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  • Recognition (REC) [VER12/01-18]

    • REC 1 Application of the Recognition Module

      • REC 1.1 Application

        • REC 1.1.1

          This module (REC) applies to every Recognised PersonG and to applicants for admission to the list of Recognised Persons under Part 3 of the Markets Law 2012.

          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

          • REC 1.1.1 Guidance

            1. A Recognised PersonG is defined in Article 37(3) as a Recognised body or a Recognised MemberG . A Recognised BodyG and a Recognised MemberG are also defined in Article 37(3) as follows:
            a. "recognised body" means a person which operates an exchange, clearing house or alternative trading system in a jurisdiction other than the DIFC which has been admitted to, and appears on, the list of recognised bodies maintained by the DFSA pursuant to this Article.
            b. "recognised member" means a person located in a jurisdiction other than the DIFC which has been admitted to, and appears on, the list of recognised members maintained by the DFSA pursuant to this article.
            2. References to Articles made in this module are references to Articles in the Markets Law 2012 unless otherwise stated.
            3. This module is divided into three main chapters. Chapter 2 sets out the requirements for admission to the list of Recognised PersonsG , including the Recognition CriteriaG a Recognised PersonG must satisfy at the time of admission to the list of Recognised Persons and on a continuing basis. Chapter 3 sets out types of information a Recognised PersonG must provide the DFSA with on an ongoing basis, and in the case of a Recognised BodyG the information that must be included in its annual report to the DFSA. Chapter 4 sets out the process for a Recognised PersonG to request removal from the list of Recognised PersonsG , and also contains the requirements on the DFSA if it removes a Recognised PersonG from the list.
            4. The following parts of the DFSA Rulebook also apply to Recognised PersonsG :
            Module Applicable chapters
            General (GEN) GEN 1 and GEN 6
            Enforcement (ENF) All chapters
            5. The Regulatory Policy and Process Sourcebook (RPP) may also be relevant to Recognised PersonsG .
            Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

    • REC 2 Admission to the List of Recognised Persons

      • REC 2.1 Application

        • REC 2.1.1

          This chapter applies to every Recognised PersonG except to the extent that a provision provides for a narrower application.

          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

      • REC 2.2 Recognition as a recognised person

        • REC 2.2 Guidance

          1. The DFSA may only admit a PersonG to its list of Recognised PersonsG if it appears to the DFSA that such PersonG satisfies and will continue to satisfy the Recognition Criteria.
          2. An applicant, or potential applicant for RecognitionG is advised to contact the DFSA to discuss their application at the earliest possible opportunity prior to the submission of any written documentation.
          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

        • REC 2.2.1

          An applicant to be a Recognised PersonG must submit a written application to the DFSA demonstrating how the applicant satisfies or intends to satisfy the relevant Recognition CriteriaG at the date of RecognitionG and on an ongoing basis.

          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

          • REC 2.2.1 Guidance

            A written application should also set out the basic general information relating to an applicant for a Recognised PersonG , including:

            a. its name;
            b. any business name or trading name it intends to use in the DIFC, if different to (a);
            c. the address of its registered office and head office; and
            d. the name of the Authorised Market InstitutionG or ATS OperatorG upon which it is applying for membership.
            Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

        • REC 2.2.2

          In assessing an application for RecognitionG the DFSA may:

          (a) carry out any enquiries which it considers appropriate including enquiries independent of the applicant;
          (b) require the applicant to submit such additional information as the DFSA may reasonably require;
          (c) require any information submitted by the applicant to be verified in such manner as the DFSA may specify; and
          (d) take into account any information which the DFSA considers appropriate in relation to the applicant.
          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

        • REC 2.2.3

          If an applicant becomes aware of a material change in circumstances that is reasonably likely to be relevant to an application which is under consideration by the DFSA, it must inform the DFSA of the change in writing, without delay.

          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

      • REC 2.3 Determination of applications and references

        • REC 2.3.1 [Deleted]

          [Deleted] DFSA RM140/2014 (Made 21st August 2014). [VER8/06-14]

        • REC 2.3.2 [Deleted]

          [Deleted] DFSA RM140/2014 (Made 21st August 2014). [VER8/06-14]

          • REC 2.3.2 Guidance

            Determination of applications

            1. Where the DFSA recognises a PersonG pursuant to Article 37 of the Law, it will include such person in its list of Recognised PersonsG .

