The long title of the Order is “An Order
to make provision with respect to financial exchanges, dealers and other
persons providing advice in respect of, managing or dealing in securities,
for certain offences relating to securities, and for other purposes
connected therewith”. The responsible Minister is the Minister of Finance,
and the Order is administered by the Authority appointed by His Majesty
the Sultan and Yang Di-Pertuan Negara Brunei Darussalam. His Majesty has
been graciously pleased to appoint the Permanent Secretary of the Ministry
of Finance to constitute the Authority.
The Minister may establish or cause to
be established within Brunei Darussalam a body or bodies corporate to be
exchanges. An exchange shall, with the approval of the Authority,
make rules which provide for the conditions of entry and admission into
membership and for the regulation generally of the conduct of trading
members in connection with the business of an exchange. The secretary of
the exchange shall keep a register of the trading members. The register of
trading members shall be made available for inspection at the registered
office of an exchange during business hours. An exchange shall provide
such assistance to the Authority, as the Authority reasonably requires for
the performance of the Authority’s functions and duties.
The Minister may by order published in
the Gazette require that an exchange shall establish and keep such
fidelity fund as he may determine to be administered by the committee on
behalf of that exchange. The assets of fidelity fund shall be the
property of the exchange but shall be separated from all other property
and shall be held in trust for the purposes set out in this Part.
Provision is also made for appropriate insurance.
The Authority may, where it appears to
be in the interests of Brunei Darussalam, issue directives to an exchange
with respect to trading, the manner in which that exchange carries on its
business, including the manner of reporting off-market purchases, and any
other matter which the Authority considers necessary for the effective
administration of this Order and such exchange shall forthwith comply with
that directive.
No person may carry on the business of a
dealer unless he is the holder of a dealer’s licence granted under Part
III. A person shall not act as a dealer’s representative unless he is
the holder of a dealer's representative's licence granted under that
Part.
No person may act as an investment
adviser unless he is the holder of an investment adviser's licence granted
under Part III. Likewise, no person shall act as an investment adviser’s
representative unless he is the holder of an investment adviser’s
representative's licence.
A dealer, a dealer's representative, an
investment adviser, an investment adviser's representatives, a journalist,
or an authorized depository agent, must maintain a register in the
prescribed form of the securities in which he has an interest. Any such
person shall give notice to the Authority in the prescribed form
containing particulars as prescribed including the place at which he will
keep the register of his interest in securities.
Dealers must keep or cause to be kept
such records as will sufficiently explain the transactions and financial
position of their business and enable true and fair profit and loss
accounts and balance sheets to be prepared. A dealer shall appoint an
auditor to audit his accounts, lodge with the exchange an auditor's report
and shall provide a copy to the Authority.
A dealer must establish and keep in a
bank or banks in Brunei Darussalam one or more trust accounts designated
and evidenced as such, into which he shall pay all amounts, less any
brokerage and other proper charges, that are received from or on account
of any person, other than a dealer, for the purchase of
securities.
No person may do anything that is
calculated to create a false or misleading appearance of active trading in
any securities on a stock market in Brunei Darussalam. A person shall not
effect, take part in, be concerned in or carry out, either directly or
indirectly, two or more transactions in any securities, being transactions
that have, or are likely to have, the effect of raising / lowering the
price of those securities on a stock market in Brunei Darussalam, with
intent to induce other persons to purchase / sell or subscribe for
securities of that or of a related body corporate. No person may
make a statement, or disseminate information, that is false or misleading
in any material particular and likely to induce the sale or purchase of
securities by other persons, or likely to have the effect of raising,
lowering, maintaining or stabilizing the market price of
securities.
No person may make improper use of
“insider” information to gain, directly or indirectly, an advantage for
himself or for any other person.
The Authority may inspect and make
copies of or take extracts from the holder of a licence under this Order,
and any of the servants or agents of that person, shall on being required
by the Authority so to do, produce any document, record or matter referred
to above.
The Authority may in writing give a
direction to an exchange requiring the production, to the Authority of any
books as is specified, being a book relating to the business or affairs of
an exchange; any dealing in securities; any advice concerning securities
of the issuing or publication of a report or analysis concerning
securities; the character or financial position of, or any business
carried on by, a person; or an audit of, or any report of an auditor
concerning, a dealing in securities or any accounts or records of a dealer
or of an investment adviser.
The Authority may require an exchange to
disclose, in relation to any acquisition or disposal of securities on the
stock market of that exchange, he names of the members of that exchange
who acted in that acquisition or disposal.
There is power for the Authority,
subject to certain safeguards and reciprocity, to assist a designated
equivalent supervisory authority in another jurisdiction.
The Minister, with the approval of His
Majesty the Sultan and Yang Di-Pertuan, may make regulations for the
purpose of giving effect to the provisions of this Order and its due
application and administration.
Under the Securities Order, “investment
adviser” includes all persons (including companies) who in or from within
Brunei Darussalam carry on the business of advising others concerning
securities or of investments or of investments or portfolio
management. Also included are those who as part of a regular
business issue or promulgate analyses or reports concerning
securities. Certain institutions are exempted, for example licenced
banks, registered newspapers and licenced broadcasters. In the latter two
cases it is giving of advice, which is relevant.
The effect is that no person or company,
whether based in Brunei or visiting, may offer any form of financial
product, advice or investment in any form of security without holding a
licence granted under the Securities Order. Special provision is
made to include representatives of investment advisers in the licensing
regime.
Any person acting as an investment
adviser or investment representative without a licence, or in breach of
the standards set for the financial industry in the Securities Order, is
liable to prosecution. If convicted, such a person would be liable to fine
of up to $500,000 or up to 5 years imprisonment, or both. Further, they
would effectively be banned from holding or obtaining any kind of licence
whatsoever in the financial industry in Brunei.
The focus of the
SO is thus to provide a level of protection for all international clients,
citizens, residents and businesses of and in Brunei to high international standards. BIFC is an
active member of IOSCO and ascribes to its standards.