Entire Section

  • 'Deemed' Professional Clients

    • COB 2.3.4 COB 2.3.4

      (1) For the purposes of Rule 2.3.3(1)(a)(i), a Person is a 'deemed' Professional Client if that Person is:
      (a) a supranational organisation whose members are either countries, central banks or national monetary authorities;
      (b) a properly constituted government, government agency, central bank or other national monetary authority of any country or jurisdiction;
      (c) a public authority or state investment body;
      (d) an Authorised Market Institution, Regulated Exchange or regulated clearing house;
      (e) an Authorised Firm, a Regulated Financial Institution or the management company of a regulated pension fund;
      (f) a Collective Investment Fund or a regulated pension fund;
      (g) a Large Undertaking as specified in (2);
      (h) a Body Corporate whose shares are listed or admitted to trading on any exchange of an IOSCO member country;
      (i) any other institutional investor whose main activity is to invest in financial instruments, including an entity dedicated to the securitisation of assets or other financial transactions;
      (j) a trustee of a trust which has, or had during the previous 12 months, assets of at least $10 million; or
      (k) a holder of a licence under the Single Family Office Regulations with respect to its activities carried on exclusively for the purposes of, and only in so far as it is, carrying out its duties as a Single Family Office.
      (2) A Person is a Large Undertaking if it met, as at the date of its most recent financial statements, at least two of the following requirements:
      (a) it has a balance sheet total of at least $20 million;
      (b) it has a net annual turnover of at least $40 million; or
      (c) it has own funds or called up capital of at least $2 million.
      (3) In (2):
      (a) a 'balance sheet total' means the aggregate of the amounts shown as assets in the balance sheet before deducting both current and long-term liabilities;
      (b) 'own funds' mean cash and investments as shown in the balance sheet; and
      (c) 'called up capital' means all the amounts paid-up on allotted shares, less any amounts owing on allotted shares.
      Derived from DFSA RM149/2015 (Made 11th February 2015) [VER24/04-15]

      • COB 2.3.4 Guidance

        1. Although an Authorised Firm is not required to undertake a detailed assessment of a 'deemed' Professional Client's expertise or net assets (as is required in the case of an 'assessed' Professional Client), a firm still needs to have a reasonable basis for classifying a Person as falling within the list of 'deemed' Professional Clients in Rule 2.3.4(1) or (2). For example, in order to verify whether a trustee of a trust can be classified as a 'deemed' Professional Client under Rule 2.3.4(1)(j), an Authorised Firm should obtain a verified copy of the most recent balance sheet of the relevant trust.
        2. An individual trustee on the board of a trust where the trust has at least $10 million assets under its control can qualify as a 'deemed' Professional Client under Rule 2.3.4(1)(j) but only in relation to that particular trust.
        Derived from DFSA RM149/2015 (Made 11th February 2015) [VER24/04-15]