GEN 3.5 GEN 3.5 Additional Rules for Financial Promotions
GEN 3.5.1 GEN 3.5.1(1) A
Personin GEN Rule 3.4.1(3) (a) to (d) must, subject to (2), take reasonable care to ensure that any Financial Promotionit makes in or from the DIFC:(a) is clear, fair and not misleading;(b) includes the Person'sname, address and regulatory status;(c) if it is intended only for Professional Clients, is not sent or directed to any Personwho appears on reasonable grounds not to be a Professional Client, and contains a clear statement that only a Personmeeting the criteria for a Professional Clientshould act upon it; and(d) which is provided to or directed at a Retail Clientand contains any information or representation relating to past performance, or any forecast based on past performance or on any other assumptions:(i) presents a balanced view of the financial products or financial services to which the Financial Promotionrelates;(ii) identifies, in an easy to understand manner, the information from which the past performance or forecast is derived and how any key facts and assumptions used in that context are drawn; and(iii) contains a prominent warning that past performance is not necessarily a reliable indicator of future performance.(2) A Persondescribed in GEN Rule 3.4.1(3)(a) who makes a Financial Promotion:(a) to an existing client in the DIFC; or(b) to a prospective client in the DIFCrelating to the Passported Fundfor which the DIFCis the Host Jurisdiction,is not required to comply with (1) provided that in making the Financial Promotionthat Personcomplies with the requirements of the relevant Financial Services Regulatorin the UAEwhich relate to Financial Promotions.
GEN 3.5.1 Guidance1. In presenting information relating to past performance of a financial product or financial service, a
Personshould use a reputable independent actuarial, financial or statistical reporting service provider.2. The effect of GEN Rule 3.5.1(2) is that a Personwho is licensed and regulated by a Financial Services Regulatorin the UAEis not required to comply with GEN Rule 3.5.1(1) when communicating with an existing client or with a prospective client in relation to a Passported Fundwhere the DIFCis a Host Jurisdiction. However, when making any other Financial Promotionto a prospective client in the DIFC, GEN Rule 3.5.1(1) does apply to such Persons, as do the prohibitions on the making of offers contained in the Markets Law 2012 and Collective Investment Law 2010 respectively. The exclusion in GEN Rule 3.5.1(2) applies only if the Personis complying with the financial promotion requirements of its Financial Services Regulatorin the UAE.
Personmust not, in any Financial Promotion, attempt to limit or avoid any duty or liability it may have under any DFSA-administered laws or the Rules.Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]
GEN 3.5.3 GEN 3.5.3
A Person must not make a Financial Promotion, in or from the DIFC, in relation to a Restricted Speculative Investment offered by a Person outside the DIFC unless the Person making the Financial Promotion is reasonably satisfied that the issuer or provider of the Restricted Speculative Investment is:(a) a Regulated Financial Institution; and(b) subject to substantially similar requirements to the requirements applicable to an Authorised Firm under COB section 6.16.
GEN 3.5.3 Guidance1. A communication that is an ‘exempt financial promotion” under GEN Rule 3.4.1(4) is still permitted.2. A Person making a Financial Promotion relating to a Restricted Speculative Investment should be able to demonstrate to the DFSA the basis upon which it was reasonably satisfied that the issuer or provider of the Restricted Speculative Investment was subject to substantially similar requirements to those applicable under COB section 6.16.