            References

            2. If the DFSAG proposes to refuse an application for RecognitionG it is required under Article 37(9) of the Law to comply with the procedures in schedule 3 to the Regulatory LawG .
            3. If the DFSAG decides to refuse an application for RecognitionG , the applicant may refer the matter to the FMTG for review under Article 37(10) of the Law.
            4. Under Article 29 of the Regulatory Law, a PersonG who commences a reference to the FMTG , must do so within 30 days of the notification of the relevant decision.
            5. The form of submission that a reference must take is specified in the rules of procedures of the FMTG .
            Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]
            [Amended] DFSA RM140/2014 (Made 21st August 2014). [VER8/06-14]

      • REC 2.4 Recognition criteria for recognised bodies

        • REC 2.4.1

          For the purposes of Article 37(6) of the Law the Recognition CriteriaG for a Recognised BodyG are that:

          (a) it is licensed or otherwise authorised to operate an exchange, clearing house or alternative trading system in a jurisdiction acceptable to the DFSA;
          (b) it is regulated by a Financial Services RegulatorG to a standard satisfactory to the DFSA;
          (c) the law and practice under which the Recognised BodyG is licensed or otherwise authorised is broadly equivalent to the DFSA's regulatory regime as it applies to a DIFC ExchangeG ;
          (d) adequate arrangements exist, or will exist for co-operation between the DFSA and the Financial Services RegulatorG responsible for the Recognised Body'sG licensing and regulation.
          (e) it has its head and registered offices outside of the DIFC; and
          (f) it operates to a standard which would reasonably satisfy the Licensing Requirements for Authorised Market InstitutionsG set out in AMI.
          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

      • REC 2.5 Recognition criteria for recognised members

        • REC 2.5.1

          For the purposes of Article 37(6) of the Law the Recognition CriteriaG for a Recognised MemberG are that:

          (a) it is licensed or otherwise authorised to trade on or use the facilities of an exchange, clearing house or alternative trading system in a jurisdiction acceptable to the DFSA;
          (b) it is regulated in respect of the trading in (a) by a Financial Services RegulatorG to a standard satisfactory to the DFSA;
          (c) the law and practice under which the Recognised MemberG is licensed or otherwise authorised is broadly equivalent to the DFSA's regulatory regime as it applies to a DIFC MemberG ;
          (d) adequate arrangements exist, or will exist for co-operation between the DFSA and the Financial Services RegulatorG responsible for the Recognised Member'sG licensing and regulation.
          (e) when using the facilities of an exchange, clearing house or alternative trading system in the DIFC, it does not exceed the scope of the activities it is licensed to carry on by its Financial Services RegulatorG ;
          (f) subject to 2.5.2, it carries on business in a jurisdiction other than the DIFC and has its head and registered offices outside of the DIFC; and
          (g) subject to 2.5.3, when dealing on an ExchangeG or Alternative Trading SystemG in the DIFC, it does so only for:
          (i) non-DIFC customers; or
          (ii) DIFC customers for whom it deals as a result of an unsolicited request for execution-only services.
          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

        • REC 2.5.2

          Rule 2.5.1(e) does not prevent a Recognised MemberG which has a BranchG which is an Authorised FirmG from carrying on a Financial ServiceG in or from the DIFC through such BranchG .

          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

        • REC 2.5.3

          Rule 2.5.1(g) does not apply to:

          (a) a Recognised MemberG which is licensed and supervised by a Financial Services RegulatorG in the UAE; and
          (b) a Recognised MemberG which has a BranchG which is an Authorised FirmG .
          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

    • REC 3 General Provisions

      • REC 3.1 Application

        • REC 3.1.1

          This chapter applies to every Recognised PersonG except to the extent that a provision provides for a narrower application.

          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

      • REC 3.2 Supervisory approach

        • REC 3.2 Guidance

          The DFSA will rely upon a Recognised Person'sG lead Financial Services RegulatorG to supervise a Recognised PersonG . The focus of DFSA's interest will be on the DIFC and on those activities of the Recognised PersonG that may impact the DIFC.

          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

      • REC 3.3 Core information

        • REC 3.3.1

          A Recognised PersonG must provide the DFSA with reasonable advance notice of a change in:

          (a) its name;
          (b) any business name or trading name it uses in the DIFC, if different to (a); or
          (c) the address of its registered office or head office in its home jurisdiction.
          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

      • REC 3.4 Reporting

        • REC 3.4.1

          A Recognised BodyG must notify the DFSA immediately upon the granting, modification, variation, withdrawal or refusal of any application for, or revocation of, licensing, recognition or authorisation:

          (a) in the jurisdiction in which the Recognised BodyG has its head office or principal business; and
          (b) in any other jurisdiction to the extent that the relevant licensing, recognition or authorisation relates to operating an exchange, clearing house or alternative trading system.
          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

        • REC 3.4.2

          A Recognised PersonG must notify the DFSA immediately upon the granting, modification, variation, withdrawal or refusal of an application for, or revocation of membership of an exchange, clearing house or alternative trading system, including membership of an Authorised Market InstitutionG .

