Anyone can apply for admission as a Member of the Exchange, provided that he;
- is 18 years or older;
- if a partnership or body corporate, must be duly incorporated under the Laws of Malawi;
- complies with the capital adequacy requirements that may be prescribed by the Exchange, from time to time;
- complies with the registration and other provisions as may be prescribed by the Exchange from time to time;
- is not be an employee of the Exchange;
- is not be a Board member of the Exchange; and
- pays such fee, charges, deposits and other monies indicated by the Exchange
An applicant can apply for any category of membership of the Exchange as long as he fulfils the membership criteria above and the requirements that are specific to the category being applied for.
Rights and privileges of members
- Members are entitled to exercise all rights and privileges that are attached to their membership for dealing on the Exchange.
- A Member of the Exchange can however not assign, mortgage, pledge or charge his right of membership or any rights or privileges attached to the membership, or transfer his obligations as a member. A member can be expelled from the Exchange for attempting to do this.
- Membership rights are transferable as indicated below in section 1.5. A member has to seek prior approval of the exchange before transferring his rights to another person.
Transferability of membership
- There is a membership lock-in period of three years, after which membership can be transferable to any eligible person, with approval of the Exchange. Members wishing to form a Merger will be exempted from the requirement of the lock-in period.
- Membership can be surrendered either by resignation from the Membership of the Exchange or transfer of the membership by nomination. A member can nominate anyone to take up his membership as long as the nominee meets the requirements of the Exchange stated above on admission criteria.
Register of members
The Exchange will keep a register and index of all its members, including other information appropriate for this purpose. A member should inform and seek permission of the Exchange prior to carrying out changes to information provided by him. The Exchange will indicate the changes in respect of which the Member of the Exchange should take prior approval from the Exchange.
- Members may be required to pay an initial security deposit at the time of registration, as may be prescribed by the Exchange and this minimum capital will be maintained with the Exchange, by the member at all times.
- The Exchange may decide to divide the security deposit into refundable and non-refundable security deposits and allow trading and exposure limit only on such part of the security deposit.
- A member wishing to get higher limits to trade and settlement can be entitled by the Exchange to provide additional deposits in order to do so.
Partnerships as members of the Exchange
A partnership firm may be admitted into membership of the Exchange. Below are some of the conditions that have to be met;
- The firm must be duly registered in accordance with the Laws of Malawi;
- The deed of partnership must be approved by the Exchange;
- The deed of partnership must contain a provision to the effect that the business of the firm shall at all times be carried out so as to comply with these Rules and the Regulations applicable to the Exchange from time to time;
- The partners of the firm must be acceptable to the Exchange;
- The deed of partnership must prohibit individual partners of the firm from carrying on business of commodities trading or clearing in their individual capacity or as partners in other firms.
Partnerships by or between members of the exchange
A partnership can be formed by;
- existing members of the Exchange merging to form a partnership, or;
- An existing member admitting a new person who is not a member of the Exchange, into partnership.
- On partnering, membership will be transferred to the Partnership firm on admission of such firm as a Member of the Exchange. To this effect, one member will give up his membership where the partnership is being done by existing members. All regulatory compliances thereafter will be in the name of the firm. Partnerships will be subject to the requirements of the Exchange.
- A copy of the draft deed of partnership will be submitted together with the application for partnership. The Exchange will then record the partnership when it is satisfied and a signed copy of the deed of partnership will be delivered to the Exchange for records.
- A dissolved partnership firm will cease to be a Member of the Exchange and the original Members of the Exchange holding membership in their individual capacity, and who was a partner or were partners may resume business in their own individual names, however subject to payment of the admission fee or deposit, if any, that will be payable by him in accordance with the Rules.
A company or body corporate can only be admitted to membership of the exchange where;
- it is incorporated under the Laws of Malawi; and
- The objects for which the company is established allow the company to carry on business in commodities or to clear and settle transactions or contracts in commodities.
- A director of a company that is a Member of the Exchange cannot carry on business in commodities trading and clearing, either, as a proprietor, partner of a firm or director of any other company which is a Member of the Exchange, except with the previous approval of the Exchange.
- Any change to shareholding structure of a company has to be acceptable by the Exchange.
- A member can inform the Exchange if he wishes to carry on business under a particular business, firm or trade name which he has registered. However, if the name appears to be misleading the Exchange may not grant permission to the member to use it.
- Once approved, the particulars under the business name will be entered in the register of business names, which will be open for inspection by other members of the Exchange.
- A Member of the Exchange will be fully responsible for the acts and omissions of his partnership firm and of his partners, attorneys, Authorized Representatives, and employees. A member of the Exchange will be liable to a penalty as if the act or omission had been done or omitted to be done by him personally.
Power of attorney
A member of the Exchange can give a power of attorney to any person to carry on or supervise his business in the Exchange, so long as the appointed person is at least eighteen years old, and is in all other respects eligible for election as a member of the Exchange. The appointment must first be approved by the Exchange.
Termination of Membership
Termination of membership of the Exchange can be by:
- transfer or nomination;
- being declared as a defaulter in accordance with the Rules;
- expulsion in accordance with the Rules; or
NominationA member can nominate a person to take up his membership, subject to the approval of the Exchange. The Exchange will not approve a nomination unless the nominating Member of the Exchange, and in the case of a deceased member, his legal heir or legal representative or the person in whose favour the nomination has been made, has paid and satisfied in full dues of the Exchange and any outstanding liabilities arising from any contract.
DeathIn case a member of the Exchange dies, his legal representatives or the authorised representatives or approved users, if any, will not continue to carry on any business in the name of membership of the deceased except for the purposes of winding up of the outstanding business of the deceased. The heirs or legal representatives of the deceased member may request the Exchange to transmit the membership of the deceased to his heir who is eligible for the membership of the Exchange. In this case, no admission fee will be charged from the person in whose name the membership is transmitted under the Rule.
DefaultA member of the Exchange can be declared as a defaulter by the Exchange, where the monies, commodities, securities and bank guarantees deposited with the Exchange are not adequate to discharge the memberâ€™s obligations and liabilities. Below are some of the instances that can render a member a defaulter;
- If he is unable to fulfil his engagements or obligations;
- If there is inadequate balance in his designated bank account and as a result an instruction issued by the Exchange for debiting his account towards recovery of any dues fails;
- If he admits or discloses his inability to fulfil or discharge his engagements, obligations or liabilities;
- If he fails to pay any sum due to the Clearing House or to deliver to the Clearing House any commodity on the due date;
- If he fails to pay or deliver money or commodities arising out of a transaction executed on the Exchange, provided that the obligation is not disputed by the trading member;
- If he fails or neglects to pay subscription, security deposit or any other levies as required by the Exchange for a continuous period of one (1) month.
Declaration of defaulter will have the following consequences:
- Cessation of membership
- Lapse of right of membership
- Prohibition to re-admission
ExpulsionIn expelled member will forfeit to the Exchange his rights of membership of the Exchange and all his rights and privileges as a member, but any liability of the member to the Exchange will continue and remain unaffected by his expulsion. The expulsion will further create a vacancy in any office or position held by the expelled member of the Exchange.