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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
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General Module (GEN) [VER43/02-19]
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  • GEN 11 Supervision

    • Introduction

      • Guidance

        1. This chapter outlines DFSA'sG supervisory requirements for an Authorised PersonG .
        2. This chapter should be read in conjunction with the RPP Sourcebook which sets out DFSA'sG general regulatory policy and processes.

    • GEN 11.1 Information gathering and DFSA access to information

      • GEN 11.1.1

        This section applies to an Authorised PersonG other than a Representative OfficeG with respect to the carrying on of all of its activities.

      • GEN 11.1.2

        An Authorised PersonG must where reasonable:

        (a) give or procure the giving of specified information, documents, files, tapes, computer data or other material in the Authorised Person'sG possession or control to the DFSAG ;
        (b) make its EmployeesG readily available for meetings with the DFSAG ;
        (c) give the DFSAG access to any information, documents, records, files, tapes, computer data or systems, which are within the Authorised Person's possession or control and provide any facilities to the DFSAG ;
        (d) permit the DFSAG to copy documents or other material on the premises of the Authorised PersonG at the Authorised Person'sG expense;
        (e) provide any copies as requested by the DFSAG ; and
        (f) answer truthfully, fully and promptly, all questions which are put to it by the DFSAG .

      • GEN 11.1.3

        An Authorised PersonG must take reasonable steps to ensure that its EmployeesG act in the manner set out in this chapter.

      • GEN 11.1.4

        An Authorised PersonG must take reasonable steps to ascertain if there is any secrecy or data protection legislation that would restrict access by the Authorised PersonG or the DFSAG to any data required to be recorded under the DFSA'sG RulesG . Where such legislation exists, the Authorised PersonG must keep copies of relevant documents or material in a jurisdiction which does allow access in accordance with legislation applicable in the DIFCG .

      • Lead regulation

        • GEN 11.1.5

          (1) If requested by the DFSAG , an Authorised PersonG must provide the DFSAG with information that the Authorised PersonG or its auditor has provided to a Financial Services RegulatorG .
          (2) If requested by the DFSAG , an Authorised PersonG must take reasonable steps to provide the DFSAG with information that other members of the Authorised Person'sG GroupG have provided to a Financial Services RegulatorG .

    • GEN 11.2 Waivers

      • GEN 11.2.1

        This section applies to every Authorised PersonG .

      • GEN 11.2.2

        Throughout the RulebookG reference to the written notice under Article 25 will be referred to as a 'waiver'.

      • GEN 11.2.3

        If an Authorised PersonG wishes to apply for a waiver, it must apply in writing to the DFSAG using the appropriate form in AFNG .

        Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RM176/2016 (Made 19th June 2016) [VER37/08-16]

      • GEN 11.2.4

        The application must contain:

        (a) the name and LicenceG number of the Authorised PersonG ;
        (b) the RuleG to which the application relates;
        (c) a clear explanation of the waiver that is being applied for and the reason why the Authorised PersonG is requesting the waiver;
        (d) details of any other requirements; for example, if there is a specific period for which the waiver is required;
        (e) the reason, if any, why the waiver should not be published or why it should be published without disclosing the identity of the Authorised PersonG ; and
        (f) all relevant facts to support the application.

      • GEN 11.2.5

        An Authorised PersonG must immediately notify the DFSAG if it becomes aware of any material change in circumstances which may affect the application for a waiver.

      • Continuing relevance of waivers

        • GEN 11.2.6

          An Authorised PersonG must immediately notify the DFSAG if it becomes aware of any material change in circumstances which could affect the continuing relevance of a waiver.

    • GEN 11.3 Application to change the scope of a Licence

      • GEN 11.3.1

        This section applies to an Authorised FirmG applying to change the scope of its LicenceG or, where a condition or restriction has previously been imposed, to have the condition or restriction varied or withdrawn.

      • GEN 11.3.2

        The provisions relating to permitted legal forms, fitness and propriety, adequate resources, compliance arrangements, enquiries and the provision of additional information set out in section 7.2 also apply to an Authorised FirmG making an application under this chapter, and are to be construed accordingly.

      • GEN 11.3.3

        An Authorised FirmG applying to change the scope of its LicenceG , or to have a condition or restriction varied or withdrawn, must provide the DFSAG , with written details of the proposed changes.

    • GEN 11.4 Withdrawal of a Licence at an Authorised Firm's request

      • GEN 11.4.1

        An Authorised FirmG other than a Representative OfficeG seeking to have its LicenceG withdrawn must submit a request in writing stating:

        (a) the reasons for the request;
        (b) that it has ceased or will cease to carry on Financial ServicesG in or from the DIFCG ;
        (c) the date on which it ceased or will cease to carry on Financial ServicesG in or from the DIFCG ;
        (d) that it has discharged, or will discharge, all obligations owed to its customers in respect of whom the Authorised FirmG has carried on, or will cease to carry on, Financial ServicesG in or from the DIFCG ; and
        (e) if it is providing Trust Services, that it has made appropriate arrangements for the transfer of business to a new Trust Service ProviderG and the appointment, where necessary, of new trustees.
        Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RM155/2015 (Made 9th December 2015) [VER35/02-16]

    • GEN 11.5 Changes to an authorised individual status

      • GEN 11.5 Guidance

        This section addresses applications or requests regarding Authorised IndividualsG with respect to Article 53(3), 56(3), 58(2) and 58(3).

        Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

      • GEN 11.5.1

        An application to extend the scope of an Authorised IndividualG status to other Licensed FunctionsG may be made by the Authorised IndividualG and Authorised FirmG by the completion and submission of the appropriate form in AFN.

      • GEN 11.5.2

        An Authorised FirmG or Authorised IndividualG requesting:

        (a) the imposition, variation or withdrawal of a condition or restriction;
        (b) withdrawal of Authorised IndividualG status; or
        (c) withdrawal of authorisation in relation to one or more Licensed FunctionsG ;
        must, subject to Rule 11.5.3, for (a) submit such request in writing to the DFSAG , and for (b) and (c) submit a request by completing the appropriate form in AFN.

      • GEN 11.5.3

        A request for the variation or withdrawal of a condition or restriction may only be made after the expiry of any period within which a reference to the FMTG relating to the relevant condition or restriction may commence under Article 29.

        Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

        • GEN 11.5.3 Guidance

          In considering the suitability of such an application or request the DFSAG may take into account any matter referred to in RPP with respect to fitness and propriety for Authorised IndividualsG .

