الهيئة العامة للرقابة المالية

Inspection of Capital Market Intermediaries

FRA conducts a continuous inspection of entities and companies operating in the capital market in order to ensure their compliance with the rules and regulations governing the capital market. In this respect, the Central Department of Capital Market Inspection & Surveillance implements two types of inspections:

1- Periodical On-site/Off-site Inspection:

The periodical on-site/off-site inspection is carried out according to an annual program approved by the FRA Chairman.

The program includes a set of companies selected based on specific criteria. The program is implemented throughout the year by the FRA inspection committees or working groups that comprise of members from various specialties (legal, accounting) to inspect all activities of licensed entities.

Then the inspection teams prepare reports on the findings of the on-site/off-site inspection, including all comments and irregularities made by the licensed companies. These reports are submitted to the FRA top management to take appropriate action against such companies.

2. Surprise Inspection:

The surprise inspection is carried out in specific events (complaints, market manipulations etc.) that require on-site inspection and verification. In this case, a committee or working group is formed, including all specialties required to investigate the matter. The inspection team acts swiftly to obtain documents related to the irregularity, investigate with those responsible, and prepare a report submitted to the FRA top management to take appropriate action against such entity.

Surprise inspections may be conducted by the FRA inspection committees or working groups, in cooperation with the Public Funds Investigation Department, as per a permission from the Public Prosecution in cases related to practicing capital market activities without obtaining necessary licenses from FRA.

Surprise inspections may also be conducted by the FRA inspection committees or working groups formed as per a decision of the Public Prosecution to investigate specific issues at entities operating in the capital market.

Removal of irregularities (on-site/off-site inspection):

During the periodical/surprise inspection of capital market intermediaries subject to FRA’s supervision, some comments and irregularities may be identified related to their engagement in licensed activities. Capital market intermediaries are notified of and warned against these comments and irregularities according to the provisions of Article (30) of the Capital Market Law issued by Law No. 95/1992. If the entity fails to rectify it situation, it may be banned from practicing the activity licensed by FRA. Then the license may be canceled if the entity fails to comply with the removal of irregularities detected in the periodical/surprise inspection.