• Chapter 1 Chapter 1 Exemption

    • General

      • 119. Exemption for Recognised Investment Exchanges and Recognised Clearing Houses

        (1) A Recognised Investment Exchange is exempt from the General Prohibition as respects any Regulated Activity —
        (a) which is carried on as a part of the Recognised Investment Exchange's business as an investment exchange; or
        (b) which is carried on for the purposes of, or in connection with, the provision by the exchange of services designed to facilitate the provision of clearing services by another person.
        (2) A Recognised Clearing House is exempt from the General Prohibition as respects any Regulated Activity —
        (a) which is carried on for the purposes of, or in connection with, the provision of clearing services by the Recognised Clearing House; or
        (b) which is carried on for the purposes of, or in connection with, the provision by the Recognised Clearing House of services designed to facilitate the provision of clearing services by another person.
        (3) The Regulator may make Rules which amend paragraph (b) of subsection (1) or (2).

      • 120. Qualification for recognition

        The Regulator may make Rules setting out the requirements ("Recognition Requirements") —

        (a) which must be satisfied by an investment exchange or clearing house if it is to qualify as a body in respect of which the Regulator may make a recognition order under this Part; and
        (b) which, if a recognition order is made, it must continue to satisfy, if it is to remain a Recognised Body.

    • Applications for recognition

      • 121. Application by an investment exchange

        (1) Any Body Corporate may apply to the Regulator for an order declaring it to be a Recognised Investment Exchange for the purposes of these Regulations.
        (2) An Application under subsection (1) must be made in such manner as the Regulator may by Rules require.

      • 122. Application by a clearing house

        (1) A Body Corporate may, where it intends to provide clearing services in the Abu Dhabi Global Market, apply to the Regulator for an order declaring it to be for the purposes of these Regulations a Recognised Clearing House.
        (2) An Application under subsection (1) must be made in such manner as the Regulator may by Rules require.

      • 123. Applications: supplementary

        (1) At any time after receiving an Application and before determining it, the Regulator may require the Applicant to provide such further information as it reasonably considers necessary to enable it to determine the Application.
        (2) Information which the Regulator requires in connection with an Application must be provided in such form, or verified in such manner, as the Regulator may direct.
        (3) Different directions may be given, or requirements imposed, by the Regulator with respect to different Applications.

      • 124. Recognition orders

        (1) If it appears to the Regulator that the Applicant satisfies the Recognition Requirements applicable in its case, the Regulator may —
        (a) where the Application is made under section 121, make a recognition order declaring the Applicant to be a Recognised Investment Exchange;
        (b) where the Application is made under section 122, make a recognition order declaring the Applicant to be a Recognised Clearing House.
        (2) In considering an Application made under section 121 or 122, the Regulator may have regard to any information which it considers is relevant to the Application.
        (3) A recognition order must specify a date on which it is to take effect.
        (4) Section 135 has effect in relation to a decision to refuse to make a recognition order —
        (a) as it has effect in relation to a decision to revoke such an order; and
        (b) as if references to a Recognised Body were references to the Applicant.

      • 125. Variation of a recognition order

        (1) On an application made to it, the Regulator may vary a recognition order by adding or removing a specified service or activity or class of Financial Instruments.
        (2) The Regulator may at any time vary a recognition order for the purpose of correcting an error in, or omission from, the order.

      • 126. Liability in relation to Recognised Body's Regulatory Functions

        A Recognised Body and its officers and staff are not to be liable in damages for anything done or omitted in the discharge of the Recognised Body's Regulatory Functions unless it is shown that the act or omission was in bad faith.

      • 127. Non-Abu Dhabi Global Market Investment Exchanges and Non-Abu Dhabi Global Market Clearing Houses

