THE CAPITAL MARKETS AND SECURITIES (AMENDMENTS) ACT…

THE CAPITAL MARKETS AND SECURITIES (AMENDMENTS)ACT,2010

PART IPRELIMINARY PROVISIONS

PARTTIGENERAL AMENDMENTS

2. Amendment of section 2.3. Amendment of section to.4. Amendment ofsection 15.5. Amendment of section 18.6. Amendment of section 20.7. Amendment of section 21.8. Amendment of section 22.9. Amendment of section 23.to. Amendment ofsection 25.11. Amendment of section 28.12. Amendment of section 30.13. Amendment of section 31.14. Amendment of section 32.15. Repeal of sections 33, 34 and 35.16. Amendment of section 39.17. Amendment of section48.18. Repealing of section49.19. Amendment of section 50.20. Amendment of section 52.21. Amendment of section 59.22. Amendment of section 60.23. Amendment of section 61.24. Amendment of section 63.25. Amendment of section 64.26. Amendment of section 65.

Capital Markets And Securities (Amendments)

27. Amendmentof section67.28. Amendmentof section69.29. Amendmentof section70.30. Amendmentof section72.31. Amendmentof section95.32. Amendmentof section97.33. Amendmentof sections98, 10Iand102.34. Amendmentof section106.35. Amendmentof section107.36. Amendmentof section113.37. Amendmentof section115.38. Amendmentof section116.39. Amendmentof sections122,125,126and ]27.40. Amendmentof section129.41. Amendmentof section131.42. Amendmentof section134.43. Amendmentof section135.44. Amendmentof section136.45. Additionof newParts.46. Amendmentof section140.47. Amendmentof section143.48. Amendmentof section144.49. Additionof section147A.50. Additionof section151.


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An Act to amend the Capital Markets and Securities Act with a view tomaking better provision for regulating, supervising 'andcoordinating the capital markets activities and to provide for otherrelated matters.

PART IPRELIMINARY PROVISIONS

1. This Act may be cited as the Capital Markets andSecurities (Amendments) Act. 2010 and shall be read as one withthe Capital Markets and Securities Act, hereinafter referred to asthe "principal Act".

PART IIGENERAL AMENDMENTS

Amendment ofsection 2

(a) inserting in their appropriate alphabetical orderthe following new definitions:"enterprise growth market" means a stock market

segment that facilitates trading ofsecurities of start up, small and mediumsize companies;

"market intermediary" means an individual orcorporate body whose activities areprovided for under this Act including butnot limited to dealers, dealers'representatives, investment advisors,investment advisors' representatives,nominated advisors, nominated advisors'representatives, stock exchanges,collective investment schemes, securitiesdepositories and custodianof securities;

"nominated advisor's" means a company licensedby the authority to undertake theresponsibility of nurturing and assistingan issuer for a public office of securities,listing of those securities on the enterprisegrowth market of the stock exchange andadvising the issuer listed on the enterprisegrowth market.

"nominated advisors representative" means aperson in full time employment of anominated advisor, who performs for suchnominated advisor any of the functions ofthe nominatedadvisor,

"Tribunal" means the Capital Markets Tribunalestablished under this Act.

(b) deleting the definition of the word "securities"and substituting for it the following newdefinition:''''securities'' includes-

(a) debentures, stock, shares, bonds ornotes issued or proposed to beissued by a body corporate and

Amendmentof section 10

any right, warrant or option inrespect thereof;

(b) bonds or other loan instrument ofthe Government of Tanzania or ofany other country or corporation;

(c) rights or interests, whetherdescribed ~ units or otherwiseunder any collective investmentscheme;

(d) any right, warrant, option or futuresin respect of any debenture, stocks,shares, bonds, notes or in respect ofcommodities;

(e) options and warrants on shares,depository receipts, derivatives andoptions on derivatives;

(f) such other rights, interests orinstruments as the Authority may,by notice published in the Gazetteprescribe:"

3. The principal Act is amended in section 10 byrepealing it and substituting for it the following:

"Functions 10.-(1) Subject to theand powers provisions of this Act, the Authorityof the shall have the duty to-Authority

(a) regulate the securitiesmarket;

(b) protect the interests ofinvestors in securities;

(c) promote and facilitatethe development ofsecurities market; and

(d) conduct public educationprogrammes.

