

1.          (a)      Name of applicant

(b)     Registered office

(c)     Place of incorporation

(d)     Full address and telephone number of the principal place at which the business of the applicant is or is to be carried on

(e)     The authorized and paid-up capital of the applicant, including the types of shares issued or to be issued

(f)          The details of shareholders of the applicant, including the name, address, amount of shares being held and date of acquisition

(g)          Address of place at which applicant’s register under section 79 of the Act will be kept

(h)         State the location of all premises at which records or other documents of the business for which the application is made are to be kept 

(i)           Set out as an annexure to this application details of each director and senior officer showing the full name, residential address, date of birth, academic qualifications and experience, office held and date of appointment

(j)           Set out, as an annexure to this application, details of each (prospective) representative showing  full  name, date of birth, residential address, academic qualifications and expe-rience

2.     State the nature of the principal business of the applicant

3.     (a)     indicate  areas  of  proposed  business  for  which the applicant requires an investment advisor licence –

(i)      advises others concerning securities,

(ii)     issues or promulgates analyses or reports   concerning securities,

(iii)    pursuant to a contract or arrangement with a customer, undertakes on behalf of the customer (whether on a discretionary authority granted by the customer or otherwise) the management of a portfolio of securities for the purpose of investment.

(iv)    Other (please specify).

(b)     For each indicated area of proposed business, state in detail the manner in which the business will be conducted and the experience of the applicant and its management staff in that business.

(c)     The type of customers with whom the applicant proposes to do business.

(d)     Describe the organizational structure and internal control procedures which the applicant has adopted or proposes to adopt in the conduct of the business.

4.     Name and address of auditors or proposed auditors

5.     Name and address of attorney-at-law or proposed attorneys-at-law

6.     Name and address of bankers or proposed bankers

7.          If the company is a subsidiary of another company give the name, address and nature of the parent company

8.          Give the name and address of subsidiaries, if any, of the company, or any enterprise in which it has a shareholding or similar interest, give details and nature of business pursued

9.     Set out the name and address of each person who directly or indirectly exercise  or has power to exercise a controlling influence over the management and policies ) of the applicant other than those shown as directors

(For questions 10 and 11 answer "Yes" or "No" in the space provided. If "Yes", please provide full particulars below by an annexure)

10.      Has the applicant or any director of the applicant within the past 10 years

(a)          been licensed or registered in any place under any law which requires licensing or registration in relation to dealing in securities or acting as an investment advisor?

(b)     been refused the right or restricted in its or his right to carry on any securities-related business for which a specific licence, registration or other authority is required by law in any place?

(c)     been the subject of suspension, cancellation or revocation of his registration licence, or other authorization to carry on securities-related business by any authority in any jurisdiction? 

(d)     been subject to regulatory or enforcement action by any authority in any jurisdiction?

(e)          been a member or partner in a member firm of a securities exchange?

(f)     been suspended from membership of any securities exchange or otherwise disciplined by a securities exchange?

(g)         been refused membership of any securities exchange?

(h)     carried on business under any name other than the name or names shown in this application?

11.      Has any judgment or order or conviction been made or are any legal proceedings, actions or other claims pending against the applicant or any of its directors, whether civil or criminal in nature, involving alleged or proven:

(a)     fraud or dishonesty or theft or misrepresentation or misappropriation or similar conduct?

(b)         fraud or dishonesty or theft or misrepresentation or misappropriation or similar conduct arising out of or relating to dealings in securities or securities or investment related business or activities?

12.      In relation to each director and staff management member of the applicant, set out below details of the, officers, employment and business activities, during the previous l0 years:

(a)          Name of Director or staff member

(b)         Name and address of employer (if self-employed, so state)

(c)          Nature of business

(d)         Description of duties in relation to the employment or activity

(e)          Periodofemployment or activity

13.      Set out any additional information (including any formal qualifications or training and experience of the directors, other officers and representatives of the applicant) considered relevant to this application:

14.      State the name, address and occupation of two persons (who must not be related to the applicant, and neither of whom has any interest in the success or otherwise of this application) with whom each director of the applicant has had regular contact over the past 4 years and  of whom the Authority may enquire regarding their character and reputation:

(a)         Name, address and occupation of Character Referee

(b)     Name of Director, other officer or representative in respect of whom enquiriesmay be made

Part 2 - DECLARATION

We declare that all information given in this application and in any annexures and supporting documents or other information provided is complete and accurate to the best or our knowledge and belief.

 

Dated this _________ day of  _____________

Signature ___________________

 

Signed by or on behalf of the applicant

Name:

PositionIcapacity:

Applicant:

 

Witness: ______________

Name:

Address:

Occupation:

 

 

FORM 4

APPLICATION FOR (NATURAL PERSON) PRINCIPAL OR REPRESENTATIVE LICENCE

Application for a representative licence under the Act is made as follows? 

Notes:

   (1)           If space is insufficient to provide details, please attach annexure, and the annexure should be identified as such as signed by the signatory to this application.

   (2)           This application must be accompanied by a Personal Questionnaire (in the form issued by the Authority) completed by the applicant person.

1.            (a)     Application type: Security dealer's representative or investment advisor’s  representative?

(b)     Applicant's full name

(c)     Residential address, telephone number and email address

(d)     Date of birth and place of birth

(e)     Nationality

(f)     Full name of employer and licences held by it

(g)     The full address at which the business of the employer is to be carried on, and the telephone number, fax number and email address:

(h)     Nature of business of the representative

(i)      State in detail the activity and the manner in which the applicant proposes to conduct the business for which the applicant requires a licence (including details of the services which the applicant will hold itself out as being able to provide if the application is allowed)

(j)      Address of place at which register under section 79 of the Act will be kept

(k)     Present remuneration arrangement with employer: salary, commission or both.

2.     (Answer "Yes" or  "No"  in the space provided.  If “Yes" attach annexure giving all relevant particulars.) Has the applicant within the past l0 years ?

(a)     been licensed or registered in any place under any law which requires licensing or registration to deal or trade in securities or advise on securities or act as principal or representative?

(b)     been refused the right or restricted in the applicant's right to carry on any securities-related business for which a specific licence, registration or other authority is required by law in any place? 

(c)     been the subject of suspension, cancellation or revocation   of   his   registration,   licence  or   other

authorization to carry on securities-related business by any authority in any jurisdiction?     

(d)     been subject to regulatory or (enforcement action by any authority in any jurisdiction?   

(e)     been a shareholder in a member firm of any securities exchange? 

(f)          been suspended from membership of any securities exchange or otherwise disciplined by a securities exchange?

(g)          been refused membership of any securities exchange?

(h)     carried on business under any name other than the name or names shown in this application in paragraph 1(b)?

3.     Has the applicant had any experience in performing the functions of a representative? (Answer "Yes" or "No") If "Yes" attach annexure giving all  relevant particulars

4.     Set out below details of the applicant's employment and business  activities during the previous 10 years: 

(a)          Name and address of employer (if self-employed, so state)

(b)     Nature of business

(c)     Description of duties in relation to (the employment of activity

(d)     Period of employment or activity

5.          State the name,  address and occupation of two persons (who  must not be related  to the applicant and neither of whom has any interest in the success or otherwise of this application) with whom the applicant has had regular contact over the past 4 years and of whom the Authority may enquire regarding the applicant's character and reputation

6.     Does the applicant have an interest in one or more shares in any company, the shares of which are quoted on a securities exchange, the aggregate of the nominal amount of which constitutes not less than 10% of the aggregate of the nominal amount of all issued shares of the company?

(Answer "Yes” of "No". If "Yes”, give full details of the interest including the names of companies and percentage of interest).

7.     Set out any additional information (including any formal qualifications or training and experience of the directors, other officers and representative of the applicant) considered relevant to this application

 

I declare that all information given in this application and in any annexure and supporting documents or other information provided is complete and accurate to the best of my knowledge and belief.

 

Dated this __________ day of ___________

Signature ________________

 

SIGNED BY THE APPLICANT:

Name:

Applicant:

 

Witness: ____________________

Name:

Address:

Occupation:

 

NOTE:       (a)      This application should be accompanied by a certificate in or to the effect of the following form:

 

To the Authority:

 

On the basis of due and diligent enquiry made of the background of the applicant named in this form who is in my direct employment or acting for or on behalf of me, and other information available, I believe the applicant to be of good character and reputation and to have the competence and experience to perform the function of a representative.

 

Dated this __________ day of _____________­

Signature
Name
Capacity

 

(b)    The certificate should be signed by each licensee by whom the applicant is to be employed or for or by arrangement with whom  the applicant is to act

 

___________

FORM 5

REGISTER OF SECURITIES

Name of person having an interest

Particulars*Acquired                                               Disposed of         Balance

Date           Name of Security Unit

Price

No. of Units

Cost No. of Units

Proceeds in Units

 

* State how securities were acquired or disposed of and if acquired or disposed of on a securities exchange, give agent's name.

 

___________

FORM 6

NOTICE OF PLACE AT WHICH REGISTER IS TO BE KEPT

1.          Name

2.          Capacity in which section 79 of the Act applies

3.     Residential address and telephone number of applicant

4.     Business address and telephone number

5.     Name of employer (if any)

6.     Place at which record is to be kept

7.     Date of commencement of keeping register

 

Dated this _________  day of _____________

 

Signature
Name
Capacity

 

FORM 7

NOTICE OF CHANGE OF PLACE OF BUSINESS AND CHANGE OF PLACE AT WHICH REGISTER IS KEPT.

1.     Name of licensee

2.     Type of licence held and licence number

3.     (a)      Former address of place of business 

(b)      New address of place of business

(c)      Date of change of place of business

4.     (a)     Former address of place at which register was kept

(b)      New address of place at which register is kept

(c)      Date of change of address of place at which register is kept

 

Dated this __________ day of _____________

Signature

Name

Capacity

____________

FORM 8

NOTIFICATION OF CESSATION OF BUSINESS

 

1.     Name of licensee __________________

2.     Type of licence held and licence number ______________

3.          Notice is given that on the_______ day of  __________, business ceased to be carried on in Seychelles by the above-mentioned licensee in respect of which he was licensed to carry on business

 

Dated this __________ day of _____________

Signature

Name

Capacity

____________

FORM 9

NOTICE OF CHANGE OF REPRESENTATIVE'S EMPLOYER AND NOTICE  OF CHANGE OF PLACE AT WHICH REGISTER IS KEPT

1.          Name of licensee _____________________ 

2.          Type of licence held and licence number: _____________

3.          Residential Address: ___________________

___________________

___________________

___________________

4.     Notice is given that on the ________day of _________the licensee will cease to be a representative of ____________ and that from the ________ day of ___________ the licensee will be a representative of ________________ whose principal place of business is at ______________.

