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CORPORATE SERVICES

DIFC Financial Licensing Categorisation DIFC Financial Licence

There are two main onshore financial centers within the UAE where financial licenses can be obtained, alongside several authorities responsible for regulating the financial services companies’ activities in the UAE. All financial companies operating in Dubai must comply with licensing requirements imposed by the Central Bank. Also, all financial companies set up within the onshore financial centers must adhere to the rules and regulations set forth by the independent regulators, depending on the jurisdiction.

The DUBAI INTERNATIONAL FINANCIAL CENTER (DIFC) is one of the two Financial Free Zones within the UAE. At the heart of the DIFC model is an independent risk-based regulator, the Dubai Financial Services Authority (DFSA), which grants licenses and regulates the activities of all banking and financial institutions in DIFC. The DIFC is a broadly based recognized and renowned international financial center serving local, regional and international institutions, and serves in the obtainment of Financial Licensing Categories 1, 2, 3A, 3B, 3C, 3D, 4 & 5.

General Rules of DIFC Financial Licensing Categories

1. In each DIFC Financial category, the Authorised Firm, may only conduct the activities for which it has been specifically authorised.

For example, an Authorised Firm which is a Category 2 licensed entity can only conduct the activities for which it was authorised at the time of licensing – it is not automatically allowed to conduct Category 3A, 3B, 3C and 4 activities.

Authorised Firms must observe the rules in the DFSA Rulebook, in particular, the following restrictions:

  1. may only offer products or services to clients in accordance with the DFSA’s Conduct of Business client classification requirements; and
  2. may not take deposits or deal in UAE Dirhams, and may not accept deposits from the State’s markets.

Breaching the rules and regulations may result in withdrawal of authorisation of the Authorised Firm by the DFSA. This can be in respect of one or more of its Financial Services. If the DFSA considers it necessary, such consequences may also extend to the Authorised Individuals or other persons performing any functions in the Authorised Firm. Any breach of obligations on the part of the aforesaid persons entitles the DFSA to restrict them from performing their functions or in the case of Authorised Individuals, suspend or withdraw their status.

The Three Financial Independent Authorities in DIFC:

Dubai Financial Services Authority (DFSA);

Dubai International Financial center Authority (DIFCA) and;

DIFC Courts operating under common law;

These three authorities ensure that DIFC offers a highly professional yet business-friendly environment operating with the best practices and recognized by all the major financial centers across the world.

DIFC is unique in that it has a legislative system consistent with English Common law. DIFC has its own set of civil and commercial laws -Companies Law DIFC Law No. 5 of 2018 including UK Companies Act 2006 plus policy decisions on where to deviate or apply lighter touch than UK or other common law positions)- and regulations and has developed a complete code of law governing financial services regulation. As part of its autonomy, DIFC has created an independent judicial system. The DIFC Courts is the entity responsible for the independent administration and enforcement of justice in DIFC. The Courts have exclusive jurisdiction over all civil and commercial disputes arising within DIFC and or relating to bodies and companies registered in DIFC.

DIFC Category 1 License – Accepting Deposits / Managing an Unrestricted Profit Sharing Account

DIFC Category 1 License Authorised Firm is a firm that is licensed to carry out the Financial Service of Accepting Deposits or Managing a Profit Sharing Investment Account (received on an unrestricted basis). The Authorised Firm under this category may be authorised to conduct other Financial Services, but its authorisation for Accepting Deposits and/or Managing a Profit Sharing Investment Account is what determines it as a Category 1 Authorised Firm, rather than another. A Category 1 firm may apply for an Islamic Window to conduct certain aspects of its business in a Sharia-compliant manner.

Base Capital – US$ 10,000,000.

Risk-based Capital minimum based on the totality of risks – CET1, 6%; Tier 1, 8%.

Capital Requirement is not applicable to a Branch set-up of existing regulated bank.

Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.

Note that additional capital requirements may be imposed by DFSA on the review of the application. 

An applicant is required to submit an application to the DIFC’s regulatory body, the DFSA, which will consider the merits and suitability of the applicant, and the category of license for which the application is made.

The Application Process

  1. The DFSA has will informally review a draft Regulatory Business Plan and projected financial and, if satisfied, allow a full formal application (which includes a finalised Regulatory Business Plan to be submitted).

