Decree No. 143 / 2009 Coll.
Ordinance on the expertise of persons with whom a securities dealer carries out his activities
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Order
Effective from 01.06.2009
Text versions:
01.06.2009
25.05.2009
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143
DECLARATION
of 4 May 2009
on the expertise of persons with whom a securities dealer carries out his activities
The Czech National Bank provides pursuant to § 199 (2) of Act No. 256 / 2004 Coll., on Capital Market Enterprise, as amended by Act No. 230 / 2008 Coll., for the implementation of § 14 (3) of this Act:
Subject matter
This decree sets out the scope of the necessary knowledge and experience of the person (1) by which the securities dealer carries out his activities and the requirements for demonstrating that knowledge and experience.
Definition of terms
(1) For the purposes of this decree:
(a) a customer-dealing person who receives and transmits orders concerning investment vehicles from customers;
(b) by an investment agent, a person who carries out orders on behalf of a client or conducts transactions on his own account concerning investment vehicles or the subscription or placement of investment vehicles with or without a commitment to subscription;
(c) by the portfolio manager, the person who manages the client's assets, if the investment instrument is part of it, on the basis of free consideration under the contractual arrangement;
(d) by an investment adviser, the person who provides investment advice on investment instruments;
(e) the person responsible for managing the risks of the securities dealer (2);
(f) a compliance officer, the person who provides the compliance activity with the securities dealer or investment intermediary (3); and
(g) the person carrying out the internal audit of the person responsible for carrying out the internal audit4).
(2) For the purposes of this decree, a person acting with a limited customer shall be the person who carries out at least one of those activities.
(a) receiving and transmitting orders from customers where:
1. the order concerns collective investment securities;
2. the order concerns investment instruments with a right to repayment of at least the amount invested, issued or guaranteed by a Member State of the European Union or by a central bank of a Member State of the Organisation for Economic Cooperation and Development, the territorial authority of a Member State of the European Union, the European Central Bank, the European Communities, the European Investment Bank, or an international organisation of which at least one Member State of the European Union is a member or a person authorised by a Member State of the European Union or a Member State of the Organisation for Economic Cooperation and Development subject to supervision in the field of capital adequacy rules;
3. the person receiving the order relating to investment vehicles does not affect the content of the order or influence it only in the framework of a fully standardised procedure regulated by the internal regulation by which it is bound; or
4. the order concerning investment vehicles has been submitted by a customer who is a professional customer pursuant to § 2a (1) and (2) or § 2b (1) of Act No. 256 / 2004 Coll., on the capital market business, as amended, (hereinafter referred to as "the law"), unless that customer is considered to be a non-professional customer,
(b) in the context of receiving and transmitting orders from customers relating to collective investment securities, it also implements such orders; or
(c) in the context of the receipt and transmission of orders from customers referred to in points (a) (2) to (4) of paragraph 2, the orders shall be executed in writing by or through the purchase or sale to or from the property of the securities dealer or foreign persons referred to in paragraph 28 (1) of the Act, and the terms of the purchase or sale shall be bound by those terms and conditions.
(1) Professional experience in the financial market (hereinafter referred to as "professional practice") means activity in a statutory body for the purposes of this decree
(a) persons referred to in § 2a (1) (a) to (l) and § 2a (2) (a) of the Act;
(b) investment intermediaries;
(c) the tied agent,
(d) the operator of the regulated market;
(e) the operator of the settlement system;
(f) a CSD; or
(g) the issuer of the quoted investment instrument is materially related to the financial market.
(2) In addition, the professional practice is the exercise of the activity of a fixed weekly working period (5) or of the full weekly working hours usual for the activity in question and actually consisting of the professional work of the financial market-related matters.
(a) persons engaged in their profession, profession or function for the person referred to in paragraph 1;
(b) the auditor or tax advisor of the person referred to in paragraph 1;
(c) persons performing legal practice or carrying out scientific or academic activities;
(d) employees of the Czech National Bank, the Ministry of Finance or the Financial Market Supervisory Authority and professional associations; or
(e) staff of the World Bank, the International Monetary Fund, the European Investment Bank or other international financial institutions.
(3) The professional practice shall also be to carry out the activities of the person referred to in paragraph 1, where that person is a natural person.
