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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Rulebook Modules
Prudential — Investment, Insurance Intermediation and Banking Module (PIB) [VER33/02-19]
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
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Financial Markets Tribunal
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  • PIB 5.10 Securities Underwriting Capital Requirement

    • PIB 5.10.1

      This section applies to an Authorised FirmG in CategoryG 1, 2 or 5 in respect of Trading BookG SecuritiesG UnderwritingG positions.

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

      • PIB 5.10.1 Guidance

        1. This section sets out a framework for calculating the amount of Capital RequirementG when an Authorised FirmG has commitments to underwrite an issue of SecuritiesG , and the associated risk management standards which an Authorised FirmG UnderwritingG SecuritiesG must meet.
        2. UnderwritingG is defined in the Glossary as an arrangement under which a party agrees to buy, before issue, a specified quantity of SecuritiesG in an issue of SecuritiesG on a given date and at a given price, if no other party has purchased or acquired them.
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

    • PIB 5.10.2

      An Authorised FirmG must establish and maintain such systems and controls to monitor and manage its UnderwritingG and sub-underwriting business as are appropriate to the nature, scale and complexity of its UnderwritingG and sub-underwriting business.

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

      • PIB 5.10.2 Guidance

        1. An Authorised FirmG should take reasonable steps to:
        a. allocate responsibility for the management of its UnderwritingG and sub-underwriting business;
        b. allocate adequate resources of the Authorised FirmG to monitor and control its UnderwritingG and sub-underwriting business;
        c. satisfy itself that its systems to monitor its ExposureG to a CounterpartyG will calculate, revise and update its UnderwritingG ExposureG to each CounterpartyG and its Capital RequirementsG ;
        d. satisfy itself of the suitability of each person who performs functions for it in connection with the Authorised Firm'sG UnderwritingG business, having regard to the person's skill and experience; and
        e. satisfy itself that its procedures and controls to monitor and manage its UnderwritingG business address the capacity of sub-underwriters to meet sub-underwriting commitments.
        Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

    • PIB 5.10.3

      (1) An Authorised FirmG must calculate a Securities Underwriting Capital RequirementG if it has a commitment to underwrite or sub-underwrite an issue of SecuritiesG .
      (2) An Authorised FirmG has a commitment to underwrite or sub-underwrite an issue of SecuritiesG where:
      (a) it gives a commitment to an IssuerG of SecuritiesG to underwrite an issue of SecuritiesG ;
      (b) it gives a commitment to sub-underwrite an issue of SecuritiesG ; or
      (c) it is a member of a syndicate or GroupG that gives a commitment to an IssuerG to underwrite an issue of SecuritiesG or a commitment to sub-underwrite an issue of SecuritiesG .
      Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

    • PIB 5.10.4

      An Authorised FirmG must regard a commitment to underwrite an issue of SecuritiesG , subject to any right set out in PIB Rule 5.10.6, as the initial commitment to underwrite from the earlier of:

      (a) the time the Authorised FirmG signs an agreement with the IssuerG of SecuritiesG to underwrite those SecuritiesG ; or
      (b) the time the price and allocation of the issue are set.
      Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

    • PIB 5.10.5

      Where the issue price has not been fixed, an Authorised FirmG must use the highest estimate of the price and its allocation for the purpose of calculating its initial gross commitment.

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

    • PIB 5.10.6

      If an Authorised FirmG has at its discretion an irrevocable right to withdraw from an UnderwritingG commitment, exercisable within a certain period, the commitment commences when that right expires.

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

    • PIB 5.10.7

      An Authorised FirmG must calculate its Securities Underwriting Risk Capital RequirementG by:

      (a) applying its internally developed Market RiskG model which has been approved by the DFSAG for this purpose; or
      (b) applying the Rules in PIB section A5.8.
      Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]