5.     (a)      Former address of place at which register was kept

(b)      New address of place at which register is kept

(c)      Date of change of address of place at which register is kept 

 

Dated this _________day of ___________

­Signature

Name

______________

FORM 10

LICENCE RENEWAL OF COMPLIANCE CERTIFICATE

To: the Central Bank of Seychelles

We,  [full name and address of licensee], certify that we are not in breach of any duties or other obligations imposed on us under the Securities Act ("the Act").

We undertake to continue to comply with our duties and other obligations under the Act.

Dated:

………………………..

Signature

Name

Director

For and on behalf of (Name of licensee company)

___________

SCHEDULE 2

FEES

NOTE  Any fee expressed to be an "application" fee is a one-time fee paid upon submission of the application form and accompanying documentation. The fee is non–refundable and allows for the costs of due diligence procedure undertaken by the Authority to thoroughly review the application.

 

TYPE OF FEES

AMOUNT

(in US$)

EXPLANATION

(if applicable)

 

1.          Application Fee

 

 

 

(a)        Securities dealer

$1000

 

 

(b)      Investment advisor (company)

$1000

 

 

(c)       Investment advisor (individual)

$1000

 

 

(d)      Representative

$250

 

 

(e)       Securities exchange

$2000

 

 

(f)       Clearing agency

$2000

 

 

(g)       Securities facility

$1000

 

 

2.          Annual Licence Fee

 

 

 

(a)       Securities dealer

$2500

 

 

(b)      Investment advisor (company)

$2000

 

 

(c)       Investment advisor (individual)

$2000

 

 

(d)      Representative

$500

 

 

(e)       Securities exchange

$6000

 

 

(f)       Clearing agency

$5000

 

 

(g)       Securities facility

$2500

 

 

3.          Replacement of Licence Fee

$300

 

 

4.          Searches

 

 

 

(a)       fee for a search under section 58(4) of the Act of the public register

 

 

$100

 

 

(b)      fee per page for obtaining a copy of any document available on public search of the register

 

 

$1

 

 

(c)       fee per official search under section 58(5) of the Act

 

$100

 

5.          Proposed Rule Change Fee (Securities exchanges and clearing agencies

$1000

Fee per submission

6.          Advertisement Filing Fee

$50

Fee per person

7.          Registration of Corporate Issuers Fee

 

 

(a)       registration of existing public company

$750

 

 

(b)      registration of company proposing to issue securities to the public

1/50th of 1% of offering amount to be raised

Minimum $3000. If 1/50th of 1% is greater, the greater amount will apply

8.         Examination Fee

 

 

(a)       Investment advisor examination fee

$1,500

Fee per person

(b)      Representative examination fee

$1,250

 

 

 

_________________

SECTION 133

S.I. 44 of 2008

SECURITIES (PROSPECTUS) REGULATIONS

(1ST July, 2008)

 

ARRANGEMENT OF REGULATIONS

1.          Citation

2.          Application and interpretation

3.          Exemptions

4.          Form and content of prospectus

5.          Exceptions

6.          Advertisements in connection with public offer

SCHEDULE

____________

1.    These regulations may be cited as the Securities (Prospectus) Regulations.

2.     (1)      These regulations shall not apply to licensed funds or application exempt foreign funds under the Mutual Fund and Hedge Fund Act.

(2)           In these Regulations –

"Act" means the Securities Act 2007;

"director" includes any person who occupies the position of a director, by whatever name called; 

"prospectus" means a prospectus or draft prospectus approved by the Securities Exchange under the Act; and

"securities exchange" means a securities exchange licensed by the Securities Authority.

3.     (1)      A public offer of securities shall not be required to be the subject of a prospectus if any one of the conditions specified in sub-regulation (2) is satisfied in relation to the offer.

(2)      The conditions specified, as referred to in sub-regulation (1), are ?

(a)     the securities offered are not generally advertised to the public;

(b)     the securities are offered in connection with a bona fide invitation to enter into an underwriting agreement with respect to them;

(c)     the securities are offered by the issuer to -

(i)      members or employees of the issuer;

(ii)     members of the families of any such members or employees; or

(iii)    holders of debentures of the issuer;

(d)     the aggregate consideration payable for the securities cannot exceed US$25,000; or

(e)     the securities are shares and are offered free of charge to any or all of the holders of shares in the issuer.

(3)      If a class of shares has been admitted for dealings on a securities exchange, the securities exchange may authorise the making of an offer without a prospectus, provided that-

(a)     the number or estimated market value of the shares amounts to less than 10% of the number  or  the corresponding market value of shares of the same class already admitted for dealings; and

(b)     up-to-date information equivalent to that required by this regulation is available as a result of the requirements of that securities exchange.

4.     (1)      A prospectus shall contain sufficient information to enable a prospective investor to make an informed assessment of-

(a)     the assets and liabilities, financial position, profits and losses, purpose or use of proceeds, risk of offering and prospects of the issuer of the securities; and

(b)     the rights attaching to those securities.

(2)      Without limiting the generality of sub-regulation (1), a prospectus shall contain, subject to sub-regulations (3), (4) and (5), the information specified in the Schedule.

(3)      If, on the occasion of their admission to dealings on a securities exchange, shares are offered on a pre-emptive basis to some or all of the existing  shareholders, the securities exchange may authorise the omission from a prospectus of specified information provided that up-to-date information equivalent to that which would otherwise be required by this regulation is available as a result of the requirements of that securities exchange.

(4)      Where a person –

(a)     makes an offer to the public in Seychelles of securities which the person proposes to issue; and         

(b)     has, within the twelve months preceding the date on which the offer is first made, published a full prospectus relating to a different class of securities which the person

has issued, or to an earlier issue of the same class of securities, the person may publish, instead of a full prospectus, a prospectus which contains only the differences which have arisen since the publication of that full prospectus and which are likely to influence the value of the securities, provided that the prospectus is accompanied by that previously published full prospectus.

(5)      For the purposes of sub-regulation (4), a “full prospectus” is one that contains the information specified in the Schedule (other than information whose omission is authorised by the securities exchange under sub-regulations (3) or (4)).

5.     The securities exchange may authorise the omission from a prospectus of information whose inclusion would otherwise be required by these regulations, if the securities exchange is satisfied that –

(a)            disclosure of that information would be contrary to the public interest;

(b)           the information is of minor importance only, and is not likely to influence assessment of risk and the issuer's assets and liabilities, financial position, profits and losses and prospects; or

(c)      disclosure of that information would be seriously detrimental to the issuer and its omission would not be likely to mislead investors with regard to facts and circum-stances necessary for an informed assessment of the securities. 

6.    No advertisement shall be issued to the public in Seychelles  announcing a public offer of securities for which a prospectus is required under these regulations by the person proposing to make the offer unless the advertisement states that–

(a)     the securities exchange has approved the prospectus relating to the public offer; and

(b)     a prospectus is or will be published, as the case may be, and gives an address in Seychelles from which it can be obtained or will be obtainable.

 

 

SCHEDULE

(regulation 4)

FORM AND CONTENT OF PROSPECTUS

PART l  – GENERAL REQUIREMENTS

1.          The name of the issuer, the address of its registered office and the date and location of incorporation.

2.          The names and full functions of the directors of the issuer.

3.          The date of publication of the prospectus.

4.          A statement that a copy of the  prospectus has been delivered to the securities exchange for approval in accordance with these regulations.

5.          A statement that the prospectus has been drawn up in accordance with these Regulations.

6.          The following words, "If you are in any doubt about the contents of this document you should consult a lawyer or a person  licensed  under  the  Act who is able to give expert advice on the acquisition of shares and other securities", or words to the like effect.

PART 2 – PERSONS RESPONSIBLE FOR  THE PROSPECTUS AND ADVISORS

1.     The names, addresses (home or business) and functions of the persons responsible for the prospectus or any part of the prospectus, specifying the part.

2.    A declaration by the directors of the issuer (or, if the offeror is not the issuer, by the directors of the offeror) that to the best of their knowledge the information contained in the prospectus is in accordance with the facts and that the prospectus makes no omission likely to affect the import of the information.

PART 3  – THE SECURITIES TO WHICH THE PROSPECTUS RELATES AND THE OFFER

1.     A description of the securities being offered, including the class to which they belong and a description of the rights attaching to them including (where applicable) –

(a)     if the securities are shares, rights as regards –

(i)      voting;

(ii)     dividends;

(iii)    return of capital on the winding up of the issuer;

(iv)    redemption, and

(v)     a summary of the consents necessary for the variation of any of  those rights; and

(b)     if the securities are debentures rights as regards –

(i)      interest payable; 

(ii)     repayment of principal.

2.          The dividend policy of the issuer, and in particular whether it has paid dividends within the past five years (and, if so, how much and when), and whether the issuer expects to pay dividends over the next two years.

3.          The date (if any) on which entitlement to dividends or interest arises.

4.     The procedure for the exercise of any right of pre-emption attaching to the securities.

5.     Any restriction on the free transferability of the securities being offered.

6.     (1)     A statement as to whether -

(a)     the securities being offered have been admitted to dealings on a licensed securities exchange; or

(b)     an application for such admission has been made.

(2)         If no application for dealings has been made, or an application has been made and refused, a statement as to whether or not there are, or are intended to be, any other arrangements for there to be dealings in the securities and, if there are, a brief description of the arrangements.

7.     The purpose for which the securities are being issued.

8.    The number of securities being issued.

9.     The number of securities being offered.

10.   The total proceeds expected to be raised by the offer and the expected net proceeds, after deduction of the expenses, of the offer.

11.      Details as to the use of the proceeds of the issue and in particular their use for capital expenditure, debt reduction, acquisitions, working capital or other, as the case may be.

12.      Where the prospectus relates to shares which are offered for subscription, particulars as to –

(a)          the minimum amount which, in the opinion of the directors of the issuer, must be raised by the issue of those shares in order to provide the sums (or, if any part of them is to be defrayed in any other manner, the balance of the sums) required to be provided in respect of each of the following ? 

(i)      the purchase price of any property purchased, or to be purchased, which is to be defrayed in whole or in part out of the proceeds of the issue; 

(ii)     any preliminary expenses payable by the issuer and any commission so payable to any person in consideration of his agreeing to subscribe for, or of his procuring or agreeing to procure subscriptions for, any shares in the issuer;

(iii)    the repayment of any money borrowed by the issuer in  respect of any of the foregoing matters; 

(iv)    working capital; and

(b)     the amounts to be provided in respect of the matters mentioned otherwise than out of the proceeds of the issue and the sources out of which those amounts are tobe provided.

