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 theseRules 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 aCollective 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 aProfit Sharing Investment Account ;(s)Operating an Alternative Trading System ;(t)Providing Trust Services ;(u)Providing Fund Administration ;(v) Acting as theTrustee of aFund ;(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 theseRules ; and(b) is subject to exclusions under theseRules 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 2.2.4
Pursuant to Article 42(1)(a) of the Regulatory Law 2004 an
Authorised Firm , subject to theRules , may carry on any one or moreFinancial 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 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 2.2.5
The
Financial Services ofEffecting Contracts of Insurance andCarrying Out Contracts of Insurance may be carried on only by anAuthorised Firm which by virtue of itsLicence is permitted to carry on suchFinancial Services and no otherFinancial 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 aProfit Sharing Investment Account may be carried on only by anAuthorised Firm which by virtue of an appropriate endorsement on itsLicence is permitted to conductIslamic 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 ofManaging aCollective Investment Fund may be carried on in respect of anIslamic Fund only by anOperator which by virtue of an appropriate endorsement on itsLicence is permitted to conductIslamic 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) AnAuthorised Firm may use a Fund Platform only if it:(a) is aFund Manager ; and(b) has an endorsement on itsLicence permitting it to use theFund Platform .(2) In (1), anAuthorised Firm uses aFund 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) An Authorised Firm may carry on a Financial Service with or for a Retail Client only if it is permitted to do so by an 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]
[Amended] DFSA RMI309/2021 (Made 30th June 2021). [VER53/10-21]GEN 2.2.9
An
Authorised Firm which is licenced to carry on theFinancial Service ofOperating a Representative Office may not be licenced to carry on any otherFinancial 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 2.2.10
An
Authorised Firm (other than aRepresentative Office ) may carry on an activity of the kind described in GEN Rule 2.26.1 that constitutes marketing without the need for any additional authorisation to do so.[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) AnAuthorised Firm may hold or controlClient Assets only if it is permitted to do so by an endorsement on itsLicence .(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 anAuthorised Firm that has an authorisation forProviding Custody .Derived from DFSA RM166/2016 (Made 10th February 2016). [VER36/04-16]GEN 2.2.10B
An
Insurance Intermediary orInsurance Manager may holdInsurance Monies only if it is permitted to do so by an endorsement on itsLicence .Derived from DFSA RM166/2016 (Made 10th February 2016). [VER36/04-16]GEN 2.2.10C
An
Insurance Intermediary may conductInsurance Intermediation activities in respect of a contract ofLong-Term Insurance , that is not a contract of reinsurance, only if it is permitted to do so by an endorsement on itsLicence .Derived from DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]GEN 2.2.10D
The
Financial Service of Operating aCrowdfunding Platform may be carried on only by aBody 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 onFinancial Products ;(c) Managing aCollective 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 aCrowdfunding Platform that facilitates aPerson investing in the following kinds ofInvestments through the platform:a)Warrants ,Units orStructured Products ; orb)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 followingFinancial Services :(a)Operating an Exchange ;(b)Operating a Clearing House ; or(c) Operating anAlternative Trading System to the extent that such activities constitute operating aMultilateral 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 ofOperating an Alternative Trading System , to the extent that such activities constitute operating aMultilateral Trading Facility , may be carried on by anAuthorised Market Institution which is permitted to do so by an endorsement on itsLicence .[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 aTrade Repository may be carried on by anAuthorised Person which is permitted to do so by an endorsement on itsLicence .(2) In (1), aTrade Repository is a centralised registry that maintains an electronic database containing records of transactions inInvestments and over-the-counter derivatives.[Added] DFSA RM119/2013 (Made 14th July 2013). [VER33/07-13]GEN 2.2.13 Guidance
1. Maintaining aTrade Repository is not a separately licensedFinancial Service , but may be carried on by anAuthorised Person which has on itsLicence an endorsement permitting it to do so. AnAuthorised Person maintaining aTrade Repository is subject to some specific requirements relating to that activity, which are set out in App 5.2. The functions of aTrade Repository promote increased transparency and integrity of information, particularly for centrally clearing over-the-counter derivatives. Currently there are no transaction reporting requirements in theDIFC which require reporting toTrade Repositories .3. AnAuthorised Person does not carry on the activities of aTrade 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 itsClients by anAuthorised Firm , or transactions carried out on the facilities of anAuthorised Market Institution ).[Added] DFSA RM119/2013 (Made 14th July 2013). [VER33/07-13]