Interim Law on Securities Markets No. 74 of 2004

COALmo:"l PROVlSlONAL AlJTHORrry ORDF.R "-UMBER 7.4 I1IoTERIM LAW ON SECURITlr.s MARKETS Punutw to my awhority as Administnttof of!he CoalTtioo Provisional AIllhority (CPA).lIDll UDder the laws and usages oh•...-. uv;I oonsiSfall ",ith ~le"UIt U.N. Security Council n:soIuliorIs, including Rcsohttions 1483 mil lSI I (200]), HOl'Utg ....-orkOO dosely ...ith!he Go-eming Couneil to ensure thai. c.....llomk: change as 11lX- s""y to benefit the people ofIraq occun in a rnaDDIT accepoble to the people of
h....
Aclmu.../edging the Govcrning Council's desire to bring about significant change to !he Iraqi econonlli: system as nl.'Ce:SSlII)' to improvc fhc condition oflhc people ofIraq. DI!/erm;ned to impro'c fhc conditions of life. technical skills.. and opponunities for all Iraqis and 10 light unemployment ....ith its associated dclctcriOtU effect on public seCurily. Recognizing that some ofthc regulations concerning securities markets under the prior regime an: not well-5lJited to a modem, efficient. tmnsparcnt and independently regulated securities ~rt. Notillf{ that Iraqi entrepm'l('un and bus~ will benefit fTom tbe ~ival of Iraq', capital markets, Recogni=ing the CPA's obligation 10 prov)de for the effecti"t M1minisrrllMln of Iraq. to ensuI"t the ....1'11. being of dx: Iraqi people and to enable the social and economic f\ml:tions and nonna! trmlSlICtioos ofC'ef)' da) life, Mliltg in • lDlIIIDl:l" consi_ ...ith the Report ofthe Seem&/)' GaJcraI to the Security Council of July 17, 200]. oollccllling the need fO'l" the dcvclopmcut of Inq lid its U8IISitioo from. a DOD-UaI1SpBI'CIt c:cnlTl1ly planned ecO'lOiil) to. fitt maricet econonty tharxterized by SUSUlinabk COCJDOmic gJ'O"'tb through the e;tabIistwnent of. d)'namic prh1tle!lCC1Ol". uv;I the neal to coact instinnional and legal refonns to gh"t it effect. 1/(1'ing ....orlr:cd closely ...illt !he Go'eming Council. in1cmllliorlal otganizatioos. relevant Ministm and Iraqi busille$5 people in dC'Cloping policies that ....ill organi1% and r.-ililalC fair. efficient. and ordcrl) securities tr1IDS3Ctions in Iraq, I hereby promulgate Ihe foUo...ing:
CPA/ORDI18 ApriI200~m

Sedion I
Definitions
For the pu'JlO5Cs ofthis law, the following tenns shall be defined as follows:
I) "Commission" means the interim Iraq Securities and Exchange Commission.
2) "Commissioners" mean the members ofthe Iraq Securities and ExehaIlge
Commission.
3) "Exchange" means the Iraq Stock Exchange ("ISX") or such other exchange as the
Commission. pursuant to its rules, may licell5e under this Law.
4) ~Gcrn:ral Assembly" means the: body consisting of all Exchange members and
companies listed on the Exchange.
5) "Board of Governors" or ~Board" or "Go"emors" means tbe Board of Governors of
the Exchange or the Governors ....110 sit on the Board.
6) '"Go'emrng Council" means the Governing Council ofIraq and. following the
transfer of full gO'emanec authority to the Interim Iraqi Government, the body vested with national executive autborit)'.
7) '"Chair" means the: Chair ofthe Exchange's Board ofGovcmors ofthe Exchange;
or Chair ofthe Securities and Exchangc Commission, as the context indieatcs.
8) "CEO" means the Chief Exccutive Officer ofthc Exchange.
9) ~Member" ofthe Exchange means a licensed Broker ofthe Exchange
10) ~Brokcr" means a natural perron licensed by the I30ard ofGovernors under Section
5(1) (a) ofthis Law to engage in securities transactions on the Excbange or a legal person so licensed under Section 5(1) (b). A bank may be accepted as a BroktT if authorized to act in that capacity under the Banking Law. It) "Bank" means an entity authorized by the Central Bank ofIraq to conduct banking operations in Iraq.
12) "Company~ means ajoint stock Company that is an issuer ofsccurities subjcctlO
the: provisions ofthis Law or a Company referred to in Section 5(1) (b) (ii) ofthis Law. CPA/ORD/IS April 2004n4 ,

13. "Dcpository~ means the Iraq Depository which will serve as the central ckaring
    and settlement facility for all securitics transactions.
14. ~Liccnscd Securities Market" shall mean any securities lIllU"ket Wt is granted a
    license by the Iraq Securities Commission to condUICt scx;urities transactions.
15. "Sceuritics" mean tradable interests representing financial ,·a!uc. including shares
    of corporate stock or mutual funds, bonds issued by corpomtions or the gO"crnmcnt, stock options, wununts and other dcrivat;"e scx;urities. limited partoership units and 'llrioU<; other form "im'cstment instruments".
16. '"Ga"eRUncnt Sccurities~ mt'ans S«urit;cs backed by the full faith wxl credit of,
    or guarantced by. the Go.-emment oflraq_
17. ""Listed CompaniCl;" shall mean all companio::s that arc listed for trading on a
    Licensed Securities Markcl.
    (8) ~IASD" means the Iraqi Association ofSc:curitics Dealers. a tmde organization for all brokers wishing to become participants in Licensed Securities Mmets.
18. "La"," or "Interim Law" means this Intcrim Law on Securities Markets.
    20)"Pennanent Securities Law" means the successor law to this law, which will establish thc comprehensive kgal and regulatory framework for securities lrading, ovcrsight and securities mmcts in Iraq. Seelion 2 Organization and Objeelives I) The Baghdad Stock Exchang., shall rease 0f!t'rat;ons. A new Exchange known as the "Iraq Stock Exchange" is hcreby established under Ihis Law. al The E:'(change's headquaners shall be in Baghdad, with no prohibition against opening branch offices in other Iraqi eities. b) Its corporate existcnce. including limitation of liability (C) its own assets and nol those ofits members. commences immediately. c) Thc Exchangc shall havc no responsibilil}' for any obligations ofthe Baghdad Stock Exchange. d) Thc Registrar ofCompanies in the Minislry ofTrade shall have no oversighl authorilY over the Exchange and it n«d not register with the Ministry ofTradc. CPAIORD/18 ApriI200.m4 ,

e) ~f~in the: Company La.... of 1997, No. 21. its amrndments or otbef Ia"",. to !he Baghdad Stock Exchanae thall, subject 10 arnmdment ofsueh laws. beDceforth be mid to mean li«nsed 5IOek aehanges; or~lSimofar as specifted by Commission rules. f) Up;>n liquidation oflhc Ba&hd-J Stock Exehangc,lUl}" rnooies rnnaining after diJdww: ofits obIiptiolu shall go to the public budgc:L
2) The Exchange shall be a emil)" ....itb financial and adminislJ'Ilh-e
inlkpc:n& '" e. the right to submit claims bef~ rouns.judicial authorities or any other authori1)·. and shall be fq)retented by the Chair ofthe Board ofGo"CmOB or a JlCT50fl authorized by ihc Chair"
3) The F.)I;change shall be a not-for-profit, mcmbcr-o....ncd and !lClf-rcgulaiory
organil'.ation. It shall be independent ofthc Iraqi Go"emmcnt and Ihe Ministry of Finance. Its business with third panics is commercial in a manner nol contradictory to this Law. Its internal governance and the disposition ofits assel$ upon liquidation after payment of lawful claims shall be according to the lenns ofthis Law and the Exchange's rules as authorized Wld approved hc~undcr,
4) No stock achange or other Ofllanizcd securities marli:ct may opcm1C "'ithout a
license: from the: Conunission. The ExehanltC is hereby licensed lU1d authorilCd by 'inuc ofthis La", to commence opc:mtions immcdiatc:l~·. subject 10 !qulalory Ol-en.ight ofthc Commission. At such time as a new securities Law is adopted. the Exchange shall be: to cxist and operate in acrortIarx:c ....ith the terms and cOllditiom ofsuch law. No other inlCrim exchange liccrtses shall be: granted before !be first anni'CISV)' oflhe efTeelh-e date ofthis Law W11ess tbc Commission specifteail}' rmd$ that the interests ofin'eS!Of'S oouId not be: "'eU-5CI"-ro Olhc:l'wise.
5) Col'llJaCtS for !he purciID: and sale ofsecurities concluded on !Ix ExehIn&e shall
be exempt fium stamp fees. Companies .... hose sccuriIic:s an: admilted 1(1 tnlding on !he F.)I;change shall M'e DO right 10 collect ....} fees "itb rapea to the: issuanoc or nnsferoflbcir securities cxoepI in such limited c:imlm¢lOCCS as lht Conunission may b)' rule define to ptOl11(llC the C(III~ or Iowa the expenses ofin~
6) The: Exebaoge aims to achie'e!he following:
a) To operate and regulate ilS mcmben and listed companies in a nwmcr!hat is consistent "itb!lx goal ofprotC'C1ing in,c:stnrs and promoting investor confidence: in the market. b) To promole the intCTCstS ofin"estors in efficient, ~liable. compCIith'c. transparent and honesl markets. CPA/ORD/18 April2004n4 ,

