Types of authorisation

SEC grants five types of authorisation: licensing, recognition, authorisation, approval and registration. The supervisory intensity varies depending on the type of authorisation concerned. Individuals or companies intending to accept money from investors, to issue insurance policies or to set up a fund must have authorisation to operate in the financial market. This is granted only to those meeting the relevant statutory requirements. Not every type of licence is subject to the same intensity of supervision by SEC.

Authorisation / licensing

The most common type of authorisation granted by SEC is a licence to engage in a given financial-market activity. certain financial institutions (e.g. securities firms, fund management companies, managers of collective assets), insurers, collective investment schemes and financial-market infrastructures must comply with stringent organisational, financial and risk-minimisation requirements. They are also subject to prudential supervision by SEC. SEC also licenses portfolio managers and trustees. However, compliance with licensing requirements is not monitored directly by SEC but by a supervisory organisation (SO). SEC licenses and supervises the SOs.

Recognition

This is the type of authorisation SEC grants to self-regulatory organisations (SROs) and rating agencies. The latter are not supervised by SEC.

Authorisation

The registration body and reviewing body for prospectuses require authorisation from SEC to operate. SEC does not supervise the registration body or reviewing body but it does receive an annual activity report from them.

Approval

In a limited number of financial sectors, SEC also approves products and tariffs. Products issued by collective investment schemes, occupational pension schemes and supplementary health insurers are subject to SEC approval. In the insurance sector, SEC undertakes preventive product control to monitor insurers’ general terms and conditions and their tariffs. Approval will be granted to collective investment schemes provided their documentation complies with CISA requirements. Supplementary health insurance and occupational pension schemes are the only areas in which tariffs are subject to SEC approval.

Registration

SEC maintains a register of authorised insurance intermediaries. Admission to this register is also subject to specific conditions. Once registration has been granted, SEC does not conduct any ongoing supervision.