Decree No. 259 / 2004 Coll.
Ordinance on the types of professional business activities of a securities dealer carried out through a broker, on the types of professional specialisation of a broker and on the brokerage test
Valid
Order
Effective from 01.05.2004
Text versions:
01.05.2004
30.04.2004
259
DECLARATION
of 12 March 2004
on the types of professional business activities of a securities dealer carried out through a broker, on the types of professional specialisation of the broker and on the brokerage test
According to § 199 (2) (e) in conjunction with § 12 (8) and § 14 (7) of Act No. 256 / 2004 Coll., on Capital Market Business, hereinafter referred to as "the Act":
Subject matter
This decree regulates the types of professional business activities carried out through a broker in the provision of an investment service, the types of professional specialisation of brokers, the manner in which the brokerage test is carried out (hereinafter referred to as "the test '), its category and organisation and the amount of remuneration associated with the test.
Types of professional business activities of a securities dealer carried out through a broker
The professional business activity which a securities dealer may conduct only through a broker shall be:
(a) the receipt and transmission of orders relating to investment vehicles [Paragraph 4 (2) (a) of the Act] in which the securities dealer communicates with the customer and may influence the final formulation of the order, in particular the manner or conditions of execution of the order;
(b) the execution of orders relating to investment vehicles on behalf of another person [Paragraph 4 (2) (b) of the Act], if the transaction is executed on a regulated market,
(c) trading in investment vehicles for own account [Paragraph 4 (2) (c) of the Act] where the transaction takes place on a regulated market; and
(d) the management of the client's assets under contract with the customer if the investment instrument is part of the assets [Paragraph 4 (2) (d) of the Act]; However, the professional business activity referred to in this point shall not include the pursuit of the professional business activities referred to in points (b) and (c).
Types of professional specialisation of broker
The types of professional specialization of the broker are
(a) professional specialisation A, which includes the pursuit of professional business activities under § 2 (b) and (c) in relation to investment instruments under § 3 (1) (a) to (c) of the Act; for performance of professional specialization A category I test is required,
(b) the professional specialisation of AD, which includes the pursuit of professional business activities under § 2 (b) and (c) in relation to investment instruments under § 3 (1) (a) to (d) of the Act; A category I and III test is required for the performance of the AD professional specialisation.
(c) professional specialisation B, which includes the pursuit of professional business activities under § 2 (d) in relation to investment instruments under § 3 (1) (a) to (c) of the Act; A category II test is required for the performance of professional specialisation B.
(d) the professional specialisation of BD, which includes the pursuit of professional business activities under § 2 (d) in relation to investment instruments under § 3 (1) (a) to (d) of the Act; For the performance of the professional specialisation of BD, a category II and III test is required.
(e) professional specialisation C, which includes the pursuit of professional business activities under § 2 (a) in relation to investment instruments under § 3 (1) (a) to (d) of the Act; For the performance of professional specialisation C, the test of category IV. or category II. or category II. or III., for the performance of professional specialisation C in relation to investment instruments under Section 3 (1) (a) and (c) of the Act is required to test category IV. or category I or category II.
Test range
(1) The test examines knowledge
(a) the legislation governing the provision of investment services and related legislation;
(b) exchange rules [Paragraph 66 (1) (a) of the Act];
(c) rules on trading in the over-the-counter market (Section 81 of the Act);
(d) settlement system rules (Section 83 (9) of the Act),
(e) the operational rules of the CSD (Section 104 of the Act);
(f) generally accepted trading practices in investment vehicles;
(g) the financial market and its functioning; and
(h) investment instruments (Section 3 of the Act).
(2) The list of legislation referred to in paragraph 1 (a), the list of thematic headings to be tested, the list of thematic headings and the list of sample test questions broken down by thematic heading shall be published by the Securities Commission (hereinafter referred to as "the Commission") in the Securities Bulletin (hereinafter referred to as "the Bulletin") and in a manner that allows remote access no later than 35 days before the test date.
Test category
(1) The test is divided according to the type of professional specialisation of the broker into four categories marked by the digits I to IV.
(2) The Category I test examines the knowledge referred to in Article 4 (1) as regards the execution of orders relating to investment vehicles with the exception of derivatives and the acceptance and transmission of orders relating to investment vehicles with the exception of derivatives.
