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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
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General Module (GEN) [VER44/07-19]
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  • GEN 3 Financial Promotions

    • GEN 3.1 Application

      • GEN 3.1.1

        This chapter applies to any PersonG who approves, makes or intends to make a Financial PromotionG in or from the DIFCG .

        Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]

      • GEN 3.1.2

        Rules GEN 3.4.1 to GEN 3.6.3 do not apply to a PersonG who makes an OfferG which is in accordance with the requirements relating to:

        (a) an Offer of SecuritiesG under the Markets Law and the MKT Rules; or
        (b) an Offer of UnitsG under the Collective Investment Law 2010 and CIR Rules.
        Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]
        [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

        • GEN 3.1.2 Guidance

          The purpose of the exclusion in GEN Rule 3.1.2 is to ensure that a PersonG who makes an OfferG referred to in that Rule is not subject to duplicative requirements under this chapter. The exclusion applies only to a communication by a PersonG making an OfferG and if that communication is subject to requirements specified in the relevant laws or Rules.

          Derived from DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

    • GEN 3.2 Overview

      • GEN 3.2.1

        The RulesG in this chapter are made for the purposes of the Financial Promotions ProhibitionG in Article 41A of the Regulatory Law.

        Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

        • GEN 3.2.1 Guidance

          1. Article 41A(3) of the Regulatory Law defines a Financial PromotionG as:

          "Any communication, however made, which invites or induces a PersonG to:
          (a) enter into, or offer to enter into, an agreement in relation to the provision of a financial service; or
          (b) exercise any rights conferred by a financial product or acquire, dispose of, underwrite or convert a financial product."
          2. The GuidanceG in this chapter is designed to help explain the scope of the Financial Promotions ProhibitionG .
          3. The definition of a Financial PromotionG is very broad and encompasses the definitions of a "financial promotion" in Article 19(3) of the Collective Investment Law 2010. A Financial PromotionG also includes "marketing material" as defined elsewhere in the RulebookG .
          4. The DFSAG considers that a Financial PromotionG may be made in any manner and by any form including, but not limited to, an oral, electronic or written communication and includes an advertisement, or any form of promotion or marketing. A disclaimer stating that a communication is not a Financial PromotionG would not, on its own, prevent a communication from being a Financial PromotionG .
          5. A PersonG who is permitted to make a Financial PromotionG in the DIFCG pursuant to these RulesG should ensure that in making such a Financial PromotionG he does not breach the Financial Services ProhibitionG in Article 41 of the Regulatory Law.
          6. Depending on the nature and scale of the activities, if a PersonG makes Financial PromotionsG on a regular basis or for a prolonged period while physically located in the DIFCG , for example by way of a booth, meetings or conferences, the DFSAG may consider such activities as constituting the carrying on of a Financial ServiceG , such as Operating a Representative OfficeG . The DFSAG considers that in the context of Financial PromotionsG , "a regular basis" would be anything more than occasional and "a prolonged period" would usually be anything more than 3 consecutive days.
          Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]
          [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

