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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Recognised Jurisdictions and Funds
Declaration Notices
Financial Markets Tribunal
Archive
Rulebook Modules
Prudential — Investment, Insurance Intermediation and Banking Module (PIB) [VER34/12-19]
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
Notices

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  • PIB 2 General Requirements

    • Introduction

      • PIB 2 Guidance

        This chapter details the threshold conditions for the mandatory maintenance of a Trading BookG , periodic prudential reporting requirements to the DFSAG , and guidance on prudent valuation practices. PIB Appendix 2 includes detailed RulesG on the positions to be included in the Trading BookG , the valuation of such positions, prudent valuation practices and associated issues related to the identification and treatment of Trading BookG positions. PIB Appendix 2 also specifies the DFSA'sG expectations with regard to the need for a documented Trading BookG policy and risk management systems and controls for the Trading BookG . PIB Appendix 2 also presents in a tabular fashion, detailed specifications on periodic prudential reporting requirements for different categories of Authorised FirmsG .

        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

    • PIB 2.1 Application

      • PIB 2.1.1

        This chapter applies to an Authorised FirmG in any CategoryG .

        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

    • PIB 2.2 Trading Book

      • PIB 2.2.1

        An Authorised FirmG must have a Trading BookG if:

        (a) it has positions that must be included in a Trading BookG in accordance with PIB section A2.1 of PIB App2;
        (b) those positions are held with trading intent in accordance with PIB Rule A2.1.5; and
        (c) the total value of the positions eligible for inclusion in the Trading BookG pursuant to (a) and (b):
        (i) normally exceeds $15 million or 5% of its combined on and off-balance sheet positions; or
        (ii) has exceeded $20 million or 6% of its combined on and off-balance sheet positions at any time in the preceding twelve month period.
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

      • PIB 2.2.2

        An Authorised FirmG that must have a Trading BookG in accordance with PIB Rule 2.2.1 must:

        (a) comply with the requirements of PIB section A2.1 of PIB App2; and
        (b) differentiate its business between Trading BookG activity and Non-Trading BookG activity on a consistent basis.
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

      • PIB 2.2.3

        An Authorised FirmG which has a Trading BookG must have adequate systems and controls to:

        (a) monitor the size of its Trading BookG ; and
        (b) ensure that positions are included consistently in its Trading BookG and Non-Trading BookG so that:
        (i) the inclusion of hedging positions in the Trading BookG or the Non-Trading BookG at all times reflects the intent of the Authorised FirmG in holding the position; and
        (ii) adequate records are made if positions are transferred between Trading and Non-Trading BooksG so that the transfers may be identified.
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

    • PIB 2.3 Reporting to the DFSA

      • PIB 2.3.1

        (1) An Authorised FirmG must comply with the accounting and prudential reporting requirements set out in this chapter and PRUG which apply to it.
        (2) The DFSAG may impose additional reporting requirements on an Authorised FirmG .
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

      • PIB 2.3.2

        An Authorised FirmG must, subject to PIB Rule 2.3.3:

        (a) prepare its returns in accordance with the RulesG in this chapter, the instructional guidelines in PRUG , and the requirements of the DFSA'sG electronic prudential reporting system; and
        (b) submit the returns to the DFSAG using the electronic prudential reporting system.
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

        • PIB 2.3.2 Guidance

          The returns and instructional guidelines are provided in PRUG and the DFSA'sG electronic prudential reporting system.

          Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

      • PIB 2.3.3

        The DFSAG may by way of a written notice direct an Authorised FirmG to submit its returns in a form, manner or frequency other than as prescribed in PIB Rule 2.3.2. An Authorised FirmG must continue to submit its returns in accordance with this direction until the DFSAG by way of written notice directs otherwise.

        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

      • PIB 2.3.4

        (1) The submission of any return must be accompanied by a Form B100 (Declaration by Authorised FirmsG ) signed by the Authorised FirmG in the manner set out in (2) or (3) as applicable.
        (2) In relation to an annual return the form must be signed by two officers of the Authorised FirmG each of whom is a DirectorG , PartnerG or individual previously approved by the DFSAG for that purpose.
        (3) In relation to a quarterly return the form must be signed by one officer of the Authorised FirmG who is a DirectorG , PartnerG or individual previously approved by the DFSAG for that purpose.
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

      • PIB 2.3.5

        An original signed hard copy of Form B100 (Declaration by Authorised FirmsG ), together with a copy of the return submitted to the DFSAG must be kept for at least 6 years for inspection by the DFSAG .

        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

      • PIB 2.3.6

        If the DFSAG notifies an Authorised FirmG , or the Authorised FirmG itself forms the view, that a return that has been submitted to the DFSAG appears to be inaccurate or incomplete, the Authorised FirmG must consider the matter and within a reasonable time it must correct any inaccuracies and make good any omissions, and re-submit the relevant parts of the return.

        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

      • PIB 2.3.7

        (1) An Authorised FirmG must prepare and submit returns in accordance with Table 1 in PIB section A2.4 of PIB App2, which forms part of these RulesG .
        (2) All returns must be completed in thousands of dollars ($).
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]
        [Amended] DFSA RM135/2014 (Made 21st August 2014). [VER22/06-14]

      • PIB 2.3.8

        (1) An Authorised FirmG must submit to the DFSA any annual return required by Table 1 in PIB section A2.4 of PIB App2, within four months of the end of the Authorised Firm'sG financial year.
        (2) An Authorised FirmG must submit to the DFSAG any other return required by Table 1 in PIB section A2.4 of PIB App2, within one month after the end of the reporting period to which the return relates.
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]
        [Amended] DFSA RM135/2014 (Made 21st August 2014). [VER22/06-14]

      • PIB 2.3.9 [Deleted]

        [Deleted] DFSA RM209/2017 (Made 4th July 2017). [VER28/08-17]

        • PIB 2.3.9 Guidance [Deleted]

          [Deleted] DFSA RM209/2017 (Made 25th October 2017). [VER30/01-18]

    • PIB 2.4 Prudent Valuation Practices

      • PIB 2.4 Guidance

        1. This section and related PIB section A2.5 in PIB App2 provide Authorised FirmsG with GuidanceG on prudent valuation for positions that are accounted for at fair value, whether they are in the Trading BookG or in the Non-Trading BookG (also known as the banking book).
        2. A framework for prudent valuation practices should at a minimum include adequate systems and controls and valuation methodologies. The DFSA'sG expectations in this regard are set out in PIB section A2.5 PIB App2.
        3. The GuidanceG is especially important for positions without actual market prices or observable inputs to valuation, as well as less liquid positions which raise supervisory concerns about prudent valuation. The GuidanceG is not intended to require Authorised FirmsG to change valuation procedures for financial reporting purposes.
        4. The DFSAG will assess an Authorised Firm'sG valuation procedures for consistency with the GuidanceG . The DFSAG may impose a valuation adjustment if there is a material degree of inconsistency between the Authorised Firm'sG valuation procedures and the GuidanceG .
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]