Entire Section
GEN 11 GEN 11 Supervision
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]Introduction
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]Guidance
1. This chapter outlinesDFSA's supervisory requirements for anAuthorised Person .2. This chapter should be read in conjunction with the RPP Sourcebook which sets outDFSA's general regulatory policy and processes.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.1 GEN 11.1 Information gathering and DFSA access to information
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.1.1
This section applies to an
Authorised Person other than aRepresentative Office with respect to the carrying on of all of its activities.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.1.2
An
Authorised Person must where reasonable:(a) give or procure the giving of specified information, documents, files, tapes, computer data or other material in theAuthorised Person's possession or control to theDFSA ;(b) make itsEmployees readily available for meetings with theDFSA ;(c) give theDFSA access to any information, documents, records, files, tapes, computer data or systems, which are within theAuthorised Person's possession or control and provide any facilities to theDFSA ;(d) permit theDFSA to copy documents or other material on the premises of theAuthorised Person at theAuthorised Person's expense;(e) provide any copies as requested by theDFSA ; and(f) answer truthfully, fully and promptly, all questions which are put to it by theDFSA .Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.1.3
An
Authorised Person must take reasonable steps to ensure that itsEmployees act in the manner set out in this chapter.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.1.4
An
Authorised Person must take reasonable steps to ascertain if there is any secrecy or data protection legislation that would restrict access by theAuthorised Person or theDFSA to any data required to be recorded under theDFSA's Rules . Where such legislation exists, theAuthorised Person must keep copies of relevant documents or material in a jurisdiction which does allow access in accordance with legislation applicable in theDIFC .Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]Lead regulation
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.1.5
(1) If requested by theDFSA , anAuthorised Person must provide theDFSA with information that theAuthorised Person or its auditor has provided to aFinancial Services Regulator .(2) If requested by theDFSA , anAuthorised Person must take reasonable steps to provide theDFSA with information that other members of theAuthorised Person's Group have provided to aFinancial Services Regulator .Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.2 GEN 11.2 Waivers
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.2.1
This section applies to every
Authorised Person .Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.2.2
Throughout the
Rulebook reference to the written notice under Article 25 will be referred to as a 'waiver'.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.2.3 GEN 11.2.3
If an
Authorised Person wishes to apply for a waiver, it must apply in writing to theDFSA using the appropriate form inAFN .Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM176/2016 (Made 19th June 2016) [VER37/08-16]GEN 11.2.3 Guidance
Waiver application forms are contained in AFN and the RPP Sourcebook sets out the
DFSA's approach to considering a waiver.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.2.4
The application must contain:
(a) the name andLicence number of theAuthorised Person ;(b) theRule to which the application relates;(c) a clear explanation of the waiver that is being applied for and the reason why theAuthorised Person is requesting the waiver;(d) details of any other requirements; for example, if there is a specific period for which the waiver is required;(e) the reason, if any, why the waiver should not be published or why it should be published without disclosing the identity of theAuthorised Person ; and(f) all relevant facts to support the application.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.2.5
An
Authorised Person must immediately notify theDFSA if it becomes aware of any material change in circumstances which may affect the application for a waiver.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]Continuing relevance of waivers
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.2.6
An
Authorised Person must immediately notify theDFSA if it becomes aware of any material change in circumstances which could affect the continuing relevance of a waiver.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.3 GEN 11.3 Application to change the scope of a Licence
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.3.1
This section applies to an
Authorised Firm applying to change the scope of itsLicence or, where a condition or restriction has previously been imposed, to have the condition or restriction varied or withdrawn.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.3.2
The provisions relating to permitted legal forms, fitness and propriety, adequate resources, compliance arrangements, enquiries and the provision of additional information set out in section 7.2 also apply to an
Authorised Firm making an application under this chapter, and are to be construed accordingly.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.3.3
An
Authorised Firm applying to change the scope of itsLicence , or to have a condition or restriction varied or withdrawn, must provide theDFSA , with written details of the proposed changes.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.4 GEN 11.4 Withdrawal of a Licence at an Authorised Firm's request
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.4.1 GEN 11.4.1
An
Authorised Firm other than aRepresentative Office seeking to have itsLicence withdrawn must submit a request in writing stating:(a) the reasons for the request;(b) that it has ceased or will cease to carry onFinancial Services in or from theDIFC ;(c) the date on which it ceased or will cease to carry onFinancial Services in or from theDIFC ;(d) that it has discharged, or will discharge, all obligations owed to its customers in respect of whom theAuthorised Firm has carried on, or will cease to carry on,Financial Services in or from theDIFC ; and(e) if it is providing Trust Services, that it has made appropriate arrangements for the transfer of business to a newTrust Service Provider and the appointment, where necessary, of new trustees.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM155/2015 (Made 9th December 2015) [VER35/02-16]GEN 11.4.1 Guidance
When considering a withdrawal of a
Licence , theDFSA takes into account a number of matters including those outlined in the RPP Sourcebook.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.5 GEN 11.5 Changes to an authorised individual status
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.5 Guidance
This section addresses applications or requests regarding