          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

        • REC 3.4.3

          A Recognised PersonG must provide the DFSA with a copy of any information provided to any Financial Services RegulatorG to which the Recognised PersonG is subject and which is relevant to its status as a Recognised PersonG .

          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

        • REC 3.4.4

          Notwithstanding Rules 3.4.1 to 3.4.3, a Recognised PersonG must notify the DFSA as soon as possible of:

          (a) anything which causes or may cause it to fail to satisfy the Recognition CriteriaG ;
          (b) it becoming aware that a Financial Services RegulatorG has started an investigation into the affairs of the Recognised PersonG ;
          (c) the appointment of inspectors, howsoever named, by a Financial Services RegulatorG to investigate or manage the affairs of the Recognised PersonG ;
          (d) the imposition of disciplinary measures or disciplinary sanctions on the Recognised PersonG by any Financial Services RegulatorG ; or
          (e) any significant event or anything else relating to the Recognised PersonG of which the DFSA would reasonably expect to be notified.
          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

          • REC 3.4.4 Guidance

            1. The DFSA does not require notification from a Recognised PersonG , for the purposes of Rule 3.4.2(b) or (c), where the activities of the Financial Services RegulatorG are part of a routine or regular inspection or audit of the affairs of the Recognised PersonG .
            2. Events which may cause a Recognised PersonG to be unable to meet the Recognition CriteriaG include significant changes to any relevant laws or regulations in its home jurisdiction, which:
            a. govern exchanges, clearing houses or alternative trading systems;
            b. are designed to prevent market abuse or money laundering;
            c. affect the ability of a Recognised BodyG to seek information from its users;
            d. affect the ability of a Recognised PersonG to provide information to the DFSA; or
            e. requires significant changes to a Recognised Body'sG organisation, structure or practices.
            Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

        • REC 3.4.5 Suspected Market Abuse

          (1) A Recognised Member must notify the DFSA immediately if it:
          (a) receives an order from a ClientG , or arranges or executes a transaction with or for a ClientG ; and
          (b) has reasonable grounds to suspect that the order or transaction may constitute Market AbuseG .
          (2) The notification under (1) must specify:
          (a) sufficient details of the order or transaction; and
          (b) the reasons for the Recognised MemberG suspecting that the order or transaction may constitute Market AbuseG .
          (3) A Recognised MemberG must not inform the ClientG , or any other Person involved in the order or transaction, of a notification under this Rule.
          Derived from DFSA RM191/2016 (Made 7th December 2016). [VER11/02-17]

          • REC 3.4.5 Guidance

            1. Recognised MembersG should note that conduct which occurs outside the DIFCG is only Market AbuseG under Part 6 of the Markets Law (and therefore subject to the notification requirement in REC Rule 3.4.5) if it affects DIFCG markets or users of DIFCG markets.
            2. Further GuidanceG on the requirement to notify the DFSA of suspected Market AbuseG can be found after GEN Rule 11.10.12A (the equivalent requirement for an Authorised FirmG ).
            Derived from DFSA RM191/2016 (Made 7th December 2016). [VER11/02-17]

      • REC 3.5 Annual report

        • REC 3.5.1

          A Recognised BodyG must submit to the DFSA an annual report in accordance with Rule 3.5.2 within four months of its financial year end.

          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

        • REC 3.5.2

          A Recognised Body'sG annual report must include:

          (a) a copy of its annual report and accounts, including any consolidated annual report and accounts of any GroupG of which the Recognised BodyG is a member;
          (b) notwithstanding Rule 3.4.4(a), confirmation that the Recognised BodyG has satisfied the Recognition CriteriaG throughout the previous 12 months and is continuing to satisfy the Recognition CriteriaG ; and
          (c) if the Recognised BodyG has not satisfied the Recognition CriteriaG in any respect, an explanation of why the Recognised Body failed to satisfy the Recognition CriteriaG and what actions it is taking to satisfy the Recognition CriteriaG .
          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

          • REC 3.5.2 Guidance

            The annual report may be submitted to the DFSA in either hard copy or electronic form.

            Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

        • REC 3.5.3 [Deleted]

          [Deleted] DFSA RM200/2017 (Made 19th April 2017). [VER12/01-18]

      • REC 3.6 Communication with and notification to the DFSA

        • REC 3.6.1

          A Recognised PersonG must deal with the DFSA in an open and co-operative manner.

          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

          • REC 3.6.1 Guidance

            GEN section 6.10 sets out Rules about how information is to be provided to the DFSA.

