• Part 12 Part 12 Recognised Bodies and OTC Derivatives

    • 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.

    • Chapter 2 Chapter 2 Interpretation

      • 139. Interpretation of Part 12

        (1) References in this Part to rules of a Recognised Body are to rules made, or conditions imposed, by a Recognised Body with respect to —
        (a) Recognition Requirements;
        (b) admission of persons to, or their exclusion from the use of, its facilities; or
        (c) matters relating to its constitution.
        (2) References in this Part to guidance issued by a Recognised Body are references to guidance issued, or any recommendation made, in writing or other legible form and intended to have continuing effect, by a Recognised Body to —
        (a) all or any class of its members or users; or
        (b) persons seeking to become members of a Recognised Body or to use its facilities;
        with respect to the provision by it or its members of services.

    • Chapter 3 Chapter 3 Clearing, Reporting and Risk Mitigation of OTC Derivatives

      • 140. Commencement

        (1) The provisions of this Chapter 3 shall enter into force at such time as the Regulator shall appoint in Rules made by the Regulator. Different dates may be appointed for different provisions of this Chapter.
        (2) Such Rules may make transitional provision in relation to the entry into force of this Chapter 3.

      • 141. Clearing obligation

        (1) Counterparties shall clear all OTC Derivative Contracts pertaining to a class of OTC Derivatives that has been declared subject to the clearing obligation in accordance with section 142(1), if those contracts fulfil both of the following conditions —
        (a) they have been concluded in one of the following ways —
        (i) between two Financial Counterparties;
        (ii) between a Financial Counterparty and a Non-Financial Counterparty that meets the conditions referred to in section 147(1)(b);
        (iii) between two Non-Financial Counterparties that meet the conditions referred to in section 147(1)(b);
        (iv) between a Financial Counterparty or a Non-Financial Counterparty meeting the conditions referred to in section 147(1)(b) and an entity established in a jurisdiction outside the Abu Dhabi Global Market that would be subject to the clearing obligation if it were established in the Abu Dhabi Global Market; or
        (v) between two entities established in one or more jurisdictions outside the Abu Dhabi Global Market that would be subject to the clearing obligation if they were established in the Abu Dhabi Global Market, provided that the contract has a direct, substantial and foreseeable effect within the Abu Dhabi Global Market or where such an obligation is necessary or appropriate to prevent the evasion of any provisions of these Regulations; and
        (b) they are entered into or novated either —
        (i) on or after the date from which the clearing obligation takes effect; or
        (ii) on or after recognition as referred to in section 142(1) but before the date from which the clearing obligation takes effect if the contracts have a remaining maturity higher than the minimum remaining maturity determined by the Regulator in accordance with section 142(1)(c).
        (2) If a class of OTC Derivatives that has been previously declared subject to a clearing obligation in accordance with section 142(1) is no longer cleared by at least one Recognised Clearing House, it shall cease to be subject to the clearing obligation.
        (3) Without prejudice to risk-mitigation techniques under section 148, OTC Derivative Contracts that are Intragroup Transactions shall not be subject to the clearing obligation, provided that, at least 30 days before the use of the exemption, the counterparty or counterparties established in the Abu Dhabi Global Market have notified the Regulator in writing that they intend to make use of the exemption.
        (4) The OTC Derivative Contracts that are subject to the clearing obligation shall be cleared by a Recognised Clearing House. For that purpose a counterparty shall become a Clearing Member, a client, or shall establish indirect clearing arrangements with a Clearing Member, provided that those arrangements do not increase counterparty risk.
        (5) The Regulator may make Rules specifying the contracts that are considered to have a direct, substantial and foreseeable effect within the Abu Dhabi Global Market or the cases where it is necessary or appropriate to prevent the evasion of any provisions of these Regulations as referred to in subsection (1)(a)(v).

