COB 4 COB 4 Additional Rules — Accepting Deposits and Providing Credit
COB 4.1 COB 4.1 Application
The Rules in this chapter apply to an
Authorised Firmwith respect to Accepting Depositsor Providing Creditthrough an establishment maintained by it in the DIFC.Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]
COB 4.2 COB 4.2 Accepting Deposits
Bank, in the course of Accepting Deposits, must not:(a) Accept Depositsfrom the State's markets;(b) Accept Depositsin the U.A.E. Dirham;(c) undertake currency or foreign exchange transactions involving the U.A.E. Dirham; or(d) Accept Depositsfrom Retail Clients.Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]
COB 4.3 COB 4.3 Providing Credit
COB 4.3.1(1) An
Authorised Firmmay, subject to (2), Provide Creditto a:(a) Professional Client or Market Counterparty; and(b) Retail Client, but only where:(i) the Retail Clientis an Undertaking; and(ii) the Credit Facilityis provided to the Retail Clientfor a business purpose.(2) An Authorised Firm, in the course of Providing Credit, must not:(a) Provide Creditin the U.A.E. Dirham; or(b) undertake currency or foreign exchange transactions involving the U.A.E. Dirham.
COB 4.4 COB 4.4 Depositor protection
COB 4.4.1(1) Subject to (2), to the extent that the Rules in this section are inconsistent with the Insolvency Law 2019 and any regulations made for the purposes of that law the Rules in this section will prevail.(2) The following provisions of laws, Rules and Regulations prevail over the Rules in this section:(a) parts A5.13.2 (a), (b), (c) and (d)(ii) of the Client Money Distribution Rules;(b) Article 98 of the Insolvency Law 2019;(c) the DIFC Preferential Creditor Regulations; and(d) Regulations 5.45.4 and 5.52 of the DIFC Insolvency Regulations.
COB 4.4.2(1) In the event of:(a) the appointment of a provisional liquidator, liquidator, receiver or administrator, or trustee in bankruptcy, over a
Bankwhich is a Domestic Firm; or(b) a direction by the DFSAto a Bank which is a Domestic Firmunder Article 76 of the Regulatory Law 2004 to deal with all or substantially all its Depositsin a specified manner,eligible depositors of the Bankhave priority over, and shall be paid in priority to, all other unsecured creditors of the Bank.(2) In (1), an “eligible depositor” means, subject to (3), a Personwho, at the relevant time, is a creditor of a Bankreferred to in (1) by virtue of being owed an amount of Money held by the Bankas a Deposit.(3) In (2), eligible depositor excludes any creditor which is:(i) a Market Counterparty; or(ii) a bank.[Added] DFSA RM144/2014 (Made 24th August 2014). [VER23/08-14]
COB 4.4 Guidance
Article 136 of the DIFC Insolvency Law 2019 gives the
DFSAa power to modify the application of provisions of that law and the Regulations made for the purposes of it in particular cases or classes of case. It permits the DFSAto make Rules which provide for the orderly conduct of affairs or winding up of an Authorised Firmand to prescribe procedures and priorities for dealing with assets of the Authorised Firmor other persons in the event of pending or actual insolvency or other default.