Brunei Darussalam Securities Markets Order, 2013 PDF

SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] CONSTITUTION OF BRUNEI DARUSSALAM (Order made under Article 83(3)) SECURITIES MARKETS ORDER, 2013...

SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] CONSTITUTION OF BRUNEI DARUSSALAM (Order made under Article 83(3)) SECURITIES MARKETS ORDER, 2013 ARRANGEMENTS OF SECTIONS Section PART I PRELIMINARY 1. Citation. 2. Interpretation. 3. Controlling interest over regulated persons. 4. Acquiring control. 5. Increasing control. 6. Reducing control. 7. Acquiring or increasing control notification procedure. 8. Duty of Authority in relation to notice of control. 9. Approval of acquisition of control. 10. Conditions attached to approval. 11. Objection to acquisition of control. 12. Objection to existing control. 13. Procedure for notices of objection under section 12. 14. Improperly acquired shares. 15. Reducing control procedure. 16. Offences. 17. Parent and subsidiary undertaking.  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] 18. Group. 19. Controller. 20. Specific classes of investors. PART II GENERAL APPLICATION 21. Application. 22. General prohibition. 23. Islamic investment business. 24. Discharge of functions. 25. Statement of principle and code of practice. 26. Conduct of investment business regulations. 27. Modification of conduct of investment business regulations. 28. Enforcement. 29. Arrangements for investigation of complaints. 30. Investigation of complaints. 31. Record keeping. 32. Financial penalties. 33. Fees. 34. Exemption from liability. 35. Power of Authority to issue prohibition order. 36. Variation or revocation of prohibition order. 37. Approval for particular controlled function. 38. Application for approval to exercise controlled function. 39. Misconduct. 40. Publication. 41. Statement of policy. 42. Investigation : power to call for information. 43. Investigation powers. 44. Exercise of investigation powers by officer. 45. Powers of entry. 46. Failure to comply with investigation powers. ii  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] 47. Confidential information. 48. Exemption for disclosure of confidential information. 49. Co-operation. 50. Investigations in support of foreign regulatory authority. PART III MARKET OPERATORS AND MARKET INFRASTRUCTURE 51. Regulated market. 52. General requirements for market operators. 53. Application for licence to operate securities exchange. 54. Application for licence to operate clearing house. 55. Supplemental information requirements. 56. Grant of licence to securities exchange and clearing house. 57. General requirements for operator of licensed securities exchange and licensed clearing house. 58. Admission of securities to trading by operator of licensed securities exchange or licensed clearing house. 59. General requirements as to outsourcing. 60. Supervision and notification requirements. 61. Modification of Authority’s regulations. 62. Directions to operator of licensed securities exchange or licensed clearing house. 63. Recognition of foreign securities exchanges or foreign clearing houses. 64. Reporting requirements for operators of recognised securities exchanges or recognised clearing houses. 65. Designation of operators of foreign securities exchanges or foreign clearing houses. 66. Power to give directions in case of non-compliance. 67. Revocation of licence, recognition or designation. 68. Directions and revocation procedure. 69. Investigation of relevant complaints about operator of licensed, recognised or designated securities exchange or licensed, recognised or designated clearing house. 70. Trading facility. 71. Application for licence to operate trading facility. iii  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] 72. Supplemental information requirements. 73. Grant of licence to operator of licensed trading facility. 74. General requirements for operator of licensed trading facility. 75. General requirement as to outsourcing. 76. Supervision and notification requirements. 77. Modification of Authority’s regulations for trading facility. 78. Directions to operator of licensed trading facility. 79. Recognition of operator of foreign trading facility. 80. Reporting requirements for recognised trading facility. 81. Designation of operator of foreign trading facility. 82. Power to give directions in case of non-compliance. 83. Revocation of licence, recognition or designation. 84. Directions and revocation procedure. 85. Complaints arrangements. 86. General requirements for credit rating agency. 87. General requirements for licensing of credit rating agency. 88. Supplemental information requirements. 89. Grant or renewal of licence to credit rating agency. 90. General requirements for operator of credit rating agency. 91. Regulations for operator of credit rating agency. 92. Recognition of operator of foreign credit rating agency. 93. Reporting requirements for recognised credit rating agency. 94. Designation of operator of foreign credit rating agency. 95. Power to give directions in case of non-compliance. 96. Revocation of licence, recognition or designation. 97. Directions and revocation procedure. 98. Complaints arrangements. PART IV SELF-REGULATING ORGANISATIONS 99. Self-regulating organisation. 100. Application for recognition. iv  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] 101. Supplemental information requirements. 102. Central securities depository institution. 103. Trust status of property of central securities depository members. 104. Central securities depository requirements relating to dematerialised securities. 105. Indemnity insurance. 106. Establishment of default fund. 107. Nominee accounts regulations. 108. Grant of recognition to self-regulating organisation. 109. General requirements for self-regulating organisation. 110. Grant and refusal of recognition. 111. Revocation of recognition. 112. Directions. 113. Notification requirements. 114. Complaints arrangements. PART V PUBLIC OFFERING 115. Interpretation. 116. Public offering registration requirement. 117. Exempt securities and transactions. 118. General duty of disclosure in registration statement. 119. Debentures. 120. Rights to purchase shares or debentures. 121. Written consent requirement for certain statements. 122. Post effective date requirements for registration statement. 123. Amendments to registration statement. 124. Suspension of offering. 125. Offering proceeds held in trust in separate bank account. 126. Minimum subscription requirements. 127. Regulations for shelf registration and form of shelf prospectus. 128. Misleading statements and practices in relation to prospectuses. 129. Failure to comply with content or requirement of prospectus. v  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] 130. Damages for false or misleading statements in prospectus. 131. Due diligence defence. PART VI PUBLIC COMPANY STATEMENTS AND REPORTING REQUIREMENTS 132. Initial statements by public company. 133. Financial reporting requirements. 134. Periodic financial reporting requirements. 135. Disclosure of price sensitive information. 136. Required disclosure following unusual trading price or volume. 137. Authority to require production of records and documents. 138. Remedy in cases of unfair prejudice by companies. 139. Power of Authority to issue directions to companies. 140. Duty of directors to disclose shareholdings. 141. Register of directors’ interests. 142. Notification to Authority and securities exchange of directors’ interests. 143. Duty of substantial shareholder to disclose shareholding. 144. Subsequent disclosures by substantial shareholders. 145. Register of substantial shareholders. 146. Substantial shareholders notification requirement. 147. Internal record keeping and accounting controls requirement. 148. Required reports by certain holders of equity securities. 149. Proxy solicitations. 150. Right of shareholder’s action to recover certain trading profits. 151. Publicly tradable company requirements to minority shareholders. 152. Tender offer. 153. Requirements for tender offer statement. 154. Prohibited activity during tender offer. 155. Authority’s tender offer regulations. vi  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] PART VII CAPITAL MARKETS SERVICES LICENCE AND REPRESENTATIVE’S LICENCE 156. Application of general prohibition to this Part. 157. Application for capital markets services licence or representative’s licence. 158. Requirements for capital markets services representative’s licence. 159. Exemption from requirement to hold capital markets services licence. 160. Grant or renewal of capital markets services licence or representative’s licence. 161. General requirements for holder of capital markets services licence. 162. Power of Authority to impose conditions or restrictions on holder of capital markets services licence or representative’s licence. 163. Variation of licence. 164. Power to give directions and suspend licence. 165. Revocation of capital markets services licence or representative’s licence. 166. Directions and revocation procedure. 167. Complaints arrangements. 168. False statements regarding licence application. 169. Effect of revocation, suspension or expiration of licence. 170. Notification of change of holder of capital markets services licence’s business activity. 171. Public register of holders of capital markets services licences. 172. Publication of names and addresses. 173. Appeal to Panel. PART VIII BOOKS, AUDIT AND CLIENT’S ASSETS 174. Maintaining books and records and furnishing returns. 175. Appointment of auditor. 176. Required audited reports. 