      • 142. Clearing obligation procedure

        (1) The Regulator may make Rules specifying —
        (a) a class of OTC Derivatives that shall be subject to the clearing obligation;
        (b) the date or dates from which the clearing obligation takes effect in respect of such class of OTC Derivatives, including any phase-in and the categories of counterparties to which the obligation applies; and
        (c) the minimum remaining maturity of the OTC Derivative Contracts referred to in section 141(1)(b)(ii).
        (2) With the overarching aim of reducing systemic risk, the Regulator may take into consideration the following criteria —
        (a) the degree of standardisation of the contractual terms and operational processes of the relevant class of OTC Derivatives;
        (b) the volume and liquidity of the relevant class of OTC Derivatives;
        (c) the availability of fair, reliable and generally accepted pricing information in the relevant class of OTC Derivatives;
        (d) the interconnectedness between counterparties using the relevant classes of OTC Derivatives;
        (e) the anticipated impact on the levels of Counterparty Credit Risk between counterparties;
        (f) the impact on competition in the Abu Dhabi Global Market;
        (g) the expected volume of the relevant class of OTC Derivatives;
        (h) whether more than one Recognised Clearing House already clears the same class of OTC Derivatives;
        (i) the ability of the relevant Recognised Clearing Houses to handle the expected volume and to manage the risk arising from the Clearing of the relevant class of OTC Derivatives;
        (j) the type and number of counterparties active, and expected to be active within the market for the relevant class of OTC Derivatives;
        (k) the amount of time a counterparty subject to the clearing obligation needs in order to put in place arrangements to clear its OTC Derivative Contracts through a Recognised Clearing House; and
        (l) the risk management and the legal and operational capacity of the range of counterparties that are active in the market for the relevant class of OTC Derivatives and that would fall within the scope of the clearing obligation.

      • 143. Access to a Recognised Clearing House in relation to OTC Derivative Contracts

        (1) A Recognised Clearing House that has been authorised to clear OTC Derivative Contracts shall accept clearing such contracts on a non-discriminatory and transparent basis, regardless of the trading venue.
        (2) A Recognised Clearing House may require that a trading venue comply with the operational and technical requirements established by the Recognised Clearing House, including the risk-management requirements.
        (3) A Recognised Clearing House shall accede to or refuse a formal request for access by a trading venue within three months of such a request.
        (4) Where a Recognised Clearing House refuses access under subsection (3), it shall provide the trading venue with full reasons for such refusal.
        (5) Save where the competent authority of the trading venue and that of the Recognised Clearing House refuse access, the Recognised Clearing House shall, subject to subsection (6), grant access within three months of a decision acceding to the trading venue's formal request in accordance with subsection (3).
        (6) The competent authority of the trading venue and that of the Recognised Clearing House may refuse access to the Recognised Clearing House following a formal request by the trading venue only where such access would threaten the smooth and orderly functioning of the markets or would adversely affect systemic risk.
        Amended on (21 February 2018).

      • 144. Access to a trading venue in relation to OTC Derivative Contracts

        (1) A trading venue shall provide trade feeds on a non-discriminatory and transparent basis to any Recognised Clearing House that has been authorised to clear OTC Derivative Contracts traded on that trading venue upon request by the Recognised Clearing House.
        (2) Where a request to access a trading venue has been formally submitted to a trading venue by a Recognised Clearing House, the trading venue shall respond to the Recognised Clearing House within three months.
        (3) Where access is refused by a trading venue, it shall notify the Recognised Clearing House accordingly, providing full reasons.
        (4) Without prejudice to the decision by competent authorities of the trading venue and of the Recognised Clearing House, access shall be made possible by the trading venue within three months of a positive response to a request for access.
        (5) Access of the Recognised Clearing House to the trading venue shall be granted only where such access would not require interoperability or threaten the smooth and orderly functioning of markets in particular due to liquidity fragmentation and the trading venue has put in place adequate mechanisms to prevent such fragmentation.
        Amended on (21 February 2018).

