Persondoes not carry on the activity of Arranging Dealsin Investmentsunder GEN Rule 2.9.1(1) in relation to a transaction if the Personbecomes, or proposes to become, a party to the transaction (regardless of whether the transaction is effected). This exclusion does not apply in the case of a branch which makes arrangements for its head office, or any other branch of the same legal entity as itself, to enter into a transaction as provided under GEN Rule 2.9.1(1).
Persondoes not Arrange Deals in Investmentsmerely by providing means by which one party to a transaction is able to communicate with other such parties.
Persondoes not Arrange Deals in Investmentsby making arrangements under which another Personaccepts or is to accept an instrument creating or acknowledging indebtedness in respect of any loan, credit, guarantee or other similar financial accommodation which he or his principal has made or provided.
Persondoes not Arrange Deals in Investmentsmerely by making arrangements having as their sole purpose the provision of finance to enable a Personto buy, sell, subscribe for or underwrite Investments.
Persondoes not Arrange Deals in Investmentsby making arrangements for the issue or redemption of Securitiesissued by it.
Persondoes not Arrange Deals in Investmentsif the activity:(a) is carried on in the course of providing legal or accountancy services, which do not otherwise consist of the carrying on of Financial Services;(b) may reasonably be regarded as a necessary part of any other services provided in the course of providing legal or accountancy services;(c) is not remunerated separately from the other services; and(d) in the case of a contract of Long-Term Insurance, does not assist in the conclusion or performance of the contract.
GEN 2.9.8 GEN 2.9.8
Exchangedoes not make arrangements referred to in GEN Rule 2.9.1(a), merely by making arrangements for, or taking steps that facilitate, another Personto act as Central Counterpartyto transactions entered into on a facility operated by the Exchange.Derived from DFSA RM166/2016 (Made 10th February 2016). [VER36/04-16]
GEN 2.9.8 Guidance
1. GEN Rule 2.9.2 excludes the activities of a party to a transaction from being 'arranging'. This is because a person cannot be both a party to a transaction, and its arranger.
2. Where a
Person(an arranger) makes arrangements in the DIFCfor another Personto obtain dealing services (e.g. broking services) from its head office, the arranger is not regarded as 'Dealing in Investments as Agent' in the DIFCmerely because it is the same legal entity as its head office. However, to be able to do so without breaching the Financial ServicesProhibition, the arranger would need to have an Authorisationfor ' Arranging Deals in Investments'. It would also need to take care not to conduct activities that go beyond 'arranging' (see Guidance under GEN Rule 2.9.1 for activities which constitute arranging).
3. GEN Rule 2.9.3 excludes providers of means by which one party to a transaction (or potential transaction) communicates with the other contracting parties, from being arrangers. Communication channel providers, such as internet or telecommunication network providers, are excluded from being arrangers under this exclusion. However, if such a provider goes beyond being a 'mere' communication channel provider, for example, by adding value to the service provided to those communicating with each other, with a view to facilitating a contract being concluded, this exclusion will not apply to them.
4. GEN Rule 2.9.4 excludes from being arranging the activity of making arrangements for a lender (such as a bank) to accept an instrument acknowledging debt by a person who has obtained credit, a loan, a guarantee or any other form of financial facility. This mirrors the similar carve-out from regulation available to banks and other lenders where they are not considered to be 'dealing as principal' in Investments merely because they accept instruments acknowledging debt from those obtaining credit, loans, guarantees or any other form of financial facility from them.
5. GEN Rule 2.9.6 excludes issuers of
Securitiesfrom being regarded as arrangers. For example, if an issuer of Securitiessets up a website which enables prospective buyers of Securitiesto read the offer document and apply for the relevant Securities, the issuer is not required to have a Licenceas an arranger due to this exclusion (but may have to comply with the disclosure requirements in MKT relating to the offer).
6. GEN Rule 2.9.7 excludes from being 'arrangers' lawyers and accountants, who, in the course of conducting their legal and accounting business, arrange for their clients to buy or sell
Securities. To have the benefit of this exclusion, certain conditions have to be met (such as the activity being reasonably regarded as a necessary part of services provided by legal and accounting practitioners and not being separately remunerated). For example, if a lawyer arranges as part of estate planning services for a portfolio of investments to be sold by a brokerage firm, this exclusion can be applied, provided the lawyer's fees do not include a separate charge for arranging the liquidation of the portfolio, and the lawyer does not assist or participate in the conclusion of the contracts.Derived from DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]
Crowdfunding Operatordoes not Arrange Deals in Investmentsto the extent that it Operates an Investment Crowdfunding Platform.[Added] DFSA RMI201/2017 (Made 14th June 2017). [VER40/08-17]