(4) The exercise of an activity with a foreign person or a foreign natural person shall also be considered as professional practice if their pursuit of the activity is similar to that of the persons referred to in paragraphs 1 or 2 (a) to (d) and is carried out in the territory of a Member State of the European Union or a Member State of the Organisation for Economic Cooperation and Development.
Scope of the necessary knowledge of the customer, investment broker, portfolio manager and investment advisor
(1) The customer-dealing person has the necessary expertise in particular in the field of:
(a) financial market legislation where it is materially related to its activities;
(b) investment vehicles and their emissions;
(c) the provision of investment services; and
(d) the principles and functioning of collective investment.
(2) The investment agent has the necessary expertise in the field of:
(a) referred to in paragraph 1 (a) to (c);
(b) the regulation and functioning of major global financial markets;
(c) financial market principles, including finance theory;
(d) the organisation and rules of regulated markets and other points of transfer;
(e) financial market trading, including settlement; and
(f) financial analyses, where they underwrite or place investment vehicles with or without an obligation to sign them.
(3) The portfolio manager has the necessary expertise in particular in the field of:
(a) referred to in paragraph 1 (a) to (d);
(b) the regulation and functioning of major global financial markets;
(c) financial market principles, including finance theory;
(d) investments, investment strategies and portfolios and related risks; and
(e) financial analyses.
(4) The investment adviser has the necessary expertise in the field of:
(a) referred to in paragraph 1 (a) to (d);
(b) the regulation and functioning of major global financial markets;
(c) financial market principles, including finance theory; and
(d) investments, investment strategies and portfolios and associated risks.
(5) The extent of the required knowledge referred to in paragraphs 1 to 4 shall correspond to the material activity of the client, investment broker, portfolio manager and investment adviser in order to ensure their qualified performance.
Scope of the necessary knowledge of the risk management person
(1) The risk management officer has the necessary expertise in particular in the field of:
(a) risk management;
(b) financial market legislation where it relates in substance to its activities;
(c) the regulation and functioning of major global financial markets;
(d) financial market principles, including finance theory;
(e) investment vehicles and their emissions;
(f) the organisation and rules of regulated markets and other points of transfer;
(g) trading on the financial market, including settlement;
(h) the provision of investment services;
(i) principles and functioning of collective investment;
(j) investments, investment strategies and portfolios and related risks; and
(k) financial analyses.
(2) The extent of the knowledge required under paragraph 1 must correspond to the substantive activity of the risk management person in order to ensure its qualified performance; In particular, consideration shall be given to whether the risk manager6), market risk 7), operational risk8), liquidity risk 9), concentration risk 10) or other risks.
Scope of the required knowledge of the compliance officer
(1) The compliance officer has the necessary expertise, in particular in the field of:
(a) referred to in Article 5 (1) (b) to (k); and
(b) compliance procedures.
(2) The extent of the knowledge required under paragraph 1 must correspond to the substantive activity of the compliance officer in order to ensure its qualified performance.
Scope of the necessary knowledge of the person carrying out the internal audit
(1) The person carrying out the internal audit has the necessary expertise in particular in the field of:
(a) referred to in Article 5 (1) (b) to (k); and
(b) internal audit procedures.
(2) The extent of the required knowledge referred to in paragraph 1 must correspond to the material activity of the person carrying out the internal audit in order to ensure its qualified performance.
How to demonstrate knowledge
The person who carries out the securities dealer's activities shall demonstrate his knowledge to the securities dealer by confirming the professional examination carried out by the Czech National Bank in accordance with § 14a (2) and (3) of the Act (hereinafter referred to as the "professional examination '), the certificate of completion of the training course, the certificate of completion of the study or any other document proving compliance with the requirements of § 9 to 15.
Demonstration of knowledge by a person dealing with customers
(1) A person dealing with clients with limited activity must have at least completed secondary education (11) or secondary education (12) and have an appropriate vocational course. The training course is not required if the person dealing with clients with limited activity has professional experience for at least 2 years.
(2) A person acting with customers whose activity does not include investment vehicles referred to in § 3 (1) (d) to (k) of the Act (hereinafter referred to as "derivative") must have completed at least a Bachelor's study programme (13) or completed a higher vocational training (14) and have completed an appropriate vocational course. Compliance with these requirements is not required if:
(a) have passed the relevant professional examination;
(b) has completed secondary education with a graduate examination of 15) and professional experience of at least 1 year; or
(c) has completed secondary or secondary education with a certificate and professional experience of at least 2 years.