      • 145. Public register

        (1) The Regulator shall establish, maintain and keep up to date on its website a public register in order to identify the classes of OTC Derivatives subject to the clearing obligation.
        (2) The register shall include —
        (a) the classes of OTC Derivatives that are or will be subject to the clearing obligation;
        (b) the dates from which the clearing obligation takes effect, including any phased-in implementation;
        (c) the classes of OTC Derivatives identified by the Regulator that will be subject to the clearing obligation; and
        (d) the minimum remaining maturity of the Derivative Contracts referred to in section 141(1)(b)(ii).

      • 146. Reporting obligation

        (1) Taking effect as from such date as is specified by the Regulator, Counterparties and Recognised Clearing Houses established in the Abu Dhabi Global Market shall ensure that the details of any OTC Derivative Contract they have concluded and any modification or termination of the contract are reported to a Trade Repository registered with the Regulator. The details shall be reported no later than the Business Day following the conclusion, modification or termination of the contract.
        (2) A counterparty or a Recognised Clearing House which is subject to the reporting obligation in subsection (1) may delegate the reporting of the details of the OTC Derivative Contract. Counterparties and Recognised Clearing Houses shall ensure that the details of their OTC Derivative Contracts are reported without duplication.
        (3) Counterparties shall keep a record of any OTC Derivative Contract they have concluded and any modification for at least five years following the termination of the contract.
        (4) Where a Trade Repository is not available to record the details of an OTC Derivative Contract which is subject to the reporting obligation in subsection (1), counterparties and Recognised Clearing Houses shall ensure that such details are reported to the Regulator.
        (5) A counterparty or a Recognised Clearing House that reports the details of an OTC Derivative Contract to a Trade Repository or to the Regulator, or an entity that reports such details on behalf of a counterparty or a Recognised Clearing House shall not be considered in breach of any restriction on disclosure of information imposed by that contract or by any enactment or subordinate legislation. No liability resulting from that disclosure shall lie with the reporting entity or its officers, agents or employees.
        (6) The Regulator may make Rules specifying the details, type, format, frequency and reporting deadlines of the reports for the different classes of OTC Derivatives. The reports shall specify at least —
        (a) the parties to the OTC Derivative Contract and, where different, the beneficiary of the rights and obligations arising from it; and
        (b) the main characteristics of the OTC Derivative Contracts, including their type, underlying maturity, notional value, price, and settlement date.

      • 147. Non-Financial counterparties

        (1) Where a Non-Financial Counterparty takes positions in OTC Derivative Contracts and those positions exceed the Clearing threshold as specified under subsection (3), that Non-Financial Counterparty shall —
        (a) immediately notify the Regulator;
        (b) become subject to the clearing obligation for future contracts if the rolling average position over 30 Business Days exceeds the threshold; and
        (c) clear all relevant future contracts within four months of becoming subject to the clearing obligation.
        (2) A Non-Financial Counterparty that has become subject to the clearing obligation in accordance with subsection (1)(b) and that subsequently demonstrates to the Regulator that its rolling average position over 30 Business Days does not exceed the clearing threshold, shall no longer be subject to the clearing obligation.
        (3) In calculating the positions referred to in subsection (1), the Non-Financial Counterparty shall include all the OTC Derivative Contracts entered into by the Non-Financial Counterparty or by other non-financial entities within the Group to which the Non-Financial Counterparty belongs, which are not objectively measurable as reducing risks directly relating to the commercial activity or treasury financing activity of the Non-Financial Counterparty or of that Group.
        (4) The Regulator may make Rules specifying —
        (a) criteria for establishing which OTC Derivative Contracts are objectively measurable as reducing risks directly relating to the commercial activity or treasury financing activity referred to in subsection (3); and
        (b) values of the clearing thresholds, which are determined taking into account the systemic relevance of the sum of net positions and exposures per counterparty and per class of OTC Derivatives.

