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  • AMI 8 Controllers

    • AMI 8.1 Application

      • AMI 8.1.1

        This chapter applies to:

        (a) an Authorised Market InstitutionG ; or
        (b) a PersonG who is a ControllerG as defined in Rule 8.1.2.
        Derived from RM118/2013 [VER15/07-13]

      • Definition of a Controller

        • AMI 8.1.2

          (1) A ControllerG is a PersonG who, either alone or with any AssociateG :
          (a) holds 10% or more of the shares in either the Authorised Market InstitutionG or a Holding CompanyG of that institution;
          (b) is entitled to exercise, or control the exercise of, 10% or more of the voting rights in either the Authorised Market InstitutionG or a Holding CompanyG of that institution; or
          (c) is able to exercise significant influence over the management of the Authorised Market InstitutionG as a result of holding shares or being able to exercise voting rights in the Authorised Market InstitutionG or a Holding CompanyG of that institution or having a current exercisable right to acquire such shares or voting rights.
          (2) A reference in this chapter to:
          (a) a share means:
          (i) in the case of an Authorised Market InstitutionG or a Holding CompanyG of an Authorised Market InstitutionG which has a share capital, its allotted shares;
          (ii) in the case of an Authorised Market InstitutionG or a Holding CompanyG of an Authorised Market InstitutionG with capital but no share capital, rights to a share in its capital; and
          (iii) in the case of an Authorised Market InstitutionG or a Holding CompanyG of an Authorised Market InstitutionG without capital, any interest conferring a right to share in its profits or losses or any obligation to contribute to a share of its debt or expenses in the event of its winding up.
          (b) "a holding" means, in respect of a PersonG , shares, voting rights or a right to acquire shares or voting rights in an Authorised Market InstitutionG or a Holding CompanyG of that institution held by that PersonG either alone or with any AssociateG .
          Derived from RM118/2013 [VER15/07-13]

          • AMI 8.1.2 Guidance

            1. For the purposes of these Rules, the relevant definition of a Holding CompanyG is found in the DIFC Companies LawG . That definition provides when one body corporateG is considered to be a holding companyG or a subsidiary of another body corporateG and extends that concept to the ultimate holding company of the body corporateG .
            2. Pursuant to Rule 8.1.2(1)(c), a Person becomes a Controller if that Person can exert significant management influence over an Authorised Market InstitutionG . The ability to exert significant management influence can arise even where a Person, alone or with Associates, controls less than 10% of the shares or voting rights of the Authorised Market InstitutionG or a Holding CompanyG of that institution. Similarly, a PersonG may be able to exert significant management influence where such Person does not hold shares or voting rights but has exercisable rights to acquire shares or voting rights, such as under OptionsG .
            Derived from RM118/2013 [VER15/07-13]

      • Disregarded Holdings

        • AMI 8.1.3

          For the purposes of determining whether a PersonG is a ControllerG , shares, voting rights or rights to acquire shares or voting rights that a PersonG holds, either alone or with an AssociateG , in an Authorised Market InstitutionG or a Holding CompanyG of that institution are disregarded if:

          (a) the shares are held for the sole purpose of clearing and settling within a short settlement cycle;
          (b) the shares are held in a custodial or nominee capacity and the voting rights attached to the shares are exercised only in accordance with written instructions given to that PersonG by another PersonG ; or
          (c) the PersonG is an Authorised FirmG or a Regulated Financial InstitutionG and it:
          (i) acquires a holding of shares as a result of an underwriting of a share issue or a placement of shares on a firm commitment basis;
          (ii) does not exercise the voting rights attaching to the shares or otherwise intervene in the management of the issuer; and
          (iii) retains the holding for a period less than one year.
          Derived from RM118/2013 [VER15/07-13]

    • AMI 8.2 Changes Relating to Control

      • Requirement for Prior Approval of Controllers of an Authorised Market Institution incorporated under DIFC law

        • AMI 8.2.1

          (1) In the case of an Authorised Market InstitutionG which is incorporated under DIFCG law, a PersonG must not:
          (a) become a ControllerG of the Authorised Market InstitutionG ; or
          (b) increase the level of control which that PersonG has in the Authorised Market InstitutionG beyond a threshold specified in (2), unless that PersonG has obtained the prior written approval of the DFSAG to do so.
          (2) For the purposes of (1)(b), the thresholds at which the prior written approval of the DFSAG is required are when the relevant holding is increased:
          (a) from below 30% to 30% or more; or
          (b) from below 50% to 50% or more.
          Derived from RM118/2013 [VER15/07-13]

          • AMI 8.2.1 Guidance

            See Rule 8.1.2 for the circumstances in which a PersonG becomes a ControllerG of an Authorised Market InstitutionG .