Wincore will assist you in the following:

  • Introduction to the Regulator
  • Draft of Regulatory Business Plan (RBP) (Application Forms, Business flow processes & charts)
  • Preparation of Financial model for 3 years and draft of ICAAP and IRAP report.
  • Preparation of policies and manuals (Compliance, AML, Risk Management, Remuneration, Governance, Conflicts of Interests, Business Continuity Plan)
    • AUT – CORE: this form must be submitted by all applicants applying for a licence to carry out one or more financial services in or from DIFC. It covers information on the applicant, its activities, prospective clients and controllers;
    • AUT – IND: this form must be submitted by the individuals holding a mandatory function including directors, senior executive officer, finance officer, compliance officer and money laundering reporting officer; and
    • AUT-AMS: this form must be submitted by applicants applying to conduct financial services relating to arranging credit or deals in investment. The applicant will be required to submit this form as one of the Proposed Activities of DIFC CO includes arranging credits and deals in investment.
  • Draft of regulatory application for the company and individuals
  • Submission of Regulatory Application (with Policies and appointment of SEO, FO, MLRO, RO, CO)
  • Provision of full-time functions
    • SEO – Senior Executive Officer
    • FO – Finance Officer
    • RO – Risk Officer
    • MLRO – Money Laundering Reporting Officer
    • CO – Compliance Officer
  • Office lease
  • Introduction to the UAE Bank for opening an Account
  • Issuance of Regulator’s financial services license
  1. The DFSA will carry out a review of the application and enter into an ongoing dialogue with the applicant, which may involve interviews with the nominated authorised individuals.
  1. Once the DFSA is satisfied with the application and the applicant, it will issue an In-Principle approval to the applicant which will contain a number of conditions to be satisfied before granting of the final license, including:
  • incorporation or registration of the entity with the DIFC Registrar of Companies;
  • opening a local bank account and providing the DFSA with proof of remittance of capital; and
  • evidence of office space from which it will conduct its financial activities.
  1. Once the conditions on the in-principle approval are fulfilled, the DFSA will issue the formal license.

Wincore Advisory Group helps businesses to articulate their objectives and aspirations to set up ADGM Category 1 Financial Licence. Contact us at contact@wincoreadvisory.com

DIFC Category 2 License – Principal Investor (not matched) / Providing Credit

This is an Authorised Firm licensed to carry out the Financial Service of Dealing In investments as Principal, and Providing Credit. In addition to this activity, the Authorised Firm under this category may also be authorised to conduct other Financial Services found in Category 3A, 3B, 3C or 4, provided that it cannot be authorised to conduct the Financial Services set out in Category 1.

Base Capital – US$ 2,000,000

Risk-based Capital minimum based on the totality of risks – CET1, 6%; Tier 1, 8%.

Capital Requirement not applicable to a Branch set-up of existing regulated bank.

Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.

 Note that additional capital requirements may be imposed by DFSA on review of the application.

An applicant is required to submit an application to the DIFC’s regulatory body, the DFSA, which will consider the merits and suitability of the applicant, and the category of license for which the application is made.

The Application Process

  1. The DFSA has will informally review a draft Regulatory Business Plan and projected financial and, if satisfied, allow a full formal application (which includes a finalised Regulatory Business Plan to be submitted).

Wincore will assist you in the following:

  • Introduction to the Regulator
  • Draft of Regulatory Business Plan (RBP) (Application Forms , Business flow processes & charts)
  • Preparation of Financial model for 3 years and draft of ICAAP and IRAP report.
  • Preparation of policies and manuals (Compliance, AML, Risk Management, Remuneration, Governance, Conflicts of Interests, Business Continuity Plan)
    • AUT – CORE: this form must be submitted by all applicants applying for a licence to carry out one or more financial services in or from DIFC. It covers information on the applicant, its activities, prospective clients and controllers;
    • AUT – IND: this form must be submitted by the individuals holding a mandatory function including directors, senior executive officer, finance officer, compliance officer and money laundering reporting officer; and
    • AUT-AMS: this form must be submitted by applicants applying to conduct financial services relating to arranging credit or deals in investment. The applicant will be required to submit this form as one of the Proposed Activities of DIFC CO includes arranging credits and deals in investment.
  • Draft of regulatory application for the company and individuals
  • Submission of Regulatory Application (with Policies and appointment of SEO, FO, MLRO, RO, CO)
  • Provision of full-time functions
    • SEO – Senior Executive Officer
    • FO – Finance Officer
    • RO – Risk Officer
    • MLRO – Money Laundering Reporting Officer
    • CO – Compliance Officer
  • Office lease
  • Introduction to the UAE Bank for opening an Account
  • Issuance of Regulator’s financial services license
  1. The DFSA will carry out a review of the application and enter into an ongoing dialogue with the applicant, which may involve interviews with the nominated authorised individuals.
  1. Once the DFSA is satisfied with the application and the applicant, it will issue an In-Principle approval to the applicant which will contain a number of conditions to be satisfied before granting of the final license, including:
  • incorporation or registration of the entity with the DIFC Registrar of Companies;
  • opening a local bank account and providing the DFSA with proof of remittance of capital; and
  • evidence of office space from which it will conduct its financial activities.
  1. Once the conditions on the in-principle approval are fulfilled, the DFSA will issue the formal license.