13.   The names of any persons underwriting or guaranteeing the offer.

14.  The amount or the estimated amount of the expenses of the offer and by whom they are payable, including a statement as to any commission payable by the issuer to any person in consideration of his agreeing to subscribe for securities  to which the prospectus relates or of his procuring or agreeing to procure subscriptions for the securities. 

15.   The names and addresses of the paying agents (if any).

16.  The period during which the offer of the securities is open.

17.   The price at which the securities are offered or, if appropriate, the procedure, method and timetable for fixing the price.

18.   The arrangements for payment for the securities being offered and the arrangements and timetable for their delivery. 

19.   The arrangements during the period prior to the delivery of the securities being offered relating to the money received from applicants including the arrangements for the return of moneys to applicants where their applications are not accepted in whole or in part and the timetable for the return of the money. 

PART 4 – GENERAL INFORMATION ABOUT THE ISSUER AND ITS CAPITAL

1.          The date and place of incorporation of the issuer.  In the case of an issuer not incorporated in Seychelles, the address of its principal place of business in Seychelles should also be stated.

2.     The legal form of the issuer, the legislation under which it was formed and (if different) the legislation now applicable to it. 

3.     A summary of the provisions in the issuer's constitution determining its objects.

4.     The amount of the issuer's authorized share capital and any limit on the duration of the authorization to issue share capital.

5.     The amount of the issuer's issued share capital.

6.     The number and particulars of any listed and unlisted securities issued by the issuer not representing share capital.

7.     The number of shares of each class making up each of the authorised and issued share capital, the nominal value of the shares and, in the case of the issued share  capital, the amount paid upon the shares.

8.     If the issuer is a member of a group, a brief description of the group and of the issuer's position in it, stating, where the issuer is controlled by another company, the name of its controlling company. 

9.     In so far as the offeror has the information, an indication of the persons, who, directly or indirectly, jointly or severally, exercise or could exercise control over the issuer and particulars of the proportion of the issuer's voting capital held by such persons.

PART 5 – ISSUER'S PRINCIPAL ACTIVITIES

1.          A description of the issuer's principal activities and any exceptional factors that have influenced its activities.

2.          A statement of any dependence of the issuer on patents or other. intellectual property rights, licences or particular contracts, where any of these are of fundamental importance to the issuer's business.

3.          With regard to risk factors, list the factors which the issuer considers to be the most substantial risks to an investor in this offering, amongst them the following –

(a)          untested products;

(b)         cash-flow or liquidity problems;

(c)          dependence upon a key supplier or customer;

(d)         management inexperience;

(e)          nature of business;

(f)          absence of a trading market; and

(g)          any other high risks.

4.          Information regarding investments in progress where they are significant. 

5.          Information on any legal or arbitration proceedings, active, pending or threatened against, or being brought by, the issuer or any member of its group which are having or may have a significant effect on the issuer's financial position.

PART 6 – ISSUER'S FINANCIAL POSITION

1.          Subject to paragraph 3 of this Part, the issuer's annual accounts (balance sheet and profit and loss account) for the last three years together with –

(a)          a statement by the directors of the issuer that the accounts have been prepared in accordance with the Act, and that they accept responsibility for them, or a statement why they are unable to make that statement;

(b)         the names and addresses of the auditors of the accounts;

(c)          a copy of the auditor's reports on the account; and

(d)         a statement by the auditors that they consent to the inclusion of their reports in the prospectus and accept responsibility for them, and have not become aware, since the date of any report, of any matter affecting the validity of that report at that date, or a statement why they are unable to make such a statement. 

2.     (1)      If more than ten months have elapsed at the date on which the offer is first made since the end of the last financial year in respect of which accounts are required to be included in the prospectus by paragraph 1 of this Part, there shall also be included in the prospectus – 

(a)          a report by a person qualified to act as an auditor, covering the period referred to in subparagraph (2) of this Part, with respect to the state of affairs and profit or loss of the issuer together with the name arid address of the person responsible for preparing the report; and

(b)     a statement by the person preparing the report   that   the   person  consents  to  the inclusion of the report in the prospectus and accepts responsibility for it; or

(c)     a statement why the person preparing the report is unable to make such a statement.  

(2)      The period to be covered by the report is the period beginning at the end of the last financial year, in respect of which accounts are required to be included in the prospectus by paragraph 1 of this Part and ending on the latest practicable date before (but not in any event more than three monthsbefore) the date on which the offer is first made. 

3.    If an issuer has not been in existence for the whole of the last three years, the prospectus shall contain a report by a person qualified to act as an auditor which includes -

(a)     details of the profit or loss of the issuer in respect of the period beginning with the date of its formation and ending on the latest practicable date before (but not in any event more than three months before) the date on which the offer is first made, and of its state of affairs at that latest practicable date; and

(b)     a statement by the person responsible for the report that in that person's opinion it gives a true and fair view of the state of affairs and profit or loss of the issuer and that the person consents to the inclusion of the report in the prospectus and accepts responsibility for it, or a statement why the person is unable to make such a statement.  

4.     If the issuer is a parent company, the requirements of paragraphs 2 and 3 of this Part shall apply to each of its subsidiaries.

PART 7 – ISSUER’S ADMINISTRATION AND MANAGEMENT

1.          A description of the directors' existing or proposed service contracts with the issuer or any subsidiary of the issuer, excluding contracts expiring, or determinable by the employing company without payment of compensation within one year, or an appropriate negative statement.

2.          The aggregate remuneration paid and benefits in kind granted to the directors of the issuer during the last completed financial year of the issuer, together with an estimate of the aggregate amount payable and benefits in kind to be granted to the directors, and proposed directors, for the current financial year under the arrangements in force at the date on which the offer is first made.

3.          The interests of each director of the issuer in the share capital of the issuer, distinguishing between beneficial and non-beneficial interests, or an appropriate negative statement.

4.          Full particulars or any contract or arrangement existing at the date of the prospectus in which a director of the issuer is materially interested, or an appropriate negative statement.

5.     (1)      A description being the qualifications or area of expertise or responsibility of every director or proposed director or any other person who performs an important administrative, management or supervisory function, and particulars of the principal functions performed by each.

(2)      The nature of any family relationship between the persons mentioned in subparagraph (1) of this Part.

(3)      Indicate each director or proposed director that holds any other directorship.

PART 8

RECENT DEVELOPMENT IN THE ISSUER’S BUSINESS AND PROSPECTS

1.          The significant recent trends and occurrences concerning the development of the issuer's business since the end of the last completed financial year of the issuer.

2.          Information on the issuer's financial and trading prospects for at least the current financial year of the issuer.

3.          The dates of and parties to all material contracts (not being contracts entered into in the ordinary course of business) entered into by the issuer and its subsidiaries within the two years immediately preceding the issue of the prospectus together with a summary of the principal contents of the contracts.

4.          Where a profit forecast appears in the prospectus the principal assumptions, including commercial assumptions that the forecast is based on must be stated.

______________

SECTION 124

S.I. 45 of 2008

SECURITIES (TAKEOVERS) REGULATIONS

[1st July 2008]

 

ARRANGEMENT OF REGULATIONS

PART 1 – PRELIMINARY

1.          Citation and application

2.          Interpretation

3.          Object

4.          Contravention

PART 2 – GENERAL PRINCIPLES

5.          Equitability of treatment

6.          Information to shareholders

7.          Announcements

8.          Sufficient information and time

9.          Full and prompt disclosure

10.      Minority rights

11.      Duties of directors

12.      Independent advice

13.      Limitations on directors’ actions

14.      No frustration of offer by offeree Board

15.      No less favourable terms

16.      Full cooperation with the Authority

PART 3  – SPECIFIC REQUIREMENTS

17.      Offer

18.      Identity of offeror

19.      Implementation of offer

20.      Confidentiality

21.      Board of offeree company

22.      Board of offeror company

23.      Persons not suited to give independent advice

24.      Independent financial advisors

25.      Independent committees

26.      Offers or possible offers

27.      Responsibilities of offeror and offeree for announcements

28.      Suspension of trading

29.      Announcement of firm intention to make an offer

30.      Announcement of certain purchases

31.      No frustrating action

32.      No withdrawal of an offer

33.      Information to offerors

34.      Resignation of directors of offeree company

35.      Availability of information

36.      Time limit of offer document

37.      Content of offer document

38.      Offeree reply document

39.      Views of offeree’s Board and financial advisor

40.      Subsequent documents

41.      Prospectus standard

42.      Sufficient information

43.      Directors’ joint and several responsibility

44.      Authority’s consent required for exclusion of directors

45.      Standard of care

46.      Assumptions

47.      Disclosure of revaluations

48.      Preparing revaluations

49.      Filing of documents for comments

50.      Publication of announcements

51.      Minimum period

52.      Conditions

53.      Period for acceptance

54.      Final day

55.      Revised offer

56.      Acceptor’s right to withdraw

57.      Nature of announcement

58.      Consequence of failure to announce

59.      Restrictions on dealings before the offer

60.      Restrictions on dealings during the offer

61.      Restrictions on dealings by offeror during non-cash offers

62.      Dealings after termination of discussions

63.      Dealings in relevant securities

64.      Dealings by 10% shareholders

65.      Discretionary accounts

66.      When cash offer required

67.      Highest price paid

68.      Offers involving a further issue of listed securities

69.      Shareholder notification

70.      Special deals

71.      Subjective conditions

72.      Acceptance condition

73.      Temporary ban

74.      6 months delay before acquisition above offer price

75.      Disclosure of acquisitions of 20% and above

SCHEDULE 1 – Required Contents of Offeror Company’s Offer Document

SCHEDULE 2 Required Contents of Offeree Company’s Reply Document

_____________________

PART 1 – PRELIMINARY

1.     (1)      These regulations may be cited as the Securities (Takeovers) Regulations.

(2)      These  regulations shall apply to –

(a)          all takeover or merger offers affecting public companies listed on a Seychelles Securities Exchange; and

(b)         all takeover or merger offers affecting all other entities listed on a Seychelles Securities Exchange (including, without limitation, a  limited partnership registered

under the Limited Partnerships Act 2003), and provisions of these regulations applying to listed companies shall apply mutatis mutandis to all other listed entities.

(3)       All persons engaged in takeover transactions shall observe the general principles and shall comply with the specific requirements set out in these regulations.