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

      • Approval Process

        • AMI 8.2.2

          (1) A PersonG who is required to obtain the prior written approval of the DFSAG pursuant to Rule 8.2.1(1) must make an application to the DFSAG using the appropriate form in AFNG .
          (2) Where the DFSA receives an application under (1), it may:
          (a) approve the proposed acquisition or increase in the level of control;
          (b) approve the proposed acquisition or increase in the level of control subject to such conditions as it considers appropriate; or
          (c) object to the proposed acquisition or increase in the level of control.
          Derived from RM118/2013 [VER15/07-13]

          • AMI 8.2.2 Guidance

            1. A PersonG intending to acquire or increase control in an Authorised Market InstitutionG should submit an application for approval in the appropriate form in AFN sufficiently in advance of the proposed acquisition to be able to obtain the DFSAG approval in time for the proposed acquisition.
            2. Paragraph 3.6.7 of the RPP Sourcebook sets out the matters which the DFSAG takes into consideration when exercising its powers under Rule 8.2.2 to approve, object to or impose conditions of approval relating to a proposed ControllerG or an increase in the level of control of an existing ControllerG .
            Derived from RM118/2013 [VER15/07-13]

        • AMI 8.2.3

          (1) Where the DFSAG proposes to approve a proposed acquisition of or an increase in the level of control in an Authorised Market InstitutionG pursuant to Rule 8.2.2(2)(a), it must:
          (a) do so as soon as practicable and in any event within 90 days of the receipt of a duly completed application, unless a different period is considered appropriate by the DFSAG and notified to the applicant in writing; and
          (b) issue to the applicant, and where appropriate to the Authorised Market InstitutionG , an approval notice as soon as practicable after making that decision.
          (2) An approval, including a conditional approval granted by the DFSAG pursuant to Rule 8.2.2(2)(a) or (b), is valid for a period of one year from the date of the approval, unless an extension is granted by the DFSAG in writing.
          Derived from RM118/2013 [VER15/07-13]

          • AMI 8.2.3 Guidance

            1. If the application for approval lodged with the DFSAG does not contain all the required information, then the 90 day period runs from the date on which all the relevant information is provided to the DFSAG .
            2. If a PersonG who has obtained prior DFSAG approval for an acquisition of or an increase in the control in an Authorised Market InstitutionG is unable to effect the acquisition before the end of the period referred to in Rule 8.2.3(2), it will need to obtain fresh approval from the DFSAG .
            Derived from RM118/2013 [VER15/07-13]

      • Objection or Conditional Approval Process

        • AMI 8.2.4

          (1) Where the DFSAG proposes to exercise its objection or conditional approval power pursuant to Rule 8.2.4(2)(b) or (c) in respect of a proposed acquisition or an increase in the level of control in an Authorised Market InstitutionG , it must, as soon as practicable and in any event within 90 days of the receipt of the duly completed application form, provide to the applicant:
          (a) a written notice stating;
          (i) the DFSA'sG reasons for objecting to that PersonG as a ControllerG or to the Person'sG proposed increase in control; and
          (ii) any proposed conditions subject to which that PersonG may be approved by the DFSAG ; and
          (b) an opportunity to make representations within 14 days of the receipt of such objections notice or such other longer period as agreed to by the DFSAG .
          (2) The DFSAG must, as soon as practicable after receiving representations or, if no representations are received, after the expiry of the period for making representations referred to in (1)(b), issue a final notice stating that:
          (a) the proposed objections and any conditions are withdrawn and the PersonG is an approved ControllerG ;
          (b) the PersonG is approved as a ControllerG subject to conditions specified in the notice; or
          (c) the Person is not approved and therefore is an unacceptable ControllerG with respect to that PersonG becoming a ControllerG of, or increasing the level of control in, the Authorised FirmG .
          (3) If the DFSAG decides to exercise its power under this Rule not to approve a PersonG as a ControllerG or to impose conditions on an approval, the PersonG 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 8.2.4 Guidance [Deleted]

            [Deleted] DFSA RM133/2014 (Made 21st August 2014). [VER16/06-14]

        • AMI 8.2.5

          (1) A PersonG who has been approved by the DFSAG as a ControllerG of an Authorised Market InstitutionG subject to any conditions must comply with the relevant conditions of approval.
          (2) A PersonG who has been notified by the DFSAG pursuant to Rule 8.2.4(2)(c) as an unacceptable ControllerG must not proceed with the proposed acquisition of control of the Authorised Market InstitutionG .
          Derived from RM118/2013 [VER15/07-13]

          • AMI 8.2.5 Guidance

            A PersonG who acquires control of or increases the level of control in an Authorised Market InstitutionG without the prior DFSAG approval or breaches a condition of approval is in breach of the Rules. See Rule 8.2.10 for the actions that the DFSA may take in such circumstances.