177. Responsibilities of auditor in certain situations. 178. Additional powers of Authority with respect to auditors. vii  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] 179. Power of Authority to appoint independent auditor. 180. Powers of independent auditor appointed by Authority. 181. Communications restrictions for auditors and employees. 182. Destroying, concealing etc of books, accounts etc. 183. Rights of securities exchange to impose obligations. 184. Defamation. 185. Certain representations prohibited. 186. Clients’ recommendations by holder of capital markets services licence. 187. Liability. 188. Priority given to client’s order. 189. Dealings by certain employees. 190. Additional disclosure obligations on holder of capital markets services licence. 191. Disclosure of interests with respect to underwriting agreement. 192. Handling of client’s money and other assets. 193. Safeguarding of client’s money and other assets. 194. Safekeeping of client’s money and other assets. 195. Client’s assets other than moneys received by holder of capital markets services licence. 196. Moneys withdrawn from trust account. 197. Claims and liens not affected. 198. Right to copy book entries and inspection of contract notes. 199. Authority’s actions to protect client’s assets. 200. Indemnity insurance. 201. Liability to clients for activities. 202. Reporting requirement. PART IX COLLECTIVE INVESTMENT SCHEME 203. Collective investment scheme. 204. Operating without licence. 205. Types of collective investment schemes. 206. Arrangements not constituting collective investment scheme. viii  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] 207. Interpretation. 208. Restrictions on promotion of collective investment scheme. 209. Application for collective investment scheme licence. 210. Grant of collective investment scheme licence. 211. Time limits for determination of collective investment scheme licence. 212. Refusal of application for licence. 213. Collective investment scheme regulations. 214. Scheme particulars regulations. 215. Disqualification of auditor. 216. Modification or waiver of regulations. 217. Alteration of collective investment scheme. 218. Refusal of proposed changes to collective investment scheme. 219. Exclusion clauses. 220. Revocation of collective investment scheme licence. 221. Procedure for revocation of collective investment scheme licence. 222. Requests for revocation or withdrawal of collective investment scheme licence. 223. Recognised collective investment scheme. 224. Regulations for recognised collective investment scheme. 225. Revocation of recognition. 226. Procedure for refusal of recognition. 227. Powers of intervention for collective investment scheme. 228. Application to Court. 229. Procedure for directions. PART X INTERVENTION POWERS OF AUTHORITY 230. Scope of powers of Authority. 231. Employment of prohibited persons. 232. Public statement of misconduct. 233. Restriction of business. 234. Restriction on dealing with assets. 235. Vesting of assets in third party. ix  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] 236. Maintenance of assets. 237. Injunction. 238. Liquidation orders. 239. Notices. 240. Recession and variation of notices. 241. Market abuse. 242. Application of insider dealing. 243. Insider dealing. 244. Insider information. 245. Insiders. 246. Conduct not amounting to insider dealing. 247. Limits on insider dealing. 248. Companies disclosure responsibilities of insider information. 249. Responsibility to maintain list of persons. 250. Supplying auditors with false or misleading information. 251. Claiming falsely to be licensed and misleading statements. PART XI COMPLAINTS COMMITTEE AND INVESTOR COMPENSATION SCHEME 252. Complaints committee. 253. Investor Compensation Scheme. PART XII FINANCIAL MARKETS SERVICES PANEL 254. Panel. PART XIII GENERAL 255. Licence fees. 256. Fees collected to be paid into funds of Authority. x  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] 257. Notification of changes and events. 258. Copy of entry in the regulated person’s record as prima facie evidence of such entry. 259. Criminal jurisdiction of Intermediate Court. 260. Offences by bodies corporate etc. 261. General penalty. 262. Abetment of offences. 263. Attempts. 264. Conspiracy. 265. Compounding of offences. 266. Convicted persons liable to pay compensation. 267. Prosecution of offences. 268. Power to make regulations. 269. Tax and filing exemptions. 270. Repeal of S 31/2001, S 18/2001. 271. Transitional and saving provisions. SCHEDULE – SECURITIES AND INVESTMENT BUSINESS xi  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] CONSTITUTION OF BRUNEI DARUSSALAM (Order made under Article 83(3)) SECURITIES MARKETS ORDER, 2013 In exercise of the power conferred by Article 83(3) of the Constitution of Brunei Darussalam, His Majesty the Sultan and Yang Di-Pertuan hereby makes the following Order – PART I PRELIMINARY Citation. 1. This Order may be cited as the Securities Markets Order, 2013. Interpretation. 2. (1) In this Order, unless the context otherwise requires – “accounting records” means, in relation to a corporation, invoices, receipts, orders for payment of money, bills of exchange, cheques, promissory notes, vouchers and other primary documentation and includes such working papers as are necessary to explain the methods and calculations by which accounts are made up and however compiled, recorded or stored; “advertisement” means any advertisement – (a) inviting persons to enter or offer to enter an investment agreement or to exercise any rights conferred by an investment to acquire, dispose of, underwrite, or convert an investment; or (b) containing information calculated to lead directly or indirectly to persons doing so and,  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] for the purposes of this Order, an advertisement or other information issued outside Brunei Darussalam shall be treated as issued in Brunei Darussalam if it is directed to persons in Brunei Darussalam; “assets”, in relation to a holder of a capital markets services licence, means all the assets of the holder, whether or not used in connection with the carrying on of the regulated activity by the holder; “auditor” means an auditor authorised to perform the duties of the auditor under the Companies Act (Chapter 39); “Authority” means the Autoriti Monetari Brunei Darussalam established by the Autoriti Monetari Brunei Darussalam Order, 2010 (S 103/2010); “board”, in relation to a corporation, means the board of directors or other governing authority of the corporation; “books” includes – (a) any register; (b) any document or other record of information; and (c) any accounts or accounting records, however compiled, recorded or stored, whether in written or printed form or on microfilm or in any other electronic form or otherwise; “borrower”, in relation to a debenture, means the corporation that is or will be liable to repay money under the debenture; “broker” means a person engaged in the business of buying and selling securities for the account of others; “capital markets services licence” means a licence that is granted by the Authority under section 157(5) to a person to carry on a business in any regulated activity; 2  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] “central securities depository” means a market operator who has been licensed by the Authority – (a) to establish and operate a system for the central handling of securities, whether or not listed on any licensed, recognised or designated securities exchange – (i) whereby all such securities are deposited with and held in custody by, or registered in the name of, the company or its nominee company for the depositors and dealings in respect of these securities are effected by means of entries in securities accounts without the physical delivery of certificates; or (ii) which permits or facilitates the settlement of securities transactions or dealings in securities without the physical delivery of certificates; and (b) to provide other facilities and services incidental thereto; “clearing facility” means a licensed or recognised market operator who provides – (a) a facility for the clearing or settlement of transactions in securities as defined by this Order which are traded on a securities exchange; (b) a facility for the guarantee of settlement of transactions referred to in paragraph (a); or (c) such other clearing or settlement facility or class of clearing or settlement facilities as the Authority may allow; “clearing house” means a market operator whose activities or objects include the provision of clearing facilities; “client”, in relation to a holder of a capital markets services licence, means – (a) a person on whose behalf the holder carries on or will carry on any regulated activity; or 3  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (b) any other person with whom the holder, as principal, enters or will enter into transactions – (i) for the purposes of dealing in securities; or (ii) for the purposes of trading in futures contracts, but does not include such person or class of persons as may be prescribed; “company” has the meaning assigned to it in the Companies Act (Chapter 39); “contract note” means the document issued by a holder of a capital markets services licence as prescribed by the Authority under section 198(2); “corporation” has the meaning assigned to it in the Companies Act (Chapter 39); “credit institution” means an undertaking whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account; or an electronic money institution namely an institution which has the facility