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  • RPP 10 Permissible Company and Trading Names for Entities Established in the DIFC

    • 10-1 Introduction

      • 10-1-1

        This chapter sets out the DFSA'sG policy on the names that Applicants, Authorised FirmsG , FundsG and other entities established in the DIFCG should use.

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-1-2

        This chapter also sets out the DFSAG policy on approving applicants' use of particular names in the DIFCG , and when the DFSAG will use its prohibition power to prohibit an Authorised FirmG , FundG or other entity established in the DIFCG from using a name which is contrary to the DFSA'sG policy.

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-1-3

        This chapter is structured as follows:

        (a) Section 10-2 sets out the purpose and scope of the chapter, including who it applies to;
        (b) Section 10-3 explains some of the guiding principles behind the policy;
        (c) Section 10-4 explains the source of the DFSAG powers in relation to names of firms;
        (d) Section 10-5 describes the DFSA'sG general policy on the use by firms of the words "bank", "insurance" and "trust";
        (e) Section 10-6 describes the exceptions to the general policy set out in section 10-5;
        (f) Section 10-7 describes the DFSAG policy on other matters such as the use of the words "investment bank", "fund" or "Islamic" and on the use of trading names;
        (g) Section 10-8 sets out the DFSAG policy on the use of its power to prohibit the use of a particular name by an Authorised PersonG or a FundG ; and
        (h) Section 10-9 sets out the DFSAG policy on giving consent to the use of certain names by unregulated entities.
        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

    • 10-2 Purpose and Scope of the DFSA's Naming Policy

      • 10-2-1

        This policy aims to ensure that entities operating in or from the DIFCG use names that are fair and clear so as not to mislead consumers. Naming conventions for Authorised FirmsG are an important element of consumer protection.

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-2-2

        This policy is aimed primarily at entities which are authorised to carry on a Financial ServiceG , which include applicants for Authorisation, or others which otherwise fall within the DFSAG regulatory perimeter e.g. funds and trusts (referred to collectively as "firms" in this chapter). However, this policy will also be relevant to unregulated entities to the extent that such a person uses a name that suggests, or could suggest, that the person is authorised to carry on a Financial ServiceG .

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-2-3

        This policy applies to any entity in the DIFCG that uses or proposes to use in its business name or trading name:

        (a) the word "bank" or any of its derivatives;
        (b) the word "insurer" or any of its derivatives;
        (c) the word "trust" or any of its derivatives;
        (d) any other words connected to financial services;
        (e) any other words which suggest that it is authorised to carry on a Financial ServiceG ; and
        (f) any other words that are misleading in light of its actual business activities.
        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-2-4

        Any reference in this policy to words used in names, such as "bank" or "insurance" includes their derivations, regardless of the language used, unless expressly stated otherwise.

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

    • 10-3 Guiding Principles

      • 10-3-1

        The DFSAG has considered and adopted international best practice in formulating this policy. In particular the DFSAG has considered the international standards promulgated by the Basel Committee on Banking Supervision in its Core Principles for Effective Banking Supervision. These principles require financial services regulators to control the use of specific words related to the conduct of banking business. The key requirement is set out under "Principle 4":

        "The permissible activities of institutions that are licensed and subject to supervision as banks are clearly defined and the use of the word "bank" in names is controlled";

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-3-2

        The DFSAG adopts a similar policy approach for entities which use the word "insurance" or "trust" in their name and for the general use of names connected to financial services which may be misleading to consumers. This is to ensure consistency across industry sectors and to reflect the standards set out in the DIFCG Companies Regulations.

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

    • 10-4 Relevant Laws and Regulations

      • 10-4-1

        In the DIFCG , a company, general partnership or limited liability partnership must seek the approval of the Registrar to the use of a particular name. The Registrar also has a very broad power to direct such persons to change their name if the name by which the person is registered is "misleading, conflicting or otherwise undesirable" (see for instance Article 19 of the DIFCG Companies Law).

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-4-2

        Additionally, the DIFCG Companies Regulations (COR) contain, in COR 2.3.2, a requirement to seek the prior approval of the DFSAG if their proposed name contains:

        "(i) the word 'bank', 'insurance' or 'trust';
        (ii) words which suggest that it is a bank, an insurance company or trust company; or
        (iii) words which suggest in some other way that it is authorised to carry on a Financial Service within the DIFC."
        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-4-3

        Regulation 2.2.2 of both the General Partnership Regulations and the Limited Liability Partnership Regulations contain an identical rule.

