Entire Section

  • RPP 6 RPP 6 Decision Making

    • RPP 6-1 RPP 6-1 Introduction

      • RPP 6-1-1

        This chapter sets out the DFSA's general approach to making decisions in the exercise of its discretionary powers, including those set out in chapters 4 and 5 of this Sourcebook.

        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • RPP 6-1-2

        A reference to:

        (a) an Article in this chapter is a reference to an Article in the Regulatory Law 2004, unless otherwise stated; and
        (b) the Law in this chapter is a reference to any legislation administered by the DFSA.
        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • RPP 6-1-3

        The DFSA is aware that when it makes a decision to take certain action or pursue a remedy, such decisions are likely to affect the rights, interests and legitimate expectations of Persons. Therefore, the DFSA has put in place a fair and transparent decision making process.

        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

    • RPP 6-2 RPP 6-2 Who can Exercise a DFSA Power?

      • RPP 6-2-1

        The DFSA's powers can be exercised by the Chief Executive and any DFSA officer with an appropriate delegation.

        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • RPP 6-2-2

        Some DFSA powers can be exercised only by the Chief Executive, or an individual acting in the capacity of the Chief Executive. An example of such a decision is the power to commence an investigation under Article 78 of the Regulatory Law 2004.

        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • RPP 6-2-3

        The decisions which are made by the DFSA generally fall into two main categories:

        (a) the first category is those decisions made by the DFSA in response to an application or notification made by a Person to the DFSA to obtain a right, status or other privilege which the Person would not have, unless the DFSA grants such a right, status or other privilege. These decisions mainly involve "entry control" or "gatekeeper" type decisions. An example of such a decision is when the DFSA considers an application for a Licence or extension to an existing Licence. Such decisions are referred to as "Executive Decisions" in this chapter; and
        (b) the second category is those decisions which result from action initiated by the DFSA and which can have a significant adverse impact on the existing rights, interests and legitimate expectations of Persons. An example of such a decision is when the DFSA seeks to withdraw an Authorised Person's Licence. Such decisions are referred to as "Decision Maker Decisions" in this chapter.
        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

    • RPP 6-3 RPP 6-3 What are the DFSA's Decision Making Procedures?

      • RPP 6-3-1

        Subject to the considerations of procedural fairness, the decision making procedures of the DFSA will generally take into account matters including:

        (a) the requirements set out in the relevant Law and Rules;
        (b) the nature of the decision, including its complexity, importance and urgency; and
        (c) the extent and manner in which the rights, interests and legitimate expectations of Persons may be affected by the decision.
        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • RPP 6-3-2

        In regard to 6.3.1(b), the DFSA has appropriate procedures for making Executive Decisions (see section 6-4) and Decision Maker Decisions (see section 6-5).

        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • RPP 6-3-3

        Generally, decisions of the DFSA which affect the rights of a Person are appealable to the DFSA's Regulatory Appeals Committee. The Regulatory Appeals Committee is a committee of the DFSA Board which will conduct a full merits review of certain decisions made by the DFSA. In doing so, it looks at the facts afresh, and can make a new decision ensuring procedural fairness, objectivity and transparency in arriving at its decision. A decision of the Regulatory Appeals Committee may be reviewed by the DIFC Court by way of judicial review on a point of law. For more information on the Regulatory Appeals Committee, including its rules and procedures, please see the DFSA's website (www.dfsa.ae).

        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • RPP 6-3-4

        Based on the above considerations, the DFSA has prepared a list containing the most common types of decisions it may take and the types of procedures followed in making such decisions (see Appendix 1 to this chapter). This list also sets out whether a Person has a right of appeal to the Regulatory Appeals Committee in respect of a particular decision. However, it is not an exhaustive list.