to create an electronic store of monetary value on a technical device that may be widely used for making payments to undertakings other than the issuer without necessarily involving bank accounts in the transaction, but which acts as a prepaid general purpose instrument; “credit rating” means an opinion regarding the creditworthiness – (a) of an entity, a debt or financial obligation, debt security, preferred share or other security; or (b) of an issuer of such a debt or financial obligation, debt security, preferred share or other security, issued using an established and defined ranking system of rating categories; “credit rating activities” means data and information analysis and the evaluation, approval, issuing and review of credit ratings; 4  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] “credit rating agency” means a person whose occupation includes the issuing of credit ratings on a professional basis; “custodian” means a person who, by way of business, is entrusted with safekeeping the property of another person and “custodian” in relation to a client of a holder of a capital markets services licence, means a bank which holds a licence from the appropriate regulatory authority or such other organisation as may be prescribed by regulations made by the Authority; “dealer” means a person who buys or sells securities on his behalf and for his account; “director” has the meaning assigned to it in the Companies Act (Chapter 39); “discontinuance” means a discontinuance of listing; “distribution channels” means a channel through which information is, or is likely to become publicly available and “likely to become publicly available information” shall mean information to which a large number of persons of the public have access; “durable medium” means any instrument which enables a client to store information addressed personally to that client in a way accessible for future reference for a period of time adequate for the purposes of the information and which allows the unchanged reproduction of the information stored; “eligible delivery agreement” means an agreement that is one of two or more standardised agreements the effect of which is that a person is under an obligation to make or accept delivery at a particular future time of a particular quantity of a particular instrument – (a) for a particular price; or (b) for a price to be calculated in a particular manner, whether or not – 5  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (i) the subject matter of the agreement is in existence; or (ii) the agreement is capable of being varied or discharged before that future time, and in respect of which it appears likely at the relevant time, having regard to all relevant circumstances, that – (A) the obligation of the person in the short position to make delivery will be discharged except by the person making the delivery; (B) the obligation of the person in the long position to accept delivery will be discharged except by the person accepting the delivery; or (C) the person in the short position or long position will assume an offsetting long position or offsetting short position, as the case may be, under another agreement of the same kind; “financial analyst” means a relevant person who produces the substance of investment research; “financial institution” means any bank, merchant bank, or finance company licensed under any written laws of Brunei Darussalam; “fund management” has the same meaning as investment business in the Schedule; “group”, in relation to an investment firm, means the group of which that firm forms a part consisting of the parent undertaking, its subsidiaries and the entities in which the parent undertaking holds an interest; “guarantor”, in relation to a debenture, means a person who guarantees or has agreed to guarantee the repayment of any money secured or payable under the debenture; 6  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] “holding company” has the meaning assigned to it in the Companies Act (Chapter 39); “Hukum Syara’” has the same meaning as in the Syariah Financial Supervisory Board Order, 2006 (S 5/2006); “information service” means – (a) a broadcasting service; (b) an interactive or broadcast videotext or teletext service or other similar service; (c) an online database service or other similar service; or (d) any other service as may be prescribed by the Authority but does not include bond pricing facilities; “insider” of an issuer means – (a) an officer, member of the Board of directors, and other senior management of the issuer or of an affiliated issuer; (b) a controlling shareholder in the issuer or in an affiliated issuer; (c) an individual who, because of a position in, or because of a relationship of trust and confidence with an issuer or insider that provides him access to inside information of that issuer or an affiliated issuer, has information that he knows or should know to be inside information; or (d) an individual who within the last 6 months has had a position or an affiliation referred to in paragraphs (a) to (c); “insider information” means information that would likely affect the price of securities or information that a reasonable investor would consider important under the circumstances in determining whether to buy, sell or hold a security, when such information is disclosed to the public within a reasonable time for the market to absorb the information; “investment advice” has the same meaning as in the Schedule; 7  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] “investment business” has the same meaning as defined in the Schedule; “issuer” means – (a) in the case of shares or debentures, the corporation whose shares or debentures are being issued, offered for subscription or purchase or in respect of which an invitation to subscribe or purchase has been made; (b) in the case of units of a unit trust scheme or a collective investment scheme, the management company or the custodian; and (c) in the case of any other securities, the person making available, issuing, offering for subscription or purchase, or making an invitation to subscribe for or purchase, such securities; “listed”, in relation to a security or a company, means such security or company whose securities or any class of its securities having gained admission to be quoted on a market operator; “management company” means a company by which or on whose behalf a unit of a unit trust scheme or collective investment scheme – (a) has been or is proposed to be issued or offered for subscription or purchase; or (b) in respect of which an invitation to subscribe or purchase has been made, and includes any person for the time being exercising the functions of the management company; “market maker” means a person who holds himself out on the financial markets on a continuous basis as being willing to deal on own account by buying and selling securities against his proprietary capital at prices defined by him; 8  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] “market operator” means a person who manages or operates the business of a regulated market. The market operator may be the regulated market himself; “material information” means information which a person considering acquiring securities of the kind in question would be likely to need, in order not to be misled about any facts essential for him to know in making a decision to purchase, to sell or to hold a security; “member” means a regulated person who, under the membership regulations of a licensed, recognised or designated market operator, may participate in one or more of the services provided by that institution; “Minister” means the Minister of Finance; “nominee” means a person who holds securities on his behalf at the request of another person (security owner or another nominee) but who is not the owner of the security; “officer”, in relation to a corporation, includes – (a) any director, secretary of the corporation; (b) a receiver and manager, appointed under a power contained in any instrument, of any part of the undertaking or property of the corporation; and (c) any liquidator of a corporation appointed in a voluntary winding up, but does not include – (i) any receiver who is not also a manager; (ii) any receiver and manager appointed by the Court; or (iii) any liquidator appointed by the Court or by the creditors; “official list”, in relation to a securities market of a securities exchange, means a list specifying all securities which have been admitted for quotation on a licensed or recognised securities exchange; 9  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] “outsourcing” means an arrangement of any form between a regulated person and a service provider by which that service provider performs a process, a service or an activity which would otherwise be undertaken by the regulated person himself; “Panel” means the Financial Markets Services Panel established under section 254; “party”, in relation to a proposed or discharged agreement, means a person who would be a party to the agreement if it were in effect; “prescribed” means prescribed under this Order or any regulations made under this Order; “private offering” is any offer to sell securities to a group of investors who are not accredited investors within the meaning of this Order totalling less than fifty during a 12-month period; “prospectus” is the document prepared by or on behalf of an issuer to sell or offer its securities for sale to the public through a registration statement filed with the Authority; “proxy” is a written authorisation issued by a shareholder to another person granting the right to vote on behalf