Entire Section

  • RPP 7 RPP 7 Decision Making

    • RPP 7-1 RPP 7-1 Introduction

      • RPP 7-1-1

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

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-1-2

        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.
        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-1-3

        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.

        Figure 1: DFSA's Decision Making Process

        Inserted (Made 21st August 2014). August 2014 Edition

    • RPP 7-2 RPP 7-2 Who Can Exercise a DFSA Power?

      • RPP 7-2-1

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

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-2-2

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

        (a) first, 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 (see section 7-3 for further details); and
        (b) second, those decisions that result from action initiated by the DFSA and that 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 (see section 7-4 for further details).
        Inserted (Made 21st August 2014). August 2014 Edition

    • RPP 7-3 RPP 7-3 DFSA's Approach to Decision Making

      • RPP 7-3-1

        The key elements of DFSA's approach to decision making include:

        (a) having in place adequate systems and controls to ensure that those making decisions, on behalf of the DFSA, are impartial and not affected by conflicts of interests that may affect their decisions;
        (b) giving a person in respect of whom the DFSA proposes to make a decision (the "affected person") advance notice about the DFSA's proposed action (with the exception of cases when the DFSA may take immediate action because any delay resulting from advance notice would be prejudicial to the interests of direct or indirect users of financial services in the DIFC or otherwise prejudicial to the interests of the DIFC);
        (c) giving the affected person clear reasons why the DFSA proposes to take the relevant action;
        (d) giving the affected person a suitable opportunity to make representations (in person and in writing) with regard to the DFSA's proposed action;
        (e) taking into account any representations made by the affected person before making a final decision, i.e. making any consequential changes to the proposed action given the representations made or other additional material available to the DFSA, as appropriate;
        (f) taking into account only those considerations which are relevant to the matter to be decided upon;
        (g) giving, without undue delay, the affected person a clear statement in writing of the DFSA's final decision, the reasons for that decision and the effective date;
        (h) informing the affected person what rights of review that person has in respect of the DFSA's decision, and within what period those rights of review must be exercised; and
        (i) having in place adequate mechanisms to enable the affected person to have the DFSA decision properly and impartially reviewed.
        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-3-2

        In certain circumstances, as set out in (b) above, the DFSA does not have to give an affected person advance notice of its proposed action and a right for that person to make prior representations to the DFSA before the DFSA makes its final decision. In such circumstances, the DFSA is still obliged to give the affected person a right of representation within 14 days (or other longer period as may be agreed) from the date on which the DFSA decision is made and communicated to the relevant person. The DFSA is obliged to consider any representations made by the affected person during that period.

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-3-3

        If representations are made, the DFSA must also communicate to the affected person whether the DFSA confirms its original decision, or otherwise varies or withdraws that decision, given the representations made. Where no representations are made by the affected person during the relevant period, the DFSA's original decision will remain in effect.

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-3-4

        For example, decisions that might be made without giving the affected person a right to make prior representations are:

        (a) the issuing of a stop order under Article 25 of the Markets Law 2010; and
        (b) suspension of an individual's Authorised Individual status under Article 58 of the Regulatory Law 2004 ('Regulatory Law').
        Inserted (Made 21st August 2014). August 2014 Edition

    • RPP 7-4 RPP 7-4 What are the DFSA's Decision Making Procedures?

      • RPP 7-4-1

        To facilitate a consistent approach to decision making, a central provision in Schedule 3 of the Regulatory Law sets out clearly the steps the DFSA is required to follow in order to comply with its due process obligations.

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-4-2

        The relevant DFSA powers, whether in the laws or Rules, cross-refer to Schedule 3. The powers also set out whether the affected person has a right to have the DFSA decision reviewed by the Financial Markets Tribunal.

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-4-3

        The procedures are designed to ensure procedural fairness by giving (see Figure1 above):

        (a) advance notice of the DFSA's proposed decision (referred to as the Preliminary Notice), except in the cases referred to in 7-3-1(b);
        (b) a suitable opportunity for the affected person to make representations relating to the proposed decision;
        (c) the DFSA's reasons for the final decision made, taking into account any representations made (referred to as the Decision Notice); and
        (d) the affected person a right to have the DFSA decision reviewed by the Financial Markets Tribunal.
        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-4-4

        Some supervisory decisions of the DFSA, by their nature, do not invoke the procedures referred to in section 7-4-3. These decisions are generally made as part of the DFSA's day-to-day supervision of regulated firms. Examples include its decisions to:

        (a) obtain additional information from regulated firms;
        (b) issue risk mitigation plans stemming from any concerns identified; and
        (c) commence an investigation.
        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-4-5

        In making these decisions, the DFSA is still subject to overarching administrative law principles which require it to act in good faith, and in a proportionate and reasonable manner. It is also required, to the extent appropriate, to act in a transparent and consistent manner.

