Title: Awareness Announcement on the Transfer Procedure of the License Resulting from Merger Deals with the aim to Obtain the License of Qualified Securities Broker Registered with an Exchange

The Capital Markets Authority (CMA) would like to draw the attention of all persons interested to practice the activity of Qualified Securities Broker registered with an Exchange. 

In implementation of Article (2) of Resolution No. (60) of 2016 on amending the Executive Bylaws of Law No. (7) of 2010 on the Establishment of the Capital Markets Authority and Regulating Securities Activities and its amendments by adding the activity of Qualified Securities Broker registered with an Exchange, and in the case where the companies that are part of a merger deal involve one licensed person who is authorized to practice the activity of Qualified Securities Broker registered with an Exchange, then the companies involved in the merger deal are required to abide by the following procedures:
1. Companies entering the merger deal shall state that the reason of the merger is to obtain the license of Qualified Securities Broker registered with an Exchange, as stated in clause No. (3) “Reasons and purposes of the Merger” of the Draft Merger Contract mentioned in the provisions of Article (2-6) of Chapter Two (Merger) of Module Nine (Mergers and Acquisitions) of the Executive Bylaws of Law No. (7) of 2010 on the Establishment of the Capital Markets Authority and Regulating Securities Activities and their amendments.

2. The company that holds the license of a Qualified Securities Broker registered with an Exchange (Company No.1), must submit an application to the CMA for the license of the activity of Qualified Securities Broker registered with an Exchange before concluding the merger deal according to the application enclosed in Appendix No. (5) of Module Five (Securities Activities and Registered Persons) of the Executive Bylaws of CMA’s Law. The requirements of the license mentioned therein may be fulfilled by the company interested in obtaining the mentioned license (Company No.2) in coordination with Company No.1.  They are required to fulfill, but may not be limited to, the following:
i. Internal systems and operations to ensure the capability of performing the tasks required by a Qualified Securities Broker registered with an Exchange.
ii. Evidence of the availability of the necessary IT systems which enable a Qualified Securities Broker registered with an Exchange to perform his duties.
iii. Any other conditions specified by the CMA.

3. The CMA shall issue the license of the Qualified Securities Broker registered with an Exchange in accordance to the regular proceedings.

4. As an exception from the previously mentioned provisions, and in case the companies that are part of the merger deal involve two licensed persons where a company holds the license of a Securities Broker registered with an Exchange (Company A), and another company is interested to obtain the License of Qualified Securities Broker Registered with an Exchange but holds the license of a different Securities Activity (Company B); then the CMA may, during the course of the proceedings of the merger deal and before its conclusion, grant a provisional license for a period specified by the CMA to Company A, if that company has a contract for Service Level Agreements (SLA) with the Company B, to enable Company A to practice the activity of Qualified Securities Broker registered with an Exchange, provided that the applicant must fulfil the licensing conditions mentioned in Module Five and Module Six of the Executive Bylaws, while taking into consideration the requirements provided to the CMA by Company B in regards to the internal systems and operations that ensure the capability of performing the tasks associated with that activity, and any other conditions specified by the CMA.