[Draft #2] - Securities Issuers Board Governance

[Simone]

Draft 2

[box]The World Assembly,

Acknowledging previous efforts to safeguard international investments and free trade;

Recognising the need for issuers of securities traded by the public through exchanges to maintain minimum levels of corporate governance and disclosure standards, in order to facilitate investments between member states;

Hereby defines:

"Director(s)" to mean members of the board of directors of an issuer and/or such other bodies in charge of overall supervision of an issuer, such as members of supervisory boards and members of management boards (if any), and references to "boards" shall also include such said bodies;

"Exchange(s)" to mean venue(s) for trading securities, duly authorised and operating within the jurisdiction of a member state and governed by a competent authority of the member state;

"Issuer(s)" to mean the issuer(s) of securities, which must be a legal person recognised as duly established by the member state operating the exchange;

"Officer(s)" to mean the chief executive and other senior officers of the issuer, as designated by the board of the issuer, in charge of such key functions of the issuer as it deems;

"Securities" to include all shares, bonds, notes, units, funds, partnership interests, and other similar instruments traded on an exchange and issued by an Issuer;

Hereby requires all member states to designate a competent authority to set regulations on the following matters for issuers whose securities are traded on an exchange within the said member state, with due consideration to the structure of their economies:

1. Minimum levels of participation in the management of the issuerby duly entitled public investors in the securities of the issuer, which shall be binding on the issuer if approved (by a quorum to be specified by the competent authority) cast in any duly held meetings of investors, including all of the following:
   • the qualifications, biographies, appointment, removal, and tenure of directors and their powers;
   • requirements on the appointment of independent director(s) to specifically represent the interests of holders of securities other than those that have a substantial interest in the securities of the issuer;
   • compensation paid to directors and officers of the issuer; and
   • any transactions with actual and/or potential material conflict(s) of interest between the issuer(s) and other investors, and requirements on approvals by duly entitled public investors in the securities independent of such transactions;
   • such other related matters as deemed appropriate;
2. Minimum levels of disclosure on the governance of the issuerincluding all of the following:
   • relations (including business, family, or other material relations), if any, between substantial investors, directors and officers of the issuer;
   • details on transactions in the securities of an issuer by the directors and officers;
   • the separation of duties and responsibilities between different officers;
   • procedures with regards to internal audit, risk management and internal controls;
   • the issuer's policy with regards to diversity among the ranks of directors and officers in accordance with the demographics of the jurisdictions relevant to the issuer;
   • the issuer’s compliance with all legal and regulatory requirements applicable to it; and
   • the investor relations policy and the channels for investors in the securities of the issuer to have meaningful communications with officers of the issuer on various matters affecting the issuer;
   • such other related matters as deemed appropriate;
3. Hereby clarifies, for the avoidance of doubt, that:
   • all disclosures must be made through the customary communications channels of the exchange as well as any customary channels employed by the issuer, all of which must be available to the general public free of charge;
   • a member state, if it considers necessary, may request assistance from another member state in implementing the provisions of this resolution (including verifying the accuracy of any disclosures made by an issuer), and the state receiving such a request may not decline offering such assistance if the requesting state agrees to fully indemnify all reasonable costs associated with such assistance;
   • the said competent authority of the member state is responsible for the implementation and interpretation of this resolution, and for any enforcement activities and penalties that may be imposed.

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