        (1) An Application under sections 121 or 122 by a Non-Abu Dhabi Global Market Applicant must comply with such requirements relating to Non-Abu Dhabi Global Market Recognised Bodies as the Regulator may specify by Rules.
        (2) If it appears to the Regulator that a Non-Abu Dhabi Global Market Applicant satisfies the requirements of subsection (3) it may make a recognition order declaring the Applicant to be —
        (a) a Recognised Investment Exchange;
        (b) a Recognised Clearing House.
        (3) The requirements are that —
        (a) investors are afforded protection equivalent to that which they would be afforded if the body concerned were required to comply with Recognition Requirements, other than any such requirements which are expressed in Rules under section 120 not to apply for the purposes of this paragraph;
        (b) there are adequate procedures for dealing with a person who is unable, or likely to become unable, to meet his obligations in respect of one or more Market Contracts connected with the investment exchange or clearing house;
        (c) the Applicant is able and willing to co-operate with the Regulator by the sharing of information and in other ways;
        (d) adequate arrangements exist for co-operation between the Regulator and those responsible for the supervision of the Applicant in the country or territory in which the Applicant's head office is situated.
        (4) In considering whether it is satisfied as to the requirements mentioned in subsections (3)(a) and (b), the Regulator is to have regard to —
        (a) the relevant law and practice of the country or territory in which the Applicant's head office is situated, including, with respect to a Non-Abu Dhabi Global Market Recognised Clearing House applicant, the equivalence of such laws to those set out in Chapter 3 and Chapter 4 of this Part, and Part 13 of these Regulations;
        (b) the rules and practices of the Applicant.
        (5) In relation to a Non-Abu Dhabi Global Market Applicant and a body or association declared to be a Recognised Investment Exchange or Recognised Clearing House by a recognition order made by virtue of subsection (2) —
        (a) the reference in section 139(1) to Recognition Requirements is to be read as a reference to matters corresponding to the matters in respect of which provision is made in the Recognition Requirements;
        (b) sections 132(1) and 134(2) have effect as if the requirements mentioned in section 132(1)(a) and section 134(2)(a) were those of subsections (3)(a), (b), and (c) of this section;
        (c) section 134(2) has effect as if the grounds on which a recognition order may be revoked under that provision included the ground that in the opinion of the appropriate regulator arrangements of the kind mentioned in subsection (3)(d) no longer exist.

    • Publication of information by Recognised Investment Exchange

      • 128. Publication of information by Recognised Investment Exchange

        (1) A Recognised Investment Exchange must as soon as practicable after a recognition order is made in respect of it publish such particulars of the ownership of the exchange as the Regulator may reasonably require.
        (2) The particulars published under subsection (1) must include particulars of the identity and scale of interests of the persons who are in a position to exercise significant influence over the management of the exchange, whether directly or indirectly.
        (3) If an Ownership Transfer takes place in relation to a Recognised Investment Exchange, the exchange must as soon as practicable after becoming aware of the transfer publish such particulars relating to the transfer as the Regulator may reasonably require.
        (4) A Recognised Investment Exchange must publish such particulars of any decision it makes to suspend or remove a Financial Instrument from trading on a Recognised Investment Exchange operated by it as the Regulator may reasonably require.
        (5) The Regulator may determine the manner of publication under subsections (1), (3) and (4) and the timing of publication under subsection (4).
        (6) This section does not apply to a Non-Abu Dhabi Global Market Investment Exchange.

    • Supervision

      • 129. Notification requirements

        (1) The Regulator may make Rules requiring a Recognised Body to give it —
        (a) notice of such events relating to the body as may be Specified; and
        (b) such information in respect of those events as may be Specified.
        (2) The Rules may also require a Recognised Body to give the Regulator, at such times or in respect of such periods as may be Specified, such information relating to the body as may be Specified.
        (3) An obligation imposed by the Rules extends only to a notice or information which the Regulator may reasonably require for the exercise of its functions under these Regulations.
        (4) The Rules may require information to be given in a Specified form and to be verified in a Specified manner.
        (5) If a Recognised Body —
        (a) alters or revokes any of its rules or guidance; or
        (b) proposes to make new rules, makes new rules or issues new guidance;
        it must give written notice to the Regulator without delay.
        (6) If a Recognised Investment Exchange makes a change —
        (a) in the arrangements it makes for the provision by another person of clearing services in respect of transactions effected on the exchange; or
        (b) in the criteria which it applies when determining to whom it will provide services falling within section 119(1)(b);
        it must give written notice to the Regulator without delay.
        (7) If a Recognised Clearing House makes a change —
        (a) in the Recognised Investment Exchanges for whom it provides clearing services or services falling within section 119(2)(b); or
        (b) in the criteria which it applies when determining to whom (other than Recognised Investment Exchanges) it will provide clearing services or services falling within section 119(2)(b);
        it must give written notice to the Regulator without delay.
        (8) Subsections (5) to (7) do not apply to a Non-Abu Dhabi Global Market Investment Exchange or a Non-Abu Dhabi Global Market Clearing House.

