PIB 1.1.2 Guidance

Past version: effective from 01/01/2018 - 31/03/2020
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1. The effect of PIB Rule 1.1.1(1) is that these Rules apply to all Authorised Firms, except those carrying on Insurance Business (that is, Insurers), that operate a Representative Office and those that are CRAs. Those Authorised Firms that are authorised to effect or carry out Contracts of Insurance should refer to the PIN module. Authorised Firms that are authorised to Operate a Representative Office should refer to the REP module.
2. These Rules apply both to Domestic Firms and, to the extent specified in PIB Rule 1.1.2, to Authorised Firms conducting Financial Services through a Branch in the DIFC.
3. The Rules in PIB reinforce the fitness and propriety requirements found in GEN chapter 5 - Management Systems and Principle 4 for Authorised Firms. The PIBmodule is set out in:
a. an initial chapter establishing a categorisation of firms for the application of PIB;
b. two general chapters setting overall requirements: General Requirements and Capital;
c. six chapters setting specific requirements relating to the following particular risks or issues: Credit Risk, Market Risk, Operational Risk, Interest Rate Risk in the Non-Trading Book, Group Risk and Liquidity Risk;
d. a chapter imposing processes for supervisory assessment, by which an Authorised Firm which is a Domestic Firm in Category 1, 2 or 5 has obligations to establish and conduct an IRAP and an ICAAP, and to provide documented assessments to the DFSA; and
e. a final chapter imposing public disclosure requirements.

Domestic Firms

4. To assist Authorised Firms that are Domestic Firms there is a table "Application Table B" which sets out in general the application of the provisions in this module to different Categories of Authorised Firms. This table is for Guidance purposes only. The Rules in this module apply to Authorised Firms in accordance with this Chapter and as specified in Rules elsewhere in this module.
5. With regards to Authorised Firms carrying on Islamic Financial Business, there are additional matters that should be included in their report to the DFSA which are in the Islamic Finance Rules (IFR) module (see IFR section 5.4 of IFR module).

APPLICATION TABLE A FOR AUTHORISED FIRMS THAT OPERATE AS A BRANCH IN THE DIFC

PIB Chapters Category 1 Category 2 Category 3A Category 3B Category 3C Category 4 Category 5
PIB Chapter 1: Application, Interpretation and Categorisation Whole Chapter Whole Chapter Whole Chapter Whole Chapter Whole Chapter Whole Chapter Whole Chapter
PIB Chapter 2: General Requirements Whole Chapter Whole Chapter Whole Chapter Whole Chapter Whole Chapter Whole Chapter Whole Chapter
PIB Chapter 3: Capital Only PIB Rule 3.2.4 Only PIB Rule 3.2.4 Only PIB Rule 3.2.4 Only PIB Rule 3.2.4 Only PIB Rule 3.2.4 Only PIB Rule 3.2.4 Only PIB Rule 3.2.4
PIB Chapter 4: Credit Risk Only sections PIB 4.1 to PIB 4.4 and Rules PIB 4.5.1 to PIB 4.5.7 and PIB 4.5.9 Only sections PIB 4.1 to PIB 4.4 and Rules PIB 4.5.1 to PIB 4.5.7 and PIB 4.5.9 Only sections PIB 4.1 to PIB 4.4 and Rules PIB 4.5.1 to PIB 4.5.7 and PIB 4.5.9       Only sections PIB 4.1 to PIB 4.4 and Rules PIB 4.5.1 to PIB 4.5.7 and PIB 4.5.9
PIB Chapter 5: Market Risk Only sections PIB 5.1 and PIB 5.2 Only sections PIB 5.1 and PIB 5.2 Only sections PIB 5.1 and PIB 5.2       Only sections PIB 5.1 and PIB 5.2
PIB Chapter 6: Operational Risk Whole Chapter, except sections PIB 6.11 and PIB 6.12 Whole Chapter, except sections PIB 6.11 and PIB 6.12 Whole Chapter, except sections PIB 6.11 and PIB 6.12 Whole Chapter, except sections PIB 6.10 and PIB 6.11 Whole Chapter, except sections PIB 6.10 and PIB 6.11 Whole Chapter, except sections PIB 6.10 and PIB 6.11 Whole Chapter, except sections PIB 6.11 and PIB 6.12
PIB Chapter 7: Interest Rate Risk In the Non-Trading Book Whole Chapter Whole Chapter          
PIB Chapter 8: Group Risk Only sections PIB 8.1, PIB 8.2 and PIB 8.5 Only sections PIB 8.1, PIB 8.2 and PIB 8.5 Only sections PIB 8.1 and PIB 8.5 Only sections PIB 8.1 and PIB 8.5 Only sections PIB 8.1 and PIB 8.5 Only sections PIB 8.1 and PIB 8.5 Only sections PIB 8.1, PIB 8.2 and PIB 8.5
PIB Chapter 9: Liquidity Risk Whole Chapter, except PIB Rules 9.2.2(3), 9.3.12 and 9.3.13 Only PIB Rule 9.2.2(3)         Whole Chapter, except PIB Rules 9.2.2(3), 9.3.12 and 9.3.13
PIB Chapter 10: Supervisory Review and Evaluation Processes              
PIB Chapter 11: Disclosure Requirements              