        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

    • RPP 6-4 RPP 6-4 Executive Decision Procedures

      • RPP 6-4-1

        The Executive Decisions of the DFSA are generally operational decisions which involve the DFSA being called upon to make a decision in response to an application or notification made by a Person. Some examples of these decisions include where the DFSA proposes to:

        (a) grant an application for a Licence or an extension to such a Licence of an Authorised Person;
        (b) grant an application for an Authorised Individual's status;
        (c) register an Ancillary Service Provider or Auditor;
        (d) register a Public Fund;
        (e) approve an application for a change in control by an Authorised Person; or
        (f) approve a Prospectus filed with the DFSA.
        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • RPP 6-4-2

        The decisions of the kind referred to above are generally decisions which would confer on a Person a right or authority to undertake specified activities or enjoy a particular privilege or status only if the DFSA decides to grant the relevant licence, registration, approval, or privilege sought. Although a Person does not have any vested rights relating to the subject matter of the application or notification, that Person has:

        (a) a right to be treated fairly and properly by the DFSA when considering the relevant application or notification; and
        (b) a right to have the DFSA's decision reviewed by the Regulatory Appeals Committee.
        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • Procedural Fairness Principles

        • RPP 6-4-3

          Because a Person has a right to be treated fairly and properly during the course of processing the application or notification made by that Person, a DFSA officer making an Executive Decision is expected to:

          (a) act without bias or conflict of interest;
          (b) give the Person a fair right to present his case; and
          (c) take into account only those considerations which are relevant to the matter to be decided upon.
          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • Acting without Bias or Conflict of Interest

        • RPP 6-4-4

          A DFSA officer is expected to act impartially. If an officer has a vested financial or personal interest in the subject matter of the decision, a conflict of interest may arise that prevents a decision being made by that officer.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-4-5

          A DFSA officer who has a financial or other personal interest in the subject matter of the decision, is required to disclose the fact to the DFSA, and where such interest is material, not act in relation to such decision.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • Right to Present his Case

        • RPP 6-4-6

          A Person who will be affected by a decision of the DFSA has the right to present his case. This right arises at the point of submission of an application or notification, and continues during the process until a decision is made. Generally, the application or notification form which is required to be submitted by the Person who is asking for such a decision to be made will contain all the information relevant to the DFSA decision sought. The DFSA officer may require further information if the information provided is not complete.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-4-7

          In some cases, the DFSA officer will obtain information relevant to the matter in relation to which the decision is to be made from sources other than the Person making the application or notification (external sources) in response to which the decision has to be made. As a matter of fair procedure, where information is obtained from an external source, particularly if that information has an adverse bearing (for example, information that does not support the grant of a Licence, authorisation or approval sought from the DFSA), the DFSA officer should, before acting on such information (subject to any confidentiality obligations), give to the Person making the application or notification a right to comment upon the adverse information before making his decision.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • Relevant Considerations

        • RPP 6-4-8

          The DFSA officer is expected to take into account only those considerations which are relevant to the matter to be decided upon. Taking into account only those considerations which are relevant to the matter to be decided upon necessarily requires disregarding any irrelevant information. This also requires the DFSA officer to ensure that he has all the material information that is necessary to be able to make the relevant decision. For this purpose, the DFSA officer may ask for further information.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • Right of Review

        • RPP 6-4-9

          Generally, a Person affected by an Executive Decision has a right of review of that decision (see paragraph 6-3-3 above). To enable the Person affected by the DFSA decision to exercise that right effectively, the DFSA Officer will inform the relevant Person without undue delay of:

          (a) the decision and the reasons for making that decision;
          (b) any information required to be provided by the relevant Law or Rule empowering the action; and
          (c) if applicable, the fact that the Person has the right to appeal the decision to the Regulatory Appeals Committee, the process for making the appeal and the period within which the appeal can be lodged.
          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

    • RPP 6-5 RPP 6-5 Decision Maker Procedures

      • RPP 6-5-1

        Decision Maker Decisions result from action initiated by the DFSA which can have a significant adverse impact on the existing rights, interests or legitimate expectations of a Person.

        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • RPP 6-5-2

        The procedures that must be followed when making such decisions are often prescribed in the Laws and Rules administered by the DFSA. These decisions attract prescribed procedures because they can have a significant adverse impact on the existing rights, interests or legitimate expectations of Persons. Therefore, a Decision Maker is bound by procedural fairness principles such as those set out in paragraphs 6-4-3 to 6-4-8, in addition to the considerations noted below.

