Activities regularly or professionally carried on behalf of a third party are subject to the provisions set by the present law and listed below:

1 - Portfolio management of securities and term financial instruments;

2 - Forwarding orders on financial markets relating to securities and term financial instruments;

3 - Counseling and assisting in the matters listed under 1

and 2 above;

All activities carried out regularly or professionally, whatever their denomination, having for object or effect the conduct of activities listed in Paragraphs 1 to 3 above are also subject to the conditions stated in the present law.

The following are admitted to conduct the activities listed in Article 1:

1 - Credit Establishments and those Financial Companies members of a Stock Exchange ;

2 - Corporations accepted by the Minister of State as qualified (Hereafter "Qualified Companies").

Section II - Approval of Companies Active 
in Portfolio Management and Related Activities

The acceptance mentioned under 2 of Article 2 above may be issued after a motivated advice of the Control Commission created by Article 16 of the present law to corporations justifying of:

1 - A Certificate of Incorporation with a purpose clause permitting solely all or part of the activities listed in Article 1;

2 - A fully paid-in capital reflected by registered shares. The minimum amount of capital is set in a Sovereign Order;

3 - A satisfactory financial capability which will be notably appreciated in regard to the qualifications of direct or indirect fund suppliers;

4 - The honorable character and professional experience of the managers;

5 - Premises and employees that allow the exercise of the activities referred to in 1.

The companies referred to above must be able to justify, at any moment, of net assets at least equal to the amount of minimum capital required in 2. They may be found to be qualified to exercise all or part of the activities mentioned in Article 1.

The composition and contents of the application submitted for qualification are set by a Sovereign Order.

Modifications subsequent to the application for acceptance referred to in Article 2-2 of one or more of the characteristic elements mentioned in the acceptance file must be notified without delay to the Minister of State. The latter may order the company concerned to apply for a new acceptance or to comply, in the time he will determine, with all the requirements the modifications make necessary.

The Qualified Companies so accepted must exercise their activities to the exclusive benefit of their client by virtue of the authority mentioned in Article 8. They must not use such authority for purposes other than those for which they have been given. Within the limits of such authority the companies must also see to it that the clients are aware of the risks inherent to the nature of the transactions they consider.

The Qualified Companies must enquire about the financial situation of their clients, their experience in matters of investments, their expectations in matters of customer service and they must give, in an appropriate way, all the useful information as they negotiate with their clients.

The Qualified Companies may not receive from their clients authority beyond that pertaining to the activities listed in the acceptance issued under Article 2-2 or Article 4.

It is forbidden for the Qualified Companies to receive fund deposits, securities or precious metals from their clients, and to realize operations between their client accounts and their own account, nor are they allowed to carry out operations among client accounts.

Subject to Articles 5 and 6, the above-mentioned prohibition does not prevent Qualified Companies from receiving authority to deposit or withdraw shares or funds for their clients if they hold a specific and written power of attorney, to be renewed for each operation.

The authority given by clients to the Qualified Companies are subject to written agreements, signed by both sides and according to the rules set by a Sovereign Order.

Every Qualified Company exercising the activities listed in Articles 1-1 and 2 hereof must, according to rules defined in a Sovereign Order, be able to show proof of the moment of both reception and forwarding of every order.

In addition, any Qualified Company given authority to forward orders for execution on stock exchange markets by an agent entitled to negotiate, must be able to justify that every order has been given by the client.

The funds or securities given for management are deposited by the client in one of the financial firms listed in Article 2-1 hereof, which will assure the safekeeping of the securities and the keeping of the accounts, cash and shares, and will keep records of the operations on the various authorized markets.

The financial firm holding the securities is not responsible for the negotiations by the Qualified Company for its client.

The financial firm must not accept deposits nor withdrawals of funds or securities upon order from a Qualified Company, except pursuant to a specific and written power of attorney given by the client and to be renewed for each operation.

The opening of the account is subject to a written agreement, signed by both sides.

Every Qualified Company must communicate to the Minister of State all documents it intends to publish or distribute, related to its activities and meant for clients or public.

Whenever the Minister of State finds any inaccuracy or oversight in the publications contemplated by law and regulations, or in any of the documents listed in the above paragraph, he may, upon advice of the Control Commission, prohibit the publishing of the publications or documents in question or order the appropriate modifications.