c) To 0JgBDize and fllciliwe fair. cllkknt and onJcrly tts.....;tiom in securities, including the elearsnc:t: and settlemenl ofsucb D:ans3etions. d) To rqubu: il$ mnnbas' dcalinp in securio~ X!"ic:c:s snd nns.:tions and dcfiDe !he- rigtm &Dd obliplions ofpartics COl..... lied and the means CO prolcct Ibcir legal in~. e) To usisI in capital-~for companies "'iJicb cidEr are 1iSlCd. or v;hieh to lisl: on !he F.xchangc. f) To mgage. as .PP'opi isle, in iO~ education proglIllll!IlO tducalc poIential investor.; abow opjX)f1unities for in'CSlments at thc Exchange. lJ) To eollccL analyze and publish Stalislics and information necrsslII)' to achie\e !be: goals stipulated in this Law. h) To establish and suppol1 CODlaCts with the SlOCk exchanges of Arab and international markrls that may be beneficial to the developmenl ofdlC Exchange. i) To undertake other scrviec:s and 1II:1;"itics lI«eSSlU) to suppol1 its objeclives.
Section 3
TnnsaC1ioM Olllhe uebang..

1. No srcuritics transactions shall take place 011 thc Exchange WLIess the Company has
   listed that class of5rl:Uritic:s for lrading on the F.xchange and Ibr tnnsKlions are conducted. inl\lCCOl"danco: "'ilb the Exchange's rules.
2. Tbc Exchange's rWcs n:gantin& 1I'tI1SSC1ions in srcuriocs and other manersshall he
   .ciop(od by the ExdlaDge's Board of Governors and shall be: sut;ect 10 appu~ by the Commission.
3. Securities uansactions sball be rntric:ted as follows:
   a) All transactions on Ihe Exthange sha1t be rntricted 10 those cooduclcd b)·ltJe Brokers autbori...J:d by m.. Exdlange to engage in such tnmactklns. b) No Broker or person in tho: business ofeffecting lran$2II;Iiom in securiltcs for proprietary or c:lil'1llaeoounlS dJall engage in lilly such lICCuritics broketS£e 9ClViccs offthc ExchanJ!:e. Il:'gardless of whetocr the sec::uritics in'Olved in suth llllnsaction are admitted 10 trllding on the Exchange, unless those securities are subjecllO other 1'C'k'lIllt regulation by the Commission. CPAIOIl.OllS Aprill00·m4 ,

c) The restrictioo in subparagnpb (b) ofthis pamgr:aph 3 ofSectioo 3 shall not apply to:
i). Public subscTiplioD for securilies. isslla'¥"', pro~i<k:d lbae is complianl:c ",ith me provisions ofCompany La", No. 21 of 1997, tIS amcDdcd. ..) 5UIXCSSOI" laws or amendments and the rules ofthe Ccmmissioo.
iil. Tnmsfer by gift 10 ~laJh'es oflb:: degra: {pllle••ts. parentJ-in-law,
siblings. siblings-in-Iaw, childtm. childJen.-in-law) or Ir'ansfer b)' inberitance oc_""'" iii). The restrictions in wbparagrap/'l (b) ofthis paragraph 3 ofSection 3 shall not apply to Ib:: is5uan« o(Go'ernmcm ~ties.provided there is compliance \ith the rules ofthe CenUBI Bank ofll1lll and Mini!llry of Finance. d) The restrictions in subpBnlgtllph (b) nfthis paragraph 3 ofSeelion 3 shall not apply in nther circumstaDCes lhatthe Commission may by rule define regarding:
i). TrnnsplII'em and competitive pricing and trading arrangements; ii) Investor cost and con'eroience:
iii) Oplimal interaction ofsupply ofand demand for the security:
iv) Disclosun: ofi5SUer fintll1ciaJ condilion. o....'TICrship and conlJOl:
v) Reliable sclIll:ment III1'lIIlgem<'nlS: and vi) CompclCtlt and reliable providers of in\estmerot 5Cl'ice:s.
4) The Exchange shall have ,uthorily to in-.lidale lII1y lransa:tion in securities 00 the
Exchange that is in violation nfthis Law. the rules ofthe Exchange, or the 1\Iks: of the Commimon. S) The Ex~shall admil an Iraqi COilq_'Y's KCUritics for trading on the F..xc~ pr1l\ided lbat the lnqi Compan) complies ....ith the ExchaDte's listing ..,danis. ",ilich 5baIl at a miDimOOl. requm Ihat:
a) The Compan)' bas held its most annual gmera.I auembly required by In."; b) The Company has submined to the Exebaogc and made public:1y lI'J1IabJe flnancial swements ofthe Company current lIS ofa dak not more lban six monlhs prior to the opening da)' oftrading prepared in IICCOfdanee ....ith such requirrnJrnls lIS 10 fonn.. conlClll and applicable IIIXOlIllIiog standards and accompankd by such asswanees and explanations lIS the Exchange 1TIa)' requirt-:
c) The Depository has certified to lhe Exchange lhat the Company's securities proposed to be admitted for trading on the Exchange art' digible fot thc Depository based upon such assurances that the Depository may require from Ct"AIOIOOIl8 April 200-*f14 ,

the Co!npan}' or the Company's regisuar rqanling !be: a:mpkteness and accuracy ofinformation cooceming lhc llmOUIlt ofthe ~tic:s outstanding mil !be: O\'tIef$hip ofsucb sceuritics; d) 1'be seeurities 01T~ for uading an! oot subject 10 my kgaI rc:striction on .....r~ e) The CoInpaD)' has agRCd 10 make timely publ.ie di5lciosoJn, ofany iDformation Ihat might haVl" a signifleaDt effect on lhc pritt ofits sa:uritio:s 10 be .tnIinN f(l!" IJlIding, Bnd has BgIl"Cd 10 a:mply ..ith such other requirements as !be:
Exchange may impI)5C IU a condilKln fill'" admitting the CornpaDy's JeCUrilio:s for ll'lIding on the Exchange; and f) The Exchange may (either punua.nllO a Commission order or based upon its o"n determination) rcmo~'C 8ft Iraqi Company's securities from I'IIding on the Elle/lange when the issuer fails 10 comply willi Exchange rules or the sa:urilies law, or ifits securities no longer mcelthc Exchange's liSlUtg requirements.
6) A Compan)' with a class ofSCl:orities admitted 10 trading on the Exchange punluant
to Section 3(5) shall be required to comply "ilh!he foJlo..ing requirements in order for $lICh securities to continue to be admined 10 ltading from the opening ofthc Exchange onward. a) The Company shall file ..ilh the F.xchange and the Commission and make publicly available oot later than 60 days after the close ofeach ofthe firsl thrtt quarters ofthe Company's fiscal )'C3f unaudiled. quarterly frnancia.l reportS thai incfuck summary balance sheets lIS ofthe dosc ofthe quartef and the mosI rcttm fiscal )'C3l" and comp.luin~quarterly and rear-to-datc summary swcmcnts ofincome and c;ash Dow through the close oflhe qualtCf and for tbc (XlfIlparabic prior )'ear periods. The qUlll1Crl)' reports shall be pl't'JlIImI iD acoordancc with such requimnmts as 10 fonn. COOI£1ll mil. applkable K'COUlIting SIarJdanh. and lllXOmpanicd by such rnanagemmllSSllnJlOCS and explanations, as lhe Exchange and the Commissim may require br rule. I'or Ibc:
pwposcs ofthis Law, the fust unaudited qlWtcrl) finanrial rqxJrt ..;11 be due 60 dars following Ihc dose ofthe second quarter of 2004 (00. or bd<:tt AugUSI 31,2(04). b) lk Company shall file \ith the Exchange and the Commission and makc publicly a~'ailablc not later than 150 days after the close oflhe Company's flSCll1 yc:ar. financial stalerrtelllS lhat shall include a haJancc sheet lIS oflhe tlosc oflbc fiscal )"CllI" and SUltemcnts ofincome, cash &w and changes iD ownership equity for the fiscal )·C31. CI'A/OltU/18 April 21HJ.&n4 ,

