Requirements of Preliminary Approval of Membership at the Palestine Exchange
Palestine Exchange (PEX) considers membership applications of companies asking for authorization from Capital Market Authority, Requirements of preliminary approval of membership at the Palestine Exchange
1. The Company have to submit an authorization request to CMA, and the request has been diverted to PEX.
2. The company is to be established and registered in Palestine. A securities company which is a member of a foreign exchange may apply for membership provided that it has a branch, a subsidiary company, a holding company, or a allied company in Palestine.
3. The company's purposes and activities must be restricted to dealings with securities by its bylaw, and to have the licensing of the Capital Market Authority to do so. The company must not be permitted to practice any other commercial activities including banking or currency exchanging unless it has an additional licensing by the competent parties provided that there is complete separation between such activities and the basic activity related to securities that qualified it to become a member at the PEX.
4. The company's paid up capital should be at least 2,000,000 (two million) US$ or its equivalent; provided that 1,000,000 US$ of it must be cash money or liquid assets for companies that wish to sell and buy securities listed at the PEX whether on behalf of its clients or for itself. If the company wishes to practice other activities such as under-writing and selling new securities and managing investment portfolios, its capital should be at least 4,000,000 (four million) US$ or its equivalent; provided that 2,000,000 US$ of it is cash money or liquid assets.
5. Any member in the Board of Directors or Managers Staff of the company, in any case, stopped paying his commercial debts, even if the stoppage didn’t combine with bankruptcy or broken, or
6. The minimum percentage of members of the Board of Directors who are knowledgeable in securities must be 30% of the total number of the Board of Directors of the company.
7. The member of the Board of Directors or any of the executive Management employees must not be a member of Board of Directors of another member company, or listed company (unless the member company it self is listed), or work in any other position in a listed company, or work in the PEX or the Capital market Authority.
8. The company undertakes to be committed to all the regulations and directives issued by the PEX in addition to the regulations and laws applied in Palestine.
9. The company undertakes to be committed to the right of the PEX to impose penalties and precautionary procedures stated by the PEX internal directives and regulations including financial fines, pledging of the company's cash and assets, and suspension of the company or any of its employees whether completely or partially.
10. The company undertakes to abstain from employing any person as an administrative official, a professional or financial consultant to deal with securities trading unless he or she is licensed by the Capital Market Authority and registered at the PEX.
11. The location of the company's headquarters shall be stated.
12. The company undertakes to state in its correspondences and publications that it is a member at the PEX.
Requirements of Post – Preliminary Approval of Membership at the Palestine Exchange
I.In order to obtain the final approval for the company to work as a member at PEX, the said company must carry out the following items within a period that does not exceed three months starting from the date of preliminary approval
1. To obtain license from the Capital Market Authority.
2. To open a settlement account at the settlement bank.
3. If the company wishes to buy and sell securities listed at PEX on behalf of clients or for its own interest only, it must participate in any mutual funds or insurance set up by PEX and to supply a minimum cover of 1,500,000 (one and a half million) JOD or its equivalent to guarantee the clearance of its daily trading transactions. The said cover can either be provided as a guarantee letter for the benefit of the settlement bank or deposited at the settlement bank. Should the company wish to practice other activities such as under-writing and selling of new securities issuances or managing investment portfolios, the minimum cover must not be less than 3,000,000 (three million) JOD or its equivalent.
4. If the company wishes to buy and sell securities listed at PEX on behalf of clients or for its own interest only, it must supply subscriptions and deposits at settlement operations guarantee funds when such funds are set up, or in the form of guarantee letter for the benefit of PEX with a sum of 300,000 (three hundred thousand) JOD or its equivalent issued by a bank working in Palestine. The guarantee is to be valid for a period of one year and renewed automatically. The said guarantee covers any liabilities of the member company towards PEX, other member companies and / or clients. Should the company wish to practise other activities such as under-writing and selling of new securities issuances or managing investment portfolios, the minimum amount of guarantee letter must be 600,000 (six hundred thousand) JOD or its equivalent.
5. The company is to provide a headquarter, for practicing its activities, which fulfill the stipulations determined by PEX from time to time, in addition to furnishing the equipment necessary to carry out its works in accordance with the specifications and standards specified by PEX according to the Members Operations Manual provided by PEX.
6. Membership of Securities Company is not accepted unless it appoints at least:
• a full-time General Manager who holds a university degree with a minimum experience of seven years at banking or financial corporations.
• a full-time Deputy Manager who holds a university degree with a minimum experience of three years at banking or financial corporations.
• At least one accredited Broker approved from PEX.
• Financial Manager Approved from PEX.
II. In addition to what is stated in the former article, the company is committed to provide the following obligations in order to obtain the final approval of working as a member of PEX
1. Pay all its dues such as membership fees, trading fees, and to cover all the costs of its linkage with the PEX communications network, trading systems, and ownership transfer in accordance with the systems, regulations and decisions issued by the PEX.
2. Pay its contributions and subscription fees in the settlement operation guarantee funds and investors' rights funds in addition to any other funds and accounts in accordance with Securities Law and the applicable laws or any regulations and directives of PEX.
3. Carry out training, up-dating, and development programs that are determined by PEX. It shall also be committed to marinating specific levels of serving the public and executing specified directives that are issued by PEX from time to time.
4. Carry out certain activities determined by PEX from time to time such as making markets and other types of investment activities in accordance with decisions and directives issued by PEX for these purposes.
5. Furnishing its headquarter provided that the required technologies are available to guarantee a convenience, non stop trading transactions through PEX Systems.
6. Disclose information according to disclosure regulation, to open its books and records for auditing, and to provide other documents and information that the Capital Market Authority and PEX may require.
7. The company and all its employees committed not to disclose for any person any information related to investors' dealings or securities that they possess without the written permission of the client at each time of requiring information disclosing, except such information that is required to be disclosed in accordance with law or disclosing regulation.