(2) Without prejudice to theprovISIons of subsection (1), theAuthority shall have powers to-


(a) advise the Minister onall matters relating tothe securities industry;

(b) maintain surveillanceover securitiesbusiness;

(c) ensure orderly, fair and

equitable dealings insecurities;(d) register, authorise,

approve and regulate inaccordance with thisAct, stock exchanges,dealers, dealers'representatives,investment advisors,investment advisors'representatives,collective investmentschemes and othermarket intermediaries;

(e) regulate and supervisethe activities of dealers,dealers' representatives,investments advisors,investment advisors'representatiyes andother markctintermediaries with aview to maintainingproper standards ofconduct andprofessionalism in thesecurities business;

(t) formulate principles forthe guidance of theindustry;

(g) determine licensingcriteria, conditions andthe minimum capitalrequirements for alicensed, approved,registered, authorized orregulated personsdepending on the size ofoperations and risk;

(h) monitor the solvency oflicence holders and takemeasures to protect theinterest of customerswhere the solvency ofany such licence holderis in doubt;

(i) inquire into the affairsof, or conduct routine orad hoc inspections ofthe books and records ofany licensed,authorized, registered,approved or regulatedperson and any publiccompany or issuer ofthe securities;

(j) adopt measures tominimize and superviseany conflict of interestthat may arise;

(k) review, approve andregulate takeovers,mergers, acquisitionsand all forms ofbusiness combination inaccordance with anyexisting rules of practiceauthorizing or requiringthe Authority to do so;

(1) create the necessaryenvironment for theorderly growth anddevelopment of thecapital market;

(m) perform the functionsrequired to beperformed by theAuthority under theCompanies Act;

(n) conduct inve~tigationswhere the Authority hasreasons to believe that:(i) transaction in

securities isdealt with in amarket in amanner whichis detrimentalto the investorsor securitiesmarkets; or

(ii) a marketintermediarywhich violatedthis Act or thedirectionsissued by theAuthority;

(0) call for informationfrom any person andundertake, inspect,conduct inquiries andaudits of any marketintermediaries includinga stock exchange,collective investmentscheme or a publiccompany;

(p) call for or furnish anyagencysuchinfonnationas may be considerednecessary by it for theefficient discharge of itsfunctions;

(q) lpvy fees or othercharges on any personfor carrying outsecurities business inTanzania;

(r) conduct research into allaspects of securitiesindustry;

(s) disqualify unfitindividuals from beingemployed anywhere inthe securities industry;

(t) liaise effectively withthe regulators andsupervisors of otherfinancial institutionslocally and overseas;

(u) do anything which iscalculated to facilitatethe discharge of itsfunctions, or isincidental or conduciveto its discharge, underthis Act;

(v) issue notices, circulars,conditions andguidelines as theAuthority considersnecessary for effectiveadministration of theprovisions of this Act;and




(w) undertake such otheractivities . as arenecessary or expedientfor giving full effect tothe provisions of thisAct"

4. The principal Act is amended in section 15 by-(a) deleting the phrase "is guilty of an offence and

shall be liable on conviction to a fine of not lessthan one million shillings or to imprisonment fora term. of not less than five years or to both suchfine and imprisonment" appearing in paragraph(c) after figure "13";

(b) inserting below paragraph (c) the followingphrase -

"is guilty of an offence and shall beliable on conviction to a fine of not lessthan five million shillings or toimprisonment for a term of not less thanfive years or to both."

5. The principal Act is amended in section 18 by-(a) adding new paragraph (c) in subsection (1) as

follows:"(c) for the purpose of exchange of

information required undersection 147A."

(b) deleting the word "one" and substituting for it theword "five" appearing in subsection (2).

6.deleting-

(a) in subsection (6)-(i) the phrase "of section 18 or

subsection (1) or (2)" appearingimmediately after figure "(3)";and



(ii) the words "one hundredthousand" and substituting forthem the words ''ten millionappearing immediately after thewords "five not exceeding";

(b) in subsection (7)-(i) the words "subsection (I), (2)

or (3) of section 18or"; and(ii) the word "one" and substituting

for it the word "five" appearingafter the word "than".