c) Commencing with the annual repon for mc Company's 2004 fiscal year. the financial statements shall be presented on a companllivc basis with financial statcments for the preceding fl5C3.l )'eaf pursuant to the: following guidelines i) 1hc financial suuements included in the annual repon shall be audited in accordance wim international auditing standards by an indcpendent auditor duly licensed in Iraq and shall be presented in acwrdancc y,;th inteIDiltional accounting standards to the extent pemlissible under the standards in force in 1"'1. ii) The financial statements shall be ll<:companied by a signed copy ofthe independent auditor's audit report indicating that lhey have been audited in ll<:cordance with international audiling standards to the exlent permissible under lhe standards in fon:e in Iraq and that they represent a true and fair view <)fthe Company's financial results. iii) The financial statements shall also be accompanied by such management assurances and explanations as the: Exchangc and the Commission may require by rule; iv) The Commission may b)' rule allow additional time for the: audit and audit report if conditions in Iraq indicate thaI this is necessary. d) 'The Company shall hold its annual general assembly llOtlat<:r than 60 da)'li after thc datc that its audited financial statements are publicly available or such earlier date as may be prescribed by law; and e) The Company shall comply with such other requirements as thc Exchangc may impose as a condition for the conlinued trading ofsuch securities on the F.l<change. All information submiued by the Company shall be accuratc and objet:tive.
7) The Board ofGovcrnors may adopl separate rules regarding the: listing. second
market and third lIllII"ket trading of Set:urities.
8) Any joint stock company whose securities are not admitted to trading on the
Exchange shall notify lhe Exchange or such other authority as the Commission may designate as to the dates, quantities, prices or other lerms and parties to any transactions in its securities, according to such rules as the Commission may prescribe. By mlc or order, thc Commission may pn:scribc a requirement for joint stock companies to apply for admission to trading on the Exchange in order to conduct securities lnmsactions. CPAlORDI18 ApriI200.fn.j 8

Ptlrlllrllpfts'tI"d II nltlte til frtllU#Ktiotu til., wrn NHldlKUd tlfter M.rrll '9, 2"J (tI/kr tile dMtln oftire BtlglldtulSltlCl E:ulllllf~tllId tire lIpOfill, oftile 1""1 ~l ExtIl.II,eJ. A...y tTtIlU#KtillllS tllaJ/tlIl141f1hr ptlrlllrtlplu 'or 1(1 "'ill M SIIItJ«I to sPffiFlt: £,ub.1fge Tqlll4Jiolltllltl stri"gellt twt'nigllt to OUIIn tlrtl' slKll trtIlfSfIaioM IIYrr IIot/,."lIdllkll' or tflDllipllllltin- Ut IItliun.
9) Any ttansklKms amductcd 0IllSi& oflhe Baghcl.d SIOd EvllMlgc follOVting its
elosure on Man:h 19.2003 W1tilthe opening ofdx: Iraq SlOd; ExdJa:n&e. othet" tba.n. tbo8r transactiom spcciflCd in pangrapIJ 9 bdo....·. shall nat be m:oani:l:m b)' dx:
Exehange aodfor Commimon as \wid ttansaetions, unlc:s.s such u..lSlCtioos ate executed al the Iraq SlOek Exehange by a licensed Broka folkMing the opening of the Iraq Siock Exehange. IO)Transaetions resulting from transfer by gift to relatives oftlx: second degree (parents, paTe'I1ts-in-law. siblings. siblings-in-law, children, ehildml-in-Iaw). transfcr by inheritance or transfer by court onler shall DOl be subjecllO the restrictions in parngraph 9 abovc. SetlioD 4 Gtntnl AUfmbl)' I) The 0rneraI Assembly shall consist ofthe BrokelS authorized 10 engage in s«uritics uansactions on the EJlchan~.
2) The GcneraI As:sembl>' sha1I ha'e authoril}' 10 elect the members ofthe Exchange
Board ofGo'nnOni as fiutbo:r pro'ided in the Exchange's rules. and to exercise such ocha: po.....ns as lIla)' be assigned undCT the Excbangc's ruks.
3) The Exchange's ruk:s sbaII dctcrmioc a date for mtttings ofthe GeoenI Assembly
and !he pmcedurcs for holding such mtttings.
Section 5
O...bn t) A Broka- authorized to do business on !he Exchange shall be OIX ofthe following:
a) A bank authorized unda- the Banking La...... including foreign banks, subs.idiaries and bnmcbes.. to engagc in securities opcntions in Iraq; b) A Company established lIC'Cording 10 Company Law No. 21 of 1997, as amended. or illi Suctt'li5Ot law. and amendm.ems. thal: has a specially in securilies brokemge activities. in,estm(nl management Of investment ad\·isory C1'A/OIl:I)/III April 200·1n4 ,

• won:: and wtlOSe autborized director sarid""" tht coodilioos set forth in Section.
  5(2), bclow: 01" c) A Parmaship. CSlabli5hcd .ccording 10 rcln'UllIa..... lhat has a specialt}' in securities brokcnge acti\iUcs. investment manage".:"lt or m\CSWltllt ~\i!lOfy wor'OO ....iaosc autborizal director satisfies tbc ccodiliOl"lS set forth in Sectioo 5(2) bek,.,.

2. A direclOl"or ltpicscnlalh'C of. Broker ..110 is authorized 10 condUC1 securities
   transaetiom on tbc Exchan~ (HRtpicscnwi'C) shall be a nalWIJ penon "'1M!:
   a) ill 00 less than 21 fears old.oo is • legal n:sidml ofIraq as defined by Iraqi la.. b) is oflegal capacity; c) is not an undiscil:ulled bunkrupt; d) has not been convicted of a felony in a court ofcomptlentjurisdiction:
   e) has not been convicted ofa misdemeanor related 10 financial fraud in I court ofcompetent jurisdiction:
   I) is a hokJer ofa unh'CtSity diploma or ilS cqw'alenl; g) has al \casl Ii\e yean e;:perima: in fmanciaJ.1IDd oommc:rciII alTairs as dttmed acceptable b)' the Exchanic:
   h) shall conduct brokeDge acti\ities ....ithin Iraq or al other locations 15 aulhori=d by the F..a:ctwtae.oo apprond by dx: CommissiorL J). An associated person ofa Broker("Associated PCBOIIJ .....ho is IIlIlbori2Ied 10 assist in the brokn-age business titheT 01\ the Ex~ OJ" at aOroka'$ platt ofbusi_ shall be allatWlLl pc:r.;on \110:
   a) ill 00 k::ss than 18 )'ean and is a lcgaI resident ofIraq 15 ddined by Iraqi Ia.....; b) is oflega.! capacit)·:
   c) is DOt an undischarged bankntpt:
   d) has not commilled a felony;
   CPA/ORDIl8 AprlI200-tn4
   10