Authorised Individuals with respect to Article 53(3), 56(3), 58(2) and 58(3).Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]GEN 11.5.1
An application to extend the scope of an
Authorised Individual status to otherLicensed Functions may be made by theAuthorised Individual andAuthorised Firm by the completion and submission of the appropriate form in AFN.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.5.2
An
Authorised Firm orAuthorised Individual requesting:(a) the imposition, variation or withdrawal of a condition or restriction;(b) withdrawal ofAuthorised Individual status; or(c) withdrawal of authorisation in relation to one or moreLicensed Functions ;must, subject to Rule 11.5.3, for (a) submit such request in writing to theDFSA , and for (b) and (c) submit a request by completing the appropriate form in AFN.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.5.3 GEN 11.5.3
A request for the variation or withdrawal of a condition or restriction may only be made after the expiry of any period within which a reference to the
FMT relating to the relevant condition or restriction may commence under Article 29.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]GEN 11.5.3 Guidance
In considering the suitability of such an application or request the
DFSA may take into account any matter referred to in RPP with respect to fitness and propriety forAuthorised Individuals .[Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]GEN 11.6 GEN 11.6 Temporary cover
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.6.1
(1) AnAuthorised Firm may, subject to (2), appoint an individual, who is not anAuthorised Individual , to carry out the functions of anAuthorised Individual where the following conditions are met:(a) the absence of theAuthorised Individual is temporary or reasonably unforeseen;(b) the functions are carried out for 12 weeks maximum in any consecutive 12 months; and(c) theAuthorised Firm has assessed that the individual has the relevant skills and experience to carry out these functions.(2) AnAuthorised Firm may not appoint under (1) an individual to carry out theLicensed Functions of aLicensed Director orLicensed Partner .(3) TheAuthorised Firm must take reasonable steps to ensure that the individual complies with all theRules applicable toAuthorised Individuals .(4) Where an individual is appointed under thisRule , theAuthorised Firm must notify theDFSA in writing of the name and contact details of the individual appointed.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.6.2
Where an individual is appointed under this section, the
DFSA may exercise any powers it would otherwise be entitled to exercise as if the individual heldAuthorised Individual status.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.7 GEN 11.7 Dismissal or resignation of an Authorised Individual
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.7.1
An
Authorised Firm must request the withdrawal of anAuthorised Individual status within seven days of theAuthorised Individual ceasing to be employed by theAuthorised Firm to perform aLicensed Function .GEN 11.7.2
In requesting the withdrawal of an
Authorised Individual status, theAuthorised Firm must submit the appropriate form in AFN, including details of any circumstances where theAuthorised Firm may consider that the individual is no longer fit and proper.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.7.3
If an
Authorised Individual is dismissed or requested to resign, a statement of the reason, or reasons, for the dismissal or resignation must be given to theDFSA by theAuthorised Firm .GEN 11.7.4
If the
Authorised Individual was acting as a trustee, theTrust Service Provider must confirm to theDFSA in writing that a new trustee has been appointed in place of the trustee in question.GEN 11.8 GEN 11.8 Changes relating to control
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.8.1 GEN 11.8.1
(1) This section applies, subject to (2) and (3), to:(a) anAuthorised Firm ; or(2) This chapter does not apply to aRepresentative Office or aPerson who is aController of such a firm.(3) ACredit Rating Agency must comply with the requirements in this section as if it were a non-DIFC established company.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM96/2012 (Made 24th July 2012) [VER30/07-12]
[Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]GEN 11.8.1 Guidance
The requirements in respect of notification of changes relating to control of
Branches (i.e. Non-DIFC established companies) are set out in GEN Rule 11.8.10. Although someCredit Rating Agencies may be companies established in the DIFC, such companies will only be subject to the notification requirements relating to theirControllers . Accordingly, regardless of whether aCredit Rating Agency is a company established in the DIFC or aBranch operation, it is subject to the notification requirements only and not to the requirement for prior approval by the DFSA of changes relating to itsControllers .[Added] DFSA RM96/2012 (Made 24th July 2012) [VER30/07-12]Definition of a Controller
GEN 11.8.2 GEN 11.8.2
(1) AController is aPerson who, either alone or with anyAssociate :(a) holds 10% or more of the shares in either theAuthorised Firm or aHolding Company of that firm;(b) is entitled to exercise, or controls the exercise of, 10% or more of the voting rights in either theAuthorised Firm or aHolding Company of that firm; or(c) is able to exercise significant influence over the management of theAuthorised Firm as a result of holding shares or being able to exercise voting rights in the Authorised Firm or aHolding Company of that firm or having a current exercisable right to acquire such shares or voting rights.(2) A reference in this chapter to the term:(a) "share" means:(i) in the case of anAuthorised Firm , or aHolding Company of anAuthorised Firm , which has a share capital, its allotted shares;(ii) in the case of anAuthorised Firm , or aHolding Company of anAuthorised Firm , with capital but no share capital, rights to a share in its capital; and(iii) in the case of anAuthorised Firm , or aHolding Company of anAuthorised Firm , without capital, any interest conferring a right to share in its profits or losses or any obligation to contribute to a share of its debt or expenses in the event of its winding up; and(b) "a holding" means, in respect of aPerson , shares, voting rights or a right to acquire shares or voting rights in anAuthorised Firm or aHolding Company of that firm held by thatPerson either alone or with any Associate .Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]GEN 11.8.2 Guidance
1. For the purposes of these Rules, the relevant definition of aHolding Company is found in the DIFC Companies Law. That definition describes when one body corporate is considered to be a holding company or a subsidiary of another body corporate and extends that concept to the ultimate holding company of the body corporate.2. Pursuant to Rule 11.8.2(1)(c), aPerson becomes aController if that Person can exert significant management influence over anAuthorised Firm . The ability to exert significant management influence can arise even where aPerson , alone or with hisAssociates , controls less than 10% of the shares or voting rights of theAuthorised Firm or aHolding Company of that firm. Similarly, aPerson may be able to exert significant management influence where suchPerson does not hold shares or voting rights but has current exercisable rights to acquire shares or voting rights, such as underOptions .Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]Disregarded holdings