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-4-4

        Under Article 75(1)(a)(iv) of the Regulatory Law 2004, the DFSAG has a power to prohibit an Authorised PersonG from "using a particular name or description in respect of the Authorised Person". Under Article 75(1)(a)(v) of the Regulatory Law, the DFSAG can also prohibit an Authorised PersonG from "using a particular name for a FundG or sub-fund of a FundG ".

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-4-5

        The DFSAG can also exercise the Registrar's powers under DIFCG laws and regulations when acting as the Registrar's delegate.

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

    • 10-5 The General Policy on Use of the Words "Bank", "Insurance" and "Trust"

      • 10-5-1

        Any applicant for incorporation or registration in the DIFCG needs to seek DFSAG consent to the use of certain names, including names which use the words "bank", "insurance" or "trust". The DFSAG will generally consent to the use of a particular name if the use of the name would not be misleading. The DFSAG will generally look at substance over form when considering requests to use a particular name.

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-5-2

        The basis upon which the DFSAG would consider a business name to be misleading would include:

        (a) where the use of a name is misleading because it does not accurately describe the actual activities of the firm; or
        (b) where the use of a name is misleading because it implies that the firm has a particular status that it in fact does not have.
        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • "Bank"

        • 10-5-3

          The DFSAG considers that if a firm name includes the word "bank" this can be misleading if the business does not, in fact, have the appropriate licence to carry out any banking activities. It may also mislead actual or potential clients about the quality and quantity of the firm's financial resources. The word "bank" also suggests that the firm may benefit from the protections afforded to banking customers by a depositor protection scheme or an express or implied government guarantee.

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

        • 10-5-4

          The DFSAG policy approach set out above is the same, irrespective of whether a business uses a derivative word such as "banking", "banker", "investment bank/banking", "merchant bank/banking", "commercial bank" or "private bank/banking". The word "Bank" is defined in the DFSAG Rulebook, Glossary Module (GLO) as:

          "An Authorised FirmG which holds a LicenceG authorising it to carry on the Financial ServicesG of Accepting DepositsG "

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

        • 10-5-5

          The DFSAG will, therefore, only permit a firm to use the word "bank" or any of its derivatives if the firm holds a LicenceG to Accept DepositsG and/or Manage a Profit Sharing Investment AccountG on an Unrestricted basis. There are exceptions to this general policy, which we set out below in section 10-6.

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • "Insurance" and "Trust"

        • 10-5-6

          The same general principles in 10-5-2 (a) and (b) apply to the use of the words "insurance" and "trust" and any of their derivatives such as "insurer", "reinsurance", "reinsurer", "insurance/reinsurance company", "insurance/reinsurance broker", "trustee", or "trust company".

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

        • 10-5-7

          In the case of the use of the word "insurance" in a firm name, it should be noted that "Insurance Business" is defined in GLO as:

          "The business of Effecting Contracts of InsuranceG or Carrying Out Contracts of InsuranceG , including effecting or carrying out contracts of reinsurance (as reinsurer)."

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

        • 10-5-8

          The DFSAG will, therefore, only permit a firm to use the word "insurance" or any of its derivatives if the firm holds a LicenceG to Effect Contracts of InsuranceG or Carry Out Contracts of InsuranceG . There are exceptions to this general policy which we set out below in section 10-6.

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

    • 10-6 Exceptions to the General Policy

      • Branches of non-DIFC companies and partnerships

        • 10-6-1

          An exception to the general policy on the use of the terms "bank" and "insurance" set out in section 10-5 above is where the relevant firm is a BranchG of a non-DIFCG licensed bank or insurance company.

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

        • 10-6-2

          For example, if a firm is a BranchG of a bank, which is licenced as a bank in its home state jurisdiction, because the BranchG is the same legal entity as its Head Office, it is in fact itself a bank. However, such firms should use their Head Office name with added words which describe their legal status. This is to ensure that the name does not mislead in any way. For example, the Head Office of ABC Bank PLC may call its DIFC Branch "ABC Bank PLC (DIFC Branch)".