c} ha.~ not commined a misdemeanor related 10 financial ff1\ud or honor. f) is a holder of a itCCondluy scbool eertificate or ~uivalrnl;
8) hlu appropriate refut,KXs as deemed acceptable by the EKCbangC;
h) shall conduct brokerage activilies "ilhin IntQ or at other locations as authorized by the EKCltangc and appro'ed by !he Commission.
4) A Broker shall be required to and conduct business Wlder a commen:ial
5) A Broker sttallnot be permitted 10 engage in se<:urities tnutsaeliollS on lhe
Exchange WlIeSS the Broker satisfies the fol1o"ing conditions:
a) The llroktt has bt-tn admincd 10 membership on the Exc~; b) The Broker has betn lK:Ccpted as a participant in the Depository either directly or indirectly through another partieipant, including through a COI'TeSpOndent dearing participant ofthe Deposito!)':
e) The daily trading limi15 for the Broker shall be determined pursuant 10 Exchange regulation bided upon the Broke(s net capital adequacy. Tbe Broker's net capital adequacy shall be determined based upon the DtposilOry's lISSCSSIllent oftbc Broker's ability to meet its trading obligations. as wdl as the advice from the settlement bank 10 the DeposilOry: and
6) A Broker thai was authorized 10 engage in securities transactions on the Baghdad
Stock Exchange immediately prior 10 the closure ofstICh exchange March 19, 2003, is hereby granted interim authority and an interim license 10 engage in securities tntnsaetion.~ On the Exchange in accordance with this Law, provided that:
a) Such Broker shall be required to comply "'ith such additional roles applicable 10 tbc llrokcr under this l..aw as wdlas subjecllO such additional rules as may be prescribed by the Exchange, tbc Depository, the Roaro of Governors or the Commission, b) Brokl'T\l holding interim or other aulhority 10 conduct Je<:urilics trIUlSaCtions on the Exchange shall comply conlinuowJy "ith any licensing or other requi=nenlS l1CC'CSSlUY to condllC'l securities tntnsactions in acoordarooe "ith any revised tcnm and conditions.. CPAIORDlt8 April 201W7.4 "

7. A Brok.... must b< represented at the EJlchange by one or more ofilS
   Representatives who satisfy the conditions sct forth in Section 5(2) above and whom the Broker authorizes to conduct the Broker's business on the EJlchange. or a perllOn under the supervision and control ofthe Broker, and for whom the Droker assumes resporu;ihility in accordance with such rules lIS may be prescribed by the Exchange.
8. l11c Board ofGovemors shall adopt rul~ regulating the circumstances under which
   a Droker may engage in securities transactions for the Broker's o'wn account or related accounts.
9. A Broker shall act on behalfofthe seller or purchaser ofsecurities in a manner that
   complies with the rules adopted by the Board ofGovemors. Such rules will include, but not be: limited to a requirement that each client provide a signed authorization ofthe brokerage relatioru;hip on appropriate account opening documents. Brokers may not engage in securities transactions for a client or request dishunemem of client funds or se<:urities without appropriate elil;'Tlt authorization.
10. A Broker shall b< required to:
    a) Pay all fees related to the Broker's authon7.ation to conduct business on the:
    Exchange according to the EJlehange's rules; b) Keep and maintain books, registers and documents as specified by rules adop{ed by the: Board ofGo~morsofthe Exchange or by the Commission. II) A Broker shall nol engage in a sale ofsecurities on behalfof a eUSlomer unless the Broker has determined. in accordance ",ith such rules as may be prescribed by the Exchange or the Depositol1'. that the securities arc in the eusrody ofthc Depository and that the eUSlomer has an appropriate ownership interest in the securities.
11. A Broker shall not engage in a purchase ofsecurities on behalf of a customer
    unless the Broker has determined, in accordance with such rules as may be prescribed by the Exchange or the Depository that the customer has sufficient funds to pay for the securities.
12. A Broker shall be bound to do the following:
    a) Protect confidential infonnation regarding investors except where legall}' obligated 10 fCveal such infonnation; CPAlORD/18 April 2004n4 12

b) Att "'ith horK:sly. iotcsrit> and adtJt,tuce to the Nies oftbc: Exc.... and eommerciaJ nonm; e) in \he: bt:st inu::n::sl ofdjmu. all timl:s. meluding placing !he ifl1efeSt5 of climls ahead oftbc: Broker's interesU, prourtingcliarts· rishU and infomring clintts ofall rde~ information rcluing 10 clients· securities d) Abstain fitIm mgagina in false or sham UBll5aClions. Olbcr forms of market manipuWjon and acts and prKticelr; !hal ....'1: the. eIT«t ofmisleading or decriving in'~or ereating falx or misleading impusioas. e) To act lIS a fiduciary for dienl funds and lIS such. to DOl co-mingle client li.mlb or IICOOIllItS with broker flUllb or.ecount5-
14) lbc Commission and the Exchange shall have the authority 10 gain 1ICte53 to an)'
information rdC'llll1 10 enforcemenl ofthis La.... or the rules of me F.xchan~eor Commission from Brokers or their agenu. employees or owners. withoul Wl)' need for notice or approval by that13roker. l/w::ir Repre:;entati"cs or Associaled Pe'~IIIS. IS)The Broker shall maintain a required le"el ofcash or collaleral in i1s Il«ount. lIS delermined b}' the Board ofGo"l:ITI(II"S lICCOrding to Exchange rules. which is 10 be held 81 the Depository or Depository ~tlemmt bank. IfIbt required llll"IOOnl is deficient for BII)' reason. thc Drokei' shall complete it ",ithin 8 period ~ificd by rules ofthc Exchange. the Depository or the Depositor). scttIc:mcnl bank, as applicable. The faiJun: ofttle Broker to do so sba1I be £IllUDda for prohibiting the Broker from engaging in further ~ties tnImlICtiom until complete financial as:sunIJJtt is provided. 16)A Broker shall k mruin:d to disclOlC all fen.. cornmmions and mIrt-upa charsd \0 ib dimb prior 10 o:nteriD& inlO an) ag"xmo:nts or undcrsIaodiD&S ..ith. C1lSIOmn. n., ba..rge may prescribe Il.dn relating 10 maximum commission.. mark-up and fee !e-cIs. as "''1:11 asditclosurt requir",,,...,,u, as apprtl'ed by the Commission. S«-lioa' Board ofConno" I) The F-'lchangc shall be gg'cmcd and opcnrtcd wxkr the dirtetior:t of. ninc-mcmbcr Boord ofGo..".-nors who$l: members. durin; the period. gD'emed by thisla",. $hall Stn-e for tbc: sOOner ofI One-rCM term Of unlilthe Pmnanc:m Scauities Law is promulgated. Manbcrs ofttle Board ofGo'ernors arc eligible OOIIlOI guamueed for re-appointmcnt under the Pcrmancnl Securilies I.a",. CPAlORD/18 April201W74 IJ

2. The composition ofthe Board of('JI)Vemonl shall be as follows:
   a) The Chair ofthe Board of Governors. One or more nominees shall be proposed by the Board of Governors or a Nominating Committec ofthe Board of Governors. b) 1hc ChiefExecutlve Officer oflbe Exchange. whose appoinunent shall be approved by the Adrninistnlwr in consultation with the Board ofGovemors. c) A member representing the companies whose securities are listed or admitted to trading on tbe Exchange, for v.'hieh one or more nominees shall be proposed by the Roord of Governors or its Nominating Comminee. d) A member who shall be a senior officer ofthc Iraqi Association of Securities Dealers ((ASO) or a senior member ofan IASO member finn, for ",'hieh the IASO shall propose one or more nominees. e) A member ll:p£cscming IJrokers that arc authori;red to engage in securities transactions on the Exchange. for which tbe Board of Governors shall propose one or mOll: nommees. l) Four qualified publi; governors who UTe. and mUSIll:rnain. independent ofthe Exchange or any ofils ;oostilt>er\Cies shall be proposed by the IJoard of Governors. One ofthcse andidales shall have expertise in infonnation technology mailers, for which lAc independent members oftbe Board of Governors shall propose Ihree or more nominees.

3. Exeepl for the Chief Executive Officer, all members oftile inlerim Board of
   Governors shall be appoinled by tAc Administmlor following ronsultation with the Governing Council. The interim term ofthese members shall commence on the effective date ofthis Law and shall exp~ at the sooner ofthe enactment oftAc Permanent Securities Law or one: )'ear after this law is promulgated. The members oflbe interim Board ofGovernors are eligible. but not guaranteed for reappointmcnt.

4. Members ofthe Board of Governors will also be appointed tmder the Permanenl
   Securities Law. ·Iltercafter. the Board of Governors shall be elected by the GencraI Assembly in acrordanec with the rules ofthe Exchange.