7. The principalAct is amended by repealing section 21and replacing it with the following:

"Investiga-tion ofcertainmatters

21.-(1) Where the Authority hasreason to suspect that any person isinvolved in any fraudulent or unfairpractice on a securities market it mayconduct an investigation as it thinkproper.

(2) For the purposes ofinvestigation under this section, theAuthoritymay inspect the book, accounts,document and transactionsof any person.

(3) The powers of investigationunder subsection (2), may be exercised bythe Authority itself or by any personappointed in writing by the Authority toexercise those powers.

(4) For the purpose of aainvestigation under this section, a personshall afford the Authority or any personappointed by the Authority undersubsection (3) access to, and shallproduce, its or his books, accounts anddocuments and shall give suchdocuments, information and facilities asmay be required to conduct theinspection.


(5) The Authority and anyperson appointed by the Authority shallfor the purposes of investigations have thepower to copy or take possession of thebooks, accounts and other documents ofany person.

(6) Any person who, withoutreasonable excuse, fails to produce anybook, account or document or furnish anyinformation or facilities in accordancewith subsection (3), is guilty of an offenceand shall be liable on conviction to a fineof not less than five million shillings or toimprisonment for a term of not less thanfive years or to both .••

8. The principal Act is amended by repealing section22 and replacing it with the following provisions:

"Measures to 22.-(1) The Authority may, forbe taken reasons to be recorded in writing, in thepending interests of investors or the securitiesinvestigations market, take any of the following

measures, either pending investigations oron completion of investigations-

(a) suspend the trading of anysecurity on a stockexchange;

(b) restrain any person fromaccessing the securitiesmarket and prohibit anyperson associated with asecurities market to buy,sell or deal in securities;

(c) suspend any office-bearerof any stock exchange orself-regulatoryorganization, marketintermediary or any issuerof securities from holdingsuch position;

(d) impound and retainproceeds of securities withrespect to any transactionwhich is underinvestigation;

(e) attach one or more bankaccQunts of anyintermediary or any personassociated with thesecurities market in anymanner involved inviolation of any of theprovisions of this Act, orthe rules or the regulationsmade thereunder; and

(f) direct any intermediary orany person associated withthe securities market in anymanner not to dispose of oralienate an asset formingpart of any transactionwhich is underinvestigations.

(2) Subject to subsection (1), thebank account or accounts or anytransaction entered therein, so far as itrelates to the proceeds actually involvedin violation of any of the provisions ofthis Act shall be allowed to be attached.

(3) The Authority may take anyof the measures under this section againstany person where the Authority hasreasonable grounds to believe that suchperson has been involved in insidertrading, market manipulation, fraudulentor unfair practices relating to securitiesmarket.





Amendment ofsection 3]

(4) For the purpose of subsection(3), the Authority may either before orafter taking any measures referred to inthis section afford a person concerned anopportunity to be heard."

9. The principal Act is amended in section 23 bydeleting the word "one" appearing in subsection (7) andsubstituting for it the word "five".

10. The principal Act is amended in section 25 bydeleting in subsection (2) -

(i) the phrase "exceeding five hundred thousandshillings appearing after the words ''fine not" andsubstituting for it the phrase "less than fifty millionand not more than five hundred million shillings;"

(ii) the word "two" and substituting for it the phrase"ten and not more than fifteen years";

11. The principal Act is amended in section 28 bydeleting in subsection (5)-

(a) the phrase "or of the Authority" which appearsafter the word "exchange";

(b) the phrase "Minister whose decision shall be final"which appears at the end and substituting for it thephrase "Authority and where the decision wasmade by the Authority the appeal shall lie to theTribunal".

12. The principal Act is amended in section 30 bydeleting the word "Minister" and substituting for it the word"Tribunal".

13. The principal Act is amended in section 31 by-

(a) deleting the word "Minister" appearing insubsection (4) and (5) and substituting for it theword ''Tribunal'" and

(b) deleting the word "one" appearing in subsection(6) and substituting for it the word ''fifty''.


Repealing ofsections 33,34and 35



Repealing ofsection 49



14. The principal Act is amended by repealing section32 and replacing it with the following provisions:

"Requirement 32. A person shall not act in thefor licences capacity of-

(a)(b)(c)(d)

a dealer;a dealers' representatives;an investment advisor;an investment advisor'srepresentative; or

(e) any otherintermediary,

unless he is the holder of a licence orcertificate for that purpose granted underthis Part of the Act."