          [Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

    • GEN 11.6 Temporary cover

      • GEN 11.6.1

        (1) An Authorised FirmG may, subject to (2), appoint an individual, who is not an Authorised IndividualG , to carry out the functions of an Authorised IndividualG where the following conditions are met:
        (a) the absence of the Authorised IndividualG is temporary or reasonably unforeseen;
        (b) the functions are carried out for 12 weeks maximum in any consecutive 12 months; and
        (c) the Authorised FirmG has assessed that the individual has the relevant skills and experience to carry out these functions.
        (2) An Authorised FirmG may not appoint under (1) an individual to carry out the Licensed FunctionsG of a Licensed DirectorG or Licensed PartnerG .
        (3) The Authorised FirmG must take reasonable steps to ensure that the individual complies with all the RulesG applicable to Authorised IndividualsG .
        (4) Where an individual is appointed under this RuleG , the Authorised FirmG must notify the DFSAG in writing of the name and contact details of the individual appointed.

      • GEN 11.6.2

        Where an individual is appointed under this section, the DFSAG may exercise any powers it would otherwise be entitled to exercise as if the individual held Authorised IndividualG status.

    • GEN 11.7 Dismissal or resignation of an Authorised Individual

      • GEN 11.7.1

        An Authorised FirmG must request the withdrawal of an Authorised IndividualG status within seven days of the Authorised IndividualG ceasing to be employed by the Authorised FirmG to perform a Licensed FunctionG .

      • GEN 11.7.2

        In requesting the withdrawal of an Authorised IndividualG status, the Authorised FirmG must submit the appropriate form in AFN, including details of any circumstances where the Authorised FirmG may consider that the individual is no longer fit and proper.

      • GEN 11.7.3

        If an Authorised IndividualG is dismissed or requested to resign, a statement of the reason, or reasons, for the dismissal or resignation must be given to the DFSAG by the Authorised FirmG .

      • GEN 11.7.4

        If the Authorised IndividualG was acting as a trustee, the Trust Service ProviderG must confirm to the DFSAG in writing that a new trustee has been appointed in place of the trustee in question.

    • GEN 11.8 Changes relating to control

      • GEN 11.8.1

        (1) This section applies, subject to (2) and (3), to:
        (a) an Authorised FirmG ; or
        (b) a PersonG who is, or is proposing to become, a ControllerG specified in GEN Rule 11.8.3.
        (2) This chapter does not apply to a Representative OfficeG or a PersonG who is a ControllerG of such a firm.
        (3) A Credit Rating AgencyG must comply with the requirements in this section as if it were a non-DIFC established company.
        Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RM96/2012 (Made 24th July 2012) [VER30/07-12]
        [Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

        • GEN 11.8.1 Guidance

          The requirements in respect of notification of changes relating to control of BranchesG (i.e. Non-DIFC established companies) are set out in GEN Rule 11.8.10. Although some Credit Rating AgenciesG may be companies established in the DIFC, such companies will only be subject to the notification requirements relating to their ControllersG . Accordingly, regardless of whether a Credit Rating AgencyG is a company established in the DIFC or a BranchG operation, it is subject to the notification requirements only and not to the requirement for prior approval by the DFSA of changes relating to its ControllersG .

          [Added] DFSA RM96/2012 (Made 24th July 2012) [VER30/07-12]

      • Definition of a Controller

        • GEN 11.8.2

          (1) A ControllerG is a PersonG who, either alone or with any AssociateG :
          (a) holds 10% or more of the shares in either the Authorised FirmG or a Holding CompanyG of that firm;
          (b) is entitled to exercise, or controls the exercise of, 10% or more of the voting rights in either the Authorised FirmG or a Holding CompanyG of that firm; or
          (c) is able to exercise significant influence over the management of the Authorised Firm as a result of holding shares or being able to exercise voting rights in the Authorised FirmG or a Holding CompanyG of that firm or having a current exercisable right to acquire such shares or voting rights.
          (2) A reference in this chapter to the term:
          (a) "share" means:
          (i) in the case of an Authorised FirmG , or a Holding CompanyG of an Authorised FirmG , which has a share capital, its allotted shares;
          (ii) in the case of an Authorised FirmG , or a Holding CompanyG of an Authorised FirmG , with capital but no share capital, rights to a share in its capital; and
          (iii) in the case of an Authorised FirmG , or a Holding CompanyG of an Authorised FirmG , without capital, any interest conferring a right to share in its profits or losses or any obligation to contribute to a share of its debt or expenses in the event of its winding up; and
          (b) "a holding" means, in respect of a PersonG , shares, voting rights or a right to acquire shares or voting rights in an Authorised FirmG or a Holding CompanyG of that firm held by that Person either alone or with any AssociateG .
          Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

          • GEN 11.8.2 Guidance

            1. For the purposes of these Rules, the relevant definition of a Holding CompanyG is found in the DIFC Companies Law. That definition describes when one body corporate is considered to be a holding company or a subsidiary of another body corporate and extends that concept to the ultimate holding company of the body corporate.
            2. Pursuant to Rule 11.8.2(1)(c), a PersonG becomes a ControllerG if that Person can exert significant management influence over an Authorised FirmG . The ability to exert significant management influence can arise even where a PersonG , alone or with his AssociatesG , controls less than 10% of the shares or voting rights of the Authorised FirmG or a Holding CompanyG of that firm. Similarly, a PersonG may be able to exert significant management influence where such PersonG does not hold shares or voting rights but has current exercisable rights to acquire shares or voting rights, such as under OptionsG .
            Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
            [Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

      • Disregarded holdings

        • GEN 11.8.3

          For the purposes of determining whether a PersonG is a ControllerG , any shares, voting rights or rights to acquire shares or voting rights that a Person holds, either alone or with any AssociateG , in an Authorised FirmG or a Holding CompanyG of that firm are disregarded if:

          (a) they are shares held for the sole purpose of clearing and settling within a short settlement cycle;
          (b) they are shares held in a custodial or nominee capacity and the voting rights attached to the shares are exercised only in accordance with written instructions given to that Person by another Person; or
          (c) the PersonG is an Authorised FirmG or a Regulated Financial InstitutionG and it:
          (i) acquires the shares as a result of an underwriting of a share issue or a placement of shares on a firm commitment basis;
          (ii) does not exercise the voting rights attaching to the shares or otherwise intervene in the management of the issuer; and
          (iii) retains the shares for a period less than one year.
          Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

      • Requirement for prior approval of Controllers of Domestic Firms

        • GEN 11.8.4

          (1) In the case of an Authorised FirmG which is a Domestic FirmG , a PersonG must not:
          (a) become a ControllerG ; or
          (b) increase the level of control which that PersonG has in the firm beyond a threshold specified in (2),
          unless that PersonG has obtained the prior written approval of the DFSA to do so.
          (2) For the purposes of (1)(b), the thresholds at which the prior written approval of the DFSA is required are when the relevant holding is increased:
          (a) from below 30% to 30% or more; or
          (b) from below 50% to 50% or more.
          Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

          • GEN 11.8.4 Guidance

            See Rules 11.8.2 and 11.8.3 for the circumstances in which a PersonG becomes a ControllerG of an Authorised PersonG .

