Entire Section

  • AMI 9 AMI 9 Supervision of Authorised Market Institutions

    • AMI 9.1 AMI 9.1 Application

      • AMI 9.1.1

        This chapter applies to every Authorised Market Institution.

        Derived from RM118/2013 [VER15/07-13]

    • AMI 9.2 AMI 9.2 Relations with Regulators and the Risk Based Approach

      • AMI 9.2.1

        An Authorised Market Institution must deal with regulatory authorities in an open and co-operative manner and keep the DFSA promptly informed of significant events or activities, wherever they are carried on, relating to the Authorised Market Institution, of which the DFSA would reasonably expect to be notified.

        Derived from RM118/2013 [VER15/07-13]

      • AMI 9.2.2

        An Authorised Market Institution must advise the DFSA immediately if it becomes aware, or has reasonable grounds to believe, that a significant breach of a Rule or Licensing Requirement by the Authorised Market Institution or any of its Employees may have occurred or may be about to occur.

        Derived from RM118/2013 [VER15/07-13]

    • AMI 9.3 AMI 9.3 Notifications

      • AMI 9.3.1

        Unless otherwise provided, notifications in this section may be made orally or in writing, whichever is more appropriate in the circumstances, but where the Authorised Market Institution gives notice or information orally, it must confirm that notice or information in writing without delay.

        Derived from RM118/2013 [VER15/07-13]

    • AMI 9.4 AMI 9.4 Key Individuals

      • Notifications

        • AMI 9.4.1 AMI 9.4.1

          An Authorised Market Institution must, where an individual ceases or is reasonably likely to cease to be a Key Individual of the Authorised Market Institution, give written notice to the DFSA of that event and take prompt action to replace the Key Individual who has ceased to perform the relevant functions.

          Derived from RM118/2013 [VER15/07-13]

          • AMI 9.4.1 Guidance

            1. An Authorised Market Institution must lodge with the DFSA the relevant applications for the approval of the proposed Key Individual in accordance with the requirements in section 3.3.
            2. An Authorised Market Institution should ensure that functions that are assigned to Key Individuals as per the definitions of those functions are carried out by the relevant Key Individuals or other individuals subject to appropriate oversight and control of the relevant Key Individuals.
            3. The DFSA does not need to be notified where minor changes are made to the responsibilities of a Key Individual, but where major changes in responsibilities are made, such as a significant re-alignment of responsibilities, then the DFSA should be notified with the appropriate information. Such changes may also require the DFSA prior approval if they are material changes. See section 4.3.
            Derived from RM118/2013 [VER15/07-13]

      • Disciplinary Action and Events Relating to Key Individuals

        • AMI 9.4.2

          Where any Key Individual of an Authorised Market Institution:

          (a) is the subject of any:
          (i) disciplinary action arising out of alleged misconduct; or
          (ii) criminal prosecution arising out of alleged misconduct involving fraud or dishonesty;
          (b) resigns as a result of an investigation into alleged misconduct; or
          (c) is dismissed for misconduct;

          the Authorised Market Institution must immediately give the DFSA notice of that event and give the following information:
          (d) the name of the Key Individual and his responsibilities within the Authorised Market Institution;
          (e) details of the alleged acts of misconduct by that Key Individual; and
          (f) details of any disciplinary action which has been imposed or is proposed to be taken by that body in relation to that Key Individual.
          Derived from RM118/2013 [VER15/07-13]

        • AMI 9.4.3

          Where an Authorised Market Institution becomes aware that any of the following events have occurred in relation to a Key Individual, it must immediately give the DFSA notice of that event:

          (a) a petition of bankruptcy is presented against a Key Individual;
          (b) a bankruptcy order is made against a Key Individual; or
          (c) a Key Individual entering into a voluntary arrangement with his creditors.
          Derived from RM118/2013 [VER15/07-13]

    • AMI 9.5 AMI 9.5 Constitution and Governance

      • AMI 9.5.1

        Where an Authorised Market Institution is to circulate any notice or other document proposing any amendment to its memorandum or articles of association, or other document relating to its constitution, to:

