Banks OK’d to trade
in financial instruments
CMA to monitor accounts
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The Central Bank (BDL) has reauthorized commercial banks and financial institutions to directly carry out transactions involving financial instruments on behalf of their clients, according to two new BDL circulars.

The new circulars overturn a November 2016 BDL decision that prohibited such transactions unless they were done through specialized banks or brokerage firms. That decision was frozen following an objection by the Association of Banks, said Amine Awad, General Manager of BLOM Bank.

Commercial banks and financial institutions must open specific accounts for transactions pertaining to financial products. The Capital Markets Authority (CMA) is given the prerogative to monitor such accounts.

CMA will have access to operations confined to the financial markets only, according to Awad. He said that in compliance with the banking secrecy law, access to other services provided to customers has remained the exclusive prerogative of BDL’s Banking Control Commission.

Banks must also create specific departments to carry out operations involving structured products and derivatives. These departments must be staffed with skilled professionals with adequate experience in financial markets and security trading.

Commercial banks and financial institutions, which are licensed to establish or operate investment funds, must set up an independent team specifically tasked with managing the fund.
Reported by Shikrallah Nakhoul
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Date Posted: Jun 13, 2018