Considering upgrading to a Category 4 licence?
A Representative Office (Rep Office) undertaking
activities outside of the scope of its licence might be in breach of Article
42(4) of the Regulatory Law and the DFSA could take appropriate regulatory
action if it considers a breach has occurred including withdrawing
authorisation or taking formal enforcement action.
Rep Office licence holders are permitted to market one or
more financial services or financial products which are offered in a
jurisdiction other than the DIFC by a related party i.e. its head office,
another branch of the head office or a Group member.
Definitions
Marketing:
(a) Providing
information on one or more financial products or financial services
(b) Engaging
in promotion in relation to (a) or
(c) Making
introduction or referrals in connection with the offer of financial services or
financial products
Financial products: an Investment, a Credit Facility,
a Deposit, a Profit Sharing Investment Account or a Contract of Insurance.
Financial services: A broad list of activities
specified in GEN module rule 2.2.2.
REPRESENTATIVE OFFICE LICENCE HOLDER
û
No arranging
Rep Offices are not permitted to conduct arranging
activities and can only refer or introduce potential customers to a related
party, who provides the financial products or services.
û No advising
Prohibited from ‘Advising on Financial Products’ e.g. giving
a view on the merits of an investor buying or selling a financial products. It
can only give factual information about services offered by a related third
party.
û
No Clients
No client relationship or relationship management activities
are permitted e.g. you cannot nominate a Rep Office employee as a key contact
for a potential customer to make enquiries or complaints.
û Limited marketing
A Rep Office is limited to providing factual information and
promotional literature about financial products or financial services, e.g.
product features and benefits, offered by a related party outside of the DIFC.
Limited to Professional Clients and Market Counterparties only.
CATEGORY 4 LICENCE HOLDER
ü
Arranging
Licensed to conduct ‘Arranging Deals in Investments,
Arranging Credit and Advising on Credit, Arranging Custody and Insurance
Intermediation’.
ü Advising
Licensed to conduct ‘Advising on Financial Products’ and in
the case of insurance products, ‘Insurance Intermediation’ allowing the entity
to give opinions, recommendations or specific advice on buying and selling.
ü
Clients
Licensed to maintain and manage client relationships, assist
with the completion of account opening documentation, subscriptions forms, and acceptance and
forwarding of client instructions.
ü
Marketing
Licensed to provide more in depth information, e.g.
recommendations to buy/sell with virtually no restrictions. The distribution of
marketing material can be tailored to the client.
May apply for a Retail Endorsement on its License.
How HOLT consultancy can help you
ü Evaluate
your existing scope of activities and check if you are operating within the
boundaries of permitted activities.
ü Assist
with varying or upgrading a licence including detailing the rationale for the
licence variation and updating the Regulatory Business Plan.
ü Provide
Compliance and AML manuals tailored to your business model.
ü Develop
a Risk Based Compliance Monitoring Program.
ü Assist
in completing applications for new Authorised Individuals.
ü Train
employees for interviews with the regulator.
ü Document
and help you to implement systems and controls to meet the regulator’s
requirements according to your risk appetite.
Contact us now to
discuss your requirements.
+971 4 386 6360 or
+971 50 644 2541Email: info@holtconsultancy.com
