Entire Section

  • GEN 2.11 GEN 2.11 Advising on financial products

    • GEN 2.11.1 GEN 2.11.1

      (1) In GEN Rule 2.2.2, Advising on Financial Products means giving advice to a Person in his capacity as an investor or potential investor, or in his capacity as agent for an investor or a potential investor, on the merits of his buying, selling, holding, subscribing for or underwriting a particular financial product (whether as principal or agent).
      (2) Advice in (1) includes a statement, opinion or report:
      (a) where the intention is to influence a Person, in making a decision, to select a particular financial product or an interest in a particular financial product; or
      (b) which could reasonably be regarded as being intended to have such an influence.
      (3) Giving advice to a Person under (1) includes operating an Insurance Aggregation Site relating to contracts of Long-Term Insurance, other than contracts of reinsurance.
      (4) For the purposes of this Rule and GEN Rule 2.11.2, a "financial product" is:
      (a) an Investment;
      (b) a Deposit;
      (c) a Profit Sharing Investment Account;
      (d) a right under a contract of Long-Term Insurance, that is not a contract of reinsurance;
      (e) a right under an Employee Money Purchase Scheme; or
      (f) a right or interest in a pension, superannuation, retirement or gratuity scheme or arrangement, or a broadly similar scheme or arrangement.
      Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
      [Amended] [VER10/06-06]
      [Amended] DFSA RM49/2007 (Made 1st October 2007). [VER16/10-07]
      [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]
      [Amended] DFSA RM176/2016 (Made 19th June 2016) [VER37/08-16]
      [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]
      [Amended] DFSA RMI260/2019 (Made 18th December 2019). [VER47/01-20]
      [Amended] DFSA RMI301/2021 (Made 30th June 2021). [VER52/09-21]

      • GEN 2.11.1 Guidance

        1. As a 'financial product' is defined in GEN Rule 2.11.1(4) to include rights under a contract of Long-Term Insurance (other than a contract of reinsurance), advice on contracts of Long-Term Insurance will fall within Advising on Financial Products.
        2. An 'Insurance Aggregation Site' is defined in GLO. In summary, it is a website or other form of electronic media that provides a facility for a user to search for, and then to conclude, directly or indirectly, a Contract of Insurance. The site may, for example, enable the user to conclude a Contract of Insurance:
        a. directly, if the user can enter into the Contract of Insurance by clicking a button on the website itself; or
        b. indirectly, if it provides a link to the insurer, transmits the details of one party to the other party or otherwise facilitates contact between the parties.
        3. Operating an Insurance Aggregation Site will fall under Advising on Financial Products to the extent that it relates to contracts of Long-Term Insurance, and under Insurance Intermediation to the extent that it relates to other types of Contracts of Insurance.
        4. An operator of an Insurance Aggregation Site that can be used by Retail Clients will need an endorsement on its Licence to deal with Retail Clients (see GEN Rule 2.2.8).
        5. As a ‘financial product’ is defined in GEN Rule 2.11.1(4) to include rights under an Employee Money Purchase Scheme, advice on rights under an Employee Money Purchase Scheme will fall within Advising on Financial Products. It should be noted that an Operator of an Employee Money Purchase Scheme or an Administrator of an Employee Money Purchase Scheme are not licensed to provide such advice to Members of the Scheme.
        Derived from 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]
        [Added] DFSA RMI260/2019 (Made 18th December 2019). [VER47/01-20]

    • Exclusions

      • GEN 2.11.2

        A Person does not Advise on Financial Products by giving advice in any newspaper, journal, magazine, broadcast service or similar service in any medium if the principal purpose of the publication or service, taken as a whole, is neither:

        (a) that of giving advice of the kind mentioned in GEN Rule 2.11.1; nor
        (b) that of leading or enabling Persons to buy, sell, subscribe for or underwrite a particular financial product of the kind in GEN Rule 2.11.1(4).

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

      • GEN 2.11.3

        A Person does not Advise on Financial Products if 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; and
        (c) is not remunerated separately from the other services.
        Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
        [Amended] DFSA RM166/2016 (Made 10th February 2016). [VER36/04-16]
        [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]