        (a) its shareholders or any group or class of them;
        (b) persons granted access to its facilities or any group or class of them; or
        (c) any other group or class of persons which has the power to make that amendment or whole consent or approval is required before it may be made:

        that Authorised Market Institution must give notice of that proposed amendment to the DFSA setting out the following information:

        (d) the proposed amendment;
        (e) the reasons for the proposal; and
        (f) a description of the group or class of persons to whom the proposal is to be circulated.
        Derived from RM118/2013 [VER15/07-13]

      • AMI 9.5.2

        Where an Authorised Market Institution makes an amendment to its memorandum or articles of association, or other document relating to its constitution, that Authorised Market Institution must immediately give the DFSA notice of that event, setting out written particulars of that amendment and of the date on which it is to become or became effective.

        Derived from RM118/2013 [VER15/07-13]

      • AMI 9.5.3 AMI 9.5.3

        (1) Where any significant change is made to an agreement which relates to the constitution, or to the corporate governance framework or the remuneration structure or strategy, of an Authorised Market Institution, that Authorised Market Institution must give the DFSA a notice as provided in (2).
        (2) Where any significant change is made to:
        (a) an agreement which relates to the constitution of an Authorised Market Institution, the Authorised Market Institution must give the DFSA notice of that change as soon as it becomes aware of it, and the date on which it is to become or became effective; or
        (b) the corporate governance framework or the remuneration structure or strategy of an Authorised Market Institution, the Authorised Market Institution must give the DFSA notice of that change as soon as practicable before making such a change.
        Derived from RM118/2013 [VER15/07-13]

        • AMI 9.5.3 Guidance

          1. Key aspects of the corporate governance framework of an Authorised Market Institution encompass a range of matters. These include the composition of its Governing Body, any committees of the Governing Body, the senior management and the Persons Undertaking Key Control Functions, the reporting lines between the Governing Body, senior management and the Persons Undertaking Key Control Functions and any key policies and practices relating to the internal governance of the firm, such as codes of ethics or its remuneration practices. Significant changes relating to such arrangements and policies need to be notified to the DFSA pursuant to Rule 9.5.3(2)(b) before making any changes.
          3. Notification relating to proposed changes to corporate governance and remuneration referred to in Rule 9.5.3(2)(b) must be given sufficiently in advance of effecting the proposed change. If there are any concerns that an Authorised Market Institution may not be able to meet the applicable requirements relating to corporate governance and remuneration set out in GEN Rules 5.3.30 and 5.3.31 as a result of a proposed change, the DFSA may require the Authorised Market Institution to address those concerns effectively before implementing such a change.
          Derived from RM118/2013 [VER15/07-13]

    • AMI 9.6 AMI 9.6 Financial and Other Information

      • AMI 9.6.1

        An Authorised Market Institution must give the DFSA:

        (a) a copy of its annual report and accounts; and
        (b) a copy of any consolidated annual report and accounts of any group of which the Authorised Market Institution is a member;

        no later than when the first of the following events occurs:
        (c) three months after the end of the financial year to which the document relates;
        (d) the time when the documents are sent to Persons granted access to the facilities or shareholders of the Authorised Market Institution; or
        (e) the time when the document is sent to a Holding Company of the Authorised Market Institution.
        Derived from RM118/2013 [VER15/07-13]

      • AMI 9.6.2

        Where an audit committee of an Authorised Market Institution has received a report in relation to any period or any matter relating to any Regulatory Functions of that Authorised Market Institution, the Authorised Market Institution must immediately give the DFSA a copy of that report.

        Derived from RM118/2013 [VER15/07-13]

      • AMI 9.6.3

        An Authorised Market Institution must give the DFSA a copy of its quarterly management accounts within one month of the end of the period to which they relate.

        Derived from RM118/2013 [VER15/07-13]

      • AMI 9.6.4 AMI 9.6.4

        An Authorised Market Institution must give the DFSA:

        (a) a statement of its anticipated income, expenditure and cash flow for each financial year; and
        (b) an estimated balance sheet showing its position as it is anticipated at the end of each financial year;

        at least 15 days before the beginning of that financial year.

