What does Securities Business mean?
A security activity shall mean any of the following activities:
◾Dealing
◾Arranging
◾Managing
◾Advising
◾Custody
What does Dealing activity mean?
Dealing activity means a person deals in a security as principal or as agent, and dealing includes to sell, buy, manage the subscription or underwrite securities.
What does Arranging activity mean?
Arranging activity means a person (natural or legal person) introduces parties in relation to securities business, advises on corporate finance business or otherwise acts to bring about a deal in a security.
What does Carry out Securities Business means?
Securities business shall mean engaging in any of the securities activities specified in Article of the Securities Business Regulations by any person acting by way of business unless any of the exclusions specified in Chapter 2 of Part 2 of the mentioned regulation apply.
When is a person considered carrying out securities business in the Kingdom?
A person carries out securities business in the Kingdom if:
a) he engages in securities activity from a permanent place of business in the Kingdom;
b) he is presumed to carry out a securities activity from a permanent place of business in the Kingdom in any of the following situations:
1. he engages in the relevant activity, or in securities business generally, in the Kingdom; or
2. he engages in the relevant activity with or for a person in the Kingdom.
Does carrying out a Securities business in the Kingdom need an authorization?
A person who intends to carry out securities business in the Kingdom must have an authorisation issued by the Authority, Unless a person is an exempt person as specified in Annex1 to the Securities Business Regulations.
Are there any securities business activities do not require an authorisation from the Authority?
There are some securities business activities do not need an authorization from CMA, as follows:
◾ The activities within the groups and joint projects.
◾ activities carried out in the course of carrying out any profession or business which does not otherwise consist of carrying out securities business.
◾ Sale of Goods and Supply of Services if the activity of the securities is necessary or complementary to those purposes.
◾ executor of a will.
◾ Activities related to the sale of the company.
And that is according to the details contained in these regulations.
Is a person excluded from the authorisation when dealing in securities that is not a contractually based security as a principal?
Dealing by a person as principal in a security that is not a contractually based security is excluded unless:
a) the person holds himself out as engaging in the business of dealing in securities; or
b) the person regularly solicits members of the public to deal in securities.
Who are the addresses in the Prudential Rules?
The addresses in the prudential rules are the authorised persons that are authorised to carry out any of the securities business in the Kingdom.
What is the purpose of these Prudential Rules?
The purpose of these Rules is to specify the requirements that an authorised persons needs to comply with to maintain its financial prudence, confront any losses and ensure continuity of its business. The Rules also aim to ensure the availability of the needed financial resources to carry on the authorised person businesses.
What is the capital base?
The capital base consists of Tier-1 capital and Tier-2 capital which are calculated as per the Prudential Rules.
What does Tier-1 capital mean?
It means the most loss-absorbing form of capital in containing potential losses. It consists of (a)paid-up capital, (b) audited retained earnings, (c) share premium, (d)reserves (other than revaluation reserves), and (e) Tier-1 capital contributions. Tier-1 capital is the net figure after applicable deductions as per the Prudential Rules.
What does Tier-2 capital mean?
It is the second component of capital base, and less loss-absorbing than Tier-1 in containing potential losses. Tier-2 may include subordinated loans, accumulated preferred shares and revaluation reserves. Tier-2 is the net figure after applicable deductions as per the Prudential Rules.
What does offering of securities mean?
offering securities shall mean issuing securities, inviting the public to subscribe therefor or the direct or indirect marketing thereof; or any statement, announcement or communication that has the effect of selling, issuing or offering securities, but does not include preliminary negotiations or contracts entered into with or among underwriters.
What does the offeror mean?
A person shall be considered an offeror of securities if he makes an offer or invites a person to make an offer which, if accepted, would give rise to the issue or sale of securities by him or by another person with whom he has made arrangements for the issue or sale of the securities.
