Regulatory Bylaw No. (30) for Trading Securities for Investors via the Internet

Regulatory Bylaws of the Iraq Securities Commission 2022 Regulatory Bylaw No. (30) for Trading Securities for Investors via the Internet Iraq Stock Exchange

Article (1) These bylaws shall be titled "Regulatory Bylaws for Trading Securities for Investors via the Internet at the Iraq Stock Exchange for the year 2016".

Article (2) a. Definitions The words and phrases appearing in these bylaws shall have the meanings indicated below, unless the context indicates otherwise:

• The Commission: The Iraq Securities Commission.
• The Market: The Iraq Stock Exchange.
• The Executive Director: The Executive Director of the Market.
• Trading System: The electronic trading system used in the Market.
• Service: The online trading service provided by the Intermediary to the Investor wishing to buy and sell and monitor it themselves, enabling them to enter orders through a licensed electronic network system.
• System: The licensed electronic system approved by the Market for trading purposes.
• Intermediary: The legal entity licensed by the Commission to conduct securities brokerage business and authorized to provide the Service.
• Settlement: The final and unconditional process by which any trading contract is completed to transfer ownership of securities from the seller to the buyer and to pay their prices.

b. Other Definitions The words and phrases known in the Regulatory Bylaws for Trading Securities in the Iraq Stock Exchange shall have the meanings indicated in those bylaws, unless the context indicates otherwise.

Article (3) No Intermediary shall provide the Service except after obtaining the written approval of the Market in accordance with the mechanism stipulated in these bylaws.

Article (4) For the purpose of implementing the provisions of these bylaws, the entry of buy and sell orders shall be limited to investors who use the Service through the System provided by the Intermediary licensed by the Market.

Article (5) The Intermediary must provide sufficient and necessary funds to meet the financial contingencies arising from its dealings in accordance with the Regulatory Bylaws for Trading Securities in the Market.

Article (6) a. The Intermediary wishing to provide the Service shall submit an application to the Iraq Stock Exchange, accompanied by all required documents and papers approved by the Market, according to the form prepared for this purpose. The documents and papers must include:

1. The Agreement Form to be signed by the Intermediary with the Investor to regulate the provision of the Service in accordance with the requirements of these bylaws.
2. The Intermediary's strategy and available resources.
3. A written contingency plan describing the buy and sell process for customers on their behalf if the online trading service becomes unavailable to the Investor for any reason.
4. A Risk Disclosure Statement which must clearly and accurately state all risks associated with buying and selling securities through the Service.
5. The amount of commission the Intermediary will receive for providing the Service.
6. Know Your Customer (KYC) Form prepared by the Intermediary.

b. The Market may determine additional requirements for consideration in the request of the Intermediary wishing to provide the Service.

Article (7) The Market shall review and provide a certificate to the Commission confirming that: a. The documents and papers submitted by the Investor attached to the request are complete and comply with these bylaws, meeting the requirements for providing the Service. b. The System used by the Intermediary meets the requirements for providing the Service. c. The Intermediary's system infrastructure is suitable for conducting trading operations via the internet smoothly and without interruption. d. The preparation and loading of the System and communication systems with the Trading System comply with the technical and operational requirements of the Iraq Stock Exchange.

Article (8) a. After completing the Market's approval of the Intermediary's request as stated in these bylaws, the Market shall submit the request to the Commission supported by the documents. b. The Commission may determine additional requirements.

Article (9) a. The Intermediary who has obtained the Market's approval to provide the Service shall publish the Risk Disclosure Statement mentioned in Article (6)/a/3 of these bylaws on its website before commencing the provision of the Service. b. The Intermediary shall keep the online trading risk disclosure statement on its website at all times, in addition to any information related to the Service requested by the Market and/or the Commission.

Article (10) a. The Intermediary shall determine the conditions for the Investor using the Service, considering any conditions that may be specified by the Market and/or the Commission in this regard. b. The Intermediary shall take all necessary measures to verify the identity of the Investor requesting to open an account for online trading, and must keep a true copy of all documents used to verify the Investor's identity. c. The Intermediary shall not provide the Service before signing an agreement with the Investor that conforms to the Agreement Form mentioned in Article (6)/a/1 and specifically includes:

1. The Risk Disclosure Statement, and the Investor's signature acknowledging receipt and review of the statement.
2. The commission the Intermediary will receive for providing the Service.
3. A detailed statement of the rights and obligations of both the Investor and the Intermediary.
4. Confirmation of the Investor's responsibility to maintain the confidentiality of their username and password.
5. The Investor's consent to receive documents and correspondence electronically.
6. Confirmation that the Investor is aware of the nature of the risks associated with investing in securities through online trading, especially those arising from the possibility of delay in the arrival of orders sent by them to the Trading System.
7. Confirmation that the Investor bears the responsibility resulting from their errors in entering, modifying, or canceling orders.
8. Notification of the Investor of the provisions of the Securities Law, regulations, and bylaws issued pursuant thereto, and their full legal responsibility for any violations committed by them.
9. The technical support and necessary technical assistance provided by the Intermediary to the Investor. d. The Intermediary shall not exempt itself from legal responsibility for losses resulting from the misuse by a third party or technical failures in the documentation and protection mechanism of its program, by transferring such responsibility to the Investor.