(3) The category II test examines the knowledge referred to in Article 4 (1) regarding the management of the customer's assets under contract with the customer, where the assets are part of any of the investment instruments other than derivatives, the advisory activities relating to investment in investment instruments with the exception of derivatives and the acceptance and transmission of orders relating to investment instruments with the exception of derivatives.
(4) The category III test shall examine the knowledge of the performance of the activities referred to in paragraphs 2 and 3 concerning derivatives.
(5) The candidate may only pass the category III test after having successfully passed the category I or II test.
(6) The Category IV test examines the knowledge referred to in Article 4 (1) (a) and (e) to (g) concerning the receipt and transmission of orders relating to investment instruments.
Organisation of the test
(1) The application shall be submitted to the Commission. The applicant is obliged to pay the fee associated with the exam of CZK 4,000 or, in the case of the examination of category III, CZK 2,000 per account according to paragraph 5.
(2) The applicant shall indicate in the application:
(a) surname, first name, title, maiden name,
(b) the birth number, if assigned,
(c) date of birth;
(d) place of birth; if the candidate is born abroad, only the State of birth shall be indicated;
(e) citizenship;
(f) the address of the place of permanent residence, for foreign nationals also the place of residence in the Czech Republic,
(g) the address for service of documents, if different from the address of the place of permanent residence or the place of residence in the Czech Republic with foreign nationals,
(h) the category of test to be carried out; and
(i) the required test date.
(3) The applicant shall attach to the application a copy of the proof of payment. The applicant applying for the category III test shall also attach to the application an officially certified copy of the certificate of successful completion of the category I or II test.
(4) The application for the test shall be submitted by the tenderer on the prescribed form, a specimen of which is given in the annex to this order. The application shall be sent to the Commission no later than 21 days before the test date.
(5) The test term, the place of test and the name and account number of the payment shall be published by the Commission no later than 35 days before the test date in the Bulletin and in a manner that allows remote access.
Committee for Brokerage Examinations and Examination Committee
(1) The Committee for Brokerage Tests (hereinafter referred to as "the Committee") is composed of a chairman and a further 10 members. The Presidium of the Commission shall appoint the President of the Commission or a member of the Presidium of the Commission as chairman of the Committee. Other members of the Committee shall be appointed by the Presidium of the Commission from among experts, representatives of service providers on the capital market and Commission staff.
(2) The Committee sets out the thematic test circuits and their content, ensures the creation, revision and replacement of a set of test questions and decides on the model test questions for publication.
(3) The examination committee shall consist of a chairman and an additional 8 members. The Presidium of the Commission shall be appointed by the President and other members of the Examination Committee. The President and at least four other members of the Examination Board shall be staff members of the Commission. A member of the Committee may be appointed as a member of the Examination Board. The members of the test committee shall supervise the proper conduct of the test.
(4) The duties of chairman or member of the Committee or of the Examination Committee shall cease if:
(a) terminate his employment with the Commission;
(b) the performance of his duties as President of the Commission or a member of the presidium of the Commission shall cease;
(c) it shall be withdrawn from office by the Commission's presidium;
(d) resign from office; or
(e) the office shall not be performed for more than 6 months; the function shall not cease if the chairman or member of the Committee or of the Examination Committee has not performed the function because the examinations have not taken place within 6 months.
(5) If the President or a member of the Committee or of the Examination Committee resigns to the office referred to in paragraph 4 (d), the performance of his duties shall end with the resignation of the President of the Commission. If the President of the Commission resigns to the office of President of the Committee, he shall terminate his duties by serving the resignation of the President of the Commission.
(1) The examination committee shall send an invitation to carry out the examination to any tenderer who has submitted an application with all the particulars within the time limit for its submission and on the prescribed form, no later than 14 days before the trial date.
(2) A candidate who, for serious reasons, cannot attend the test within the prescribed test period and requests the Commission to amend it at least 2 working days before the prescribed test period may carry out the test at another test period specified by the Commission. The applicant may request the Commission to amend the test deadline no more than once. In such a case, they shall not be refunded. If the tenderer does not wish to pass the test within another trial period and requests reimbursement, the Commission shall reimburse the remuneration.
(3) Candidates who do not show up for serious reasons will duly apologize for their failure to participate within 10 days of the date of the trial period and request repayment of the remuneration, the Commission will repay the remuneration. Candidates who, instead of applying for reimbursement, apply for the test to be carried out at another test date, the Commission shall set a different test date.
(4) A candidate who does not show up for the test and does not apologize properly within 10 days of the date of the test period may, after submitting a new application and paying the refund, take the test.