of the shareholder; “public offering” is any offer to sell a security which has been made to at least more than fifty who are not accredited investors for the purposes of this Order; “publically tradable company” means a company that is required by this Order to file periodic reports due to the fact that – (a) it has a class of securities listed for trading on a securities exchange; or 10  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (b) it has sold a class of its securities pursuant to registration under this Order; and (c) such securities are owned by fifty or more persons who are not accredited investors for the purposes of this Order; “rated entity” means a person whose creditworthiness is explicitly or implicitly rated in the credit rating, whether or not it has solicited that credit rating and whether or not it has provided information for that credit rating; “recommendation” means research or other information recommending or suggesting an investment strategy, explicitly or implicitly, concerning one or several securities or the issuers of securities, including any opinion as to the present or future value or price of such securities, intended for distribution channels or for the public; “regulated activity” includes any of the types of activities constituting investment business specified in Part II of the Schedule; “regulated person” means persons regulated under this Order; “regulatory functions” means the functions of issuing regulations, making statements of principle, codes of practice or guidance by the Authority and monitoring and enforcing compliance with these; “relevant circumstances”, in relation to an eligible delivery agreement, includes – (a) the provisions of any agreement; (b) the regulations and practices of any market; and (c) the manner in which the respective obligation of persons in the short positions and persons in the long positions under agreements of the same kind as the agreement concerned are generally discharged, but does not include the respective 11  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] intention of the persons in the short positions and the persons in the long positions under the agreement concerned; “relevant time”, in relation to an eligible delivery agreement, means the time – (a) when the agreement concerned is entered into; or (b) if the agreement concerned is not a delivery agreement at the time when it is entered into, becomes a delivery agreement; “representative” means a person, by whatever name called, in the direct employment of, or acting for, or by arrangement with, a person who carries on business in any regulated activity, who carries out for that person any such regulated activity; “research or other information recommending or suggesting investment strategy” means – (a) information produced by an independent financial analyst, an investment person, a credit institution, any other person whose main business is to produce recommendations or a firm working for them under a contract of employment or otherwise, that, directly or indirectly, expresses a particular investment recommendation in respect of a security or an issuer of securities; and (b) information produced by a person other than the persons referred to in paragraph (a) which directly recommends a particular investment decision in respect of a security; “securities” includes any of the types of investment instruments specified in Part I of the Schedule; “securities exchange” means a market operator that is licensed, recognised or designated as such by the Authority under Part III; 12  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] “securities market” means a regulated market or other place at which, or a facility by means of which – (a) offers to sell, purchases or exchanges of securities are regularly made or accepted; (b) offers or invitations that are intended, or may reasonably be expected to result, whether directly or indirectly, in the making or acceptance of offers to sell, purchase or exchange securities, are regularly made; or (c) information concerning the prices at which or the consideration for which, particular persons or particular classes of persons, propose, or may reasonably be expected to sell, purchase or exchange securities is regularly provided; “self-regulatory organisation” means an organisation that is licensed or recognised by the Authority as such under Part IV; “senior management” means the person or persons who effectively direct the business of the regulated person or the market operator and includes the member or members of his Board; “settlement”, in relation to a market contract, means the discharge of the rights and liabilities of the parties to the market contract whether by performance, compromise or otherwise; and includes partial settlement effected in accordance with the regulations of an approved clearing house; “significant” means significant for the purpose of an investor making an informed assessment of the securities being admitted to listing; “specify”, where no mode is mentioned, means specify in writing, and a power to specify includes the power to specify differently for different persons, or types of investment transactions; 13  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] “subsidiary” has the meaning assigned to it in the Companies Act (Chapter 39); “suspension” means a suspension of listing; “trust account” means a trust account established under section 194; “underwriter” is any person, who acquires securities from an issuer with a view to distribute them, or offers or sells for an issuer in connection with the distribution of any security, or participates in any agreement or contract with respect to such underwriting, with the exceptions that may be defined by the decision of the Authority; “unit”, in relation to a unit trust scheme or a collective investment scheme, means any right or interest therein by whatever name called and includes any subunit thereof; “unit holder” means the unit holder of a unit trust scheme or a collective investment scheme; (2) Any reference to this Order shall, unless otherwise expressly stated, include a reference to any regulations or other subsidiary legislation made under this Order. (3) For the avoidance of doubt, any reference in this Order to delivery or service of documents shall include delivery and receipt by electronic means. Controlling interest over regulated persons. 3. (1) If a step which a person proposes to take would result in his acquiring – (a) control over a regulated person; (b) an additional kind of control over a regulated person; or (c) an increase in a relevant kind of control which he already has over a regulated person, he must notify the Authority of his proposal. 14  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (2) A person who, without himself taking any such step, acquires any such control, or additional or increased control must notify the Authority before the end of the period of 14 days beginning with the day on which he first becomes aware that he has acquired it. (3) A person who is under the duty to notify the Authority imposed by subsection (1) must also give notice to the Authority on acquiring, or increasing such control. (4) A notice under subsection (1) or (2) is referred to in this Part as a notice of control. Acquiring control. 4. (1) For the purposes of this Part, a person acquires control over a regulated person (acquirer) if he – (a) holds 10 percent or more of the shares in the regulated person; (b) is able to exercise significant influence over the management of the regulated person by virtue of his shareholding in the regulated person; (c) holds 10 percent or more of the shares in a parent undertaking of the regulated person; (d) is able to exercise significant influence over the senior management of the parent undertaking by virtue of his shareholding in that parent undertaking; (e) is entitled to exercise, or control the exercise of, 10 percent or more of the voting power in the regulated person; (f) is able to exercise significant influence over the management of the regulated person by virtue of his voting power in the regulated person; (g) is entitled to exercise, or control the exercise of, 10 percent or more of the voting power in the parent undertaking; or (h) is able to exercise significant influence over the senior management of the parent undertaking by virtue of his voting power in the parent undertaking. (2) In subsection (1), “acquirer” means – (a) the acquirer; 15  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (b) any of the acquirer’s associates; or (c) the acquirer and any of his associates. (3) For the purposes of this Part, each of the following is to be regarded as a kind of control – (a) control arising as a result of the holding of shares in the regulated person; (b) control arising as a result of the holding of shares in the parent undertaking; (c) control arising as a result of the entitlement to exercise, or control the exercise of, voting power in the regulated person; (d) control arising as a result of the entitlement to exercise, or control the exercise of, voting power in the parent undertaking. (4) For the purposes of this Part, “associate”, “shares” and “voting power” have the same meaning as defined in section 19. Increasing control. 