Entire Section

  • Part 4: Part 4: General Regulation and Anti-Money Laundering Provisions

    • Chapter 1 — Chapter 1 — General Provisions

      • 64. Provisions Governing Controllers

        (1) The DFSA may make Rules governing controllers of Authorised Persons, including Rules as to:
        (a) when a person becomes or ceases to be a controller of an Authorised Person;
        (b) when the acquisition or increase in the level of control of an Authorised Person requires either the prior approval of, or notification to, the DFSA;
        (c) when the DFSA may object to an existing controller;
        (d) the procedures relating to the approval, notification and objections referred to in Article 64(1)(b) and (c); and
        (e) any other matter necessary or incidental to give effect to the provisions governing controllers.
        (2) Without limiting the generality of the DFSA powers, the DFSA may:
        (a) approve or object to a person becoming a controller of an Authorised Person;
        (b) approve or object to an increase in the level of control of an existing controller of an Authorised Person;
        (c) object to an existing controller of an Authorised Person where it has reasonable grounds to believe that such a person is no longer an acceptable controller; and
        (d) approve a person as a controller or approve an increase of control by an existing controller subject to such conditions as it considers appropriate.
        (3) Where the DFSA considers an existing controller of an Authorised Person to be an unacceptable controller:
        (a) it must notify the controller and the Authorised Person in writing that the controller is no longer an acceptable controller; and
        (b) it may require that the controller and the Authorised Person take such actions as specified by the DFSA.
        (4) Without limiting the generality of the DFSA powers, the DFSA may, for the purposes of Article 64(3)(b):
        (a) require an Authorised Person to take such action as specified by the DFSA in relation to an unacceptable controller;
        (b) where an Authorised Person has failed to comply with a requirement referred to in Article 64(4)(a) to the satisfaction of the DFSA, either withdraw, or impose conditions, on the Authorised Person's licence; or
        (c) require the unacceptable controller to take such action as specified by the DFSA.

      • 65. Unenforceable Agreements — Breach by Party to the Agreement

        (1) Subject to Article 65(5), a person who makes an agreement in the course of carrying on a Financial Service in breach of the Financial Services Prohibition or the Collective Investment Prohibitions, or who makes an agreement as a result of the making by himself or another person of a Financial Promotion which is in breach of the Financial Promotions Prohibition shall not be entitled to enforce such agreement against any party (a "relevant party") to the agreement.
        (2) Subject to any agreement that may otherwise be reached between the parties, a relevant party may apply to the Court to recover:
        (a) any money paid or property transferred by him under the agreement;
        (b) compensation reflecting any loss sustained by the relevant party as a direct result of such payment or transfer; and
        (c) compensation for an amount becoming due that is dependent upon a contingency occurring under the relevant agreement, provided that such contingency shall have occurred prior to the relevant party being notified by the other party or by the DFSA that the agreement has been entered into in breach of the Financial Services Prohibition, the Collective Investment Prohibitions or the Financial Promotions Prohibition.
        (3) If the relevant party chooses not to perform the agreement or, under Article 65(2), recovers money paid or property transferred by him under the agreement, he shall in turn repay any money or property he has received under the agreement.
        (4) The compensation recoverable under Article 65(2)(b) is the amount agreed between the parties to the agreement or, following an application to the Court, the amount determined by the Court.
        (5) If the Court is satisfied that the person:
        (a) carrying on the Financial Service reasonably believed that he was not in breach of the Financial Services Prohibition or the Collective Investment Prohibitions by entering into such agreement;or
        (b) who made the Financial Promotion reasonably believed that he was not in breach of the Financial Promotions Prohibition, or
        (c) who made an agreement as a result of the making by another person of a Financial Promotion which was in breach of the Financial Promotions Prohibition, did not know that the relevant Financial Promotion was in breach of the Financial Promotions Prohibition,
        and that it is fair and just in the circumstances to make such an order, it may make one or more of the following orders:
        (d) an order that the agreement be enforced between the parties to such extent and under such terms and conditions as the Court sees fit; or
        (e) an order that money paid or property transferred under the agreement be retained or dealt with in accordance with the agreement or in such manner as the Court deems fit.
        (6) Where property transferred under the agreement has been transferred to a third party, a reference in Article 65 to such property shall be interpreted as a reference to the value of the property at the time of the transfer under the agreement.
        (7) In Article 65, "agreement" means an agreement, the making or performance of which constitutes, or is part of, the carrying on of a Financial Service.