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

        • 10-6-3

          The above policy would apply even if the DIFC Branch is not authorised to Accept DepositsG . However, the Head Office's licence in its home state must include authorisation to Accept DepositsG or the equivalent local financial service if the firm wishes to use the word "bank" in its name in the DIFCG . In other words, if the name of the Head Office includes the word "bank" but the Head Office is not in fact permitted to Accept DepositsG , the DIFC Branch will not be permitted to use the word "bank" in its name or would be required to follow the policy set out in paragraphs 10-6-4 to 10-6-6 below.

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • DIFC-incorporated companies and partnerships

        • 10-6-4

          A further exception to the general policy on the use of the terms "bank" and "insurance" set out in section 10-5 above applies to a Domestic FirmG . The DFSAG would permit a Domestic FirmG , whose immediate parent is a BankG or InsurerG , to refer to the parent's name in its name, provided that the name is not actually or potentially misleading.

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

        • 10-6-5

          In order to not be misleading, the DFSAG would expect the firm to append words to their parent's name which describe the firm's DIFCG activities. For example, assuming that ABC Bank PLC has a DIFCG subsidiary which is a Category 3C firm, the DFSAG would accept the name "ABC Bank Asset Management Limited" for the firm.

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

        • 10-6-6

          For the avoidance of doubt, if the DIFCG entity does not itself hold a LicenceG to Accept DepositsG , it will not be able to use the name of its parent (which is a bank) without some qualification.

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

        • 10-6-7

          In some cases, a firm's immediate parent may be an intermediate company. In such cases, provided that the intermediate company is not an operating company (for example, because it has been established to hold the Group's Middle East subsidiaries or because it was established for tax purposes) the firm may refer to the intermediate company's parent's name in their name, provided that the name does not mislead in any way.

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

        • 10-6-8

          For example, assuming that ABC Bank PLC has a subsidiary, ABC Bank Middle East Holdings Ltd, which was established to hold ABC Bank PLC's Middle East subsidiaries, a Category 3C DIFCG subsidiary of ABC Bank Middle East Holdings Ltd could use the name "ABC Bank Asset Management Limited".

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

        • 10-6-9

          The examples above would apply equally to insurance companies and intermediaries. In particular, the DFSAG would expect an insurance broker or other intermediary which uses the word "insurance" in its name to ensure that its name adequately describes its permitted activities by, for example, appending the word "broker" in the name. The use of the word "insurance" by an insurance intermediary without further description could be misleading; consumers might assume that the firm is an insurer which benefits from a strong capital base.

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

    • 10-7 Other Matters

      • Investment, Merchant or Private Bank

        • 10-7-1

          The DFSAG considers that firms which include the words "investment bank" in their name pose less risk of misleading the consumers because the concept of an investment bank is less closely associated with deposit taking. Historically, the DFSAG has permitted a firm to use the words "investment bank" in its name (in the absence of the firm having a Deposit Taking authorisation) provided that the firm's activities involve what would commonly be described as investment banking activities. The DFSAG considers that investment banking activities would generally include Dealing as Principal in combination with one or more of Providing CreditG , and Advising or Arranging on Financial Products or Credit.

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

        • 10-7-2

          When assessing whether a firm is undertaking investment banking activities, the DFSAG will adopt a substance over form approach. As a general rule, the DFSAG would not consider that a Prudential Category 4 firm is undertaking investment banking activities. The DFSAG would adopt the same general policy to the use of the words "merchant bank" or "private bank" in an Authorised Firm'sG name.

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • Fund

        • 10-7-3

          The DFSAG naming policy for entities which use the word "fund" in their name, including a FundG , adopts the same fundamental principle as that described in section 10-5 above. When considering whether the name of a FundG is appropriate, or whether to permit an entity which is not a FundG to use the word "fund" in its name, the DFSAG will adopt a substance over form approach and in particular will consider whether the use of a name is misleading because the name:

          (a) does not accurately describe the actual activities of the firm or FundG ; or
          (b) implies that the entity has a particular status that it, in fact, does not have.
          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

        • 10-7-4

          An example of a misleading name for a FundG would be where the name does not reflect the actual nature of the investments which the FundG invests in. So "ABC Emerging Markets FundG " would not be an appropriate name for a FundG that does not in fact invest in emerging markets investments. CIR Rule 7.1.4, and the subsequent Guidance, provide further information on what is and is not permissible as regards the name of a Domestic FundG .