      • 130. Modification or waiver of Rules

        (1) The Regulator may, on the application or with the consent of a Recognised Body, direct that Rules made under section 129 or 131
        (a) are not to apply to the body; or
        (b) are to apply to the body with such modifications as may be specified in the Direction.
        (2) An application must be made in such manner as the Regulator may direct.
        (3) Subsections (4) to (6) apply to a Direction given under subsection (1).
        (4) The Regulator may not give a Direction unless it is satisfied that —
        (a) compliance by the Recognised Body with the Rules, or with the Rules as unmodified, would be unduly burdensome or would not achieve the purpose for which the Rules were made; and
        (b) the Direction would not result in undue risk to persons whose interests the Rules are intended to protect.
        (5) A Direction may be given subject to conditions.
        (6) The Regulator may —
        (a) revoke a Direction; or
        (b) vary it on the application, or with the consent, of the Recognised Body to which it relates.

      • 131. Notification: Non-Abu Dhabi Global Market Investment Exchanges and Non-Abu Dhabi Global Market Clearing Houses

        (1) At least once a year, every Non-Abu Dhabi Global Market Investment Exchange and Non-Abu Dhabi Global Market Clearing House must provide the Regulator with a report.
        (2) The report must contain a statement as to whether any events have occurred which are likely to affect the Regulator's assessment of whether the requirements set out in section 127(3) have been satisfied.
        (3) The report must also contain such information as may be specified in the Rules made by the Regulator.

      • 132. Regulator's power to give Directions

        (1) This section applies if it appears to the Regulator that a Recognised Body —
        (a) has failed, or is likely to fail, to satisfy the Recognition Requirements; or
        (b) has failed to comply with any other obligation imposed on it by or under these Regulations.
        (2) The Regulator may direct the body to take specified steps for the purpose of securing the body's compliance with —
        (a) the Recognition Requirements; or
        (b) any obligation of the kind in question.
        (3) In the case of a Recognised Body other than a Non-Abu Dhabi Global Market Investment Exchange or Non-Abu Dhabi Global Market Clearing House, those steps may include —
        (a) the granting to the Regulator of access to the premises of the body for the purpose of inspecting —
        (i) those premises; or
        (ii) any Documents on the premises which appear to the Regulator to be relevant for the purpose mentioned in subsection (2);
        (b) the suspension of the carrying on of any Regulated Activity by the body for the period specified in the Direction.
        (4) A Direction under this section is enforceable, on the application of the Regulator, by an injunction.
        (5) The fact that a rule made by a Recognised Body has been altered in response to a Direction given by the Regulator does not prevent it from being subsequently altered or revoked by the Recognised Body.

      • 133. Additional power to direct Recognised Clearing Houses

        (1) The Regulator may direct a Recognised Clearing House to take, or refrain from taking, specified action if the Regulator is satisfied that it is necessary to give the Direction, having regard to the public interest in —
        (a) protecting and enhancing the stability of the Abu Dhabi Global Market Financial System;
        (b) maintaining public confidence in the stability of the Abu Dhabi Global Market Financial System;
        (c) maintaining the continuity of the clearing services provided by the Recognised Clearing House; and
        (d) maintaining and enhancing the financial resilience of the Recognised Clearing House.
        (2) The Direction may, in particular —
        (a) specify the time for compliance with the Direction;
        (b) require the rules of the Recognised Clearing House to be amended; and
        (c) override such rules (whether generally or in their application to a particular case).
        (3) The Direction may not require the Recognised Clearing House —
        (a) to take any steps for the purpose of securing its compliance with —
        (i) the Recognition Requirements; or
        (ii) any obligation of a kind mentioned in section 132(1)(b); or
        (b) to accept a transfer of property, rights or liabilities of another Recognised Clearing House.
        (4) If the Direction is given in reliance on section 135(7), the Regulator must, within a reasonable time of giving the Direction, give the Recognised Clearing House a statement of its reasons —
        (a) for giving the Direction; and
        (b) for relying on section 135(7).
        (5) A Direction under this section is enforceable, on the application of the Regulator, by an injunction.
        (6) The Regulator may revoke a Direction given under this section.