            [Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

      • Approval process

        • GEN 11.8.5

          (1) A PersonG who is required to obtain the prior written approval of the DFSA pursuant to Rule 11.8.4(1) must make an application to the DFSA using the appropriate form in AFN.
          (2) Where the DFSA receives an application under (1), it may:
          (a) approve the proposed acquisition or increase in the level of control;
          (b) approve the proposed acquisition or increase in the level of control subject to such conditions as it considers appropriate; or
          (c) object to the proposed acquisition or increase in the level of control.
          Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

          • GEN 11.8.5 Guidance

            1. A PersonG intending to acquire or increase control in an Authorised FirmG should submit an application for approval in the appropriate form in AFN sufficiently in advance of the proposed acquisition to be able to obtain the DFSA approval in time for the proposed acquisition. Sections 3-2-343-2-37 of the RPP Sourcebook set out the matters which the DFSA will take into consideration when exercising its powers under Rule 11.8.5 to approve, object to or impose conditions of approval relating to a proposed ControllerG or a proposed increase in the level of control of an existing ControllerG .
            2. The DFSA will exercise its powers relating to Controllers in a manner proportionate to the nature, scale and complexity of an Authorised Firm's business, and the impact a proposed change in control would have on that firm and its ClientsG . For example, the DFSA would generally be less likely to impose conditions requiring a proposed acquirer of control of an Authorised Firm whose financial failure would have a limited systemic impact or impact on its ClientsG to provide prudential support to the firm by contributing more capital. Most advisory and arranging firms will fall into this class.
            [Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

        • GEN 11.8.6

          (1) Where the DFSA proposes to approve a proposed acquisition or an increase in the level of control in an Authorised FirmG pursuant to Rule 11.8.5(2)(a), it must:
          (a) do so as soon as practicable and in any event within 90 days of the receipt of a duly completed application, unless a different period is considered appropriate by the DFSA and notified to the applicant in writing; and
          (b) issue to the applicant, and where appropriate to the Authorised FirmG , an approval notice as soon as practicable after making that decision.
          (2) An approval, including a conditional approval granted by the DFSA pursuant to Rule 11.8.5(2)(a) or (b), is valid for a period of one year from the date of the approval, unless an extension is granted by the DFSA in writing.
          Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

          • GEN 11.8.6 Guidance

            1. If the application for approval lodged with the DFSA does not contain all the required information, then the 90 day period runs from the date on which all the relevant information has been provided to the DFSA.
            2. If a PersonG who has obtained the prior DFSA approval for an acquisition or an increase in the control of an Authorised FirmG is unable to effect the acquisition before the end of the period referred to in Rule 11.8.6(2), it will need to obtain fresh approval from the DFSA.
            [Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

      • Objection or conditional approval process

        • GEN 11.8.7

          (1) Where the DFSAG proposes to exercise its objection or conditional approval power pursuant to Rule 11.8.5(2)(b) or (c) in respect of a proposed acquisition of, or an increase in the level of control in, an Authorised FirmG , it must, as soon as practicable and in any event within 90 days of the receipt of the duly completed application form, provide to the applicant:
          (a) a written notice stating:
          (i) the DFSA'sG reasons for objecting to that PersonG as a ControllerG or to the Person'sG proposed increase in control; and
          (ii) any proposed conditions subject to which that PersonG may be approved by the DFSAG ; and
          (b) an opportunity to make representations within 14 days of the receipt of such notice or such other longer period as agreed to by the DFSAG .
          (2) The DFSAG must, as soon as practicable after receiving representations or, if no representations are received, after the expiry of the period for making representations referred to in (1)(b), issue a final notice stating that:
          (a) the proposed objections and any conditions are withdrawn and the PersonG is an approved ControllerG ;
          (b) the PersonG is approved as a ControllerG subject to conditions specified in the notice; or
          (c) the PersonG is not approved and therefore is an unacceptable ControllerG with respect to that PersonG becoming a ControllerG of, or increasing the level of control in, the Authorised FirmG .
          (3) If the DFSAG decides to exercise its power under this Rule not to approve a PersonG as a ControllerG or to impose conditions on an approval, the PersonG may refer the matter to the FMTG for review.
          Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]
          [Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

          • GEN 11.8.7 Guidance [Deleted]

            [Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

        • GEN 11.8.8

          (1) A PersonG who has been approved by the DFSA as a ControllerG of an Authorised FirmG subject to any conditions must comply with the relevant conditions of approval.
          (2) A PersonG who has been notified by the DFSA pursuant to Rule 11.8.7(2)(c) as an unacceptable ControllerG must not proceed with the proposed acquisition of control of the Authorised FirmG .
          [Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

          • GEN 11.8.8 Guidance

            A PersonG who acquires control of or increases the level of control in an Authorised FirmG without the prior DFSA approval or breaches a condition of approval is in breach of the Rules. See Rule 11.8.13 for the actions that the DFSA may take in such circumstances.

