Decree No. 59 / 2007 Coll.
Ordinance on the types of professional business activities of a securities dealer carried out through a broker, the types of specialisation of a broker and the brokerage test
Valid
Order
Effective from 15.04.2007
Text versions:
15.04.2007
28.03.2007
59
DECLARATION
of 19 March 2007
on the types of professional business activities of a securities dealer carried out through a broker, the types of specialisation of the broker and the brokerage test
Pursuant to Article 199 (2) (e) of Act No. 256 / 2004 Coll., on Capital Market Enterprise, as amended by Act No. 57 / 2006 Coll., hereinafter referred to as "the Act":
Subject matter
This decree regulates
(a) the types of professional business activities which a securities dealer must carry out through a broker and the types of specialisation of a broker (Sections 2 and 3);
(b) method of performing the brokerage test (hereinafter referred to as the "test") (Sections 4 to 11);
(c) the amount of remuneration associated with the examination (§ 12).
Types of professional business activities of a securities dealer and types of specialisation of a broker
(1) A professional business activity which a securities dealer must carry out only through a broker (hereinafter referred to as "professional business") is:
(a) receiving orders for investment vehicles from customers;
(b) the execution of orders relating to investment vehicles on own account or in a foreign account where the order concerns a listed investment instrument;
(c) creating instructions for the customer in the management of the customer's assets.
(2) The professional business of receiving orders for investment vehicles from customers shall not be:
(a) the order concerns collective investment securities;
(b) the order concerns investment vehicles with a right to pay at least the amount invested, issued or guaranteed
1. a Member State or a central bank of a Member State of the Organisation for Economic Cooperation and Development, a regional or local administrative unit of a Member State of the European Union, the European Central Bank, the European Union, the European Investment Bank or an international organisation of which at least one Member State of the European Union is a member; or
2. a person authorised by a State forming the European Economic Area or a Member State of the Organisation for Economic Cooperation and Development under supervision in the field of solvency rules;
(c) the person receiving an order from the customer for a securities dealer is not entitled to influence the content of the order or to influence it only in the framework of a fully standardised procedure provided for in the internal regulation of the securities dealer; or
(d) the order has been submitted by a client who is a professional investor pursuant to Article 2 (a) of the Act, unless that client has explicitly requested that the rules for requiring information from the customer (1) apply, and this is not the case in points (a) to (c).
(3) The specialisation of the broker is:
(a) the adoption of orders for investment vehicles with the exception of derivatives from customers;
(b) the adoption of orders for all investment vehicles from customers;
(c) the execution of orders relating to investment vehicles on own account or on a foreign account where the order relates to a listed investment instrument, in relation to investment instruments other than derivatives;
(d) the execution of orders relating to investment vehicles on own account or in a foreign account, where the order relates to a listed investment instrument, in relation to all investment vehicles;
(e) the creation of customer orders for the management of the client's assets in relation to investment instruments except derivatives;
(f) the creation of customer orders for the management of the customer's assets in relation to all investment instruments.
Test category
(1) The test is divided into categories A, B, C and D according to the background of the knowledge checked.
(2) To perform professional business
(a) the execution of orders relating to investment vehicles on own or foreign account where the order relates to a listed investment instrument, a category A test is required;
(b) the formation of orders for the customer in the management of the customer's assets is required to pass the category B test;
(c) the adoption of orders concerning investment vehicles by customers is required to pass a category C test.
(3) In addition, a category D test shall be required for professional business involving derivatives.
Organisation of the test
(1) The examination is organized and provided by the Czech National Bank.
(2) The application for the test shall be submitted by the tenderer using a form the model of which is set out in the Annex to this Order and the electronic form of which shall be published in a manner which allows remote access. The application together with a copy of the proof of payment must be delivered to the Czech National Bank no later than 21 days before the exam date. The Czech National Bank shall send an invitation to the candidate who submitted the application in due time, not later than 14 days before the date of the examination.
(3) The examination dates, the place of the examination, the account to which payment is due, the list of legislation, thematic circuits and sample questions for the test will be published by the Czech National Bank no later than 30 days before the examination date in the Czech National Bank Bulletin and in a way that allows remote access.
(4) The Czech National Bank will allow the applicant to pass the test within the deadline for applying. In the event that operating conditions prevent this, in particular insufficient capacity of the test rooms, or the applicant has not indicated the required deadline, the applicant shall assign the required category to the next free date.
Test
(1) The test shall take the form of an electronic test. In the test, the candidate selects from several possible correct answers to the questions identified by the Czech National Bank from the set of questions proposed pursuant to § 11 (4). Questions for test categories A, B and C are arranged into thematic groups.
(2) Testing of categories A and B may take place for a maximum of 4 hours, testing of categories C and D for a maximum of 2,5 hours.
(3) The test is not public.
(4) The condition for successful completion of the test is that the correct answer is at least 75% of the questions in the test and, in the case of categories A, B and C, the correct answer is at least 60% of the questions in each group of thematic circuits.
Perform the test at the alternate time
(1) A candidate who is unable to attend the test within the prescribed time limit and may request the Czech National Bank for a replacement period of at least 2 working days before the specified time limit may take the test at the replacement time specified by the Czech National Bank. The candidate can only ask the Czech National Bank for a replacement exam date once.
(2) A candidate who does not show up for serious reasons will make a proper apology within 10 working days of the date of the deadline and ask the Czech National Bank for a replacement term, may pass the test in the replacement period specified by the Czech National Bank.
(3) If the candidate requests reimbursement instead of a replacement period, the Czech National Bank will refund the remuneration.
(4) In other cases where the candidate does not show up for the test, the test may be carried out only after the new application has been submitted and the reimbursement has been repaid.