Wincore Advisory Group helps businesses to articulate their objectives and aspirations to set up ADGM Category 1 Financial Licence. Contact us at contact@wincoreadvisory.com

DIFC Category 3A License – Dealing in Investments as Principal / Dealing in Investments as Agent

In this category, an Authorised Firm is licensed to carry on one or more of the Financial Services of: Dealing in Investments as Principal where it does only so as a Matched Principle; Dealing in Investments as Agent. An Authorised Firm grouped under this category may be authorised to conduct other Financial Services found in Category 3B, 3C or 4, but it cannot be authorised to conduct any of the Financial Services in Categories 1 or 2.

Base Capital – US$ 500,000

Risk-based Capital minimum based on the totality of risks – CET1, 6%; Tier 1, 8%.

Capital Requirement is not applicable to a Branch set-up of existing regulated bank.

Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.

 Note that additional capital requirements may be imposed by DFSA on the review of the application.

An applicant is required to submit an application to the DIFC’s regulatory body, the DFSA, which will consider the merits and suitability of the applicant, and the category of license for which the application is made.

The Application Process

  1. The DFSA has will informally review a draft Regulatory Business Plan and projected financial and, if satisfied, allow a full formal application (which includes a finalised Regulatory Business Plan to be submitted).

Wincore will assist you in the following:

  • Introduction to the Regulator
  • Draft of Regulatory Business Plan (RBP) (Application Forms, Business flow processes & charts)
  • Preparation of Financial model for 3 years and draft of ICAAP and IRAP report.
  • Preparation of policies and manuals (Compliance, AML, Risk Management, Remuneration, Governance, Conflicts of Interests, Business Continuity Plan)
    • AUT – CORE: this form must be submitted by all applicants applying for a licence to carry out one or more financial services in or from DIFC. It covers information on the applicant, its activities, prospective clients and controllers;
    • AUT – IND: this form must be submitted by the individuals holding a mandatory function including directors, senior executive officer, finance officer, compliance officer and money laundering reporting officer; and
    • AUT-AMS: this form must be submitted by applicants applying to conduct financial services relating to arranging credit or deals in investment. The applicant will be required to submit this form as one of the Proposed Activities of DIFC CO includes arranging credits and deals in investment.
  • Draft of regulatory application for the company and individuals
  • Submission of Regulatory Application (with Policies and appointment of SEO, FO, MLRO, RO, CO)
  • Provision of full-time functions
    • SEO – Senior Executive Officer
    • FO – Finance Officer
    • RO – Risk Officer
    • MLRO – Money Laundering Reporting Officer
    • CO – Compliance Officer
  • Office lease
  • Introduction to the UAE Bank for opening an Account
  • Issuance of Regulator’s financial services license
  1. The DFSA will carry out a review of the application and enter into an ongoing dialogue with the applicant, which may involve interviews with the nominated authorised individuals.
  1. Once the DFSA is satisfied with the application and the applicant, it will issue an In-Principle approval to the applicant which will contain a number of conditions to be satisfied before granting of the final license, including:
  • incorporation or registration of the entity with the DIFC Registrar of Companies;
  • opening a local bank account and providing the DFSA with proof of remittance of capital; and
  • evidence of office space from which it will conduct its financial activities.
  1. Once the conditions on the in-principle approval are fulfilled, the DFSA will issue the formal license.

Wincore Advisory Group helps businesses to articulate their objectives and aspirations to set up Category 3A Financial License DIFC. Contact us at contact@wincoreadvisory.com

DIFC Category 3B License – Providing Custody (for a Fund) / Acting as Trustee of a Fund

An Authorised Firm in this category is licensed to Provide Custody (but only for a Fund) and act as trustee for a Fund. An Authorised Firm in this category can carry on financial services in Category 3C and 4 but cannot carry on financial services in Categories 1, 2 or 3A.

Base Capital – US$ 4,000,000

Capital Requirement is not applicable to a Branch set-up of an existing regulated bank.

Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.

Note that additional capital requirements may be imposed by DFSA on the review of the application.

An applicant is required to submit an application to the DIFC’s regulatory body, the DFSA, which will consider the merits and suitability of the applicant, and the category of license for which the application is made.

The Application Process

  1. The DFSA has will informally review a draft Regulatory Business Plan and projected financial and, if satisfied, allow a full formal application (which includes a finalised Regulatory Business Plan to be submitted).

Wincore will assist you in the following:

  • Introduction to the Regulator
  • Draft of Regulatory Business Plan (RBP) (Application Forms, Business flow processes & charts)
  • Preparation of Financial model for 3 years and draft of ICAAP and IRAP report.
  • Preparation of policies and manuals (Compliance, AML, Risk Management, Remuneration, Governance, Conflicts of Interests, Business Continuity Plan)
    • AUT – CORE: this form must be submitted by all applicants applying for a licence to carry out one or more financial services in or from DIFC. It covers information on the applicant, its activities, prospective clients and controllers;
    • AUT – IND: this form must be submitted by the individuals holding a mandatory function including directors, senior executive officer, finance officer, compliance officer and money laundering reporting officer; and
    • AUT-AMS: this form must be submitted by applicants applying to conduct financial services relating to arranging credit or deals in investment. The applicant will be required to submit this form as one of the Proposed Activities of DIFC CO includes arranging credits and deals in investment.
  • Draft of regulatory application for the company and individuals
  • Submission of Regulatory Application (with Policies and appointment of SEO, FO, MLRO, RO, CO)
  • Provision of full-time functions
    • SEO – Senior Executive Officer
    • FO – Finance Officer
    • RO – Risk Officer
    • MLRO – Money Laundering Reporting Officer
    • CO – Compliance Officer
  • Office lease
  • Introduction to the UAE Bank for opening an Account
  • Issuance of Regulator’s financial services license
  1. The DFSA will carry out a review of the application and enter into an ongoing dialogue with the applicant, which may involve interviews with the nominated authorised individuals.
  1. Once the DFSA is satisfied with the application and the applicant, it will issue an In-Principle approval to the applicant which will contain a number of conditions to be satisfied before granting of the final license, including:
  • incorporation or registration of the entity with the DIFC Registrar of Companies;
  • opening a local bank account and providing the DFSA with proof of remittance of capital; and
  • evidence of office space from which it will conduct its financial activities.
  1. Once the conditions on the in-principle approval are fulfilled, the DFSA will issue the formal license.

Wincore Advisory Group helps businesses to articulate their objectives and aspirations to set up ADGM Category 1 Financial Licence. Contact us at contact@wincoreadvisory.com

DIFC Category 3C License – Managing a Collective Investment Fund / Managing Assets

An Authorised Firm in this category may be licensed to carry on one or more Financial Services of Managing a Collective Investment Fund, Managing Assets, Providing Trust Services as a trustee of an express trust, Providing Custody (other than for a fund) and Managing a Profit Sharing Investment Account (received on a restricted basis). An Authorised Firm that has a 3C licence can also provide Financial Services in Category 4 but cannot provide Financial Services in Categories 1, 2, 3A or 3B.

Base Capital – US$ 500,000

Base capital requirement 3C Fund Manager – US$ 140,000 (to manage a Public Fund US$ 70,000 to manage exempt funds/QIFs).

Expenditure based capital requirement of 18/52 of annual operating expenditure (as the Fund Manager will hold or control Client Money)

Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.

 Note that additional capital requirements may be imposed by DFSA on the review of the application.

An applicant is required to submit an application to the DIFC’s regulatory body, the DFSA, which will consider the merits and suitability of the applicant, and the category of license for which the application is made.

The Application Process

  1. The DFSA has will informally review a draft Regulatory Business Plan and projected financial and, if satisfied, allow a full formal application (which includes a finalised Regulatory Business Plan to be submitted).

