Regulatory Bylaw No. 5: Suspension, Cessation, and Revocation of Financial Intermediation Companies

Capital Markets Authority Regulatory Bylaws for the Year 2022 Regulatory Bylaw No. (5): Suspension, Cessation, and Revocation of Financial Intermediation Companies

Article (1)
Suspension Based on the Company's Request:
A. The intermediary has the right to suspend operations for a period not exceeding one month upon submitting a request to the Market, authorizing the Market's Managing Director to approve the request once per year. B. In the event that the intermediary submits a request to suspend operations for a period exceeding one month up to six months, it must provide sufficient and convincing justifications to the Market, and the approval of the request falls under the authority of the Board.
C. In the event that the intermediary suspends operations in the Market without prior approval, the Market may impose a fine for each day of suspension and/or administrative penalties, taking into account what is stated in Article (3/A/Fifth).

Article (2)
Cessation of the Intermediary's Trading
A. The intermediary shall be ceased from conducting trading activities in the Market by a decision of the Managing Director if it commits any of the following violations:
First: Failure to pay the annual subscription fee to the Market within two months from the due date.
Second: The intermediary's delay in renewing the guarantee letter for the Market's order upon its due date.
Third: Shortage or withdrawal of the guarantee letter for any reason.
Fourth: The intermediary's failure to take the necessary measures to align the company's capital in accordance with decisions taken by the Authority, such as increasing its capital.
Fifth: The intermediary or one of its employees violates the provisions of the system or engages in conduct inconsistent with professional ethics.
Sixth: The intermediary fails to comply with its obligations specified in the Fifth Part of Capital Markets Law No. (74) of 2004 or any law replacing it.

Capital Markets Authority Regulatory Bylaws for the Year 2022 B. The Managing Director may refer violations to administrative investigation if found, if the matter requires it.

Article (3)
Revocation of Intermediary Status
A. The intermediary status is revoked in one of the following cases:
First: The conviction of the Managing Director of a crime involving moral turpitude by a competent court due to his practice of the company's activities.
Second: Inability to fulfill financial obligations arising from the trading of securities of companies listed in the Iraq Stock Exchange or the declaration of his bankruptcy.
Third: The occurrence of a state of total insolvency related to the financial efficiency regarding the minimum capital of the company specified by the Capital Markets Authority or the amount of the guarantee letter specified by the Board within a period of (15) days from the due date and after being notified by the Market. Fourth:

• The intermediary ceases to practice intermediary activities in the Market for a period exceeding twenty consecutive working days without prior written approval from the Market's Managing Director.
• The intermediary ceases to practice intermediary activities in the Market for a period exceeding 40 non-consecutive trading sessions during the year.
  Fifth: Issuance of a decision to liquidate or close the financial intermediation company.
  Sixth: Failure of the intermediary to appoint a Managing Director meeting the required conditions to practice the intermediary's work within two months from the date the Managing Director's position became vacant. Seventh: Issuance of a decision by the Discipline Committee of the Iraq Stock Exchange to revoke the intermediary status from the intermediary. Eighth: The Managing Director's failure to devote himself fully to the financial intermediation company to practice his work in the company after the company is warned for a period of two months. Ninth: In the event that the company is ceased from working in the Market by a decision of the Authority or the Market, and the company has not taken measures to return to work within six months from the date of cessation.

Capital Markets Authority Regulatory Bylaws for the Year 2022 B. The Managing Director is required to inform the Board at the next session about violations that result in the revocation of intermediary status, to decide what he deems appropriate.
C. The intermediary status is revoked from the intermediary, except for paragraph (A/Seventh) of these Bylaws, by a decision of the Board and with the approval of the Authority, and he has the right to object to the Board's decision before the Authority and competent courts.
D. The Authority's Board may revoke the intermediary status if the Authority deems it necessary, and the aggrieved party has (15) days to appeal and object to this decision with a written request. The Authority shall rule on the request within (10) days from the date of its submission; in the event of failure to rule, the request is deemed accepted, and the Authority's Board's decision is deemed revoked.

• Article 3 was amended by adding paragraph (D) by the Authority's Board convened on 26/5/2021, and the Authority's Board decision No. (13/22) was issued on 14/6/2021.