GEN 11.8.3
For the purposes of determining whether a
Person is aController , any shares, voting rights or rights to acquire shares or voting rights that a Person holds, either alone or with anyAssociate , in anAuthorised Firm or aHolding Company of that firm are disregarded if:(a) they are shares held for the sole purpose of clearing and settling within a short settlement cycle;(b) they are shares held in a custodial or nominee capacity and the voting rights attached to the shares are exercised only in accordance with written instructions given to that Person by another Person; or(c) thePerson is anAuthorised Firm or aRegulated Financial Institution and it:(i) acquires the shares as a result of an underwriting of a share issue or a placement of shares on a firm commitment basis;(ii) does not exercise the voting rights attaching to the shares or otherwise intervene in the management of the issuer; and(iii) retains the shares for a period less than one year.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]Requirement for prior approval of Controllers of Domestic Firms
GEN 11.8.4 GEN 11.8.4
(1) In the case of anAuthorised Firm which is aDomestic Firm , aPerson must not:(a) become aController ; or(b) increase the level of control which thatPerson has in the firm beyond a threshold specified in (2),unless thatPerson has obtained the prior written approval of the DFSA to do so.(2) For the purposes of (1)(b), the thresholds at which the prior written approval of the DFSA is required are when the relevant holding is increased:(a) from below 30% to 30% or more; or(b) from below 50% to 50% or more.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]GEN 11.8.4 Guidance
See Rules 11.8.2 and 11.8.3 for the circumstances in which a
Person becomes aController of anAuthorised Person .[Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]Approval process
GEN 11.8.5 GEN 11.8.5
(1) APerson who is required to obtain the prior written approval of the DFSA pursuant to Rule 11.8.4(1) must make an application to the DFSA using the appropriate form in AFN.(2) Where the DFSA receives an application under (1), it may:(a) approve the proposed acquisition or increase in the level of control;(b) approve the proposed acquisition or increase in the level of control subject to such conditions as it considers appropriate; or(c) object to the proposed acquisition or increase in the level of control.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]GEN 11.8.5 Guidance
1. APerson intending to acquire or increase control in anAuthorised Firm should submit an application for approval in the appropriate form in AFN sufficiently in advance of the proposed acquisition to be able to obtain the DFSA approval in time for the proposed acquisition. Sections 3-2-34 – 3-2-37 of the RPP Sourcebook set out the matters which the DFSA will take into consideration when exercising its powers under Rule 11.8.5 to approve, object to or impose conditions of approval relating to a proposedController or a proposed increase in the level of control of an existingController .2. The DFSA will exercise its powers relating to Controllers in a manner proportionate to the nature, scale and complexity of an Authorised Firm's business, and the impact a proposed change in control would have on that firm and itsClients . For example, the DFSA would generally be less likely to impose conditions requiring a proposed acquirer of control of an Authorised Firm whose financial failure would have a limited systemic impact or impact on itsClients to provide prudential support to the firm by contributing more capital. Most advisory and arranging firms will fall into this class.[Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]GEN 11.8.6 GEN 11.8.6
(1) Where the DFSA proposes to approve a proposed acquisition or an increase in the level of control in anAuthorised Firm pursuant to Rule 11.8.5(2)(a), it must:(a) do so as soon as practicable and in any event within 90 days of the receipt of a duly completed application, unless a different period is considered appropriate by the DFSA and notified to the applicant in writing; and(b) issue to the applicant, and where appropriate to theAuthorised Firm , an approval notice as soon as practicable after making that decision.(2) An approval, including a conditional approval granted by the DFSA pursuant to Rule 11.8.5(2)(a) or (b), is valid for a period of one year from the date of the approval, unless an extension is granted by the DFSA in writing.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]GEN 11.8.6 Guidance
1. If the application for approval lodged with the DFSA does not contain all the required information, then the 90 day period runs from the date on which all the relevant information has been provided to the DFSA.2. If aPerson who has obtained the prior DFSA approval for an acquisition or an increase in the control of anAuthorised Firm is unable to effect the acquisition before the end of the period referred to in Rule 11.8.6(2), it will need to obtain fresh approval from the DFSA.[Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]Objection or conditional approval process
GEN 11.8.7 GEN 11.8.7
(1) Where theDFSA proposes to exercise its objection or conditional approval power pursuant to Rule 11.8.5(2)(b) or (c) in respect of a proposed acquisition of, or an increase in the level of control in, anAuthorised Firm , it must, as soon as practicable and in any event within 90 days of the receipt of the duly completed application form, provide to the applicant:(a) a written notice stating:(i) theDFSA's reasons for objecting to thatPerson as aController or to thePerson's proposed increase in control; and(ii) any proposed conditions subject to which thatPerson may be approved by theDFSA ; and(b) an opportunity to make representations within 14 days of the receipt of such notice or such other longer period as agreed to by theDFSA .(2) TheDFSA must, as soon as practicable after receiving representations or, if no representations are received, after the expiry of the period for making representations referred to in (1)(b), issue a final notice stating that:(a) the proposed objections and any conditions are withdrawn and thePerson is an approvedController ;(b) thePerson is approved as aController subject to conditions specified in the notice; or(c) thePerson is not approved and therefore is an unacceptableController with respect to thatPerson becoming aController of, or increasing the level of control in, theAuthorised Firm .(3) If theDFSA decides to exercise its power under this Rule not to approve aPerson as aController or to impose conditions on an approval, thePerson may refer the matter to theFMT for review.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]
[Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]GEN 11.8.7 Guidance [Deleted]
[Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]GEN 11.8.8 GEN 11.8.8
(1) APerson who has been approved by the DFSA as aController of anAuthorised Firm subject to any conditions must comply with the relevant conditions of approval.(2) APerson who has been notified by the DFSA pursuant to Rule 11.8.7(2)(c) as an unacceptableController must not proceed with the proposed acquisition of control of theAuthorised Firm .[Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]GEN 11.8.8 Guidance
A
Person who acquires control of or increases the level of control in anAuthorised Firm without the prior DFSA approval or breaches a condition of approval is in breach of the Rules. See Rule 11.8.13 for the actions that the DFSA may take in such circumstances.[Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]Notification for decrease in the level of control of Domestic Firms
GEN 11.8.9
A
Controller of anAuthorised Firm which is aDomestic Firm must submit, using the appropriate form in AFN, a written notification to the DFSA where that Person:(a) proposes to cease being aController ; or(b) proposes to decrease that Person's holding from more than 50% to 50% or less.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]Requirement for notification of changes relating to control of Branches
GEN 11.8.10 GEN 11.8.10
(1) In the case of anAuthorised Firm which is aBranch , a written notification to the DFSA must be submitted by aController or aPerson proposing to become aController of thatAuthorised Firm in accordance with (3) in respect of any one of the events specified in (2).(2) For the purposes of (1), a notification to the DFSA is required when:(a) aPerson becomes aController ;(b) an existingController proposes to cease being a Controller; or(c) an existing Controller's holding is:(i) increased from below 30% to 30% or more;(ii) increased from below 50% to 50% or more; or(iii) decreased from more than 50% to 50% or less.(3) The notification required under (1) must be made by aController orPerson proposing to become aController of a Branch using the appropriate form in AFN as soon as possible, and in any event, before making the relevant acquisition or disposal.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12][Deleted]
[Deleted] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]Obligations of Authorised Firms relating to its Controllers
GEN 11.8.11 GEN 11.8.11
(1) AnAuthorised Firm must have adequate systems and controls to monitor:(a) any change or proposed change of its Controllers; and(b) any significant changes in the conduct or circumstances of existing Controllers which might reasonably be considered to impact on the fitness and propriety of theAuthorised Firm or its ability to conduct business soundly and prudently.(2) AnAuthorised Firm must, subject to (3), notify the DFSA in writing of any event specified in (1) as soon as possible after becoming aware of that event.(3) AnAuthorised Firm need not comply with the requirement in (2) if it is satisfied on reasonable grounds that a proposed or existingController has either al obtained the prior approval of the DFSA or notified the event to the DFSA as applicable.[Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]GEN 11.8.11 Guidance
Steps which an
Authorised Firm may take in order to monitor changes relating to Controllers include the monitoring of any relevant regulatory disclosures, press reports, public announcements, share registers and entitlements to vote, or the control of voting rights, at general meetings.[Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]GEN 11.8.12 GEN 11.8.12
(1) AnAuthorised Firm must submit to the DFSA an annual report on its Controllers within four months of its financial year end.(2) The Authorised Firm's annual report on its Controllers must include:(a) the name of eachController ; and(b) the current holding of each Controller, expressed as a percentage.[Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]GEN 11.8.12 Guidance
1. AnAuthorised Firm may satisfy the requirements of Rule 11.8.12 by submitting a corporate structure diagram containing the relevant information.2. AnAuthorised Firm must take account of the holdings which theController , either alone or with anyAssociate , has in theAuthorised Firm or anyHolding Company of the firm (see the definition of aController in Rule 11.8.2).[Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]Other Powers relating to Controllers
GEN 11.8.13 GEN 11.8.13
(1) Without limiting the generality of its other powers, theDFSA may, subject only to (2), object to aPerson as aController of anAuthorised Firm where such aPerson :(a) has acquired or increased the level of control thatPerson has in anAuthorised Firm without the prior written approval of theDFSA as required under Rule 11.8.4;(b) has breached the requirement in Rule 11.8.8 to comply with the conditions of approval applicable to thatPerson ; or(c) is no longer acceptable to theDFSA as aController .(2) Where theDFSA proposes to object to aPerson as aController of anAuthorised Firm under (1), theDFSA must provide such aPerson with:(a) a written notice stating:(i) theDFSA's reasons for objecting to thatPerson as aController ; and(ii) any proposed conditions subject to which thatPerson may be approved by theDFSA ; and(b) an opportunity to make representations within 14 days of the receipt of such objections notice or such other longer period as agreed to by theDFSA .(3) TheDFSA must, as soon as practicable after receiving representations, or if no representations are made, after the expiry of the period for making representations referred to in (2)(b), issue a final notice stating that:(a) the proposed objections and any conditions are withdrawn and thePerson is an approvedController ;(b) thePerson is approved as aController subject to conditions specified in the notice; or(c) the Person is an unacceptableController and accordingly, must dispose of that Person's holdings.(4) Where theDFSA has issued a final notice imposing any conditions subject to which aPerson is approved as aController , thatPerson must comply with those conditions. (5) Where theDFSA has issued a final notice declaring aPerson to be an unacceptableController , thatPerson must dispose of the relevant holdings within such period as specified in the final notice.(6) TheDFSA must also notify theAuthorised Firm of any decision it has made pursuant to (3).(7) If theDFSA decides to exercise its power under this Rule to object to aPerson as aController , to impose conditions on an approval or to require aPerson to dispose of their holdings, thePerson may refer the matter to theFMT for review.[Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]
[Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]GEN 11.8.13 Guidance
Sections 3.2.34 and 3.2.37 of the RPP Sourcebook set out the matters which the DFSA takes into consideration when exercising its powers under Rule 11.8.13.
[Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]
[Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14][deleted] [deleted]
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Deleted] DFSA RMI247/2019 (Made 18th December 2019). [VER45/12-19][Deleted] [Deleted]
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Deleted] DFSA RMI247/2019 (Made 18th December 2019). [VER45/12-19][Deleted]
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Deleted] DFSA RMI247/2019 (Made 18th December 2019). [VER45/12-19][Deleted]
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Deleted] DFSA RMI247/2019 (Made 18th December 2019). [VER45/12-19][Deleted]
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Deleted] DFSA RMI247/2019 (Made 18th December 2019). [VER45/12-19][Deleted]
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]
[Deleted] DFSA RMI247/2019 (Made 18th December 2019). [VER45/12-19][Deleted]
[Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]GEN 11.9.5 [Deleted]
[Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14][Deleted]
[Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]GEN 11.9.6 [Deleted]
[Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]GEN 11.9.7 [Deleted]
[Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]GEN 11.10 GEN 11.10 Notifications
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.1 GEN 11.10.1
(1) This section applies to everyAuthorised Person , unless otherwise provided, with respect to the carrying on ofFinancial Services and any other activities whether or not financial.(2) This section does not apply to aRepresentative Office .Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.1 Guidance
1. This chapter sets outRules on specific events, changes or circumstances that require notification to theDFSA and outlines the process and requirements for notifications.2. The list of notifications outlined in this chapter is not exhaustive. Other areas of theRulebook may also detail additional notification requirements.3. AnAuthorised Person and its auditor are also required under Article 67 to disclose to theDFSA any matter which may indicate a breach or likely breach of, or a failure or likely failure to comply with, laws orRules . AnAuthorised Person is also required to establish and implement systems and procedures to enable its compliance and compliance by its auditor with notification requirements.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]Core information
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.2
An
Authorised Person must provide theDFSA with reasonable advance notice of a change in:(a) theAuthorised Person's name;(b) any business or trading name under which theAuthorised Person carries on aFinancial Service in or from theDIFC ;(c) the address of theAuthorised Person's principal place of business in theDIFC ;(d) in the case of aBranch , its registered office or head office address;(e) its legal structure; or(f) anAuthorised Individual's name or any material matters relating to his fitness and propriety.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.3
A
Domestic Firm must provide theDFSA with reasonable advance notice of the establishment or closure of a branch office anywhere in the world from which it carries on financial services.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.4
When giving notice under Rule 11.10.3 in relation to the establishment of a branch, a
Domestic Firm must at the same time submit to theDFSA a detailed business plan in relation to the activities of the proposed branch.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.5
(1) TheDFSA may object to the establishment by aDomestic Firm of a branch office elsewhere in the world.(2) If theDFSA objects to the firm establishing a branch anywhere in the world the firm may not proceed with establishment of such a branch.(3) The procedures in Schedule 3 to theRegulatory Law apply to a decision of theDFSA under (1).(4) If theDFSA decides to exercise its power under (1), theDomestic Firm may refer the matter to theFMT for review.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]GEN 11.10.6 [Deleted]
[Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]Regulatory impact
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.7
An
Authorised Person must advise theDFSA immediately if it becomes aware, or has reasonable grounds to believe, that any of the following matters may have occurred or may be about to occur:(a) theAuthorised Person's failure to satisfy the fit and proper requirements;(b) any matter which could have a significant adverse effect on theAuthorised Person's reputation;(c) any matter in relation to theAuthorised Person which could result in serious adverse financial consequences to the financial system or to other firms;(d) a significant breach of aRule by theAuthorised Person or any of its Employees;(e) a breach by theAuthorised Person or any of itsEmployees of any requirement imposed by any applicable law in respect of theAuthorised Person or any of itsEmployees ;(f) subject to Rule 11.10.8, any proposed restructuring, merger, acquisition, reorganisation or business expansion which could have a significant impact on theAuthorised Person's risk profile or resources;(g) any significant failure in theAuthorised Person's systems or controls, including a failure reported to theAuthorised Person by the firm's auditor;(h) any action that would result in a material change in the capital adequacy or solvency of theAuthorised Firm ; or(i) non-compliance withRules due to an emergency outside theAuthorised Person's control and the steps being taken by theAuthorised Person .Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RMI288/2020 (Made 16th December 2020). [VER50/02-21]Major acquisitions
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.8 GEN 11.10.8
(1) Subject to (2), anAuthorised Firm which makes or proposes to make aMajor Acquisition as defined in (3) must:(a) if it is aDomestic Firm , comply with the requirements in Rule 11.10.9; and(b) if it is not aDomestic Firm , comply with the requirements in Rule 11.10.10.(2) The requirement in (1) does not apply to anAuthorised Firm which is aCredit Rating Agency or a firm in Category 3 (as defined in PIB Rules 1.3.3 to 1.3.5) or Category 4 (as defined in PIB Rule 1.3.6).(3) Subject to (4), anAuthorised Firm makes aMajor Acquisition if it makes or proposes to directly or indirectly acquire a shareholding in aBody Corporate where that acquisition:(a) is of a value (whether by one acquisition or a series of acquisitions) of 10% or more of:(i) theAuthorised Firm's Capital Resources , if it is aDomestic Firm which is a Category 1Authorised Firm (as defined in PIB Rule 1.3.1), Category 2Authorised Firm (as defined in PIB Rule 1.3.2) or Category 5Authorised Firm (as defined in PIB Rule 1.3.7); or(ii) theAuthorised Firm's Adjusted Capital Resources , if it is aDomestic Firm conductingInsurance Business ; or(iii) the capital resources of theAuthorised Firm calculated in accordance with the requirements of theFinancial Services Regulator in its home jurisdiction, if it is not aDomestic Firm ; or(b) even if it does not exceed the 10% threshold referred to in (a), it is reasonably likely to have a significant regulatory impact on theAuthorised Firm's activities.(4) An acquisition is not aMajor Acquisition for the purposes of (3) if it is an investment made by anAuthorised Firm :(a) in accordance with the terms of a contract entered into by theAuthorised Firm as an incidental part of its ordinary business; or(b) as a routine transaction for managing theAuthorised Firm's own investment portfolio and therefore can reasonably be regarded as made for a purpose other than acquiring management or control of aBody Corporate either directly or indirectly.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM96/2012 (Made 24th July 2012) [VER30/07-12]
[Amended] DFSA RM166/2016 (Made 10th February 2016). [VER36/04-16]GEN 11.10.8 Guidance