        Derived from RM118/2013 [VER15/07-13]

        • AMI 9.6.4 Guidance

          An Authorised Market Institution is subject to GEN 8 and the requirements imposed by those Rules.

          Derived from RM118/2013 [VER15/07-13]

      • Fees and Charges

        • AMI 9.6.5

          An Authorised Market Institution must give the DFSA a summary of:

          (a) any proposal for changes to the fees or charges levied on users of its facilities, or any group or class of them, at the same time as the proposal is communicated to the relevant users; and
          (b) any such change, no later than the date when it is published and notified to relevant parties.
          Derived from RM118/2013 [VER15/07-13]

    • AMI 9.7 AMI 9.7 Complaints

      • AMI 9.7.1

        Where an Authorised Market Institution has investigated a complaint arising in connection with the performance of, or failure to perform, any of its Regulatory Functions, and the conclusion is, that the Authorised Market Institution should:

        (a) make a compensatory payment to any person; or
        (b) remedy the matter which was the subject of that complaint,

        the Authorised Market Institution must immediately notify the DFSA of that event and give the DFSA a copy of the report and particulars of the recommendation as soon as that report or those recommendations are available to it.

        Derived from RM118/2013 [VER15/07-13]

    • AMI 9.8 AMI 9.8 Notification

      • Notification in Respect of Trading

        • AMI 9.8.1

          Where an Authorised Market Institution proposes to remove from trading or admit to trading, by means of its facilities, a class of Investment which it has not previously traded, but is licensed to do so, it must give the DFSA notice of that event, at the same time as the proposal is communicated to persons granted access to its facilities or shareholders, with the following information;

          (a) a description of the Investment to which the proposal relates;
          (b) where that Investment is a derivative product, the proposed terms of that derivative; and
          (c) the name of any clearing or settlement facility in respect of that Investment.
          Derived from RM118/2013 [VER15/07-13]

        • AMI 9.8.2

          Where an Authorised Market Institution decides to suspend, restore from suspension or cease trading any Investment, it must immediately notify the DFSA and any person granted access to its facilities of the decision.

          Derived from RM118/2013 [VER15/07-13]

        • AMI 9.8.3 AMI 9.8.3

          Where a Clearing House proposes to cease clearing or settling, or to commence clearing or settling, by means of its facilities, a class of Investment which it has not previously cleared or settled, but is licensed to do so, it must give the DFSA notice of that event, at the same time as the proposal is communicated to persons granted access to its facilities or shareholders, with the following information;

          (a) a description of the Investment to which the proposal relates;
          (b) where that Investment is a derivative product, the proposed terms of that derivative; and
          (c) the name of any trading facility in respect of that Investment.
          Derived from RM118/2013 [VER15/07-13]

          • AMI 9.8.3 AMI 9.8.3 Delisting or Suspension of Securities from an Official List of Securities

            • AMI 9.8.3 Guidance

              An Authorised Market Institution which maintains an Official List of Securities has the power under Article 35(1) of the Markets Law 2012 to delist or suspend Securities from its Official List of Securities.

              Derived from RM118/2013 [VER15/07-13]

        • AMI 9.8.4

          Where an Authorised Market Institution suspends, restores or delists from suspension any Securities from an Official List of Securities it maintains under an endorsement on its Licence, it must immediately notify the DFSA of its decision and the reasons for the decision.

          Derived from RM118/2013 [VER15/07-13]

    • AMI 9.9 AMI 9.9 Information Technology Systems

      • AMI 9.9.1

        Where an Authorised Market Institution changes any of its plans for action in response to a failure of any of its information technology systems resulting in disruption to the operation of its facilities, it must immediately give the DFSA notice of that event, and a copy of the revised or new plan.

