Minimum Standards for Operating Premises of Securities Market Players Directive, 2024

(3) The penalties in subparagraphs (1) and (2) shall be paid through an electronic bank transfer in favour of the Reserve Bank within five working days after notification. 22. In addition to the monetary penalties in paragraph 21, the Registrar may impose directions or administrative penalties as provided for under the Act and the Financial Services Act. 23. The Securities (Clearing and Settlement) Directive is hereby revoked. Issued this 1st day of May, 2024. DR. W. T. BANDA (REF. NO. FIN/PFSPD/02/12) Registrar of Financial Institutions GOVERNMENT NOTICE NO. 36 SECURITIES ACT (CAP. 46:06) SECURITIES (MINIMUM STANDARDS FOR OPERATING PREMISES OF SECURITIES MARKET PLAYERS) DIRECTIVE, 2024 IN EXERCISE of the powers conferred by section 67 (1) of the Securities Act, I, DR WILSON TONINGA BANDA, Registrar of Financial Institutions, issue the following Directive—

1. This Directive may be cited as the Securities (Minimum Standards for Operating Premises of Securities Market Players) Directive, 2024.
2. In this Directive, unless the context otherwise requires “securities market player” includes an exchange, operator of a collective investment scheme, broker, dealer, portfolio manager, transfer secretary, investment advisor and securities market intermediary.
3. The objective of this Directive is to prescribe approval and certification requirements for operational infrastructure and operating premises for securities market players.
4. A securities market player shall not operate his business from a premises unless the premises is approved and certified in accordance with this Directive.
5. —(1) A securities market player shall not__ (a) acquire or develop a premises for use as a securities business premises; (b) renovate a securities business premises; 24th May, 2024 183 Administra￾tive penalties Cap.44:05 Revocation G.N. 25/2015 Citation Interpretation Objective Securities market players to operate from approved and certified premises Requirement for, and grant of, prior written approval of the Registrar

(c) relocate a securities business from one business premises to another; (d) merge securities business premises; or (e) close a securities business premises, without prior written approval of the Registrar. (2) An application for approval under subparagraph (1) shall be in Form SBM 1 set out in the First Schedule and shall be accompanied by a business case. (3) An application for approval to relocate a securities business to another premises shall, in addition to the requirements in subparagraph (2), be accompanied by__ (a) information on the basis for the relocation (b) a plan for settlement or transfer of accrued claims and liabilities; (c) expected date of relocation; and (d) an analysis of the potential and feasibility for the relocation. (4) The Registrar shall, in assessing an application for prior written approval required under subparagraph (1)__ (a) inspect the proposed premises; and (b) consider__ (i) the location of the proposed premises; (ii) the merits and demerits of the proposal, including its impact on the financial inclusion agenda; (iii) the most recent performance indicators and condition of the applicant; and (iv) whether the applicant is under any administrative or enforcement action. (5) The Registrar shall, within thirty days of receiving the application and upon consideration of the application__ (a) approve the application on such terms and conditions as he determines appropriate; or (b) reject the application and give reasons for the rejection. 6.—(1) A premises shall not be certified for operation of a securities business unless the premises complies with the minimum requirements prescribed in the Second Schedule. (2) The Registrar may require a securities market player to meet higher standards than the standards prescribed in the Second Schedule, where the Registrar is of the opinion that the nature and volume of services intended to be offered at the premises require higher standards. (3) The Registrar shall not certify a premises for operation of a securities business if__ 184 24th May, 2024 Minimum certification requirements for securities business premises