(3) A client whose activity includes derivatives must have completed at least a Bachelor's study programme or completed a higher professional education in economics or mathematics and have completed an appropriate vocational course. Compliance with these requirements is not required if:
(a) have passed the relevant professional examination;
(b) has completed a bachelor's study programme or completed a higher vocational education in a field other than economics or mathematics and professional experience for at least 1 year;
(c) has completed secondary education with a graduate examination and professional experience of at least 2 years; or
(d) has completed secondary or secondary education with a certificate and professional experience of at least 3 years.
(4) The professional experience referred to in points (b) and (c) of paragraph 2 shall not be counted in accordance with Article 16 (1). The professional experience referred to in paragraph 3 (b) to (d) shall not be included in the professional experience referred to in Article 16 (2).
Demonstration of knowledge by an investment broker
(1) An investment broker whose activity does not include derivatives must pass the relevant expert test. Compliance with this requirement is not required if the investment agent:
(a) has completed at least the Master's study programme (16);
(b) has completed a bachelor's study programme or completed a higher vocational education and professional experience for at least 1 year; or
(c) has completed secondary education with a graduate examination and professional experience of at least 2 years.
(2) An investment broker whose activity involves derivatives must pass the relevant professional examination. Compliance with this requirement is not required if the investment agent:
(a) has completed at least a master's degree in economics or mathematics;
(b) has completed a Master's degree in a field other than economics or mathematics and professional experience of at least 1 year;
(c) has completed a Bachelor's study programme or completed a higher vocational education in economics or mathematics and professional experience for at least 1 year;
(d) has completed a bachelor's study programme or completed a higher vocational education in a field other than economics or mathematics and professional experience for at least 2 years; or
(e) has completed secondary education with a graduate examination and professional experience of at least 3 years.
(3) The professional experience referred to in paragraph 1 (b) and (c) does not include the relevant professional experience referred to in Article 16 (3). The professional experience referred to in paragraph 2 (b) to (e) shall not include the relevant professional experience referred to in Article 16 (4).
Demonstration of knowledge by the portfolio manager
(1) A portfolio manager whose activity does not include derivatives must pass the relevant expert test. Compliance with this requirement is not required if the portfolio manager
(a) has completed at least the Master's study programme;
(b) has completed a bachelor's study programme or completed a higher vocational education and professional experience for at least 1 year; or
(c) has completed secondary education with a graduate examination and professional experience of at least 2 years.
(2) A portfolio manager whose activities involve derivatives must pass the relevant expert test. Compliance with this requirement is not required if the portfolio manager
(a) has completed at least a master's degree in economics or mathematics;
(b) has completed a Master's degree in a field other than economics or mathematics and professional experience of at least 1 year;
(c) has completed a Bachelor's study programme or completed a higher vocational education in economics or mathematics and professional experience for at least 1 year;
(d) has completed a bachelor's study programme or completed a higher vocational education in a field other than economics or mathematics and professional experience for at least 2 years; or
(e) has completed secondary education with a graduate examination and professional experience of at least 3 years.
(3) The professional experience referred to in paragraph 1 (b) and (c) does not include the relevant professional experience referred to in Article 16 (3). The professional experience referred to in paragraph 2 (b) to (e) shall not include the relevant professional experience referred to in Article 16 (4).
Demonstration of knowledge by an investment consultant
(1) An investment adviser whose activity does not include derivatives must pass the relevant expert test. Compliance with this requirement is not required if the investment advisor:
(a) has completed at least a bachelor's study programme or completed a higher vocational education;
(b) has completed secondary education with a graduate examination and professional experience of at least 1 year; or
(c) has completed secondary or secondary education with a certificate and professional experience of at least 2 years.
(2) An investment adviser whose activities involve derivatives must pass the relevant expert test. Compliance with this requirement is not required if the investment advisor:
(a) has completed at least a bachelor's study programme or completed a higher vocational education in economics or mathematics;
(b) has completed a bachelor's study programme or completed a higher vocational education in a field other than economics or mathematics and professional experience for at least 1 year;
(c) has completed secondary education with a graduate examination and professional experience of at least 2 years; or
(d) has completed secondary or secondary education with a certificate and professional experience of at least 3 years.
(3) The professional experience referred to in paragraph 1 (b) and (c) does not include the relevant professional experience referred to in Article 16 (3). The professional experience referred to in paragraph 2 (b) to (d) shall not include the relevant professional experience referred to in Article 16 (4).