Article (11) The Market's Board of Governors shall determine what is necessary to open a trading account via the internet, including: a. The minimum cash balance or its equivalent in securities. b. The types of buy and sell orders the Investor is allowed to enter through the Service and their duration.

Article (12) a. The System shall verify the availability of sufficient cash or securities balance with the Investor before entering any order or modifying an entered order into the Trading System. b. If the Investor issues an order to the Intermediary in accordance with Article (13)/b of these bylaws, the Intermediary shall verify the availability of the Investor's securities balance (based on actual holdings) or sufficient cash balance before entering any order or modifying an entered order into the Trading System.

Article (13) a. The Investor may, at all times except for pre-specified maintenance times, enter new buy and sell orders and modify and cancel previously entered orders through the System, which sends them to the Market's Trading System during trading hours for execution or partial execution. b. The Investor may issue new buy or sell orders to the Intermediary or request modification or cancellation of previously entered orders on their behalf, if the Service is unavailable to the Investor for any reason, during the Intermediary's official working hours.

Article (14) The System shall: a. Immediately reserve the value of the securities intended to be purchased, the trading commission, and due fees from the Investor's available cash trading account balance upon sending a buy order to the electronic Trading System. b. Immediately reserve the quantity of securities intended to be sold from the Investor's available securities trading account balance upon sending a sell order to the electronic Trading System. c. Upon full or partial execution of a buy order, deduct the value of the purchased securities, the trading commission, and due fees from the reserved cash balance, and increase the Investor's securities account balance by the quantity purchased. d. Upon full or partial execution of a sell order, deduct the number of securities sold from the reserved securities balance, and increase the Investor's cash account balance by the sale amount minus the trading commission and due fees on the Investor. e. Adjust the Investor's cash account balance and securities account balance in case the order is rejected by the Trading System, modified by the Investor, or canceled, as applicable.

Article (15) The Intermediary shall immediately notify the Market and the Commission in writing of any prohibited acts committed by the Investor using the Service in violation of the Securities Law, regulations, bylaws, and decisions issued pursuant thereto.

Article (16) The Intermediary shall ensure the availability of live trading information for Investors using the Service, including: a. A trading monitoring screen. b. Information showing market depth by displaying at least the best five bid and ask prices for the security and their quantities, as provided by the Market. c. The Investor's cash balance and securities balance (supported by time and date). d. An immediate evaluation of the Investor's portfolio. e. A statement of the status of orders entered by the Investor. f. A statement of the Investor's transactions supported by time and date. g. Any other additional information requested by the Market and/or the Commission.

Article (17) The Intermediary wishing to provide the Service to Investors shall sign an information distribution agreement with the Market.

Article (18) The Market shall maintain a performance record according to a form approved by the Commission for all Intermediaries providing the Service, including the following data and information for each Intermediary:

1. The date, time, and duration for which the Service was unavailable to their customers for any reason.
2. A description of the service interruption.
3. A description of the measures taken to address the service interruption.
4. An explanation of the causes of the service interruption.
5. Providing the Board of Governors and the Commission with the record and its updates monthly.

Article (19) The Market's Board of Governors shall determine the amount of fees charged by the Market for activating the Service after obtaining the Commission's approval.

Article (20) The Market shall take one or more of the following measures after obtaining the Commission's approval: a. Restricting, suspending, or prohibiting the activity of any Intermediary regarding their provision of the Service. b. Restricting, suspending, or prohibiting the provision of the Service to any specific Investor. c. Reorganizing the Service.

Article (21) The Intermediary shall comply with the decisions issued by the Market and the Commission necessary to implement the provisions of these bylaws.

Article (22) The provisions contained in the Regulatory Bylaws for Trading Securities in the Iraq Stock Exchange shall apply to the Iraq Stock Exchange for trading via the internet, except where no provision is stated in these bylaws.

Article (23) The Executive Director shall take all necessary measures to implement the provisions of these bylaws, unless otherwise stipulated.

Article (24) Intermediaries and Investors shall be dealt with based on these bylaws, in accordance with the Regulatory Bylaws for Electronic Trading in the Market.

Article (25) If the Market finds any violations of the provisions of these bylaws, it shall submit a report to the Board of Governors containing the facts, violations, and measures taken. The violator shall be subject to administrative, legal, and financial penalties based on the law and prevailing regulatory bylaws, in accordance with the contexts and procedures followed in the Market.