(a) in the case of a multi-storey building, the upper or lower floor or any other adjoining room is used as a residential premises; or (b) in the case of a semi-detached building, the adjoining building is used as a residential premises. 7.—(1) A securities market player shall inform the Registrar of its intention to occupy a certified premises at least ten working days prior to occupying the premises. (2) The notification under subparagraph (1) shall include— (a) copy of the letter from the Registrar in which prior written approval was granted in terms of paragraph 5; (b) the date on which the premises are expected to be opened for business; (c) preferable dates on which the Registrar may inspect the premises; (d) precise location of the premises; and (e) a proposed organization structure for the premises. (3) The Registrar shall, within five working days of receiving the notification, inspect the premises and assess the suitability of the premises in line with the requirements set out in the Second Schedule. (4) Where the Registrar is satisfied that the premises do not comply with the minimum requirements stipulated in this Directive— (a) the securities market player shall rectify the shortfalls; (b) the Registrar shall, upon being informed of the rectification, re￾inspect the premises; and (c) the securities market player shall bear the costs of the re￾inspection. (5) Where the Registrar is satisfied that the premises comply with the minimum requirements stipulated in this Directive, the Registrar shall issue a premises certificate in Form SBM 2 set out in the First Schedule to the securities market player in respect of the premises, on such terms and conditions as the Registrar may determine. (6) The securities market player shall display the premises certificate at a conspicuous place inside the business premises. 8.—(1) The Registrar may, at any time during office hours, inspect a certified securities business premises to ascertain continued compliance with the prescribed standards and the terms and conditions of the securities business premises certificate. (2) Where the Registrar is of the opinion that the premises__ (a) have ceased to comply with the prescribed standards or any term or condition of the certificate, the Registrar may, by notice in writing, order the securities market player to rectify the deficiencies within a period specified in the notice; or 24th May, 2024 185 Occupation of business premises Routine inspection of securities business premises

(b) require higher standards than the standards prescribed in the Second Schedule, the Registrar may, by notice in writing, order the securities market player to upgrade the premises as specified in the order within a specified period. (3) The Registrar shall, at the expiry of the period specified in the order issued under subparagraph (2), re-inspect the premises at the cost of the securities market player. (4) Where upon re-inspection of the premises in accordance with paragraph (3), the Registrar is of the opinion that the securities market player has not complied with the order issued under subparagraph (2), the Registrar shall revoke the premises certificate. (5) A securities market player whose premises certificate is revoked under subparagraph (4) may apply for another premises certificate for the premises in accordance with this Directive. 9.—(1) A securities market player shall not temporarily or permanently cease to operate from a certified business premises unless the cessation is approved by the Registrar in writing. (2) An application to cease to operate from a certified business premises shall be in Form SBM 3 set out in the First Schedule. (3) Where approval is granted for permanent cessation of business operations at certified premises, the securities market player shall__ (a) give at least three months’ notice in writing to the public of the intended cessation of business at the premises; and (b) within fourteen days of ceasing operations at the premises, notify the cessation to the Registrar in writing. (4) A notice under subparagraph (3)(a) shall be published__ (a) by placing the notice at conspicuous places within and around the premises concerned; (b) in at least two newspapers of nationwide circulation in Malawi; and (c) by circulating the notice to government administrative offices in the area where the concerned premises is located. 10.__(1) The board of directors of a securities market player shall put in place policies, procedures and internal controls with regard to acquisition, revaluation, maintenance, depreciation and disposal of securities business premises. (2) Management of a securities market player shall keep a register of its premises together with all agreements relating to the premises. (3) A securities market player shall ensure that, where applicable— (a) the title or lease of its premises is legally valid, and that any necessary steps such as deed registration are taken in a timely manner; (b) the premises have adequate insurance cover; and 186 24th May, 2024 Cessation to temporarily or permanently operate from a certified premises Board and management responsibili￾ties

