Entire Section

  • GEN 2.3 GEN 2.3 By way of business

    • GEN 2.3.1

      Subject to Rules GEN 2.3.2 and GEN 2.3.3, for the purpose of these Rules a Person carries on an activity by way of business if the Person:

      (a) engages in the activity in a manner which in itself constitutes the carrying on of a business;
      (b) holds himself out as willing and able to engage in that activity; or
      (c) regularly solicits other Persons to engage with him in transactions constituting that activity.

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

    • Exclusions

      • GEN 2.3.2 GEN 2.3.2

        (1) Subject to GEN Rule 2.3.5, a Person does not carry on an activity specified under paragraphs (a), (b), (c), (d), (e), (f), (g), (h), (j), (k), (p), (q), (r) and (y) of GEN Rule 2.2.2 by way of business if:
        (a) the Person enters into transactions solely as a nominee for another Person and is bound to and does act on that other Person's instructions;
        (b) the Person is a Body Corporate and carries on that activity solely as principal with or for other Bodies Corporate:
        (i) which are within the same Group as that Person; or
        (ii) which are or propose to become participators in a joint enterprise and the transaction is entered into for the purposes of or in connection with that enterprise;
        provided:
        (iii) for the purposes of the activities specified in paragraphs (g), (j), (k) and (r) of GEN Rule 2.2.2 the assets in question belong to a Body Corporate falling within (i) or (ii); and
        (iv) for the purposes of the activities specified in paragraphs (f), (h), (p), (q) and (y) of GEN Rule 2.2.2, the activity does not involve an insurance Policyholder who is not a Group member; or
        (c) the Person carries on the activity solely for the purposes of or in connection with the sale of goods or the supply of services to a customer of that Person or a customer of a member of the same Group, provided that:
        (i) the supplier's main business is to sell goods or supply services and not to carry on any Financial Service; and
        (ii) the customer is not an individual;
        and for the purposes of the activities specified in paragraphs (g), (j), (k) and (r) of GEN Rule 2.2.2 the assets in question belong to that customer or member.
        (2) A Person who is a Body Corporate does not carry on the activity specified under paragraph (d) or (e) of GEN Rule 2.2.2 by way of business, if:
        (a) the Person carries on such activities as a member of an Authorised Market Institution or Recognised Body;
        (b) the Person carries on such activities for its own account or for another Body Corporate which is in the same Group as the Person, provided that any such member of the Group for which the Person acts is a wholly-owned Subsidiary of a Holding Company within the Group or is the Holding Company itself;
        (c) the Person restricts such activities to transactions involving or relating only to Commodity Derivatives on that Authorised Market Institution or Recognised Body;
        (d) the main business of the Person is dealing in relation to Commodity Derivatives; and
        (e) the Person is not part of a Group whose main business is the provision of financial services.
        Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
        [Amended][VER6/12-05]
        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]
        [Amended] DFSA RM155/2015 (Made 9th December 2015) [VER35/02-16]
        [Amended] DFSA RM176/2016 (Made 19th June 2016) [VER37/08-16]
        [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]
        [Amended] DFSA RM211/2018 (Made 22nd February 2018). [VER41/04-18]

      • GEN 2.3.3

        A Person does not carry on an activity specified under paragraphs (d), (e), (f), (h), or (y) of GEN Rule 2.2.2 by way of business if the activity is carried on solely for the purposes of or in connection with the acquisition or disposal of Shares in a Body Corporate, other than an Investment Company or Investment Partnership, provided that:

        (a) such Shares carry at least 50% of the voting rights or the acquisition will take an existing holding to at least 50%; or
        (b) the object of the transaction may reasonably be regarded as being the acquisition of day to day control of the Body Corporate; and
        (c) he is to enter as principal into the transaction.
        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 RM155/2015 (Made 9th December 2015) [VER35/02-16]
        [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

      • GEN 2.3.4 [Deleted]

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

      • GEN 2.3.4

        (1) A Person who is a Trustee does not carry on an activity specified under paragraphs (d), (g), and (j) of Rule 2.2.2 by way of business in circumstances where he is acting as a trustee.

        (2) A Person who is an individual does not carry on an activity specified under paragraph (t) by way of business where he is acting as trustee, enforcer or protector or where he is arranging for a Person to act as trustee, in respect of less than three (3) trusts.

        [Amended] DFSA RMI201/2017 (Made 14th June 2017). [VER38/02-17]

      • GEN 2.3.5

        (1) A Person does not carry on an activity specified under paragraphs (d), (e), (f), (g), (h), (i), (j), (k), (p), (t), (u), (v) and (y) of GEN Rule 2.2.2 by way of business if:
        (a) that Person is the holder of a licence under the SFO Regulations to establish a Single Family Office in the DIFC; and
        (b) the activity is carried on exclusively for the purposes of, and only in so far as it is, carrying out its duties as a Single Family Office.
        (2) A Private Trust Company or Family Fiduciary Structure does not carry on an activity specified under paragraph (t) of GEN Rule 2.2.2 by way of business if it:
        (a) carries on that activity exclusively for the purposes of, and only in so far as it is, providing services to a Single Family; and
        (b) does not solicit trust business from, or provide trust services to, any Person outside the structure of the Single Family Office and outside the Single Family.
        [Added][VER7/01-06]
        [Amended] DFSA RM60/2008 (as from 2nd September 2008). [VER21/09-08]
        [Amended] DFSA RM119/2013 (Made 14th July 2013). [VER33/07-13]
        [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

      • GEN 2.3.6 GEN 2.3.6

        (1) This Rule applies if the DIFC is the Host Jurisdiction of a Passported Fund.

        (2) A Fund Manager of the Passported Fund does not carry on an activity specified under paragraphs (d), (e), (f), (h) or (i) of GEN Rule 2.2.2 by way of business to the extent that it Promotes the Passported Fund in the DIFC.

        (3) An Agent of the Fund Manager or another Licensed Person does not carry on an activity specified under paragraphs (d), (e), (f) or (h) of GEN Rule 2.2.2 by way of business to the extent that it Promotes the Passported Fund in the DIFC.

        (4) The exclusions in (2) and (3) do not apply if the relevant Fund Manager, Agent or Licensed Person is an Authorised Person.

        Derived from DFSA RM234/2019 (Made 20th February 2019). [VER43/02-19]

        • GEN 2.3.6 Guidance

          The terms "Host Jurisdiction", "Passported Fund", "Fund Manager", "Promote", "Agent" and "Licensed Person" are defined in the Fund Protocol Rules (and in GLO). The exclusion in GEN Rule 2.3.6 does not apply if the Person is already an Authorised Person in the DIFC; it applies to a Fund Manager or its Agent or a Licensed Person that is authorised by another Authority.

          Derived from DFSA RM234/2019 (Made 20th February 2019). [VER43/02-19]