Ordinance n°. 9,737 implementing Law n°. 1.338 of September 7th, 2007 on financial activities, as amended by Law n°. 1.529 of July, 29th 2022 (the “Law“), was published on February 10th 2023 in the “Journal de Monaco” (the “Ordinance“).
Article 69 of the Constitution provides that Sovereign Laws and Ordinances may only be enforced against third parties from the day after their publication in the “Journal de Monaco”.
This note refers to the Ordinance which clarifies and defines the amendments made by Law n°. 1.529 of July 29th, 2022.
In order to provide some context, we invite you to read our note and comments on “Amendments to Law n°. 1.338 of September 7th, 2007 on financial activities, as amended“, available in the “News” section of our website.
The Ordinance defines the concept of professional investor, as referred to in Article 23(3) of the Law, clarifies the application of the exceptions provided by Article 29 of the Law, the professional certifications required under Article 23 of the Law, the procedures and the establishment of a Professional Certifications Commission.
- With regard to the notion of professional investor :
Article 2 of the Ordinance provides that :
“Within the meaning of the aforementioned Law n°. 1.338 of September 7th, 2007, as amended, the following shall be considered as professional investors:
1°) entities authorized or regulated in Monaco or abroad to carry out financial activities;
2°) companies meeting at least two of the following criteria: a balance sheet total equal to or greater than 20 million euros, a turnover equal to or greater than 40 million euros and equity capital equal to or greater than 2 million euros;
3°) institutional investors;
4°) governments, central banks, international institutions.
Investors other than those mentioned in the previous paragraph, including natural persons, may be considered as professional investors if their investment skills, experience and knowledge enable them to assess the merits and risks of the services or transactions envisaged.
As part of this assessment, the investor must meet one of the following criteria:
– the value of its portfolio of financial instruments, plus bank deposits, exceeds 1 million €;
– the investor has been employed for at least one year or has been employed for at least one year in a professional position in the financial sector which requires knowledge of the services or transactions envisaged.
Investors who fulfil one of the criteria provided in the previous paragraph must, in Ordinance to be treated as professional investors, notify the authorized company in writing of their wish to be treated as such, either for all future operations or for the service or transaction envisaged.
- With regard to the conditions required for the application of the exceptions provided by Article 29 of the Law :
Article 2 of the Ordinance specifies the conditions for the application of Article 29 of the Law relating to solicited or unsolicited approaches carried out in the Principality of Monaco when these are related to a client of a licensed company.
In this case, the Ordinance specifies that :
“For the purposes of applying paragraph 3°) of article 29 of the aforementioned law n° 1.338 of September 7th, 2007, as amended, all approaches, whether solicited or unsolicited, made on the territory of the Principality by any person or entity not approved under the conditions of the said law, to a client of an approved company domiciled in the Principality, requires the presence of a representative of the approved company during the meeting between its client and the non-approved person or entity“.
- With regard to the required professional qualifications and the categories of persons covered by them :
Article 3 of the Ordinance now provides that the “Association Monégasque des Activités Financières” (“AMAF”) organizes training sessions, determines the content of the courses and organizes exams, which are sanctioned by a professional certificate.
In this respect, Article 3 of the Ordinance specifies that the following persons are required to obtain a professional certification:
- The persons designated as responsible for internal control, as well as the persons under their authority (Professional Certification “Internal Control of Financial Activities“)
- Persons having the positions of manager, salesperson, financial analyst, trading room operator and their direct supervisors (Professional certification in banking, finance and environmental, social and governance issues), unless they can prove, before starting work, that they hold a diploma recognized as equivalent in the areas concerned, issued by a competent authority in the country where the diploma was obtained. In this case, the persons concerned may be exempted by AMAF from the examination relating to the technical aspect of the certification.
In addition, the Ordinance specifies the procedures for the implementation of training sessions by requiring the above-mentioned categories of persons to be registered within six months of taking up their duties in the approved company for which they carry out their activity.
However, they may be granted additional time for service or internal organizational reasons after approval from the AMAF.
In contrast to the above, the Ordinance offers the possibility to be exempted from any application of the obligations relating to professional certification for :
- The persons designated as responsible for internal control, as well as the persons placed under their authority, who have been in continuous service in Monaco for more than five years as of the date of entry into force of the Ordinance;
- Persons occupying the duties of manager, salesperson, financial analyst, trading room operator and their direct supervisor when they have obtained the professional certification instituted by Ministerial Ordinance n°. 2014-168 of March 19th, 2014 or occupied their duties prior to May, 2nd 2014.
- With regard to the establishment of a Professional Certifications Commission :
Under the terms of the Ordinance, a Professional Certifications Commission is set up to give an opinion on any matter falling within the scope of the Ordinance and the regulations drawn up by the AMAF in consultation with the “Commission de Contrôle des Activités Financières” (“CCAF“).
The Professional Qualifications Commission shall comprise :
- The President of AMAF or any person that he/she designates to represent him/her, Chairman of the Commission ;
- The Vice-President of the AMAF ;
- The Secretary General of AMAF ;
- The Secretary General of the CCAF or any person that he/she designates to represent him/her;
- A maximum of six members appointed each year by the AMAF Board for their expertise in the field of education and their knowledge of the Monegasque economic fabric.
The deliberations and opinions of the Commission (adopted by a majority of the present members) are recorded in a register kept by the AMAF and made accessible to the CCAF and to any person designated by the Government Councilor-Minister of Finance and Economy.
Our team remains at your disposal to assist you and to answer your questions on the subject.
February 10th, 2023.