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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Rulebook Modules
Authorised Market Institutions (AMI) [VER18/02-17]
Part 3 Licensing Requirements
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
Notices
Financial Markets Tribunal
Archive

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  • AMI 5.6 Business Rules

    • Content of Business Rules

      • AMI 5.6.1

        (1) An Authorised Market InstitutionG must establish and maintain Business RulesG in accordance with the requirements in this section. Such rules must include:
        (a) criteria governing the admission of MembersG and any other PersonsG to whom access to its facilities is provided;
        (b) criteria governing the admission of Investments to trading, or clearing and settlement, as appropriate to its facilities;
        (c) Default RulesG ; and
        (d) any other matters necessary for the proper functioning of the Authorised Market InstitutionG and the facilities operated by it.
        (2) An Authorised Market Institution'sG Business RulesG must:
        (a) be based on objective criteria and non-discriminatory;
        (b) be clear and fair;
        (c) set out the Members' and other participants' obligations:
        (i) arising from the Authorised Market Institution'sG constitution and other administrative arrangements;
        (ii) when undertaking transactions on its facilities; and
        (iii) relating to professional standards that must be imposed on staff and agents of the MembersG and other participants when undertaking transactions on its facilities;
        (d) be legally binding and enforceable against the MembersG and other participants;
        (e) be made publicly available free of charge;
        (f) contain provisions for the resolution of Members'G and other participants' disputes and an appeal process from the decisions of the Authorised Market InstitutionG ; and
        (g) contain disciplinary proceedings, including any sanctions that may be imposed by the Authorised Market InstitutionG against its MembersG and other participants.
        Derived from RM118/2013 [VER15/07-13]

        • AMI 5.6.1 Guidance

          1. The DFSAG assesses, at the point of grant of a LicenceG to an Authorised Market InstitutionG , the adequacy of its Business RulesG and its systems and controls to ensure effective monitoring of compliance with such rules. Thereafter, any amendment to the Business RuleG s can only be made in accordance with the requirements set out in Rules 5.6.4 to 5.6.7 in this section.
          2. Persons other than MembersG may have access to an Authorised Market InstitutionG 's facilities. See Rule 6.9.1(1)(a)(ii).
          Derived from RM118/2013 [VER15/07-13]

    • Default Rules

      • AMI 5.6.2

        An Authorised Market InstitutionG must have Default RulesG which, in the event of a MemberG or other participant on its facilities being, or appearing to be, unable to meet its obligations in respect of one or more contracts, enable action to be taken in respect of unsettled market contracts to which the MemberG or that other participant is a party.

        Derived from RM118/2013 [VER15/07-13]

        • AMI 5.6.2 Guidance

          The DFSAG requires all Authorised Market InstitutionG to have Default RulesG under Article 28 of the Markets Law. Default RulesG allow an Authorised Market InstitutionG to close-out open positions by discharging the appropriate rights and liabilities of transactions which a MemberG or any other PersonG granted access to its facilities cannot, or may not be able to, fulfil.

          Derived from RM118/2013 [VER15/07-13]

    • Monitoring Compliance with Business Rules

      • AMI 5.6.3

        An Authorised Market InstitutionG must have adequate compliance procedures in place to ensure that:

        (a) its Business RulesG are monitored and enforced;
        (b) any complaints relating to its operations or regarding MembersG and other participants on its facilities are promptly investigated;
        (c) where appropriate, disciplinary action resulting in financial and other types of penalties can be taken;
        (d) appeal procedures are in place; and
        (e) referrals can be made to the DFSAG in appropriate circumstances.
        Derived from RM118/2013 [VER15/07-13]

        • AMI 5.6.3 Guidance

          1. In determining whether an Authorised Market InstitutionG can effectively monitor its Business RulesG , the DFSAG will consider:
          a. the oversight of activity conducted on its facilities;
          b. the range of powers it retains over MembersG and other PersonsG granted access to its facilities, which should include the ability to modify, revoke or suspend access; and
          c. the disciplinary procedures which have been established to take disciplinary action, including a fair and clear policy on any financial penalties which may be imposed, and the appeal processes.
          2. In determining whether an Authorised Market InstitutionG can effectively oversee the activities conducted on its facilities, the DFSAG will consider how non-compliance is identified and how the significance of any non-compliance is assessed.
          Derived from RM118/2013 [VER15/07-13]

    • Amendments to Business Rules

      • AMI 5.6.4

        (1) An Authorised Market InstitutionG may only adopt new Business RulesG or make any amendments to existing Business RulesG in accordance with the requirements in Rules 5.6.5, 5.6.6 and 5.6.7.
        (2) A reference to an amendment in Rules 5.6.5, 5.6.6 and 5.6.7 includes the introduction of a new Business RuleG or a change to an existing Business RuleG or a proposal to do so.
        Derived from RM118/2013 [VER15/07-13]