5. For the purposes ofthis law and for the expedirnl purpose of opening the Iraq
   Stock Exchange. S«tions 6.1 and 6.2 above not",ithstanding, for the initial term. the Board ofGovemors should, bUI is not required 10 be romprised ofpersons who meet the criteria specified in this Law. CrAfORl>f18 Apri12004n4 14

6. 11le Board ofGo'emors shall ~rfonn or may authorize director.!., officers or
   managers ofthe Exchange 10:
   a) Establish the gencral polie}' and organizational framework ofthe Exehange. b) Creale the Exehan~e's rules and submh them to the Commission for approval, including rules to pre\oeDt eonnicts ofinten:st from inl1uencing the work ofthe Board and the Exchange and providing for the withdrawal ofGovcmors from "OlinI' when a conniet of interesl arises. e) Establisb other rules rdaled 10 transactions in securities, 10 br; filed ",ith the Conunission. d) Implement financial, administrati"C and accounting rules flClXSSlIry to regulate the Exchange's operations, $lIbject 10 Commi$sioo llppfOvaI. e) Review and appro"C, llppfO'c subject 10 condilions. or disapprove, appliealions for admission ofsccurilies to trading on the Exehange, including procedures for removing securities from admission to trnding. I) Review and approve, aPPJO\oe $lIbjoxl to conditions ordisappro'C. applications of peJ'SOII5 woo seck to become Broken aulhori;rd to engage in securitics lransaClions on the Exchange. g) Verify and approve the budget and final aeeounts ofthe Exehange, enclosed with a ~potl of an inde~lldenl auditor, and submit them 10 the Commission and the General As5cmbl}·. h) Take necessaI')' ",1th regtltd 10 suspieious operations according to the Exchange rules, this Law, and the rules of!he Commission. i) Conduct oversight of all adivil)' at the Exchange, Slop the Exchangt' activity if oeccssary for the protoxtion ofinvestors and ban trading in securities for a period DOl exceeding five business da)'slIlld, ",ith the Comrnissioo's appro"tl.l, for any additional period. j) Stop lnKIing in securities ora pMieular Company for the protection ofinvestors for a period not exceeding len business days and. ",ith the Commission's appn,,'R1. for any additional period. k) Cheek and inspect Brokers' registers. n:cords, books, and business. and require members to furnish documcnts or wilnesses under their control for the in'cstigalion or adjudication ofdisciplinary or arbitration mallen. CPA/ORDIIS April2004n4 "

• I) Engage in intemal. di~ipline of. foonal or infllmla1 oat1IOl includina i~
  fines and ........ "'ions punuanllO rules ofthr Ex~and this interim Law.

7. 'The Boiml OfOo\U,kliS!IhaIl Mhorizc: lhe CEO co have !he audloritics
   in S«tion 6(5) (i) Ihrough (I), abo'e, KOOlding 10 dE limits it dceides. B) The Board ofGcr;uOOQ may delepre other authotit}' orlbe Board aDd !he Cllair to the CEO, other oflia:n ofthe Exchange or • Olmmittce ofthe Board as docu)(d approprialt. pro,ida! thai such dcleption$ shall be: ren«ted in rules ofthe Exchange. The Board, ilS delegates, and all Exchange oflia:n; shall act diligently in the bc:sI: interests of\be Exclw1gt. its membon and the investing public and shall strive 10 cfJDCtll3lC thc purposes and pro;sions ofthi.!; Law.
8. The Administrator, in consultation wilh the Commission and notification to the
   Governing Council. llllIy rcmcwc a Governor prior 10 the expil1ltion of his or her leon only for eause, which shall be defined 10 mean conviction of a violation oflhis Law or lloolher law, other than minor infrllClions. physical inability to perform his or her duties. or gross incompetence.
   Section 7
   Eltbugt Finance
   I) 'The Exchange's finances shall c~ afme follo....;og:
   .) Fea paid b)' companies for .tmission oftbcir sreuritic:s to uading and for continued trading on tb: Exchange.
9. Fees paid by Exchange memben rela1rd 10 wthorizalion of me memben and
   Ihrir cmplO}"ces and -sm1S 10 mgage in 5CC11rities uansactiom on the Exchange. including but DOt limited 10. an entry fee and annual dues. c) Commissions or fees baed upon the mllmK: of uading laking p1IIoe on the """""'0<- d) Fines ilTlpOSl:d by the Evbange on tho9r penons subject 10 the F.-'lchange·s jurisdiction ....iIo violate this La.... or the rulcs or regulations oftbe Exchange or the Commission. e) Re'enun from the sale of exchange tnmsact;on data, statistics and publications, subject 10 rules ofthc Commission ltSsuring the dissemination ofbasic information. CI'A/ORD/18I1priI200.u74 "

f) Donations and loans to the Exchange, v.hieh shall be subjed to Exchange and CollUnission rules. g) Revenues from investment of Exchange funds. h) Other revenue sourc:es authorized by the Roard ofGovemors. subject to Commission approval and consistent with relevant laws.. including Orders ofthe Coalition Provisional Authority.
2) The Board ofGovemors shan establish the alx)"c-mentioned fees, eollllllissioDS and
charges for services offered by the Exchange, subject to Commission approval. recognizing that the continued operating and development needs ofthe Exchange shall be taken into consid~tion, hut that accumulation OfWlllCCCSsary surplus funds is to be avoided.
3) TIle EJlchange's final acooun15 and annual report shall be subject to approval by the
Board ofGo,'m'lors and then shall be Jiled v.ith the Commission as soon as practicable, regardless ofwnether or not they have been presented to the General Assembly. Any amendments to the final accoun15 and annual report shall be timely filed with the Commission. The final aCCOWlIS and annual report shall be presented to the General Assembly at its annual meeting. v.hieh shall be scheduled in accordance v.ith the Exchange's rules.
4) The Exchange's fmancial year shall commence on the first ofJanuary of each )'car
and end on the last day of December, provided. howe"cr, that the initial financial year shall begin upon the commenccment of Exchange operations and shall concluded De<:ember 31. 2004.
Section 8
EJchang... Openlions and Oversight
I) 1lle Government ofIraq shall have no ownership interest in the Exchange or any revenues or assets ofthe Exchange. pro"ided, however, that nothing contained in this Law shall pre"ent an otherwise qualified legal entity owned in whole or in pari b)' the Government of Iraq from being a member ofthe Exchange or Depository and participating in the General Assembly.
2) All governing instruments and rules ofthe Exchange shall be subjoctto approval,
supplementation and abrogation by the Commission. which shall have authority to inspect all operations ofthe Exchange and impose appropriate disciplinary sanctions in the event that the Exchange fails to cnforee any provision ofthis Law for which it is fC'SponsibJe or any rule or regulation ofthe EJlehange. CPAlORDI18 AI1I;1200·m4 17

3. The lloard ofGovemors may form eommitkeS to address the needs oftbe
   Exchange. The Exehange'Srules shall spel;:ify the woR ofthese eommittees. Such eommitttt:s may include. but 00l be limited to the following:
   a) Executive Commincc b) Compliance Commiltee c) Business Conduct Committee and a Sub-Commince of Member Officials (on￾floor rolings) d) FinllllCe Commiltee e) Membership Commitke f) MarketingfPublic Relations Commiucc g) Arbitnltion Commincc
4. All Exehange GovelIlOD. officcn and employees shall be required to agrtt to and
   sign a Code ofConduct which ....ill include but not be limited to, full disclOSllfl: of all financial dealings oftOOse indi~iduals. potential conflicts ofinterest and such additional eomponenlS aceording to the rules ofthe F.xelt.anie. 5«lioo II IRpository Clunnce aDd Seulemtnt I) There is hereby established a securities depository known as the Iraq Dcpo$itllf)". Subject to lbe funher provisions oflhis Se<:tion. the Depository shall be. division ofthe ISX open to participation b) any member ofthe Exehange subject to such terms and conditions as the Director ofthe DepositOI)' shall specify by rule, subje.:t to the approval ofthe 80ard ofGovernors and the Corrunission. The Depository aims to:
   a) Promote the timely. safe and efficient settlement ofsecurities tnmsaetions in lIl:cordanee ....ith the terms ofthose trllrIS&C:tions; b) Promote open lind non-diseriminalory llCceSS to clearance and seulcment SCIVICCS. The Commission may b). rule require fair lICCe$\I to the Depository by JlC"IOfIs .... ho an: not members ofthe F-"change bUi whose securities holdings or aclivilics lin' cpA/ORDn8April200.in4 11

• $llCh as 10 make thdr din:<:1 participation benefic:ialto the effICient functioning of
  lbe mar\CI: or ....ho should be able ha,'c access Ihrough a ~bcr.