15. The principal Act is amended by repealing sections33, 34, and 35.

16.deleting -

(a) the phrase ''two hundred thousand" and substitutingfor it the words ''ten million" ;the word "two" and substituting for it the word"five" which appears after the words ''term of notless than";

17. The principal Act is amended by repealing section 48and replacing it with the following:

"Appeal 48.-(1) Any person who is aggrievedagainst by the decision of the Authority refusing tothe grant, renew, suspend or revoke a licencedecision may appeal to the Tribunal, within thirty daysof the from the date of receiving such decision."Authority18. The principal Act is amended by repealing section49.

19. The principal Act is amended in section 50 by addingimmediately after paragraph (d) the following paragraph:

"(e) any other market intermediary as the Ministermay prescribe in the Regulations."










2010

20. The principal Act is amended in section 52(5) bydeleting -

(a) the phrase "one hundred thousand" and substitutingfor it the words "one million";the word ''fifty'; and substituting for it the words"one hundred" appears in third line.

21. The principal Act is amended in section 59(10) bydeleting -

(a) the words "one hundred thousand" andsubstituting for it the words ''five million".the words "fifty thousand" and substituting for itthe words "one hundred thousand".

22. The principal Act is amended in section 60(3) bydeleting the words ''five hundred thousand" and substituting for itthe words "five million".

23. The principal Act is amended in section 61(7) bydeleting the words "one hundred thousand" and substituting for itthe words "ten million".

24. The principal Act is amended in section 63(2), bydeleting the words ''five hundred thousand" and substituting for itthe words "ten million".

25. The principal Act is amended in section 64(2) bydeleting the words "two million" and substituting for it the words"twenty million".

26. The principal Act is amended in section 65(2) bydeleting the words "five hundred thousand" and substituting for itthe words "two million".

27. The principal Act is amended in section 67(2) bydeleting the words "two hundred thousand" and substituting for itthe words "five million".

28. The principal Act is amended in section 69 by -

(a) deleting the word "one" which appears insubsection (6) and substituting for it the word"five";





Amendmentof sections98,101 and102


Amendmentofsection 107

(b) deleting the word "five" which appears insubsection (7) an<i substituting for it the word"fifty" .

29.deleting -

(a) the word "two" whicn appears in the penultimateparagraph and substituting for it the word"twenty"

(b) the word "five" which appears in subs~tion (2)and substituting for it the word "fifty"; and

(c) the word "two" which appears in subsection (8)and substituting for it the word "twenty".

30. The principal Act is amended in section 72(2) bydeleting the word "Court" and substituting for it the word"Tribunal".

31. The principal Act is amended in section 95, bydeleting the word "Court" and substituting for it the word"Tribunal" .

32. The principal Act is amended in section 97 bydeleting -(a) the phrase "to a judge of the high Court who"

which appears in subsection (3) and substitutingfor it the phrase "to the Authority which";

(b) the word "Court" which appears in subsection (7)and substituting for it the word ''Tribunal.

33. The principal Act is amended in sections 98, 101 and102, by deleting the word "Court" and substituting for it the word''Tribunal'' .

34. The principal Act is amended in section 106 byinserting after the words "in Tanzania" appearing in subsection (1)the words "or outside Tanzania".

35. The principal Act is amended in section 107 byinserting after the word "in Tanzania" appearing in subsection (1)the words "or outside Tanzania".




Amendmentof sections122, 125, 126and 127



NO. 10 Capital Markets And Securities (Amendments)

36. The principal Act is amended in section 113 bydeleting the words "five" and substitutingfor it the word "fifty".

37. The principal Act is amended in section 115 bydeleting the word "not exceeding one" and substituting for it thewords ''oot less than fiftymillion".

38. The principal Act is amended in section 116, bydeleting the words "not exceeding one" which appear in paragraph(b) and substituting for them the words ''oot less than twentymillion".

39. The principal Act is amended in sections 122, 125,126 and 127, by deleting the words "High Court" or "Court" andsubstituting for them the word "Tribunal".

40. The principal Act is amended in section 129 bydeleting the words "not exceeding five hundred thousand" andsubstituting for them the words "qot less than fifty million".