1. Examples of the kind of investments referred to in Rule 11.10.8(3)(b) include an acquisition of a stake in a small specialised trading firm that engages in high risk trades or other activities that could pose a reputational risk to theAuthorised Firm .2. The onus is on anAuthorised Firm proposing to make an acquisition to consider whether it qualifies as aMajor Acquisition under Rule 11.10.8(3)(b). Generally, in the case of anAuthorised Firm that is not aDomestic Firm (i.e. aBranch operation in theDIFC ), the significant regulatory impact referred to in Rule 11.10.8 (3)(b) should be prudential risk to theAuthorised Firm as a whole. If anAuthorised Firm is uncertain about whether or not a proposed acquisition qualifies as aMajor Acquisition under Rule 11.10.8 (3)(b), theAuthorised Firm may seek guidance from theDFSA .3. Examples of contractual arrangements of the kind referred to in Rule 11.10.8(4)(a) include enforcement of a security interest in the securities of the investeeBody Corporate or a loan workout pursuant to a loan agreement entered into between a bank and its client.4. Examples of the kind of investments referred to in Rule 11.10.8(4)(b) include temporary investments, such as investments included in theAuthorised Firm's trading book or which are intended to be disposed of within a short term (e.g. within 12 months).Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.9 GEN 11.10.9
(1) AnAuthorised Firm which is aDomestic Firm must:(a) before making aMajor Acquisition :(i) notify theDFSA in writing of the proposedMajor Acquisition at least 45 days prior to the proposed date for effecting theMajor Acquisition ; and(ii) give to theDFSA all the relevant information relating to thatMajor Acquisition to enable theDFSA to assess the impact of the proposedMajor Acquisition on theAuthorised Firm ; and(b) not effect the proposedMajor Acquisition unless:(i) theAuthorised Firm has either received written advice from theDFSA that it has no objection to thatMajor Acquisition or has not received any written objection or request for additional information from theDFSA within 45 days after the date of the notification; and(ii) if theDFSA has imposed any conditions relating to the proposedMajor Acquisition , it has complied with, and has the on-going ability to comply with, the relevant conditions.(2) TheDFSA may only object to a proposedMajor Acquisition if it is of the view that the proposedMajor Acquisition is reasonably likely to have a material adverse impact on theAuthorised Firm's ability to comply with its applicable regulatory requirements or on the financial services industry in theDIFC as a whole. TheDFSA may also impose any conditions it considers appropriate to address any concerns it may have in relation to the proposedMajor Acquisition .(3) Without limiting the generality of its powers, the factors that theDFSA may take into account for the purposes of (2) include:(a) the financial and other resources available to theAuthorised Firm to carry out the proposedMajor Acquisition ;(b) the possible impact of the proposedMajor Acquisition upon theAuthorised Firm's resources, including its capital, both at the time of the acquisition and on an on-going basis;(c) the managerial capacity of theAuthorised Firm to ensure that the activities of the investeeBody Corporate are conducted in a prudent and reputable manner;(d) the place of incorporation or domicile of the investeeBody Corporate and whether or not the laws applicable to that entity are consistent with the laws applicable to theAuthorised Firm . In particular, whether there are any secrecy constraints that are likely to create difficulties in relation to theDFSA requirements including those relating to consolidated supervision by theDFSA where applicable; and(e) any other undue risks to theAuthorised Firm or the financial services industry in theDIFC as a whole arising from the proposedMajor Acquisition .Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.9 Guidance
Factors which the
DFSA may take into account in assessing whether there are any undue risks arising from the proposedMajor Acquisition include the size and nature of the business of the investeeBody Corporate , its reputation and standing, its present and proposed management structure and the quality of management, the reporting lines and other monitoring and control mechanisms available to theAuthorised Firm and the past records of theAuthorised Firm relating to acquisitions of a similar nature.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.10
(1) AnAuthorised Firm which is not aDomestic Firm must:(a) notify theDFSA in writing of anyMajor Acquisition in accordance with the notification requirement applying to theAuthorised Firm under the requirements of theFinancial Services Regulator in its home jurisdiction (the home regulator); and(b) if there is no notification requirement applying to theAuthorised Firm under (a), comply with the requirements in Rule 11.10.9 as if it were aDomestic Firm . TheDFSA must follow the same procedures, and shall have the same powers, as set out in Rule 11.10.9 in relation to such a notification.(2) AnAuthorised Firm which gives to theDFSA a notification under (1)(a) must:(a) notify theDFSA of theMajor Acquisition at the same time as it notifies the home regulator;(b) provide to theDFSA the same information as it is required to provide to the home regulator; and(c) provide to theDFSA copies of any communications it receives from the home regulator relating to the notification it has provided to the home regulator as soon as practicable upon receipt.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.11 GEN 11.10.11
(1) TheDFSA may, for the purposes of the requirements in this section, require from anAuthorised Firm any additional information relating to theMajor Acquisition as it may consider appropriate. AnAuthorised Firm must provide any such additional information to theDFSA promptly.(2) TheDFSA may, where it considers appropriate, withdraw its no objection position or modify or vary any condition it has imposed or any remedial action it has required under theRules in this section.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]GEN 11.10.11 Guidance
The
DFSA will generally not withdraw a no objection position it has conveyed to anAuthorised Firm , except in very limited circumstances. An example of such a situation is where theAuthorised Firm is found to have provided to theDFSA inaccurate or incomplete information and that commission or omission has a material impact on theDFSA's no objection decision.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.12
(1) The procedures in Schedule 3 to theRegulatory Law apply to a decision of theDFSA under Rules 11.10.9, 11.10.10 and 11.10.11 to object to an acquisition or to impose or vary conditions.(2) If theDFSA decides to exercise its power under Rule 11.10.9, 11.10.10 and 11.10.11 to object to an acquisition or to impose or vary conditions, theAuthorised Firm may refer the matter to theFMT for review.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]Suspected Market Abuse
GEN 11.10.12A
(1) AnAuthorised Firm must notify the DFSA immediately if it:(a) receives an order from aClient , or arranges or executes a transaction with or for aClient ; and(b) has reasonable grounds to suspect that the order or transaction may constituteMarket Abuse .(2) The notification under (1) must specify:(a) sufficient details of the order or transaction; and(b) the reasons for theAuthorised Firm suspecting that the order or transaction may constituteMarket Abuse .(3) AnAuthorised Firm must not inform theClient , or any otherPerson involved in the order or transaction, of a notification under this Rule.Derived DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]GEN 11.10.12A Guidance