Wincore will assist you in the following:

  • Introduction to the Regulator
  • Draft of Regulatory Business Plan (RBP) (Application Forms, Business flow processes & charts)
  • Preparation of Financial model for 3 years and draft of ICAAP and IRAP report.
  • Preparation of policies and manuals (Compliance, AML, Risk Management, Remuneration, Governance, Conflicts of Interests, Business Continuity Plan)
    • AUT – CORE: this form must be submitted by all applicants applying for a licence to carry out one or more financial services in or from DIFC. It covers information on the applicant, its activities, prospective clients and controllers;
    • AUT – IND: this form must be submitted by the individuals holding a mandatory function including directors, senior executive officer, finance officer, compliance officer and money laundering reporting officer; and
    • AUT-AMS: this form must be submitted by applicants applying to conduct financial services relating to arranging credit or deals in investment. The applicant will be required to submit this form as one of the Proposed Activities of DIFC CO includes arranging credits and deals in investment.
  • Draft of regulatory application for the company and individuals
  • Submission of Regulatory Application (with Policies and appointment of SEO, FO, MLRO, RO, CO)
  • Provision of full-time functions
    • SEO – Senior Executive Officer
    • FO – Finance Officer
    • RO – Risk Officer
    • MLRO – Money Laundering Reporting Officer
    • CO – Compliance Officer
  • Office lease
  • Introduction to the UAE Bank for opening an Account
  • Issuance of Regulator’s financial services license
  1. The DFSA will carry out a review of the application and enter into an ongoing dialogue with the applicant, which may involve interviews with the nominated authorised individuals.
  1. Once the DFSA is satisfied with the application and the applicant, it will issue an In-Principle approval to the applicant which will contain a number of conditions to be satisfied before granting of the final license, including:
  • incorporation or registration of the entity with the DIFC Registrar of Companies;
  • opening a local bank account and providing the DFSA with proof of remittance of capital; and
  • evidence of office space from which it will conduct its financial activities.
  1. Once the conditions on the in-principle approval are fulfilled, the DFSA will issue the formal license.

Wincore Advisory Group helps businesses to articulate their objectives and aspirations to set up Category 3C Financial License DIFC. Contact us at contact@wincoreadvisory.com

DIFC Category 3D License – Providing or Operating a Payment Account, Executing Payment Transactions or Issuing Payment Instruments

An Authorised Firm in this category may be licensed to carry on one or more Financial Services of providing money services where the firm is providing or operating a payment account, executing payment transactions or issuing payment instruments. This includes creating and maintaining accounts for executing payment transactions, issuance of personalized sets of procedures agreed upon by the users and the provider, for initiation or execution of payment instructions. An Authorised Firm that has a 3D licence can also provide Financial Services in Category 4 but cannot provide Financial Services in Categories 1, 2, 3A or 3B, 3C or 5.

Base Capital – US$ 200,000

Expenditure based capital requirement  –  9/52 of annual operating expenditure

Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.

 Note that additional capital requirements may be imposed by DFSA on the review of the application.

DIFC Category 3D License – Licensing Process

An applicant is required to submit an application to the DIFC’s regulatory body, the DFSA, which will consider the merits and suitability of the applicant, and the category of license for which the application is made.

The Application Process

  1. The DFSA has will informally review a draft Regulatory Business Plan and projected financial and, if satisfied, allow a full formal application (which includes a finalised Regulatory Business Plan to be submitted).

Wincore will assist you in the following:

  • Introduction to the Regulator
  • Draft of Regulatory Business Plan (RBP) (Application Forms, Business flow processes & charts)
  • Preparation of Financial model for 3 years and draft of ICAAP and IRAP report.
  • Preparation of policies and manuals (Compliance, AML, Risk Management, Remuneration, Governance, Conflicts of Interests, Business Continuity Plan)
    • AUT – CORE: this form must be submitted by all applicants applying for a licence to carry out one or more financial services in or from DIFC. It covers information on the applicant, its activities, prospective clients and controllers;
    • AUT – IND: this form must be submitted by the individuals holding a mandatory function including directors, senior executive officer, finance officer, compliance officer and money laundering reporting officer; and
    • AUT-AMS: this form must be submitted by applicants applying to conduct financial services relating to arranging credit or deals in investment. The applicant will be required to submit this form as one of the Proposed Activities of DIFC CO includes arranging credits and deals in investment.
  • Draft of regulatory application for the company and individuals
  • Submission of Regulatory Application (with Policies and appointment of SEO, FO, MLRO, RO, CO)
  • Provision of full-time functions
    • SEO – Senior Executive Officer
    • FO – Finance Officer
    • RO – Risk Officer
    • MLRO – Money Laundering Reporting Officer
    • CO – Compliance Officer
  • Office lease
  • Introduction to the UAE Bank for opening an Account
  • Issuance of Regulator’s financial services license
  1. The DFSA will carry out a review of the application and enter into an ongoing dialogue with the applicant, which may involve interviews with the nominated authorised individuals.
  1. Once the DFSA is satisfied with the application and the applicant, it will issue an In-Principle approval to the applicant which will contain a number of conditions to be satisfied before granting of the final license, including:
  • incorporation or registration of the entity with the DIFC Registrar of Companies;
  • opening a local bank account and providing the DFSA with proof of remittance of capital; and
  • evidence of office space from which it will conduct its financial activities.
  1. Once the conditions on the in-principle approval are fulfilled, the DFSA will issue the formal license.

