• MIR 2.15 MIR 2.15 Applications for recognition

    • Application process

      • MIR 2.15.1

        An applicant for Recognised Body status must demonstrate to the Regulator that it is able to meet the Recognition Requirements before a recognition order can be made. Once it has been recognised, a Recognised Body must comply with the Recognition Requirements at all times.

      • MIR 2.15.2

        The Regulator must refuse to make a recognition order in relation to a body applying for recognition as a Recognised Body if it appears to the Regulator that an existing or proposed regulatory provision of the applicant in connection with the applicant's business as an investment exchange or the provision by the applicant of Clearing Services imposes, or will impose, an excessive requirement on Persons directly or indirectly affected by it. A requirement is excessive if it is not required by any Abu Dhabi Global Market law and either:

        (a) it is not justified as pursuing a reasonable regulatory objective; or
        (b) it is disproportionate to the end to be achieved,

        in either case, having regard to the effect of existing legal and other requirements, the global character of financial services and markets and the international mobility of activity, the desirability of facilitating innovation and the impact of the proposed provision on market confidence.

      • MIR 2.15.3 MIR 2.15.3

        There is no standard application form. A prospective applicant should contact the Regulator at an early stage for advice on the preparation, scheduling and practical aspects of its application. It is very important that an application is comprehensively prepared, demonstrates satisfaction of all Recognition Requirements and is based on a well-developed and clear proposal.

        • Guidance

          There is no standard application form. A prospective Applicant should contact the Regulator at an early stage for advice on the preparation, scheduling and practical aspects of its application. It is very important that an application is comprehensively prepared, demonstrates satisfaction of all Recognition Requirements and is based on a well‐ developed and clear proposal.

      • MIR 2.15.4

        An application should include the following information:

        (a) Details of the applicant's constitution including copies of its memorandum and articles of association (or similar or analogous documents) and any agreements between the applicant, its owners or other Persons relating to its constitution or governance.
        (b) Details of the applicant's structure and ownership, including the identity and scale of interests of the Persons who are in a position to exercise significant influence over the management of the proposed Recognised Body, whether directly or indirectly in a structure chart.
        (c) A full organisation chart and a list of the posts to be held by Key Individuals (with details of the duties and responsibilities) and the names of the Persons proposed for these appointments when these names are available.
        (d) Copies of the applicant's proposed rules and procedures.
        (e) Information, evidence and explanatory material (including supporting documentation) necessary to demonstrate to the Regulator that the Recognition Requirements will be met.
        (f) Details of all business to be conducted by the applicant, whether or not a Regulated Activity.
        (g) Details of the facilities which the applicant plans to operate, including details of the trading platform, settlement arrangements, Clearing Services and custody services which it plans to supply.
        (h) Copies of the last three annual reports and accounts and, for the current financial year, quarterly management accounts.
        (i) Its business plan for the first three years of operation as a Recognised Body.
        (j) Details of its auditors, bankers, solicitors and any Persons providing corporate finance advice or similar services (such as reporting accountants) to the applicant.
        (k) Details of any relevant functions to be outsourced or delegated, with copies of relevant agreements.
        (l) Details of information technology systems and of arrangements for their supply, management, maintenance and upgrading, and security.
        (m) Details of all plans to minimise disruption to operation of its facilities in the event of the failure of its information technology systems.
        (n) Details of internal systems for financial control, arrangements for risk management and insurance arrangements to cover operational and other risks.
        (o) Details of its arrangements for managing any counterparty risks, including details of margining systems, guarantee funds and insurance arrangements.
        (p) Details of internal arrangements to safeguard confidential or privileged information and for handling conflicts of interest.
        (q) Details of arrangements for complying with the notification rules and other requirements to supply information to the Regulator.
        (r) Details of the arrangements to be made for monitoring and enforcing compliance with its rules and with its Clearing, settlement and default arrangements.
        (s) A summary of the legal due diligence carried out in relation to ascertaining the enforceability of its rules (including Default Rules) and arrangements for margin against any of its Members based outside the Abu Dhabi Global Market, and the results and conclusions reached.
        (t) Details of the procedures to be followed for declaring a Member in default, and for taking action after that event to close out positions, protect the interests of other Members and enforce its Default Rules.
        (u) Details of Membership selection criteria, rules and procedures.
        (v) Details of arrangements for recording transactions effected by, or cleared through, its facilities.
        (w) Details of arrangements for detecting financial crime and market abuse, including arrangements for complying with money laundering law.
        (x) Details of criteria, rules and arrangements for selecting Specified Investments to be admitted to trading on a Recognised Investment Exchange, or to be cleared by a Recognised Clearing House and, where relevant, details of how information regarding Specified Investments will be disseminated to users of its facilities.
        (y) Details of arrangements for cooperating with the Regulator and other appropriate authorities, including draft memoranda of understanding or letters.
        (z) Details of the procedures and arrangements for making and amending rules, including arrangements for consulting on rule changes.
        (aa) Details of disciplinary and appeal procedures, and of the arrangements for investigating complaints.
        (bb) Any information required in accordance with directions issued by the Regulator.
        (cc) The appropriate fee.

      • MIR 2.15.5

        The Regulator may require the applicant to provide additional information, and may require the applicant to verify any information in any manner. In view of their likely importance for any application, the Regulator will normally wish to arrange for its own inspection of an applicant's information technology systems.

    • Timing

      • MIR 2.15.6

        The application must be determined by the Regulator before the end of the period of six months beginning with the date on which it receives the completed application.

      • MIR 2.15.7

        At any time after making a formal application, the applicant may make amendments to its rules, guidance or any other part of its application submitted to the Regulator, provided that it updates its application accordingly.

      • MIR 2.15.8 MIR 2.15.8

        The Regulator will keep the applicant informed of the progress of the application. It may be necessary to ask the applicant to clarify or amplify or discuss some aspects of its proposals, and the Regulator may invite the applicant to attend meetings for that purpose.

        • Guidance

          The Regulator will keep the Applicant informed of the progress of the application. It may be necessary to ask the Applicant to clarify or amplify or discuss some aspects of its proposals, and the Regulator may invite the Applicant to attend meetings for that purpose.

      • MIR 2.15.9

        The Regulator will notify the applicant if it does not give its approval.