Country Manuals Private Banking
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 OUT OF BANK’S COUNTRY OF ESTABLISHMENT (Def, RS, BT & RT)
Regulatory Template
Material changes
The Manual has been reviewed to take account of an evolving interpretation of the applicable legal and regulatory framework.
Following consultations with our local lawyers, the update reflects a less strict approach towards the permissibility of cross-border banking activities under unofficial tolerated market practices. In particular, under these unofficial tolerated market practices, cross-border banking activities follow the same approach regardless of the sophistication of the prospect or client.
Under these unofficial tolerated practices, marketing and promotional activities should be carried out at all times in a discreet manner and on a selective basis. In particular:
– The foreign bank may not have a physical or legal presence in the UAE;- Marketing should generally be performed from outside of the UAE, except for pre-arranged marketing visits on a strict one-to-one and occasional basis to “pre-identified” prospects/clients (regardless of sophistication);
– Marketing visits to the UAE should be kept to a minimum, both in terms of frequency and duration;
– Aggressive marketing, such as the following, should be avoided:
• Mass or general advertising campaigns in the UAE;
• Seminars, presentations or promotional “road shows” to which a number of potential customers are invited; and
• Approaching customers on a “cold-calling” basis.
All activities in relation to pre-contractual activities with respect to banking services should be conducted on a pure cross-border basis (such that all activities of the bank in relation to the entry into, execution and performance of all related documentation and transactional activities are conducted and performed from outside of the UAE – “offshore transaction”). Consequently:
– Communications with any UAE customer should preferably be conducted from outside the UAE by telephone, facsimile or electronic messaging system;
– All contractual documents relating to the financial service in question and related transactions should be finalised and executed outside the UAE: while a prospect may sign contractual documents on UAE territory, the contractual documents should be countersigned by the bank outside the UAE;
– The service agreement should include language to the effect that the financial services are rendered/executed abroad and the agreement should be subject to the laws and jurisdiction of the bank’s country of establishment;
– No payments or monies should be accepted or disbursed in the UAE: payment by the client for the financial service or funds to be transferred should be wired directly to an account outside the UAE.
Reverse solicitation is tolerated as market practice during occasional on-site visits in or via remote means of communication into the UAE regardless of client status, but the prospect’s request must be duly documented/evidenced.
However, the foreign bank should be aware of the risks resulting from the lack of a clear basis, precedent or official position of the UAE regulatory authorities to rely upon when acting based on this current tolerated practice.
No changes have been made to the approach towards the permissibility of cross-border investment activities under unofficial tolerated market practices.
Without prejudice to the foregoing, we can otherwise confirm that there have not been any relevant legal or regulatory changes in the UAE since the last update.
The changes are reflected as follows:
– Actively promoting the bank in general terms or the bank’s banking services as well as providing general or specific documentation towards non-qualified prospects is now permitted during occasional on-site visits in or via remote means of communication into the UAE on a one-to-one basis (unofficial tolerated practices). Promoting the bank in general terms or the bank’s banking services as well as providing general or specific documentation is now also permitted upon a non-qualified prospect’s request during occasional on-site visits in the UAE provided the reverse solicitation is duly documented (unofficial tolerated practices);
– The same approach applies to pre-contractual activities with respect to account openings as well as the offering of additional services (debit cards, credit cards, Lombard credits), which are now permitted actively during occasional on-site visits in or via remote means of communication into the UAE on a one-to-one basis as well as passively upon a non-qualified prospect’s duly documented request during occasional on-site visits in the UAE (unofficial tolerated practices);
– Receiving unsolicited brokerage orders from a client while in the UAE is now permitted provided the reverse solicitation is duly documented;
– In view of the recommendation of an ongoing advisory agreement as a risk mitigating factor, actively providing personalised investment advice to a non-qualified client without an ongoing advisory agreement via remote means of communication should now be avoided.
Implications for business relations with third parties
There have been no substantial changes to the answers when a foreign bank co-operates with third parties.
Non-material changes
Certain comments have been slightly reworded (without introducing material changes) to reflect the new format of the document.
Regulatory Summary
The document has been reformatted onto the latest template.
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,