            [Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

      • Notification for decrease in the level of control of Domestic Firms

        • GEN 11.8.9

          A ControllerG of an Authorised FirmG which is a Domestic FirmG must submit, using the appropriate form in AFN, a written notification to the DFSA where that Person:

          (a) proposes to cease being a ControllerG ; or
          (b) proposes to decrease that Person's holding from more than 50% to 50% or less.
          Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

      • Requirement for notification of changes relating to control of Branches

        • GEN 11.8.10

          (1) In the case of an Authorised FirmG which is a BranchG , a written notification to the DFSA must be submitted by a ControllerG or a PersonG proposing to become a ControllerG of that Authorised FirmG in accordance with (3) in respect of any one of the events specified in (2).
          (2) For the purposes of (1), a notification to the DFSA is required when:
          (a) a PersonG becomes a ControllerG ;
          (b) an existing ControllerG proposes to cease being a Controller; or
          (c) an existing Controller's holding is:
          (i) increased from below 30% to 30% or more;
          (ii) increased from below 50% to 50% or more; or
          (iii) decreased from more than 50% to 50% or less.
          (3) The notification required under (1) must be made by a ControllerG or PersonG proposing to become a ControllerG of a Branch using the appropriate form in AFN as soon as possible, and in any event, before making the relevant acquisition or disposal.
          Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

          • [Deleted]

            [Deleted] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

      • Obligations of Authorised Firms relating to its Controllers

        • GEN 11.8.11

          (1) An Authorised FirmG must have adequate systems and controls to monitor:
          (a) any change or proposed change of its Controllers; and
          (b) any significant changes in the conduct or circumstances of existing Controllers which might reasonably be considered to impact on the fitness and propriety of the Authorised FirmG or its ability to conduct business soundly and prudently.
          (2) An Authorised FirmG must, subject to (3), notify the DFSA in writing of any event specified in (1) as soon as possible after becoming aware of that event.
          (3) An Authorised FirmG need not comply with the requirement in (2) if it is satisfied on reasonable grounds that a proposed or existing ControllerG has either already obtained the prior approval of the DFSA or notified the event to the DFSA as applicable.
          [Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

          • GEN 11.8.11 Guidance

            Steps which an Authorised FirmG may take in order to monitor changes relating to Controllers include the monitoring of any relevant regulatory disclosures, press reports, public announcements, share registers and entitlements to vote, or the control of voting rights, at general meetings.

            [Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

        • GEN 11.8.12

          (1) An Authorised FirmG must submit to the DFSA an annual report on its Controllers within four months of its financial year end.
          (2) The Authorised Firm's annual report on its Controllers must include:
          (a) the name of each ControllerG ; and
          (b) the current holding of each Controller, expressed as a percentage.
          [Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

          • GEN 11.8.12 Guidance

            1. An Authorised FirmG may satisfy the requirements of Rule 11.8.12 by submitting a corporate structure diagram containing the relevant information.
            2. An Authorised FirmG must take account of the holdings which the ControllerG , either alone or with any AssociateG , has in the Authorised FirmG or any Holding CompanyG of the firm (see the definition of a ControllerG in Rule 11.8.2).
            [Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]

      • Other Powers relating to Controllers

        • GEN 11.8.13

          (1) Without limiting the generality of its other powers, the DFSAG may, subject only to (2), object to a PersonG as a ControllerG of an Authorised FirmG where such a PersonG :
          (a) has acquired or increased the level of control that PersonG has in an Authorised FirmG without the prior written approval of the DFSAG as required under Rule 11.8.4;
          (b) has breached the requirement in Rule 11.8.8 to comply with the conditions of approval applicable to that PersonG ; or
          (c) is no longer acceptable to the DFSAG as a ControllerG .
          (2) Where the DFSAG proposes to object to a PersonG as a ControllerG of an Authorised FirmG under (1), the DFSAG must provide such a PersonG with:
          (a) a written notice stating:
          (i) the DFSA'sG reasons for objecting to that PersonG as a ControllerG ; and
          (ii) any proposed conditions subject to which that PersonG may be approved by the DFSAG ; and
          (b) an opportunity to make representations within 14 days of the receipt of such objections notice or such other longer period as agreed to by the DFSAG .
          (3) The DFSAG must, as soon as practicable after receiving representations, or if no representations are made, after the expiry of the period for making representations referred to in (2)(b), issue a final notice stating that:
          (a) the proposed objections and any conditions are withdrawn and the PersonG is an approved ControllerG ;
          (b) the PersonG is approved as a ControllerG subject to conditions specified in the notice; or
          (c) the Person is an unacceptable ControllerG and accordingly, must dispose of that Person's holdings.
          (4) Where the DFSAG has issued a final notice imposing any conditions subject to which a PersonG is approved as a ControllerG , that Person must comply with those conditions.G
          (5) Where the DFSAG has issued a final notice declaring a PersonG to be an unacceptable ControllerG , that PersonG must dispose of the relevant holdings within such period as specified in the final notice.
          (6) The DFSAG must also notify the Authorised FirmG of any decision it has made pursuant to (3).
          (7) If the DFSAG decides to exercise its power under this Rule to object to a PersonG as a ControllerG , to impose conditions on an approval or to require a PersonG to dispose of their holdings, the PersonG may refer the matter to the FMTG for review.
          [Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]
          [Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

          • GEN 11.8.13 Guidance

            Sections 3.2.34 and 3.2.37 of the RPP Sourcebook set out the matters which the DFSA takes into consideration when exercising its powers under Rule 11.8.13.

            [Added] DFSA RM105/2012 (Made 23rd December 2012). [VER32/12-12]
            [Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

    • GEN 11.9 Creation of additional cells of a protected cell company for an Insurer

      • GEN 11.9.1

        This section applies to InsurersG that are Protected Cell CompaniesG .

        • GEN 11.9.1 Guidance

          1. An InsurerG that is a Protected Cell CompanyG is a company incorporated as, or converted into, a Protected Cell CompanyG in accordance with the provisions of the DIFCG Company Regulations.
          2. Under the provisions of the DIFCG Company Regulations dealings or transactions between CellsG in relation to an InsurerG may take place only with the approval of the CourtG .
          3. An Authorised FirmG which intends to apply to the CourtG for approval under the provisions is invited to consult with the DFSAG before making the necessary application to the CourtG .

      • GEN 11.9.2

        An InsurerG that is a Protected Cell CompanyG may not create a new CellG unless approval has been granted by the DFSAG .

      • GEN 11.9.3

        An application to the DFSAG for the approval for the creation of a new CellG must be made on the appropriate form in AFN, and shall be accompanied by such documents and information and verified in such manner, as the DFSAG may require.

      • GEN 11.9.4

        (1) The DFSAG may:
        (a) grant approval;
        (b) grant approval with conditions or restrictions; or
        (c) refuse approval;
        for the creation of a new CellG .
        (2) The procedures in Schedule 3 to the Regulatory LawG apply to a decision of the DFSAG under (1)(b) and (c).
        (3) If the DFSAG decides to exercise its power under (1)(b) and (c), the InsurerG may refer the matter to the FMTG for review.
        Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

      • [Deleted]

        [Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

        • GEN 11.9.5 [Deleted]

          [Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

      • [Deleted]

        [Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

        • GEN 11.9.6 [Deleted]

          [Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

        • GEN 11.9.7 [Deleted]

          [Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

    • GEN 11.10 Notifications

      • GEN 11.10.1

        (1) This section applies to every Authorised PersonG , unless otherwise provided, with respect to the carrying on of Financial ServicesG and any other activities whether or not financial.
        (2) This section does not apply to a Representative OfficeG .