        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • RPP 6-5-3

        Decision Maker Decisions are made by a DFSA officer known as a Decision Maker. The Decision Maker will be a person with no previous direct involvement in the matter to which the decision relates. Examples of these decisions include where the DFSA, on its own initiative, proposes to:

        (a) impose an administrative fine or censure,
        (b) withdraw a Licence of an Authorised Person;
        (c) withdraw the status of an Authorised Individual;
        (d) withdraw the registration of an Ancillary Service Provider or Auditor; or
        (e) withdraw the registration of a Public Fund.
        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • RPP 6-5-4

        Decision Maker Decisions are often, but not always, made by the DFSA at the conclusion of an investigation.

        Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • Prior Representation Procedures

        • RPP 6-5-5

          Decision Maker Decisions generally involve prescribed procedures, which require the Decision Maker to give to the Person who will be affected by his decision ("the Affected Person") a right of representation prior to making his decision. Prior representation procedures involve the Decision Maker giving to the Affected Person:

          (a) a written notice setting out the basis on which he proposes to exercise the relevant DFSA power; and
          (b) a suitable opportunity to make representations prior to the Decision Maker's exercising the relevant DFSA power, unless the Law or Rules provide for making a decision without giving a prior right of representation. In the latter case, generally, a right of representation is given immediately after the decision is made (see paragraphs 6-5-12 to 6-5-16).
          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-5-6

          If the Decision Maker receives no response or representations from the Affected Person within the period specified in the notice, the Decision Maker may regard the allegations or matters in the notice as undisputed and proceed to make his decision.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-5-7

          If, however, the Affected Person makes representations, then the Decision Maker will take into account those representations in making his decision on the basis of the material then available, subject to seeking further clarification of any issues that might arise from such representations.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-5-8

          Should the Affected Person wish to make oral representations in addition to, or in lieu of, written submissions, he should notify the Decision Maker as soon as practicable and within the timeframe provided for making representations. The notification should specify the matters on which the Person wishes to make oral representations, how long the Person expects the representations will take and the names of any representatives appointed to attend the hearing at which the representations will be made.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-5-9

          The Affected Person may appoint one or more representatives of that Person's choice (who may be legally qualified) to attend the meeting at which representations will be made. Such representatives may make, or assist in making, the representations.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-5-10

          As soon as is reasonably practicable after receiving the notification for the meeting to take place, the Decision Maker will specify the time and place at which the meeting will take place. Before making his decision, the Decision Maker may also seek further comments or clarification from DFSA officers on matters that were represented to him by the Affected Person.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-5-11

          Upon making the relevant decision, a written notice setting out the DFSA decision, the reasons for making such decision and any right of appeal to the Regulatory Appeals Committee must be given to the Affected Person.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • Post Representations Procedures

        • RPP 6-5-12

          In certain circumstances a Decision Maker is not required to follow the procedures relating to prior representations when exercising specific DFSA powers. These circumstances are set out in the relevant Law and Rules. For example, the DFSA is not obliged to provide an Affected Person with a prior opportunity to make representations where any delay likely to arise from giving such a right is prejudicial to the interests of the DIFC. These circumstances can sometimes apply in the decision to:

          (a) withdraw an authorisation in relation to one or more Financial Services for which an Authorised Person is authorised under a Licence (see Article 50);
          (b) withdraw a Licence of an Authorised Person (see Article 51);
          (c) impose conditions and restrictions, impose additional conditions and restrictions, or vary or withdraw existing conditions and restrictions on a Licence of an Authorised Person (see Article 49);
          (d) restrict a Person from performing one or more Licensed Functions or suspend or withdraw Authorised Individual status from such a Person (see Article 58(2));
          (e) impose conditions and restrictions, impose additional conditions and restrictions, or vary or withdraw existing conditions and restrictions on Authorised Individual status (see Article 57);
          (f) restrict Persons from performing functions (see Article 58(1)); and
          (g) remove a Recognised Person from the list of Recognised Persons (see Article 37(7) of the Markets Law and REC Rule 4.4.4).
          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-5-13

