BSEC Authorized Representative key terms

An individual licensed by BSEC to act on behalf of a registered market intermediary, such as a broker or dealer, in dealing with investors and executing permitted securities activities.

A firm registered with BSEC to carry out securities business, including brokerage, dealing, portfolio management, underwriting, or merchant banking, subject to capital and conduct requirements.

The formal approval document BSEC issues to an intermediary or representative permitting specified regulated activities, valid for a stated period and subject to renewal and conditions.

A regulatory assessment of honesty, integrity, competence, and financial soundness applied to applicants and license holders to confirm they are suitable to conduct securities business.

The obligation to collect and verify information about a client's identity, financial position, investment objectives, and risk tolerance before recommending or executing transactions.

The duty to ensure that a recommendation or trade matches the client's documented objectives, risk profile, and circumstances, and to warn the client when it does not.

The requirement that funds belonging to clients be held in separate designated accounts, apart from the intermediary's own money, and reconciled regularly to protect investors.

A written notice explaining the nature and hazards of a product or market, which the client signs or acknowledges before trading begins, particularly for margin and derivative business.

Selling or recommending a product through misleading statements, concealment of risks, or disregard of the client's profile, giving rise to regulatory sanction and possible compensation claims.

Trading or tipping securities while in possession of material non-public information obtained through a relationship of trust, which is prohibited and punishable under securities law.

Information that a reasonable investor would consider important in an investment decision and that has not yet been disclosed to the general market.

Conduct that creates a false or misleading appearance of trading activity or price, such as wash trades, matched orders, or ramping, and is prohibited as abusive market conduct.

A transaction in which the buyer and seller are effectively the same person or act in concert, creating misleading volume without a genuine change in ownership.

Pre-arranged buying and selling of the same security by colluding parties at an agreed price, typically used to create artificial price or volume signals.

A formal measure BSEC takes against a violator, such as a warning, fine, suspension, cancellation of registration, or referral for prosecution, following investigation.

A written communication requiring a person to explain why a proposed regulatory penalty or restriction should not be imposed, giving an opportunity to be heard before a decision.

A regulatory direction barring a person from holding office or acting as a representative or director of a registered entity, usually for a stated period.

The continuous monitoring of trading activity, order flow, and disclosures by the regulator or exchange to detect anomalies, abuses, or breaches of rules.

A formal document that discloses the issuer's business, financials, risks, and use of proceeds, and which must be approved and published before a public offer of securities.

A preliminary offer document that omits the final price and certain allotment details, circulated to gauge investor interest before the offer price is fixed.

A sale of securities to the general public that triggers mandatory disclosure, regulatory approval, and allotment procedures under securities law.

A price discovery process in which investors submit bids within a stated range, allowing the issuer and underwriters to set the final offer price based on demand.

An arrangement in which a party agrees to purchase unsold securities of an issue, or guarantees proceeds, in return for a commission and exposure to subscription risk.

An offer of securities to a limited number of selected investors that is exempt from full public offer requirements but still subject to prescribed disclosure and eligibility limits.

An investor meeting prescribed criteria of wealth, income, or institutional status, who may access offerings and products not available to ordinary retail investors.

A tradable instrument representing money borrowed by an issuer, carrying an obligation to pay interest and repay principal according to stated terms.

A long-term debt instrument issued by a government or company that pays periodic coupon interest and returns face value at maturity.

A shariah-compliant certificate representing ownership in an underlying asset or project, giving holders a share of returns rather than a fixed interest payment.

Conformity of a security or transaction with Islamic finance principles, typically certified by an appointed shariah advisory board and monitored on an ongoing basis.

A pooled investment vehicle that collects money from many investors and invests it in a diversified portfolio under professional management, issuing redeemable units.

A firm registered to manage collective investment schemes and discretionary portfolios, holding client assets in trust and reporting performance to unitholders.

The total value of a fund's assets minus its liabilities, divided by the number of units outstanding, used to price purchases and redemptions.

A regulated institution that safekeeps securities and fund assets on behalf of clients, processes settlements, and maintains records separate from its own holdings.

An independent assessment of an issuer's or instrument's ability to meet obligations, expressed on a letter scale and used by investors to gauge default risk.

The total return an investor earns by holding a bond until maturity, assuming all coupons are reinvested, expressed as an annual percentage rate.

The ongoing duty of a listed issuer to promptly publish material information and periodic financial reports so that the market remains fairly informed.

A minimum capital standard that intermediaries must maintain, calculated against risk exposures, to absorb losses and protect clients and counterparties.

Purchasing securities with borrowed funds from a broker, subject to initial and maintenance margin limits, with the securities pledged as collateral.

A demand by a broker that a client deposit additional funds or securities when the equity in a margin account falls below the required maintenance level.

The forced sale of a client's pledged securities or the winding up of an insolvent entity to convert assets into cash and settle outstanding obligations.

The principle that a person affected by a regulatory decision must be given notice of the allegations and a fair opportunity to respond before the decision is made.