        • GEN 11.10.1 Guidance

          1. This chapter sets out RulesG on specific events, changes or circumstances that require notification to the DFSAG and outlines the process and requirements for notifications.
          2. The list of notifications outlined in this chapter is not exhaustive. Other areas of the RulebookG may also detail additional notification requirements.
          3. An Authorised PersonG and its auditor are also required under Article 67 to disclose to the DFSAG any matter which may indicate a breach or likely breach of, or a failure or likely failure to comply with, laws or RulesG . An Authorised PersonG is also required to establish and implement systems and procedures to enable its compliance and compliance by its auditor with notification requirements.

      • Core information

        • GEN 11.10.2

          An Authorised PersonG must provide the DFSAG with reasonable advance notice of a change in:

          (a) the Authorised Person'sG name;
          (b) any business or trading name under which the Authorised PersonG carries on a Financial ServiceG in or from the DIFCG ;
          (c) the address of the Authorised Person'sG principal place of business in the DIFCG ;
          (d) in the case of a BranchG , its registered office or head office address;
          (e) its legal structure; or
          (f) an Authorised Individual'sG name or any material matters relating to his fitness and propriety.

        • GEN 11.10.3

          A Domestic FirmG must provide the DFSAG with reasonable advance notice of the establishment or closure of a branch office anywhere in the world from which it carries on financial services.

        • GEN 11.10.4

          When giving notice under Rule 11.10.3 in relation to the establishment of a branch, a Domestic FirmG must at the same time submit to the DFSAG a detailed business plan in relation to the activities of the proposed branch.

        • GEN 11.10.5

          (1) The DFSAG may object to the establishment by a Domestic FirmG of a branch office elsewhere in the world.
          (2) If the DFSAG objects to the firm establishing a branch anywhere in the world the firm may not proceed with establishment of such a branch.
          (3) The procedures in Schedule 3 to the Regulatory LawG apply to a decision of the DFSAG under (1).
          (4) If the DFSAG decides to exercise its power under (1), the Domestic FirmG may refer the matter to the FMTG for review.
          Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

        • GEN 11.10.6 [Deleted]

          [Deleted] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

      • Regulatory impact

        • GEN 11.10.7

          An Authorised PersonG must advise the DFSAG immediately if it becomes aware, or has reasonable grounds to believe, that any of the following matters may have occurred or may be about to occur:

          (a) the Authorised Person'sG failure to satisfy the fit and proper requirements;
          (b) any matter which could have a significant adverse effect on the Authorised Person'sG reputation;
          (c) any matter in relation to the Authorised PersonG which could result in serious adverse financial consequences to the financial system or to other firms;
          (d) a significant breach of a RuleG by the Authorised PersonG or any of its Employees;
          (e) a breach by the Authorised PersonG or any of its EmployeesG of any requirement imposed by any applicable law by the Authorised PersonG or any of its EmployeesG ;
          (f) subject to Rule 11.10.8, any proposed restructuring, merger, acquisition, reorganisation or business expansion which could have a significant impact on the Authorised Person'sG risk profile or resources;
          (g) any significant failure in the Authorised Person'sG systems or controls, including a failure reported to the Authorised PersonG by the firm's auditor;
          (h) any action that would result in a material change in the capital adequacy or solvency of the Authorised FirmG ; or
          (i) non-compliance with RulesG due to an emergency outside the Authorised Person'sG control and the steps being taken by the Authorised PersonG .

      • Major acquisitions

        • GEN 11.10.8

          (1) Subject to (2), an Authorised FirmG which makes or proposes to make a Major AcquisitionG as defined in (3) must:
          (a) if it is a Domestic FirmG , comply with the requirements in Rule 11.10.9; and
          (b) if it is not a Domestic FirmG , comply with the requirements in Rule 11.10.10.
          (2) The requirement in (1) does not apply to an Authorised FirmG which is a Credit Rating AgencyG or a firm in Category 3 (as defined in PIB Rules 1.3.3 to 1.3.5) or Category 4 (as defined in PIB Rule 1.3.6).
          (3) Subject to (4), an Authorised FirmG makes a Major AcquisitionG if it makes or proposes to directly or indirectly acquire a shareholding in a Body CorporateG where that acquisition:
          (a) is of a value (whether by one acquisition or a series of acquisitions) of 10% or more of:
          (i) the Authorised Firm'sG Capital ResourcesG , if it is a Domestic FirmG which is a Category 1 Authorised FirmG (as defined in PIB Rule 1.3.1), Category 2 Authorised FirmG (as defined in PIB Rule 1.3.2) or Category 5 Authorised FirmG (as defined in PIB Rule 1.3.7); or
          (ii) the Authorised Firm'sG Adjusted Capital ResourcesG , if it is a Domestic FirmG conducting Insurance BusinessG ; or
          (iii) the capital resources of the Authorised FirmG calculated in accordance with the requirements of the Financial Services RegulatorG in its home jurisdiction, if it is not a Domestic FirmG ; or
          (b) even if it does not exceed the 10% threshold referred to in (a), it is reasonably likely to have a significant regulatory impact on the Authorised Firm'sG activities.
          (4) An acquisition is not a Major AcquisitionG for the purposes of (3) if it is an investment made by an Authorised FirmG :
          (a) in accordance with the terms of a contract entered into by the Authorised FirmG as an incidental part of its ordinary business; or
          (b) as a routine transaction for managing the Authorised Firm'sG own investment portfolio and therefore can reasonably be regarded as made for a purpose other than acquiring management or control of a Body CorporateG either directly or indirectly.
          Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM96/2012 (Made 24th July 2012) [VER30/07-12]
          [Amended] DFSA RM166/2016 (Made 10th February 2016). [VER36/04-16]

          • GEN 11.10.8 Guidance

            1. Examples of the kind of investments referred to in Rule 11.10.8(3)(b) include an acquisition of a stake in a small specialised trading firm that engages in high risk trades or other activities that could pose a reputational risk to the Authorised FirmG .
            2. The onus is on an Authorised FirmG proposing to make an acquisition to consider whether it qualifies as a Major AcquisitionG under Rule 11.10.8(3)(b). Generally, in the case of an Authorised FirmG that is not a Domestic FirmG (i.e. a BranchG operation in the DIFCG ), the significant regulatory impact referred to in Rule 11.10.8 (3)(b) should be prudential risk to the Authorised FirmG as a whole. If an Authorised FirmG is uncertain about whether or not a proposed acquisition qualifies as a Major AcquisitionG under Rule 11.10.8 (3)(b), the Authorised FirmG may seek guidance from the DFSAG .
            3. Examples of contractual arrangements of the kind referred to in Rule 11.10.8(4)(a) include enforcement of a security interest in the securities of the investee Body CorporateG or a loan workout pursuant to a loan agreement entered into between a bank and its client.
            4. Examples of the kind of investments referred to in Rule 11.10.8(4)(b) include temporary investments, such as investments included in the Authorised Firm'sG trading book or which are intended to be disposed of within a short term (e.g. within 12 months).

