44. The Schedule to the principal enactment as amended by Act, No, 26 of 1991 is hereby further amended as follows :
| (1) in Part I of that Schedule by the substitution for the words "a licence as a stock exchange to a body corporate", of the words "a licence as a stock exchange to a body corporate and a renewal of such licence,", |
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| (2) in Part II of that Schedule- |
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| (3) in Part III of that Schedule- |
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| "(bb) has been traincd,al1dcertified by the licensed stock exchange in ,accordance with the requiren1Cnts laid down by the licensed stock exchange, and by the Commission from time to time ;", |
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| (4) by the repeal of Part IV of that Schedule and the substitution therefor of the following Part ; |
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| (a) that the trustee and the managing company of the unit trust are separate persons; |
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| (b) that the trustee is not a connected person of the managing company; |
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| (c) that the managing company is a company formed and registered under the Companies Act, No. 17 of 1982 and includes a company duly incorporated outside Sri Lanka, or formed in pursuance of any statute of any foreign country, Royal Charter, Letters Patent; |
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| (d) that the managing company has the necessary professional experience and is financially sound; |
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| (e) that the Directors of the managing company are fit and proper persons; |
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| (f) that an explanatory memorandum has been prepared by the managing company and approved by the Commission; |
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| (g) that the trustee has been approved by the Commission; |
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| (h) that the trust deed between the managing company and trustee creating the trust has been approved by the Commission;
| | | (i) sets out the restrictions on the investment or trust property: | | |
| | (ii) sets out the responsibilities of the trustee: | | |
| | (iii) provides that unit holders shall not he required to make any further payment or assume any further liability. except in circumstances, if any, set out in such trust deed: | | |
| | (iv) sets out the method of calculating the offer and redemption prices of units: | | |
| | (v) sets out the circumstance:, in which the redemption of units can be suspended: | | |
| | (vi) provides for the maintenance of a register of unit holders: | | |
| | (vii) contains provisions requiring the trustee. the managing company and their connected persons to disclose their interest. whenever any business in, which they have a material interest is being discussed at any meeting of the trust: | | |
| | (viii) provides for the appointment as auditors of the unit trust of persons having the qualifications specified by rules or the Commission and empowers the Commission to require the retirement of such auditors when they cease to possess such qualifications : | | |
| | (ix) prohibits the trustee from retiring until a new trustee is appointed: | | |
| | (x) prohibits the managing company from entering into any underwriting or sub-underwriting contract on behalf of the trust. except with the approval of the trustee and the Commission: | | |
| | (xi) prohibits the making or granting of loans out of the trust property, except with the consent of the trustee; | | |
| | (xii) provides for the approval in writing of the trustee, few any transaction between the managing company or any connected person of the managing company and the trust; | | |
| | (xiii) provides that the consideration paid in respect of any duly created units (less any charges that the managing company is entitled to retain) shall become subject to the trust immediately on receipt of such consideration by the trustee; | | |
| | (xiv) provides that a certificate in respect of units shall be delivered to a third party only on the trustee being satisfied that the consideration paid for such units (less any charges that may be retained by the managing company) has been, or will be, vested in the trustee; | | |
| | (xv) specifies the minimum initial investment in units permitted, which amount shall be subject to the approval of the Commission; | | |
| | (xvi) specifies the maximum initial charge which can be levied on the purchase of units, which charge shall be subject to the approval of the Commission; | | |
| | (xvii) provides for a deposit of security by the trustee, guaranteeing against Joss due to his misconduct or negligence, where required by the Commission; and | | |
| | (xviii) contains such other information as the Commission may, from time to time, determine by rules made for that purpose.". | | |
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| (5) by the insertion immediately after Part IV of that Schedule of the following new Part:- |
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| A. Terms and conditions to be complied with for the purpose of granting registration as a market intermediary to an investment manager margin provider or underwriter. which is a body corporate and the renewal of such registration are:-
| | (i) that the applicant is a company formed and registered under die Companies Act. No. 17 of 1982 and includes a company duly incorporated outside Sri Lanka. or formed in pursuance of any statute of any foreign country. Royal Charter or Letters Patent and a body corporate established by or under any written law; | | |
| | (ii) that the Directors or the applicant
| | | (a) have never been declared bankrupt: |
| (b) have never been persons, or been Directors of a company. whose registration as a market intermediary or license as a stock broker. stock dealer or managing company of a unit trust has been cancelled or suspended by the Commission; |
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| | (iii) that all Directors and employees who will be dealing with clients on behalf of the applicant possess such adequate qualifications and training as may be determined by the Commission from time to time: | | |