      • 66. False or Misleading Information

        A person shall not:

        (a) provide information which is false, misleading or deceptive to the DFSA; or
        (b) conceal information where the concealment of such information is likely to mislead or deceive the DFSA.

      • 67. Obligations of Disclosure to the DFSA

        (1)
        (a) Subject to Article 67(2), any of the following persons:
        (i) an Authorised Person or DNFBP; or
        (ii) an auditor of any person in sub-paragraph (i);
        shall disclose to the DFSA anything which reasonably tends to show a matter specified in paragraph (b):
        (b) The relevant matters for the purposes of (a) are:
        (i) a breach, or likely breach of a provision of the Law or Rules or other legislation administered by the DFSA;
        (ii) a failure, or likely failure, to comply with any obligation to which a person is subject under such legislation; or
        (iii) any other matter as the DFSA may prescribe in Rules:
        which may be attributable to the conduct of the person in (a)(i) or its director, officers, employees or agents.
        (2) Article 67(1) shall not apply to the extent that compliance with such requirement would disclose a Privileged Communication.
        (3) A person referred to in Article 67(1)(a) shall establish and implement appropriate systems and internal procedures to enable its compliance, and compliance by its auditor, with Article 67(1).
        (4) Any provision in an agreement between a person referred to in Article 67(1)(a) and a director, officer, employee, agent or auditor is void in so far as it purports to hinder compliance with an obligation under Article 67(1).
        (5) Without limiting the application of any other provision of this Law, an auditor does not contravene any duty to which the auditor is subject merely because the auditor gives to the DFSA:
        (a) a notification as required under this Article; or
        (b) any other information or opinion in relation to any such matter;
        if the auditor is acting in good faith and reasonably believes that the notification, information or opinion is relevant to any functions of the DFSA.
        (6) No person shall be subjected to loss of employment or any other detriment or loss or damage merely by reason of undertaking any act to cause or assist a person referred to in Article 67(1)(a) or (b) to comply with an obligation under Article 67(1).
        (7) A Court may, on application of an aggrieved person, make any order for relief where the person has been subjected to any such loss of employment or detriment or loss or damage referred to in Article 67(6).

      • 68. Disclosures to the DFSA

        A person is neither liable to a proceeding, nor subject to a liability, nor in breach of any duty, merely by reason of the giving of information or production of a document by the person to the DFSA:

        (a) in good faith; and
        (b) in reasonable belief that the information or document is relevant to any functions of the DFSA;

        whether such information or document is given or produced pursuant to a requirement at law or otherwise.

