Frequently Asked Questions

Security means any document or record evidencing ownership or any interest in the capital or debt, property, profits, earning or royalties of any enterprise or proposed enterprise and, without limited the generality of the foregoing, includes any:

1. Bond, debenture, note or other evidence of indebtedness;
2. Share, stock, unit, unit certificate, participation certificate, or certificate of share or interest,
3. Instrument commonly known as a security,
4. Instrument or document constituting evidence of or any interest in or participation in -
   1. A profit sharing agreement, or
   2. A trust, or
   3. An oil, natural gas or mining lease, claim or royalty or other mineral right;
5. Units in collective investment schemes, including shares in or securities of an open-ended investment company, or
6. The right to acquire or dispose of anything specified in paragraphs (i) to (v).

   But does not include -

7. Currency
8. A cheque, bill of exchange or bank letter of credit
9. A certificate or document constituting evidence of any interest in a deposit account with -
   1. A financial institution
   2. A credit union
   3. An insurance company within the meaning of the Insurance Act, or
   4. A contract of insurance issued by an issuer.

In summary the main purposes of the Council are to protect investors, maintain fair, orderly and efficient markets and facilitate capital formation.

A public company is defined in the SIA as a company (I) any of whose issued shares or debentures are or were part of a distribution, or any offer, to the public; or (II) that is the issuer of a security that is beneficially owned by more than fifty (5) persons. It is important to note that the definition of public company in the SIA is a wider definition than contained in the Companies Act Chapter 89:01.

The primary advantage of going public is raising capital from a larger investor pool. Going public also means building public credibility through disclosure obligations.

Initial Public Offering or Offer to the Public in relation to any security, means any offer to the public at large or to any section of the public, whether selected as clients of persons issuing the prospectus or in any other manner by way of advertisement or other form of solicitation, but does not include an offer by an offeror who is not a reporting issuer under this Act where the offer is made to fewer than fifty (5) persons and the offer can be regarded as not being calculated to result directly or indirectly in the securities becoming available for subscription or purchase by persons other than those receiving the offer or invitation, or as being other than a matter of domestic concern of the persons making and receiving it.

A market participant is a person registered pursuant to Section 47 of the SIA as:

1. A broker
2. A dealer
3. A trader
4. An underwriter
5. An investment adviser
6. A securities intermediary, or
7. A securities company;
8. Save and Except in the case of an underwriter or an investment adviser, that person is the holder of a valid license issued by a self-regulatory organisation, as more fully provided for in Section 47 of the SIA.

A reporting entity is defined in Fourth Schedule of Section 2 of the Anti-Money Laundering and Countering the Financing of Terrorism Act (AML/CFT Act). Specifically, the Securities Council is the Supervisory Authority for the following reporting entities under the AML/CFT Act:

1. Trading for own account or for account of customers in money market instruments (such as cheque, bills, certificates of deposits), foreign exchange, financial futures and options, exchange and interest rate instruments, and transferrable securities.
2. Underwriting share issues and participation in such issue.
3. Advise to undertakings on capital structure, industrial strategy and related questions, and advise and services relating to mergers and the purchase of undertakings.
4. Money-broking.
5. Portfolio management and advice.
6. Safekeeping and administration of securities.
7. Venture risk capital.
8. Unit trusts.

Reporting issuers are all public companies duly registered with the Council pursuant to Section 56 of the SIA.

The fit and proper assessment is an assessment to meet the criteria as set out in Section 47A of the SIA by Amendment No. 1 of 2015 of the AML/CFT Act.