(c) the use of the premises conforms to all legal requirements applicable to the location where the premises are situated. 11.(1) A securities market player who contravenes any provision of this Directive commits an offence, and the Registrar may impose a monetary penalty on the market player and any member of the board of directors or management of the securities market player (a) in the case of a securities market player, of up to K50,000,000; and (b) in the case of a member of the board of directors or management of the securities market player, of up to K10,000,000. (2) Payment of a penalty under subparagraph (1) shall be made by the offender__ (a) within five days from the date the notice of the penalty is received by the offender; and (b) through an electronic bank transfer in favour of the Reserve Bank of Malawi. (3) In addition to a monetary penalty imposed under subparagraph (1), the Registrar may issue any direction or impose any administrative penalty prescribed under the Act or the Financial Services Act. 12. A securities market player who is not satisfied with a decision of the Registrar under this Directive may appeal to the Financial Services Appeals Committee within twenty-one working days of receiving the decision. 13. The Securities (Premises Inspection Requirements for Securities Market Players) Directive, 2015 is hereby revoked. FIRST SCHEDULE (Para. 5(2)) FORM SBM 1 APPLICATION TO OPEN/MERGE/RENOVATE BUSINESS PREMISES PART I__GENERAL INFORMATION 1 Name of institution…………………............................................................................… 2 Type and number of licence….......................................................................................... 3 Location of head office and branches and dates of establishment ................................... ........................................................................................................................................... 24th May, 2024 187 Penalties Cap. 44:05 Appeal against decisions of the Registrar Revocation of GN/29/2015

Type of premises Date established Location PART II – NEW BUSINESS PREMISES 4. Type of proposed business premises (head office or branch) ........................................................................................................................................... 5. Particulars of the proposed business premises: (a) Location: district/town………………………..............…………….......................... (b) Postal address and telephone numbers…………........................…………………… (c) Physical address …………………….....................................……………………… 9 Proposed date of commencement of operations……………................………………… 10 Do you plan to change the type of business premises (e.g. branch, agency, kiosk)? ........................................................................................................................................... If yes, state intended date for the change ......................................................................... PART III – MERGING OF BUSINESS PREMISES

1. Type of proposed business premises (head office or branch) ........................................................................................................................................... 2 Particulars of the proposed business premises: (a) Location: district/town................................................................................................ (b) Postal address and telephone numbers....................................................................... (c) Physical address ......................................................................................................... 3 Reasons for the merger...................................................................................................... 4 Proposed date of commencement of operations at the merged premises........................ PART IV – RENOVATION OF BUSINESS PREMISES 1 Type of proposed business premises (head office or branch) ........................................................................................................................................... 188 24th May, 2024

2 Particulars of the business premises to be renovated: (a) Location: district/town……..........................................................….......................... (b) Postal address and telephone numbers……………………………................……… (c) Physical address ……….....................................................................……………… 3 Reasons for renovation ..................................................................................................... 4 Proposed date of commencement of operations at the renovated premise................................ Signed………………………………...…. …………………………………… Chief Executive Officer/Principal Officer Date PIC No…........................................................................................................................... NOTES 1 All enquiries concerning the preparation and filing of this application form shall be made to: The Director, Financial Sector Regulation, Reserve Bank of Malawi, 10 Hannover Avenue, PO Box 565, Blantyre. Email: fsr@rbm.mw. 2 Upon completion this application form, submit the form and all attachments to: The Registrar of Financial Institutions, Convention Drive, PO Box 30063, Capital City, Lilongwe 3. FORM SBM 2 (Para. 7(5)) SECURITIES BUSINESS PREMISES CERTIFICATE THIS IS TO CERTIFY that the Registrar of Financial Institutions conducted a premises inspection of..............................................................located at………………......………….. and has determined that the premises is appropriate for the conduct of a securities market business. Dated this……………day of ……………………, 20…. ....................................................... Registrar of Financial Institutions NOTES 1 This Certificate is not a licence to conduct a securities market business. 2 This Certificate shall become invalid upon withdrawal of the securities market business licence. 3 The Registrar may revoke this certificate upon being satisfied that the premises no longer meet the prescribed minimum standards or that the facilities therein have deteriorated. 24th May, 2024 189