All approaches at the residence or domicile of clients, on their job or in public places are prohibited - except at the premises of the Qualified Companies and Financial Firms listed in Article 2-1 and aiming to propose orally or in writing, by telephone or any telemetric or computerized way, the services of a Qualified Company. These approaches may, however, be authorized by the Minister of State upon advice of the Control Commission created by Article 16.

It is also prohibited to advertise the acceptance referred to in Article 2-2, especially as constitutive of finding of management quality.

Within six months after the annual closing of the books, the Qualified Company sends an annual report of its activities to the Minister of State, in compliance with the rules set by a Sovereign Order, and certified true and regular by the auditors mentioned in Article 14. The company's balance sheet is attached to the report of annual activity.

The Qualified Companies must designate, for a period of three financial years, two auditors chosen amongst certified public accountants practicing in Monaco.

Except for the case mentioned in the Article 307 of the Monégasque Penal Code, the auditors' responsibility can not be engaged. They notify the Attorney General of the illegal facts they are aware of. They are required to notify the Minister of State if they find, in the performance of their mission, that the activity of the company is not in conformity with the acceptance it has received by virtue of Article 2-2 or Article 4.

For the accomplishment of their mission, the auditors are compensated by reference to a rate set by a ministerial order taken upon the advice of the Control Commission created by Article 16.

The obligations imposed upon the Qualified Companies by Articles 5,8 and 9-2 also apply to the Financial Firms mentioned in Article 2-1 if they carry on one or more of the activities mentioned in Article 1 hereof.

A Control Commission for portfolio securities management and related stock exchange activities is created to guarantee compliance with the present law. Its composition and operating rules will be set by a Sovereign Order.

In strict compliance with its mission and free from the restrictions of professional privacy except by notaires and other representatives of the law, it may:

1 - Require communication of all documents distributed by the Financial Firms mentioned in Article 15 and by the Qualified Companies, as well as all documents it finds useful and, in particular, all contracts, books of account, vouchers and minute books;

2 - Collect any useful information for the accomplishment of its mission from third parties having performed work or transactions for one of the financial firms listed in Article 15 or for Qualified Companies;

3 - It may call-in and audition the managers or representatives of the Financial Firms listed in Article 15 or of the Qualified Companies, as well as any persons likely to give information on the case it examines. The persons called-in may choose to be assisted by an attorney;

4 - The Control Commission may receive and investigate all claims submitted by any person justifying of an interest, with a view, if appropriate, to the application of Article 18;

It may, by a specific decision, mandate any person it desires to collect information and documents needed for its mission and proceed to the callings and auditions mentioned in the third paragraph of the present article, if appropriate.

Article 17

The members of the Control Commission and the persons it mandates by virtue of Article 16 are bound by the confidence provisions of Article 308 of the Monégasque Penal Code. They are bound by an obligation of confidentiality on every element of information they acquire in the exercise of their authority.

When the Control Commission finds that the law and regulations it seek to enforce are not respected, it informs the Minister of State so that the Financial Firm or the Qualified Company may be ordered to put an end to the irregularities the Control Commission has found as well as to their effects.

If the formal notice is unsuccessful within the time given, the Minister of State may request the President of the Court of First Instance, in a summary proceeding, to order the Financial Firm or the Qualified Company to comply with the formal notice it has received. The President may complete his decision by a per diem fine and take, if necessary, conservatory measures in order to preserve the clients' interests.

The Minister of State may withdraw the qualification of a Qualified Company with no significant activity during a period of twelve months or which does not have the staff or premises required to carry on its statutory activity with no legitimate reason.

This decision is taken after receipt of the detailed recommendation of the Control Commission established by Article 16 which has duly asked the company's representative to present his explanations.

The company not accepted must be dissolved as provided by Articles 5 to 7 of Law 767 of July 8, 1964. Failing compliance, the Minister of State may ask the Court of General Jurisdiction to order the dissolution of the company and designate a liquidator.

Whoever carries or tries to carry on, for himself or for any reason, part or whole of the activities mentioned in Article 1 without having the acceptance required in Articles 2-2, 4 or 30 is subject to a one to five year prison sentence and/or to the fine mentioned in Article 26-2 of the Monaco Penal Code. The fine may be as high as the amount of profit made in the exercise of the illegal activity.

The following persons are subject to both or only one of the penalties established by the preceding article:

1 - The managers of Qualified Companies conducting activities which are not within the purpose of the company as set forth Article 3-1 or which exceed the limits set forth by the acceptance issued under Article 2-2, Articles 4 or 30.

