A. The Eligibility Criteria For Companies

A.
THE ELIGIBILITY CRITERIA FOR COMPANIES

A company that applies for any license to act as a market intermediary must meet fit
and proper criteria for that particular regulated activity.
The fit and proper criteria are as follows:

a) The company should not have been declared bankrupt;
b) The company should not be in the course of being wound up;
c) The company should not (whether inside or out site Tanzania) be in a compromise
scheme or arrangement with its creditors;
d) Capital Market and Securities Authority must be satisfied with the information as
to the educational qualifications or experience of the officers in the applications
who are to perform duties in connections with the holding of the license;
e) The company should assure the Capital Market and Securities Authority that it will
perform the duties of a holder of a license, efficiently honestly and fairly
In addition the company must comply with the following conditions:

(a) must be duly incorporated under the Companies Act (Cap. 212) or in the case of a
foreign companies, must comply with the registration requirements of foreign
companies under the Companies Act and the requirements of section 42 of the
Commodity Exchanges Act, 2015;
(b) must have Memorandum and Articles of association which expressly empowers the
company to undertake the business in which the license is sought;
(c) must have a representative who meet all criteria set out in paragraph 4.2.
(d) must comply with the financial requirements set out in the Financial Requirements
Regulations including the capital adequacy and liquidity margin ratios as follows:
(i) for licensed commodity brokers or dealers shall maintain at all times sufficient
liquid asset to –
(aa) promptly satisfy their liabilities;
(bb) provide a cushion of liquid assets in excess of liabilities to cover
potential market, credit and other risks if they should be required to
liquidate;
(cc) the net capital shall be not be less than 120% of its required minimum
monetary value of its net capita;
(dd) the aggregate indebtedness (i.e. all liabilities or customer related
receivables (money owed to the broker or dealer by customers) as
computed by the reserve requirements remain 18%;
(ee) the customer funds shall not be more than 4%.
(ff) the broker-dealer shall first determine its equity in accordance with
IFRS.
(gg) the net capital shall be as defined in the International Financial
Reporting Standards as shown below:
TOTAL CAPITAL (equity plus allowable subordinate debt or credits)-
ILLIQUID ASSETS (unsecured receivables, operational charges and
proprietary positions) = NET CAPITAL (of which aggregate indebtedness
shall not exceed 18%
ELIGIBILITY CRITERIA
(hh) the customer related receivable or customer funds shall not be more than
4%)
(e) maintain and operate effective organizational and administrative structures,
systems, policies and procedures to ensure-
(i) compliance by its managers and employees with the obligations of the
company;
(ii) ensuring all reasonable steps to prevent conflicts of interest from adversely
affecting the interests of its clients;
(iii) ensuring all reasonable steps to ensure continuity and regularity in the
performance of its business particularly the employment of appropriate and
proportionate systems, personnel, resources and procedures;
(iv) sound administrative and accounting procedures, internal control
mechanisms, effective procedures for risk assessment, and effective control
and safeguard arrangements for information processing systems;
(v) prevention of money laundering and financing of terrorism in particular
having in place detection manuals and policies including, procedures for
conducting customers due diligence and reporting of suspicious transactions
to the Authority and to the Financial Intelligence Unit;
(vi) proper record keeping of all services and transactions undertaken to enable
the Authority to monitor compliance with the requirements of the Act, and
in particular to ascertain that the licensee has complied with all obligations
with respect to clients and potential clients;
(vii) when holding clients’ property, will make adequate arrangements to
safeguard clients’ ownership rights, especially in the event of its insolvency,
and to prevent the use of a clients’ property on own account except with the
client’s express consent;
(viii) when holding clients’ funds, will make adequate arrangements to safeguard
the client’s rights and to prevent the use of clients’ funds for its own use;
(ix) has, and is able to maintain, the minimum paid up capital prescribed having
regard to the nature and type of regulated activity to be provided.
B. ELIGIBILITY CRITERIA FOR REPRESENTATIVES OF MARKET

INTERMEDIARIES
TYPES OF REPRESENTATIVES:
a) Commodity broker’s representative
Must be a natural person to act for, or by arrangement with a commodity
broker to perform any of the functions of that commodity broker in
connection with trading in commodities.
b) Commodity dealer’s representative
Must be natural persons licensed by the Authority to act for, or by
arrangement, with a commodity dealer, to perform any of the functions of
that commodity dealer in connection with dealing in commodity contracts.
c) Commodity trading adviser’s representative

Must be natural persons in the employment of, or acting for, or by
arrangement with a commodity trading adviser, to performs for that
commodity trading adviser any of the functions of a commodity trading
adviser other than work ordinarily performed by accountants, clerks or
cashiers by way of salary, wages, commission or otherwise
d) Commodity pool operator representatives
Must be a natural person in the direct employment of, or acting for, or by
arrangement with, a spot commodity pool operator, to perform for that
commodity pool operator any of the functions of a commodity pool operator
ELIGIBILITY CRITERIA OF REPRESENTATIVES

a. must be a natural person or individual who wishes to act as representatives
of an intermediaries;
b. should not have been declared/adjudged bankrupt
c. should not have been convicted in Tanzania or elsewhere of an offence
involving fraud or dishonesty punishable on conviction with imprisonment
for a term of three months or more.
d. should not be of bad reputation or character.
e. have passed an examination or undertaken such training as may be required
or recognized by the Authority
f. appointed by the licensed market intermediary.
g. should have a bachelor degree as minimum requirement, master’s and
doctorate degree are added advantage in any of the following fields:-
i. economics
ii. finance
iii. business and personal financial services marketing operations,
iv. investment and securities,
v. sales agent in securities and commodities, securities,
vi. commodities and financial services sale agent,
vii. financial planning and services,
viii. Investment and securities
ix. programs covering a combination of agriculture, marketing,
investment and financial market,
x. a strong background in specific commodities trading such as practical
experience through internship opportunities at brokerage houses and
investment firms through a school’s relevant degree program and any
related subject as may deemed fit.

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A.

THE ELIGIBILITY CRITERIA FOR COMPANIES

The fit and proper criteria are as follows:

In addition the company must comply with the following conditions:

B. ELIGIBILITY CRITERIA FOR REPRESENTATIVES OF MARKET

b) Commodity dealer’s representative

c) Commodity trading adviser’s representative

ELIGIBILITY CRITERIA OF REPRESENTATIVES

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