5. (1) For the purposes of this Part, a controller of a regulated person increases his control over the regulated person if – (a) the percentage of shares held by the controller in the regulated person increases by any of the steps mentioned in subsection (2); (b) the percentage of shares held by the controller in a parent undertaking of a regulated person increases by any of the steps mentioned in subsection (2); (c) the percentage of voting power which the controller is entitled to exercise, or control the exercise of, in the regulated person increases by any of the steps mentioned in subsection (2); (d) the percentage of voting power which the controller is entitled to exercise, or control the exercise of, in the parent undertaking increases by any of the steps mentioned in subsection (2); or (e) the controller becomes a parent undertaking of a regulated person. (2) The steps are – 16  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (a) from below 10 percent to 10 percent or more but less than 20 percent; (b) from below 20 percent to 20 percent or more but less than 33 percent; (c) from below 33 percent to 33 percent or more but less than 50; (d) from below 50 percent to 50 percent or more. (3) In paragraphs (a) to (d) of subsection (1), “controller” means – (a) the controller; (b) any of the controller’s associates; or (c) the controller and any of his associates. (4) In this Part, “acquiring control” or “having control” includes – (a) acquiring or having an additional kind of control; or (b) acquiring an increase in a relevant kind of control, or having increased control of a relevant kind. Reducing control. 6. (1) For the purposes of this Part, a controller of a regulated person reduces his control over the regulated person if – (a) the percentage of shares held by the controller in the regulated person decreases by any of the steps mentioned in subsection (2); (b) the percentage of shares held by the controller in a parent undertaking of the regulated person decreases by any of the steps mentioned in subsection (2); (c) the percentage of voting power which the controller is entitled to exercise, or control the exercise of, in the regulated person decreases by any of the steps mentioned in subsection (2); (d) the percentage of voting power which the controller is entitled to exercise, or control the exercise of, in the parent undertaking decreases by any of the steps mentioned in subsection (2); or (e) the controller ceases to be a parent undertaking of the holder of a capital markets services licence unless the controller ceases to have the kind of control concerned over the regulated person as a result. (2) The steps are – 17  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (a) from 50 percent or more to 33 percent or more but less than 50 percent; (b) from 33 percent or more to 20 or more but less than 33 percent; (c) from 20 percent or more to 10 percent or more but less than 20 percent; (d) from 10 percent or more to less than 10 percent. (3) In subsection (1)(a) to (d), “controller” means – (a) the controller; (b) any of the controller’s associates; or (c) the controller and any of his associates. Acquiring or increasing control notification procedure. 7. (1) A notice of control must – (a) be given to the Authority in writing; and (b) include such information and be accompanied by such documents as the Authority may reasonably require. (2) The Authority may require the person giving a notice of control to provide such additional information or documents as it reasonably thinks necessary in order to enable it to determine what action it is to take in response to the notice. (3) The Authority may impose different requirements in different circumstances. Duty of Authority in relation to notice of control. 8. (1) The Authority must, before the end of the period of 3 months beginning with the date on which it receives a notice of control in relation to the period for consideration, determine whether – (a) to approve of the person having the control to which the notice relates; or (b) to serve a warning notice under this Part. (2) If the Authority proposes to give the person having the control a notice of objection of acquisition of control, it must give him a warning notice. 18  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] Approval of acquisition of control. 9. (1) If the Authority decides to approve of the person having the control to which the notice relates, it must notify that person of its approval of the acquisition in writing without delay. (2) If the Authority fails to comply with section 8(1), it is to be treated as having given its approval and notified the person concerned at the end of the period fixed by that subsection. (3) The Authority’s approval remains effective only if the person to whom it relates acquires the control in question – (a) before the end of such period as may be specified in the notice; or (b) if no period is specified, before the end of the period of 12 months beginning with the date – (i) of the notice of approval; (ii) on which the Authority is treated as having given approval under subsection (2); or (iii) of a decision on a reference to the Panel which results in the person concerned receiving approval. Conditions attached to approval. 10. (1) The Authority’s approval under section 9 may be given unconditionally or subject to such conditions as the Authority thinks fit. (2) In imposing any conditions, the Authority must have regard to its regulatory objectives under this Order. (3) If the Authority proposes to impose conditions on a person, it must give him a warning notice. (4) If the Authority decides to impose conditions on a person, it must give him a decision notice. 19  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (5) A person who is subject to a condition imposed under this section may apply to the Authority for the condition to be varied or for the condition to be cancelled. (6) The Authority may, on its own initiative, cancel a condition imposed under this section. (7) If the Authority has given its approval to a person subject to a condition, he may refer to the Panel – (a) the imposition of the condition; or (b) the Authority’s decision to refuse an application made by him under subsection (5). Objection to acquisition of control. 11. (1) In considering a notice of control, the Authority may give a decision notice of objection to the acquirer unless it is satisfied that the approval requirements are met. (2) The approval requirements are that – (a) the acquirer is a fit and proper person to have the control over the regulated person that he has or would have if he acquired the control in question; and (b) the interests of investors would not be threatened by the acquirer’s control or by his acquiring that control. (3) In deciding whether the approval requirements are met, the Authority must have regard, in relation to the control that the acquirer – (a) has over the regulated person; or (b) will have over the regulated person if the proposal to which the notice of control relates is carried into effect, to its regulatory objectives under this Order. (4) If the Authority gives a decision notice under subsection (1) but considers that the approval requirements would be met if the person to whom a notice is given were to take, or refrain from taking, a particular step, the notice must identify that step. 20  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (5) A person to whom a decision notice under subsection (1) is given may refer the matter to the Panel. Objection to existing control. 12. (1) If the Authority is not satisfied that the approval requirements are met, it may give a decision notice of objection to a person who has failed to comply with a duty to notify the Authority imposed by section 3. (2) If the failure relates to section 3(1) or 3(2), the Authority may (instead of giving a notice under subsection (1)) approve the acquisition of the control in question by the person concerned as if he had given it a notice of control. (3) The Authority may also give a decision notice under subsection (1) to a person who is a controller of a regulated person if the Authority becomes aware of matters as a result of which it is satisfied that – (a) the approval requirements are not met with respect to the controller; or (b) a condition imposed under section 10 which required that person to do (or refrain from doing) a particular thing and the condition has been breached as a result of his failing to do (or doing) that thing. (4) A person to whom a decision notice under subsection (1) is given may refer the matter to the Panel. Procedure for notices of objection under section 12. 13. (1) If the Authority proposes to give a decision notice of objection to a person under section 12, it must give him a warning notice. (2) If the Authority decides to give a warning notice under subsection (1), it must do so before the end of the period of 3 months beginning – (a) in the case of a notice to be given under section 12(1), with the date on which it became aware of the failure to comply with the duty in question; 21  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (b) in the case of a notice to be given under section 12(3), with the date on which it became aware of the matters in question. (3) The Authority may require the person concerned to provide such additional information or documents as it thinks reasonable. (4) The Authority may impose different requirements for different circumstances. Improperly acquired shares. 