Jordan Securities Commission Proposes Draft Project of the Instructions of Marketing Agreements to Financial Services Companies

Jordan Securities Commission (JSC) recently prepared the Draft Project of the “Instructions of Marketing Agreements to Financial Services Companies”, to regulate & to develop Jordan capital market & to protect its dealers & investors. This step shall permit the re-use of Marketing Agreements by Financial Services Companies in order to maintain an attractive investment environment & to eliminate previous malpractices. The “Draft Project” includes the minimum requirements to be available in any Agreement between Financial Services Companies & Marketers.

The (JSC) proposes this “Draft Project” to all concerned parties in Jordan capital market including brokers, investors, auditors & others, to state their opinions on the suggested “Instructions” within two weeks from the date of being disseminated. The Commission wishes to be acquainted with their opinions & suggestions to benefit from these prior to being finalized.

The attached “Instructions” are merely a “Draft Project” that may be altered & amended as deemed proper for public interest, nor is any part of it is final yet.

Kindly send your views & opinions to the following addresses:
Email: info@jsc.gov.jo
Fax: 5682615.

 

Proposed Draft Project of the Instructions of Marketing Agreements to Financial Services Companies

Financial Services Companies (FSC) shall be permitted to make Marketing Agreements, in condition that the following requirements are available in any one made between (FSC) & the Marketer:

The written Agreement shall be with a Legal Person, signed by the company’s Chief Executive Officer (CEO) & endorsed by an authorized signatory by any member of the Board of Directors or Board of Executives, taking into account the following:

1. The duties of the Legal Person “the Marketer” shall be limited to merely collecting clients without undertaking any other businesses defined under ‘Financial Services Businesses’.
2. It shall be prohibited to deal with collected clients in any manner other than on the Cash Bases or Margin Finance.
3. It shall be prohibited to trade in clients accounts attached to the Agreement in any form, to merely obtain a Churning Trade.
4. The Marketer shall be prohibited to have authorizations or judicial power of attorneys to run clients accounts collected to deal with the company.
5. The  Marketer shall be prohibited to collect clients related to him, such as those listed below:

A. Affiliate Companies.
B. Chairman & members of the Board of Directors/ Board of Executives & Senior Executive Management of the company from non partners/ Shareholders.
C. Chairman & members of the Board of Directors/ Board of Executives & Senior Executive Management of an Affiliate Company.
D. Any person owning (5%) or more of the company shares or of Affiliate Companies.
E. Relatives (father, mother, brother, sister, husband, wife ‘spouse’ & children).
F. Saving Funds of people working for the Legal Person recruited as a Marketer.
G. The Agreement shall conform to the Securities Law, regulations, instructions & decision issued pursuant thereto at any time & shall any issued amendment or decision contradict with any item of the Agreement, the Agreement must be amended accordingly.

6. The Agreement shall include a set of items referred to clearly & in a manner that cannot bear any other legal explanation:

A. The agreed upon percentage referred to as Marketing Commission.
B. The mechanism to calculate the Marketing Commission & specify it with the total volume of trades of those collected clients by the Marketer.
C. The Agreement duration & method to terminate it. Mechanisms to change any item of it & to notify legally.
D. The Agreement items shall be subject to & conform to the effective laws & regulations of the Hashemite Kingdom of Jordan.
E. The authorized entity to solve any arising future dispute.
F. The Marketer responsibility to notify his collected clients of the Agreement two parties including, the nature of Agreement between the Financial Services Company & the Marketer.

7. A set of annexations shall be attached to the Agreement regularly, including the following items:

A. Names of collected clients of which shall be up-dated on a regular base.
B. A copy of the ‘Open Account Form’ & the ‘Agreement to Deal in Securities’ concluded between the company & the collected clients.
C. Affirmation from collected clients that they have viewed & agreed on the signed Agreement between the company & the Marketer.
D. Copies of the relevant to & prepared ‘Anti Money Laundering in Securities Activities Form’ signed by the client.