A licensed stockbroker in the stock exchange receives buy and sell orders and executes them according to the client’s instructions in return for a commission, in his capacity as registered in the list of brokers with the stock exchange.
When is it permissible for the Kuwait Stock Exchange to cancel the registration of a licensed securities broker? What are the procedures for the decision to cancel the registration?
Al-Rashed, Al-Hadlaq and Al-Roudan Advocates and Legal Consultations Group answers this question through what is stated in the rules of the Boursa Kuwait:
Powers of the Boursa Kuwait and Capital Markets Authority to cancel the registration of a licensed securities broker
The registration of a licensed stockbroker in the Boursa shall be canceled if the Capital Markets Authority decides to cancel the license granted to him to practice the activity registered in this regard, and in case the license expires without renewing it. The Boursa may cancel the registration in any of the following cases:
- In the event that the licensed broker falls into a major or minor default.
- The licensed broker stops paying or repaying any fees, subscriptions or amounts due to the Boursa.
- If the licensed broker commits a grave mistake while carrying out his duties.
- If it is proven to the Boursa that the licensed broker’s registration was based on incorrect, non-conforming or misleading information.
Procedures arising from the decision to cancel the registration of a licensed securities broker
In the event the Boursa cancels the registration of the licensed broker, it shall notify the licensed broker, the Capital Markets Authority and the clearing agency of the decision to cancel the registration, and this decision shall be published on the website of the Boursa.
The decision to cancel the registration entails the following matters:
- Cancellation of the licensed broker’s membership in the Boursa.
- Suspending the powers of the licensed broker’s access to the trading system, and not allowing him to carry out any transactions on the securities in the Boursa.
- Cancel unexecuted orders that were previously entered by the licensed broker or any person authorized to enter the system through it.
- The licensed broker may not receive any new orders from clients or attempt to carry out any operations, whether for its own benefit or for the benefit of any of its clients.
- It is not permissible for any other licensed broker to deal with the broker whose registration has been canceled unless the Boursa agrees to that.
The licensed broker shall remain responsible for all its obligations under these rules until all the transactions it has made in the Boursa are settled, and the licensed broker in this case may not request the refund of any fees, subscriptions or amounts paid in advance to the Boursa.
The licensed broker must deliver to the Boursa – upon being notified of the decision to cancel the registration – any software, equipment or documents delivered to him by the Boursa on the occasion of accepting his registration with it.
Fees and charges
The licensed broker shall pay all fees, fees and subscriptions due from him to the Boursa, at the dates and in the manner determined by the Boursa.
The Boursa shall submit a written request for payment to the licensed broker who has stopped paying fees or commissions if the required amounts are not paid within the period specified in the claim letter. The Boursa has the right to terminate or stop its registration in the event of non-compliance with the payment on time or to take any action it deems appropriate and to inform the licensed broker via the email registered with it.
The licensed broker must keep the documents and records within the period specified in the regulation of the law establishing the Capital Markets Authority, and he must submit these documents and records to the Boursa if requested.
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To book an appointment or request legal advice about the duties of securities companies in the optimal implementation of clients’ orders, we are pleased to receive your inquiries at (info@Taqneen.com).