Reporting of the tenderer interfering with the conduct of the test
The Czech National Bank may report from the exam a candidate who used the assistance of another person illegally during the examination, used auxiliary materials, communicated during the examination with another person, obtained copies of the test or extracts thereof, used telecommunications equipment or otherwise interrupted the course of the test. Reimbursement shall not be refunded to the reported applicant.
Test progress report
(1) The Czech National Bank shall, within 7 days of the examination date, draw up a report indicating:
(a) the names and surnames of the persons 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 important facts which occurred during the examination, in particular the record of the applicant's declaration of examination under Section 7.
(2) The Protocol shall include:
(a) the list of tenderers;
(b) an assessment of the results of the test, in the form of a written output from the electronic system through which the test is carried out and which the evaluation provides.
Test result
(1) The Czech National Bank will send the applicant a written notification of the test result within 14 days of the date of the examination; in the communication, indicate the category of test carried out and the test result expressed as a percentage of the score achieved throughout the test and, in the case of test categories A, B and C, in each group of thematic circuits.
(2) Candidates who have successfully passed the test will send the Czech National Bank, together with the notification of the certificate of the test; the certificate shall indicate the category of test carried out.
Review of the test result
(1) A candidate who has not received an examination certificate may submit an application for examination of the test result within 15 days of receipt of the information on the test result. The application must show who is submitting it, which cases relate to what is proposed and in what way the tenderer sees the incorrect outcome of the examination indicated in the notification.
(2) The Czech National Bank will review the result of the examination on the basis of an opinion pursuant to Article 11 (4).
(3) The Czech National Bank shall forward the result of the examination referred to in paragraph 2 to the tenderer within 30 days of the date of receipt of the complete request for examination of the test result. If the application is justified and it can be verified that the conditions for the successful completion of the test are met, the Czech National Bank shall issue a certificate of the examination; If it is not possible to verify compliance with the conditions of successful completion of the test, the Czech National Bank will allow the test to be carried out free of charge within the alternate period.
Committee for Brokerage Tests
(1) The Committee for Brokerage Examinations (hereinafter referred to as the Committee) is the advisory body of the Czech National Bank for Brokerage Trials.
(2) The Committee consists of the Chairman, Vice-President and 9 other members, appointed by the Banking Board of the Czech National Bank (hereinafter the "Banking Board") from among experts, representatives of service providers on the capital market and employees of the Czech National Bank.
(3) The duties of the President, Vice-President or Committee member shall cease if the Board of Directors withdraws from office or resigns in writing.
(4) The Committee shall propose a set of test questions, carry out an interim review and a replacement thereof, recommend standard questions for publication and give an opinion on the applicant's request for review of the test result.
(5) The Committee approves its Rules of Procedure.
Payment associated with the test
The remuneration associated with each of the tests of categories A, B and C is CZK 4,000, the remuneration associated with the test of category D is CZK 2,000.
Transitional provisions
(1) Professional Specialisation A under Decree No. 259 / 2004 Coll., on the types of professional business of a securities dealer carried out through a broker, on the types of professional specialisation of a broker and on the brokerage test (hereinafter referred to as "the existing Order") is considered to be a specialisation in the implementation of orders relating to investment vehicles for own or foreign account, where the order concerns a listed investment instrument, in relation to investment instruments with the exception of derivatives. The professional specialisation of AD according to the current decree shall be considered as a specialisation in the execution of orders relating to investment vehicles for own or foreign account where the order concerns a listed investment instrument in relation to all investment instruments.
(2) Professional specialisation B under the current Decree is considered to be a specialisation of the formation of orders as a customer in the management of the client's assets in relation to investment instruments except derivatives. The professional specialisation of BD according to the current decree is considered to be a specialization of the formation of orders as a customer in the management of the client's assets in relation to all investment instruments.
(3) Professional specialisation C under the current Decree is considered to be a specialisation in the adoption of orders concerning all investment vehicles from customers.
(4) Category test Even according to the present decree, it is considered to be a test of categories A and C under that decree. Category II test according to the present Regulation shall be considered to be a test of categories B and C under this Regulation. Category III test according to the present Regulation shall be considered as a category D test under this Regulation. Category IV test according to the present Regulation shall be considered as a test of categories C and D according to this Regulation.
(5) The activity of executing orders relating to investment vehicles on own account or on a foreign account where the order relates to a listed investment instrument, where transactions under such orders are carried out outside a regulated market, shall be considered as a professional business activity pursuant to Paragraph 2 (1) (b) of this Order with a period of one year from the date of application of that order.
(6) The President and members of the Committee on Brokerage Tests, as provided for in the current Decree, who, at the date of application of this Order, perform their duties under the current Order, shall be the chairman and members of the Committee as from the date of application of that Order.
(7) The request for examination of the result of the test submitted in accordance with the existing Order, which the Committee for Brokerage Tests did not decide before the expiry of this Order, shall be decided on in accordance with that Order.
Repeal
Decree No. 259 / 2004 Coll., on the types of professional business of a securities dealer carried out through a broker, on the types of professional specialisation of a broker and on the brokerage test, shall be repealed.
Efficacy
This Decree shall take effect on 15 April 2007.
Governor:
Doc. Ing. Tůma, CSc.
Annex to Decree No 59 / 2007 Coll.
Model
Application for a brokerage test
1) Paragraph 23 (1) in conjunction with § 15 of Decree No. 258 / 2004 Coll., which provides for details of compliance with the rules on the prudent provision of investment services and more detailed ways of dealing with securities with customers.
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Regulation Information
| Citation | Decree No. 59 / 2007 Coll., on the types of professional business of the dealer of securities carried out through a broker, on the types of specialization of the broker and on the brokerage test |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 28.03.2007 |
|---|---|
| Effective from | 15.04.2007 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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