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                Licensing, Registration and Monitoring

                Article (47)
                A- Unless licensed by the Board in accordance with instructions issued thereby, no person may engage in business as:
                1. Financial Broker;
                2. Dealer;
                3. Investment Trustee;
                4. Investment Manager;
                5. Financial Advisor;
                6. Underwriter,
                7. Financial Services Company;
                8. Custodian;
                9. Any other activities relating to securities determined by the Board.
                B- No natural person may serve as a Registered Person of any of the entities referred to in Paragraph (A) of this Article unless registered with the Commission.
                C- The Board shall, in accordance with instructions issued thereby, determine the nature of the activities referred to in Paragraph (A) of this Article, the licensing requirements for each, the registration requirements for Registered Persons, and standards of training, experience, and competence for such. The Board may subject applicants to an examination or to any other demonstration establishing satisfaction of prescribed standards.
                D- The Board may, in accordance with instructions issued thereby, grant any person exemption from the licensing and registration requirements set forth in Paragraph (C) of this Article, subject to the dictates of public interest.

                Article (48)
                A- An application for a license for any of the activities referred to in Paragraph (A) of Article (47) shall be filed in writing with the Commission on the form prescribed thereby, enclosed therewith a statement attesting to the accuracy of the information in the applicant signed by the applicant. The application shall include:
                1. The applicant’s name or commercial name;
                2. The form of the company;
                3. The applicant’s principal place of business, and its principal office and branches in the Kingdom, if applicable;
                4. The residence and business addresses of all persons concerned in the company including owners, managers and employees, specifying as to each his capacity and title;
                5. The nature of the applicant’s business and the length of time the applicant has engaged therein.
                B- The Commission may also require of the applicant such additional information as to the applicant's previous history, record and relation with other companies, as it may deem necessary to establish the good repute in business of the applicant
                C- The Commission may take the necessary measures to verify the information filed in the application.
                D- The application for registration shall be filed with the Commission in accordance with the instructions issued by the Board.
                E- The Board shall issue its decision granting or denying the license or registration within 60 days as of the date of filing a complete application therewith satisfying all the terms and conditions.

                Article (49)
                A- 1. The license or registration granted in accordance with the provisions of Article (48) of this Law shall expire on the 31st day of December of each year.
                2. The Board may issue a new license for the succeeding year upon written application submitted for this purpose and payment of the fee specified by the Board.
                3. An applicant for a license or registration shall file any additional data or information necessary for this purpose. Applications for renewals must be made not less than thirty days before the first day of the ensuing year, otherwise they shall be treated as new applications.
                B- The Board may approve petitions to modify licenses occasioned by changes in any information relating to the company employees, owners, managers or directors of any Financial Broker, Dealer, Investment Manager, Financial Services Company, Investment Trustee or Underwriter, provided this is made in a written application setting forth the information and facts with respect to such change.

                Article (50)
                The Board may require the Licensed Person to provide unconditional bank guarantees or any other acceptable guarantees so as to secure the Licensed Person’s obligations to its clients dealing in securities and ensure its compliance with the provisions of this Law and the regulations, instructions and decisions issued pursuant thereto. The Board may liquidate the guarantees and dispose of the guarantees as it deems appropriate.

                Article (51)
                A- A Financial Services Company may obtain a single license to embrace the conduct of business as a Financial Broker, Dealer, Investment Manager, Investment Trustee and Underwriter or any combination of these services.
                B- Any person licensed to carry out any of the activities referred to in Paragraph (A) of this Article may carry out the activity of a Financial Advisor without a need for a separate license as a Financial Advisor.

                Article (52)
                No person shall, at the same time, serve both as an Investment Manager and as an Investment Trustee for the same account or for the same client

                Article (53)
                The names and addresses of all Licensed and Registered Persons, as well as all provisions pertaining thereto, shall be recorded in a register of Licensed or Registered Persons which shall be kept at the Commission and accessible to the public.

                A- The Board shall issue the instructions and decisions specifying the records to be maintained and kept by the Licensed Persons and such Person’s obligation to submit any copies thereof requested by the Commission.
                B- The Commission employees authorized by the Chairman, may at any time inspect and view the records mentioned in Paragraph (A) of this Article periodically or whenever necessary to protect the investors and ensure public interest.
                C- Licensed Persons must maintain accounting records in accordance with accepted accounting standards.

                Article (55)
                Notwithstanding what is stated in any other legislation:
                A- The Licensed Person shall segregate client’s moneys and securities that are considered a civil deposit therewith from its own moneys and securities, in accordance with the conditions specified by the Board which should be included in the agreements concluded with the clients.
                B- Except where otherwise determined by the Board pursuant to instructions issued thereby, money and assets that belong to clients and held by a Licensed Person shall not, under any circumstances, be available to distribute to the creditors of the Licensed Person in the event of the Licensed Person’s insolvency or default.
                C- The method of naming accounts and the requirements for the segregation and custody of clients money and assets shall be specified in instructions or decisions issued by the Board.

