Entire Section

  • GEN 2.2 GEN 2.2 Financial Service activities

    • GEN 2.2.1

      An activity constitutes a Financial Service under the Regulatory Law and these Rules where:

      (a) it is an activity specified in GEN Rule 2.2.2; and
      (b) such activity is carried on by way of business in the manner described in GEN section 2.3.

      Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
      [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

    • GEN 2.2.2 GEN 2.2.2

      The following activities are specified for the purposes of GEN Rule 2.2.1:

      (a) Accepting Deposits;
      (b) Providing Credit;
      (c) Providing Money Services;
      (d) Dealing in Investments as Principal;
      (e) Dealing in Investments as Agent;
      (f) Arranging Deals in Investments;
      (g) Managing Assets;
      (h) Advising on Financial Products;
      (i) Managing a Collective Investment Fund;
      (j) Providing Custody;
      (k) Arranging Custody;
      (l) Effecting Contracts of Insurance;
      (m) Carrying Out Contracts of Insurance;
      (n) Operating an Exchange;
      (o) Operating a Clearing House;
      (p) Insurance Intermediation;
      (q) Insurance Management;
      (r) Managing a Profit Sharing Investment Account;
      (s) Operating an Alternative Trading System;
      (t) Providing Trust Services;
      (u) Providing Fund Administration;
      (v) Acting as the Trustee of a Fund;
      (w) Operating a Representative Office;
      (x) Operating a Credit Rating Agency;
      (y) Arranging Credit and Advising on Credit;
      (z) Operating a Crowdfunding Platform;
      (aa) Operating an Employee Money Purchase Scheme;
      (bb) Acting as the Administrator of an Employee Money Purchase Scheme; and
      (cc) Arranging or Advising on Money Services.
      Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
      [Amended] [VER4/08-05]
      [Amended] [VER6/12-05]
      [Amended] [VER7/01-06]
      [Amended] [VER8/04-06]
      [Amended] DFSA RM34/2006[VER11/08-06]
      [Amended] DFSA RM68/2009 (Made 3rd January 2010). [VER24/01-10]
      [Amended] DFSA RM72/2010 (Made 11th July 2010) [VER26/07-10]
      [Amended] DFSA RM96/2012 (Made 24th July 2012) [VER30/07-12]
      [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]
      [Amended] DFSA RMI201/2017 (Made 14th June 2017). [VER40/08-17]
      [Amended] DFSA RMI260/2019 (Made 18th December 2019). [VER47/01-20]
      [Amended] DFSA RMI266/2020 (Made 26th February 2020). [VER48/04-20]

      • GEN 2.2.2 Guidance

        Note that the ambit of these activities in GEN Rule 2.2.2 may be restricted under COB, AMI or REP and may be fettered by the continuing operation of the Federal Law.


        Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
        [Amended] DFSA RM68/2009 (Made 3rd January 2010). [VER24/01-10]
        Amended in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]

    • GEN 2.2.3

      Each activity specified in GEN Rule 2.2.2:

      (a) is to be construed in the manner provided under these Rules; and
      (b) is subject to exclusions under these Rules which may apply to such an activity.

      Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

    • Permitted Financial Services for Authorised Firms

      • GEN 2.2.5

        The Financial Services of Effecting Contracts of Insurance and Carrying Out Contracts of Insurance may be carried on only by an Authorised Firm which by virtue of its Licence is permitted to carry on such Financial Services and no other Financial Services.

        Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
        Amended in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]

      • GEN 2.2.6

        The Financial Service of Managing a Profit Sharing Investment Account may be carried on only by an Authorised Firm which by virtue of an appropriate endorsement on its Licence is permitted to conduct Islamic Financial Business.

        Derived from DFSA RM01/2004(Made 16th September 2004). [VER1/09-04]
        Amended in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]

      • GEN 2.2.7

        The Financial Service of Managing a Collective Investment Fund may be carried on in respect of an Islamic Fund only by an Operator which by virtue of an appropriate endorsement on its Licence is permitted to conduct Islamic Financial Business.

