IFR 5.1 IFR 5.1 Application
IFR 5.1.1 IFR 5.1.1
This chapter applies to an
Authorised Firmwhich conducts the Financial Serviceof Managing Profit Sharing Investment Accounts(PSIAs).Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
IFR 5.1.1 Guidance1. A
PSIAdoes not constitute a Deposit, because a PSIAis managed in relation to property of any kind, and the risk of loss of capital, to the extent of the Client'scontribution, remains with the Client. Accordingly, an Authorised Firmshould take great care to ensure that a PSIAis not represented as a Deposit, either directly or indirectly. The DFSA may conclude that the Authorised Firmis Accepting a Depositinstead of Managing a PSIAin certain circumstances, for example, where the Authorised Firmattaches to the investment account characteristics or facilities that are generally regarded to be those of a Depositor current account such as providing:a. an explicit or implicit guarantee to the Clientagainst the risk of loss of capital; orb. a cheque book, an ATM card or a debit card.2. The prudential Categoryfor Islamic Financial Institutionsand other Authorised Firms Managing PSIAsis determined in accordance with the Rules in PIB. Prudential Category 5firms are Islamic Financial Institutionswhose entire business is conducted according to Shari'aand are authorised to manage Profit Sharing Investment Accounts. An Authorised Firmwhich manages PSIAs, whether as an Islamic Financial Institutionor through an Islamic Window, must also comply with the requirements in PIB in relation to specific prudential requirements relating to Trading Bookand Non-Trading Bookactivities, including Credit Risk, Market Risk, Liquidity Riskand Group Risk.