Demonstration of knowledge by the risk management person
(1) The risk management person must pass the relevant expert test. Compliance with this requirement is not required if the person carrying out the risk management
(a) has completed at least a master's degree in economics or mathematics;
(b) has completed a Master's degree in a field other than economics or mathematics and professional experience of at least 1 year;
(c) has completed a Bachelor's study programme or completed a higher vocational education in economics or mathematics and professional experience for at least 1 year;
(d) has completed a bachelor's study programme or completed a higher vocational education in a field other than economics or mathematics and professional experience for at least 2 years; or
(e) has completed secondary education with a graduate examination and professional experience of at least 3 years.
(2) The professional experience referred to in paragraph 1 (b) to (e) does not include the relevant professional experience referred to in Article 17.
Demonstration of knowledge by compliance
(1) The compliance officer must pass the relevant professional examination. Compliance with this requirement is not required if the compliance person
(a) has completed at least a master's degree in law or economics;
(b) has completed a master's study programme in a field other than law or economics and professional practice for at least 1 year;
(c) has completed a bachelor's study programme or completed a higher vocational education in law or economics and professional practice for at least 1 year;
(d) has completed a bachelor's study programme or completed a higher vocational education in a field other than law or economics and professional practice for at least 2 years; or
(e) has completed secondary education with a graduate examination and professional experience of at least 3 years.
(2) Where a compliance practitioner has completed a secondary education or middle education with a certificate and professional experience on the financial market for at least 4 years, he shall not be required to meet the requirements laid down in paragraph 1.
(3) The professional experience referred to in paragraph 1 (b) to (e) and paragraph 2 shall not include the relevant professional experience referred to in Article 17.
Demonstration of knowledge by an internal auditor
(1) The person carrying out the internal audit must pass the relevant expert examination. Compliance with this requirement is not required if the person carrying out the internal audit
(a) has completed at least a Master's degree in law, economics or mathematics;
(b) has completed a master's study programme in a field other than law, economics or mathematics and professional practice for at least 1 year;
(c) has completed a bachelor's study programme or completed a higher vocational education in law, economics or mathematics and professional experience for at least 1 year;
(d) has completed a bachelor's study programme or completed a higher vocational education in a field other than law, economics or mathematics and professional experience for at least 2 years; or
(e) has completed secondary education with a graduate examination and professional experience of at least 3 years.
(2) The professional experience referred to in paragraph 1 (b) to (e) does not include the relevant professional experience referred to in Article 17.
Scope of the necessary experience of a client, investment broker, portfolio manager and investment advisor
(1) A person acting with customers whose activity does not include derivatives may only become a person who has previously performed the activity of a client with a limited activity of at least 6 months or has professional experience of at least 1 year.
(2) A person acting with customers whose activity includes derivatives may only become a person who has previously performed the activity of a person acting with customers under paragraph 1 for at least 1 year or has professional experience for at least 3 years.
(3) An investment broker, portfolio manager or investment consultant whose activity does not include derivatives can only become a professional practitioner for at least 1 year.
(4) An investment broker, portfolio manager or investment adviser whose business includes derivatives may only become a former agent who has previously carried out the relevant activity referred to in paragraph 3 for at least 1 year or has professional experience for at least 3 years.
(5) The requirements laid down in paragraphs 1 to 4 do not apply if the persons listed therein:
(a) carry out activities under the supervision of a person who fulfils the relevant requirement; or
(b) carry out the activity they wish to pursue for at least 1 year under the supervision of a person who fulfils the relevant requirement.
(6) The requirements referred to in paragraph 1 shall not apply to a person acting with clients with limited activity.
Scope of the necessary experience of the risk management person, compliance activity or internal audit
A person carrying out risk management, compliance activity or internal audit may only become a person having professional experience for at least 1 year. This shall not apply if he carries out his activities under the supervision of a person who meets the requirements.
How to demonstrate experience
The person with whom the securities dealer carries out his business shall demonstrate his experience to the securities dealer at least:
(a) a structured professional CV containing at least:
1. the name of the person by whom the securities dealer carries out his business;
2. information on the type of professional practice referred to in Article 3;
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Regulation Information
| Citation | Decree No. 143 / 2009 Coll., on the expertise of persons with whom a securities dealer carries out his activities |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 25.05.2009 |
|---|---|
| Effective from | 01.06.2009 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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