14. (1) The powers conferred by this section are exercisable if a person has acquired, or has continued to hold, any shares in contravention of – (a) a notice of objection; or (b) a condition imposed on the Authority’s approval. (2) The Authority may by notice in writing served on the person concerned (a restriction notice) direct that any such shares that are specified in the notice are, until further notice, subject to one or more of the following restrictions – (a) a transfer of (or agreement to transfer) those shares, or in the case of unissued shares any transfer of (or agreement to transfer) the right to be issued with them, is void; (b) no voting rights are to be exercisable in respect of the shares; (c) no further shares are to be issued in right of them or in pursuance of any offer made to their holder; (d) except in a liquidation, no payment is to be made of any sums due from the person on the shares, whether in respect of capital or otherwise. (3) The Court may, on the application of the Authority, order the sale of any shares to which this section applies and, if they are for the time being subject to any restriction under subsection (2), that they are to cease to be subject to that restriction. (4) No order may be made under subsection (3) – (a) until the end of the period within which a reference may be made to the Panel in respect of the notice of objection; and 22  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (b) if a reference is made, until the matter has been determined or until the reference is withdrawn. (5) If an order has been made under subsection (3), the Court may, on the application of the Authority, make such further order relating to the sale or transfer of the shares as it thinks fit. (6) If shares are sold in pursuance of an order under this section, the proceeds of sale, less the costs of the sale, must be paid into Court for the benefit of the persons beneficially interested in them, and any such person may apply to the Court for the whole or part of the proceeds to be paid to him. (7) This section applies – (a) in the case of an acquirer falling within section 3(1), to all the shares – (i) in the regulated person which the acquirer has acquired; (ii) that are held by him or his associate; and (iii) that were not so held immediately before he became a person with control over the regulated person; (b) in the case of an acquirer falling within section 3(2), to all the shares held by him or his associate at the time when he first became aware that he had acquired control over the regulated person; and (c) to all the shares in an undertaking – (i) that are held by the acquirer or his associate; and (ii) that were not so held before the acquirer became a person with control in relation to the regulated person, where the undertaking is the undertaking in which shares were acquired by the acquirer or his associate and, as a result, he became a person with control in relation to that regulated person. (8) A copy of the restriction notice must be served on – (a) the regulated person on to whose shares it relates; and (b) if it relates to shares held by an associate of that regulated person, on that associate. 23  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] Reducing control procedure. 15. (1) If a step which a controller of a regulated person proposes to take would result in his – (a) ceasing to have control of a relevant kind over the regulated person; or (b) reducing a relevant kind of control over that person, he must notify the Authority of his proposal. (2) A controller of a regulated person who, without himself taking any such step, ceases to have that control or reduces that control, must notify the Authority before the end of the period of 14 days beginning with the day on which he first becomes aware that – (a) he has ceased to have the control in question; or (b) he has reduced that control. (3) A person who is under the duty to notify the Authority imposed by subsection (1) must also give a notice to the Authority – (a) on ceasing to have the control in question; or (b) on reducing that control. (4) A notice under this section must – (a) be given to the Authority in writing; and (b) include details of the extent of the control (if any) which the person concerned will retain or still retains over the regulated person concerned. Offences. 16. (1) A person who fails to comply with the duty to notify the Authority imposed on him by section 3(1) or 15(1) is guilty of an offence. (2) A person who fails to comply with the duty to notify the Authority imposed on him by section 3(2) or 15(2) is guilty of an offence. (3) If a person who has given a notice of control to the Authority carries out the proposal to which the notice relates, he is guilty of an offence if – 24  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (a) the period of 3 months beginning with the date on which the Authority received the notice is still running; and (b) the Authority has not responded to the notice by either giving its approval or giving him a warning notice under section 8(2) or section 13(1). (4) A person to whom the Authority has given a warning notice under section 8(2) is guilty of an offence if he carries out the proposal to which the notice relates before the Authority has decided whether to give him a notice of objection. (5) A person to whom a notice of objection has been given is guilty of an offence if he acquires the control to which the notice applies at a time when the notice is still in force. (6) A person guilty of an offence under subsection (1), (2), (3) or (4) is liable on conviction to a fine not exceeding $100,000, and, in the case of a continuing offence, with a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction. (7) A person guilty of an offence under subsection (5) is liable on conviction to a fine not exceeding $150,000, and, in the case of a continuing offence, with a further fine not exceeding $15,000 for every day or part thereof during which the offence continues after conviction. (8) It is a defence for a person charged with an offence under subsection (1) to show that he had, at the time of the alleged offence, no knowledge of the act or circumstances by virtue of which the duty to notify the Authority arose. (9) If a person – (a) was under the duty to notify the Authority imposed by section 3(1) or 15(1) but had no knowledge of the act or circumstances by virtue of which that duty arose; but (b) subsequently becomes aware of that act or those circumstances, he must notify the Authority before the end of the period of 14 days beginning with the day on which he first became so aware. 25  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (10) A person who fails to comply with the duty to notify the Authority imposed by subsection (9) is guilty of an offence and liable on conviction to a fine not exceeding $100,000. Parent and subsidiary undertaking. 17. In this Part – (a) “parent undertaking” includes an individual who would be a parent undertaking for the purposes of this Order, if he were taken to be an undertaking (and “subsidiary undertaking” is to be read accordingly); (b) “subsidiary undertaking” includes, in relation to a body incorporated in or formed under the written law of a country or territory other than Brunei Darussalam, an undertaking which is a subsidiary undertaking within the meaning of any written law in force in that country or territory. Group. 18. (1) In this Part, “group”, in relation to a regulated person, means any person who is – (a) a parent undertaking of the regulated person; (b) a subsidiary undertaking of the regulated person; (c) a subsidiary undertaking of a parent undertaking of the regulated person; (d) a parent undertaking of a subsidiary undertaking of the regulated person; (e) an undertaking in which the regulated person or an undertaking mentioned in paragraph (a), (b), (c) or (d) has a participating interest. (2) “Participating interest” includes an interest held by a person who would be a participating interest for the purposes of this Order, if he were taken to be an undertaking. Controller. 19. (1) In this Part, “controller” means, in relation to a regulated person, a person who falls within any of the cases in subsection (2). 26  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (2) The cases are where the person – (a) holds 10 percent or more of the shares in the regulated person; (b) is able to exercise significant influence over the management of the regulated person by virtue of his shareholding in the regulated person; (c) holds 10 percent or more of the shares in a parent undertaking of the regulated person; (d) is able to exercise significant influence over the management of the parent undertaking by virtue of his shareholding in the parent undertaking; (e) is entitled to exercise, or control the exercise of, 10 percent or more of the voting power in the regulated person; (f) is able to exercise significant influence over the management of the regulated person by virtue of his voting power in the regulated person; (g) is entitled to exercise, or control the exercise of, 10 percent or more of the voting power in the parent undertaking; or (h) is able to exercise significant influence over the management of the parent undertaking by virtue of his voting power in the parent undertaking. (3) In subsection (2), “person” means – (a) the person; (b) any of the person’s associates; or (c) the person and any of his associates. (4) “Associate”, in relation to a person holding shares in an undertaking, or entitled to exercise or control the exercise of voting power in relation to another undertaking, means – (a) the spouse of the person holding shares in an undertaking; (b) a child or stepchild of the person holding shares in the undertaking (if he is under 18 years old); (c) the trustee of any settlement under which the person holding shares in the undertaking has a life interest in possession; (d) an undertaking of which the person holding shares in the undertaking is a director; 27  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (e) a person who