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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Rulebook Modules
General Module (GEN) [VER44/07-19]
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
Notices
Financial Markets Tribunal
Archive

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  • GEN 4 Core Principles

    • GEN 4.1 Principles for Authorised Firms — application

      • GEN 4.1.1

        (1) The twelve Principles for Authorised FirmsG , set out in GEN section 4.2, apply subject to (2) and (3) to every Authorised FirmG in accordance with Rules GEN 4.1.2 and GEN 4.1.3.
        (2) The twelve Principles for Authorised FirmsG , set out in GEN section 4.2, do not apply to an Authorised FirmG which is a Representative OfficeG .
        (3) An Authorised FirmG which is a Credit Rating AgencyG does not have to comply with the Principles set out in Rules GEN 4.2.6, GEN 4.2.7, GEN 4.2.8 and GEN 4.2.9.
        Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
        [Amended]DFSA RM43/2007 (Made 1st June 2007). [VER14/06-07]
        [Amended] DFSA RM68/2009 (Made 3rd January 2010). [VER24/01-10]
        [Amended] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]
        [Amended] DFSA RM96/2012 (Made 24th July 2012) [VER30/07-12]

      • GEN 4.1.2

        (1) For the purposes of GEN Rule 4.1.3 the term 'activities' means:
        (a) Financial ServicesG business;
        (b) activities carried on in connection with a Financial ServiceG business;
        (c) activities held out as being for the purpose of a Financial ServiceG business; and
        (d) in relation to any particular Principle, any activity specified in (2), (3) and (4).
        (2) Principles 3 and 4 also apply in a Prudential ContextG to an Authorised FirmG with respect to the carrying on of all its activities.
        (3) Principles 3 and 4 also take into account any activities of other members of the GroupG of which the Authorised FirmG is a member.
        (4) Principles 10 and 11, to the extent that it relates to disclosing to the DFSAG , also applies to an Authorised FirmG with respect to the carrying on of all its activities, and takes into account any activities of other members of the GroupG of which the Authorised FirmG is a member.

        Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
        [Amended]DFSA RM43/2007 (Made 1st June 2007). [VER14/06-07]
        [Amended] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]

      • GEN 4.1.3

        (1) The PrinciplesG apply to an Authorised FirmG only with respect to activities carried on from an establishment maintained by it in the DIFCG , unless an extension in (2), (3), (4) or (5) applies.
        (2) Where another applicable RuleG , which is relevant to the activity, has a wider territorial scope than that in (1), any related PrincipleG applies with that wider scope in relation to the activity described in the RuleG .
        (3) Principles 1, 2 and 3 apply in a Prudential ContextG to an Authorised FirmG with respect to activities wherever they are carried on.
        (4) Principles 4 and 11 apply to an Authorised FirmG with respect to activities wherever they are carried on.
        (5) Principle 5 also applies to an Authorised FirmG with respect to the activities carried on in or from any place outside the DIFCG if and to the extent that the activities have, or might reasonably be regarded as likely to have, a negative effect on confidence in the financial markets operating in the DIFCG .
        Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
        [Amended]DFSA RM43/2007 (Made 1st June 2007). [VER14/06-07]

        • GEN 4.1.3 Guidance

          1. The Principles for Authorised FirmsG have the status of RulesG and are a general statement of fundamental regulatory requirements which apply alongside the other RulesG and also in new or unforeseen situations which may not be covered elsewhere by a specific RuleG . RulesG in other areas of the RulebookG build upon these fundamental principles. Consequently the RulesG and GuidanceG elsewhere in the RulebookG should not be seen as exhausting the implications of the Principles.
          2. Breaching a Principle for Authorised FirmsG makes an Authorised FirmG liable to disciplinary action, and may indicate that it is no longer fit and proper to carry on a Financial ServiceG or to hold a LicenceG and the DFSAG may consider withdrawing authorisation or the LicenceG on that basis.
          3. The onus will be on the DFSAG to show that the Authorised FirmG has been at fault in some way, taking into account the standard of conduct required under the Principle in question.

          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

    • GEN 4.2 The Principles for Authorised Firms

      • Principle 1 — Integrity

        • GEN 4.2.1

          An Authorised FirmG must observe high standards of integrity and fair dealing.


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 2 — Due skill, care and diligence

        • GEN 4.2.2

          In conducting its business activities an Authorised FirmG must act with due skill, care and diligence.


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 3 — Management, systems and controls

        • GEN 4.2.3

          An Authorised FirmG must ensure that its affairs are managed effectively and responsibly by its senior management. An Authorised FirmG must have adequate systems and controls to ensure, as far as is reasonably practical, that it complies with legislation applicable in the DIFCG .


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 4 — Resources

        • GEN 4.2.4

          An Authorised FirmG must maintain and be able to demonstrate the existence of adequate resources to conduct and manage its affairs. These include adequate financial and system resources as well as adequate and competent human resources.