Wincore Advisory Group helps businesses to articulate their objectives and aspirations to set up Category 3D Financial License DIFC. Contact us at contact@wincoreadvisory.com

FAQ

DIFC and ADGM are the ones granting category 3D license

The required Individuals for a DIFC or ADGM category 3D license are the ones carrying out Licensed Functions in an Authorised Firm such as the Senior Executive Officer, the Compliance officer, the Money laundering reporting officer, the Finance Officer, and the risk officer and other main persons who are essential to the business operations (Technology officer, portfolio, or investment managers).

A DIFC or ADGM category 3D License covers the following activities: Providing or operating a payment account, executing payment transactions, or issuing payment instruments, Providing Money Services such as Payment Service provider (PSP) not Issuing Stored value.

USD 200,000 is the base capital requirement for a DIFC or ADGM category 3D license. Actual capital required to conduct a category 3 D License activity will depend on the nature, quantum of business and forecasted annual expenditure, as per the financial model of the proposed firm. Based on higher risks associated with the activities, the regulator may place higher entry-level requirements and restrictions on the license itself. Capital waivers may be available to the branch of a regulated financial institution having its head office in a recognized regulatory jurisdiction. The higher of the three components of capital for a category 3 D license is set to be the capital requirement: base capital, risk-based capital, and expense-based capital.

Under a DIFC or ADGM category 3D license a Stored Value means any electronically (including magnetically) stored monetary value as represented by a claim on the issuer which is issued on receipt of funds or other assets for the purpose of making Payment Transactions.

Under Law No. (5) of 2021 relating to the DIFC on the rules governing the promotion and supply of services & products outside the DIFC, a Category 3D Financial License DIFC allows the provision of services and products outside the DIFC, if they are primarily provided out of the firm’s office in the DIFC area. Marketing is also allowed outside the DIFC. However, active funds marketing would require a passporting regime where the fund manager register for a passport for the fund to be marketed in the UAE.

Following the introductory call to the regulator, the Regulatory Business Plan (RBP) with 3 years financial projections are submitted to the regulator for review. Subjects to its comments, a full application with its annexes (including processes, policies, structure chart, KYC and AML supportive documentation, Key individuals’ KYC) are submitted for acceptance within 10 business days while the detailed review shall take a minimum of 2 months. During this period, exchanges are made with the applicant. Then after, an In-Principle approval, with the conditions to be fulfilled (such as incorporation, capitalisation, bank account opening, obtention of professional indemnity, rent of an office), is granted by the regulator in case the application is fully accepted. Once the conditions fulfilled, a final submission is made to the DFSA or FSRA for the regulator to issue the Financial Service Permissions under the DIFC or Category 3D Financial License ADGM.

DIFC Category 4 License – Arranging Credit or Deals in Investments / Advising on Financial Products

Authorised Firms in this category can do one or more of Arranging Deals in Investments, Advising on Financial Products, Arranging Custody, Insurance Intermediation, Insurance Management, Operating an Alternative Trading System, Providing Fund Administration, Arranging Credit and Advising on Credit, Operating a Crowdfunding Platform and/or Providing Trust Services (other than as a trustee of an express trust). In Categories 2-4, Authorised Firms may apply to conduct their business in a wholly Sharia Compliant manner or through an Islamic Window.

Base Capital – US$ 10,000

Operating a crowdfunding platform while holding client money –$140,000

Expenditure-based capital requirement of 6/52 of annual operating expenditure (18/52 if will holding or controlling Client Money).

 Note that additional capital requirements may be imposed by DFSA on the review of the application.

An applicant is required to submit an application to the DIFC’s regulatory body, the DFSA, which will consider the merits and suitability of the applicant, and the category of license for which the application is made.

The Application Process

  1. The DFSA has will informally review a draft Regulatory Business Plan and projected financial and, if satisfied, allow a full formal application (which includes a finalised Regulatory Business Plan to be submitted).

