RPP 5-7 RPP 5-7 Appointment of Managers
Under Article 88, the
DFSAmay require an Authorised Personto appoint one or more individuals to act as a manager of the business of the Personon such terms as the DFSAmay stipulate. Such individuals must be nominated or approved by the DFSA.
The types of circumstances in which the
DFSAmay exercise this power are set out in Article 88(3). For example, the DFSAmay require an Authorised Personto appoint a manager where it has concerns about the solvency or the level of compliance with prudential requirements of an Authorised Person.
Authorised Personmay receive an opportunity to make representations prior to being required to appoint a manager in accordance with the procedures set out in Schedule 3 of the Regulatory Law. However, in circumstances of urgency, the DFSAmay not give advance notice of the proposed requirement and may not provide the relevant Authorised Personwith the opportunity to make representations prior to the imposition of the requirement.
DFSAdoes require an Authorised Personto appoint a manager, it will do so in writing, setting out:(a) that the Authorised Personis required to appoint a manager;(b) the time by which such manager must be appointed;(c) the reasons for the Authorised Personbeing required to appoint a manager;(d) the individual nominated by the DFSAto be the manager or the process by which approval may be given by the DFSA; and(e) the fact that the Authorised Personmay have the decision reviewed by the Financial Markets Tribunal.
DFSArecognises that the use of its Article 88 power to appoint a manager is likely to have a significant impact on an Authorised Person. Accordingly, the DFSAis likely to exercise such power only in exceptional circumstances.
In considering whether a manager should be appointed, the
DFSAwill take into consideration all relevant circumstances including, but not limited to, the following matters:(a) the nature and extent of the business of the Authorised Person;(b) the nature of the DFSA'sconcerns in relation to the Authorised Personand whether they affect, or have the potential to affect, the DFSA'sobjectives;(c) whether the DFSA'sconcerns in relation to the Authorised Personmay be addressed by the appointment of a manager;(d) where the DFSAconsiders it necessary to protect regulated entities and customers in the DIFC;(e) whether an appropriately qualified manager may be available and willing to undertake the appointment;(f) the likely duration of the appointment; and(g) the likely impact of costs associated with the appointment of a manager.