Regulatory Alerts2019-04-25
SEC Circular No 3/2019 on Professional Indemnity Insurance Compliance under Section 182(2) of the Securities Act No. 41
The Securities and Exchange Commission directs all licensed capital market operators to comply with Section 182(2) of the Securities Act No. 41 by securing professional indemnity insurance against liabilities arising from negligence or default. Licensees must confirm their compliance status and submit copies of the relevant insurance policies to the Commission on or before May 17, 2019. This directive operationalizes requirements previously highlighted during the 2017 Capital Markets Operators Workshop to ensure robust risk coverage for licensees and their employees.
[SEC LOGO] SECURITIES AND EXCHANGE COMMISSION Protecting Investors in the Capital Markets
Directorate of Market Supervision and Development
CIRCULAR No: 3/2019/DMSD
TO : ALL SEC LICENSEES SUBJECT : COMPLIANCE WITH SECTION 182(2) OF THE SECURITIES ACT NO.41 - PROFESSIONAL INDEMNITY INSURANCE DATE : 25TH APRIL, 2019
Reference is made to the 2017 Capital Markets Operators Workshop held from 26th to 27th January 2017; the newspaper notifications published in the Zambia Daily Mail of 18th and 19th January 2017 and subsequent letters sent to licensees on the salient features of the Securities Act No. 41 of 2016 (“the Act”).
You may recall that one of the requirements that was included in the aforementioned and therefore brought to the attention of licensees was Section 182(2) of the Act which is restated below for ease of reference.
“A licensed person shall, in addition to contributing towards the Compensation Fund, take out insurance against the liabilities that may arise from the negligence or default of the licensed person, and employees of the licensed person.”
In view of the above, the Securities and Exchange Commission (the “Commission”) hereby requests concerned licensees to confirm whether they have complied with the above requirement and, if not, ensure compliance forthwith. Licensees are further requested to submit, to the Commission, copies of insurance policies taken out in this respect on or before Friday 17th May 2019.
For further enquiries please contact the Commission on +260 211 227012/ 222368/ 222369 or info@seczambia.org.zm. You may also contact the Market Supervision Manager assigned to your institution as relationship manager: Mr. Abraham Alutuli (aalutuli@seczambia.org.zm) or Mr. Nonde Sichilima (nsichilima@seczambia.org.zm).
Dated this 25th day of April 2019
[Signature]
Mutumboi Mundia (Ms) DIRECTOR MARKET SUPERVISION AND DEVELOPMENT
cc: Chief Executive Officer - SEC ✓ Director Enforcement and Legal Services - SEC