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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Rulebook Modules
Conduct of Business Module (COB) [VER33/07-19]
COB App 2 Key Information and Client Agreement
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
Notices
Financial Markets Tribunal
Archive

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  • COB App 2 Key Information and Client Agreement

    • COB A2.1 Key Information and Content of the Client Agreement

      • General

        • COB A2.1.1

          The key information which an Authorised FirmG is required to provide to a ClientG and include in the Client AgreementG with that ClientG pursuant to COB Rule 3.3.2 must include:

          (a) the core information set out in:
          (i) COB Rule A2.1.2 (1) if it is a Retail ClientG ; and
          (ii) COB Rule A2.1.2(2) if it is a Professional ClientG ;
          (b) where relevant, the additional information required under COB Rule A2.1.3 for Investment BusinessG and COB Rule A2.1.4 for Investment ManagementG ; and
          (c) the additional terms set out in COB Rules A2.1.5 and A2.1.6 if the Client AgreementG relates to the use of a Crowdfunding PlatformG .
          Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]
          [Added] DFSA RMI202/2017 (Made 14th June 2017). [VER29/08-17]

      • Core Information

        • COB A2.1.2

          (1) In the case of a Retail ClientG , the core information for the purposes of COB A2.1.1(a) is:
          (a) the name and address of the Authorised FirmG , and if it is a SubsidiaryG , the name and address of the ultimate Holding CompanyG ;
          (b) the regulatory status of the Authorised FirmG ;
          (c) when and how the Client AgreementG is to come into force and how the agreement may be amended or terminated;
          (d) sufficient details of the service that the Authorised FirmG will provide, including where relevant, information about any product or other restrictions applying to the Authorised FirmG in the provision of its services and how such restrictions impact on the service offered by the Authorised FirmG . If there are no such restrictions, a statement to that effect;
          (e) details of fees, costs and other charges and the basis upon which the Authorised FirmG will impose those fees, costs and other charges;
          (f) details of any conflicts of interests for the purposes of disclosure under COB Rule 3.5.1(2)(b);
          (g) details of any Soft Dollar AgreementG required to be disclosed under Rules COB 3.5.6 and COB 3.5.7; and
          (h) key particulars of the Authorised Firm'sG ComplaintsG handling procedures and a statement that a copy of the procedures is available free of charge upon request in accordance with GEN Rule 9.2.11.
          (2) In the case of a Professional ClientG , the core information for the purposes of COB A2.1.1(a) is the information referred to in (1)(a), (b), (c) and (e).
          Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

      • Additional Information for Investment Business

        • COB A2.1.3

          The additional information required under COB A2.1.1(b) for Investment BusinessG is:

          (a) the arrangements for giving instructions to the Authorised FirmG and acknowledging those instructions;
          (b) information about any agreed investment parameters;
          (c) the arrangements for notifying the ClientG of any Transaction ExecutedG on his behalf;
          (d) if the Authorised FirmG may act as principal in a TransactionG , when it will do so;
          (e) the frequency of any periodic statements and whether those statements will include some measure of performance, and if so, what the basis of that measurement will be;
          (f) when the obligation to provide best execution can be and is to be waived, a statement that the Authorised FirmG does not owe a duty of best execution or the circumstances in which it does not owe such a duty; and
          (g) where applicable, the basis on which assets comprised in the portfolio are to be valued.
          Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

      • Additional Information for Investment Management Activities

        • COB A2.1.4

          The additional information required under COB A2.1.1(b) where an Authorised FirmG acts as an Investment ManagerG is:

          (a) the initial value of the managed portfolio;
          (b) the initial composition of the managed portfolio;
          (c) the period of account for which periodic statements of the portfolio are to be provided in accordance with COB section 6.10; and
          (d) in the case of discretionary investment management activities:
          (i) the extent of the discretion to be exercised by the Authorised FirmG , including any restrictions on the value of any one InvestmentG or the proportion of the portfolio which any one InvestmentG or any particular kind of InvestmentG may constitute; or that there are no such restrictions;
          (ii) whether the Authorised FirmG may commit the ClientG to supplement the funds in the portfolio, and if it may include borrowing on his behalf:
          (A) the circumstances in which the Authorised FirmG may do so;
          (B) whether there are any limits on the extent to which the Authorised FirmG may do so and, if so, what those limits are;
          (C) any circumstances in which such limits may be exceeded; and
          (D) any margin lending arrangements and terms of those arrangements;
          (iii) that the Authorised FirmG may enter into TransactionsG for the ClientG , either generally or subject to specified limitation; and
          (iv) where the Authorised FirmG may commit the ClientG to any obligation to underwrite or sub-underwrite any issue or offer for sale of SecuritiesG :
          (A) whether there are any restrictions on the categories of SecuritiesG which may be underwritten and, if so, what these restrictions are; and
          (B) whether there are any financial limits on the extent of the underwriting and, if so, what these limits are.
          Derived from DFSA RM56/2008 (Made 1st July 2008). [VER14/07-08]

      • Additional terms for Crowdfunding Platforms

        • COB A2.1.5

          The following terms must be included in a Client AgreementG between a Crowdfunding OperatorG and a ClientG that is a lender or an investor:

          (a) the operator's obligations to administer the loan or InvestmentG , including:
          (i) how payments made by the borrower, IssuerG , or in respect of a property, will be transferred to the lender or investor; and
          (ii) steps that will be taken if payments by a borrower, IssuerG , or in respect of a property are overdue or the borrower or IssuerG is in default;
          (b) if the ClientG is a Retail ClientG , the steps that will be taken by the operator and lender or investor to ensure that the lender or investor complies with any applicable limits relating to the amounts of loans or investments that may be made using the platform;
          (c) for Investment CrowdfundingG or Property Investment Crowdfunding, if the ClientG is a Retail ClientG , that the ClientG agrees to sign a risk acknowledgement form each time before he makes an InvestmentG using the platform; and
          (d) the contingency arrangements that the operator will put in place to deal with a platform failure or if the operator ceases to carry on its business.
          [Added] DFSA RMI202/2017 (Made 14th June 2017). [VER29/08-17]
          [Amended] DFSA RMI254/2019 (Made 26th June 2019). [VER33/07-19]

        • COB A2.1.6

          The following terms must be included in a Client AgreementG between a Crowdfunding OperatorG and a ClientG that is a borrower, IssuerG or seller:

          (a) a restriction on the borrower, IssuerG , or seller using any other crowdfunding service to raise funds during the commitment period;
          (b) a restriction on the borrower, IssuerG , or seller any PersonG that is ConnectedG to the borrower, IssuerG , or seller lending or financing, or arranging lending or finance for a lender or an investor using the service;
          (c) a restriction on the borrower, IssuerG , or seller advertising its proposal, or soliciting potential lenders or investors, outside the platform during the commitment period;
          (d) a requirement on the borrower or IssuerG to give reasonable advance notice to the operator of any material change affecting the borrower or IssuerG , its business or the carrying out of its proposal;
          (e) the obligations of the borrower or IssuerG if there is any material change after funds have been provided; and
          (f) an obligation on the borrower or IssuerG to produce financial statements at least annually.
          [Added] DFSA RMI202/2017 (Made 14th June 2017). [VER29/08-17]
          [Amended] DFSA RMI254/2019 (Made 26th June 2019). [VER33/07-19]