2.     (1)      In these regulations, unless the context otherwise requires –

“acquisition of voting rights” includes the exercise  of control or direction over voting rights other than by way of a revocable proxy given for no consideration for the purpose of one meeting of shareholders only;

“acting in concert” in relation to a person means that, pursuant to an agreement or undertaking, the persons actively co-operate to obtain or consolidate control of a company through the acquisition of voting rights of the company;

“Authority” means the Securities Authority;

“control” means a holding, or aggregate holdings, of 50% or more of the voting rights of a company irrespective of whether that holding or holdings give de facto  control;

“director” includes any person who occupies the position of a director by whatever name called;

“document” includes any announcement, advertisement or offer document issued or published by any party to an offer or possible offer in connection with such offer or possible offer;

“offer” includes a takeover and merger transaction

however effected, including a scheme of arrangement which has similar commercial effect to takeovers and mergers, and offers by a parent company for shares in its subsidiary;

“offer period” means the period from the date when an announcement is made of a proposed or possible offer (with or without terms) until the first closing date or (if this is later) the date when such offer becomes or is declared unconditional in all respects or is declared to have lapsed;

“person” includes an individual or a company;

“rights over shares” include any rights acquired by the person by virtue of an agreement to purchase shares or an option to acquire shares or an irrevocable commitment to accept an offer to be made by the person;

“securities exchange” means any securities exchange on which the offeror or offeree company is listed;

“securities exchange offer” means an offer in which the consideration includes securities of the offeror or any other corporate body;

“share” means share in the capital of a company and includes an interest in a partnership and trust unit in a unit trust;

“substantial shareholder”, in relation to an issuer, means a person who has an interest in shares of the issuer –

(a)             the stated value of which is more than 10% of the issued share capital of the issuer; or

(b)            which entitles the person to exercise or control  the  exercise  of more than 10% of

the voting power at a general meeting of the issuer;

“takeover” includes merger; and

“voting rights” means all the voting rights currently exercisable at a general meeting of a company whether or not attributable to the share capital of the company.

(2)      For the purpose of these regulations, persons falling within each of the following classes will be presumed to be acting in concert with others in the same class unless the contrary is established -

(a)          a company, its parent, its subsidiaries, its fellow subsidiaries, associated companies of any of the foregoing, and companies of which such companies are associated companies;

(b)         a company and any of its directors (together with their close relatives, related trusts and companies controlled by any of the directors, their close relatives and related trusts);

(c)          a company and any of its pension funds, provident funds and employee share schemes;

(d)         a fund manager and any mutual fund, or other body, whose investments such fund manager manages on a discretionary basis, in respect of the relevant investment accounts;

(e)          a financial or other professional advisor, including a securities dealer, and its client in respect of the shareholdings of the advisor and persons controlling, controlled by or under the same control as the advisor;

(f)          direction of a company (together with their close relatives, related trusts and companies controlled by such directors, their close relatives and related trusts) which is subject to an offer or where the directors have reason to believe a bona fide offer for their company may be imminent;

(g)          partners; and

(h)         an individual and a close relative, related trusts and companies controlled by the individual or by a close relative or related trusts.

(3)      For the purpose of these regulations, a company shall be deemed to be an associated company of another company if one of them owns or controls 25% or more of the voting rights of the other or if both are associated companies of the same company.

3.     (1)      The object of these regulations is to –

(a)             ensure fair treatment for shareholders who are affected by takeover transactions;

(b)            seek to achieve fair treatment by requiring equality of treatment of shareholders, requiring the disclosure of timely and adequate information to enable share-holders to make an informed decision as to the merits of an offer and ensuring that there is a fair and informed market in the shares of company affected by takeover transactions.

4.     A person who contravenes any provision contained  in Part 3 of these  regulations commits an offence and is liable on conviction to a fine not exceeding US$50.000.

PART 2

GENERAL PRINCIPLES

5.     All shareholders are to be treated even-handedly and all shareholders of the same class are to be treated similarly.

6.     (1)      During the course of an offer, or when an offer is in contemplation, neither an offeror, nor the offeree company, nor any of their respective advisors may furnish information to any shareholder that is not made available to all shareholders.

(2)      Sub-regulation (1) does not apply to the furnishing of information in confidence by the offeree company to a bona fide potential offeror or vice versa.

7.     (1)      An offerer shall announce an offer only after careful and responsible consideration.

(2)      The offeror and its financial advisors shall be satisfied that it can and will continue to be able to implement the offer in full.

8.     (1)      A shareholder shall be given sufficient information, advice and time to reach an informed decision on an offer and no relevant information shall be withheld.

(2)      Documents and advertisements issued in connection with takeovers and mergers shall be prepared with a high degree of care, responsibility and accuracy.

9.     (1)      All persons concerned  with takeovers shall make full and prompt disclosure of all relevant information and take every precaution to avoid the creation or continuance of an uninformed market.

(2)      Parties involved in offers must take care that statements are not made which may mislead shareholders or the market.

10.   Rights or control shall be exercised in good faith and there shall be no oppression of minority or non-controlling shareholders.

11.   Directors shall have regard to the interests of the shareholders as a whole, and not to their own interests or those derived from personal and family relationships.

12.   A board which receives an offer, or is approached with a view to an offer being made, shall seek competent independent advice in the interests of its shareholders.

13.   (1)      In connection with takeover and merger transactions the boards of an offeror and of an offeree company and their respective advisors and associates must accept that there are limitations in carrying out the transactions in the best interest of their shareholders.

(2)      The limitations referred to in the sub-regulation (1) are contained in the general principles and the specific rules that control the actions of the boards of an offeror and of an offeree company and persons involved in the transactions.

14.   No action may be taken by the board of the offeree company, without the approval of shareholders in general meeting, in relation to the affairs of the company, which  could effectively result in any bona fide offer being frustrated or in the shareholders being denied an opportunity to decide on its merits –

(a)            after a bona fide offer has been communicated to the board of the offeree company; or

(b)           after the board of the offeree company has reason to believe that a bona fide offer might be imminent.

15.   If, after a takeover or merger transaction is reasonably in contemplation –

(a)            a written offer has been made to an offeree company; or

(b)           shares have been purchased from one or more shareholders of an offeree company,

any subsequent general offer made by or on behalf of the same offeror, or any person acting in concert with it, to the shareholders of the same class shall not be on less favourable terms.

16.   All parties concerned with takeovers are required to fully co-operate with the Authority, and to provide all relevant information.

PART III

SPECIFIC REQUIREMENTS

17.  An offer shall be put forward in the first instance to the board of the offeree company or to its advisors, before the offer is announced to the public.

18.   If an offer or an approach with a view to an offer being made is not made by the ultimate offeror or potential offeror, the identify of that person or the ultimate control ling shareholder must be disclosed at the outset to the Board of the offeror company.

19.  A board which is approached is entitled to  be satisfied by the offeror that the offeror will be in a position to implement the offer in full.

20.   (1)      There shall be absolute privacy before an announcement of an offer or proposed offer.

(2)      Without prejudice to the provisions of the Act relating to an insider dealing a person who has confidential information, particularly if it is price sensitive, shall take all due care not to disclose that information.

21.   (1)      A board which receives an offer, or is approached with a view to an offer being made, shall, in the interests of shareholders, retain an independent financial advisor or other appropriate expert to advise the board as to whether the offer is, or is not, fair and reasonable.

(2)      The advice, including reasons, shall be known to shareholders by including it in the offeror’s offer document along with the recommendation of the offeree’s board regarding acceptance of the offer.

(3)      If a director of an offeree company is faced with a conflict of interest, the offeree board shall, if possible, establish an independent committee of the board to discharge the board’s responsibilities in relation to the offer.

22.   (1)      If a director of an offeror which is a public company in Seychelles is faced with a conflict of interest as a result of a proposed offer, the offeror’s board should, if possible, establish an independent committee to assess the proposed offer.

(2)      If the conflict is a material one the Authority should be consulted to assess, having regard to, among other things, the materiality of the offer to the offeror whether –

(a)          the offeror’s board should retain an independent financial advisor to advise the shareholders or independent share-holders, of the offeror, as the case may be; and

(b)         the offer should be made conditional upon approval of the offer by a majority of the votes cast by the shareholders in attendance either in person or by proxy at a duly convened general meeting of the offeror’s shareholders.

23.   A person who has, or had, a connection, financial or otherwise, with the offeror or offeree company of a kind likely to create a conflict of interest will not be regarded as a suitable person to give independent advice.

24.   A financial advisor or other expert who is considered to have a relationship with the offeror, the offeree company, or the controlling shareholder of either of them, which is reasonably likely to affect the objectivity of the advice, will not be considered to be independent.

25.   (1)      Members of an independent committee of a company’s board of directors shall consist of directors of the company who have no direct or indirect interest in the offer for consideration by the independent committee other than as a shareholder of the offeree.

(2)      For the purposes of sub-regulation (1) there is a presumption that employees of an offeree company that is an associated company of the offeror have an indirect interest in the offer and are not independent.

(3)      The presumption under sub-regulation (2) is applicable to employees, directors, agents, partners, close relatives and affiliates of any person that exercises control or direction over the business and operations of the offeree company if the person has a direct interest in the offer.

(4)      For the purposes of sub-regulation (3) an affiliate is a person that controls, is controlled by, or is under common control with, the person in question.

(5)      In cases of doubt the Authority shall be consulted.

(6)      If it is not possible to form an independent committee responsible for representing the interests of any independent shareholders the responsibility shall reside primarily with the independent financial advisor.

26.  An announcement is required –

(a)            when a firm intention to make an offer is notified to the board of the offeree company from a serious source, irres-pective of the attitude of the board to the offer;

(b)           when, following an approach to the offeree company, the offeree company is the subject of rumour and speculation or there is undue movement in its share price, or a significant increase in the volume of share turnover, whether or not there is a firm intention to make an offer;

(c)            when, before an approach has been made, the offeree company is the subject of rumour and speculation or there is undue movement in its share price, and there are reasonable grounds for concluding that it is the potential offeror’s actions (whether through inadequate security, purchasing of offeree company shares or otherwise) which have led to the situation; or

(d)           when negotiations or discussions are about to be extended to include more than a very restricted number of people (outside those who need to know in the companies concerned and their immediate advisors).

27.   (1)      Before the board of the offeree company is approached, the responsibility for making an announcement can lie only with the offeror who should closely monitor the offeree company’s share price and volume for any signs of undue movement.

(2)      After an approach to the board of the offeree company which may or may not lead to an offer, the primary responsibility for making an announcement will normally rest with the board of the offeree company who shall closely monitor its share price and volume.

28.   (1)      When an announcement is required the offeror or offeree, as the case may be, shall notify the Authority and the securities exchange immediately that an announcement is imminent.

(2)      If there is any possibility that an uninformed market for shares of the offeror or offeree could develop prior to publication of the announcement consideration should be given to requesting a suspension of trading in the shares pending publication of the announcement.