        [Added][VER8/04-06]
        [Amended] DFSA RM72/2010 (Made 11th July 2010) [VER26/07-10]
        Amended in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]

      • GEN 2.2.7A GEN 2.2.7A

        (1) An Authorised Firm may use a Fund Platform only if it:
        (a) is a Fund Manager; and
        (b) has an endorsement on its Licence permitting it to use the Fund Platform.
        (2) In (1), an Authorised Firm uses a Fund Platform if it uses an Incorporated Cell Company (ICC) to provide infrastructure that facilitates the establishment, management, operation or winding up of a Fund that is an Incorporated Cell of the ICC.
        Derived from DFSA RMI247/2019 (Made 18th December 2019). [VER45/12-19]

        • GEN 2.2.7A Guidance

          1. A Fund Platform is an Incorporated Cell Company (ICC) that provides infrastructure to one or more Funds that are Incorporated Cells of the ICC.
          2. Infrastructure that facilitates a Fund Manager to manage Funds may include common rules and procedures, technical facilities, human resources, risk management tools and procedures, compliance and oversight facilities and other infrastructure relating to fund administration and asset management activities.
          3. Both CIR and the ICC Regulations contain additional requirements that apply to a Fund Manager using a Fund Platform.
          Derived from DFSA RMI247/2019 (Made 18th December 2019). [VER45/12-19]

      • GEN 2.2.8

        (1) A Financial Service may be carried on with or for a Retail Client only by an Authorised Firm which is permitted to do so by endorsement on its Licence.
        (2) An endorsement under (1) is not required by an Authorised Firm when:
        (a) Operating an Employee Money Purchase Scheme; or
        (b) Acting as the Administrator of an Employee Money Purchase Scheme.
        [Added] DFSA RM56/2008 & DFSA RM58/2008 (Made 1st July 2008). [VER19/07-08]
        Amended in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RMI260/2019 (Made 18th December 2019). [VER47/01-20]

      • GEN 2.2.9

        An Authorised Firm which is licenced to carry on the Financial Service of Operating a Representative Office may not be licenced to carry on any other Financial Service.

        [Added] DFSA RM68/2009 (Made 3rd January 2010). [VER24/01-10]
        Amended in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]

      • GEN 2.2.10A

        (1) An Authorised Firm may hold or control Client Assets only if it is permitted to do so by an endorsement on its Licence.
        (2) In (1), the expression "hold or control Client Assets" has the meaning given in COB Rule 6.11.4.
        (3) An endorsement under (1) is not required by an Authorised Firm that has an authorisation for Providing Custody.
        Derived from DFSA RM166/2016 (Made 10th February 2016). [VER36/04-16]

      • GEN 2.2.10B

        An Insurance Intermediary or Insurance Manager may hold Insurance Monies only if it is permitted to do so by an endorsement on its Licence.

        Derived from DFSA RM166/2016 (Made 10th February 2016). [VER36/04-16]

      • GEN 2.2.10C

        An Insurance Intermediary may conduct Insurance Intermediation activities in respect of a contract of Long-Term Insurance, that is not a contract of reinsurance, only if it is permitted to do so by an endorsement on its Licence.

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

      • GEN 2.2.10D

        The Financial Service of Operating a Crowdfunding Platform may be carried on only by a Body Corporate incorporated under the DIFC Companies Law.

        [Added] DFSA RMI201/2017 (Made 14th June 2017). [VER40/08-17]

      • GEN 2.2.10E

        A Crowdfunding Operator must not carry on the following activities:

        (a) Managing Assets;
        (b) Advising on Financial Products;
        (c) Managing a Collective Investment Fund; or
        (d) Advising on Credit.
        [Added] DFSA RMI201/2017 (Made 14th June 2017). [VER40/08-17]

      • GEN 2.2.10F

        A Crowdfunding Operator must not Operate a Crowdfunding Platform that facilitates a Person investing in the following kinds of Investments through the platform:

        a) Warrants, Units or Structured Products; or
        b) Derivatives.
        [Added] DFSA RMI201/2017 (Made 14th June 2017). [VER40/08-17]
        [Amended] DFSA RMI253/2019 (Made 26th June 2019). [VER44/07-19]

      • GEN 2.2.10G GEN 2.2.10G

        An Authorised Firm must not carry on currency exchange in the DIFC unless that activity is in connection with, and a necessary part of, providing another Financial Service, including another Money Service activity referred to in paragraphs (b) to (f) of GEN Rule 2.6.1(1).

