Chapter 1 Chapter 1 Dealing in Investments
4. Dealing in Investments as Principal
Buying, Selling, subscribing for or underwriting Financial Instruments as principal is a specified kind of activity.
5. Absence of holding out etc.(1) Subject to sub-paragraph (2), a person ("A") does not carry on an activity of the kind specified by paragraph 4 by entering into a transaction which relates to a Security (or is the assignment of a Contract of Insurance, or of an investment specified in paragraph 98, so far as relevant to such a contract), unless —(a) A holds himself out as willing, as principal, to Buy, Sell or subscribe for investments of the kind to which the transaction relates at prices determined by him generally and continuously rather than in respect of each particular transaction;(b) A holds himself out as engaging in the business of Buying investments of the kind to which the transaction relates with a view to Selling them;(c) A holds himself out as engaging in the business of underwriting investments of the kind to which the transaction relates; or(d) A regularly solicits members of the public with the purpose of inducing them, as principals or agents, to enter into transactions constituting activities of the kind specified by paragraph 4, and the transaction is entered into as a result of his having solicited members of the public in that manner.(2) This paragraph does not apply where A enters into the transaction as bare trustee for another person and is acting on that other person's instructions.
6. Deals with or through Authorised Persons or Exempt Persons or through foreign licensed persons(1) A person who is not an Authorised Person does not carry on an activity of the kind specified by paragraph 4 by entering into a transaction relating to a Derivative or a Contract of Insurance —(a) with or through an Authorised Person, or an Exempt Person acting in the course of a business comprising a Regulated Activity in relation to which he is exempt; or(b) through an office outside the Abu Dhabi Global Market maintained by a party to the transaction, and with or through a person whose head office is situated outside the Abu Dhabi Global Market and whose ordinary business involves him in carrying on activities of the kind specified by any of paragraphs 4, 12, 16, 28, 43, 56, 59, 60, 61 or, so far as relevant to any of those paragraphs, paragraphs 64 or 70 (or would do so apart from any exclusion from any of those paragraphs made by this Schedule).
7. Acceptance of instruments creating or acknowledging indebtedness(1) A person does not carry on an activity of the kind specified by paragraph 4 by accepting an instrument creating or acknowledging indebtedness in respect of any loan, Credit, guarantee or other similar financial accommodation or assurance which he has made, granted or provided.(2) The reference in sub-paragraph (1) to a person accepting an instrument includes a reference to a person becoming a party to an instrument otherwise than as a debtor or a surety.
8. Issue by a Company of its own Shares etc.(1) There is excluded from paragraph 4 the issue by a Company of its own Shares or share warrants, and the issue by any person of his own debentures or debenture warrants.(2) In this paragraph —(a) "Company" means any Body Corporate other than an open-ended investment company;(b) "Shares" and "debentures" include any investment of the kind specified by paragraphs 87 or 88 respectively;(c) "share warrants" and "debenture warrants" mean any investment of the kind specified by paragraph 91 which relates to shares in the Company concerned or, as the case may be, debentures issued by the person concerned.
9. Dealing by a Body Corporate in its own Shares(1) A Body Corporate does not carry on an activity of the kind specified by paragraph 4 by purchasing its own Shares where section 666 of the Companies Regulations 2015 (Treasury shares) applies to the Shares purchased.(2) A Body Corporate does not carry on an activity of the kind specified by paragraph 4 by dealing in its own Shares held as treasury shares, in accordance with section 668 (Treasury shares: disposal) or 670 (Treasury shares: cancellation) of those Regulations.(3) In this paragraph "shares held as treasury shares" has the same meaning as in the Companies Regulations 2015.
10. Risk management(1) A person ("B") does not carry on an activity of the kind specified by paragraph 4 by entering as principal into a transaction with another person ("C") if —(a) the transaction relates to investments of the kind specified by any of paragraphs 94 to 96 (or paragraphs 98 or 99 so far as relevant to any of those paragraphs);(b) neither B nor C is an individual;(c) the sole or main purpose for which B enters into the transaction (either by itself or in combination with other such transactions) is that of limiting the extent to which a relevant business will be affected by any identifiable risk arising otherwise than as a result of the carrying on of a Regulated Activity; and(d) the relevant business consists mainly of activities other than —(i) Regulated Activities; or(ii) activities which would be Regulated Activities but for any exclusion made by this Part.(2) In sub-paragraph (1), "relevant business" means a business carried on by —(a) B;(b) a member of the same Group as B; or(c) where B and another person are, or propose to become, participators in a Joint Enterprise, that other person.
12. Dealing in Investments as Agent
Buying, Selling, subscribing for or underwriting Financial Instruments as agent is a specified kind of activity.
13. Deals with or through Authorised Persons(1) A person who is not an Authorised Person does not carry on an activity of the kind specified by paragraph 12 by entering into a transaction as agent for another person (the "client") with or through an Authorised Person if —(a) the transaction is entered into on advice given to the client by an Authorised Person; or(b) it is clear, in all the circumstances, that the client, in his capacity as an investor, is not seeking and has not sought advice from the agent as to the merits of the client's entering into the transaction (or, if the client has sought such advice, the agent has declined to give it but has recommended that the client seek such advice from an Authorised Person).(2) But the exclusion in sub-paragraph (1) does not apply if —(a) the transaction relates to a Contract of Insurance; or(b) the agent receives from any person other than the client any pecuniary reward or other advantage, for which he does not account to the client, arising out of his entering into the transaction.
14. Risk management
For the purposes of this paragraph, paragraph 10 applies with the necessary changes, save that references in that paragraph to "principal" shall be construed as "agent" in this paragraph.
15. Other exclusions
Paragraph 12 is also subject to the exclusions in paragraphs 75 (Profession or non-investment business), 76 (Sale of goods and supply of services), 77 (Groups and Joint Enterprises), 78 (Sale of a Body Corporate), 79 (Non-Abu Dhabi Global Market Persons), 80 (Insurance Intermediation: incidental basis), and 82 (Insolvency Practitioners).