APPLICATION TABLE B FOR AUTHORISED FIRMS THAT OPERATE AS A DOMESTIC FIRM

PIB Chapters Category 1 Category 2 Category 3A Category 3B Category 3C Category 4 Category 5
PIB Chapter 1: Application, Interpretation and Categorisation Whole Chapter Whole Chapter Whole Chapter Whole Chapter Whole Chapter Whole Chapter Whole Chapter
PIB Chapter 2: General Requirements Whole Chapter Whole Chapter Whole Chapter Whole Chapter Whole Chapter Whole Chapter Whole Chapter
PIB Chapter 3: Capital Whole Chapter, except Rules PIB 3.2.4 and PIB 3.2.6, and sections PIB 3.4, PIB 3.5 and PIB 3.7 Whole Chapter, except Rules PIB 3.2.4 and PIB 3.2.6, and sections PIB 3.3 and PIB 3.5 Whole Chapter, except Rules PIB 3.2.4 and PIB 3.2.6, except sections PIB 3.3, PIB 3.5, PIB 3.9, PIB 3.9A, PIB 3.9B, 3.9C and PIB 3.18 Whole Chapter, except Rules PIB 3.2.4 and PIB 3.2.7, and sections PIB 3.3, PIB 3.4, PIB 3.8, PIB 3.9, PIB 3.9A, PIB 3.9B, 3.9C and PIB 3.18 Whole Chapter, except Rules PIB 3.2.4 and PIB 3.2.7, and sections PIB 3.3, PIB 3.4, PIB 3.8, PIB 3.9, PIB 3.9A, PIB 3.9B, 3.9C and PIB 3.18 Whole Chapter, except Rules PIB 3.2.4 and PIB 3.2.7, and sections PIB 3.3, PIB 3.4, PIB 3.8, PIB 3.9, PIB 3.9A, PIB 3.9B, 3.9C and PIB 3.18 Whole Chapter, except Rules PIB 3.2.4 and PIB 3.2.6, and sections PIB 3.4, PIB 3.5 and PIB 3.7
PIB Chapter 4: Credit Risk Whole Chapter Whole Chapter Whole Chapter       Whole Chapter
PIB Chapter 5: Market Risk Whole Chapter Whole Chapter Only sections PIB 5.1, PIB 5.2 and PIB 5.6       Whole Chapter, except PIB section 5.4
PIB Chapter 6: Operational Risk Whole Chapter, except PIB section 6.12 Whole Chapter, except PIB section 6.12 Whole Chapter, except PIB section 6.12 Whole Chapter, except sections PIB 6.10 and PIB 6.11 Whole Chapter, except sections PIB 6.10 and PIB 6.11 Whole Chapter, except sections PIB 6.10 and PIB 6.11 Whole Chapter, except PIB section 6.12
PIB Chapter 7: Interest Rate Risk In the Non-Trading Book Whole Chapter Whole Chapter          
PIB Chapter 8: Group Risk Whole Chapter Whole Chapter Only sections PIB 8.1 and PIB 8.5 Only sections PIB 8.1 and PIB 8.5 Only sections PIB 8.1 and PIB 8.5 Only sections PIB 8.1 and PIB 8.5 Whole Chapter
PIB Chapter 9: Liquidity Risk Whole Chapter, except PIB Rule 9.2.2(3) Only PIB Rule 9.2.2 (3).         Whole Chapter, except PIB Rule 9.2.2(3)
PIB Chapter 10: Supervisory Review and Evaluation Processes Whole Chapter Whole Chapter Whole Chapter Whole Chapter, except sections PIB 10.4 and PIB 10.6 Whole Chapter, except sections PIB 10.4 and PIB 10.6   Whole Chapter
PIB Chapter 11: Disclosure Requirements Whole Chapter Whole Chapter         Whole Chapter
Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]
[Amended] DFSA RM209/2017 (Made 25th October 2017). [VER30/01-18]