| Country Manuals Private Banking – We would like to inform you that BRP has updated its COUNTRY MANUAL PRIVATE BANKING for the following jurisdiction: UNITED ARAB EMIRATES (UAE) OUT OF BANK’S COUNTRY OF ESTABLISHMENT (Def, RS, BT & RT) Regulatory Template Material changes The Manual has been updated in consultation with our local legal counsels to integrate the latest regulatory changes implemented by the UAE Securities and Commodities Authority (SCA). The SCA issued on 9 May 2021 the Decision of the Chairman of the Authority’s Board of Directors No. (13/R.M) of 2021 regarding the Rulebook on Financial Activities and Reconciliation Mechanisms (the “Rulebook”), which introduces a more unified licensing framework for financial activities supervised by the SCA as well as important novelties (for a detailed summary of the key changes and implications, please see our BRP Alert of 6 July 2021 “UAE 1/2021 New SCA Rulebook in force”). The SCA Rulebook entered into effect on 17 May 2021 and gives existing licensed entities a grace period of one year to comply with its rules. Most importantly: – The Rulebook introduced more detailed definitions of “professional investor” and lowered the asset threshold for natural persons/HNWI to qualify as professional investor. – The promotion of financial products to all professional investors (including HNWI) is now exempt from licensing requirements. – According to our local legal counsels, it can be assumed that the UAE regulatory approach towards the cross-border promotion of investment services remains to date unchanged and continues to be governed by unofficial tolerated practices and recommendations that, if respected by a foreign bank unlicensed in the UAE, help lower the risk that a cross-border activity will be considered as conducting business in the UAE (“onshore”). The same seems to apply to the cross-border provision of investment services. However, it is unclear whether the reverse solicitation exemption and the professional investor exemption are available under tolerated practices for the cross-border provision of investment services. In view of the uncertainties that continue to prevail in the new SCA Rulebook with respect to cross-border investment services, foreign banks should always carefully assess their position in view of their own internal risk evaluation policies and be aware of the lack of formal rules or official position of the supervisory authorities. A cautious and discreet approach is recommended at all times as the attitude of the supervisory authorities may change at any time without prior notice. The main changes to the CM PB UAE are the following: – Execution Only: Receiving unsolicited brokerage orders from a client in the UAE is no longer permitted as this constitutes a regulated “onshore” activity, regardless of client category. – Providing macroeconomic information: Providing macroeconomic information is now considered to be permitted on an active or passive basis during occasional meetings in the UAE and via remote means of communication into the UAE, regardless of client category, as such information does not seem to constitute regulated financial consultancy/financial analysis services. – Providing investment research or financial (…) Implications for business relations with third parties There have been no substantial changes to the answers when a bank co-operates with third parties. Non-material changes – Several comments have been slightly reworded (without introducing material changes) to reflect the regulatory situation/current interpretation of the regulatory framework more accurately. – For streamlining purposes, several BT conditions have been reworded without introducing material change. – In several instances, the comments for Grey zone/YES have been modified to reflect standardised comments that BRP has adopted as a result of using a new editing platform for the creation of manuals. The underlying reasoning has not changed. Regulatory Summary This document has now a more user-friendly layout and reflects the changes contained in the RT. Behaviour Template The answers in the BT have been aligned to those contained in the RT. BT Short Comparison BRP has created a comparison document allowing users to quickly identify the modifications made compared to the previous version of the PB Manual (BT Short Comparison). The BT Short Comparison can be found on BRP’s platform (mybrponline) in the Search tab by entering in the Document Field “CM PB BT SHORT COMP” and “UAE” in the Target Country Field. The BT Short Comparison should be read as follows: The first column contains a short description of the activity in question. The second column contains the answers of the previous version of the Country Manual (online until the day of the alert). The third column contains the new answers of the most recent version of the Country Manual. Only the modified answers are displayed (in color). If the answers in the new version are unchanged compared to the previous version, they are shaded in grey. Best regards, |