                Article (56)
                A Licensed or Registered Person shall be deemed in violation of the Law if it carries out any of the following:
                A- Misdirect, misapply or otherwise misuse funds entrusted by clients or by shareholders;
                B- Practice Deception, Misrepresentation or Prohibited Acts;
                C- Individually or in collusion with others, affect competition adversely, by manipulating the commissions or service fees charged to clients, or limiting the types of services provided thereto;
                D- Individually or in collusion with others, affect or attempt to affect the capital market adversely or otherwise.

                Article (57)
                In carrying out their activities, Licensed and Registered Persons, and their employees, shall perform their duties abiding by the rules of professional conduct in accordance with the instructions issued by the Board. This shall include acting with loyalty and dedication so as to maximize their clients’ interests, realize their clients’ investment objectives, and refrain from discriminating between clients, charging them excessive commissions and service fees, or guaranteeing or promising clients definite amounts of profits, or otherwise engaging in fraudulent and deceptive practices.

                Article (58)
                The Board may deny the license of any person or revoke the license granted to any person if it finds that any of that person’s board of directors, chief executive officers, directors or managers in a position of responsibility has violated the licensing requirements of this Law or the regulations, instructions and decisions issued pursuant thereto.

                Article (59)
                A- Any Licensed or Registered Person shall continue to comply with all the licensing and registration requirements provided for by this Law and specified in the instructions issued pursuant thereto, subject otherwise to revoking the license or registration.
                B- Subject to the provisions of Article (61) of this Law, if a license or registration for an activity is not renewed, the Licensed or Registered Person shall cease to engage in that activity.

                Article (60)
                A- The Board may deny, suspend or revoke the license or registration of any person, as the case may be, if after notice and hearing it finds that this person has carried out any of the following:
                1. violated any provision of this Law or the regulations, instructions or decisions issued pursuant thereto;
                2. filed false information in the application for license or registration;
                3. committed a Prohibited Act;
                4. demonstrated incompetence to transact business as a Licensed or Registered Person.
                B- In cases of charges against a Registered Person, notice thereof shall also be given to the person employing the Registered Person.
                C- Pending the hearing, the Board may suspend the license or registration, provided it states the cause for such suspension.
                D- Until the entry of a final order, the suspension of a license or registration, though binding upon the persons notified thereof, shall be deemed confidential, and shall not be published, unless it shall appear that the order of suspension has been violated after notice.
                E- The final order of the Board refusing, suspending, or revoking a license, together with its findings, shall be entered in the Record of Licensed and Registered Persons. The suspension or revocation of the license of a Licensed Person shall legally suspend or revoke the registration of all its Registered Persons.

                Article (61)
                Any Licensed Person that decides to discontinue carrying out any of its licensed activities shall promptly inform the Commission about its decision. In such a case, the license shall be revoked upon the fulfillment of all the requirements set by the Commission for the settlement of all claims and matters related to the activity being discontinued.

                Article (62)
                A- Notwithstanding what is stated in any other law, the liquidation of any Licensed Person, whether voluntary or involuntary, shall be carried out under the Commission’s supervision and follow up, provided this provision shall not apply to banks with respect to their banking assets.
                B- The Board may take any necessary measures to publicize the bankruptcy of a Licensed Person who is a natural person, or refer a Financial Services Company for compulsory liquidation.
                C- Notwithstanding what is stated in any other law, the moneys and securities belonging to the clients of a Financial Services Company or a licensed natural person, shall not be subject to the procedures of lien, sequestration, liquidation or bankruptcy to which the Financial Services Companies or the natural person is subject.

                Article (63)
                A- The relationship between the client and the Licensed Person shall be governed by a written agreement that is consistent with the provisions of this Law and the regulations, instructions and decisions issued pursuant thereto.
                B- Every Licensed or Registered Person, when contracting with its clients or transacting in securities for their interests, shall certify the validity of its clients’ signatures after verifying their identities and capacities for contracting. The Licensed or Registered Person shall be responsible for the validity of the said signatures.
                C- Any Licensed or Registered Person that sells or disposes of any securities without a written authorization from its owner or a written agreement pursuant to which the sale or disposition is authorized shall be deemed to have committed forgery and fraud.

                Article (64)
                A- With the approval of the Board, an association for Registered Persons known as the (Association of Capital Market Registered Persons) shall be established, and shall have a legal personality. As such, it may carry out its activities, pursue its objectives, develop financial professions, protect the interests of its members, promote interaction between members, and raise awareness about standards of professional conduct. B- The rules and procedures pertaining to the establishment of the Association, the contributions of its members, the method of forming its general assembly and board of directors and the tasks entrusted to each, the method of holding its meetings and all administrative and financial matters relevant to the Association, including setting the membership and subscription fees therein, the method of the dissolution of the Association and disposal of its fund shall be specified in accordance with its articles of association and by-laws.
                C- 1. The Association shall submit to the Board for approval prior to going into effect any amendments it introduces to its articles of association or by-laws.
                2. The Board may request the board of directors of the Association to introduce any amendments the Board deems fit to its articles of association or any of its by-laws and during the period specified in the application.
                3. After the lapse of the period referred to in Subparagraph (2) of this Paragraph, the Board may introduce any amendments it deems fit to the Association’s articles of association or the bylaws.
                D- Upon its establishment, the Association shall be the legal and factual successor for the Certified Financials Professionals’ Association, whereby all the latter’s rights, obligations, assets, records and moneys shall devolve upon the Association.

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