        • GEN 11.10.9

          (1) An Authorised FirmG which is a Domestic FirmG must:
          (a) before making a Major AcquisitionG :
          (i) notify the DFSAG in writing of the proposed Major AcquisitionG at least 45 days prior to the proposed date for effecting the Major AcquisitionG ; and
          (ii) give to the DFSAG all the relevant information relating to that Major AcquisitionG to enable the DFSAG to assess the impact of the proposed Major AcquisitionG on the Authorised FirmG ; and
          (b) not effect the proposed Major AcquisitionG unless:
          (i) the Authorised FirmG has either received written advice from the DFSAG that it has no objection to that Major AcquisitionG or has not received any written objection or request for additional information from the DFSAG within 45 days after the date of the notification; and
          (ii) if the DFSAG has imposed any conditions relating to the proposed Major AcquisitionG , it has complied with, and has the on-going ability to comply with, the relevant conditions.
          (2) The DFSAG may only object to a proposed Major AcquisitionG if it is of the view that the proposed Major AcquisitionG is reasonably likely to have a material adverse impact on the Authorised Firm'sG ability to comply with its applicable regulatory requirements or on the financial services industry in the DIFCG as a whole. The DFSAG may also impose any conditions it considers appropriate to address any concerns it may have in relation to the proposed Major AcquisitionG .
          (3) Without limiting the generality of its powers, the factors that the DFSAG may take into account for the purposes of (2) include:
          (a) the financial and other resources available to the Authorised FirmG to carry out the proposed Major AcquisitionG ;
          (b) the possible impact of the proposed Major AcquisitionG upon the Authorised Firm'sG resources, including its capital, both at the time of the acquisition and on an on-going basis;
          (c) the managerial capacity of the Authorised FirmG to ensure that the activities of the investee Body CorporateG are conducted in a prudent and reputable manner;
          (d) the place of incorporation or domicile of the investee Body CorporateG and whether or not the laws applicable to that entity are consistent with the laws applicable to the Authorised FirmG . In particular, whether there are any secrecy constraints that are likely to create difficulties in relation to the DFSAG requirements including those relating to consolidated supervision by the DFSAG where applicable; and
          (e) any other undue risks to the Authorised FirmG or the financial services industry in the DIFCG as a whole arising from the proposed Major AcquisitionG .

          • GEN 11.10.9 Guidance

            Factors which the DFSAG may take into account in assessing whether there are any undue risks arising from the proposed Major AcquisitionG include the size and nature of the business of the investee Body CorporateG , its reputation and standing, its present and proposed management structure and the quality of management, the reporting lines and other monitoring and control mechanisms available to the Authorised FirmG and the past records of the Authorised FirmG relating to acquisitions of a similar nature.

        • GEN 11.10.10

          (1) An Authorised FirmG which is not a Domestic FirmG must:
          (a) notify the DFSAG in writing of any Major AcquisitionG in accordance with the notification requirement applying to the Authorised FirmG under the requirements of the Financial Services RegulatorG in its home jurisdiction (the home regulator); and
          (b) if there is no notification requirement applying to the Authorised FirmG under (a), comply with the requirements in Rule 11.10.9 as if it were a Domestic FirmG . The DFSAG must follow the same procedures, and shall have the same powers, as set out in Rule 11.10.9 in relation to such a notification.
          (2) An Authorised FirmG which gives to the DFSAG a notification under (1)(a) must:
          (a) notify the DFSAG of the Major AcquisitionG at the same time as it notifies the home regulator;
          (b) provide to the DFSAG the same information as it is required to provide to the home regulator; and
          (c) provide to the DFSAG copies of any communications it receives from the home regulator relating to the notification it has provided to the home regulator as soon as practicable upon receipt.

        • GEN 11.10.11

          (1) The DFSAG may, for the purposes of the requirements in this section, require from an Authorised FirmG any additional information relating to the Major AcquisitionG as it may consider appropriate. An Authorised FirmG must provide any such additional information to the DFSAG promptly.
          (2) The DFSAG may, where it considers appropriate, withdraw its no objection position or modify or vary any condition it has imposed or any remedial action it has required under the RulesG in this section.
          Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

          • GEN 11.10.11 Guidance

            The DFSAG will generally not withdraw a no objection position it has conveyed to an Authorised FirmG , except in very limited circumstances. An example of such a situation is where the Authorised FirmG is found to have provided to the DFSAG inaccurate or incomplete information and that commission or omission has a material impact on the DFSA'sG no objection decision.

        • GEN 11.10.12

          (1) The procedures in Schedule 3 to the Regulatory LawG apply to a decision of the DFSAG under Rules 11.10.9, 11.10.10 and 11.10.11 to object to an acquisition or to impose or vary conditions.
          (2) If the DFSAG decides to exercise its power under Rule 11.10.9, 11.10.10 and 11.10.11 to object to an acquisition or to impose or vary conditions, the Authorised FirmG may refer the matter to the FMTG for review.
          Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM131/2014 (Made 21st August 2014). [VER34/06-14]

      • Suspected Market Abuse

        • GEN 11.10.12A

          (1) An Authorised FirmG must notify the DFSA immediately if it:
          (a) receives an order from a ClientG , or arranges or executes a transaction with or for a ClientG ; and
          (b) has reasonable grounds to suspect that the order or transaction may constitute Market AbuseG .
          (2) The notification under (1) must specify:
          (a) sufficient details of the order or transaction; and
          (b) the reasons for the Authorised FirmG suspecting that the order or transaction may constitute Market AbuseG .
          (3) An Authorised FirmG must not inform the ClientG , or any other PersonG involved in the order or transaction, of a notification under this Rule.
          Derived DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