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-4-6

        The Schedule 3 procedures do not apply to some other types of DFSA decisions. There are three main categories of such decisions:

        (a) decisions made by the DFSA at the request of a Person, e.g. where a Person requests the DFSA to cancel its Licence;
        (b) decisions made by the DFSA under a court order or a direction issued by the Financial Markets Tribunal; and
        (c) where bespoke due process requirements apply to a power. Examples are the DFSA's powers relating to Controllers of regulated firms and the power to approve the Business Rules of an Authorised Market Institution.
        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-4-7

        Generally, an affected person has a right to refer a DFSA decision to the Financial Markets Tribunal (the "Tribunal") for its review. Upon a referral, the Tribunal (which is operationally independent of the DFSA) is required to conduct a full merits review of the DFSA decision. In doing so, the Tribunal would look at all the relevant facts afresh and take into account all relevant matters, including any matters that the DFSA may have not been aware of, or had disregarded, when the DFSA made its decision.

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-4-8

        After review of the DFSA decision, the Tribunal has the power to make a new decision using the powers available to the DFSA as the original decision maker. This could involve confirmation of the original decision made by the DFSA, substituting the DFSA decision with a new decision, or referring the matter back to the DFSA with a direction for the DFSA to make a fresh decision.

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-4-9

        The Tribunal itself, being an administrative review body, is required to observe rules of procedural fairness, and be objective and transparent in making its decisions. So the Tribunal has its own due process procedures, which it follows.

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-4-10

        To enable an affected person to exercise properly and effectively his right to have the DFSA's original decision referred to the Tribunal, the DFSA will provide to such a person a Decision Notice specifying:

        (a) the DFSA's decision and its reasons for making that decision;
        (b) the date on which the decision is to take effect; and
        (c) the person's right to seek a review of the decision by the Tribunal; and
        (d) by when the right referred to in (c) has to be exercised.
        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-4-11

        The Decision Notice must also include a copy of the relevant materials which were considered by the DFSA when making its decision (unless such materials are al held by the affected person or are publicly available).

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-4-12

        A decision of the Tribunal may be reviewed by the DIFC Court but only on a point of law. For more information on the Financial Markets Tribunal, including its rules and procedures, please see the DFSA's website (www.dfsa.ae).

        Inserted (Made 21st August 2014). August 2014 Edition

    • RPP 7-5 RPP 7-5 Executive Decisions

      • RPP 7-5-1

        Executive Decisions of the DFSA are generally operational decisions, made by a DFSA officer exercising delegated powers of the DFSA's Chief executive. They generally involve the DFSA being called upon to consider and respond to an application or notification made by a Person. Some examples of such 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 a DNFBP or a Registered 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.
        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-5-2

        Decisions of the kind referred to above would generally confer on an applicant 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 the DFSA considers the relevant application or notification; and
        (b) if affected, a right to refer the DFSA's decision for review by the Financial Markets Tribunal.
        Inserted (Made 21st August 2014). August 2014 Edition

      • Procedural fairness principles

        • RPP 7-5-3 [Deleted]

          As 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.
          Inserted (Made 21st August 2014). August 2014 Edition

      • Acting without bias or conflict of interest

        • RPP 7-5-4

          A DFSA officer called upon to make a decision is expected to act impartially in doing so. If the DFSA officer has a vested financial or personal interest in the matter, a conflict of interest may arise that prevents an impartial or unbiased decision being made.

          Inserted (Made 21st August 2014). August 2014 Edition

        • RPP 7-5-5

          A DFSA officer who does have a financial or other personal interest in the matter is required to disclose this interest to the DFSA and, if the interest is material, would not be the decision maker in relation to that matter.

          Inserted (Made 21st August 2014). August 2014 Edition

      • Right to present his case

        • RPP 7-5-6

          A Person 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 the decision to be made, will contain all the relevant information. The DFSA officer may require further information if the information provided is not complete.

          Inserted (Made 21st August 2014). August 2014 Edition

        • RPP 7-5-7

          In some cases, the DFSA officer will obtain information relevant to the matter from external third party sources. 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 by the applicant), 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.

          Inserted (Made 21st August 2014). August 2014 Edition

      • Relevant considerations

        • RPP 7-5-8

          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 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, or obtain on his own volition, including from any third party sources, further information.

          Inserted (Made 21st August 2014). August 2014 Edition

    • RPP 7-6 RPP 7-6 Decision Maker Decisions

      • RPP 7-6-1

        Decision Maker Decisions are generally made by a single DFSA officer, or by a number of DFSA officers acting as a committee, exercising delegated powers of the DFSA Chief Executive.

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-6-2

        As such decisions can have a significant adverse impact on an affected person, the mandatory procedures set out in Schedule 3 of the Regulatory Law apply.

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-6-3

        An initial assessment has to be made by the DFSA as to whether a single DFSA officer or a committee need to be involved. In making this assessment, the DFSA will take into account the nature, scale and complexity of the subject matter to which the decision relates, and the nature and scale of impact the decision could have upon the affected person. For example, a committee, rather than an individual, would be called upon to make a decision in relation to relatively weightier matters.

        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-6-4

        The Decision Maker (covering both an individual and a committee) will have had no previous direct involvement in establishing the evidence upon which the decision is based. Examples of Decision Maker 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; or
        (c) withdraw the status of an Authorised Individual.
        Inserted (Made 21st August 2014). August 2014 Edition

      • RPP 7-6-5

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

        Inserted (Made 21st August 2014). August 2014 Edition