    • GEN 3.3 Definition of a Financial Product

    • GEN 3.4 Scope of the Financial Promotions Prohibition

      • GEN 3.4.1

        (1) A PersonG shall not, subject to (2) and (3), make a Financial PromotionG in or from the DIFCG unless that PersonG is an Authorised PersonG .
        (2) A Representative OfficeG may make a Financial PromotionG in or from the DIFCG only in relation to a financial service or financial product offered:
        (a) in a jurisdiction other than the DIFCG ; and
        (b) by a related party (as defined in GEN Rule 2.26.1(3)) of the Representative OfficeG .
        (3) A PersonG other than an Authorised PersonG may make a Financial PromotionG in or from the DIFCG if, and only to the extent that, the PersonG :
        (a) is licensed and supervised by a Financial Services RegulatorG in the UAEG ;
        (b) is a Recognised BodyG or External Fund ManagerG ;
        (c) is a Reporting EntityG and makes a Financial PromotionG in or from the DIFCG exclusively for the purpose of discharging its mandatory disclosure requirements; or
        (d) makes an exempt Financial PromotionG as specified in (4).
        (4) For the purposes of (3)(d), a communication is an "exempt Financial PromotionG " if it is:
        (a) approved by an Authorised FirmG other than a Representative OfficeG ;
        (b) approved by a Representative OfficeG and it is a communication relating to a financial service or financial product offered by a related party (as defined in GEN Rule 2.26.1(3)) of the Representative OfficeG ;
        (c) directed at and capable of acceptance exclusively by a PersonG who appears on reasonable grounds to be a Professional ClientG of the type specified in COB Rule 2.3.4;
        (d) made to a PersonG in the DIFCG (the "recipient") as a result of an unsolicited request by the recipient to receive the Financial PromotionG ;
        (e) made or issued by or on behalf of a government or noncommercial government entity; or
        (f) made in the DIFCG by a PersonG in the course of providing legal or accountancy services and may reasonably be regarded as incidental to and a necessary part of the provision of such services.
        Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]
        [Amended] DFSA RM155/2015 (Made 9th December 2015) [VER35/02-16]
        [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

        • GEN 3.4.1 Guidance

          If a PersonG proposes to conduct Financial PromotionsG in or from the DIFCG other than as permitted under (3) and (4), that PersonG should consider obtaining an appropriate LicenceG .

          Derived from DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

      • GEN 3.4.2

        A PersonG does not breach the Financial Promotions ProhibitionG if:

        (a) the PersonG causes a Financial PromotionG to be made in the course of providing a facility which is a mere conduit for the making of the Financial PromotionG ;
        (b) the PersonG is located outside the DIFCG and makes a Financial PromotionG which appears, on reasonable grounds, to be a communication which is not directed at or intended to be acted upon by a PersonG in the DIFCG ; or
        (c) the Financial PromotionG is not made for a commercial or business purpose.
        Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]

        • GEN 3.4.2 Guidance

          1. Examples of a mere conduit would include a newspaper or magazine, a website carrying third-party banner ads, a postman or courier, a person paid to hand out promotional material to the public and an event venue - unless in each case they were the originator i.e the PersonG who makes the Financial PromotionG .
          2. In GEN Rule 3.4.2(b) the DFSAG considers that the following non-exhaustive list of factors may each be indicative of whether or not a Financial PromotionG is "intended to be acted upon by, or targeted at, PersonsG in the DIFCG ":
          a. whether it is expressed to be for a PersonG or type of PersonG in the DIFCG ;
          b. whether it is sent to an address (including a P.O. Box) in the DIFCG ;
          c. whether it is physically distributed to PersonsG in the DIFCG ;
          d. whether it takes place in the DIFCG ;
          e. whether it makes reference to the DIFCG ;
          f. whether it appears in a DIFCG publication;
          g. whether it appears on a DIFC-based or related website or other media;
          h. whether it is sent to the email of a PersonG in the DIFCG ; or
          i. whether it contains a prominent and clear disclaimer on its face that it is not intended to be acted upon by PersonsG in the DIFCG .
          3. The DFSAG in applying GEN Rule 3.4.2(c) will generally consider that for a communication to be made "for a commercial or business purpose" there must be a commercial element to the Financial PromotionG , whether or not the Financial PromotionG actually leads to the provision of any financial service. However, the DFSAG considers that "for a commercial or business purpose" requires a commercial or business interest on the part of the communicator and the nature of the communicator's business need not be related to any specific financial service.
          4. The DFSAG considers that a PersonG located outside the DIFCG who makes a Financial PromotionG into the DIFCG , makes that communication in the DIFCG . The DFSAG considers that the prohibition in Article 41A(1) applies irrespective of where the communicator of the Financial PromotionG is located.
          Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]