is an employee or partner of the person holding shares in the undertaking; (f) where the person holding share in the undertaking is – (i) a director of that undertaking; (ii) a subsidiary undertaking of that undertaking; or (iii) a director or employee of such a subsidiary undertaking; and (g) if that undertaking has an agreement or arrangement with any other person with respect to the acquisition, holding or disposal of shares or other interests in an undertaking or a person who is entitled to exercise or control the exercise of voting power in relation to another undertaking or under which they agree to act together in exercising their voting power in relation to such respective undertaking, that other person. (5) “Settlement”, in subsection (4)(c), includes any disposition or arrangement under which property is held on trust (or subject to a comparable obligation). (6) “Shares” – (a) in relation to an undertaking with a share capital, means allotted shares; (b) in relation to an undertaking with capital but no share capital means rights to share in the capital of the undertaking; (c) in relation to an undertaking without capital, means interests – (i) conferring any right to share in the profits, or liability to contribute to the losses, of the undertaking; or (ii) giving rise to an obligation to contribute to the debts or expenses of the undertaking in the event of a winding up. (7) “Voting power”, in relation to an undertaking which does not have general meetings at which matters are decided by the exercise of voting rights, means the right under the constitution of the undertaking to direct the overall policy of the undertaking or alter the terms of its constitution. 28  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] Specific classes of investors. 20. (1) Subject to subsection (2), unless the context otherwise requires – (a) “accredited investor” means – (i) an individual – (A) whose net personal assets exceed in value $2,000,000 (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount; or (B) whose income in the preceding 12 months is not less than $300,000 (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount; (ii) a corporation with net assets exceeding $10,000,000 in value (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe, in place of the first amount, as determined by – (A) the most recent audited balance-sheet of the corporation; or (B) where the corporation is not required to prepare audited accounts regularly, a balance-sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance-sheet, which date shall be within the preceding 12 months; (iii) the trustee of such trust as the Authority may prescribe, when acting in that capacity; or (iv) such other person as the Authority may prescribe; (b) “expert investor” means – (i) a person whose business involves the acquisition and disposal, or the holding, of securities, whether as principal or agent; (ii) the trustee of such trust as the Authority may prescribe, when acting in that capacity; or 29  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (iii) such other person as the Authority may prescribe; (c) “institutional investor” means – (i) a bank licensed under the Banking Order, 2006 (S 45/2006) or Islamic Banking Order, 2008 (S 96/2008); (ii) a finance company that is licensed under the Finance Companies Act (Chapter 189); (iii) a person registered under the Insurance Order, 2006 (S 48/2006) or Takaful Order, 2008 (S 100/2008); (iv) a company licensed under the International Trusts Order, 2000 (S 55/2000); (v) the Perbadanan Tabung Amanah Islam Brunei established under section 3(1) of the Perbadanan Tabung Amanah Islam Brunei Act (Chapter 163); (vi) the Government of His Majesty the Sultan and Yang Di-Pertuan; (vii) a statutory authority established under any written law; (viii) a pension fund or a collective investment scheme; (ix) the holder of a capital markets services licence granted under this Order; (x) the trustee of such trust as the Authority may prescribe, when acting in that capacity; or (xi) such other person as the Authority may consider as an institutional investor based on the knowledge and experience of that person in securities including his ability to hire specialists with corresponding knowledge and experience, volume of his net assets or net assets under his management or other similar criteria. (2) The interpretation in subsection (1) may be subject to such modifications as the Authority may determine for any specified provision of this Order. 30  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] PART II GENERAL APPLICATION Application. 21. (1) This Order shall apply to all regulated activities within the meaning of this Order and shall apply to all persons conducting such regulated activities in or from Brunei Darussalam. (2) In the case where any international convention is signed or participated in by the Government of His Majesty the Sultan and Yang Di-Pertuan conflicts with the provisions of this Order, this Order shall prevail. (3) An agreement made in contravention of this Order by a person in the course of carrying on a regulated activity, is unenforceable against the other party and any provision that purports to vary any obligation imposed by this Order shall be void. (4) Where an agreement is made in contravention of this Order, the other party to such agreement is entitled to recover – (a) any money paid or any property transferred by him under the agreement; and (b) compensation for any loss sustained by him as a result of having parted with any money or property. (5) In this section, “agreement” means an agreement – (a) made after the commencement of this Order; and (b) the making or performance of which constitutes, or is part of, the regulated activity in question. (6) The amount of compensation recoverable under subsection (4)(b) is – (a) the amount agreed by the parties; or (b) on the application of either party, the amount determined by the Court. 31  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (7) If the Court is satisfied that it is just and equitable in the circumstances of the case, it may allow – (a) the agreement to be enforced; or (b) any money paid or any property transferred under the agreement to be retained. General prohibition. 22. (1) No person may carry or hold himself out as carrying on or purporting to carry on a regulated activity in Brunei Darussalam unless he is – (a) licensed; (b) recognised; (c) designated; or (d) exempted, by the Authority. (2) The prohibition is referred to in this Order as the general prohibition. (3) The contravention does not – (a) make any transaction void or unenforceable; or (b) subject to subsection (4), give rise to any right of action for breach of statutory duty. (4) In prescribed cases, the contravention is actionable at the suit of a person who suffers loss as a result of the contravention, subject to the defence under subsection (6). (5) Any person who contravenes the general prohibition is guilty of an offence and liable on conviction to a fine not exceeding $10,000,000, imprisonment for a term not exceeding 10 years or both. (6) In proceedings for contravention of the general prohibition, it is a defence for the accused to show that he has taken all reasonable precautions and has exercised all due diligence to avoid committing the offence. 32  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] Islamic investment business. 23. (1) No person may hold himself out as carrying on or purporting to carry on Islamic investment business in Brunei Darussalam unless he has an endorsement granted by the Authority to his licence or recognition permitting it to conduct Islamic investment business or is exempt from this Order either – (a) as an Islamic investment institution; or (b) by operating an Islamic window. (2) A holder of a capital markets services licence or a market operator who has an endorsed licence permitting it to conduct Islamic investment business shall – (a) appoint a syariah advisory body; and (b) obtain the prior approval of the Syariah Financial Supervisory Board pursuant to the Syariah Financial Supervisory Board Order, 2006 (S 5/2006) for the conduct of the regulated activities that it proposes to provide to investors. (3) The Authority may make regulations prescribing the appointment, establishment, conduct and operation of a syariah advisory body. (4) The Authority may make regulations prescribing circumstances in which a person may be taken to hold himself out as conducting Islamic investment business. (5) In this section – (a) “conducting Islamic investment business” means carrying on one or more of the regulated activities in the Schedule in accordance with Hukum Syara’; (b) “Islamic investment institution” means a holder of a capital markets services licence or a market operator whose entire business operations are conducted in accordance with Hukum Syara’; and (c) “Islamic window” means where a holder of a capital markets services licence or a market operator, other than an Islamic investment institution, conducts Islamic investment business as part of his overall business operations. (6) An application for an endorsement to permit a holder of a capital markets services licence or a market operator to conduct Islamic investment business may be made to 33  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] the Authority when applying for a licence under this Order to conduct any regulated activities by any – (a) body corporate; (b) partnership; or (c) unincorporated association, as appropriate in relation to the person providing the service. (7) An application for an endorsement to permit a holder of