          • GEN 11.10.12A Guidance

            1. Under GEN Rule 5.3.20, an Authorised FirmG must establish and maintain systems and controls that ensure that it and its employees do not engage in market abuse or facilitate others to engage in market abuse, whether in the DIFCG or elsewhere. GEN Rule 11.10.12A requires the firm to notify the DFSA if it reasonably suspects that a client's order or transaction may constitute Market AbuseG under Part 6 of the Markets Law.
            2. In some cases, a suspicion of Market AbuseG may arise when an order is received. In other cases, it may not be apparent until a transaction is executed or when viewed in the context of later information, behaviour or transactions. When a firm submits a notification, it should be able to explain to the DFSA its reasons for suspecting that the order or transaction may constitute Market Abuse.
            3. The details of the order or transaction provided with the notification should include the date and time of the order or transaction, the relevant Investment, the client and other parties involved, the nature of the order (e.g. limit order or market order), the nature of the transaction (e.g. on-exchange or OTC) and if the client was acting on its own account or for a third party.
            4. If a firm reasonably suspects that a client's order or transaction may constitute market abuse under the laws in another jurisdiction, it will also need to consider if it needs to notify the regulator in that other jurisdiction (under any corresponding obligation to notify).
            5. If an Authorised FirmG becomes aware that the firm itself, or an employee of the firm, (rather than a client) has engaged in conduct that may constitute market abuse in the DIFCG or elsewhere, it has a separate obligation to notify the DFSA under Article 67 of the Regulatory Law and GEN Rule 11.10.7.
            Derived DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

      • Fraud and errors

        • GEN 11.10.13

          An Authorised PersonG must notify the DFSAG immediately if one of the following events arises in relation to its activities in or from the DIFCG :

          (a) it becomes aware that an EmployeeG may have committed a fraud against one of its customers;
          (b) a serious fraud has been committed against it;
          (c) it has reason to believe that a PersonG is acting with intent to commit a serious fraud against it;
          (d) it identifies significant irregularities in its accounting or other records, whether or not there is evidence of fraud; or
          (e) it suspects that one of its EmployeesG who is connected with the Authorised Person'sG Financial ServicesG may be guilty of serious misconduct concerning his honesty or integrity.

      • Other regulators

        • GEN 11.10.14

          An Authorised PersonG must advise the DFSAG immediately of:

          (a) the granting or refusal of any application for or revocation of authorisation to carry on financial services in any jurisdiction outside the DIFCG ;
          (b) the granting, withdrawal or refusal of an application for, or revocation of, membership of the Authorised PersonG of any regulated exchange or clearing house;
          (c) the Authorised PersonG becoming aware that a Financial Services RegulatorG has started an investigation into the affairs of the Authorised PersonG ;
          (d) the appointment of inspectors, howsoever named, by a Financial Services RegulatorG to investigate the affairs of the Authorised PersonG ; or
          (e) the imposition of disciplinary measures or disciplinary sanctions on the Authorised PersonG in relation to its financial services by any Financial Services RegulatorG or any regulated exchange or clearing house.

          • GEN 11.10.14 Guidance

            The notification requirement in Rule 11.10.14(c) extends to investigations relating to any employee or agent of an Authorised PersonG or a member of its GroupG , provided the conduct investigated relates to or impacts on the affairs of the Authorised PersonG .

      • Action against an Authorised Person

        • GEN 11.10.15

          An Authorised PersonG must notify the DFSAG immediately if:

          (a) civil proceedings are brought against the Authorised PersonG and the amount of the claim is significant in relation to the Authorised Person'sG financial resources or its reputation; or
          (b) the Authorised PersonG is prosecuted for, or convicted of, any offence involving fraud or dishonesty, or any penalties are imposed on it for tax evasion.

      • Winding up, bankruptcy and insolvency

        • GEN 11.10.16

          An Authorised PersonG must notify the DFSAG immediately on:

          (a) the calling of a meeting to consider a resolution for winding up the Authorised PersonG ;
          (b) an application to dissolve the Authorised PersonG or to strike it from the register maintained by the DIFC Registrar of CompaniesG , or a comparable register in another jurisdiction;
          (c) the presentation of a petition for the winding up of the Authorised PersonG ;
          (d) the making of, or any proposals for the making of, a composition or arrangement with creditors of the Authorised PersonG ; or
          (e) the application of any person against the Authorised PersonG for the commencement of any insolvency proceedings, appointment of any receiver, administrator or provisional liquidator under the law of any country.

      • Accuracy of information

        • GEN 11.10.17

          An Authorised PersonG must take reasonable steps to ensure that all information that it provides to the DFSAG in accordance with any legislation applicable in the DIFCG is:

          (a) factually accurate or, in the case of estimates and judgements, fairly and properly based; and
          (b) complete, in that it should include anything of which the DFSAG would reasonably expect to be notified.

        • GEN 11.10.18

          (1) An Authorised PersonG must notify the DFSAG immediately it becomes aware, or has information that reasonably suggests, that it:
          (a) has or may have provided the DFSAG with information which was or may have been false, misleading, incomplete or inaccurate; or
          (b) has or may have changed in a material particular.
          (2) Subject to (3), the notification in (1) must include details of the information which is or may be false or misleading, incomplete or inaccurate, or has or may have changed and an explanation why such information was or may have been provided and the correct information.
          (3) If the correct information in (2) cannot be submitted with the notification it must be submitted as soon as reasonably possible.

        • GEN 11.10.19

          In the case of an InsurerG which is a Protected Cell CompanyG , an InsurerG must advise the DFSAG immediately it becomes aware of any actual or prospective significant change in the type or scale of the business conducted through a CellG , or the ownership of the CellG shares.

      • Information relating to corporate governance and remuneration

        • GEN 11.10.20

          (1) Subject to (2), an Authorised FirmG must provide to the DFSA notice of any significant changes to its corporate governance framework or the remuneration structure or strategy as soon as practicable.
          (2) An Authorised FirmG which is a BranchG must provide notice of any significant changes to its corporate governance framework or the remuneration structure or strategy only if the changes are relevant to the activities and operations of the BranchG .
          [Added] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]

          • GEN 11.10.20 Guidance

            1. The purpose of these notifications is to ensure that the DFSAG is informed of any significant changes to the Authorised Firm'sG corporate governance framework and remuneration structure and strategies.
            2. Significant changes that the DFSAG expects Authorised FirmsG to notify the DFSAG pursuant to Rule 11.10.20 generally include:
            a. any major changes to the composition of the Governing BodyG ;
            b. any changes relating to Persons Undertaking Key Control FunctionsG , such as their removal or new appointments or changes in their reporting lines; and
            c. significant changes to the remuneration structure that apply to the members of the Governing BodyG , senior management, Persons Undertaking Key Control FunctionsG and major risk taking Employees.
            3. The DFSAG expects BranchesG to provide to the DFSAG notification of significant changes that are relevant to the BranchG operations.
            [Added] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]

    • GEN 11.11 [Deleted]

      [Deleted] DFSA (Made 19th June 2016) [VER37/08-16]

      • GEN 11.11.1 [Deleted]

        [Deleted] DFSA RM176/2016 (Made 19th June 2016) [VER37/08-16]

    • GEN 11.12 Requirement to provide a report

      • GEN 11.12.1

        This section applies to every Authorised PersonG .