FORM SBM 3 (Para. 9(2) APPLICATION TO RELOCATE OR CLOSE A BUSINESS PREMISES PART I__GENERAL INFORMATION Significant Total number and shareholders, Type of business location of nationality, premises to be branches and address and closed or reloca￾Name of Type and number outlets and dates shareholding ted (e.g. branch, institution of licence of establishment percentage agency etc.) PART II__RELOCATION 1 Particulars of business premises to be closed: (a) Postal address and telephone numbers:....................................................................... (b) Physical address:.......................................................................................................... (c) District, City/ Town-:................................................................................................... 2 State reasons necessitating relocation of the business premises ...................................... :.......................................................................................................................................... 3 Particulars of new business premises:............................................................................... (a) Postal address and telephone numbers:...................................................................... (b) Physical address :........................................................................................................ (c) District, City/ Town:................................................................................................... 4 Is the new business premises__ (a) self-owned?...........Yes/No*……If yes, cost of purchase or construction…............ .................................................................................................................................... (b) leased?............ Yes/No*…………..If yes, provides lease agreement (c) If agency type, provide agency agreement:................................................................ 5 Proposed date of commencement of operations at the new premises ............................ 6 Do you plan to change the status of the new business premises? ................................... If yes, state the proposed type of status and expected date of change.............................. ........................................................................................................................................... 190 24th May, 2024

PART III__CLOSURE 7 Particulars of business premises to be closed__ (a) Postal address and telephone numbers…................................................................... (b) Physical address ...............………….…………….………….................................. (c) District, City/Town…….…...............……………………………………..………... 8 State reasons necessitating closure of the business premises: …….......……………….. .......……………………………………………………………………………………… 9 Indicate profitability of the branch, in the last three years ........……………………………....................................................................................... 10 Provide the proposed action plan on current branch employees……..........................… 11 Are there other securities business facilities provided in the vicinity?............................ If so, state by whom………………………..........……………………………….……… Signed……...............……………………………. …………..........…………… Chief Executive Officer/Principal Officer Date: SECOND SCHEDULE MINIMUM REQUIREMENTS FOR SECURITIES BUSINESS PREMISES CHARACTERISTICS Mandatory/ optional

1. General outside surroundings: (a) Ensure that the outer walls are of strong reinforcement materials Mandatory (b) Windows must have blinds or tinted to obscure outsiders from observing transactions conducted inside Mandatory (c) Backyard windows must be reinforced Mandatory (d) The surrounding perimeter must have all the necessary security features to cater for the day and night. Such security features shall include__ (i) alarm or satellite communication system that must be connected to the securities market player’s management for speedy communication to security agents or police; Optional (ii) security lights; Mandatory (iii) a fence; Optional (iv)Security guards/commissionaires for day and night who should have access to alarm system; Mandatory (v) Signage post that must be conspicuously displayed Mandatory 24th May, 2024 191

CHARACTERISTICS Mandatory/ optional (e) Entrance and exit doors must be protected (e.g. with intruder alarm, strong steel trellis bars or burglar bars) Mandatory (f) The premises should at least have a customers’ car park Mandatory 2. General inside requirements: (a) Availability of strong room or chubb Mandatory (b) The strong room or chubb must be dual controlled, securely located out of customers’ sight, made of heavy iron, and preferably fire proof Mandatory (c) Ensure that the front office has reliable, fast, efficient computers for better customer service Mandatory (d) Ensure that there are monitoring cameras (closed circuit television system) in all the strategic areas, e.g. entrance or exit doors, corridors, and front or back yard. Optional (e) All strategic areas must have__ (i) smoke detectors; (ii) fire extinguishers that must be regularly tested for functionality; and (iii)emergency exit doors (e.g. one way opening from inside) and an Emergency Evacuation Plan. Mandatory (f) The roof must be properly secured e.g. intruder alarm system Mandatory (g) For speedy communication, ensure that reliable telephone and internet facilities are installed and functional Mandatory 3. Other Features: (a) The premises must have an off-site back-up centre for data and systems Mandatory (b) Utilities such as electricity, water, etc., must be available and in working order Mandatory (c) Have a standby power generator or uninterruptible power supply (UPS) to cater for periods of power failures Mandatory (d) Ensure that operational policies and procedural guidelines of a securities market player are in place and are made available and known by relevant users Mandatory Issued this 1st day of May, 2024. DR. W. T. BANDA (REF. NO. FIN/PFSPD/02/12) Registrar of Financial Institutions 192 24th May, 2024