a capital markets services licence or a market operator to conduct Islamic investment business shall be accompanied by a document evidencing the approval of the Syariah Financial Supervisory Board for every regulated activity to which the application for an endorsement relates. (8) A regulated person or a market operator may apply to the Authority for an endorsement to conduct Islamic investment business or to vary an endorsement already granted. (9) The Authority may make regulations providing that certain persons or class of persons may not be granted an endorsement in relation to Islamic investment business. (10) The Authority may make regulations prescribing – (a) the requirements that an applicant applying for an endorsement must meet before an endorsement can be granted by the Authority which may include requirements relating to the legal form an applicant must adopt; (b) that the person or the market operator is able to demonstrate to the Authority that approval for the investment has been granted by the Syariah Financial Supervisory Board; (c) the requirements referred to in paragraph (a) may be varied in cases where an application is made by a person or market operator who is, at the time of application, regulated in a jurisdiction other than the Authority; (d) certain persons, or market operators or class of persons may be exempted from the requirements referred to in paragraph (a); and (e) for any such exemptions to be – 34  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (i) limited to certain Islamic investment business activities or specified circumstances; or (ii) subject to certain conditions and restrictions. (11) The Authority may endorse the licence of a capital markets services holder or a market operator permitting it to conduct Islamic investment business as an Islamic financial institution or by operating an Islamic window. (12) The Authority may refuse to grant an application for an endorsement or for a variation to an endorsement. (13) Upon refusing to grant an endorsement or a variation to an endorsement, the Authority shall, without undue delay, inform the applicant in writing of such refusal and, if requested by the applicant, the reasons for such refusal. (14) The Panel has jurisdiction to hear and determine any appeal in relation to a decision to refuse an application for an endorsement or a variation to an endorsement. (15) The Authority may, on its own initiative at any time, by a notice in writing to a holder of a capital markets services licence or a market operator – (a) impose conditions and restrictions or additional conditions and restrictions in relation to an endorsement; or (b) vary or withdraw conditions and restrictions imposed in relation to an endorsement. (16) Where the Authority proposes to impose conditions and restrictions or additional conditions and restrictions or vary or withdraw conditions and restrictions in relation to an endorsement, the Authority must give the relevant regulated person or market operator an opportunity to make representations in writing to the Authority in relation to the proposed changes. (17) The requirement imposed on the Authority under subsection (15) shall not apply – 35  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (a) in relation to the imposition of conditions and restrictions when a licence is first endorsed; (b) where the relevant regulated person or the market operator has requested the imposition, variation or withdrawal of conditions and restrictions under subsection (15); or (c) where the Authority concludes that any delay likely to arise as a result of such requirement is prejudicial to the interests of the Authority. (18) Where pursuant to subsection 17(c), the Authority imposes, varies or withdraws a condition or restriction, without giving the relevant regulated person or market operator an opportunity to make representations, the Authority shall – (a) provide the relevant regulated person or market operator an opportunity to make representations in writing to the Authority within a period of 14 days, or such further period as may be agreed, from the date on which such condition or restriction is imposed, varied or withdrawn; and (b) provide a response to any such submission, and make any consequential imposition, variation or withdrawal of the condition or restriction, without undue delay. (19) The Panel has jurisdiction to hear and determine any appeal in relation to a decision to impose, vary or withdraw a condition or restriction. Discharge of functions. 24. (1) The Authority has the duty to regulate the securities markets so that securities can be offered and traded in a fair and transparent manner in order to protect the interests of investors and the public, subject to any limitations included in this Order. (2) In discharging its functions the Authority must, so far as is reasonably possible, act in a way – (a) which is compatible with the regulatory objectives of the Authority; and (b) which the Authority thinks fit for the purpose of meeting those objectives. 36  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (3) The regulatory objectives of the Authority include – (a) market confidence; (b) public awareness; (c) the protection of investors; and (d) the reduction of financial crime. (4) In discharging its functions under this Order, the Authority must have regard to – (a) the need to use its resources in the most efficient and economic way; (b) the responsibilities of those who manage the affairs of regulated persons; (c) the principle that a burden or restriction which is imposed on a person, or on the carrying on of an activity, should be proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction; (d) the desirability of facilitating innovation in connection with regulated activities; (e) the international character of financial services and markets and the desirability of maintaining the competitive position of Brunei Darussalam; (f) the need to minimise the adverse effects on competition that may arise from anything done in the discharge of those functions; and (g) the desirability of facilitating competition between those who are subject to any regulations made by the Authority. (5) In managing its affairs, the Authority must follow generally accepted principles of good corporate governance as applicable to it. (6) The Authority must make and maintain effective arrangements for consulting practitioners and investors on the extent to which its general policies and practices are consistent with its general functions under this section. 37  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (7) The Authority shall, at least once a year, publish a report on the discharge of its functions under this Order and the extent to which, in its opinion, the regulatory objectives have been met. Statement of principle and code of practice. 25. (1) The Authority may issue statements of principle with respect to the conduct expected of regulated persons and those persons exercising control over the regulated persons. (2) If the Authority issues a statement of principle under subsection (1), it may also issue a code of practice for the purpose of helping to determine whether or not a person’s conduct complies with the statement of principle. (3) A code of practice issued under subsection (2) may specify – (a) descriptions of conduct which, in the opinion of the Authority, comply with a statement of principle; (b) descriptions of conduct which, in the opinion of the Authority, do not comply with a statement of principle; and (c) factors which, in the opinion of the Authority, are to be taken into account in determining whether or not a person’s conduct complies with a statement of principle. (4) The Authority may at any time alter or replace a statement of principle or a code of practice issued under this section. (5) If a statement of principle or a code of practice is altered or replaced, the altered or replacement statement of principle or code of practice must be issued by the Authority. (6) A statement of principle or a code of practice issued under this section must be published by the Authority in the manner that appears to the Authority to be best calculated to bring it to the attention of the public. 38  SIGNATURE COPIES [H.HASSANAH/MWR 19/06/2013] (7) A code of practice published under this section and in force at the time when any particular conduct takes place may be relied on so far as it tends to establish whether or not that conduct complies with a statement of principle. (8) Failure to comply with a statement of principle under this section does not of itself give rise to any right of action by persons affected or affect the validity of any transaction. (9) A person is not to be taken to have failed to comply with a statement of principle if he shows that, at the time of the alleged failure, the statement of principle or its associated code of practice has not been published. (10) The Authority may charge a reasonable fee for providing a person with a copy of a statement of principle or a copy of a code of practice published under this section. (11) Before issuing a statement of principle or a code of practice under subsection (2), the Authority must publish a draft statement of principle or a draft code of practice in the manner that appears to the Authority to be best calculated to bring it to the attention of the public. (12) The draft must be accompanied by – (a) a cost benefit analysis; and (b) a notice that representations about the proposal may be made to the Authority within a specified time. (13) Before issuing the proposed statement of principle or code of practice, the Aut