      • 134. Revoking recognition

        (1) A recognition order in respect of a Recognised Investment Exchange or in respect of a Recognised Clearing House may be revoked by an order made by the Regulator at the request, or with the consent, of the Recognised Body concerned.
        (2) If it appears to the Regulator that a Recognised Body —
        (a) is failing, or has failed, to satisfy the Recognition Requirements; or
        (b) is failing, or has failed, to comply with any other obligation imposed on it by or under these Regulations;
        it may make an order revoking the recognition order for that body.
        (3) If it appears to the Regulator that a Recognised Body —
        (a) has not carried on the business of an investment exchange or (as the case may be) of a clearing house during the period of 12 months beginning with the day on which the recognition order took effect in relation to it; or
        (b) has not carried on the business of an investment exchange or (as the case may be) of a clearing house at any time during the period of six months ending with the Relevant Day;
        it may make an order revoking the recognition order for that body.
        (4) Subsection (3) does not apply to a Non-Abu Dhabi Global Market Investment Exchange or Non-Abu Dhabi Global Market Clearing House.
        (5) An order under this section (a "Revocation Order") must specify the date on which it is to take effect.
        (6) In the case of a Revocation Order made under subsection (2) or (3), the specified date must not be earlier than the end of the period of three months beginning with the day on which the order is made.
        (7) A Revocation Order may contain such transitional provisions as the Regulator thinks necessary or expedient.

      • 135. Directions and revocation: procedure

        (1) Before giving a Direction under sections 132 or 133 or making a Revocation Order under section 134(2) or (3), the Regulator must give written notice of its intention to do so to the Recognised Body concerned.
        (2) A notice under subsection (1) must —
        (a) state why the Regulator intends to give the Direction or make the order; and
        (b) draw attention to the right to make representations conferred by subsection (3).
        (3) Before the end of the period for making representations, the Recognised Body may make representations to the Regulator.
        (4) The period for making representations is such period as is specified in the notice (which may, in any particular case, be extended by the Regulator).
        (5) In deciding whether to —
        (a) give a Direction; or
        (b) make a Revocation Order;
        the Regulator must have regard to any representations made in accordance with subsection (3).
        (6) When the Regulator has decided to give a Direction under sections 132 or 133 or make the proposed Revocation Order, it must give the Recognised Body written notice of its decision.
        (7) If the Regulator reasonably considers it necessary to do so, it may give a Direction under section 132 or 133
        (a) without following the procedure set out in this section; or
        (b) if the Regulator has begun to follow that procedure, regardless of whether the period for making representations has expired.
        (8) If the Regulator has, in relation to a particular matter, followed the procedure set out in subsections (1) to (5), it need not follow it again if, in relation to that matter, it decides to take action other than that specified in its notice under subsection (1).

      • 136. Complaints about recognised bodies

        The Regulator must make arrangements for the investigation of any Relevant Complaint about a Recognised Body.

    • Power to disallow excessive Regulatory Provision

      • 137. Power of the Regulator

        (1) This section applies where a Recognised Body proposes to make any Regulatory Provision in connection with —
        (a) its business as an investment exchange;
        (b) the provision by it of clearing services; or
        (c) the provision by it of services falling within section 119(1)(b) or (2)(b).
        (2) If it appears to the Regulator —
        (a) that the proposed provision will impose a Requirement on persons affected (directly or indirectly) by it; and
        (b) that the Requirement is excessive;
        the Regulator may direct that the proposed provision must not be made.
        (3) A Requirement is excessive if —
        (a) it is not required under any enactment or rule of law in the Abu Dhabi Global Market; and
        (b) either —
        (i) it is not justified as pursuing a reasonable regulatory objective; or
        (ii) it is disproportionate to the end to be achieved.
        (4) In considering whether a Requirement is excessive, the Regulator must have regard to all the relevant circumstances, including —
        (a) the effect of existing legal and other requirements;
        (b) the global character of financial services and markets and the international mobility of activity;
        (c) the desirability of facilitating innovation; and
        (d) the impact of the proposed provision on market confidence.
        (5) Any provision made in contravention of a Direction under this section is of no effect.

      • 138. Power to disallow excessive Regulatory Provision: supplementary

        (1) In section 137
        (a) "Regulatory Provision" means any rule, guidance, arrangements, policy or practice; and
        (b) references to making provision shall be read accordingly as including, as the case may require, issuing guidance, entering into arrangements or adopting a policy or practice.
        (2) For the purposes of those sections, a variation of a proposal is treated as a new proposal.
        (3) Those sections do not apply to a Non-Abu Dhabi Global Market Investment Exchange or Non-Abu Dhabi Global Market Clearing House.