            Derived from DFSA DFSA RM178/2016 (Made 19 June 2016). [VER10/08-16]

        • REC 3.6.2 [Deleted]

          [Deleted] DFSA RM178/2016 (Made 19 June 2016). [VER10/08-16]

        • REC 3.6.2

          A Recognised PersonG must ensure that any communication with the DFSA is conducted in the English language.

          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]
          [Amended] DFSA RM178/2016 (Made 19 June 2016). [VER10/08-16]

    • REC 4 Removal from the List of Recognised Persons

      • REC 4.1 Application

        • REC 4.1.1

          This chapter applies to every Recognised PersonG except to the extent that a provision provides for a narrower application.

          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

      • REC 4.2 Removal from the list of Recognised Persons at the Recognised Body's request

        • REC 4.2.1

          A Recognised BodyG which requests to have its name removed from the list of Recognised PersonsG must submit such request in writing stating:

          (a) the reasons for the request;
          (b) that it has ceased or will cease to offer access to its facilities to PersonsG located in the DIFC;
          (c) the date on which it ceased or will cease to offer access to its facilities to PersonsG located in the DIFC; and
          (e) that it has discharged, or will discharge, all obligations owed to PersonsG located in the DIFC.
          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

      • REC 4.3 Removal from the list of Recognised Persons at the Recognised Member's request

        • REC 4.3.1

          If a Recognised MemberG wishes to have its name removed from the list of Recognised PersonsG it must submit a request in writing stating:

          (a) the reasons for the request;
          (b) that it is no longer a MemberG of an Authorised Market InstitutionG or will no longer be a MemberG of Authorised Market InstitutionG ;
          (c) the date on which its membership was terminated or will be terminated; and
          (d) that it has discharged, or will discharge, all obligations owed to any PersonG in the DIFC which have arisen as a result of its recognised status.
          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

      • REC 4.4 Removal from the list of Recognised Persons by the DFSA

        • REC 4.4.3 [Deleted]

          [Deleted] DFSA RM140/2014 (Made 21st August 2014). [VER8/06-14]

        • REC 4.4.4 [Deleted]

          [Deleted] DFSA RM140/2014 (Made 21st August 2014). [VER8/06-14]

        • REC 4.4.5 [Deleted]

          [Deleted] DFSA RM140/2014 (Made 21st August 2014). [VER8/06-14]

        • REC 4.4.6 [Deleted]

          [Deleted] DFSA RM140/2014 (Made 21st August 2014). [VER8/06-14]

          • REC 4.4.6 Guidance

            1. Where, pursuant to Article 37(7) of the Law, the DFSA removes a PersonG from its list of Recognised PersonsG , the DFSA will generally only do so if:
            a. the Recognised PersonG is in breach of, or has otherwise been in breach of, the Law or Rules or other legislation administered by the DFSA;
            b. the Recognised PersonG is failing, has failed, or is likely to fail, to satisfy the Recognition CriteriaG ;
            c. the Recognised PersonG requests to have its name removed from the list of Recognised PersonsG ; or
            d. the DFSA considers that the exercise of the power is otherwise necessary or desirable in the pursuit of its objectives.
            2. For the avoidance of doubt, the DFSA may remove a PersonG from the list of Recognised PersonsG in circumstances where such Person continues to meet the Recognition CriteriaG . This may include where the DFSA considers it necessary or desirable in the pursuit of its objectives to prevent damage to the reputation of the DIFC or to protect direct or indirect users of the financial services industry in the DIFC.
            3. If the DFSAG proposes to remove a PersonG from its list of Recognised PersonsG , it is required under Article 37(9) of the Law to comply with the procedures in Schedule 3 to the Regulatory LawG .
            4. If the DFSAG decides to remove a PersonG from its list of Recognised PersonsG , the PersonG may refer the matter to the FMTG for review.
            Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]
            [Amended] DFSA RM140/2014 (Made 21st August 2014). [VER8/06-14]

    • REC 5 Transitional Provisions

      • REC 5.1 Application

        • REC 5.1.1

          (1) Rule 5.1.2 applies to every PersonG to whom the Regulatory Law 2004 and any Rules made for the purposes of that law or the Markets Law 2004 applied immediately prior to the Effective Date.G
          (2) The Effective DateG for the purposes of this Rule is the date on which the Law comes into force.
          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]

        • REC 5.1.2

          (1) For the purposes of Article 1(5) of the Law, a PersonG who was recognised pursuant to Article 61 of the Regulatory Law 2004 as a Recognised Person and who has a valid Recognition NoticeG on the Effective Date is deemed to be recognised pursuant to the Law.
          (2) A PersonG in (1) will be admitted to the list maintained by the DFSA pursuant to Article 37(5) of the Law on the Effective Date.
          Derived from DFSA RM90/2012 (Made 14th June 2012). [VER7/06-12]