| | (iv) that the applicant is in good financial standing; and | | |
| | (v) that the applicant meets any other criteria that may be imposed by the Commission from time to time. | | |
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| B. Terms and conditions to be complied with for the purpose of registration as a market intermediary to an investment manager who is an individual and the renewal of such registration are. that the applicant |
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| (i) is a citizen of Sri Lanka: |
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| (ii) is a fit and proper person. and has not been declared bankrupt at any time; |
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| (iii) possesses such qualifications and training as may be determined by the Commission from time to time; and |
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| (iv) meets any other criteria that may be imposed by the Commission from time to time. |
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| C. Terms and conditions to be complied with for the purpose of registration as a market intermediary of a body corporate which performs the functions of a clearing house mid the renewal of such registration are- |
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| (i) that the applicant is a company incorporated under the Companies Act. No. 17 of 1982 and includes a company duly incorporated outside Sri Lanka, or formed in pursuance of any statute of any foreign country. Royal Chapter or letters Patent and a body corporate established by or under any written law; |
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| (ii) that the Directors of the applicant |
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| (a) have never been declared bankrupt; |
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| (b) have never been persons or been Directors of a company whose registration as a market intermediary or licence as a stock broker, stock dealer or managing company to a unit trust has been cancelled or suspended by the Commission; |
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| (iii) that the applicant is of good financial standing: |
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| (iv) that a licensed stock exchange is a shareholder of the applicant: |
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| (v) that the rules of the applicant make satisfactory provision |
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| (a) with respect to the conditions under which securities may be deposited. withheld, withdrawn or transferred; |
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| (b) for the holding of deposited securities: |
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| (c) for the processing of dealings in deposited securities; |
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| (d) for facilitating the settlement of deposited securities; |
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| (e) for the protection of the interests or depositors and the protection and control of information on deposited securities and dealings therein; . |
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| (f) for the monitoring of compliance with, and for the enforcement or the rules or the applicant company; |
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| (g) with respect to the maintenance or a policy or policies of insurance. the obtaining of' guarantees from participants and the establishment and maintenance of compensation funds, for the purpose of settling claims by depositors against the applicant; and |
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| (h) generally for the carrying on of the business of the applicant with due regard to the interests of the public; |
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| (vi) that the applicant meets any other criteria that may be imposed by the Commission from time to time. |
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| D. Terms and conditions to be complied with, for the purpose of granting registration as a market intermediary to a credit rating agency and the renewal of such registration are |
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| (i) that the applicant is a company incorporated under the Companies Act, No. 17 of 1982 and includes a company duly incorporated outside Sri Lanka or formed in pursuance of any statute of any foreign country, Royal Charter, Letters Patent and a body corporate established by or under any written law; |
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| (ii) that the Directors of the applicant |
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| (a) have never been declared bankrupt; |
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| (b) have never been persons or been Directors of a company whose registration as a market intermediary or licence as a stock broker, stock dealer or managing company of a unit trust has been cancelled or suspended by the Commission; |
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| (iii) that the applicant is of good financial standing; |
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| (iv) that no Director officer or employee of the applicant has been convicted of fraud or criminal breach of trust or cheating or criminal misappropriation or has been declared bankrupt or found guilty of contravening any provisions of this Act or any rules or regulations made thereunder ; |
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| (v) that the promoters of the applicant are. in the opinion of the Commission. persons of means and integrity and have special knowledge of matters which the company may have to deal with as a credit rating agency: |
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| (vi) no Director of the applicant is a Director of a corporate entity or a" business firm or a shareholder holding five per centum more of any corporate entity or business firm or is in any other way interested in 'such an entity subject to rating by the applicant: and |
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| (vii) an undertaking that no Director officer or employee of the applicant shall communicate the information acquired by him for use of rating purposes. to any other person except when required under law to do so,", |
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Sri Lanka Consolidated Acts