Decree No. 215/2012 Coll. on Professional Competence for the Distribution of Certain Financial Market Products

215

DECREE of 15 June 2012 on professional competence for the distribution of certain products on the financial market

The Czech National Bank, pursuant to Section 170(1) of Act No. 427/2011 Coll., on Supplementary Pension Savings (hereinafter referred to as the "Act"), for the implementation of Section 84(4) and Section 86(2) and (8) of the Act, decrees:

§ 1 Subject Matter

This Decree regulates a) the scope of professional knowledge and skills of persons referred to in Section 84(1) of the Act, b) the minimum scope of substantive, organizational, and personnel prerequisites of an accredited body and requirements for its examination regulations, and c) the model form of the application for accreditation to conduct a professional examination aimed at demonstrating professional competence and the content of its attachments.

§ 2 Definition of Terms

For the purposes of this Decree, the following terms shall be understood as: a) a certificate of good conduct issued by a foreign state means a document similar to an extract from the Criminal Register1) not older than 3 months, issued by a foreign state:

1. of which the natural person is a citizen, as well as a foreign state in which the natural person has resided continuously for a period longer than 6 months in the last 3 years,
2. in which the legal person has its registered office, or in which the legal person had its registered office in the last 3 years, as well as a foreign state in which the legal person has or had in the last 3 years a branch of the enterprise, provided that the legal order of that state regulates the criminal liability of legal persons, b) an original means an original document or an officially certified copy of a document, c) data on professional experience means:
3. information on the type of professional experience,
4. identification of the person with whom the professional experience was or is being performed,
5. designation of the job position and, in the case of the relevance of the experience for activities on the financial market, a description of the activity performed,
6. definition of the period during which the activity referred to in point 3 was performed,
7. consent for the performance of the job position required by other legal regulations, if such consent was necessary, d) data on education means:
8. name and type or kind of educational institution, study program, focus of the study program, duration of the study program, method and date of completion of studies, and titles obtained, if any,
9. overview of courses, internships, and study stays relevant for activities on the financial market, including the year of completion, focus, duration, and titles obtained, if any, e) data on scientific and pedagogical activities means:
10. description of publishing activities, possible academic degrees,
11. name and type or kind of educational institution where the person worked, including possible academic titles, study program or course, focus of the study program or course, duration of the study program or course, method of completion of studies or course, which the person led, f) a leading person means a member of the statutory body, the statutory body itself, the director of a legal person, or a person who otherwise actually directs the activities of the accredited body.

§ 3 Scope of Professional Knowledge (To Section 84(4) of the Act)

(1) Persons referred to in Section 84(1) of the Act shall have the necessary professional knowledge during the professional examination and in their further activities, in particular: a) legal regulations, insofar as they are substantively related to their activities, b) principles and functioning of pension savings and related risks, c) principles and functioning of supplementary pension savings and related risks, d) investment instruments, their types, and characteristics, e) principles of the financial market, including financial theory, and f) investments, investment strategies, and related risks.

(2) A more detailed description of the scope of professional knowledge according to paragraph 1 is set out in Annex No. 1 to this Decree.

(3) The scope of professional knowledge according to paragraph 1 must correspond to the substantive content of the activities of persons referred to in Section 84(1) of the Act, in order to ensure their qualified performance.

§ 4 Scope of Skills (To Section 84(4) of the Act)

(1) Persons referred to in Section 84(1) of the Act must be able to apply professional knowledge in dealings with participants and applicants for pension savings and supplementary pension savings, so that they perform their activities in the best interest of such participants and applicants.

(2) To fulfill the obligation under paragraph 1, persons referred to in Section 84(1) of the Act must, during the professional examination and in their further activities, be able to: a) qualifiedly obtain information from participants and applicants for pension savings and supplementary pension savings, so that a proper analysis of suitable pension products for them can be performed, b) properly evaluate the needs, goals, and financial possibilities of participants and applicants for pension savings and supplementary pension savings, and offer them a suitable pension product, c) qualifiedly and understandably provide information when communicating with participants and applicants for pension savings and supplementary pension savings, so that they themselves can assess whether the offered pension product corresponds to their needs, goals, and financial possibilities, and d) properly conclude contracts for pension savings and supplementary pension savings on behalf of and for the account of the pension company.