Wincore will assist you in the following:

  • Introduction to the Regulator
  • Draft of Regulatory Business Plan (RBP) (Application Forms, Business flow processes & charts)
  • Preparation of Financial model for 3 years and draft of ICAAP and IRAP report.
  • Preparation of policies and manuals (Compliance, AML, Risk Management, Remuneration, Governance, Conflicts of Interests, Business Continuity Plan)
    • AUT – CORE: this form must be submitted by all applicants applying for a licence to carry out one or more financial services in or from DIFC. It covers information on the applicant, its activities, prospective clients and controllers;
    • AUT – IND: this form must be submitted by the individuals holding a mandatory function including directors, senior executive officer, finance officer, compliance officer and money laundering reporting officer; and
    • AUT-AMS: this form must be submitted by applicants applying to conduct financial services relating to arranging credit or deals in investment. The applicant will be required to submit this form as one of the Proposed Activities of DIFC CO includes arranging credits and deals in investment.
  • Draft of regulatory application for the company and individuals
  • Submission of Regulatory Application (with Policies and appointment of SEO, FO, MLRO, RO, CO)
  • Provision of full-time functions
    • SEO – Senior Executive Officer
    • FO – Finance Officer
    • RO – Risk Officer
    • MLRO – Money Laundering Reporting Officer
    • CO – Compliance Officer
  • Office lease
  • Introduction to the UAE Bank for opening an Account
  • Issuance of Regulator’s financial services license
  1. The DFSA will carry out a review of the application and enter into an ongoing dialogue with the applicant, which may involve interviews with the nominated authorised individuals.
  1. Once the DFSA is satisfied with the application and the applicant, it will issue an In-Principle approval to the applicant which will contain a number of conditions to be satisfied before granting of the final license, including:
  • incorporation or registration of the entity with the DIFC Registrar of Companies;
  • opening a local bank account and providing the DFSA with proof of remittance of capital; and
  • evidence of office space from which it will conduct its financial activities.
  1. Once the conditions on the in-principle approval are fulfilled, the DFSA will issue the formal license.

Wincore Advisory Group helps businesses to articulate their objectives and aspirations to set up Category 4 Financial License DIFC. Contact us at contact@wincoreadvisory.com

DIFC Category 5 License – Islamic Financial Institution

An Islamic Financial Institution carries out its entire business in accordance with the principles of Sharia and manages a profit-sharing investment account (received on an unrestricted basis).

Base Capital – US$ 10,000,000

Risk-based Capital minimum based on the totality of risks – CET1, 6%; Tier 1, 8%.

Capital Requirement is not applicable to a Branch set-up of an existing regulated bank.

Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.

 Note that additional capital requirements may be imposed by DFSA on the review of the application.

An applicant is required to submit an application to the DIFC’s regulatory body, the DFSA, which will consider the merits and suitability of the applicant, and the category of license for which the application is made.

The Application Process

  1. The DFSA has will informally review a draft Regulatory Business Plan and projected financial and, if satisfied, allow a full formal application (which includes a finalised Regulatory Business Plan to be submitted).

Wincore will assist you in the following:

  • Introduction to the Regulator
  • Draft of Regulatory Business Plan (RBP) (Application Forms, Business flow processes & charts)
  • Preparation of Financial model for 3 years and draft of ICAAP and IRAP report.
  • Preparation of policies and manuals (Compliance, AML, Risk Management, Remuneration, Governance, Conflicts of Interests, Business Continuity Plan)
    • AUT – CORE: this form must be submitted by all applicants applying for a licence to carry out one or more financial services in or from DIFC. It covers information on the applicant, its activities, prospective clients and controllers;
    • AUT – IND: this form must be submitted by the individuals holding a mandatory function including directors, senior executive officer, finance officer, compliance officer and money laundering reporting officer; and
    • AUT-AMS: this form must be submitted by applicants applying to conduct financial services relating to arranging credit or deals in investment. The applicant will be required to submit this form as one of the Proposed Activities of DIFC CO includes arranging credits and deals in investment.
  • Draft of regulatory application for the company and individuals
  • Submission of Regulatory Application (with Policies and appointment of SEO, FO, MLRO, RO, CO)
  • Provision of full-time functions
    • SEO – Senior Executive Officer
    • FO – Finance Officer
    • RO – Risk Officer
    • MLRO – Money Laundering Reporting Officer
    • CO – Compliance Officer
  • Office lease
  • Introduction to the UAE Bank for opening an Account
  • Issuance of Regulator’s financial services license
  1. The DFSA will carry out a review of the application and enter into an ongoing dialogue with the applicant, which may involve interviews with the nominated authorised individuals.
  1. Once the DFSA is satisfied with the application and the applicant, it will issue an In-Principle approval to the applicant which will contain a number of conditions to be satisfied before granting of the final license, including:
  • incorporation or registration of the entity with the DIFC Registrar of Companies;
  • opening a local bank account and providing the DFSA with proof of remittance of capital; and
  • evidence of office space from which it will conduct its financial activities.
  1. Once the conditions on the in-principle approval are fulfilled, the DFSA will issue the formal license.