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

      • Notification for Decrease in the Level of Control of an AMI Incorporated under DIFC law

        • AMI 8.2.6

          A Controller of an Authorised Market InstitutionG which is incorporated under DIFCG law must submit, using the appropriate form in AFNG , a written notification to the DFSAG where that PersonG :

          (a) proposes to cease being a ControllerG ; or
          (b) proposes to decrease the existing holding from more than 50% to 50% or less.
          Derived from RM118/2013 [VER15/07-13]

      • Notification for Changes in Control Relating to an Authorised Market Institution Incorporated Under Non-DIFC Law

        • AMI 8.2.7

          (1) In the case of an Authorised Market InstitutionG which is incorporated other than under DIFCG law, a written notification to the DFSAG must be submitted by a ControllerG or a PersonG proposing to become a ControllerG in accordance with (3) in respect of any one of the events specified in (2).
          (2) For the purposes of (1), a notification to the DFSAG is required when:
          (a) a Person becomes a ControllerG ;
          (b) an existing ControllerG proposes to cease being a ControllerG ; or
          (c) an existing Controller'sG holding is:
          (i) increased from below 30% to 30% or more;
          (ii) increased from below 50% to 50% or more; or
          (iii) decreased from more than 50% to 50% or less.
          (3) The notification required under (1) must be made using the appropriate form in AFNG as soon as possible, and in any event, before making the relevant acquisition or disposition.
          Derived from RM118/2013 [VER15/07-13]

      • Obligations of an Authorised Market Institution Relating to its Controllers

        • AMI 8.2.8

          (1) An Authorised Market InstitutionG must have adequate systems and controls to monitor:
          (a) any change or proposed change of its ControllersG ; and
          (b) any significant changes in the conduct or circumstances of existing ControllersG which might reasonably be considered to impact the fitness and propriety of the Authorised Market InstitutionG or its ability to conduct business soundly and prudently.
          (2) An Authorised Market InstitutionG must, subject to (3), notify the DFSAG in writing of any event specified in (1) as soon as possible after becoming aware of that event.
          (3) An Authorised Market InstitutionG need not comply with the requirement in (2) if it is satisfied on reasonable grounds that a proposed or existing ControllerG has either already obtained the prior approval of the DFSAG or notified the event to the DFSAG as applicable.
          Derived from RM118/2013 [VER15/07-13]

          • AMI 8.2.8 Guidance

            Steps which an Authorised Market InstitutionG may take in order to monitor changes relating to its ControllersG include the monitoring of any relevant regulatory disclosures, press reports, public announcements, share registers and entitlements to vote, or the control of voting rights, at general meetings.

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

        • AMI 8.2.9

          (1) An Authorised Market InstitutionG must submit to the DFSAG an annual report on its ControllersG within four months of its financial year end.
          (2) The Authorised Market Institution'sG annual report on its ControllersG must include:
          (a) the name of each ControllerG ; and
          (b) the current holding of each ControllerG , expressed as a percentage.
          Derived from RM118/2013 [VER15/07-13]

          • AMI 8.2.9 Guidance

            1. An Authorised Market InstitutionG may satisfy the requirements of Rule 8.2.9 by submitting a corporate structure diagram containing the relevant information.
            2. An Authorised Market InstitutionG must take account of the holdings which the ControllerG , either alone or with an AssociateG , has in the Authorised Market InstitutionG or any Holding Company of that institution (see the definition of a ControllerG in Rule 8.1.2).
            Derived from RM118/2013 [VER15/07-13]

      • Other Powers Relating to Controllers

        • AMI 8.2.10

          (1) Without limiting the generality of its other powers, the DFSAG may, subject only to (2), object to a PersonG as a ControllerG of an Authorised Market InstitutionG where such a PersonG :
          (a) has acquired or increased the level of control that PersonG has in an Authorised Market InstitutionG without the prior written approval of the DFSAG as required under Rule 8.2.1;
          (b) has breached the requirement in Rule 8.2.5 to comply with conditions of approval applicable to that PersonG ; or
          (c) is no longer acceptable to the DFSAG as a ControllerG .
          (2) Where the DFSAG proposes to object to a PersonG as a ControllerG of an Authorised Market InstitutionG , the DFSAG must provide such a PersonG with:
          (a) a written notice stating:
          (i) the DFSA'sG reasons for objecting to that PersonG as a ControllerG ; and
          (ii) any proposed conditions subject to which that PersonG may be approved by the DFSAG ; and
          (b) an opportunity to make representations within 14 days of the receipt of such notice or such other longer period as agreed to by the DFSAG .
          (3) The DFSAG must, as soon as practicable after receiving representations, or if no representations are made, after the expiry of the period for making representations referred to in (2)(b), issue a final notice stating that:
          (a) the proposed objections and any conditions are withdrawn and the PersonG is an approved ControllerG ; or
          (b) the PersonG is approved as a ControllerG subject to conditions specified in the notice; or
          (c) the PersonG is an unacceptable ControllerG and accordingly, must dispose of that Person'sG holdings.
          (4) Where the DFSAG has issued a final notice imposing any conditions subject to which a PersonG is approved as a ControllerG , that PersonG must comply with those conditions.
          (5) Where the DFSAG has issued a final notice declaring a PersonG to be an unacceptable ControllerG that PersonG must dispose of the relevant holdings within such period as specified in the final notice.
          (6) If the DFSAG decides to exercise its power under this Rule to object to a PersonG as a ControllerG , to impose conditions on an approval or to require a PersonG to dispose of their holdings, the PersonG 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 8.2.10 Guidance [Deleted]

            [Deleted] DFSA RM133/2014 (Made 21st August 2014). [VER16/06-14]