    • Public Consultation

      • AMI 5.6.5

        (1) An Authorised Market InstitutionG must, subject to Rule 5.6.6, before making any amendment to its Business RulesG , undertake public consultation on the proposed amendment in accordance with the requirements in this Rule.
        (2) For the purposes of (1), an Authorised Market InstitutionG must:
        (a) publish a consultation paper setting out:
        (i) the text of both the proposed amendment and the Business RulesG that are to be amended;
        (ii) the reasons for proposing the amendment; and
        (iii) a reasonable consultation period, which must not be less than 30 days from the date of publication, within which MembersG and other stakeholders may provide comments; and
        (b) lodge with the DFSAG the consultation paper referred to in (a) no later than the time at which it is released for public comment.
        (3) The DFSAG may, where it considers on reasonable grounds that it is appropriate to do so, require the Authorised Market InstitutionG to extend its proposed period of public consultation specified in the consultation paper. An Authorised Market InstitutionG must comply with such a requirement.
        (4) An Authorised Market InstitutionG must:
        (a) facilitate, as appropriate, informal discussions on the proposed amendment with MembersG and other stakeholders including any appropriate representative bodies of such PersonsG ;
        (b) consider the impact the proposed amendment has on the interests of its MembersG and other stakeholders;
        (c) have proper regard to any public comments received.
        (5) Following public consultation, an Authorised Market InstitutionG must, before the date on which the proposed amendment comes into effect, lodge with the DFSAG :
        (a) a summary of any public comments received, and how any issues raised by those comments have been addressed; and
        (b) any changes made to the initial proposals as a result of the public comments, and if no changes have been made, a statement to that effect.
        Derived from RM118/2013 [VER15/07-13]

    • Dispensation of Public Consultation

      • AMI 5.6.6

        (1) The DFSAG may, on written application by an Authorised Market InstitutionG , dispense with the requirement in Rule 5.6.5 for public consultation where:
        (a) any delay resulting from public consultation is likely to be detrimental to the interests of the DIFCG markets; or
        (b) either the proposed amendment:
        (i) is purely administrative or immaterial; or
        (ii) the Authorised Market InstitutionG can demonstrate to the satisfaction of the DFSAG that it had taken into account the views and interests of its MembersG and other stakeholders as appropriate in developing the proposed amendment; and
        (c) the Authorised Market InstitutionG complies with the requirements in (2) or (3) as applicable.
        (2) An Authorised Market InstitutionG which seeks to dispense with public consultation on the ground referred to in (1)(a) must lodge with the DFSAG a statement setting out:
        (a) the text of both the proposed amendment and the Business RulesG that are to be amended:
        (b) the reasons for proposing the amendment;
        (c) the grounds on which it believes that a delay resulting from public consultation is likely to be detrimental to the DIFCG markets; and
        (d) whether any rights or obligations of any MembersG of the Authorised Market InstitutionG or other participants on its facilities are to be materially adversely affected by the proposed amendment, and if so, what measures are proposed to address such concerns.
        (3) An Authorised Market InstitutionG which seeks to dispense with public consultation on the ground referred to in (1)(b) must lodge with the DFSAG a statement setting out:
        (a) the text of both the proposed amendment and the Business RulesG that are to be amended; and
        (b) either:
        (i) the reasons it believes that the proposed amendment is purely administrative or immaterial; or.
        (ii) that it had taken into account the views and interests of its MembersG and other stakeholders as appropriate in developing the proposed amendment.
        Derived from RM118/2013 [VER15/07-13]

        • AMI 5.6.6 Guidance

          For the purposes of demonstrating to the DFSAG that the Authorised Market InstitutionG had taken into account the views and interests of its MembersG and other relevant stakeholders, an Authorised Market InstitutionG may rely on the input provided by its user committees where the user committees meet best practice set out in GEN App3, Guidance No. 9–12.

          Derived from RM118/2013 [VER15/07-13]

    • DFSA Approval

      • AMI 5.6.7

        (1) An Authorised Market InstitutionG must seek the DFSA'sG approval of any proposed amendment to the Business RulesG before the rules are to come into effect.
        (2) The DFSAG will approve the proposed amendment to the Business RulesG unless it has reasonable grounds to believe that the proposed amendment is reasonably likely to be detrimental to the interests of the DIFCG markets.
        (3) Where the DFSAG has any concerns about the proposed amendment, it may:
        (a) either reject the proposed amendment or request the Authorised Market InstitutionG to withdraw the proposed amendments; or
        (b) require the Authorised Market InstitutionG to make appropriate changes to the proposed amendment, with or without public consultation.
        (4) The DFSAG must give to the Authorised Market InstitutionG reasons for its decisions under (3)(a) or (b) as applicable.
        (5) An Authorised Market InstitutionG must, as soon as practicable after receiving the DFSAG approval, notify the MembersG and the public of the amendment to its Business RulesG and the date on which the amendment becomes effective.
        (6) If the DFSAG decides to exercise its power under (3)(a) or (b), the Authorised Market InstitutionG may refer the matter to the FMTG for review.
        Derived from RM118/2013 [VER15/07-13]
        [Amended] DFSA RM133/2014 (Made 21st August 2014). [VER16/06-14]

        • AMI 5.6.7 Guidance

          1. The DFSAG does not formally approve the proposed amendments at the point of release of the proposed amendment for public consultation; instead that approval occurs at the end of the public consultation period because the DFSAG can properly take into account any public comments and changes resulting from public comments only at the end of the public consultation period.
          2. However, the DFSAG may, upon receipt of the proposed amendment, request an extension of the public consultation period if it considers on reasonable grounds that such an extension is appropriate. The circumstances in which the DFSAG may require an extended period of public consultation beyond 30 days include where the proposed amendment is likely to have a significant adverse impact on the Members'G rights and obligations or the interests of other participants in the DIFCG markets. An Authorised Market InstitutionG may rely on the results of soft consultation with Members and other stakeholders, or with any user committees it has established, to demonstrate that the proposed amendment does not warrant public consultation.
          3. Generally, the DFSAG expects to have a quick turnaround time in granting formal approval where no public comments have been received on public consultation or the proposed amendment are not extensive.
          Derived from RM118/2013 [VER15/07-13]