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • Islamic firms

        • 10-7-5

          Where a firm uses the word "Islamic" in its name, the DFSAG would expect the firm to have an endorsement on its LicenceG to carry out Islamic Financial BusinessG as an Islamic Financial InstitutionG or by way of an Islamic WindowG .

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • Representative offices

        • 10-7-6

          An Authorised FirmG which is a Representative Office must be a BranchG . Therefore, it will generally take the name of its Head Office. However, in order not to mislead consumers, the DFSAG will require a Representative OfficeG to ensure that its name adequately describes the very restrictive nature of its LicenceG e.g. "ABC Bank DIFC (Representative Office)".

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • Trading names

        • 10-7-7

          The DFSAG naming policy for firms applies to any trading names used by firms and would also apply to any name used by a firm to describe a particular capability or division of the firm, including on the firm's website or in brochures. For example, the DFSAG would consider it misleading if a Prudential Category 4 firm stated on its website that it has an "investment banking" or "asset management" division in the DIFCG .

          Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

    • 10-8 Using the Prohibition Power

      • 10-8-1

        Article 75(1)(a)(iv) of the Regulatory Law 2004 permits the DFSAG to prohibit an Authorised PersonG from using a particular name or description in relation to its business. It is a strong power that the DFSAG will use if it considers that a prohibition is necessary in order to ensure customers, Authorised PersonsG or the financial system are not adversely affected.

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-8-2

        Before deciding whether to use of the Article 75(1)(a)(iv) power, the DFSAG will generally try to resolve any concerns that it has with an Authorised Person'sG name using informal channels, and would generally seek a voluntary undertaking by the firm to change its name. However, in urgent cases, the DFSAG may use the prohibition power without, or with very little, prior notice in accordance with paragraph 4(7) of Schedule 3 of the Regulatory Law 2004.

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-8-3

        Ordinarily, if the DFSAG has concerns about an Authorised Person's name, trading name or business description, it will write to the person explaining its concerns about the particular name and will provide the firm with a period in which to respond to its concerns. If, following receipt of any response, the DFSAG remains dissatisfied with the continued use of the particular name, the DFSAG will write to the firm and ask the firm to agree to cease using the name. The DFSAG will give the person a reasonable period of time in order to change their name. If the person does not agree to change their name or continues to use the name after the time allowed to change the name, the DFSAG will use Article 75(1)(a)(iv) of the Regulatory Law in order to prohibit the use of the name. Where a person refuses to comply with an Article 75(1)(a)(iv) notice, the DFSAG would generally seek to enforce the notice in the DIFCG Court under Article 92 of the Regulatory Law.

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-8-4

        The DFSAG would take this naming policy into consideration when deciding whether to use its Article 75(1)(a)(iv) power and, in particular, relevant factors that it would consider prior to using the power would include:

        (a) whether the Authorised PersonG holds the required DFSAG Authorisations to carry on the relevant Financial ServiceG s;
        (b) the extent to which the Authorised Person'sG name or description reflects the substance of the firm's Financial ServiceG s activities in or from the DIFCG ;
        (c) whether the use of certain words could mislead the public into thinking that the Authorised FirmG is operating a banking or insurance business in or from the DIFCG when the firm is not; and
        (d) whether the use of certain words could otherwise mislead consumers about the Authorised Person'sG activities in or from the DIFCG .
        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-8-5

        The DFSAG will adopt a similar process and approach when deciding to use its Article 75(1)(a)(v) power in relation to a FundG .

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

      • 10-8-6

        When the DFSAG exercises its Article 75(1)(a)(v) power in relation to an Authorised PersonG , the person may refer the matter to the Financial Markets TribunalG for review.

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition

    • 10-9 Unregulated Entities

      • 10-9-1

        Where DFSAG consent to the use of a particular name is sought by an unregulated entity, the DFSAG will only consent to the use of the name if it is reasonably satisfied that the name does not suggest in some way that the person is authorised to carry on a Financial ServiceG in or from the DIFCG . Where the DFSAG considers that a person in the DIFCG , which is an unregulated entity, has a name that uses words which suggest in some way that the person is authorised to carry on a Financial ServiceG in or from the DIFCG , the DFSAG will write to the person and ask them to cease using the name. The DFSAG will give the person a reasonable period of time in order to change their name. If the person continues to use the name after the time allowed to change the name, the DFSAG will use legal means to stop the person using the name.

        Derived from Notice of Updates (Made 14th July 2015). July 2015 Edition