Entire Section

  • Chapter 3 – Early Intervention Actions

    • 84I. Conditions for Exercise of Early Intervention Powers

      The DFSA may exercise one or more of its powers specified in Article 84J (the “Early Intervention Powers”) in relation to an Authorised Firm where it considers that:

      (a) an Authorised Firm’s liquidity or solvency is impaired, or may soon be impaired unless there is a major improvement in its financial resources, assets, leverage exposures, risk profile, business model, risk management systems and controls, or quality of its governance and management;
      (b) one or more indicators in the Authorised Firm’s Recovery Plan for taking action to restore its financial position are met; or
      (c) it is otherwise necessary and desirable to meet the DFSA’s objectives.

    • 84J. Early Intervention Powers

      (1) The DFSA may by written notice require an Authorised Firm to:
      (a) prepare and submit to the DFSA a plan which examines the status of its liquidity or solvency impairment, and explains in detail the corrective actions that will be taken to address and rectify identified weaknesses and within what timeframes (the “Corrective Action Plan”);
      (b) call a general meeting of shareholders, set an agenda and propose specified resolutions;
      (c) search for, and communicate with, potential purchasers of the Authorised Firm’s business or part thereof;
      (d) remove directors or senior management who have failed to meet their obligations, including fiduciary duties;
      (e) limit or, where appropriate, clawback compensation paid to directors and senior management;
      (f) obtain the DFSA’s written approval before making or incurring any major capital expenditure, material commitment or contingent liability;
      (g) enhance internal governance, systems, controls and risk management; or
      (h) implement one or more measures in the Authorised Firm’s Recovery Plan.
      (2) The procedures in Schedule 3 apply to a decision of the DFSA under this Article.
      (3) If the DFSA decides to exercise its power under this Article, the Authorised Firm may refer the matter to the FMT for review.
      (4) Nothing in this Article limits any other action that the DFSA may take in relation to the Authorised Firm or another person, including the exercise of a power under Part 5 of this Law.