        Derived from Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RM155/2015 (Made 9th December 2015) [VER35/02-16]

        • GEN 11.12.1 Guidance

          1. Under Article 74, the DFSAG may require an Authorised PersonG to provide it with a report on any matter. The PersonG appointed to make a report must be a PersonG nominated or approved by the DFSAG . This PersonG will be referred to throughout the RulebookG as an independent expert.
          2. When requesting a report under Article 74, the DFSAG may take into consideration the matters set out in the RPP Sourcebook.

        • Independent Expert

          • GEN 11.12.2

            (1) The DFSAG may, by sending a notice in writing, require an Authorised PersonG to provide a report by an independent expert. The DFSAG may require the report to be in whatever form it specifies in the notice.
            (2) The DFSAG will give written notification to the Authorised PersonG of the purpose of its report, its scope, the timetable for completion and any other relevant matters.
            (3) The independent expert must be appointed by the Authorised PersonG and be nominated or approved by the DFSAG .
            (4) The Authorised PersonG must pay for the services of the independent expert.

            • GEN 11.12.2 Guidance

              1. If the DFSAG decides to nominate the independent expert, it will notify the Authorised PersonG accordingly. Alternatively, if the DFSAG is content to approve the independent expert selected by the Authorised PersonG it will notify it of that fact.
              2. The DFSAG will only approve an independent expert that in the DFSA'sG opinion has the necessary skills to make a report on the matter concerned.

          • GEN 11.12.3

            When an Authorised PersonG appoints an independent expert, the Authorised PersonG must ensure that:

            (a) the independent expert co-operates with the DFSAG ; and
            (b) the Authorised PersonG provides all assistance that the independent expert may reasonably require.

          • GEN 11.12.4

            When an Authorised PersonG appoints an independent expert, the Authorised PersonG must, in the contract with the independent expert:

            (a) require and permit the independent expert to co-operate with the DFSAG in relation to the Authorised PersonG and to communicate to the DFSAG information on, or his opinion on, matters of which he has, or had, become aware in his capacity as an independent expert reporting on the Authorised PersonG in the following circumstances:
            (i) the independent expert reasonably believes that, as regards the Authorised PersonG concerned:
            (A) there is or has been, or may be or may have been, a contravention of any relevant requirement that applies to the Authorised PersonG concerned; and
            (B) that the contravention may be of material significance to the DFSAG in determining whether to exercise, in relation to the Authorised PersonG concerned, any powers conferred on the DFSAG under any provision of the Regulatory LawG 2004;
            (ii) the independent expert reasonably believes that the information on, or his opinion on, those matters may be of material significance to the DFSAG in determining whether the Authorised PersonG concerned satisfies and will continue to satisfy the fit and proper requirements; or
            (iii) the independent expert reasonably believes that the Authorised FirmG is not, may not be, or may cease to be, a going concern;
            (b) require the independent expert to prepare a report within the time specified by the DFSAG ; and
            (c) waive any duty of confidentiality owed by the independent expert to the Authorised PersonG which might limit the provision of information or opinion by that independent expert to the DFSAG in accordance with (a) or (b).

          • GEN 11.12.5

            An Authorised PersonG must ensure that the contract required under Rule 11.12.4:

            (a) is governed by the laws of the DIFCG ;
            (b) expressly provides that the DFSAG has a right to enforce the provisions included in the contract under Rule 11.12.4;
            (c) expressly provides that, in proceedings brought by the DFSAG for the enforcement of those provisions, the independent expert is not to have available by way of defence, set-off or counter claim any matter that is not relevant to those provisions;
            (d) if the contract includes an arbitration agreement, expressly provides that the DFSAG is not, in exercising the right in (b) to be treated as a party to, or bound by, the arbitration agreement; and
            (e) provides that the provisions included in the contract under Rule 11.12.4 are irrevocable and may not be varied or rescinded without the DFSA'sG consent.

    • GEN 11.13 Imposing Restrictions on an Authorised Person's business or on an Authorised Person dealing with property

      • GEN 11.13.1

        The DFSAG has the power to impose a prohibition or requirement on an Authorised PersonG in relation to the Authorised Person'sG business or in relation to the Authorised Person'sG dealing with property under Article 75 or Article 76 in circumstances where:

        (a) there is a reasonable likelihood that the Authorised PersonG will contravene a requirement of any legislation applicable in the DIFCG ;
        (b) the Authorised PersonG has contravened a relevant requirement and there is a reasonable likelihood that the contravention will continue or be repeated;
        (c) there is loss, risk of loss, or other adverse effect on the Authorised Person'sG customers;
        (d) an investigation is being carried out in relation to an act or omission by the Authorised PersonG that constitutes or may constitute a contravention of any applicable law or RuleG ;
        (e) an enforcement action has commenced against the Authorised PersonG for a contravention of any applicable law or RuleG ;
        (f) civil proceedings have commenced against the Authorised PersonG ;
        (g) the Authorised PersonG or any EmployeeG of the Authorised PersonG may be or has been engaged in market abuse;
        (h) the Authorised PersonG is subject to a merger;
        (i) a meeting has been called to consider a resolution for the winding up of the Authorised PersonG ;
        (j) an application has been made for the commencement of any insolvency proceedings or the appointment of any receiver, administrator or provisional liquidator under the law of any country for the Authorised PersonG ;
        (k) there is a notification to dissolve the Authorised PersonG or strike it from the DIFCG register of Companies or the comparable register in another jurisdiction;
        (l) there is information to suggest that the Authorised PersonG is involved in financial crime; or
        (m) the DFSAG considers that this prohibition or requirement is necessary to ensure customers, Authorised PersonsG or the financial system are not adversely affected.