Dealers and brokers in Albania are governed by Law 8080, March 1 1996, On Securities, as amended. Pursuant to this law, a dealer/broker is a joint stock company licensed by the Albanian Securities Commission (ASC) to conduct transactions on securities, either on its own (a dealer) or on behalf of third parties (a broker).
One of the main requirements for granting the dealer/broker licence is that the applicant is a joint stock company registered in Albania, in accordance with Law 7638, November 19 1992, On Companies. This rule does not recognize companies registered outside Albania or subjects operating under a licence from the National Bank of Albania (NBA). So a subject established outside Albania must register as a joint stock company in Albania to apply for an Albanian broker/dealer licence. A licensed bank or non-bank financial institution must apply for a licence from the ASC to conduct transactions on securities.
The NBA and the ASC have contradicting opinions as to the legal form of a bank's branch and subsequently its qualification for a dealer/broker licence pursuant to the Securities Law. According to the NBA, a branch of a bank has the legal form of its parent company and as such is a joint stock company, whereas according to the ASC a branch of a bank is just a representation of its parent company and it is not registered in Albanian Registry of Companies as a joint stock company, as it is the case with the subsidiary of a bank.
The procedure, requirements and criteria for granting a dealer/broker licence are set by ASC's Regulation 3/2, April 18 2005, On the Licensing of Securities Broker/Dealers, Investment Advisers and their Representatives. Pursuant to this regulation, the dealer/broker licence is granted to the applicant upon the submission of the required documentation, which evidences that the applicant fulfils the conditions set by law, and upon payment of a fee. The fee varies between L15,000 ($156) and L30,000, depending on the term of the licence. The dealer/broker licence is granted together with at least one dealer/broker representative licence. This is in accordance with Article 31(1) of the Securities Law, which requires that a dealer/broker should employ during the entire activity period at least one licensed dealer/broker representative.
The licensed dealer/broker must perform its activities in compliance with Chapter 7 of the Securities Law, the Acts implementing the Securities Law, and the dealer/broker licence.
Engaging in improper trading practices, that is, insider dealing, false trading and manipulation of the market, use of deceptive statements as inducements, fraudulent transactions and false or misleading statement in connection with sale of securities, as described in Chapter 8 of the Securities Law, constitutes an offence, which is sanctioned with a fine or imprisonment. Chapter 8 applies to any person that engages in improper trading practices, whether licensed or not pursuant to the Securities Law.
In addition to the above, based on to Article 63 of the Securities Law, any person who violates any provisions of this law, including performing securities transactions without proper licence, is sanctioned by a fine of at least L30,000, up to L5 million. Pursuant to Article 64 of the Securities Law, any licensee, including a securities dealer/broker, that violates the any provisions of this law "commits a disciplinary offence and is liable to disciplinary proceedings by the ASC irrespective of any other action, whether civil or criminal, that may be taken against the licensee in respect of the same conduct".
The securities market in Albania remains undeveloped, so the ASC has issued only a limited number of dealer/broker licences for trading activity, limited to treasury bills and government bonds.
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