    • GEN 3.5 Additional Rules for Financial Promotions

      • GEN 3.5.1

        (1) A PersonG in GEN Rule 3.4.1(3) (a) to (d) must, subject to (2), take reasonable care to ensure that any Financial PromotionG it makes in or from the DIFCG :
        (a) is clear, fair and not misleading;
        (b) includes the Person'sG name, address and regulatory status;
        (c) if it is intended only for Professional ClientsG , is not sent or directed to any PersonG who appears on reasonable grounds not to be a Professional ClientG , and contains a clear statement that only a PersonG meeting the criteria for a Professional ClientG should act upon it; and
        (d) which is provided to or directed at a Retail ClientG and contains any information or representation relating to past performance, or any forecast based on past performance or on any other assumptions:
        (i) presents a balanced view of the financial products or financial services to which the Financial PromotionG relates;
        (ii) identifies, in an easy to understand manner, the information from which the past performance or forecast is derived and how any key facts and assumptions used in that context are drawn; and
        (iii) contains a prominent warning that past performance is not necessarily a reliable indicator of future performance.
        (2) A PersonG described in GEN Rule 3.4.1(3)(a) who makes a Financial PromotionG :
        (a) to an existing client in the DIFCG ; or
        (b) to a prospective client in the DIFCG relating to the Passported FundG for which the DIFCG is the Host JurisdictionG ,
        is not required to comply with (1) provided that in making the Financial PromotionG that PersonG complies with the requirements of the relevant Financial Services RegulatorG in the UAEG which relate to Financial PromotionsG .
        Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]
        [Amended] DFSA RM234/2019 (Made 20th February 2019). [VER43/02-19]

        • GEN 3.5.1 Guidance

          1. In presenting information relating to past performance of a financial product or financial service, a PersonG should use a reputable independent actuarial, financial or statistical reporting service provider.
          2. The effect of GEN Rule 3.5.1(2) is that a PersonG who is licensed and regulated by a Financial Services RegulatorG in the UAEG is not required to comply with GEN Rule 3.5.1(1) when communicating with an existing client or with a prospective client in relation to a Passported FundG where the DIFCG is a Host JurisdictionG . However, when making any other Financial PromotionG to a prospective client in the DIFCG , GEN Rule 3.5.1(1) does apply to such PersonsG , as do the prohibitions on the making of offers contained in the Markets Law 2012 and Collective Investment Law 2010 respectively. The exclusion in GEN Rule 3.5.1(2) applies only if the PersonG is complying with the financial promotion requirements of its Financial Services RegulatorG in the UAEG .
          Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]
          [Amended] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]
          [Amended] DFSA RM234/2019 (Made 20th February 2019). [VER43/02-19]

      • GEN 3.5.2

        A PersonG must not, in any Financial PromotionG , attempt to limit or avoid any duty or liability it may have under any DFSA-administered laws or the RulesG .

        Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]

    • GEN 3.6 Approval of Financial Promotions by an Authorised Firm

      • GEN 3.6.1

        For the purposes of GEN Rule 3.4.1(4)(a) and (b), an Authorised FirmG must not approve a Financial PromotionG unless:

        (a) the Financial PromotionG includes a clear and prominent statement that it has been "approved by" the relevant Authorised FirmG ; and
        (b) the Financial PromotionG is made in accordance with the requirements in GEN Section 3.5.
        Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]
        [Amended] DFSA RM184/2016 (Made 7th December 2016). [VER38/02-17]

      • GEN 3.6.2

        An Authorised FirmG must not approve a Financial PromotionG which is directed at a PersonG who appears on reasonable grounds to be a Retail ClientG unless:

        (a) it has an endorsement on its LicenseG which permits it to carry on a Financial ServiceG with or for a Retail ClientG ; and
        (b) the scope of its LicenseG includes the Financial ServiceG and, if applicable, the particular financial product, to which the Financial PromotionG relates.
        Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]

      • GEN 3.6.3

        An Authorised FirmG must ensure that a Financial PromotionG it has approved complies with the requirements in this chapter on an on-going basis.

        Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]

        • GEN 3.6.3 Guidance

          An Authorised FirmG which proposes to approve a Financial PromotionG where all or part of that promotion will be real time, such as a live event, will need to consider whether it is able to comply effectively with any relevant RulesG in relation to the Financial PromotionG or its approval.

          Added in accordance with Notice of Amendments to Legislation April 2011 [VER27/02-11]