2 - The managers of Qualified Companies who continue to carry the activities listed in Article 1 after their acceptance under Article 2-2 , Article 4 or Article 30 has been completely or partially revoked, or after the Court has ordered the activity to be stopped.

Are subject to one or both of the penalties listed in Article 20:

1 - The managers of Qualified Companies who receive from their clients, without the specific power of attorney mentioned in Article 7, one or more of the fund deposits prohibited in that Article or realize one or more of the prohibited by said Article prohibits;

2 - The managers of Qualified Companies who receive from their clients one or more powers other than those permitted by Article 6;

3 - The managers of Financial Firms subject to Article 15 or of Qualified Companies who do not pursue the exclusive interest of their clients or use their authority to other purposes than those mentioned in Article 5;

4 - The managers of Financial Firms holding securities or funds given to them for management and who accept, without a specific power, one or more of the deposits or withdrawals prohibited by Article 10.

The following are subject to a one to five year prison sentence and/or to the fine mentioned in Article 26-4 of the Monégasque Penal Code:

1 - The managers of Qualified Companies who do not cooperate with the auditors in their verifications or control, who refuse to communicate to the auditors the documents they need to accomplish their mission;

2 - The managers of Financial Firms subject to Article 15 or of Qualified Companies refusing to give the Control Commission or the persons it appoints by virtue of Article 16 the documents needed to accomplish their mission;

3 - The managers of Qualified Companies who do not proceed to the submission required by Article 11, who distribute or cause the distribution of documents by any means, knowing of a decision ordering such documents to be modified or not published;

4 - The managers of Qualified Companies who, in violation of Article 12, take actions or cause the publication of advertising.

The managers of a Qualified Company, who do not arrange for the nomination of the auditors as required in Article 14-1, are subject to a six month to two year prison sentence and/or to the fine mentioned in Article 26-3 of the Monégasque Penal Code;

Are subject to the fine mentioned in Article 26-3 of the Monégasque:

1 - Managers of financial firms or of accepted companies called for audition by the Control Commission or by those it mandates and who don't obey to their calling with no legitimate reason;

2 - Managers of an accepted company who don't transmit to the Minister of State the documents or information mentioned in Articles 4 and 13 in the conditions set by law and regulation;

3 - Any person not mentioned in Article 23-1 who stands in the way of the verifications and supervision led by the auditors or who refuse communication of documents they need to accomplish their mission.

Is subject to a 3 month to 1 year prison sentence and/or to the fine mentioned in Article 26-4 of the Monégasque Penal Code any auditor giving or wittingly confirming an untrue information upon the situation of an accepted company or who doesn't inform the Attorney General of punishable facts he is aware of.

In the legal action based on violations of the law an regulation involving managers of a financial firm or of an accepted company the Court may, at any level of the procedure, receive advice from the Control Commission created by Article 16.

The Court can also decide that the financial firm or approved company is compelled jointly with its managers to pay the fines ordered against them. The Court can also put an end to the activity or order the winding-up of the accepted company.

In case of repetition of an offence within 5 years and without prejudice to the provisions of Article 40 of the Monégasque Penal Code not to the offences listed in Articles 20 to 26, the fine mentioned in these articles will be doubled.

The provisions of the present Section apply to foreign companies accepted by virtue of Article 30 and to their managers.

The opening of an agency or branch by a company whose head office is based abroad and aiming to carry activities mentioned in Article 1 hereof are subject to acceptance by the Minister of State.

In order to obtain this acceptance, the foreign company needs to prove that the activity it intends to pursue is subject, in its head-office country, to a regulation comparable with the regulation in effect in Monaco. It must, further, prove the honorability and professional experience of the managers of the proposed agency or branch, sufficient premises, staff and financial guarantees.

Except for the provisions of Section II, all foreign companies are subject to all other provisions of the present law.

The Minister of State may, under the conditions set by Article 19 hereof, withdraw the acceptance given to a foreign company.

All persons who carry on, at the date of publication of the present law, all or part of the activities listed in Article 1 have six months to submit to the Minister of State the appropriate and necessary application in order to regularize their situation. These persons may continue their activities until the date they receive notification of the rulings on their requests.

All contrary provisions to the present law are and will remain abrogated.

The present law is promulgated and will be given effect as a law of the Principality.

Signed in Our Palace in Monaco, July 9, 1997.

RAINIER III