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Dubai Financial Services Authority (DFSA): Contents

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Whole SectionText only Print Print Manager Link


  Versions
(1 version)
 
Feb 1 2017 onwards

GEN 2.14.3 Guidance



Whole Section PDF

The definitive version of DFSA handbook text is the PDF version as that is the text of the instrument as made and published by the DFSA.

To view past versions of this module in PDF format, please visit the Archive.

How does Providing Custody differ from Arranging Custody?

1. Refer to Guidance item 2 under Providing CustodyG in GEN section 2.13.

Activities which constitute arranging

2. The type of activities that constitute Arranging CustodyG include:
a. negotiating and settling terms of the contract between the custody provider and the PersonG who is obtaining that service (the ClientG );
b. assisting the ClientG to complete application forms and other processes;
c. collecting and processing the Client'sG payments; and
d. transmitting information (including instructions from the ClientG and confirmations by the custody provider) between the CustomerG and the custody provider.

Non-application of the Client Asset provisions

3. The Client AssetG provisions only apply to firms holding or controlling Client AssetsG and to firms Providing CustodyG . As a firm Arranging CustodyG does not 'safeguard and administer InvestmentsG ' (see Guidance items 3 and 4 under Providing CustodyG in GEN section 2.13), the Client AssetG provisions in COB section 6.11 have only limited application to such a firm (see COB Rule 6.11.2(3)). The requirement for a Safe Custody Auditor'sG Report under GEN Rule 8.6.1(e) also does not apply to a firm Arranging CustodyG .
4. A firm 'Arranging CustodyG ', although not subject to substantive Client AssetG provisions (because it does not hold or control Client AssetsG ), is still required to undertake due diligence on a non-DIFC custodian with whom it arranges for its ClientG to obtain custody services — see COB Rule A6.5.1A.

Who can rely on the exclusion in GEN Rule 2.14.2

5. The exclusion in GEN Rule 2.14.2 is available to an introducer who introduces a potential customer to a regulated firm. However, this exclusion does not apply if the introducer:
a. is a member of the same GroupG as the custodian;
b. is part of the same legal entity as the custodian (i.e. the custodian is the introducer's head office or another branch of the same legal entity as the introducer); or
c. receives remuneration for making the introduction from any Person — which can be a related party referred to in a. or b. above or any unrelated party.
Derived from DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]