§ 5 Substantive Prerequisites (To Section 86(8) of the Act)

(1) The accredited body shall have premises suitable for conducting professional examinations, with an appropriate number and capacity of examination rooms.

(2) The accredited body shall have technical and software means for conducting professional examinations.

§ 6 Organizational Prerequisites (To Section 86(8) of the Act)

(1) The accredited body shall have an organizational structure with a proper, transparent, clear, and comprehensive definition of activities and associated competencies and decision-making powers, which shall be regulated in its organizational regulations.

(2) The accredited body shall also include in its organizational regulations: a) security and control measures for processing and storing information2) concerning professional examinations, and b) rules for the transparent appointment of chairmen of examination boards and their members; a member of an appellate examination board cannot be appointed if they were a member of an examination board against whose decision the examinee filed an appeal.

§ 7 Personnel Prerequisites (To Section 86(8) of the Act)

(1) A member of an examination board must be trustworthy and have completed at least a master's study program3).

(2) At least one member of the examination board must be a person with at least three years of experience as an academic worker4) in the field of the financial market, or at least one person with at least five years of professional experience on the financial market5); other members of the examination board must have at least three years of professional experience on the financial market.

(3) If the accredited body is a person authorized to offer and mediate supplementary pension savings6), or if another member of the business group7) of the accredited body is such a person, the majority of the members of the examination board must be independent of the accredited body or the business group of which the accredited body is a member.

(4) The accredited body shall ensure that during the professional examinations, examinations can take place before at least one examination board and, if necessary, an appellate examination board can be appointed without undue delay.

§ 8 Examination Regulations (To Section 86(8) of the Act)

(1) The accredited body shall have examination regulations that ensure at least the following requirements: a) objective and impartial treatment of all examinees; in case of exceeding the capacity of the examination date, examinees invited to the examination must be selected in an objective and impartial manner, b) proper identification of the examinee before the start of the professional examination, ensuring the protection of personal data, c) objective and impartial conduct of the professional examination, d) objective and impartial selection of the examination variant from a sufficient number of variants, e) confidentiality of the content of individual examination variants, f) inclusion of all necessary parts of the professional examination with an evaluation standard, in particular theoretical and practical parts, written or oral, or their combination, g) thematically balanced content of the professional examination, h) proper compilation and regular updating of a sufficient number of examination questions, for which a specific person is responsible, i) proper communication of the result of the professional examination to the examinee, no later than 30 days from the date of its holding, j) verifiable recording of the result of the professional examination, and k) possibility and procedure for appeal or review of the result of the professional examination.

(2) The examination regulations shall contain at least: a) elaboration of the requirements according to paragraph 1 into specific procedures and model documentation, b) rules for setting and publishing examination dates; the accredited body shall ensure the holding of at least one examination date per quarter, provided that at least 10 examinees register for the given date, c) content and scope of the professional examination, including information on where examinees can find the list of recommended professional literature and legal regulations for passing the professional examination, d) maximum preparation time and minimum duration of the examination, e) minimum number of members of the examination board and the method of their decision-making, f) minimum requirements for passing the professional examination, g) rules for excluding an examinee from the professional examination and the possibility of reviewing this decision, and h) information on the amount of fees associated with taking the professional examination.

§ 9 Application for Accreditation (To Section 86(2) of the Act)

(1) The application for accreditation according to Section 86(2) of the Act shall be submitted on a form, the model of which is set out in Annex No. 2 to this Decree.

(2) If the applicant is a natural person, they shall attach to the application according to paragraph 1: a) a questionnaire for assessing the trustworthiness of persons referred to in Annex No. 3 to this Decree, b) a curriculum vitae containing:

1. data on education [Section 2(d)], and
2. data on professional experience [Section 2(c)], c) an original certificate of good conduct issued by a foreign state [Section 2(a)] of the applicant, d) a list and description of premises where professional examinations will be held, including data on the number and capacity of examination rooms, e) a description of technical and software means for conducting professional examinations, f) a draft organizational regulation of the accredited body, g) a list of members of examination boards, h) a curriculum vitae of each member of the examination board containing:
3. data on education [Section 2(d)],
4. data on professional experience [Section 2(c)], and
5. data on scientific and pedagogical activities [Section 2(e)], i) a draft examination regulation, and j) a model of examination questions and topics intended to test skills.