2. The DepositOI)' shall be gO'emW aod operated undeT lhc temu and conditions of
   its rules, as appro\·aj by the Roard ofGo'"emo!1Ii and the Commission.
3. All Kcuritie5 lnmsaetions taking place on the Exchange shall be required 10 be
   cleared and sellled through the facilitio:s ofthc lkposilOfy on a book-mtry basis. Once sa:urities ha,'c deposited in the Ikposilory.lhey may nol be \ithdnl"'"II or 5lIbscquently tr1Ul$ferml in physical form. Depository rules.dW1 provide for evidence of ownership ofsa:uriti= The Commission may adopt roles regarding thc necessity of depositing at the Depository for book-entr}, transfer other securities not admined to trading on the Excbange bul thai ha,"C been or shall be olTeml for public subscription.
4. Securities tJafISIIClioll5 on the Exchange or as OIhc-N.ise provided by Commis.sion
   rules that are cleared and settled through the flK:ilitics ofthc Depository shall be entitled to a prcsumplion of finality. This section shall supersede Article 66, first pamgrapb.. ofCompany La.... No. 21 of 1997. LawfullI'an!lfcl'!l on the books ofthc Depository ofdeposited securities shall su~e the provisions of Article 68 of the Company Law.
5. Securities registered 1I1 the Depository in the names ofothers for holding and
   uansfeT in book-cntry form shall not be n::garded as property ofthe Depository or the Exchange or be subjcclto the claims ofthcir crc<!itors.
6. Liabilities or 8SSCl5acquin::d by the Depository as central counterpany, maintainer
   of a settlement guanmtc:c fund or (l{hav,ise purely in the course ofscnling trndes and transfers shall no! be subjcctto third·patiy claims disruplive oftne settleIDCnt -~
7. The Depository or EJlchange may establish. glllll1lJll« fund for the scttlcmmt of
   Il1llks or ll'ansfel"ll. This fund shall no! be available for any other usc by the DcposilOry or Exchange or be subjcctto claims oftheir crc<!iloB, cXCCpI claims arising from !he rules of participation in such fund or the settlemcnt pro'i900s of chose roles. This section shalisupcrccdc bankruplcy law.
8. 1hc DeposilOry is hereby authorized to commence opcmtions at the same time that
   ibe Exchange oommc~opcrlltions. All govcming instruments and rules ofthc Depository shall be subject to the approwl ofibe Exchange and the Commission. CPA/ORD/18 Apri1206-V74 19

Sec-lion 10
Principal Holden of Meuritie!lllnd Control Tran~lIelions I} "Affiliated PtrS005" for purposes ofthis Section 10 shall mean IWO or I1'lOn' J1CltOIl$ working together for the JlI1IllOSe of bolding or exercising practical COI'llrol over the affairs of. eompan)', but shall in all cases include at kast pclll(m~ ",ilh the following relationships ifone is P\1\fC ofthe holdings ofanotha in.subject company:
a) Spouse, minor children orother J1Cr5OnS Ih;ng in the same household or any other relatives to the founh degree (parents, parcnl$-in-iaw, sibliDgJ or siblings￾in-law, children and/or paternal and maternal cousins):
b) When one is a kgal person and the other is its officer, dirtttor or employee or an owner uf 10% or more ofthe votes from shares or qlllllaS in it
2) Any reDon or Affiliated Persons who,'1 the time Ibis Law eome:o; into clTect or
Ihneaftcr 0"'11 or have a righllO 0\0011 10% or more ofthc: shares entitled to "o\e in a joint.srock company:
a) Shall inform the Exchange and the Commission in writing; b) Shall inform the Exchange and the Commission about any dealing orCOlldIlC( thatlcads to an increase in this percentage lIS 500D as such dcalinll occurs:
e} Shall any decrease in SU(h ov.llCrship 10 below 8%, All oflbe above disclosures shall be made public by the Exchange and the Commission.
3) It shall be unIa",iul for II Penon or Affiliated Persons 10 acquire or seck 10 acquiJ'c: a
righllO more than 30% ofthc shares I:Illided to vote ofany joint stock company unless the person or per1Oll5. whether natural or il:gaI, identify Ihml5clvcs and di5c1ose their holdinllS to the Exchange and tbc: Commission and comply with SIIch rules as the Commission may prescribe ",ith rc:spt.-<:IIO such trunSllClions and the pn)lection of minority owners, Such repons shall be made public by \he Exchange and the Commission. TIlls provision shall apply a1Jo to persons holding such positions at tbc lime tl1is Law comes into effccl.
4) Eachjoinl stock compuny's registrar lIJld the Depository shall repon 10 the
Commission the holdings of any owner in its records ha,'ing _ than 10% of. joint stock C(lmIwlIly's shan$ entitled to voI~. CPAIOIWI18 April 200417.. ,.

Section II
DiJlciplinary Mallen
I) The Exehange shall have a Business CondllC1 Committee ("BCe; lhat, PUmlllllt to Exchange /\lies, ...i11 have authority 10 make decisiollll binding upon members and 1i$ta1 companies with 1'eSpC'Cl10 \iollllions ofthis Law, Exchange rules and Commission rulcs applicable 10 the Brokers' lICtiviliC$ 00 the Exl:haDgc ot a Company's complian<:e ...ith obliKaUoIlll fot admission 10 trading.
2) The BCC shall be appoinled by the Roard ofOovemor!l and il!l by-Ia\-., shall be set
forth in Exchangc rules. Thc BCe shall be comprised of public and industry membe1'$; with the Chair ofthe BCC being Chief Regulalory Officer oflhe Exehange, or the CRO's delegate.
3) Pursuant to ExchanKc rules. the BCe may delcKlte 10 officers ot members oflbe
ExchanKe the lulhority to resolve dispulCS arising lithe Exchange in the normal courx of busineu. pro\idcd thIIl the delegate C(Mllpl}' with the Exchange's rules in resolving such disputes.
4) The procedures ofthc DCC shall provide any member, membcr organization ot
associated person it may discipline \-ith ootiec ofthe charges agailllllthe penon and reasollllhie opportunity to present evidence and arguments in the person's favot. Further procedures relating to the disciplinary process \ill be set forth in Ibe rules ofthc: Exchange. l'cmpornry IICtion may he taken in lld'l/'ICC orfull bearing but only in e:ugcnl circumstances according to the /\lies ofthe Exchange.
5) TIle BeC may make findings \ith respe<:llo malters il eOllllideTa, which may
include but oot be limited to I disrni.ual ofthc: charges. or I finding that the eharges are substantialed, along ...ith a finding ofappropriale penalties..
6) lmposillon of penalties by the BCC will be: set forth in Exchan~ rules, including:
a) A !.eller of Warning; b) I..dtCT ofConscnt \-ith Compliance Undcnakings; e) Fil'lllllCiai fmc, restitution ot disgorgemenl ofprofits; d) Suspension ora Broker, a Brokcr's Representative or Associated Penon from work for a period oflime; e) Suspension or halt oftnlding in securities of a Company for a period oftime; CrAlORDlI8 Apri1200-1n.t 21