41. The principal Act is amended by repealing section131 and replacing for it the following-

"Approval 131.-(1) No perSon shall issue orof cause to be issued an advertisementofferingprospectus securitiesunless the issuer has-

(a) submitted for approval by theAuthority and the Authorityhas approved a prospectuswhich complies with therequirementsof this Part;

(b) appointed advisors who shallinclude but not limited to theLead Advisor, SponsoringBroker, IndependentReporting Accountant and aLegal Advisor;

(2) In the case of an applicationfor issue of securities in the EnterpriseGrowth Market, the issuer shall, in additionto advisors referred to in subsection (l)(b),appoint a NominatedAdvisor."



Amendmentof section136

Addition ofnew Parts

42. The principal Act is amended in section 134 bydeleting the words ''not exceeding five hundred thousand" whichappear in subsection (5) and substituting for them the words "notless than fifty million".

43. The principal Act is amended in section 135 bydeleting the words "not exceeding three hundred thousand" whichappear in subsection (5) and substituting for them the words "fivemillion".

44. The principal Act is amended in section. 136 bydeleting the phrase "not exceeding five hundred thousand" whichappear in subsection (6) and substituting for it the words "fivemillion".

45. The principal Act is amended by adding a new PartXIIIA immediately after Part xm as follows:

"PART XIIIAESTABLISHMENT, JURISDICTION

AND PROCEDURE FOR APPELLATE TRIBUNAL

"Establish-ment of theTribunal

136A.-(l) There shall beestablished an independent Tribunal tobe known as the Capital MarketsTribunal which shall, subject to thisAct, have jurisdiction in respect ofmatters specified in subsection (2).

(2) The Tribunal shall, in theperformance of its functions and theexercise of its powers, have all thepowers of the High Court including,but not limited to-

(a) enforcing the attendance ofwitness and examiningthem on oath, affirmationor otherwise;

(b) compelling the discoveryand production ofdocuments; and

Compositionof theTribunal

Eligibility ofmembers

Tenure ofoffice ofmembers

(c) issuing of a commission orrequesting forexamination of witnessesabroad.

1368. Theconsist of-

(a) a Chairman who shall bea person holding orqualified to hold theoffice of a Judge of theHigh Court, appointedby the President afterconsultation with theChief Justice; andfour members who haveknowledge andexperience on the capitalmarkets one of whomshall be a lawyer,appmmed by theMinister.

136C. No person shall beappointed as a member of the Tribunalunless he qualifies for appointment byvirtue of his knowledge of, orexperience in law, norms, practices andoperations of the capital markets.

136D. A member of theTribunal shall hold office for a periodnot exceeding three years and shall beeligible for re- appointment unless,prior to the expiration of that period-

(a) resigns his office bywritten notificationunder his handaddressed to theMinister;

(b) the Minister, beingsatisfied that themember is unfit by


Quorum ofmeetings

Remuneration ofmembers

Jurisdiction ofthe Tribunal

reason of mental or physical ,infirmity to perform the dutiesof his office, or that themember has failed withoutleave or good cause to attend atleast three consecutivemeetings of the Tribunal,revokes his appointment.

136E.-(l) The quorum formeetings of the Tribunal shall bethe Chairman and two othermembers.

(2) The Tribunal shall sit atthe time and place as it mayappoint.

136F. The tenns andconditions of service of themembers and their remunerationshall be such as may be prescribedin their letters of appointment.

136G.-(l) The Tribunalshall have powers to adjudicate ondisputes and controversies arisingunder this Act.

(2) Without prejudice to thegenerality of subsection (1), theTribunal shall adjudicate onmatters relating to-

(a) the interpretation ofany enactment orregulations to whichthis Act applies;

(b) dispute between theAuthority and the stockexchanges;

(c) dispute between theAuthority and anymarket intennediaries;

(d) dispute between marketintermediaries and theirclients;

(e) dispute between listedcompanies and theregulators or thesecurities exchange;

(f) refusal by theAuthority to grant alicence;

(g) imposition by theAuthority of limitationsor restrictions on alicence;

(h) suspension orrevocation of a licenceby the Authority;

(i) refusal to admitsecurities on a stockexchange;

(j) suspension of tradingof a security on a stockexchange;

(k) removal of a securityfrom the official list ofa stock exchange; and

(1) any other disputearising in the course ofdischarge of thefunctions of theAuthority under thisAct.

