Instructions and Regulations for Opening Branches of Financial Intermediation Companies

Instructions No. (7) Opening Branches for Financial Intermediation Companies

Article (1) The intermediary shall submit a request to the Council in the Market expressing its desire to establish a branch for its company registered in the Iraqi Securities Market, accompanied by the General Assembly resolution of the company, and including at a minimum:

a. An economic feasibility study prepared by a specialized consulting office and approved by the Council and the Authority. b. Approval from the Companies Registration Department to open the branch. c. Approval from the competent authorities in the country where the branch is being opened, along with a certified copy of the lease agreement for the designated premises, authenticated by the relevant authorities. d. Appointment of a person to manage the branch, who must have completed one of the qualification courses for an Authorized Manager or Deputy Authorized Manager organized by the Market. e. Appointment of a full-time internal audit manager for the company to ensure the proper implementation of the Law and the Instructions issued thereunder and in force at the Market.

Article (2) The capital of the intermediary company wishing to open a branch shall not be less than what is specified in the Capital Adequacy Instructions issued by the Authority, plus an additional 50 million IQD for each branch.

Article (3) The performance bond letter submitted to the Market shall increase by an amount of (20) million IQD for each branch.

Article (4) The conditions that must be met by the intermediary company wishing to open a branch:

a. It must have been continuously engaged in trading activities for a period of not less than one year prior to the date of submitting the request. b. A declaration stating that no decision has been issued to suspend the company's trading activities during the two years preceding the request.

Article (5) Commitments and Undertakings

a. The Authorized Manager of the intermediary company shall bear full responsibility for the branch and undertake to bear all legal and financial consequences of any actions or violations committed by the branch. b. Duties of the Branch Manager:

First: Providing competent staff to manage the branch. Second: Providing the screens, computers, and equipment required by the Market according to specifications. Third: Not engaging in any other commercial activity or business other than brokerage, coordinating with the company's headquarters. Fourth: Submitting a weekly report on all branch activities to the company, which shall be subject to Market supervision.

c. Submission of a list of the branch's employees, along with certified copies of residence permits and work permits for branches outside Iraq, to the Market and the Authority. The number of employees must not be less than three persons at any time. d. The company's annual membership fee shall increase by 25% for each branch. e. The remote trading network maintenance fee shall increase by 25% for each branch. f. Compliance with the Anti-Money Laundering and Counter-Terrorism Financing Law, restricting dealings with investors only through banks, and not conducting any settlement on a direct cash basis. g. All buy and sell settlements through the branch shall be conducted through the company's main headquarters in accordance with the controls and Instructions in force at the Market.

Article (6) General Matters

a. The Board of Governors' written evaluation of the performance and capability of the intermediary company wishing to open a branch and its eligibility to do so. b. These Instructions do not apply to governorates or provinces that authorize the Capital Markets Authority to establish securities markets there, until such markets obtain approval from the Authority to grant the license. c. The Market may, with the approval of the Authority, close the branch in the following cases:

First: If it loses one of the approved conditions for opening the branch. Second: Upon request by the intermediary company, provided it has a justification that satisfies the Authority and the Market.