Test
(1) The candidate shall perform the test by electronic means. The test duration of categories I and II shall not exceed 4 hours, the test duration of categories III and IV shall not exceed 2,5 hours.
(2) The course of the exam is private. In addition to the candidates and members of the Examination Board, the persons to whom the Chairman of the Examination Board has delegated administrative activities may also be present during the examination.
(1) The applicant is obliged to comply with the test schedule (§ 15 (1)).
(2) A member of the examination committee present during the examination may exclude from the examination a candidate who has used foreign assistance during the examination, used auxiliary materials not authorised by the examination committee, communicated with another candidate, obtained copies of the test or extracts thereof, used telecommunications equipment, or otherwise interrupted the course of the examination. It shall not reimburse the excluded tenderer of the Commission.
(1) Each correctly answered question is evaluated by one point, each unanswered or incorrectly answered question is not scored.
(2) At least 75% of the highest possible score in the whole test and at least 60% of the highest possible score in each group of thematic circuits is a condition for successful performance of the test. A minimum of 75% of the highest possible score in the entire test is a condition of successful performance of the category III test.
(1) The test panel shall draw up a report on the course of the test within 7 days of the test date, indicating:
(a) the name and surname of the members of the examination committee who oversaw the proper conduct of the examination;
(b) the date and place of the examination;
(c) the start and end times of the test; and
(d) the relevant facts which occurred during the examination, in particular a record of the exclusion of the candidate from the examination referred to in Article 10 (2).
(2) An integral part of the protocol is a list of tenderers and a printed output containing an evaluation of the test results. The report shall be signed by all members of the Examination Committee who have supervised the proper conduct of the examination.
(3) The protocol and data on the data medium in electronic form relating to the Commission's examination shall be stored in accordance with the rules on archiving. 1)
(1) The examination panel shall inform the candidate of the result of the test within 14 days of its completion.
(2) Candidates who have successfully passed the test shall issue a certificate of test composition (hereinafter referred to as the certificate). The test panel certificate shall indicate its serial number, the category of test carried out and the test result expressed as a percentage of the score achieved throughout the test and in each group of thematic circuits. Certificates shall be signed by the Chairman and another member of the Examination Committee.
(3) Candidates who failed the test shall be notified by the Examination Committee of the result of the test (hereinafter referred to as the "Notice"). The report of the Test Panel shall indicate its serial number and test result, expressed as a percentage of the score achieved throughout the test and in each set of thematic circuits. The notification shall be signed by two members of the examination committee supervising the conduct of the test. The candidate according to the first sentence may carry out the next test at the earliest 1 month after the date of failure.
(1) Within 7 days of receipt of the certificate or notification, the applicant may submit a reasoned request for examination of the test result. The committee responsible for the review shall be responsible.
(2) The applicant may submit a reasoned protest against exclusion from the test referred to in Article 10 (2) within 7 days of the date on which it was excluded. The examination committee shall be responsible for assessing the protest.
(3) The Commission shall notify the tenderer in writing of the outcome of the examination referred to in paragraph 1 or of the assessment referred to in paragraph 2 within 30 days of receipt of the request for examination of the test result or of the protest against exclusion from the test.
Test and Rules of Procedure
(1) The test schedule shall be adjusted for details of the conduct of the test. The test schedule shall be approved by the Commission's presidium.
(2) The detailed rules of procedure shall be laid down in the Committee's deliberations and decisions. The Rules of Procedure shall be approved by the presidium of the Commission.
(3) The Commission will publish the Test and Procedure Rules in the Bulletin and in a manner allowing remote access no later than 35 days before the test date.
Transitional and final provisions
The test of the relevant category (§ 5 (1)) under Decree No. 305 / 2001 Coll., on the brokerage test, as amended by Decree No. 468 / 2002 Coll., shall be deemed to be the test of the relevant category under this Order.
Efficacy
This decree takes effect on the date of the entry into force of Act No. 256 / 2004 Coll., on the Capital Market Business.
Presidium member acting as Chairman:
Ing. Shimáček v. r.
Annex to Decree No 259 / 2004 Coll.
1) Act No. 97 / 1974 Coll., on archiving, as amended.
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Regulation Information
| Citation | Decree No. 259 / 2004 Coll., on the types of professional business of the dealer of securities carried out through a broker, on the types of professional specialisation of the broker and on the brokerage test |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 30.04.2004 |
|---|---|
| Effective from | 01.05.2004 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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