DETAILS OF SUPPORTING DOCUMENTATION REQUIRED TO BECOME A CLEARING PARTICIPANT
REQUIREMENT / DOCUMENTATION / PARTICIPANT COMMENTS / NZXR COMMENTSApplication Forms: / a) Clearing Participant; and
b) Depository Participant.
Responsible Person
(Rule 2.13) / a) Application Form (Schedule 1) – Clearing and Settlement Rules;
b) Application Form (Schedule 1) – Depository Rules;
c) Employment history and experience – relevant to accreditation;
d) Evidence of completion of Kaplan Papers
e) Ongoing Training (Procedure 2.36.2);
f) Details of anyone authorised by the Responsible Person to sign documents on their behalf (Procedure 2.35); and
g) Identification documentation (original certified copies only):
a. ID – Passport or New Zealand Drivers licence and Full Birth Certificate; and
b. Confirmation of Address – Bank Statement, Utility Bill.
Accept Service – Responsible Person:
(Rule 2.13.2(e)) / If the Responsible Person is not resident in New Zealand, they must appoint someone resident or incorporated in New Zealand, who is authorised to accept service of documents in New Zealand, on their behalf.
Insurance
(Procedure 2.26) / a) Professional Indemnity Insurance; and
b) Directors and Officers Insurance.
Company Details
(Procedure 2.1.1(a),(f),(m) and (n)) / a) Application Form – Clearing Participant;
b) Application Form – Depository Participant;
c) Directors Details (full name, date of birth and address details);
d) Detais of shareholders;
e) Certificate of Incorporation (or equivalent document confirmating establishment of the entity);
f) Company Number;
g) Registered address of company, if different to place of business;
h) Details of the type of company and nature of its activitives;
i) A description of the Participant’s management structures including names of personnel holding Management Positions and their experience to hold such positions;
j) A description of the Participant’s Corporate Structure; and
k) Constitution.
Access / A list of all persons who will have access to the Clearing House System (BaNCS) and / or provide instructions to the Clearing House. The list should be signed off the Responsible Person and include:
a) Name;
b) Position Title;
c) The role performed by the individual; and
d) The Key Contacts within the list should be highlighted.
Integrity, Reputation, Character
(Procedure 2.1.1(d) and (e)) / Please provide details of, or confirm, that the following do not apply:
a) Details of any legal or arbitration proceedings active or threatened; and
b) Details of skills, qualifications and experience of personnel holding senior management positions.
Financial Details
(Procedure 2.1.1(b)(i)) / a) Copies of the Participant’s audited financial statements for the previous 5 years; and
b) Details of Payment and Accounting Systems being used.
Compliance Plan
(Procedure 2.6) / The Compliance Plan should include a periodic review of the Participant’s obligations and identify the Participant’s key risks, together with establishing systems, procedures and controls to monitor and manage those risks.
The Compliance Plan should include the following:
a) A statement of objectives of the compliance plan;
b) A program of procedures and controls, including regular periodic (daily, weekly, monthly, quarterly and annual) tasks;
c) The management structure, including operations and processes, for implementation of that Clearing Participant’s Compliance Plan;
d) Allocation of compliance responsibilities among the Clearing Participant’s Personnel relevant to tasks performed reflecting, where approrpriate, the compliance and procedures manuals referred to in Procedure 2.6.2(e) including responsibility for the design, implementation, functioning and review of the compliance plan;
e) Written compliance and procedure manuals, setting out the Clearing Participant’s procedures, and controls over those procedures, in all areas of its clearing and settlement operations;
f) Recording and reporting to the Clearing Participant’s Responsible Person, breaches and suspected breaches of applicable material requirements of the Securities Legislation relevant to the Clearing Participant and the Rules, and providing structures and procedures for investigation, external reporting, mitigation, discipline and remedy of those breaches;
g) Processes for avoiding or managing conflicts of interest arising for Personnel involved in both compliance activities and operational activitives; and
h) Maintenance of records of compliance activities; and processes to review the adequacy of the Clearing Participant’s compliance plan and the effectiveness of its implementation and implement the outcome of the review.
Training Plan
(Procedure 2.8) / All personnel engaged in the Participant’s business must obtain and maintain adequate knowledge in relation to the Rules, Legislation and Clearing System.
The training plan should include:
a) Appointment of a training officer, with responsibility for supervision and implementation of the training plan;
b) Assessment at appropriate intervals of the training and development, supervision and competency of Personnel;
c) Development of training description for each position or function;
d) A programme of continuing development to ensure Personnel are kept up to date with the changes in law, rules, practices and technology;
e) Review of the effectiveness of the training at appropriate intervals; and
f) Responsible Person training (Procedure 2.36.2).
Technology
(Procedure 2.5) / Please provide details of the software you will be using in relation to Client Assets and Capital Adequacy, together with details of the technology in place to undertake business as a Participant and conformance with NZX’s Trading System.
Confirm how access to BaNCS will be managed and what access is required by Back Office systems and how this will be managed to ensure integrity with the Clearing House.
Business Continuity Plan
(Procedure 3.7) / This should be developed to ensure that the Participant at all times maintains adequate disaster recovery arrangements and the continuation of the Participant’s usual operations following short, medium and long term disruption.
Operations / Procedures Manual / This should cover all key daily processes, including:
a) Daily tasks and timings;
b) Ownership of specific tasks;
c) Reconciliations any key controls;
d) Margin Calls;
e) Provision of Collateral;
f) Collateral Release; and
g) Provision of funds to CDO.
Capital Adequacy
(Rules 4.12, 4.26 and 4.30) / Minimum Capital Adequacy, which shall be the higher of:
a) The Minimum NTCA of the Participant Requiring Capital, as prescribed for its category of Participant by C&S Rule 2.16; and
b) The Total Risk Requirement of the Participant requiring Capital as calculated in accordance with Rule C&S 2.19.
Settlement Bank / Participants are requried to appoint a Settlement Bank, and notify CHO of the name of the bank, together with confirmation from the Bank.
Buy In Procurement Agreement / The following categories of Participant require a Buy In Procurement Agreement (to be provided by NZXR):
· Cash Market Clearer;
· Derivatives Clearer; and
· Cash and Derivatives Clearer.
Clearing and Settlement Agreements
(Rule 2.14) / (Only required for General Clearing Participants)
If an application is being made for a General Clearing Participant, the Participant must have in place with each Person whom it provides Clearing and Settlement services, a C&S Agreement that complies with the requirements of Rule 2.14:
a) A copy of the Participants’ C&S Agreement;
b) A list of all Trading Participants who have executed this agreement; and
c) A copy of any agreement in place that has deviated from the standard agreement mentioned in (a).
Anti Money Laundering / The following people must supply identification for AML :
· Beneficial Owners with >25% holding
· Directors
· Responsible Executive
· BaNCS users
The following documentation should be provided in hard copy (original certified copies only):
Individuals:
Name, Date of Birth and Residential Address
The preferred method of verification for this is:
· Passport and Proof of Address, or
· New Zealand Drivers Licence and Birth Certificate and Proof of Address
All Passport copies need to be certified by an acceptable referee (e.g. a lawyer, notary public, justice of the peace, etc). Appropriate wording for the certification is:
“I confirm that this is a true copy of the original document, and represents the identity of [NAME OF PERSON]”
The attached link provides further details on ID requirements and accepted verification.
Amended Identify Verification Code of Practice 2013
Company
Does the company have any of the following:
· Nominee shareholders; and
· Any natural person shareholders who has more 25% ownership of the company?
Clearing and Depository Setup Form / Please complete the setup form.
December 2015