AFN AUT-NOTES Part 10: Other information

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Becoming Authorised

In order to conduct Financial Services through the Dubai International Financial Centre, individuals or entities need to seek authorisation from the DFSA. Authorisation is given in the form of a Licence which is issued by the DFSA, which specifies the type of Financial Services that can be conducted.

The following is a guide for firms seeking authorisation from the DFSA:

Tips for applicants

1. Spend time preparing your application. Read the GEN module of the DFSA Rulebook, as well as the guidance notes to the application forms before you start your application.
2. Carefully identify which of your proposed business activities fall within the definition of Financial Services. Check whether there are any exemptions or prohibitions which may impact your application.
3. If you are a start-up firm, review our policy statement on start-ups. This can be found on the DFSA website under Legislation. We do not accept applications for start-up banks.
4. Check you are submitting the most-up-to date version of our application form(s) and that you have used the right forms for the business activities you are proposing. Ensure your application specifies clearly the Financial Services you intend to carry out.
5. Be as comprehensive as possible in providing the information required. Make sure your forms are signed and that you have included the required attachments.
6. Review your application before submission, particularly when using consultants or legal advisers. You are the one who knows your business best and you are responsible for all information contained in the application.
7. Provide one hard copy and one soft copy of your application. The soft copy should be stored on a CD or memory stick. Please do not send e-mail copies.
8. Ensure you have paid the correct application fee. Details of the fee schedule are set out in the Fees module of the DFSA Rulebook. We will only commence work on your application when payment and the original application form(s) have been received.
9. Nominate a contact person within your firm to be responsible for managing the application process and to assist the DFSA with any enquiries.
10. Initiate the Registrar of Companies process at the same time as lodging your application with the DFSA. This will save you time at the end of the process.

How we assess applications

Before we can authorise a firm as an Authorised Firm, we need to be satisfied that the firm meets our Fit and Proper test, and is likely to do so on an ongoing basis. Generally, Fit and Proper means the ability to carry out a financial service competently, with honesty and integrity.

The areas we look at include:

•   Legal status: A firm must be a body corporate or partnership. It can be formed in the DIFC, or a firm can establish a branch of a legal entity based in another jurisdiction. In the latter instance, the DFSA would expect the outside jurisdiction to have internationally compliant regulatory and legal standards.
•   Location of offices: A firm must carry on its activities from a place of business in the DIFC. Please discuss office requirements with the DIFC Authority Business Development Unit.
•   Ownership and group structure: The DFSA seeks to establish that it will be able to effectively supervise the firm. Therefore we need to be made aware of any Close Links (eg parent, subsidiary, sister company) which could hinder effective ongoing supervision.
•   Adequate resources: A firm must have adequate resources to carry out the proposed financial services including financial resources and adequate systems and controls. A firm must have an internal audit function.
•   Senior management: A firm must appoint a Senior Executive Officer, a Compliance Officer, an Anti-Money Laundering Reporting Officer and a Finance Officer. The first three positions require the individuals responsible to be resident in the UAE. As part of our process, we will evaluate the competence and integrity of the proposed senior management team.

How to prepare to apply

We strongly recommend that firms, in the first instance, engage with the Business Development unit of the DIFCA. They will help you understand the value proposition of the DIFC to assist your evaluation of whether a presence here will make business sense for your firm.

Some firms go straight to attempting to complete the application forms. This often results in a poor application and can lengthen the application process. Here are some recommended preparation steps:

•   Decide what type of business you want to carry out and check which Financial Services you will need to apply for.
•   Determine who will be part of the senior management and who will be in the mandatory positions. Prepare to complete the necessary individual application forms.
•   Develop a comprehensive regulatory business plan that sets out your proposed activities, 3-year financial projections and budget, resources such as human, systems and financial. This can be shared with the DFSA Authorisation Enquiries team who will be happy to comment on your proposal.
•   Familiarise yourself with the applicable rules from the DFSA Rulebook and be prepared to show how you will comply with those rules. This will include providing a compliance manual, a compliance monitoring programme, and risk management policies.
•   Determine your minimum regulatory capital requirements, with which you will need to comply at all times. This should be included in your 3-year financial projections.

Completing the Application Forms

It is vital that you supply all relevant information. Openness and honesty are essential. Should we need to examine your application more closely because of any disclosures you make, this will not necessarily count against you. However, deliberately withholding information or providing false or misleading information, will adversely impact the success of your application. If in doubt, disclose.

If the information you provide is inaccurate or incomplete, we may deem your application as materially incomplete, in which case it would not be accepted. Thus, missing information will lengthen the application process. Ensure that all relevant documents are also included with your completed application.

You should also start the registration process with the DIFC Registrar of Companies at the same time as you submit your DFSA application. This will help you to avoid delays at the end of the authorisation process.

Fees

The application fee will vary according to the Financial Services to be provided. Comprehensive details of fees can be found in the Fees module (FER) of the DFSA Rulebook.

Authorisation timeline

If the application is complete and the application fee has been paid, we will process the application according to the following timeline:

•   Within 2 business days of receipt of the application: A letter acknowledging receipt of the application is sent.
•   Within 10 business days of receipt of the application: We aim to send out an initial review letter.
•   Dialogue between you and the DFSA will start and continue as required to the final review.
•   Within 4 months of receipt of the application: We aim to complete a final review and recommendation.

The timeline set out above is indicative only. The time taken to process your application will depend on its scale and complexity, as well as the timely submission of information and response to any requests for further clarification. The need to make the correct regulatory decision will always take precedence over meeting target timescales.

A successful application will result in the DFSA issuing you an in-principle letter which will allow you to complete the DIFC Registrar of Companies process. We will then issue your DFSALicence once you can demonstrate that you have successfully registered with the Registrar of Companies, opened a bank account and sufficiently capitalised the firm (for DIFC entities only) and met any other outstanding matters.

You will have only 3 months to complete the outstanding requirements and establish operational premises during the in-principle period. It will be helpful if you can establish contact with any other relevant third parties eg Registrar of Companies, bank etc at the same time as submitting your DFSA application.

Getting help

•   DFSA Rulebook: Generally applicable modules include: General (GEN) and Conduct of Business (COB).
•   Authorisation Enquiries: You can direct your questions regarding our regulatory regime or the authorisation process to Authorisation Enquiries.
•   DIFCA Business Development Manager: For advice on the commercial aspects of setting up in the DIFC and for copies of the application forms.
[Amended][VER23/04-11]
[Amended][VER6/08-14]