      • 68A. Whistleblower Protection

        (1) A person who makes a disclosure of information specified in Article 68A(2) to a person specified in Article 68A(3) is entitled to the protection in Article 68A(4).
        (2) For the purposes of Article 68A(1), the disclosure of information made by the person must:
        (a) relate to a reasonable suspicion that a Regulated Entity, an officer or employee of a Regulated Entity or, in the case of an Authorised Person, an Affiliate of the Authorised Person or an officer or employee of the Affiliate has or may have:
        (i) contravened a provision of this Law, the Rules or any other legislation administered by the DFSA; or
        (ii) engaged in money laundering, fraud or any other financial crime; and
        (b) be made in good faith.
        (3) For the purposes of Article 68A(1), the disclosure of information is made to any one or more of the following:
        (a) the Regulated Entity;
        (b) an officer of the Regulated Entity;
        (c) in the case of the Authorised Person, a person performing a Licensed Function for the Authorised Person;
        (d) an Auditor, or a member of the audit team, of the Regulated Entity;
        (e) the DFSA;
        (f) a criminal law enforcement agency in the State; or
        (g) any other person prescribed by the Rules for the purposes of this Article.
        (4) Where a person makes a disclosure referred to in Article 68A(1):
        (a) the person shall not be subject to any civil or contractual liability for making the disclosure;
        (b) no contractual, civil or other remedy or right shall be enforced against the person by another person for making the disclosure; and
        (c) the person shall not be dismissed from his current employment, or otherwise subject to any action by his employer or any related party of the employer which is reasonably likely to cause detriment to that person, for making the disclosure.
        (5) A Court may, on application of an aggrieved person, make any order for relief where the person has been subject to any loss of employment or other detriment or action referred to in Article 68A(4).
        (6) For the avoidance of doubt, to qualify for protection under this Article it is not necessary for a person who discloses information to identify himself when making the disclosure.
        (7) Nothing in this Article limits any other protection provided under this Law to a person who provides information to the DFSA or to any other person referred to in Article 68A(3).

      • 69. Compliance with an order or requirement of the DFSA

        Where the DFSA makes an order, issues a direction or prohibition, or makes any requirement in relation to a person pursuant to a provision of this Law or Rules or legislation administered by the DFSA, such person must, unless he has a reasonable excuse, comply with such order, direction, prohibition or requirement.

    • Chapter 2 — Chapter 2 — Anti-Money Laundering Compliance

      • 70. Jurisdiction

        (1) This chapter is made in recognition of the application in the DIFC of Federal Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations, Federal Law No. 7 of 2014 on Combating Terrorism Offences and any other Federal legislation relating to money laundering, terrorist financing, the financing of unlawful organisations or sanctions non-compliance.

        (2) A reference in this chapter to:

        (a) any law or legislation includes any implementing regulation or other instrument made by or under the law or legislation; and
        (b) money laundering is taken to include terrorist financing, the financing of unlawful organisations and sanctions non-compliance.

        (3) The DFSA has, in respect of Relevant Persons, jurisdiction for regulation in relation to money laundering in the DIFC and the DFSA is the relevant authority that licenses and supervises Relevant Persons in the DIFC for the purposes of the Federal Anti-Money Laundering Legislation.

        (4) Nothing in (3) is intended to limit any function or power conferred on another body or authority under the Federal Anti-Money Laundering Legislation.

        (5) In this Part, a “Relevant Person” means:

        (a) an Authorised Person;
        (b) a Registered Auditor;
        (c) a Designated Non-Financial Business or Profession (DNFBP); or
        (d) an officer, employee or agent of a person referred to in (a), (b) or (c).

      • 71. Obligations

        (1) A Relevant Person shall comply with Federal Anti-Money Laundering Legislation as it applies to such person in the DIFC.

        (2) A Relevant Person shall comply with any duty, requirement, prohibition, obligation or responsibility to which that person is subject under the Rules.

        (3) Where the DFSA detects conduct which it suspects may relate to money laundering, it shall advise the relevant authority exercising powers and performing functions under the relevant Federal Anti-Money Laundering Legislation without undue delay.

        (4) A Relevant Person shall conduct customer due diligence in the circumstances prescribed by the Rules.

        (5) A Relevant Person shall maintain such records relating to customer due diligence, transactions and anti-money laundering measures as are prescribed by the Rules.

      • 71A DNFBP Prohibition

        (1) A person who is a DNFBP shall not carry on any activities in or from the DIFC unless that person is registered by the DFSA as a DNFBP.

        (2) The DFSA shall make Rules prescribing the class of persons who are DNFBPs.

