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Statement of Principles, Guidance Notes and Codes of Conduct

The Statement of Principles prescribes certain minimum levels of net assets which must be maintained on an ongoing basis, having regard to the risks inherent in the business. When investment business is carried on as principal, the minimum amount is $250,000 whereas in the case of agents the figure is $100,000. When business is carried on other than as principal or agent, net assets of at least $12,000 must be maintained. However, the Statement of Principles also illustrates the circumstances in which the Authority may stipulate a higher minimum net asset threshold, including the possible application of a market-risk related capital add-on.
The Statement of Principles also defines those assets which the Authority accepts as liquid, and applies a standard requirement for liquid assets to be at least equivalent to the total of three months’ expenditure, other than in the case of licensees who act neither as principal nor agent where only one month’s expenditure must be maintained in the form of liquid assets.
Copies of the Statement of Principles, Guidance for Prospective Applicants, Codes of Conduct can be found in the Document Centre under Policy & Guidance/Investment Business.