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Categories of investment dealer licence
(1) Every person who, by way of business, intends to carry out any of the activities of investment dealer under section 29 of the Act shall apply for a licence as an investment dealer in one of the following categories;
(a) full service dealer – authorised to.
- act as an intermediary in the execution of securities transactions for clients;
- trade in securities as principal with the intention of reselling these securities to the public;
- underwrite or distribute securities on behalf of an issuer or a holder of securities;
- give investment advice which is ancillary to the normal course of his business activities; and
- manage portfolios of clients.
(b) broker – authorised to execute orders for clients, to manage portfolios of clients and to give advice on securities transactions to clients;
(c) discount broker – authorised to execute orders for clients without giving advice;
(2) The Commission shall not grant a licence under paragraph (1) unless it is satisfied that the applicant meets all the requirements of these rules, and in particular the minimum stated unimpaired capital requirement.
(3) A financial institution shall not apply for an investment dealer licence unless it has constituted a subsidiary which can meet all the requirements of these rules.
Categories of investment adviser licence
Every person who, by way of business, intends to carry out any of the activities of an investment adviser under section 30 of the Act, shall apply for a licence in one of the following categories –
(a) unrestricted – authorised to manage, under a mandate, portfolios of securities and give advice on securities transactions through printed materials or any other means;
(b) restricted – authorised to give advice on securities transactions through printed materials or any other means.
Activities authorised
(1) A licensed investment dealer or investment adviser may solicit any person to enter into securities transactions.
(2) The licence shall indicate the activities that the investment dealer or the investment adviser is authorised to exercise.
(3) The Commission may limit the number of activities that an investment dealer may exercise where it feels that the dealer does not have the material or financial resources necessary to carry out some of its activities.
(4) A licensed investment dealer or investment adviser shall obtain prior approval of the Commission for any modification of its licence.
Representative of investment dealer
(1) No individual shall carry out any of the securities activities of an investment dealer unless he is licensed as a representative of the investment dealer under one of the Types specified in the Third Schedule, as applicable.
(2) The Commission shall not grant a licence under paragraph (1) unless it is satisfied that the applicant holds such qualifications specified in the Third Schedule or an equivalent qualification as it may approve, and meets all the requirements of these rules.
(3) An investment dealer shall at all times employ at least one representative, who shall be entitled to carry out the functions of the investment dealer, holding a licence under the following Type, as applicable –
(a) for an Investment Dealer (Full Service Dealer) - a Degree in a relevant field and at least 8 years of relevant experience in investment business;
(b) for an Investment Dealer (Broker) - a Degree in a relevant field and at least 4 years of relevant experience in investment business;
(c) for an Investment Dealer (Discount Broker) - a Diploma course in a relevant field and at least 2 years of relevant experience in investment business.
(4) Notwithstanding paragraph (2) and (3) the Commission may consider an application from a person, licensed or deemed to be licensed as a stockbroker or dealer’s representative under the repealed Stock Exchange Act 1988, for a licence as representative of an investment dealer, as it may deem appropriate.
Representative of investment adviser
(1) No individual shall carry out any of the securities activities of an investment adviser unless he is licensed as a representative of the investment adviser.
(2) The Commission shall not grant a licence under paragraph (1) unless it is satisfied that the applicant holds such qualifications specified in the Third Schedule or an equivalent qualification as it may approve, and meets all the requirements of these rules.
(3) An investment adviser, as the case may be, shall at all times employ or be represented by at least one representative, as specified in the Third Schedule, who is entitled to carry out the functions of the investment adviser.
(4) The Commission may consider an application from a person, licensed or deemed to be licensed as a stockbroker or dealer’s representative under the repealed Stock Exchange
Act 1988, for a licence as representative of an investment adviser, as it may deem appropriate.
Licensing conditions for investment dealers
(1) The Commission shall not grant a full service investment dealer licence, unless it is satisfied that the applicant has established procedures designed to prevent conflicts of interest and the use of inside information by an effective segregation of its different activities.
(2) The procedures mentioned in paragraph (1) shall ensure that the investment decisions concerning the portfolio of clients shall not be communicated or be available to any unauthorised third party.
Licensing conditions for investment advisers
In order to obtain an unrestricted licence, an investment adviser shall provide sufficient justification to the Commission as to the competence of the persons who will be responsible for investment advice and the management of portfolios.
Licensing conditions for representatives
(1) Applicants for a licence as a representative of an investment dealer or of an investment adviser shall satisfy the Commission that they hold such appropriate training or qualification as may be deemed necessary and as the Commission may specify from time to time.
(2) Notwithstanding paragraph (1), the Commission shall consider such other training, membership to recognised professional bodies or qualifications as it deems acceptable.
(3) The investment dealer or investment adviser shall demonstrate to the Commission that any person acting as its representative is properly qualified.
MINIMUM STATED UNIMPAIRED CAPITAL REQUIREMENTS Category MUR (Rs.) or an equivalent amount
• Investment Dealer (Full Service Dealer including underwriting) Rs 10,000,000
• Investment Dealer (Full Service Dealer excluding underwriting) Rs 1,000,000
• Investment Dealer (Broker) 700,000
• Investment Dealer (Discount Broker) 600,000
• Investment Adviser (Unrestricted) 600,000
• Investment Adviser (Restricted) 500,000
• Investment Dealer (Commodity Derivatives Segment) Rs 1,000,000
• Investment Dealer (Currency Derivatives Segment) Rs 1,000,000
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