(3) The Tribunal shall haveno criminal jurisdiction.

(4) Where in the course ofinvestigation, . the Authoritydiscovers that there is evidence ofpossible commission of a criminaloffence, it shall inform an


Appeals fromthe decisionsof theAuthority

appropriate criminal prosecutingauthority.

136H.-( 1) A personaggrieved by an action or decisionof the Authority under this Act maylodge an' appeal to the Tribunalagainst such decision within thirtydays from the date of the action ordecision of the Authority wascommunicated to the aggrievedparty.

(2) No appeal shall lie to theTribunal from an order made by theAuthority with the consent of theparties.

(3) In the determinatio~ ofthe appeal, the Tribunal mayconfirm or rescind the decision ofthe Authority or give such directionas it may deem appropriate for thedetermination of the appeal.

(4) Where an appeal hasbeen lodged to the Tribunal againstany decision of the Authority, thedecision of the Authority shallremain in force until a final decisionof the Tribunal is delivered.

(5) A decision of theTribunal reversing or rescinding thedecision of the Authority shall notbe enforced until the time forlodging an appeal has expired orwhere the appeal has been lOdged,until the appeal has beendetermined.




Addition ofsection147A


Appeals to thecourt ofAppeal

(6) Until the establishmentof the Tribunal, appeals and powersof determination of the appeals shallbe exercised by the Minister and theprovisions of this section shallapply mutatis mutandis in respectwith the exercise of powers of theTribunal by the Minister.

136 I. Any persondissatisfied with a decision of theTribunal may appeal against thatdecision on points of law to theCourt of Appeal of Tanzania upongiving notice in writing to theTribunal within thirty days from thedate on which the decision wasmade.

Powers andprocedures ofthe Tribunal

136J. The Tribunal maymake Rules for regulating itsproceedings."

46. The principal Act is amended in section 140, bydeleting the word "one" which appears in the penultimateparagraph and substituting for it the word ··five".

47. The principal Act is amended in section 143 bydeleting the words "Court" or "High Court" and "Court" andsubstituting for them the word ·~ribunal".

48. The principal Act is amended in section 144 bydeleting -

(a) the word ··Court" or ··High Court" andsubstituting for them the word ·7ribunal";and

(b) subsection (3).

49. The principal Act is amended by addingimmediately after section 147 the following new provisions.

"Assistance toforeignauthorities

147A-(1) The Authority may, uponreceiving a written

request from a foreign supervisoryauthority for assistance toinvestigate into an alleged breach ofa legal 'or regulatory requirementwhich the foreign supervisoryauthority enforces or administers,and if it considers it necessary in theinterest of the public -

(a) provide assistance bycarrying outinvestigations of allthe alleged breach ofthe legal or regulatoryrequirement; or

(b) provide otherassistance,

to the foreign supervisory authorityas the Authority thinks fit.

(2) For the purpose ofsubsection (1), the provisions ofPart IX shall, apply and have effectaccordingly as if the breach of thelegal or regulatory requirementwere an offence under this Act.

(3) In determining whether itis in the interest of the public torender assistance under subsection(1), the Authority shall have regardto whether the -

(a) foreign supervisoryauthority shall pay tothe Authority any costsand expenses incurredfor providing theforeign supervisory

authority with theassistance;

(b) foreign supervisoryauthority shall be ableand willing to providereciprocal assistancewithin its jurisdictionin response to a requestfor assistance from theAuthority; and

(c) requesting foreignsupervisory authority isa signatory to theMultilateralMemorandum ofUnderstanding of theInternational~ganization ofSecuritiesCommissions. "

Addition of 50. The principal Act is amended by adding immediatelySection 151 after section 150 a new Section 151 which reads:

"Powersover otherlegislation

151. Where the provisions of this Acts IS 10

conflict or is otherwise inconsistent with aprovision of any other written law relating tolisting of shares to the stock exchange. theprovision of this Act shall prevail to the extent ofsuch inconsistency."

Passed in the National Assembly on the 16th April. 2010.

THE CAPITAL MARKETS AND SECURITIES (AMENDMENTS) ACT…

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