        Derived from RM118/2013 [VER15/07-13]

      • AMI 9.9.2

        Where any reserve information technology system of an Authorised Market Institution fails in such a way that, if the main information technology system of that body were also to fail, it would be unable to operate any of its facilities during its normal hours of operation, that body must immediately give the DFSA notice of that event, and inform the DFSA of:

        (a) what action that Authorised Market Institution is taking to restore the operation of the reserve information technology system; and
        (b) when it is expected that the operation of that system will be restored.
        Derived from RM118/2013 [VER15/07-13]

      • Inability to Discharge Regulatory Functions

        • AMI 9.9.3

          Where, because of the occurrence of any event or circumstances, an Authorised Market Institution is unable to discharge any Regulatory Function, it must immediately give the DFSA written notice of its inability to discharge that function, and inform the DFSA of:

          (a) what event or circumstance has caused it to become unable to do so;
          (b) which of its Regulatory Functions it is unable to discharge; and
          (c) what action, if any, it is taking or proposes to take to deal with the situation and, in particular, to enable it to recommence discharging that Regulatory Function.
          Derived from RM118/2013 [VER15/07-13]

    • AMI 9.10 AMI 9.10 Investigations and Disciplinary Action

      • AMI 9.10.1 AMI 9.10.1

        Where an Authorised Market Institution becomes aware that a person other than the DFSA has been appointed by any regulatory authority to investigate:

        (a) any business transacted on or through its facilities; or
        (b) any aspect of the clearing or settlement services which it provides,

        it must immediately give the DFSA notice of that event.

        Derived from RM118/2013 [VER15/07-13]

        • AMI 9.10.1 Guidance

          An Authorised Market Institution need not give the DFSA notice of:

          a. routine inspections or visits undertaken in the course of regular monitoring, complaints handling or as part of a series of theme visits;
          b. routine requests for information; or
          c. investigations into the conduct of Persons granted access to the facilities of an Authorised Market Institution where the use of its facilities is a small or incidental part of the subject matter of the investigation.
          Derived from RM118/2013 [VER15/07-13]

      • Disciplinary Action Relating to Persons Granted Access to its Facilities

        • AMI 9.10.2

          Where an Authorised Market Institution has taken disciplinary action against a Member or any other Person granted access to its facilities, or any Employee of such Person, in respect of a breach of its Business Rules, trading rules or Listing Rules, the Authorised Market Institution must immediately notify the DFSA of that event, and give:

          (a) the name of the Person concerned;
          (b) details of the disciplinary action taken by the Authorised Market Institution; and
          (c) the Authorised Market Institution's reasons for taking that disciplinary action.
          Derived from RM118/2013 [VER15/07-13]

        • AMI 9.10.3

          Where an appeal is lodged against any disciplinary action referred to in Rule 9.10.2, the Authorised Market Institution must immediately give the DFSA notice of that event and:

          (a) the name of the appellant and the grounds on which the appeal is based, immediately; and
          (b) the outcome of the appeal, when known.
          Derived from RM118/2013 [VER15/07-13]

      • Criminal Offences and Civil Prohibition

        • AMI 9.10.4

          Where an Authorised Market Institution has information tending to suggest that any person has:

          (a) been carrying on Financial Services in the DIFC in contravention of the general prohibition;
          (b) engaged in Market Abuse; or
          (c) engaged in financial crime or money laundering;

          it must immediately give the DFSA notice of that event, along with full details of that information in writing. In regard to (c) the AMI must immediately inform the appropriate authorities in the U.A.E.

          Derived from RM118/2013 [VER15/07-13]
          [Amended] RM193/2016 (Made 7th December 2016). [VER18/02-17]

      • Directions by an Authorised Market Institution

        • AMI 9.10.5

          Where an Authorised Market Institution:

          (a) decides to limit the open position of any Person in Investments; or
          (b) issues directions to any Person to close out his position in any Investment;

          that Authorised Market Institution must immediately give the DFSA notice of that event, and the Person's name, the Investment and size of any position to be limited or closed-out and the reasons for the Authorised Market Institution's decision.