1. Under GEN Rule 5.3.20, anAuthorised Firm must establish and maintain systems and controls that ensure that it and its employees do not engage in market abuse or facilitate others to engage in market abuse, whether in theDIFC or elsewhere. GEN Rule 11.10.12A requires the firm to notify the DFSA if it reasonably suspects that a client's order or transaction may constituteMarket Abuse under Part 6 of the Markets Law.2. In some cases, a suspicion ofMarket Abuse may arise when an order is received. In other cases, it may not be apparent until a transaction is executed or when viewed in the context of later information, behaviour or transactions. When a firm submits a notification, it should be able to explain to the DFSA its reasons for suspecting that the order or transaction may constitute Market Abuse.3. The details of the order or transaction provided with the notification should include the date and time of the order or transaction, the relevant Investment, the client and other parties involved, the nature of the order (e.g. limit order or market order), the nature of the transaction (e.g. on-exchange or OTC) and if the client was acting on its own account or for a third party.4. If a firm reasonably suspects that a client's order or transaction may constitute market abuse under the laws in another jurisdiction, it will also need to consider if it needs to notify the regulator in that other jurisdiction (under any corresponding obligation to notify).5. If anAuthorised Firm becomes aware that the firm itself, or an employee of the firm, (rather than a client) has engaged in conduct that may constitute market abuse in theDIFC or elsewhere, it has a separate obligation to notify the DFSA under Article 67 of the Regulatory Law and GEN Rule 11.10.7.Derived DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]Fraud and errors
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.13
An
Authorised Person must notify theDFSA immediately if one of the following events arises in relation to its activities in or from theDIFC :(a) it becomes aware that anEmployee may have committed a fraud against one of its customers;(b) a serious fraud has been committed against it;(c) it has reason to believe that aPerson is acting with intent to commit a serious fraud against it;(d) it identifies significant irregularities in its accounting or other records, whether or not there is evidence of fraud; or(e) it suspects that one of itsEmployees who is connected with theAuthorised Person's Financial Services may be guilty of serious misconduct concerning his honesty or integrity.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]Other regulators
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.14 GEN 11.10.14
An
Authorised Person must advise theDFSA immediately of:(a) the granting or refusal of any application for or revocation of authorisation to carry on financial services in any jurisdiction outside theDIFC ;(b) the granting, withdrawal or refusal of an application for, or revocation of, membership of theAuthorised Person of any regulated exchange or clearing house;(c) theAuthorised Person becoming aware that aFinancial Services Regulator has started an investigation into the affairs of theAuthorised Person ;(d) the appointment of inspectors, howsoever named, by aFinancial Services Regulator to investigate the affairs of theAuthorised Person ; or(e) the imposition of disciplinary measures or disciplinary sanctions on theAuthorised Person in relation to its financial services by anyFinancial Services Regulator or any regulated exchange or clearing house.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.14 Guidance
The notification requirement in Rule 11.10.14(c) extends to investigations relating to any employee or agent of an
Authorised Person or a member of itsGroup , provided the conduct investigated relates to or impacts on the affairs of theAuthorised Person .Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]Action against an Authorised Person
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.15
An
Authorised Person must notify theDFSA immediately if:(a) civil proceedings are brought against theAuthorised Person and the amount of the claim is significant in relation to theAuthorised Person's financial resources or its reputation; or(b) theAuthorised Person is prosecuted for, or convicted of, any offence involving fraud or dishonesty, or any penalties are imposed on it for tax evasion.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]Winding up, bankruptcy and insolvency
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.16
An
Authorised Person must notify theDFSA immediately on:(a) the calling of a meeting to consider a resolution for winding up theAuthorised Person ;(b) an application to dissolve theAuthorised Person or to strike it from the register maintained by theDIFC Registrar of Companies , or a comparable register in another jurisdiction;(c) the presentation of a petition for the winding up of theAuthorised Person ;(d) the making of, or any proposals for the making of, a composition or arrangement with creditors of theAuthorised Person ; or(e) the application of any person against theAuthorised Person for the commencement of any insolvency proceedings, appointment of any receiver, administrator or provisional liquidator under the law of any country.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]Accuracy of information
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.17
An
Authorised Person must take reasonable steps to ensure that all information that it provides to theDFSA in accordance with any legislation applicable in theDIFC is:(a) factually accurate or, in the case of estimates and judgements, fairly and properly based; and(b) complete, in that it should include anything of which theDFSA would reasonably expect to be notified.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.18
(1) AnAuthorised Person must notify theDFSA immediately it becomes aware, or has information that reasonably suggests, that it:(a) has or may have provided theDFSA with information which was or may have been false, misleading, incomplete or inaccurate; or(b) has or may have changed in a material particular.(2) Subject to (3), the notification in (1) must include details of the information which is or may be false or misleading, incomplete or inaccurate, or has or may have changed and an explanation why such information was or may have been provided and the correct information.(3) If the correct information in (2) cannot be submitted with the notification it must be submitted as soon as reasonably possible.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.10.19
In the case of an
Insurer which is aProtected Cell Company or an Incorporated Cell Company, anInsurer must advise theDFSA immediately if it becomes aware of any actual or prospective significant change in the type or scale of the business conducted through aCell , or in the ownership of theCell shares of the Protected Cell Company or of an Incorporated Cell of the ICC.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RMI247/2019 (Made 18th December 2019). [VER45/12-19]Information relating to corporate governance and remuneration
GEN 11.10.20 GEN 11.10.20
(1) Subject to (2), anAuthorised Firm must provide to the DFSA notice of any significant changes to its corporate governance framework or the remuneration structure or strategy as soon as practicable.(2) AnAuthorised Firm which is aBranch must provide notice of any significant changes to its corporate governance framework or the remuneration structure or strategy only if the changes are relevant to the activities and operations of theBranch .[Added] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]GEN 11.10.20 Guidance