(3) If the applicant is a legal person, they shall attach to the application according to paragraph 1: a) a full extract, or another document from the register of entrepreneurs or other register according to another legal regulation8), or from similar registers abroad, containing data valid as of the date of submission of the application, including information on a submitted proposal for entry into the relevant register, which has not been executed as of the date of submission of the application, b) a list of leading persons of the applicant with designation of their positions, c) a questionnaire for assessing the trustworthiness of persons referred to in Annex No. 3 to this Decree, filled out and signed by each leading person of the applicant, d) a curriculum vitae of each leading person of the applicant containing:

1. data on education [Section 2(d)], and
2. data on professional experience [Section 2(c)], e) an original certificate of good conduct issued by a foreign state [Section 2(a)] for each leading person of the applicant and for the applicant, f) a list of persons with qualified participation9) in the applicant and persons who, by acting in concert with another person, have qualified participation in the applicant, including graphically illustrated relationships between these persons with data10) on these persons, indicating the extent of participation or other form of participation in the applicant, and for persons acting in concert, also the fact on the basis of which they act in concert, g) a list and description of premises where professional examinations will be held, including data on the number and capacity of examination rooms, h) a description of technical and software means for conducting professional examinations, i) a draft organizational regulation of the accredited body, j) a list of members of examination boards, k) a curriculum vitae of each member of the examination board containing:
3. data on education [Section 2(d)],
4. data on professional experience [Section 2(c)], and
5. data on scientific and pedagogical activities [Section 2(e)], l) a draft examination regulation, and m) a model of examination questions and topics intended to test skills.

§ 10 Common Provisions

(1) If the applicant is represented, an original power of attorney or a similar document proving the representative's authority to represent the applicant shall be attached to the application. The authenticity of the applicant's signature on the power of attorney or similar document must be officially certified.

(2) If the nature of the matter excludes the submission of an attachment to the application required by this Decree or the inclusion of data in the form, and if this is not sufficiently evident from the application, the applicant shall state this fact in the application together with the reasons why the attachment cannot be submitted or the data cannot be included, and shall reasonably substantiate these reasons.

(3) Instead of submitting the prescribed attachment, the applicant may refer to a precisely identified document that was submitted to the Czech National Bank in the last 3 years and which meets the requirements established by this Decree.

(4) A foreign public document that is an attachment to the application does not need to be authenticated with a higher level of certification (superlegalization) or bear an apostille in accordance with the relevant international treaty11), if it was issued by a public authority: a) of a Member State, or b) of a foreign state with which the Czech National Bank has concluded a cooperation agreement; the Czech National Bank shall publish a list of these authorities on its website.

§ 11 Entry into Force

This Decree shall enter into force on 28 June 2012, except for Section 3 and 4, which shall enter into force on 1 January 2013.

Governor: Ing. Singer, Ph.D., in person

Annex No. 1 to Decree No. 215/2012 Coll.

Annex No. 2 to Decree No. 215/2012 Coll.

Annex No. 3 to Decree No. 215/2012 Coll.

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Footnotes:

1. Act No. 269/1994 Coll., on the Criminal Register, as amended by subsequent regulations.
2. Section 76 of Act No. 427/2011 Coll., on Supplementary Pension Savings.
3. Section 46 of Act No. 111/1998 Coll., on Higher Education Institutions and on Amendment and Supplement of Other Laws (Higher Education Act), as amended by subsequent regulations.
4. Section 70(1), (2), and (5) of Act No. 111/1998 Coll.
5. Section 3 of Decree No. 143/2009 Coll., on the professional competence of persons by whom a securities dealer performs its activities.
6. Section 74 of Act No. 427/2011 Coll.
7. Section 66a of Act No. 513/1991 Coll., Commercial Code, as amended by subsequent regulations.
8. For example, Commercial Code, Act No. 455/1991 Coll., on Trade Licensing (Trade Licensing Act), as amended by subsequent regulations, Act No. 111/2009 Coll., on Basic Registers, as amended by subsequent regulations.
9. Section 3(i) of Act No. 427/2011 Coll.
10. Section 3(f) of Act No. 427/2011 Coll.
11. Notification of the Ministry of Foreign Affairs No. 45/1999 Coll., on Access to the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents.