Entire Section

  • GEN 3.4 GEN 3.4 Scope of the Financial Promotions Prohibition

    • GEN 3.4.1 GEN 3.4.1

      (1) A Person shall not, subject to (2) and (3), make a Financial Promotion in or from the DIFC unless that Person is an Authorised Person.
      (2) A Representative Office may make a Financial Promotion in or from the DIFC only in relation to a financial service or financial product offered:
      (a) in a jurisdiction other than the DIFC; and
      (b) by a related party (as defined in GEN Rule 2.26.1(3)) of the Representative Office.
      (3) A Person other than an Authorised Person may make a Financial Promotion in or from the DIFC if, and only to the extent that, the Person:
      (a) is licensed and supervised by a Financial Services Regulator in the UAE;
      (b) is a Recognised Body or External Fund Manager;
      (c) is a Reporting Entity and makes a Financial Promotion in or from the DIFC exclusively for the purpose of discharging its mandatory disclosure requirements; or
      (d) makes an exempt Financial Promotion as specified in (4).
      (4) For the purposes of (3)(d), a communication is an "exempt Financial Promotion" if it is:
      (a) approved by an Authorised Firm other than a Representative Office;
      (b) approved by a Representative Office and it is a communication relating to a financial service or financial product offered by a related party (as defined in GEN Rule 2.26.1(3)) of the Representative Office;
      (c) directed at and capable of acceptance exclusively by a Person who appears on reasonable grounds to be a Professional Client of the type specified in COB Rule 2.3.4;
      (d) made to a Person in the DIFC (the "recipient") as a result of an unsolicited request by the recipient to receive the Financial Promotion;
      (e) made or issued by or on behalf of a government or noncommercial government entity; or
      (f) made in the DIFC by a Person in the course of providing legal or accountancy services and may reasonably be regarded as incidental to and a necessary part of the provision of such services.
      Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]
      [Amended] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]
      [Amended] DFSA RM155/2015 (Made 9th December 2015) [VER35/02-16]
      [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

      • GEN 3.4.1 Guidance

        If a Person proposes to conduct Financial Promotions in or from the DIFC other than as permitted under (3) and (4), that Person should consider obtaining an appropriate Licence.

        Derived from DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

    • GEN 3.4.2 GEN 3.4.2

      A Person does not breach the Financial Promotions Prohibition if:

      (a) the Person causes a Financial Promotion to be made in the course of providing a facility which is a mere conduit for the making of the Financial Promotion;
      (b) the Person is located outside the DIFC and makes a Financial Promotion which appears, on reasonable grounds, to be a communication which is not directed at or intended to be acted upon by a Person in the DIFC;
      (c) the Person makes a Financial Promotion relating to an Employee Share Scheme and that Person or another entity in its Group is the employer to whom the scheme relates; or
      (d) the Financial Promotion is not made for a commercial or business purpose.
      Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]
      [Amended] DFSA RMI266/2020 (Made 26th February 2020). [VER48/04-20]

      • GEN 3.4.2 Guidance

        1. Examples of a mere conduit would include a newspaper or magazine, a website carrying third-party banner ads, a postman or courier, a person paid to hand out promotional material to the public and an event venue - unless in each case they were the originator i.e the Person who makes the Financial Promotion.
        2. In Rule GEN 3.4.2(b) the DFSA considers that the following non-exhaustive list of factors may each be indicative of whether or not a Financial Promotion is "intended to be acted upon by, or targeted at, Persons in the DIFC":
        i. whether it is expressed to be for a Person or type of Person in the DIFC;
        ii. whether it is sent to an address (including a P.O. Box) in the DIFC;
        iii. whether it is physically distributed to Persons in the DIFC;
        iv. whether it takes place in the DIFC;
        v. whether it makes reference to the DIFC;
        vi. whether it appears in a DIFC publication;
        vii. whether it appears on a DIFC-based or related website or other media;
        viii. whether it is sent to the email of a Person in the DIFC; or
        ix. whether it contains a prominent and clear disclaimer on its face that it is not intended to be acted upon by Persons in the DIFC.
        3. The DFSA in applying GEN Rule 3.4.2(d) will generally consider that for a communication to be made "for a commercial or business purpose" there must be a commercial element to the Financial Promotion, whether or not the Financial Promotion actually leads to the provision of any financial service. However, the DFSA considers that "for a commercial or business purpose" requires a commercial or business interest on the part of the communicator and the nature of the communicator's business need not be related to any specific financial service.
        4. The DFSA considers that a Person located outside the DIFC who makes a Financial Promotion into the DIFC, makes that communication in the DIFC. The DFSA considers that the prohibition in Article 41A(1) applies irrespective of where the communicator of the Financial Promotion is located.
        Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RMI266/2020 (Made 26th February 2020). [VER48/04-20]