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The Iraqi Securities Commission (ISC)

Written ByMohammed Nabil
Posted OnJan 20, 2026
The Iraqi Securities Commission (ISC)

The Iraqi Securities Commission (ISC) is the primary regulatory body responsible for supervising and regulating Iraq's securities markets. Established under enabling legislation, its core mandate is to protect investors, ensure market transparency and fairness, and promote integrity and stability in the country's developing capital market.

The ISC's key functions include:

  • Licensing and regulating market intermediaries (e.g., brokerage firms, investment companies, investment managers, custodians).

  • Supervising the activities of licensed entities and listed companies.

  • Enforcing compliance with securities laws and regulations.

  • Developing the legal and regulatory infrastructure for the market.

2. Primary Legal Foundations

The ISC's authority is derived from a hierarchy of laws and regulations. The foundational texts include:

  • Coalition Provisional Authority (CPA) Order No. 74 of 2004 (The Temporary Securities Law): This remains the core legislative act governing securities markets in Iraq, establishing the ISC and outlining its broad powers.

  • Companies Law No. 21 of 1997: Governs the establishment and operation of joint-stock companies, which are the primary legal form for many ISC-regulated entities.

  • Central Bank of Iraq Law (CPA Order No. 56 of 2004): Relevant for investment companies and activities at the intersection of banking and securities.

  • Anti-Money Laundering and Counter-Terrorism Financing Law (CPA Order No. 93 of 2004): Imposes critical compliance obligations on all financial institutions, including those licensed by the ISC.

3. Analysis of Key Regulatory Regimes

Based on the provided documents, the ISC oversees several distinct but interconnected regulatory regimes:

A. Investment Companies (Non-Banking Financial Institutions)

Governed primarily by CBI Regulation No. 6 of 2011 on Financial Investment Companies.

  • Licensing Authority: The Central Bank of Iraq (CBI) grants the primary license to practice financial investment activities.

  • ISC Nexus: While licensed by the CBI, these companies operate within the securities market and are subject to ISC oversight for specific activities, such as brokerage services (as per Article 7 of Reg. No. 6).

  • Key Requirements:

B. Brokerage Firms & Financial Intermediaries

Governed by a combination of ISC regulations, including:

  • ISC Regulatory Directive No. 20 of 2023: Focuses on licensing brokerage firms to operate within the Iraq Stock Exchange (ISX).

  • ISC Regulatory Directive No. 35 of 2025: Provides a broader, more detailed framework for licensing various financial intermediary activities in both securities and foreign commodities markets.

4. Core Regulatory Principles & Trends

Analysis of the regulations reveals several strengthening principles:

  1. Risk-Based Capitalization: Moving from generic minima to activity-specific, risk-weighted capital requirements (Evident in Reg. No. 35).

  2. Strict Segregation of Assets: A clear mandate to separate client funds from company operational funds to protect investors.

  3. Enhanced Market Integrity Rules: Explicit bans on manipulative or high-risk practices like stock lending for short selling, CFD/Forex trading, and providing leverage.

  4. Comprehensive AML/CFT Integration: AML/CFT compliance is a non-negotiable precondition for licensing and ongoing operations.

  5. Professionalization of the Sector: Requirements for qualified staff, certified AML officers, approved internal systems (e.g., back office, trading software), and continuous training.

  6. Transparency and Disclosure: Obligations for periodic reporting, disclosure of material information, and publication of licensed/blacklisted entities.

5. Conclusion

The Iraqi securities regulatory landscape, spearheaded by the ISC, is evolving from a foundational post-conflict framework into a more sophisticated, activity-specific, and risk-focused regime. The introduction of Directive No. 35 of 2025 marks a significant step in this direction, expanding the ISC's scope to include commodities and explicitly defining permitted and prohibited activities.

For legal practitioners and market participants, navigating this environment requires a careful understanding of:

  • The distinct licensing paths for CBI-regulated investment companies versus ISC-regulated intermediaries.

  • The specific and increasingly stringent capital and operational requirements for each type of license.

  • The critical importance of AML/CFT and client asset protection in all compliance programs.

  • The structured but demanding process for foreign firms seeking market access.

The ISC, through these regulations, is systematically building a more resilient and transparent capital market infrastructure in Iraq.