Amendments to the regulation on financial activities (Sovereign Order No. 9.259 of 12 May 2022)

Sovereign Order No. 9.259 of 12th May 2022 (JDM No. 8591 of 20th May 2022) amends Sovereign Order No. 1.284 of 10th September 2007 implementing Law No. 1.338 of 7th September 2007 on financial activities.

Eighteen new articles are created, which transcribe the conditions of application of the provisions of Law No. 1.338 which were recently reformed by Law No. 1.515 of 23 December 2021.

SUMMARY

— Definition of financial activities the exercise of which in Monaco requires authorisation from the CCAF (modernised wording in Art. 1 L. 1.338 – new section I bis and new Art. 2-1 SO n° 1.284):

1°) “Portfolio management activity on behalf of third parties”: the discretionary and individualised management of portfolios including one or more financial instruments under a mandate from a third party;

2°) “Management of mutual funds or other undertakings for collective investment under Monegasque law”: the management of one or more mutual funds or undertakings for collective investment under Monegasque law;

3°) “Activity of receiving and transmitting orders on behalf of third parties”: receiving and transmitting orders for financial instruments on behalf of a third party;

4°) “Advice and assistance activity”: providing personalised recommendations to a third party for the activities referred to in points 1°) to 3°) of Article 1 of LawNo. 1.338 of 7 September 2007, as amended, referred to above;

5°) “Activity of management of undertakings for collective investment governed by foreign law”: the fact of managing one or more undertakings for collective investment governed by foreign law.

— Modalities of application of the stricter conflict of interest rules for authorised companies (new art. 23-1 and 23-2 L. n° 1.338 – new art. 7-1 to 7-4 OS n° 1.284) ;

— Modalities of the obligation to record telephone conversations and electronic communications of all services that authorised companies provide and all transactions that they carry out; list of relevant information to be retained and duration of their retention (5 years); modalities of access to information by the CCAF to monitor compliance with the obligations (new Art. 23-2 L. n° 1.338 – new art. 12-1 to 12-4 OS n° 1.284 which will come into force on the first day of the third month following the publication of OS No. 1.284 in the Journal de Monaco, i.e. on 1 August 2022).

— Rules of procedure concerning the CCAF’s investigations and documentary and on-the-spot checks, criteria of integrity and absence of conflicts of interest applicable to the members of the CCAF, modalities of the CCAF’s meetings and deliberations (new Articles 25-1 to 25-3, 28-1 to 28-5 of SO No. 1.284);

— Annual verification of the CCAF’s budgetary accounts: transmission of the closure of the accounts to the Minister of State for examination by the Controller General of Expenditure (new Art. 11-4 Law No. 1.338, new Art. 26-1 SO No. 1.284).