(3)      A potential offeror shall not attempt to prevent the board of an offeree company from making an announcement or requesting the securities exchange to grant a temporary suspension of listing at any time the board thinks appropriate.

29.   (1)      When a firm intention to make an offer is announced, the announcement shall contain –

(a)          the terms of the offer;

(b)         the identity of the ultimate offeror or the ultimate controlling shareholder;

(c)          details of any existing holding of voting rights in the offeree company –

(i)     which the offeror owns or over which it has control or direction;

(ii)    which is owned or controlled or directed by any person acting in concert with the offeror;

(iii)   in respect of which the offeror or any person acting in concert with him has received an irrevocable commitment to accept the offer; and

(iv)   in respect of which the offeror or any person acting in concert with him holds an option to purchase or warrants or other convertible securities;

(d)     all conditions (including normal conditions relating to acceptance, listing and increase of capital) to which the offeror or the posting of it is subject;  and

(e)     details of any arrangement (whether by way of option, indemnity or otherwise) in relation to shares of the offeror or the offeree and which might be material to the offer.

(2)      The announcement of an offer shall include confirmation by the final advisor or by another appropriate third party that resources are available to the offeror sufficient to satisfy full acceptance of the offer.

30.   (1)      Acquisition of voting rights of an offeree company by an offeror or by any person acting in concert with the offeror may give rise to an obligation to make a cash offer under regulation 66  to increase an offer under regulation 67.

(2)      Immediately after any acquisition giving  rise to an obligation under sub-regulation (1) an announcement shall be made stating (to the extent that it has not previously been announced) the number of voting rights acquired and the price paid, together with the information required by regulation 29.

31.   (1)      When a bona fide offer has been communicated to the Board of offeree company or the board of an offeree company has reason to believe that a bona fide offer may be imminent, no action which could effectively result –

(a)          in an offer being frustrated; or

(b)         in the shareholders of the offeree company being denied an opportunity to decide on the merits of an offer,

shall be taken by the board of the offeree company in relation to the affairs on the  company without the approval of the shareholders of the offeree company in general meeting.

(2)      The board shall not, without the approval of the shareholders of the offeree company in general meeting –

(a)          issue any shares;

(b)     issue or grant options in respect of any unissued shares; 

(c)          create or issue or permit the creation or issue of any securities carrying rights of conversion into, or subscription for, shares of the company;

(d)     sell, dispose of or acquire or agree to sell, dispose of or acquire assets of a material amount;

(e)     enter into contracts, including service contracts, otherwise than in the ordinary course of business; or

(f)     cause the company or any subsidiary or associated company to purchase or redeem any shares in the company or provide financial assistance for any such purchase.

(3)      The Authority shall be consulted as soon as practicably possible if, the company is under a prior contractual obligation to take any action referred to in sub-regulations (1) and (2), or where there are other special circumstances.

(4)      The Authority may in what it regards to be appropriate circumstances, grant a waiver from the general requirement to obtain shareholders' approval.

32.   If there is an announcement of a firm  intention to  make an offer, except with the consent of the Authority, the offeror shall proceed with the offer unless the posting of the offer is subject to the prior fulfilment of a  specific condition and that condition has not been met.

33.   Relevant information relating to the offeree, including particulars of shareholders, given by the offeree shall,  on request, be furnished  promptly to any other bona fide potential offeror,  who shall specify the questions to which it requires answers.

34.   Except with the consent of the Authority the directors of an offeree company shall not resign until the first closing date of the offer, or the date when the offer becomes or is declared unconditional, whichever is the later.

35.   Information about companies involved in an offer shall be made available to all shareholders as nearly as possible at the same time and in  the same manner.

36.   (1)      The offer document, which shall not be dated more than 4 days prior to dispatch, shall be posted by or on behalf of the offeror company within 21 days, (or, in the case of a securities exchange offer, 35 days) of the announcement of the terms of the offer.

(2)      The consent of the Authority is required if the offer document may not be posted within this period.

37.   The offer document submitted by the offeror to the offeree shareholders shall contain the information required by Schedule 1 together with any other relevant information to enable offeree shareholders to reach a properly informed decision.

38.   The offeree company shall send to its shareholders within 14 days of receipt by the offeree company of the offer document a document containing the information set out in Schedule 2 together with any other information it considers to be relevant to enable its shareholders to reach a properly informed decision on the offer.

39.   The offeree company's document shall include the views of its board on the offer and the advice of its financial advisor as to whether the other is, or is not, fair and reasonable and the reasons for reaching that conclusion.

40.   Documents subsequently sent to shareholders of the offeree company by either party shall contain details of any material changes in information previously published by or on behalf of the relevant party during the offer period; if there have been no such changes this must also be stated.

41.   (1)      Any document shall be prepared with the same standard of care as if it were a prospectus.

(2)      Sub-regulation (l) applies whether the document is issued by­ –

(a)     the company;

(b)     an advisor on the company’s behalf; or

(c)     any other person in relation to an offer.

(3)      A person who issues any such document shall ensure that it remains accurate and up-to-date throughout the offer period, and shall notify the shareholders of any material change as soon as possible.

42.   (l)       Shareholders shall be given sufficient infor-mation and advice to enable them to reach a properly informed decision as to the merits or demerits of an offer.

(2)      The information shall be available to shareholders early enough to enable them to make a decision in a timely manner.

(3)      The obligation of offeror in these respects towards the  shareholders of the offeree company is no less than the offeror's obligation towards its own shareholders.

43.   Documents shall state that all directors of the offeror, or, as appropriate, the offeree, jointly and severally–­

(a)          accept full responsibility for the accuracy of information contained in the document;

(b)     confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in the document have been arrived at after due and careful consideration; and

(c)     confirm that there are no other facts not  contained in the document, the omission of which would make any statement in the document misleading.

44.  If it is proposed that any director shall be excluded from a Authority's document, the Authority's consent is required and the exclusion and reasons for it shall be stated in the document.

45.   (1)     It is the responsibility of the directors to compile with due  care and objectivity a profit forecast.

(2)     The financial advisors shall report whether or not they are able to satisfy themselves that the profit forecast has been so compiled and the report must be set out in the relevant document.

46.   (1)     When a profit forecast appears in any document, the assumptions, including the commercial assumptions, upon which the forecast is based shall be stated in the document.

(2)     Assumptions shall not normally relate to matters which the directors, by virtue of their particular knowledge and experience in the business, are best able to take a view on, or over which they are able to exercise control, since such matters should be reflected directly in the profit forecast.

47.  When revaluations of assets of either the offeror or offeree company are made in connection with an offer, details of the revaluations or an appropriate summary of them shall be included in the offer document or other document circulated to the shareholders of the offeree company by its board.

48.   (1)     The revaluations shall be carried out or confirmed by an independent,  professionally qualified valuer or other expert and the basis of valuation shall be clearly stated.

(2)     The document stating the revaluations shall include a statement that the consent of the valuer or other expert to the issue of the document with the inclusion of the valuation in the form and context in which is included has not been withdrawn.

49.   (1)     Prior to release or publication, two copies of all documents shall be filed with the Authority for comment and shall not be released or published until the Authority has confirmed that it has no further comments on the documents.

(2)     The final copy of the document shall be filed with the Authority and the securities exchange in duplicate.

50.  All announcements shall be published in at least one newspaper published and circulating generally in Seychelles.

51.   An offer shall be open for at least 21 days following the  date of posting of the offer.

52.   If the offer is conditional, it shall specify the latest day when the offeror can declare the offer unconditional.

53.   (1)     A conditional offer that becomes or is declared unconditional, shall remain open for acceptance for not less than 14 days.

(2)     In an announcement of an extension of an offer, either the next closing date shall be stated or, if the offer is then unconditional, a statement may be made that the offer will remain open until further notice.

(3)     In the case, referred to in sub-regulation (2), at least 14 days notice in writing shall be given before the offer is closed to the shareholders who have not accepted the offer.

54.   Except with the consent of the Authority, an offer shall not be kept open after the expiry 60 days from the date of the posting of the initial offer document unless it has previously become unconditional.

55.   (1)     If, in the course of an offer, the offeror revises its terms, all offeree shareholders whether or not they have already accepted the offer, will be entitled to the revised terms.

(2)     A revised offer shall be kept open for at least 14 days from the date of posting written notification of the revision to shareholders.

56.   (1)     An acceptor shall be entitled to withdraw the acceptance after 21 days from the first closing date of the offer, if the offer has not by then become unconditional.

(2)     The entitlement to withdraw shall be exercisable until the offer becomes unconditional.

57.   (1)     The offeror shall immediately inform the Authority and the securities exchange that an offer has -       

(a)     been revised or extended;

(b)     expired; or

(c)     become or has been declared uncondi-tional,

and shall publish an announcement as soon as possible to that effect.

(2)     The announcement shall state the number of shares –

(a)   which it or any person acting in concert with it has or controls;

(b)   for which acceptances of the offer have been received; and

(c)   otherwise acquired by the offeror and any person acting in concert with it during the offer period.

(3)     The announcement shall also specify the percentages of the relevant classes of share capital, and the percentages of voting rights, represented by these numbers.

58.   (l)      The Authority shall be consulted if an offeror is unable to comply with any of the requirements of regulation 57.

(2)     The Authority may require that an acceptor be granted a right of withdrawal, on terms acceptable to the Authority, until the requirements of this regulation can be met.

59.   (1)     No dealings of any kind in the securities of the offeree company may be transacted by any person with a commercial interest who has confidential price sensitive information concerning an actual or contemplated offer or revised offer between the time when there is reason to suppose that an approach or an offer or revised offer is contemplated and the announcement of the approach, the offer, the revised offer, or of the termination of the discussions.

(2)     The restriction referred to in sub-regulation (1) does not apply to an offeror, or a person acting in concert with the offeror, in respect of  such dealings if the dealings are transacted for purposes of the offer unless the offeror, or a person acting in concert with the offeror, is a director or employee of the offeree company.

(3)     No dealings may take place in the securities of the offeror company except where the offer is not price sensitive in relation to those securities.

60.   During an offer period, the offeror and any person acting in concert with the offeror shall not sell any securities in the offeree company except with the prior consent of the Securities Authority and following 24 hours public notice that the sales might be made.

61.   During an offer period for an offer consisting of shares of the offeror traded on a securities exchange (and for which there is no cash alternative) the offeror, and persons acting in concert with the offeror, may not engage in any purchase of the offeror's shares until the later of the date the offeror abandons its intention to conduct the offer and the date the related offer period expires.

62.   If discussions are terminated or the offeror decides not to proceed with an offer after an announcement has been made that offer discussions are taking place or that an approach or offer is contemplated, no dealings in securities of the offeree company by any person privy to this information may take place prior to an announcement of the position.

