Entire Section

  • GEN 2.7 GEN 2.7 Dealing in investments as principal

    • GEN 2.7.1

      In GEN Rule 2.2.2 Dealing in Investments as Principal means buying, selling, subscribing for or underwriting any Investment as principal.


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

    • Exclusions

      • GEN 2.7.2

        A Person does not Deal in Investments as Principal merely by accepting an instrument, creating or acknowledging indebtedness in respect of any loan, credit, guarantee or other similar financial accommodation which that person has made or provided.


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

      • GEN 2.7.3

        A Person does not Deal in Investments as Principal by issuing or redeeming Securities issued by that person.


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

      • GEN 2.7.4 GEN 2.7.4

        (1) A Person who is not an Authorised Firm or an Authorised Market Institution does not Deal in Investments as Principal in relation to an Investment by entering into a transaction with or through an Authorised Firm or a Regulated Financial Institution.
        (2) The exclusion in (1) does not apply if the Person holds itself out as:
        (a) willing to enter into transactions in Investments of the kind to which the transaction relates; or
        (b) engaging in the business of buying, selling, subscribing for or underwriting Investments.
        Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
        [Amended] DFSA RM211/2018 (Made 22nd February 2018). [VER41/04-18]

        • Guidance

          1. The exclusion in GEN Rule 2.7.4 is intended to apply, for example, to a Person who executes proprietary trades through a duly authorised broker, or to a Person who is carrying on a commercial business and enters into a transaction with a firm for a purpose related to that business, such as to hedge a risk. It does not apply to a Person that holds itself out as willing to enter into transactions relating to Investments of that kind or as engaging in the business of dealing in Investments, such as a market maker or an online trading platform operator (even if it enters into transactions only with Authorised Firms or Regulated Financial Institutions).
          2. A Person may hold itself out as carrying on an activity by various means including, for example, on its webpage, in an advertisement or through representations made by its staff. However, merely placing orders with a broker or on a market will not amount to holding out.
          Derived from DFSA RM211/2018 (Made 22nd February 2018). [VER41/04-18]

      • GEN 2.7.5

        A Person who is an Authorised Firm does not Deal in Investments as Principal if in the course of managing the assets of a Private Equity Fund:

        (a) the Person makes an initial subscription for Units of that Fund; and
        (b) the Units are held by that Person for a period of more than 12 months.