Wincore Advisory Group helps businesses to articulate their objectives and aspirations to set up ADGM Category 1 Financial Licence. Contact us at contact@wincoreadvisory.com

DIFC Representative Office

A DIFC representative office is an Authorised Firm and is regulated by the DFSA. However, it is not included in the above Authorised Firms categorisation table because it does not have any capital requirements as per the DFSA PIB Module. This is because a DIFC Representative Office can only be set up as a branch of an already established firm.

Any firm in a financial services sector can apply to be a Representative Office in DIFC but they must be regulated in an acceptable home jurisdiction (other than the DIFC). A representative office’s activities are confined to the general marketing of financial services and financial products already being offered from a location outside the DIFC by its head office or a member of its group.

What can the DIFC Representative Office do?

  • The DIFC Representative Office is only allowed to promote financial products and services offered by its parent company and by other group financial services providers(if any).
  • The DIFC Representative Office is a branch of its foreign parent company.
  • The DIFC Representative Office can make introductions/referrals to the parent entity.
  • The DIFC Representative Office can distribute marketing material (including fund prospectuses).
  • The DIFC Representative Office can distribute investment research.
  • The DIFC Representative Office can provide information on the products and services of the parent entity.
  • The activity of the DIFC Representative Office can be changed after 1 year of operation and it can be upgraded to a financial license, however, it will always remain a branch of the foreign company.

 What you cannot do with the DIFC Representative Office

  • The DIFC Representative Office is not allowed to advise on products or arrange deals in investment.
  • The DIFC Representative Office cannot provide opinions, recommendations, or specific investment advice.
  • The DIFC Representative Office cannot receive or transmit orders.
  • The DIFC Representative Office cannot market funds that do not meet the stipulated criteria.
  • The DIFC Representative Office cannot invoice clients for services.

A DIFC Representative Office has no regulatory capital requirements and has also no share capital (being a branch of a foreign company).

An applicant is required to submit an application to the DIFC’s regulatory body, the DFSA, which will consider the merits and suitability of the applicant, and the category of license for which the application is made.

The Application Process

  1. The DFSA has will informally review a draft Regulatory Business Plan and projected financial and, if satisfied, allow a full formal application (which includes a finalised Regulatory Business Plan to be submitted).

Wincore will assist you in the following:

  • Regulatory Applications for the entity and for the authorized individuals (Principal Representative, MLRO, Directors)
  • Preparation of policies and manuals
    • Compliance Manual (including Policy of Independence, Outside Business Interests Policy, Personal Account Dealing Policy, Code of Ethics, and template forms and registers)
    • Anti-Money Laundering Policy and Procedures
    • Risk Management Policy and Register
    • Corporate Governance Framework and Terms of Reference
    • Conflict of Interests Policy and Register
    • Remuneration Policy
    • Business Continuity Plan
    • Compliance Monitoring Program
  • Submission of Regulatory Application
  • Provision of full-time/part-time functions
    • ED/NED – Executive Director/Non-Executive Director
    • PR- Principal Representative
    • MLRO – Money Laundering Reporting Officer
  • Office lease assistance
  • Introduction to the UAE Bank for opening an Account
  • Liaison with the Regulator to address the queries and project management until the in-principle approval is obtained from the Regulator
  • Liaison with the Regulator until Issuance of Regulator’s financial services license
  1. The DFSA will carry out a review of the application and enter into an ongoing dialogue with the applicant, which may involve interviews with the nominated authorised individuals.
  1. Once the DFSA is satisfied with the application and the applicant, it will issue an In-Principle approval to the applicant which will contain a number of conditions to be satisfied before granting of the final license, including:
  • incorporation or registration of the entity with the DIFC Registrar of Companies;
  • opening a local bank account and providing the DFSA with proof of remittance of capital; and
  • evidence of office space from which it will conduct its financial activities.
  1. Once the conditions on the in-principle approval are fulfilled, the DFSA will issue the formal license.
DOWNLOAD DIFC REPRESENTATIVE OFFICE SETUP HERE TO READ MORE Wincore Advisory Group helps businesses to articulate their objectives and aspirations to set up ADGM Category 1 Financial Licence. Contact us at contact@wincoreadvisory.com

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