Regulatory Bylaw No. (14) for Licensing Training and Consulting Activities in Environmental, Social, and Corporate Governance

Regulatory Regulations of the Securities Commission 2022

Based on the provisions of Section (11/12) of Order No. (74) of 2004, we have issued the following Regulatory Bylaw:

Regulatory Bylaw No. (14) Licensing of Training and Consulting Activities Related to Environmental, Social, and Corporate Governance (ESG)

Iraqi Securities Commission – Board of Commissioners

Article (1):
For the purposes of this Bylaw, the following terms and expressions shall have the meanings indicated opposite them:

First: The Commission: The Iraqi Securities Commission.

Second: Consulting: Providing specialized professional services to evaluate or develop governance systems in companies.

Third: Expertise in Governance: Proven practical experience for a period of not less than five years in corporate, environmental, or social governance.

Fourth: Professional Certificate: An academic or professional certificate issued by an accredited international or local body and subject to the Commission's audit.

Fifth: Licensee: The natural or legal person holding a training or consulting license under this Bylaw.

Article (2):
Training aims to develop and update the skills of individuals working in various governance axes, especially companies listed on the Iraq Stock Exchange, provided that governance systems include the basic aspects of training:

First: Fundamentals of Governance.

Second: Types of Governance and the tasks of the Board of Directors and Committees.

Third: Managing Environmental and Social Risks and Challenges.

Fourth: Disclosure and Transparency.

Regulatory Regulations of the Securities Commission 2022

Fifth: Shareholders' Rights.

Sixth: Stakeholders.

Seventh: Practical Training on Governance Applications.

Eighth: Preparing Annual Governance Reports.

Ninth: Performance Evaluations and Internal Evaluation Models.

Article (3):
Governance consulting aims to:

First: Evaluate and develop their systems in supporting companies.

Second: Prepare plans and strategies for corporate, environmental, and social governance.

Third: Formulate policies and procedures.

Fourth: Conduct periodic reviews and provide developmental recommendations.

Article (4):
The licensee may sign written consulting contracts with the beneficiary entities, which include (scope of work, fees, contract duration, responsibilities, confidentiality), and the Commission shall keep a copy of the contract for review upon request.

Article (5):
The following conditions are required for the licensee to provide training and consulting:

First: Experience of not less than 3 years in the field of governance in providing training.

Second: Registration in Iraq and submission of a legal establishment certificate for the legal person.

Third: A list of entities served and the nature of the programs.

Fourth: A curriculum vitae for at least one expert in governance.

Fifth: The expert must have experience of not less than 5 years in the case of consulting.

Sixth: The legal person is subject to inspection by the Commission.

Regulatory Regulations of the Securities Commission 2022

Seventh: Undertaking to maintain the licensing conditions.

Eighth: Renewal of the license every 3 years for training and 4 years for consulting.

Article (6):
The Commission evaluates the professional qualifications of experts and trainers through a specialized technical committee formed by a decision of the Commission's Board, and adopts the following standards:

First: International professional certificates.

Second: Proven practical experience.

Third: Results of previous programs.

Fourth: Evaluation reports from beneficiaries.

Article (7):
Applications shall be submitted to the Commission's Board within 30 days of their submission, and a decision of acceptance or rejection or a request for additional documents shall be made. Applications for licensing (training) or (consulting) or both may be submitted separately.

Article (8):
Training programs and curricula shall be approved according to the following standards:

First: Principles of the Organization for International Cooperation and Development.

Second: Recommendations of the International Finance Corporation IFC.

Third: Requirements related to the reality of the Iraqi business environment that the Commission deems necessary.

The Commission reviews or updates this list annually as needed.

Article (9):
Licensing fees shall be collected:

First: Fees for issuing a training license for the first time (1,000,000) one million Iraqi Dinars and renewing it annually (500,000) five hundred thousand Iraqi Dinars.

Second: Fees for issuing a consulting license for the first time (3,000,000) three million Iraqi Dinars and renewing it annually (1,500,000) one million five hundred thousand Iraqi Dinars.

Regulatory Regulations of the Securities Commission 2022

Third: These fees may be amended annually by a decision of the Commission's Board based on the recommendation of the Legal and Technical Department.

Article (10):
The Commission has the right to suspend or cancel the license in the following cases:

First: Providing misleading or incorrect information.

Second: Breach of professional or ethical standards.

Third: Failure to submit required reports or updates.

Fourth: Issuance of a final judicial ruling under penal laws, money laundering, or terrorism.

Fifth: The licensee shall be granted a period not exceeding (30) days to rectify the violation before the issuance of the cancellation decision.

Faisal Al-Haimus
Chairman of the Securities Commission