        Derived from DFSA RMI266/2020 (Made 26th February 2020). [VER48/04-20]

        • GEN 2.2.10G Guidance

          1. Providing currency exchange, although a specified Money Service under GEN Rule 2.6.1(1)(a), cannot be provided as a stand-alone financial service in or from the DIFC. An Authorised Firm may however provide currency exchange where it is in connection with, and a necessary part of, providing another Money Service or another Financial Service (see GEN Rule 2.2.10G). An Authorised Firm may also arrange for another person outside the DIFC to provide a currency exchange service if the Authorised Firm is authorised to Arrange or Advise on Money Services (see GEN Rule 2.32.1).
           
          2. An Authorised Firm that Provides Money Services is also subject to further restrictions relating to not using physical cash and the settlement of Dirham transactions (see COB section 13.2).
          Derived from DFSA RMI266/2020 (Made 26th February 2020). [VER48/04-20]

      • GEN 2.2.10H GEN 2.2.10H

        (1) An Authorised Firm must not Operate or Act as the Administrator of an Employee Money Purchase Scheme to which this Rule applies, unless the Scheme is established in the DIFC.
        (2) This Rule applies to an Employee Money Purchase Scheme if the Scheme receives contributions that are required to be made by an employer under:
        (a) the Employment Law; or
        (b) another Dubai law.
        Derived from DFSA RMI301/2021 (Made 30th June 2021). [VER52/09-21]

        • GEN 2.2.10H Guidance

          An Authorised Firm can act as the Operator or Administrator of two types of Employee Money Purchase Schemes: a scheme established in the DIFC (a “DIFC Scheme”) or a scheme established outside the DIFC (a “Non-DIFC Scheme”). However, under GEN Rule 2.2.10H, an Authorised Firm is prohibited from Operating or Acting as the Administrator of a Non-DIFC Scheme where that Scheme receives employer contributions required to be made under the Employment Law or another Dubai law. The prohibition does not apply to the operation or administration of Non-DIFC Schemes that fall within the exclusion in GEN Rule 2.3.7.

          Derived from DFSA RMI301/2021 (Made 30th June 2021). [VER52/09-21]

    • Permitted Financial Services for Authorised Market Institutions

      • GEN 2.2.11 GEN 2.2.11

        Pursuant to Article 42(1)(b) of the Regulatory Law 2004 and subject to Rule 2.2.12, an Authorised Market Institution may carry on any one or more of the following Financial Services:

        (a) Operating an Exchange;
        (b) Operating a Clearing House; or
        (c) Operating an Alternative Trading System to the extent that such activities constitute operating a Multilateral Trading Facility as defined in Rule 2.22.1(1)(a).
        Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
        Amended in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RM119/2013 (Made 14th July 2013). [VER33/07-13]

        • [Deleted]

          [Deleted] DFSA RM119/2013 (Made 14th July 2013). [VER33/07-13]

      • GEN 2.2.12

        The Financial Service of Operating an Alternative Trading System, to the extent that such activities constitute operating a Multilateral Trading Facility, may be carried on by an Authorised Market Institution which is permitted to do so by an endorsement on its Licence.

        [Added] DFSA RM119/2013 (Made 14th July 2013). [VER33/07-13]

    • Other permitted activities

      • GEN 2.2.13 GEN 2.2.13

        (1) The activity of maintaining a Trade Repository may be carried on by an Authorised Person which is permitted to do so by an endorsement on its Licence.
        (2) In (1), a Trade Repository is a centralised registry that maintains an electronic database containing records of transactions in Investments and over-the-counter derivatives.
        [Added] DFSA RM119/2013 (Made 14th July 2013). [VER33/07-13]

        • GEN 2.2.13 Guidance

          1. Maintaining a Trade Repository is not a separately licensed Financial Service, but may be carried on by an Authorised Person which has on its Licence an endorsement permitting it to do so. An Authorised Person maintaining a Trade Repository is subject to some specific requirements relating to that activity, which are set out in App 5.
          2. The functions of a Trade Repository promote increased transparency and integrity of information, particularly for centrally clearing over-the-counter derivatives. Currently there are no transaction reporting requirements in the DIFC which require reporting to Trade Repositories.
          3. An Authorised Person does not carry on the activities of a Trade Repository to the extent that it maintains records of transactions pursuant to the record keeping requirements applicable to that firm (such as those relating to transactions carried out on behalf of its Clients by an Authorised Firm, or transactions carried out on the facilities of an Authorised Market Institution).
          [Added] DFSA RM119/2013 (Made 14th July 2013). [VER33/07-13]