Regulatory Alerts2016-06-09
Amendment of Decision 10 on Financial Intermediation Institutions
The Capital Markets Authority of Lebanon issued Announcement No. 20 to amend Decision 10 regarding financial intermediation institutions. The amendment introduces a new sub-article mandating that these institutions conduct annual, conflict-free valuations of all privately placed securities held in client portfolios and proprietary books. Institutions must accurately record these valuations in client statements and proprietary records, clearly marking privately placed securities with a disclaimer detailing the valuation methodology, conducting entity, and assessment date.
Announcement No. 20 On the Amendment of Decision no. 10 of 9/1/2014 (Related to Financial Intermediation Institutions) Pursuant to Law 161 of August 17, 2011 on Capital Markets, Pursuant to the Decision of the Capital Markets Authority’s Board ref 10/1/16, taken in its meeting of January 25, 2016, Pursuant to the Decision of the Capital Markets Authority’s Board ref 8/4/16, taken in its meeting of March 21, 2016, And pursuant to the Decision of the Capital Markets Authority’s Board ref 7/7/16, taken in its meeting of May 9, 2016, Please be informed of the following: First: Sub article 9 has been added to Article 9 of decision 10 of 9/1/2014 on specifying some of the obligations incumbent upon all the institutions which, according to the first and second articles, deal with financial intermediation in Lebanon; following is the text of the sub article added: "9. Ensure that a proper valuation, (which minimizes / avoids any possible conflict of interest, is conducted on a periodic basis (at least once a year) on all Privately Placed securities (private equity offerings and structured products) held in client portfolios as well as in relevant proprietary books. The approved institutions should reflect / record the values of those securities accordingly in all client statements and relevant proprietary records. All privately placed securities should be clearly marked as such in client statements and a disclaimer should be added in the statement indicating the valuation methodology adopted the entity that conducted the valuation, and the date of the valuation." Second: Attached is Decision no. 10 of 9/1/2014 (on Financial Intermediation Institutions), amended as per the above. Beirut, on June 9, 2016. CMA Chairman/ Governor of the BDL Riad Toufic Salame (signature)