1. The purpose of these notifications is to ensure that theDFSA is informed of any significant changes to theAuthorised Firm's corporate governance framework and remuneration structure and strategies.2. Significant changes that theDFSA expectsAuthorised Firms to notify theDFSA pursuant to Rule 11.10.20 generally include:a. any major changes to the composition of theGoverning Body ;b. any changes relating toPersons Undertaking Key Control Functions , such as their removal or new appointments or changes in their reporting lines; andc. significant changes to the remuneration structure that apply to the members of theGoverning Body , senior management,Persons Undertaking Key Control Functions and major risk taking Employees.3. TheDFSA expectsBranches to provide to theDFSA notification of significant changes that are relevant to theBranch operations.[Added] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]GEN 11.11 GEN 11.11 [Deleted]
[Deleted]DFSA RM176/2016 (Made 19th June 2016) [VER37/08-16]GEN 11.11.1 [Deleted]
[Deleted] DFSA RM176/2016 (Made 19th June 2016) [VER37/08-16]GEN 11.12 GEN 11.12 Requirement to provide a report
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.12.1 GEN 11.12.1
This section applies to every
Authorised Person .Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RM155/2015 (Made 9th December 2015) [VER35/02-16]GEN 11.12.1 Guidance
1. Under Article 74, theDFSA may require anAuthorised Person to provide it with a report on any matter. ThePerson appointed to make a report must be aPerson nominated or approved by theDFSA . ThisPerson will be referred to throughout theRulebook as an independent expert.2. When requesting a report under Article 74, theDFSA may take into consideration the matters set out in the RPP Sourcebook.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]Independent Expert
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.12.2 GEN 11.12.2
(1) TheDFSA may, by sending a notice in writing, require anAuthorised Person to provide a report by an independent expert. TheDFSA may require the report to be in whatever form it specifies in the notice.(2) TheDFSA will give written notification to theAuthorised Person of the purpose of its report, its scope, the timetable for completion and any other relevant matters.(3) The independent expert must be appointed by theAuthorised Person and be nominated or approved by theDFSA .(4) TheAuthorised Person must pay for the services of the independent expert.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.12.2 Guidance
1. If theDFSA decides to nominate the independent expert, it will notify theAuthorised Person accordingly. Alternatively, if theDFSA is content to approve the independent expert selected by theAuthorised Person it will notify it of that fact.2. TheDFSA will only approve an independent expert that in theDFSA's opinion has the necessary skills to make a report on the matter concerned.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.12.3
When an
Authorised Person appoints an independent expert, theAuthorised Person must ensure that:(a) the independent expert co-operates with theDFSA ; and(b) theAuthorised Person provides all assistance that the independent expert may reasonably require.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.12.4
When an
Authorised Person appoints an independent expert, theAuthorised Person must, in the contract with the independent expert:(a) require and permit the independent expert to co-operate with theDFSA in relation to theAuthorised Person and to communicate to theDFSA information on, or his opinion on, matters of which he has, or had, become aware in his capacity as an independent expert reporting on theAuthorised Person in the following circumstances:(i) the independent expert reasonably believes that, as regards theAuthorised Person concerned:(A) there is or has been, or may be or may have been, a contravention of any relevant requirement that applies to theAuthorised Person concerned; and(B) that the contravention may be of material significance to theDFSA in determining whether to exercise, in relation to theAuthorised Person concerned, any powers conferred on theDFSA under any provision of theRegulatory Law 2004;(ii) the independent expert reasonably believes that the information on, or his opinion on, those matters may be of material significance to theDFSA in determining whether theAuthorised Person concerned satisfies and will continue to satisfy the fit and proper requirements; or(iii) the independent expert reasonably believes that theAuthorised Firm is not, may not be, or may cease to be, a going concern;(b) require the independent expert to prepare a report within the time specified by theDFSA ; and(c) waive any duty of confidentiality owed by the independent expert to theAuthorised Person which might limit the provision of information or opinion by that independent expert to theDFSA in accordance with (a) or (b).Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.12.5
An
Authorised Person must ensure that the contract required under Rule 11.12.4:(a) is governed by the laws of theDIFC ;(b) expressly provides that theDFSA has a right to enforce the provisions included in the contract under Rule 11.12.4;(c) expressly provides that, in proceedings brought by theDFSA for the enforcement of those provisions, the independent expert is not to have available by way of defence, set-off or counter claim any matter that is not relevant to those provisions;(d) if the contract includes an arbitration agreement, expressly provides that theDFSA is not, in exercising the right in (b) to be treated as a party to, or bound by, the arbitration agreement; and(e) provides that the provisions included in the contract under Rule 11.12.4 are irrevocable and may not be varied or rescinded without theDFSA's consent.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.13 GEN 11.13 Imposing Restrictions on an Authorised Person's business or on an Authorised Person dealing with property
Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]GEN 11.13.1
The
DFSA has the power to impose a prohibition or requirement on anAuthorised Person in relation to theAuthorised Person's business or in relation to theAuthorised Person's dealing with property under Article 75 or Article 76 in circumstances where:(a) there is a reasonable likelihood that theAuthorised Person will contravene a requirement of any legislation applicable in theDIFC ;(b) theAuthorised Person has contravened a relevant requirement and there is a reasonable likelihood that the contravention will continue or be repeated;(c) there is loss, risk of loss, or other adverse effect on theAuthorised Person's customers;(d) an investigation is being carried out in relation to an act or omission by theAuthorised Person that constitutes or may constitute a contravention of any applicable law orRule ;(e) an enforcement action has commenced against theAuthorised Person for a contravention of any applicable law orRule ;(f) civil proceedings have commenced against theAuthorised Person ;(g) theAuthorised Person or anyEmployee of theAuthorised Person may be or has been engaged in market abuse;(h) theAuthorised Person is subject to a merger;(i) a meeting has been called to consider a resolution for the winding up of theAuthorised Person ;(j) an application has been made for the commencement of any insolvency proceedings or the appointment of any receiver, administrator or provisional liquidator under the law of any country for theAuthorised Person ;(k) there is a notification to dissolve theAuthorised Person or strike it from theDIFC register of Companies or the comparable register in another jurisdiction;(l) there is information to suggest that theAuthorised Person is involved in financial crime;(m) the DFSA considers there are reasonable grounds to require the suspension or removal from trading of an Investment traded on any facility operated by theAuthorised Person ; or(n) theDFSA considers that this prohibition or requirement is necessary to ensure customers,Authorised Persons or the financial system are not adversely affected.Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
[Amended] DFSA RMI309/2021 (Made 30th June 2021). [VER53/10-21]