CBB Volume 4: Contents
Arranging Deals in Financial Instruments
Arranging deals in
financial instrumentsmeans making arrangements on behalf of another person, whether as principal or agent, buying, selling or subscribing for deals in financial instruments. This activity does not include the execution of a deal for which the arrangement has been made.Amended: January 2012
Amended: October 2009
Category 3 Investment Firms, the activity of arranging the deals is limited to handling the administration arrangements only.Added: January 2012
A person does not carry on an activity specified in Rule AU-1.4.19 if the arrangement does not bring about the transaction to which the arrangement relates.
A person does not carry on an activity specified in Rule AU-1.4.19 if a person's activities are limited solely to introducing clients to
The exclusion in Rule AU-1.4.21 does not apply if the agent receives from any person, other than the client, any pecuniary reward or other advantage, for which he does not account to the client, arising out of his entering into the transaction. Thus, if A receives a commission from B for arranging credit or deals in investment for C, the exclusion in Rule AU-1.4.21 does not apply.
A person does not carry on an activity specified in Rule AU-1.4.19 merely by providing the means of communication between two parties to a transaction.
A person does not carry on an activity specified in Rule AU-1.4.19 if they operate an exchange, duly recognised and authorised by the CBB.Amended: July 2007
The BFX, as a
licensed exchange, is not therefore classed as an investment firm licenseesubject to Volume 4 (Investment Business). It is subject to separate rules issued by the CBB (see Volume 6 of the CBB Rulebook).Amended: January 2011
Amended: July 2007
Negotiating terms for an investment on behalf of a client is an example of an activity which may be regarded as activities of the kind specified in Rule AU-1.4.19.
The following are examples of activities which, when taken in isolation, are unlikely to be regarded as an activity of the kind specified in Rule AU-1.4.19:(a) Appointing professional advisers;(b) Preparing a prospectus/business plan;(c) Identifying potential sources of funding;(d) Assisting investors/subscribers/borrowers to complete and submit application forms; or(e) Receiving application forms for processing/checking and/or onward transmission.Amended: July 2007
The activity specified in Rule AU-1.4.19 may also include arranging credit, where it is an incidental part of assisting a client to buy, sell, subscribe for or
underwriteany financial instrument.Amended: October 2012
Under Rule AU-1.4.28, arranging credit is an activity specified in Rule AU-1.4.19, only where it forms part of other arrangements to assist a client to buy, sell, subscribe for or
underwritea financial instrument. The activity of solely arranging credit is not a regulated activity for the purposes of Rule AU-1.4.19.Amended: October 2012