63.   (l)       During an offer period all parties to a takeover or merger transaction and their advisors and any person acting in concert with any of the parties to a takeover or merger transaction and their advisor are free to deal, subject to regulations 59, 60, 61, 62, 67, 68, and 70 and to the disclosures and restrictions mentioned in this regulation being made and complied with by them.

(2)      Dealings in relevant securities by –

(a)     a person referred to in sub-regulation (1) for that person's own account during an offer period;

(b)         a person referred to in sub-regulation (1) for discretionary accounts (but not for non­-discretionary accounts) of investment clients during an offer period; 

(c)     any company having a material trading arrangement with an offeree company,

shall be disclosed forthwith in writing to the Authority.

(3)     For the purposes of this regulation­ -

(a)     "dealings" include the purchase and sale of securities, the exercise or conversion of rights over securities, subscriptions for securities, and redemptions or purchases by a company of its own securities; 

(b)     disclosure of dealings shall include the following information - ­

(i)           the total of the relevant securities in question purchased or sold, or redeemed or purchased by the company itself; 

(ii)     the prices paid or received;

(iii)    the identity of the person dealing;

(iv)    if the dealing is by a person acting in concert with the offeror or the offeree company, an explanation of how that status arises; 

(v)     if the disclosure is made by a shareholder who holds 10% or more of any class of issued securities in the company, a statement to that effect; and

(vi)    the resultant total amount of relevant securities owned or controlled by the person in question (including those of any person with whom there is an agreement or understanding) and the percentage which it represents.

64.   During an offer period, if a person, or group of persons acting in concert, owns or controls (directly or indirectly) 10% or more of any class of relevant securities, or as a result of any transaction will so own or control 10% or more, dealings in such securities of that company by such  person or persons (or any other person through whom ownership or control is derived) shall be disclosed to the Authority.

65.   If a person manages investment accounts on a discretionary basis, relevant securities so managed will be treated, for the purpose of this rule, as controlled by that person and not by the person on whose behalf the relevant securities are managed.

66.   (1)     If –­

(a)          shares of any class under offer in the offeree company have been purchased for cash by an offeror, and any person acting in concert with the offeror, during the offer period and within 6 months prior to its commencement and such shares carry 10% or more of the voting rights of the offeree company;

(b)     an offeror making a non-cash offer (for which there is no cash alternative) acquires shares of the offeree for cash during the offer period and thereby becomes obliged to increase its offer pursuant to regulation 67; or

(c)     in the view of the Authority there are circumstances which render such a course necessary in order to give effect to regulation 5,

the offer or revised offer, as the case may be, shall be in cash or accompanied by a cash alternative and, in the case of (a) and (c), the offer price shall not be less than the highest price paid by the offeror or any person acting in concert with it for shares of that class during the offer period and within 6 months prior to its commencement.

(2)     The consent of the Authority is required if the offeror wishes to make its offer for a price other than the highest price paid by it, or any person acting in concert with it for shares of the class that is the subject of the offer during the offer period and within 6 months prior to its commencement.

67.   If the offeror or any person acting in concert with it purchases securities in the offeree company in the market or otherwise during the offer period at above the offer price, then the offeror shall increase the offer to not less than the highest price (excluding tax or duty, if any, and dealing costs) paid for any securities so acquired.

68.   (1)     If the offer involves a further issue of securities of a class already traded on a securities exchange, the current value of the offer on a given day shall be established by reference to the average traded price ofsuch securities traded during the immediately preceding trading period.

(2)     If the offer involves a combination of cash and securities and further purchases of the offeree company's shares oblige the offeror to increase the value of the offer, the offeror shall endeavour, as far as practicable,  to effect such increase while maintaining the same ratio of cash to securities as is represented by the offer.

69.   Shareholders of the offeree company shall be notified in writing of the increased price at least 14 days before the offer closes, and an announcement shall be made stating the number and class of securities purchased and the price paid.

70.   Except with the consent of the Authority, neither the offeror nor any person acting in concert with it may enter into arrangements to purchase or sell securities of the offeree company, or to accept an offer, either during an offer or where one is reasonably in contemplation, if the arrangements have special conditions which are not extended to all shareholders.

71.   An offer shall not be made subject to conditions which depend on judgments by the offeror or the fulfilment of which is in its hands.

72.   (1)     Except with the consent of the Authority, an offer shall be conditional upon the offeror having received acceptance in respect of shares which, together with shares acquired or agreed to be acquired, before or during the offer, will result in the offeror and persons acting in concert with it holding more than 50% of the voting rights of the offeree company.

(2)     An offer may be made conditional on an acceptance level of shares carrying a higher percentage of the voting rights.

73.   (1)     Except with the consent of the Authority, where an  offer  has  been announced or posted but has not become unconditional in all respects, and has been withdrawn or has lapsed, neither the offeror nor any person who acted in concert with it in the course of the original offer, nor any  person who is subsequently acting in concert with any of them, may within 12 months from the date on which the offer is withdrawn or lapses make an offer for the offeree company.

(2)     The restriction in sub-regulation (1) may also apply where a person, having made an announcement which, although not amounting to the announcement of an offer, raises or confirms the possibility that an offering might be made, does not announce a firm intention either to make, or not to make, an offer within a reasonable time after the announcement.

74.   (1)     Except with the consent of the Authority, if a person, together with any person acting in concert with that person holds more than 50% of the voting rights of a company, neither that person nor any person acting in concert with that person may make a second offer to shareholders, or purchase any shares of that company at a higher price than that made available under the previous offer, within 6 months of the closure of any previous offer made by that person to the shareholders of that company that became or  were declared wholly unconditional.

(2)     For the purpose of sub-regulation (1) the value of a securities exchange offer shall be calculated as at the day the offer became, or was declared, unconditional.

75.   (1)     After an acquisition or disposal of shares carrying voting rights in a company,  or rights over such  shares, a person shall disclose that acquisition or disposal and the person’s total holding to the company not above later than  9.00 a.m. on the dealing day following the date of the acquisition or disposal, if as a result of –

(a)          the acquisition the person comes to hold, with any shares or rights over shares already held by the person, shares or rights over shares representing 20% or more but less than 50% of the voting rights in a company; or

(b)         the acquisition or disposal of the shares or rights over shares already held by the person represents 20% or more of the voting rights and is increased or decreased to or beyond any whole percentage figure representing 20% or more but not exceeding 50%; or

(c)          a disposal of the shares or rights over shares held by the person decreases from one representing 20% or more of the voting rights to one representing less than 20%.

(2)     Where two or more persons act by agreement or understanding in the acquisition by one or more of them of shares carrying voting rights in a company, or rights over such shares, their holdings and acquisitions must be aggregated and treated as a holding or acquisition by one person for the purpose of this regulation.

(3)     A person acting in the manner referred to in sub-regulation (2) shall ensure that the obligations arising under this regulation are fulfilled.

(4)     The manner, timing and terms of the disclosures are the same (with any necessary modifications as may be appropriate) as for regulation 63.

____________

SCHEDULE 1

   (regulation 37)

REQUIRED CONTENT OF OFFEROR COMPANY'S OFFER DOCUMENT

The offer document shall contain the following statements in a prominent position

Important

"If you are in doubt as to any aspect of this offer, you should consult a licensed securities dealer, lawyer, accountant or other professional advisor."

If you have sold all your shares in ……….. you should at once hand this document and the accompanying form to the purchaser or to the bank ordealer  orother agent through whom the sale was effected for transmission to the purchaser."

The document shall include the following information

The Offeror

1.            (1)     The name and address of the offeror and any financial advisor or other person who may be acting for the offeror, and of any person acting in concert with any of them.

(2)     Unless otherwise agreed with the Authority, the offer  document shall contain a statement as to whether or not any securities acquired in pursuance of the offer will be transferred to any other persons, together with the names of the parties to the agreement, arrangement or understanding and particulars of all securities in the offeree company held by such persons, or a statement that no such securities are held.

2.      If either the offeror or any person acting in concert with it is a company, the names of its directors and controlling shareholders.

3.     (1)     The offeror's intentions regarding –

(a)          the continuation of the business of the offeree company;

(b)         any major changes to be introduced in the business, including any redeployment of the fixed assets of the offeree company; and

 

(c)     the continued employment of the employees of the offeree company and of its subsidiaries.

(2)     The long-term commercial justification for the proposed offer.

4.     (1)     The shareholdings -­

(a)     of the offeror in the offeree company;

(b)     in the offeror (in the case of a securities exchange offer only) and in the offeree company in which directors of the offeror are interested; 

(c)          in the offeror (in the case of a securities exchange offer only) and in the offeree company which any persons acting in concert with the offeror own or control (with the names of such persons acting in concert);

(d)         in the offeror (in the case of a securities exchange offer only) and in the offeree company owned or controlled of any persons who, prior to the posting of the offer document, have irrevocably committed themselves to accept or reject  the  offer, together with the names of such persons; and

(e)     in the offeror (in the case of a securities exchange offer only) and in the offeree company owned or controlled by a person with whom the offeror or any persons acting in concert with the offeror has any arrangement of an indemnity oroption nature, or any other agreement or understanding, formal or informal, of whatever nature, which might be an inducement to deal or refrain from dealing.

(2)     If in any of the categories set out under paragraphs (a) to (c) there are no shareholdings, this fact shall be stated. 

(3)     If any party whose shareholdings are required by this regulation to be disclosed has dealt for value in the shares in question during the period beginning 6 months prior to the offer period and ending with the latest practicable date prior to the posting of the offer document, the details, including dates and prices, shall be stated.

(4)     If no such dealings have taken place, this fact should be stated.

5.          If applicable, an explanation as to why the number of offeree shares it is proposed to acquire, together with the shares beneficially owned by the persons specified in sub-regulation (3), is less than the total number of shares in  issue.

6.          Precise particulars of the securities in respect of which the offer is made and a statement whether they are to be acquired cum or ex any dividend or other distribution which has been or may be declared.

7.          The  price  or other consideration to be paid for the securities.

8.     All conditions attached to acceptances, and in particular whether the offer is conditional upon acceptances, being received in respect of a minimum number and the last day on which the offer can become unconditional. 

9.     A statement whether or not the offeror intends to avail itself of any powers of compulsory acquisition.

10.   (1)     The closing price on the securities exchange of the securities of the offeree company which are the subject of the offer­ -

(a)     on the latest practicable date prior to the publication of the document;

(b)     on the latest business day immediately preceding the date of the initial announce-ment of the offer; and

(c)     at the end of each of the 6 calendar months preceding the date of the initial announce-ment.

(2)     The highest and lowest closing market prices with the relevant dates during the period between the start of the 6 months preceding, the date of the initial announcement and the latest practicable date prior to the posting of the offer document.