          Derived from RM118/2013 [VER15/07-13]

    • AMI 9.11 AMI 9.11 Supervisory Directions

      • AMI 9.11 Guidance

        1. Article 26 of the Markets Law provides as follows:
        "(1) Without limiting the application of the Regulatory Law 2004, the DFSA may direct an Authorised Market Institution to do or not do specified things that the DFSA considers are necessary or desirable or ensure the integrity of the financial services industry in the DIFC, including but not limited to, directions:
        (a) requiring compliance with any duty, requirement, prohibition, obligation or responsibility applicable to an Authorised Market Institution;
        (b) requiring an Authorised Market Institution to act in a specified manner in relation to transactions conducted on or through the facilities operated by an Authorised Market Institution, or in relation to a specified class of transactions; or
        (c) requiring an Authorised Market Institution to act in a specified manner or to exercise its powers under any rules that the Authorised Market Institution has made.
        (2) Without limiting the application of Article 75 of the Regulatory Law 2004, the DFSA may direct an Authorised Market Institution to:
        (a) close the market or facilities operated by an Authorised Market Institution in a particular manner or for a specified period;
        (b) suspend transactions on the market or through the facilities operated by an Authorised Market Institution;
        (c) suspend transactions in Investments conducted on the market or through the facilities operated by an Authorised Market Institution;
        (d) prohibit trading in Investments conducted on the market or through the facilities operated by an Authorised Market Institution;
        (e) defer for a specified period the completion date of transactions conducted on the market or through the facilities operated by an Authorised Market Institution;
        (f) prohibit a specified person from undertaking any transactions on the facilities operated by the Authorised Market Institution; or
        (g) do any act or thing, or not do any act or thing, in order to ensure an orderly market, or reduce risk to the DFSA's objectives."
        2. The DFSA expects to use these powers only in exceptional circumstances. Factors the DFSA will consider in exercising these powers include:
        a. what steps the Authorised Market Institution has taken or is taking in respect of the issue being addressed in the planned direction;
        b. the impact on the DFSA's objectives if a direction were not issued; or
        c. whether it is in the interests of the DIFC.
        3. The Decision Notice given by the DFSA will specify what an Authorised Market Institution is required to do under the exercise of such powers.
        Derived from RM118/2013 [VER15/07-13]
        [Amended] DFSA RM133/2014 (Made 21st August 2014). [VER16/06-14]

    • AMI 9.12 AMI 9.12 Reports

      • AMI 9.12.1

        For the purposes of Article 74(2) of the Regulatory Law 2004, an Authorised Market Institution must deliver to the DFSA a report in writing at such times as the DFSA may direct addressing those matters contained in Article 74(2)(a)-(d) of the Regulatory Law and such other matters as the DFSA may reasonably require.

        Derived from RM118/2013 [VER15/07-13]

    • AMI 9.13 AMI 9.13 Listing Directions

      Derived from RM118/2013 [VER15/07-13]

      • AMI 9.13 Guidance

        Article 35(2) of the Markets Law 2012 allows the DFSA to direct an Authorised Market Institution to suspend or restore from suspension or delist Securities from its Official List of Securities. Such directions may take immediate effect or from a date and time as may be specified in the directive.

        Derived from RM118/2013 [VER15/07-13]

    • AMI 9.14 AMI 9.14 Public Disclosures of Decisions in Relation to an Official List of Securities of an Authorised Market Institution

      • AMI 9.14.1 AMI 9.14.1

        (1) An Authorised Market Institution must make a market disclosure:
        (a) on the website of the Authorised Market Institution; and
        (b) to the DFSA,
        of decisions in relation to the following events:
        (c) an admission of Securities to its Official List of Securities;
        (d) a suspension of Securities from its Official List of Securities;
        (e) a restoration from suspension of Securities from its Official List of Securities;
        (f) a delisting of Securities from its Official List of Securities; and
        (g) a suspension, restoration from suspension or decision to cease trading of any Investment.
        (2) The disclosure made in accordance with (1) should also indicate whether the event was made under a direction made to the Authorised Market Institution by the DFSA.
        Derived from RM118/2013 [VER15/07-13]

        • AMI 9.14.1 Guidance

          Disclosures made in accordance with Rule 9.14.1 are designed to help ensure that an orderly market exists in relation to Securities admitted to an Official List of Securities of an Authorised Market Institution.

          Derived from RM118/2013 [VER15/07-13]