Regulatory Alerts2023-02-14
Regulatory Bylaw No. (1) on Non-Iraqi Trading in Iraqi Capital Markets
The Iraqi Securities Commission issued Regulatory Bylaw No. (1) of 2022 to establish the operational framework for non-Iraqi investors trading in Iraqi capital markets. The regulation mandates strict identity verification, requires all transactions to be conducted through authorized banks in Iraqi Dinars, and designates authorized Iraqi custodians for financial settlement. It further stipulates that non-resident investors must appoint legal representatives, maintain valid trading authorizations, and adhere to the same compliance rules as Iraqi investors unless explicitly exempted.
Regulatory Bylaws of the Securities Commission for the Year 2022 Regulatory Bylaw No. (1) on Non-Iraqi Trading in Iraqi Capital Markets
Article (1) The broker shall verify the personal information of the non-Iraqi investor by requesting the documents listed below via email, to be subsequently supported by documents certified by the Iraqi Embassy in the investor's country or any authorized government authority in their country, within a period not exceeding fifteen days. a. A valid and certified passport. b. The certified establishment contract and license if the investor is a legal entity. c. Permanent and temporary addresses, if available, along with email and phone number. d. Three signature samples certified by the correspondent bank.
Article (2) The market shall prepare a sell and buy authorization form in Arabic, English, and Kurdish, including the order number, time, date, and order receipt, investor name, number of shares, specified price, market price, order type, and order validity period. The authorization shall be delivered via email, the investor's agent, or any other means, provided that the broker bears responsibility for the sale and purchase according to the agreement between them.
Article (3) The non-Iraqi investor or their legal representative shall do the following: a. Sign an agreement contract with the financial brokerage company. b. Sign the authorization form with the financial brokerage company.
Article (4) A non-Iraqi investor who is not resident in Iraq may appoint an agent to follow up on their financial investments in the market according to an official contract and in accordance with the law.
Article (5) The broker is not permitted to receive any cash amounts from the non-Iraqi investor or their agent, nor is it permitted to settle sale amounts in cash. These operations must be conducted through one of the authorized banks in Iraq and in Iraqi Dinars.
Article (6) Financial settlement for investors' rights shall be carried out according to the period stipulated in the trading regulatory bylaws and through an authorized Iraqi custodian, with the broker bearing legal consequences.
Article (7) The broker shall provide the non-Iraqi investor or their agent with sales and purchase statements according to the prevailing regulatory bylaws or the agreement between them, using available agreed-upon means.
Regulatory Bylaws of the Securities Commission for the Year 2022
Article (8) The broker shall retain a copy of all documents mentioned in the regulatory bylaws and copies of the documents of deposited and received amounts, which shall be subject to the supervision of the market and the Commission.
Article (9) The laws, regulatory bylaws, and controls regarding the trading of non-Iraqi investors shall be published on the market's website.
Article (10) When a non-Iraqi investor wishes to sell or buy shares, the authorization must be valid and in accordance with the prevailing regulatory bylaws.
Article (11) The rules, procedures, and obligations applied to the Iraqi investor and brokers shall be applicable to the non-Iraqi investor, except where they conflict with what is stated above.