11.  Where the offer is in cash, or includes an element of cash, the offer document shall include confirmation, by a financial advisor or by another appropriate independent party that resources are available to the offeror sufficient to satisfy full acceptance of the offer.

12.   (1)     In the case of a securities exchange offer there shall be the following information about the offeror –

(a)     for the last 5 financial years for which the information has been published, turnover, net profit or loss before and after taxation, the charge for tax, extraordinary items, minority interests, the amount absorbed by dividends, and earnings and dividends per share;

(b)     a statement of the assets and liabilities shown in the last published audited accounts;

(c)     all material changes in the financial or trading position of the offeror subsequent to the last published audited accounts or a statement that there are no known material changes;

(d)     details relating to the items referred to in (a) in respect of any interim statement or preliminary announcement made since the last published audited accounts; and

(e)          significant accounting policies together with any points from the notes to the accounts which are of  major relevance to an appreciation of the figures.

(2)     Where, because of a change in accounting policy, figures are not comparable to a material extent, this shall be disclosed and the approximate amount of the resultant variation shall be stated.

(3)     In a highly-leveraged offer, the Authority shall require that the offer document contains a description of the financing arrangements.

(4)     An offer may be considered to be highly-leveraged if, as a result  of  the offer, the offeror will incur a high level of debt and the payment of interest and repayments of security for the debt will substantially depend on the business of the offeree company.

13.   Details of any benefit which will be given to any director of the offeree company as compensation for loss of office or otherwise in connection with the offer.

14.   Details of any agreement or arrangement between the offeror and any of the directors of the offeree company or any person which is conditional on the outcome of the offer or otherwise connected with the offer.

15.   A statement of the obligations of the offeror and the rights of the offeree shareholders under regulations 51 to 58.

16.   The following additional information shall be given by the offeror when it is offering its securities exchange for the securities of the offeree –

(a)          the nature and particulars of its business;

(b)         the date and country of its incorporation;

(c)          the address of its principal office in Seychelles;

(d)         the authorized and issued share capital and any options outstanding in respect thereof, and the rights of the shareholders in respect of capital, dividends and voting;

(e)          whether or not the shares being offered will rank pari passu with the existing issued shares of the company, and if not, a precise description of how the shares will rank for dividends and capital;

(f)          the number of shares issued since the end of the last financial year of the company;

(g)          details of options, warrants and conversion rights affecting shares in the offeror company;

(h)         detail of any re-organization of capital during the two financial years preceding the date of the offer;

(i)           details of any bank overdrafts or loans, or other similar indebtedness, mortgages, charges, or guarantees or other material contingent liabilities of the offeror and any of its subsidiaries, or, if there are no such liabilities, a statement to that effect;

(j)           details of any material litigation to which the company is, or may become a party;

(k)         details of every material contract entered into not more than two years before the date of the offer, not being a contract entered into in the ordinary course of the business carried on or intended to be carried on by the company; and

(l)           how and when the documents evidencing title to the securities will be issued.

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SCHEDULE 2

(regulation 38)

REQUIRED CONTENT OF OFFEREE COMPANY’S REPLY DOCUMENT

The offeree company’s document shall include the following information –

1.     (1)     Whether the directors of the offeree company recommend that the shareholders should accept or reject the offer, or a statement that the directors do not wish to make a recommendation (with reasons for the recommendation or for making no recommendation).

(2)     A copy of the written advice of the offereee’s financial advisors shall also be given.

2.    Whether the directors and any person dealing directly on their behalf intend to accept the offer.

3.     (1)     The aggregate shareholdings in the offeror and in the offeree in which the directors of the offeree are interested shall be stated.

(2)     If any securities in the offeree company have been purchased or sold by such persons within 6 months before the announcement of the offer, details of the numbers, prices and dates shall be given.

4.     (1)     The shareholdings in the offeror company in which the following persons are interested –

(a)          the offeree company, the offeree’s holding company and any subsidiary or fellow subsidiary;

(b)         each director of the offeree company; and

(c)          the offeree’s financial advisor, the advisor’s holding company or any subsidiary or fellow subsidiary.

(2)     If any shares in the offeror company have been purchased or sold by such persons within 6 months before the announcement of the offer, details of the numbers, prices and dates shall be given.

5.     (1)     The authorized and issued share capital and any outstanding options, and the rights of the shareholders in respect of capital, dividends and voting.

(2)     The number of shares  issued since the end of the last financial year of the company.

(3)     Details of options, warrants and conversion rights affecting shares in the offeree company.

6.     (1)     The information about the offeree company shall be as follows–

(a)     for the last 5 financial years for which the information has been published, turnover, net profit or loss before and after taxation, the charge for tax, extraordinary items, minority interests, the amount absorbed by dividends, and earnings and dividends per share;

(b)     a statement of the assets and liabilities shown in the last published audited accounts;

(c)     all material changes in the financial or trading position or prospects of the company subsequent to the last published audited accounts or a statement that there are no known material changes;

(d)     details relating to items referred to in (i) above in respect of any interim statement or preliminary announcement made since the last published audited accounts; and

(e)     significant accounting policies together with any points from the notes to the accounts  which  are  of  major relevance to an appreciation of the figures.

(2)     Where, because of a change in accounting policy, figures are not comparable to a material extent, this shall be disclosed and the approximate amount of the resultant variation shall be stated.

7.     Details of every material contract entered into more than two years before the date of the offer, not being a contract entered into in the ordinary course of business carried on or intended to be carried on by the company.

8.     (1)     Details of any benefit to be given to any director of the offeree company as compensation for loss of office or otherwise in connection with the offer.

(2)     Details of any agreement between any director of the offeree company and any other person which is conditional on the outcome of the offer or otherwise connected with the offer.

(3)     Details of any material contract entered into by the offeror in which any director of the offeree company has a material personal interest.

9.    Details of any service contracts with the offeree company or any of its subsidiaries or associated companies in force for directors of the offeree company which have more than 12 months to run, or which have been entered into or amended, within 6 months before the announcement of the offer.

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S.I 46 of 2008

SECTION 133

SECURITIES (FINANCIAL STATEMENTS) REGULATIONS

[1st July 2008]

 

ARRANGEMENT OF REGULATIONS

PART 1 – PRELIMINARY

1.          Citation

2.          Interpretation

3.          Contravention

  PART 2 – ACCOUNTING RECORDS

4.          Duty to keep accounting records

5.          Records to be up to date

6.          Audit trail

7.          Conformity with accounting standards

8.          Retention of records

9.          Inspection of records

10.      Securities market may impose additional requirements on members

PART 3 – FINANCIAL STATEMENTS AND RETURNS

11.      Duty to prepare annual financial statements

12.      Balance sheet to give a true and fair view

13.      Profit and loss account to give a true and fair view

14.      Form and content of financial statements

15.      Securities Authority may require returns

16.      Licensees to obtain auditor’s report etc

17.      Annual financial statements to be submitted to the Authority

18.      Contents of auditor’s report

19.      Qualified reports

PART 4 – MINIMUM ISSUED AND PAID-UP CAPITALREQUIREMENTS

20.      Minimum capital requirements

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PART 1 – PRELIMINARY

1.            (1)     These regulations may be cited as the Securities (Financial Statements) Regulations.

(2)     These regulations shall apply to securities dealers licensed by the Authority, except for regulation 20 which shall apply to securities dealers and the other persons specified therein.

2.     In these regulations –

"Act" means the Securities Act 2007;

Authority" means the Securities Authority;

"financial year' means the calendar year ending on 31December unless, in the case of a licensee, the Authority has approved in writing another financial year period;

"licensee" means a securities dealer licensed under the Act;

3.     A licensee who contravenes any provision of these regulations commits a disciplinary offence under the Act.

PART 2 – ACCOUNTING RECORDS

4.     (1)     A licensee shall keep accounting records which are sufficient to show and explain its securities transactions, whether they are effected on its own behalf or on behalf of others, and that -

(a)     disclose with reasonable accuracy, at any time, the financial position of the licensee at that time; and 

(b)     enable the licensee to prepare a balance sheet and a profit and loss account as at any time and which comply with the requirements of these regulations.

(2)     The accounting records must in particular contain –

(a)     entries from day to day of all sums of money received and expended by the licensee, and the matters in respect of which the  receipt and expenditure takes place;

(b)     a record of all assets and liabilities of the licensee including any commitments or contingent liabilities;

(c)     entries from day to day of all purchases and sales of securities by the licensee distinguishing those which are made by the licensee on its own account and those which are made by it on behalf of others;

(d)     entries from day to day of ?

(i)           all client money which is paid into or out or a client bank account maintained for the purposes of these regulations; 

(ii)     receipts and payments of client money not passed through a client bank account, identifying the persons to whom each receipt or payment relates;

(e)     a record of balances –

(i)      on client bank accounts;

(ii)     balances with individual clients stating the name of each client and the amount held or received for that client; and

(f)     details of all securities that are –

(i)                    the property of the licensee, showing by whom they are held and whether, if held otherwise than by the licensee itself, they are so held as collateral against loans or advances; and

(ii)                  not the property of the licensee but for which the licensee is accountable, showing by whom and for whom they are held distinguishing those which are deposited with a third party whether as security for loans or advances made to the licensee or any related person or for any other purpose.

5.     The obligations under these regulations are continuing obligations and continuous performance of them is required so as to ensure that records are updated daily.

6.     (1)     Where these regulations require information to be recorded it shall be recorded in such a way as to enable a particular transaction to be identified at any time and traced through from initiation of the order to final settlement.

(2)     All records shall be arranged, filed, indexed and cross referenced so as to permit prompt access to any particular record.

7.     The accounting records that a licensee is required to keep must conform to the requirements of international accounting standards.

8.     A licensee shall preserve the accounting records that are required to be kept under regulation 4 for at least seven years from the date on which they are made.

9.     Accounting records which are required to be kept under regulation 4 shall, at any time during the period in which they are required to be preserved, be produced (or inspection to the Authority, or any person authorized by the Authority to receive the documents, on demand at a reasonable time and place that may be specified by the Authority or the authorized person.

10.   Nothing in these regulations shall prevent a licensed securities exchange from imposing on licensees who are members of the exchange any further obligations or requirements that may be necessary with respect to -

(a)          the keeping of accounts, books and records;

(b)     the making of periodic financial reports to the security exchange in the form and manner required by the exchange;

(c)     the auditing of accounts;

 

(d)     the provision of an appropriate trail;

(e)     the information to be given in reports by auditors; or 

(f)          spot order checks.