7. BCC ddciplinary decisions may be appealed in lIlXOfd.aJn 'lith the ruJes ofthe
   Exchange. In general the appellatc pnxess shaJl be: co the:
   a) Boud of Go, emoB. and ifthe appellan1 is DOt satisfied. co the Commission. b) Decisions ofthe Commission arc fioal'lhen issued unless appealed in lCI;;ordance 'lim Section 13(2). belo'l. S«lion 12 latrrim Inlq See_rities C_miuiH I) T'br:re Os t...eby e:stablishOO an in&erim InII Sc:cwitics Commis$ion COfIIJlriwd of five Commisai0ner5 including. Chair. "''bose IDl:lllben $hall be Iflp)imed by !be Administrator folJowina e<nsulwiol1 ....ith _ Go>~"' Council. The a.ir may. from time 10 time. dc:sipwc. Vtce Cbair 10 llS$ltm( the Cbair's h:spoilsibilil) in tbc n"ClII dill the Chair is WJ&bIe or una, ai1abk 10 pe:rfonn the TTqWn:d duties.
8. The positioas ofChair and one other Commi.ssiooer shall be fuU-lime positions,
   ...iIere:as !be other thrtt Commissioners may bold other empl.oymenL a) No Commissioner sNtll. howe'er, panicip-IC. direct.ly or indire'Ctly. in any brol<~e business. or transactions of. clwBctcr subject 10 rq:ulatioD by the Commission pursuant to this 1.aw, nor accept an)1hing of val.... from any person in'oh'Cd in the trading Of distribution ofsecurities, their auditors or the affiliates of any o(them, ClCupt in the ordinary coune of business on tennS ."&ibble to the general public and in conformity "'ith the code rt:fermi 10 in Sectiort 12(7) below. b) No ComflliWoncr shall participMe in the coosidention of. maaa in ....1Dtb be 01"._a dirttt or i•.mecl pc...,...] 6.........1iIKre5I. sub;ea 10 the provisioas o(tbc code refermllO in Section 12(1). below. J) The: ICIm ofthe Cornmis:sioa and tbc CommiIsionn-s sbIll expire on the rltSllO occur of:
   a) The: effceti"( date of. Permanent Securities Law thai PfO\ides for the eslablishment of. pennanmt Securities and EJ«:tlange: Commi...... or equi'lllc:m rcaulatory bod)"; or CPA!OIU>1I8 ApriI200·m4 22

b} 'The KCond wm.i'ersary ofthe effective date oflhi! Law.
The AdminisU8tor in consultation ",ilh the (jo"eming Council may remove a Commissioner prior to the cxpilllliioo of hi! or her term only for cause, which shall be defined to nlC'lW conviction ofa violation ofthis La..... or another IIlW, other than minor infractions, physical inability to perfonn his or tier duties. or gross incompetence.
4) The Commission shall have a legal personality and shall ha'e the right to sue and
be !ued. and may be refll'C'CTlted in legal proceedings by the Government ofIraq or lilly Dnomey the: Commission appoinu for such purpose,
5) lbe Commission shall be accOUlltable to and shall $IIbmit an annual report ofiu
activities to the execut,,'e branch oftile Go'ernment ofIraq not later than ninety days after the close ofthe CommiMion's fISC&! y~. The: Commiss.ioo's boob, records and accounts shall be subject to inspection and its fiIWKiai stateme1lts sball be $IIbject to audit in the 58IllC manneT as provided for other aga>cies or authoritiC! oftbe G<r,'enunent orTraq.
6) 'llIe salaries, benefiu. and all financial CTltitkmenu of!he CommiS!1oneTs sbaIl be
prtSmted to the Administrator for his appro,"lI1 in consultation "'ith the GO\1'Tf1ing Council. The Commission is authorized to fix the compelWltion ofsuch officen, attorneys, atX:OUntants, examiners. economists and other experts; or employees as may be necessary for carrying out iu ftmt:tions underthis Law
7) The Commission shall adopt and publish a written code ofconduct applicable to the
Commiss~rs and all employees ofand consultanU to the Commission. ",'hieh shall address conflicts ofinteresl. and potential misuse of nonpublic information that may IIlisc in connection with such persons' duties "'ith tI'oe Commission and defmc related restrictions on soch persons holdings ofor lIlIIding in securities. 8} Notwithstanding the foct thaluny nonpublie information in the posscssKm or Iloithin the knowledge ofCommissionen. olT"lCeI'S and employees ofthe Commission shall be deemed confidential and that an)' unauthorized disclosure ofsuch information may be subject to punishment by !he Conunission or under other loWlil and regulations, the Commission shall be lIuthorized to use and make public disclosure ofsuch information II.'l it dee,," nccc:ssary for enforcement ofthe provisions ofthis Law and consistentlloith the public interest and the protection o£inVC$Ull"S.
9) No Commissioner, employee or lIgent ofthe Commission, or any pcrsoo appointed
by the Commission under this Law to cart)" out any function under this Law shall be penonally liable in damajr;C!l for an)' flCt or omission taken in the discharge or purported discharge ofofficial functions within the scope of his or her authority. CPAIOROl18 April 200U7-' 23

emploYlllC1lt or engagement under this Law, absent a finding ofmalice and intentional abu!IC ofoffice. Tlic CommiwOli shall indemnify an)' penon referred 10 in the preceding $CJ1tc:nce against any legal CO$lS inc:urred in the tlc:feme agaill$\ a legal action brought agaiMt such JlCr50n in connc:e:tion with the di$Cbarge or purported discharge of official functions within the $Cop<: oflbe penon's c:mplo)'rnmt or engagement under this Law, provided !hal no such indernnifM:ation shall appl)' ifthc: person has been con\ictcd ofa crime: arising out ofthc activilies that ltI'l: CO-ered by 'WCh legal action. IO)The Commission's budget shall be determined llltIluaily as part ofthe o~l budgcr proeess ofthe ("o(I'enuncnt ofIraq. Any fines or molletary penalties that may be: imposed by the Commission in enforeing the provisions ofthis Law shall not be retained 1»' the Commission, but s.haIl be paid inlO the gntemIlreaSury ofIhe Glwemmnu ofIraq. II)The Conunission may issue, amend or repeal rules. rc:guIations and ordml only as authorized by specific provisions ofthis Law. 111e Commission's rules, rc:gulaliOT1'!l and ordeTs may classify persons. securities. tranSa<:lions or filings, and prescribe different requircmerl!S for dilTerent classes. Tlic Commission may i5StIC a decllll'lltory ruling as 10 lbc applicability ofthis Law or any rule or order under this l.aw to an)' person, security or uansaction. For purposes ofSrction 11, parllgrllpIJ 11 eu/, bdo..., Qny referenas to tire "Exchange" slraJl also k dumed 10 uppIy to 'III)' other LkelOSed Saurilitf Markets approl¥!d b)' the Commwion
12) Tlic Commissioo is authorized 10:
a) Re"';tw the aclions of and approve, disappnwc or, when:: necessary and upon ooticc and opportunity for comment, supplement or abrogate the governing instrumenls and Other rules ofthe EKChange and the Depository undc:T this Law; b) Reqllire thc EKchange. thc Depository, and Bcoktrs authorized to ('Ilgagc in securities transaelions on the Exchange to maintain sueh records and make: such reports on their financ:ial condition and business relarod to securitit'$ transactions lIS the Commission dc:cms DCl:<:ssaJy to implement the provisions ofthis Law; c) Inspect the: opeTations ofthe Exchange. the Depository and Illy Broker or other penon authori7.cd to cfreel securities tnlJlSllCtions dirc:clly on the: EKChaOgl' or to participate directly in the Depository. d) NlM....ithstanding llIl)' pro-isions ofthe Ranking Law. inspccl Broke:rs who banks including their securitits opc:ration~ and n:lattd pcrsonoc:l and reco~ CPA/ORDlIll ApriI200·&n4 "

c) Issue subpoenas for the production ofdocuments or ....imcs"es; d) Ins:pcct the operations ofCompanics who ha,'c any c\as:s ofsccuritieslistcd for trllding on the Exchange. c) Promulgate rules for disclosure ofinfunnation and reports required to be made publicI)' available by companies .....hose securities an: or have been oITen:d for public subscription or distribution or admillcd to trllding on the Exchange; ~"iew such infotmlltion and reports. and rcqui~ revision ofsuch information nnd reports .....here the information pn),ided is mat"";ally incomplo:te, &be or misleading. nolWilhsumding any provision ofthc Law on Companies of 1997, No. 21 lIS amended, or any successor law to the contraly:
f) Promulgate rules related to the disclosure of major holdings and for lKXjuisition ofcontrol-affccting blocks of securities in joinl SlOCk companies; g) Promulgllle ruks relaling 10 investment TlllIllag(1IlClt and in"esuncnt advisory acti-i!ies for BrokeB, Banks or olhcr Companies or Partnerships, h) Enforcc this Law, any rules adopted undcrthis Law and any rules ofthe F..xchangc or the Depository; and take approprialC disciplinary llCtion against any pe'l'lIOn \ho '-iolatcs such Law or llIIy such rules: and
i) Exercise all ofthe ott!cr dUlies and rights given the CommiSliion b)' this La.....
Il) The: Commission shall.a in a timely manner upon rule filings and other relevant raflICStlI from the Exchange or an)' other Licensed Securities MartCl In the event thaI the: Commission docs nOI rl:spolld to an)" such rule fIling or request no later than 120 da)"s from the date ofreceipt ofsuch reqUC$l; the request or filing shall be deemed to be approved.
14) The Commission shall ba\OC the powers to bring civil and criminal actions relating
to this Law and the rules hereunder, induding Exeholll(C and Depository rules. Any person from whom the Commission requests infonnation or docwnellts. on thr; basis ofiu reasonable bclicfthal such information or document is reln'l1llt 10 a po!l5ible slICh violation. shall pro\ide such information or documents. Ifany person refuses 10 prtl'idc: such documenl or infonnation. the Commission may seck rclief in a ooun ofcompelCnt jurisdiction. IS) Ifthe Commission finds, ancr ooticc and opportunity for bearing. that any pcr10Il has violated, is violating or is about to ,'iolale llny provision ofmis Law or any rule ~, the Commiuion ma}':
Cl'AIOlmnS Apri1204W74
"