      • 71B. Criteria for Registration of a DNFBP

        (1) The DFSA shall make Rules setting out the criteria a person must meet to become and remain registered by the DFSA as a DNFBP. The Rules may, without limiting the generality of that power, include criteria related to:

        (a) the fitness and propriety of the person; and
        (b) its resources and arrangements for complying with Anti-Money Laundering Legislation.

        (2) The DFSA may make Rules providing that certain types of person may not be granted DNFBP registration.

      • 71C. Application for Registration

        (1) A person may apply in the prescribed form to the DFSA to be registered as a DNFBP.

        (2) The DFSA may require the applicant to provide additional information or documents reasonably required for the DFSA to be able to determine the application including, but not limited to, information or documents relating to its activities, ownership, group structure, financial and other resources.

        (3) If at any time between filing an application and the grant or refusal of a DNFBP registration the applicant becomes aware of a material change reasonably likely to be relevant to the application, it shall inform the DFSA in writing of the change without delay.

      • 71D. Grant of an Application

        (1) The DFSA may grant an application for DNFBP registration if it is satisfied that the applicant meets the criteria for registration under Article 71B.

        (2) When the DFSA decides to register a DNFBP, it shall as soon as practicable inform the applicant and the DIFC Registrar of Companies in writing of the decision and of the date on which registration is to take effect.

      • 71E. Refusal of an Application

        (1) The DFSA may refuse to grant an application for DNFBP registration if it is not satisfied that the applicant meets the criteria for registration under Article 71B.

        (2) The procedures in Schedule 3 apply to a decision of the DFSA under (1).

        (3) If the DFSA decides to exercise its power under (1), the applicant may refer the matter to the FMT for review.

        (4) The DFSA must as soon as practicable notify the DIFC Registrar of Companies if it refuses to grant an application for DNFBP registration.

      • 71F. Suspension and withdrawal of DNFBP Registration

        (1) The DFSA may suspend the registration of a DNFBP at the request of the DNFBP or on its own initiative.

        (2) The DFSA may withdraw the registration of a DNFBP:

        (a) at the request of the DNFBP;
        (b) if the DIFC Registrar of Companies notifies it that the DNFBP no longer holds the relevant commercial licence to operate in the DIFC; or
        (c) on its own initiative.

        (3) The DFSA may exercise its power on its own initiative under (1) or (2)(c) if:

        (a) the DNFBP no longer meets the criteria for DNFBP registration;
        (b) the DNFBP is in breach of, or has been in breach of, the Law or Rules or other Anti-Money Laundering Legislation;
        (c) the DNFBP is insolvent or entering into administration;
        (d) the DNFBP is no longer carrying on business in the DIFC; or
        (e) the DFSA considers that exercising the power is necessary or desirable in the pursuit of its anti-money laundering objective in Article 8(3A).

        (4) The procedures in Schedule 3 apply to a decision of the DFSA under this Article to suspend or withdraw registration of a DNFBP on its own initiative.

        (5) If the DFSA decides to exercise its power under this Article to suspend or withdraw registration of a DNFBP on its own initiative, the DNFBP may refer the matter to the FMT for review.

      • 71G. Co-ordination between DFSA and Registrar of Companies

        (1) The DIFC Registrar of Companies shall not grant a person who is a DNFBP a commercial licence to operate in the DIFC until the DFSA has confirmed to the Registrar that it intends to register the person as a DNFBP.

        (2) The DFSA shall as soon as practicable notify the DIFC Registrar of Companies if it suspends or withdraws the registration of a DNFBP.

        (3) The DIFC Registrar of Companies shall as soon as practicable suspend or withdraw (as the case may be) the commercial licence of the DNFBP if it receives a notification under (2).

      • 72. Rules

        The DFSA shall make Rules in connection with the creation and implementation of anti-money laundering measures, policies and procedures, including Rules as to:

        (a) the persons or classes of persons who shall be subject to any such measures, policies and procedures;
        (b) the nature and extent of any duty, requirement, prohibition, obligation or responsibility applicable to such persons; and
        (c) registration of any or all of such persons with the DFSA.