PART 3 – FINANCIAL STATEMENTS AND RETURNS

11.  A licensee shall prepare for each of its financial years an annual financial statement that must consist of –

(a)          a balance sheet as at the last day of the financial year; and

(b)         a profit and loss account for the financial year.

12.   The balance sheet must give a true and fair view of the state of affairs of the licensee as at the end of the   financial year.

13.  The profit and loss account must give a true and fair view of the profit or loss of the licensee for the financial year.

14.   The financial statements of a licensee must comply with the requirements of international accounting standards.

15.   (1)     The  Authority may by a written notice require a licensee to submit periodic returns to it.

(2)     In addition to any periodic returns required under sub-regulation (1), the Authority may by a written notice require a licensee, either generally or in a particular case of class of case, to submit exceptional returns to the Authority.

16.  A licensee shall submit, within six weeks after the end of each financial year, its annual financial statements to its auditor for audit and shall obtain an auditor’s report that complies with the requirements of regulation 18.

17.   (1)     A licensee shall submit, within four months after the end of each financial year, its auditor’s report to the Authority together with –

(a)          its annual financial statements; and

(b)         confirmation in writing that it has complied with every regulation that it is required to comply with and any further information or confirmation as the Authority may require from time to time.

(2)     Where the auditor’s report is qualified on the grounds of the auditor’s uncertainty as to the completeness or accuracy of the accounting records, that report when submitted by the licensee to the Authority shall be accompanied by a written document signed by two directors stating whether all –

(a)          the accounting records of the licensee have been made available to the auditor for the purposes of the audit;

(b)         transactions undertaken by the licensee have been properly reflected and recorded in its accounting records; and

(c)          other records of the licensee and related information have been available to the auditor.

18.   (1)     The auditor’s report shall state whether the annual financial statements of the licensee have been audited in accordance with approved auditing standards.

(2)     The auditor’s report shall also state whether in the opinion of the auditor –

(a)          The annual financial statements of the licensee have been properly prepared in accordance with these regulations;

(b)         in the case of the balance sheet, a true and fair view is given of the financial state of affairs of the licensee as at the end of the financial year;

(c)          in the case of the profit and loss account, a true and fair view is given of the profit or loss of the licensee for the financial year;

(d)         the licensee has, throughout the financial year, kept proper accounting records in accordance with the requirements of these regulations;

(e)          the licensee has kept client money properly segregated in accordance with regulation 31 of the Securities (Conduct of Business) Regulations 2008;

(f)          the balance sheet and the profit and loss account are in  agreement with the licensee’s accounting records.

19.    (1)     If the auditor is of the opinion that one or more of the requirements of regulation 18 have not been met, the auditor shall state that  fact in the report and specify the relevant requirements and the respects in which they have not been met.

(2)         If the auditor fails to obtain all the information and explanations that, to the best of the auditor’s knowledge and belief, are necessary for the purposes of the audit, that fact shall be stated in the report.

(3)     If the auditor is unable to form an opinion as to whether one or more of the requirements of regulation 18 have been met, the auditor shall state that fact in the report and specify those requirements and give reasons why it was not possible to form an opinion.

PART 4 – MINIMUM ISSUED AND PAID-UP CAPITAL REQUIREMENTS

20.  The following persons shall have a minimum issued and paid-up capital of not less than as follows –

(a)          Licensed securities dealer – US$50,000;

(b)         Licensed investment advisor – US$25,000;

(c)          Licensed securities exchange – US$150,000;

(d)         Licensed clearing agency – US$100,000;

(e)          Other licensed securities facility – US$50,000;

_________________

S.I. 47 of 2008

SECTION 133

SECURITIES (ADVERTISEMENTS) REGULATIONS

[1st July 2008]

 

ARRANGEMENT OF REGULATIONS

1.          Citation

2.          Interpretation

3.          Restrictions on advertising

4.          Exceptions from restrictions on advertising

5.          Advertisements to comply with Schedule

6.          Advertisement directions

7.          Advertisements to be copied to the Authority

8.          Contravention

SCHEDULE

____________

1.            These regulations may be cited as the Securities (Advertisements) Regulations 2008.

2.      (1)     In these Regulations –

“advertisement” includes every form of advertising, whether in a publication, or by the display of notices, signs, labels or showcase by means of circulars or other documents, by an exhibition of pictures or photographic or cinematographic films, by way of sound broadcasting or television, by the distribution of recordings, by internet or other computer or digital means, or in any other manner, and “advertising” shall be construed accordingly;

“Authority” means the Securities Authority;

“authorized persons” means a person specifically authorized in writing by the Authority in respect of securities business or promoting securities business;

“securities advertisement” means any advertisement for or in connection with securities investment or securities business.

2.      Subject to regulation 3, only persons who are licensed by the Authority in respect of securities business, or an authorized person, shall issue or cause to be issued a securities advertisement in Seychelles.

3.      Regulation 2 does not apply to –

(a)          a securities advertisement issued or caused to be issued by, and relating to securities issued by –

(i)           the Government of Seychelles or the government of any country or territory outside Seychelles; or

(ii)     the central bank of any country or territory; or

(b)     an advertisement which is a prospectus approved by the Authority.

4.     No licensee or authorized person, shall issue or cause to be issued, whether in Seychelles or elsewhere, a securities advertisement unless the requirements of the Schedule under these regulations are complied with in relation to that advertisement.

5.      (1)     If the Authority considers that a securities advertisement issued, caused to be issued or proposed to be issued by a licensee or advertisement person is misleading, the Authority may by notice in writing give the licensee or authorized person direction under this regulation.

(2)     A direction under this regulation may contain all or any of the following prohibitions or requirements –

(a)     a prohibition on the issue of advertisements of a specified kind;

(b)     a requirement that advertisements of a particular description must be modified in a specified manner; 

(c)     a prohibition on the issue of any advertisements which are, wholly or substantially, repetitions of an advertisement which has been issued or is proposed to be issued and which is identified in the direction;

(d)     a requirement to take all practical steps to withdraw from display in any place or from circulation any advertisement or any advertisements of a particular description specified in the direction;

(e)     a requirement, in respect of a particular advertisement, that a correction be published in the manner and form specified by the Authority.

6.     (1)     A licensee or an authorized person shall, fourteen days prior to the date of the first use, forward to the Authority a copy of every securities advertisement issued or caused to be issued by a licensee or an authorized person together with, if so prescribed, the applicable advertisement filing fee.

(2)     If on receipt, the Authority is not satisfied that the advertisement is in accordance with these regulations, the Authority shall before the date of the first use require the licensee or the authorized person to make amendments as proposed by the Authority.

7.     A person who issues or causes to be issued in Seychelles a securities advertisement that is a prohibited issue under regulation 3, or does not comply with regulation 5, commits an offence and is liable on conviction to a fine not exceeding US$50,000.

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SCHEDULE

(Regulation 4)

1.      (1)     The content of a securities advertisement and the manner of its presentation shall appear in a context that is not likely to be misunderstood.

(2)     A securities advertisement shall not contain any statement, promise or forecast unless the person issuing it has taken all reasonable steps to ensure that each statement, promise or forecast is not misleading in the form or context in which it appears.

(3)     A securities advertisement shall not contain any statement purporting to be a statement of fact that the person issuing it does not reasonably believe at the time, on the basis of evidence of which it has a record in its possession, to be true.

(4)     If the matter to which a securities advertisement relates is available –

(a)          in limited quantities;

(b)         for a limited period; or

(c)          on special terms for a limited period;

the advertisement may say so but, if that is not the case, the advertisement must not contain any statement or matter that implies it is so.

2.     No securities advertisement shall be issued with the intention of persuading persons who respond to the advertisement to enter into an agreement, or use business services, of a description not mentioned in the advertisement.

3.            A securities advertisement must not contain any matter that states or implies that the securities investment or securities business  that is the subject of the advertisement or any matter in the advertisement has the approval of a Government department or of the Authority.

4.            A securities advertisement that states only some of the rights and obligations of an investment in securities or only some of the terms and conditions of an agreement relating to securities investment must –

(a)          state a sufficient amount to give a fair view of the nature of the investment in securities, of the financial commitment undertaken by an investor in acquiring the investment in securities and of the risks involved; and

(b)         state how a written statement of all of them can be obtained.

5.            A securities advertisement must not compare or contrast one investment in securities with an alternative investment, or one securities service with an alternative securities service, unless the comparisons and contrasts are fair in relation to what is promoted and to the alternative having regard to what is not stated as well as to what is stated.

6.            A securities advertisement must not contain information about the past performance of securities investments of any description unless –

(a)          it is relevant to the performance of the securities investment being advertised;

(b)         the source of the information is stated;

(c)          if the whole of the information is not set out–

(i)           what is included is not unrepresen-tative, unfair or otherwise misleading; and

(ii)         the exclusion of what is excluded does not have the effect of exaggerating the success or perfor-mance over the period to which the information that is included relates;

(d)         if the information is presented in the form of a graph or chart, no part of the information is omitted so as to give a misleading impression of the rate at which variable quantities or amounts have changed;

(e)          the period which is  selected as illustrating past performance is a period of not less than 3 years which period must end no more than 3 months before the date of the issue of the advertisement; and

(f)          the advertisement contains a warning that the past is not necessarily a guide to the future.

7.     (1)      A securities advertisement must contain a statement in accordance with this clause warning of the risks involved in acquiring or holding the securities being advertised.

(2)     The statement of an advertisement, relating to a security that can fluctuate in value in money terms, must draw attention to that fact and to the fact that the investor may not get back the amount invested.

(3)     The statement of an advertisement, offering a security likely to yield a high income or as being suitable foran investor particularly seeking income from the investment, must draw attention to that fact and that income from the investment may fluctuate in value in money terms.

(4)     The statement of an advertisement, which relates to a security denominated in a currency other than that of the country where the advertisement is issued, must draw attention to the fact that changes in rates of exchange between currencies may cause the value of the security to diminish or to increase.

(5) The statement of an advertisement, that contemplates the investor entering into a transaction the nature of which is such that the investor may not only lose what is paid at the outset but may incur a liability to pay unspecified additional amounts later, must draw attention to the fact that the investor may or, as the case may be, will have to pay more money later and that accordingly a transaction in that security can lose the investor more than the first payment.

8.     A securities advertisement shall not describe a prospective investment return as being in any way guaranteed, secured, assured or promised, either expressly or impliedly; unless the advertisement has been approved in writing by the Authority prior to its issue.

9.      (1)     A securities advertisement shall identify the licensee or authorized person who issues or causes the advertisement to be issued, and shall identify the person on whose behalf the advertisement is issued if different from the licensee or authorized persons.

(2)     Registered principals shall approve, initial and date such advertisement or item of sales literature before the date of first issue of the material.

 

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