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 5 — Market conduct

        • GEN 4.2.5

          An Authorised FirmG must observe proper standards of conduct in financial markets.


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 6 — Information and interests

        • GEN 4.2.6

          An Authorised FirmG must pay due regard to the interests of its customers and communicate information to them in a way which is clear, fair and not misleading.


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 7 — Conflicts of interest

        • GEN 4.2.7

          An Authorised FirmG must take all reasonable steps to ensure that conflicts of interest between itself and its customers, between its EmployeesG and customers and between one customer and another are identified and then prevented or managed, or disclosed, in such a way that the interests of a customer are not adversely affected.


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]
          [Amended] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]

      • Principle 8 — Suitability

        • GEN 4.2.8

          An Authorised FirmG must take reasonable care to ensure the suitability of its advice and discretionary decisions for customers who are entitled to rely upon its judgement.


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 9 — Customer assets and money

        • GEN 4.2.9

          Where an Authorised FirmG has control of or is otherwise responsible for assets or money belonging to a customer which it is required to safeguard, it must arrange proper protection for them in accordance with the responsibility it has accepted.


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 10 — Relations with regulators

        • GEN 4.2.10

          An Authorised FirmG must deal with RegulatorsG in an open and co-operative manner and keep the DFSAG promptly informed of significant events or anything else relating to the Authorised FirmG of which the DFSAG would reasonably expect to be notified.


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 11 — Compliance with high standards of corporate governance

        • GEN 4.2.11

          An Authorised FirmG must have a corporate governance framework as appropriate to the nature, scale and complexity of its business and structure, which is adequate to promote the sound and prudent management and oversight of the Authorised Firm'sG business and to protect the interests of its customers and stakeholders.

          [Added] DFSA RM43/2007 (Made 1st June 2007). [VER14/06-07]
          [Amended] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]

          • GEN 4.2.11 Guidance

            Corporate governance framework encompasses structural and procedural arrangements such as systems, policies and practices that are put in place to promote good governance and include the specific measures required under GEN Rule 5.3.30.

            [Added] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]

      • Principle 12 — Remuneration practices

        • GEN 4.2.12

          An Authorised FirmG must have a remuneration structure and strategies which are well aligned with the long term interests of the firm, and are appropriate to the nature, scale and complexity of its business.

          [Added] DFSA RM95/2012 (Made 14th June 2012). [VER29/06-12]

    • GEN 4.3 Principles for Authorised Individuals — application

      • GEN 4.3.1

        The six Principles for Authorised IndividualsG set out in GEN section 4.4 apply to every Authorised IndividualG in respect of every Licensed FunctionG .


        Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

        • GEN 4.3.1 Guidance

          1. The Principles for Authorised IndividualsG do not apply to an Authorised IndividualG in respect of any other functions he may carry out, although his conduct in those functions may be relevant to his fitness and propriety.
          2. Breaching a Principle for Authorised IndividualsG makes an Authorised IndividualG liable to disciplinary action and may indicate that he is no longer fit and proper to perform a Licensed FunctionG and the DFSAG may consider suspending or withdrawing Authorised IndividualG status on that basis.
          3. The onus will be on the DFSAG to show that he is culpable, taking into account the standard of conduct required under the Principle in question. In determining whether or not the particular conduct of an Authorised IndividualG complies with the Principles for Authorised IndividualsG , the DFSAG will take account of whether that conduct is consistent with the requirements and standards relevant to his Authorised FirmG , the Authorised Individual'sG own role and the information available to him.

          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

    • GEN 4.4 The Principles for Authorised Individuals

      • Principle 1 — Integrity

        • GEN 4.4.1

          An Authorised IndividualG must observe high standards of integrity and fair dealing in carrying out every Licensed FunctionG .


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 2 — Due skill, care and diligence

        • GEN 4.4.2

          An Authorised IndividualG must act with due skill, care and diligence in carrying out every Licensed FunctionG .


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 3 — Market conduct

        • GEN 4.4.3

          An Authorised IndividualG must observe proper standards of conduct in financial markets in carrying out every Licensed FunctionG .


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 4 — Relations with the DFSA

        • GEN 4.4.4

          An Authorised IndividualG must deal with the DFSAG in an open and co-operative manner and must disclose appropriately any information of which the DFSAG would reasonably be expected to be notified.


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 5 — Management, systems and control

        • GEN 4.4.5

          An Authorised IndividualG who has significant responsibility must take reasonable care to ensure that the business of the Authorised FirmG for which he is responsible is organised so that it can be managed and controlled effectively.


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]

      • Principle 6 — Compliance

        • GEN 4.4.6

          An Authorised IndividualG who has significant responsibility must take reasonable care to ensure that the business of the Authorised FirmG for which he is responsible complies with any legislation applicable in the DIFCG .


          Derived from DFSA RM01/2004 (Made 16th September 2004). [VER1/09-04]