a) F.nlcT an order requiring such pcDOO IOccao;e and desisl from comrnittin& the \iolation and aII)' future \ iolation ofthe !IlllIX prmUioo. or I1IIe. SllICh an «der abo may ~w~ 5UCh penon 10 comply \ith tbl: prmisiom or rules upon tbl:
IaDI:5 and within the time that Commission ma,' 5perify in such order. b) Impose an adrninistnllh~penally upon 5UCh pc:rson. 10 the Treasury of the Go'enunaJ1 oflnlq, ofup to SO million dinars for any violalion involving frauci, dcccit or \i1lfu1 or reckless d~ard ofa reqw,emelll, or of up to 25 million dinars for any ocher \iolation. e) In e:igent cimundD........ the: Commissioo may, upon such DOtiec u is prxtical in the: circwnstanees.. provisionally orner a person to and desi51. wheTe the evklenee indicates lhat awaiting resollllion 110)' a full bearing ofthe matter carries a mon: serious risk ofharm than issuing a provisional order. No provisional order may remain in fom: more than ten business days ""i\hout futttler opportunity for hearing and presentation ofevidence by the ~rsons subject to the order.
16) Appeal and enforcement ofthe orders and decisions ofthc Commission shall
follow the procedures applkable to appeal of orders ofa court of first instance. Orders that are not appealed in such manner ma)' flO{ be challenged in procttdings to enforce them. An appeal ofan order or decision oflhe Commission shall nol stay or suspend the imposition ofany sane\ion or pmalty levied by lhe Commission unless the Commission or the court of appc:a15IakC3 affirmati\le action to stay Of suspend such sanction or penalty.
17) lfin iu opinion the public imeresl and the ",Oketioo ofin"eSlOl'S so require, the
Commission is alllhcnill:d by order to:
a) Summaril) suspend trading in an)' KCUrity admitted 10 tnding on the Exd...nge or Ihat bas been offered for public sub5criptioo for a period DCIt exceeding 1m business da)'S; and. b) Suspend or ~'~e the Exchan&c's listing or llUlhoriatioo oftnding of. lllXUrit). ifthe Commission fiDds. on the feICOId and afta- notice and oppommil)' for hearing. that the issuer ofsuch ttturity has failed to mmply \ith lD)' pro,islon ofthis Law or the ruk$ hereunder.
Section 13
Genenal
I) lbe Commission shall ensure that rules ofthe F.xchange and the Depository provide fair und open ac<;:ess 10 membership, fucilities and services and impose no Ct'AlQIWII8 Allrll200m4 26

• burdc:m OIl competition exoept insofar &$ requirallO ",OillOk'~,
  efficiency and fmanciailtiflOllSibility in the mint! ofsecurities.1Dd IbM sucb rub provide fot" fair and n:uonal»e procedures for the denial, I'e'~or rntrictioo of~10 such membership. flCilitics 01" xnia:s.

2. Commission decisions regWina appeal of. Board of Gmcmors decision 10
   impose. sanction OJ pmalty specified in Sec:tion 11(5) oftbis Law may be appeaItd 11) • court ofIIppCIJs \ithin 30 day~ ofthe final Commi5sioa decision. An appeal of such. decision oflhe Commi$$ion sball DOl suy or suspend the imposition ofany sanction or penalty levied by the Commission unJess thc Commission or the court ofappeallakcs affirmath"e action 1.0 $la)' Of suspend such 5lIDCtion or penalty.
3. During the: course of any im<estigDlion by !he Exchange, or disciplillllf)' proceeding
   by the Bee. the RoaJd ofGo"emors or lhc Commission, ifthc ('vidence indicates thaI a crime rna)' have been commined. the appropriate body, as applicable. shall l!'llllSlIlit the evidence ofthe crime to • public prosecutor or court thai would have juri$diclion to prose<:UlC or adjudicale the crime. Such criminal refermce. hQ....ever, $hall no! constitute grounds for a stay or suspension ofany investigation N procttding undertaken by the Exchange. the Bee. BoanI ofGo'~rs or Commission, as applicable.
4. The rules oftbc Baghdad Stock Exchange shall be applicable 10 the Iraq Stoek
   exchange, _. but only to the extent consistent ...ith this intalm Law and the rules
5. PeTSORS authorizrdlo engage in so:<:urities uamactions alXOfding 10 this Law shall
   not, unkss ~. art' bIutks.. be ro:quired 10 be Iittnso:d WIlkr tho: Banking Law Ii$ 10 5«IA'itio:s-~lato:d deo1ing 01" brokerage. in"l$lIl(Ilt adviSOf)' or in~t enanaganaJ.t aethitics.
6. Folkwolng the trnnsfn offull gtwmuno:ntalautbority to the Iraqi IMerim Go'ftDlllCf!I
   the dutin oftho: Adrninistndor and tho: Go-aning Caomcjl UDder this Order sball be U5UnKd b). tho: body "esto:d ...ith IWiooal C'Xcculh-o: lWlboril) unless otheor>ise provided in this I.aw. Seclion 101 Arbill':lltKln I) The Exchange may adopt roles providing for arbitration ofdisputes between members IlIld betv>"CCn members and SlIeh oftheir customers who shall consmito arbitration. The Exchange may delegate the authority for arbitration to BllOlher CPNORDIl8 April200-4nol "

organi7Juion appn;l'ed by the Corrunission, ptO'idcd that aU lll'bi\nltion rules shall be subjecl to approval. suppl~nlaliOlland abrogation by !he Conunission, a) The Commission shall monitor, and oblain repons, from time to time, from !be Exchange's arbitration eommilt~, b) Thc arbitration committee's mandate, as set fonh in Exchange rules, shall be to arbitratc disputes that may arise: bel.....een t.....o or more Uroken; or bet.....een Broker.; and customers lhat are:
i), Relat<:d to securities transaelioru effected on the Exchange; ii) Subjcct 10 clearance and sc:«lemeotlhrougb the Depll$itOf)' Conductinil!JanSllCtions in securities OIl the Exchange shall be consideml an ackno.....l<:dgement by a Broker (O subject any disputes to arbitration.
2) The F...'tchange arbitration proc:edwn shall be set forth in Exchange rules and
approved by the Board ofGo'CI'I1<m,!ben !nIbmilled to the Commission for approval. a) With respect 10 disputes bd....'eC'II BrokCB, the arbitration committee decisions shall be binding on all panies, subject to sUICh provision for appeal as !be Commission, for !be protc<:tion of investors, may lit to lIdopt by rule, b) With respect to dispules bet.....een Brokers and clients, cilher party may appeal the decision to the Board of Governors ofthe F...'tehange; and, ifstill dissatislied, to the Commission. The Commission', decision shall be binding and not subjec1lO funhcr appeal. Seelion IS Penaltits Penoos who ....illfu11y 'iolate the provisions ofthis Law or a lawful order ofthc Commi!lSion or .....ho fail to comply with the Commission', lawful demand for infOl'TNltion QI' documcnl$ under this La....., as well as pc:rsons ",'bo kno....ingly and substantially assist such oondoct. shall he subjecl to fines and penalti~ as spedficd hy law, which may include imprisonment upon a co,wiction by II court ofcompctent jurisdiction. CPA/ORDfl8 April2lKW74 28

Section 16
Eatry Into Foree
This Order JhaU enter into Con:e upon signalllnl. w~\ k (l(~(DY L. Paul Bremer, AdminiitralOr Coalition Provisional Authority crAlOROOIAprfl20lW74 "