Entire Section

  • Chapter 2 – Recovery and Resolution Planning

    • 84D. Recovery Plans

      (1) This Article applies to an Authorised Firm which:
      (a) is of a class prescribed in the Rules as requiring a Recovery Plan; or
      (b) is not included in a class prescribed under (a), but has been given written notice by the DFSA that it must prepare a Recovery Plan.
      (2) An Authorised Firm must prepare and submit to the DFSA for review a plan setting out the measures to be taken to restore the financial position of the Authorised Firm (or one or more entities in its Group) in the event of a serious deterioration of the Authorised Firm’s financial position (the “Recovery Plan”).
      (3) The Recovery Plan must be in writing and set out such information as may be prescribed in the Rules.
      (4) The DFSA may, by written notice given to the Authorised Firm, require it to prepare and provide to the DFSA such information as the DFSA considers reasonably necessary for it to assess the adequacy of the Authorised Firm’s Recovery Plan.
      (5) If the DFSA is not satisfied with an Authorised Firm’s Recovery Plan it may, by written notice, require the Authorised Firm to take measures to rectify any deficiencies in the Recovery Plan and provide the rectified Recovery Plan to the DFSA.
      (6) An Authorised Firm must review and update its Recovery Plan and submit the updated Recovery Plan to the DFSA:
      (a) annually;
      (b) where there has been a material change reasonably likely to affect the implementation of the original Recovery Plan; or
      (c) if otherwise directed in writing by the DFSA to do so.

    • 84E. Resolution Plans

      (1) The DFSA may prepare a plan for securing an orderly Resolution (the “Resolution Plan”) of an Authorised Firm.
      (2) The Resolution Plan shall set out the strategies for the Resolution including consideration of failure scenarios, the options for the exercise of the Resolution Powers, the application of the Resolution Tools and contain such information as may be prescribed in the Rules.
      (3) If the DFSA decides to prepare a Resolution Plan with respect to an Authorised Firm, it shall inform the Authorised Firm in writing of that decision.
      (4) An Authorised Firm that is informed under (3) of the DFSA’s decision to prepare a Resolution Plan must, to the extent reasonably necessary for the DFSA to prepare, assess or update the Resolution Plan, do the following:
      (a) maintain in the DIFC up to date information and systems; and
      (b) if required in writing by the DFSA, provide to the DFSA any information and assistance within a specified period.

    • 84F. Resolvability Assessment

      (1) The DFSA may conduct an assessment to determine if there are any impediments that may prevent or affect the Resolvability of an Authorised Firm (the “Resolvability Assessment”).
      (2) An Authorised Firm must provide the DFSA with such information and assistance that the DFSA considers reasonably necessary for the Resolvability Assessment.

    • 84G. Requirement to Remove Impediments to Resolvability

      (1) The DFSA may by written notice require an Authorised Firm or an entity in its Group to take such measures as the DFSA considers reasonably necessary to remove impediments to, or improve, the Resolvability of an Authorised Firm.
      (2) The measures required under (1) may include but are not limited to changes relating to:
      (a) legal, ownership or governance structure;
      (b) operations, including intra-Group dependencies and relationships with third parties;
      (c) business activities or practices;
      (d) financial matters, including assets, liabilities, rights and obligations, or funding strategy, including measures to improve the resilience of core business lines and critical functions;
      (e) risk profile, including liquidity risk; or
      (f) terms to be included in contracts.
      (3) The procedures in Schedule 3 apply to a decision of the DFSA under this Article.
      (4) If the DFSA decides to exercise its power under this Article, the Authorised Firm may refer the matter to the FMT for review.

    • 84H. Loss Absorbing Capacity Requirement

      (1) The DFSA may by written notice require an Authorised Firm to hold and maintain a minimum amount of financial instruments or resources which will be available during Resolution to absorb losses and enable the Authorised Firm to be recapitalised so that it can continue to perform critical functions while Resolution is ongoing (“Loss Absorbing Capacity”).
      (2) The DFSA shall specify in the notice the nature of the financial instruments or resources to be held and maintained by the Authorised Firm under (1).
      (3) The DFSA may vary or revoke a requirement under this Article.
      (4) The procedures in Schedule 3 apply to a decision of the DFSA under this Article.
      (5) If the DFSA decides to exercise its power under this Article, the Authorised Firm may refer the matter to the FMT for review.