          In deciding whether any delay is prejudicial to the interests of the DIFC, the Decision Maker will take into account factors including, but not limited to:

          (a) the extent of any loss, or risk of loss, or other adverse effect on DIFC regulated entities or customers;
          (b) the extent to which assets appear to be at risk;
          (c) the nature and extent of any false or inaccurate information provided by the Person to the DFSA;
          (d) the seriousness of any suspected breach of the requirements of the Law or Rules and the steps that need to be taken to correct that breach;
          (e) the risk that the Person or the Person's business may be used or has been used to facilitate money laundering or other financial crime;
          (f) the Person's conduct in identifying the conduct and taking action in respect thereto; and
          (g) the impact that use of the DFSA's powers will have on the Person's business or on its customers.
          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-5-14

          In some cases, the relevant provisions expressly require Affected Persons to be given a right of representation following the making of a decision without being given prior representation rights. The right arises when the decision involves:

          (a) imposing conditions and restrictions or additional conditions and restrictions, or varying or withdrawing conditions and restrictions imposed on a Licence of an Authorised Person (see Article 49); or
          (b) imposing conditions and restrictions or additional conditions and restrictions, or varying or withdrawing conditions and restrictions on Authorised Individual status (see Article 57),

          and the DFSA concluded that any delay would be prejudicial to the interests of the DIFC. The Decision Maker will allow the Person the opportunity to make representations within fourteen days (or such longer period as may be agreed) from the date of the decision.54


          54 Articles 49(5) and 57(5) of the Regulatory Law 2004.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-5-15

          Where the relevant Law or Rules do not expressly confer on an Affected Person a right to make representation, where the DFSA makes a decision without giving a prior right of representation due to any delay being prejudicial to the interests of the DIFC, the DFSA will generally provide such a person a post decision right of representation.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-5-16

          Where a post decision representation right is given, the Decision Maker will confirm, withdraw or vary his decision taking into account the representations made. The procedures for considering representations are the same as noted in paragraphs 6-5-5 to 6-5-11 for prior representations.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

      • Article 75, 75A and 76 Powers

        • RPP 6-5-17

          Pursuant to Articles 75, 75A and 76 of the Regulatory Law 2004, the DFSA has the power by which:

          (a) prohibitions or requirements can be imposed on an Authorised Person's business such as those relating to certain specified business transactions, soliciting business from specified persons or carrying on business in a specified manner (see Article 75);
          (b) for prudential purposes, directions can be imposed on an Authorised Firm or Authorised Firms within a specified class (see Article 75A); and
          (c) prohibitions or requirements can be imposed on an Authorised Person's dealings in property such as prohibitions against dealing in property other than in a specified manner (see Article 76).
          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-5-18

          The Article 75 and 76 powers do not require the DFSA to give an Affected Person the opportunity to make representations, prior to the DFSA exercising such powers. This is because such powers are designed to enable the DFSA to act swiftly in the circumstances set out in GEN Rule 11.13.1. These circumstances include where the DFSA considers that any prohibition or requirement is necessary to ensure that customers, Authorised Persons or the financial system are not adversely affected by the activities of the Affected Person.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-5-19

          Before issuing a direction under Article 75A, the DFSA will provide an Affected Person with an opportunity to make written and oral representations. Where the DFSA needs to exercise its powers swiftly under Article 75A, it will not be possible to provide an Affected Person with an opportunity to make representations to the DFSA prior to the issue of the relevant direction. However, an opportunity to make representations immediately after the issue of such direction will be afforded to the Affected Person.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition

        • RPP 6-5-20

          Given that the DFSA may be required to act swiftly when it exercises its Article 75, 75A and 76 powers, the Decision Maker may be a DFSA officer who might have had supervisory or other regulatory responsibilities, including enforcement responsibilities, in relation to the Affected Person.

          Derived from Notice of Updates (Made 20th December 2012). December 2012 Edition