      • 148. Risk-mitigation techniques for OTC Derivative Contracts not cleared by a Recognised Clearing House

        (1) Financial Counterparties and Non-Financial Counterparties that enter into an OTC Derivative Contract not cleared by a Recognised Clearing House, shall ensure, exercising due diligence, that appropriate procedures and arrangements are in place to measure, monitor and mitigate operational risk and Counterparty Credit Risk, including at least —
        (a) the timely confirmation, where available, by electronic means, of the terms of the relevant OTC Derivative Contract; and
        (b) formalised processes which are robust, resilient and auditable in order to reconcile portfolios, to manage the associated risk and to identify disputes between parties early and resolve them, and to monitor the value of outstanding contracts.
        (2) Taking effect as from such date as is specified by the Regulator, Financial Counterparties and Non-Financial Counterparties referred to in section 147 shall mark to market on a daily basis the value of outstanding contracts. Where market conditions prevent marking to market, reliable and prudent marking-to-model shall be used.
        (3) Taking effect as from such date as is specified by the Regulator, Financial Counterparties shall have risk management procedures that require the timely, accurate and appropriately segregated exchange of collateral with respect to OTC Derivative Contracts. Non-Financial Counterparties referred to in section 147 shall have risk management procedures that require the timely, accurate and appropriately segregated exchange of collateral with respect to OTC Derivative Contracts that are entered into on or after the clearing threshold is exceeded.
        (4) Taking effect as from such date as is specified by the Regulator, Financial Counterparties shall hold an appropriate and proportionate amount of capital to manage the risk not covered by appropriate exchange of collateral.
        (5) The requirement laid down in subsection (3) shall not apply to an Intragroup Transaction that is entered into by counterparties which are both established in the Abu Dhabi Global Market provided that there is no current or foreseen practical or legal impediment to the prompt transfer of own funds or repayment of liabilities between counterparties.
        (6) An Intragroup Transaction that is entered into by a counterparty which is established in the Abu Dhabi Global Market and a counterparty which is established outside the Abu Dhabi Global Market shall be exempt from the requirement laid down in subsection (3), provided that the following conditions are fulfilled —
        (a) the risk management procedures of the counterparties are adequately sound, robust and consistent with the level of complexity of the derivative transaction; and
        (b) there is no current or foreseen practical or legal impediment to the prompt transfer of own funds or repayment of liabilities between the counterparties.
        (7) The counterparty of an Intragroup Transaction that is exempt from the requirement laid down in subsection (3) shall publicly disclose information on the exemption.
        (8) The obligations set out in subsections (1) to (7) shall apply to OTC Derivative Contracts entered into between Non-Abu Dhabi Global Market Firms that would be subject to those obligations if they were established in the Abu Dhabi Global Market, provided that those contracts have a direct, substantial and foreseeable effect within the Abu Dhabi Global Market or where such obligation is necessary or appropriate to prevent the evasion of any provision of these Regulations.
        (9) The Regulator shall regularly monitor the activity in OTC Derivatives not eligible for Clearing in order to identify cases where a particular Class of Derivatives may pose systemic risk and to prevent regulatory arbitrage between cleared and non-cleared derivative transactions.
        (10) The Regulator may make Rules specifying —
        (a) the procedures and arrangements referred to in subsection (1);
        (b) the market conditions that prevent marking to market and the criteria for using marking-to-model referred to in subsection (2);
        (c) the risk management procedures, including the levels and type of collateral and segregation arrangements, required for compliance with subsection (3);
        (d) the applicable criteria referred to in subsections (5) and (6) including in particular what should be considered as practical or legal impediment to the prompt transfer of own funds and repayment of liabilities between the counterparties;
        (e) the details of the information on exempt Intragroup Transactions referred to in subsection (7);
        (f) the contracts that are considered to have a direct, substantial and foreseeable effect within the Abu Dhabi Global Market or the cases where it is necessary or appropriate to prevent the evasion of any provision of these Regulations as referred to in subsection (8); and
        (g) the dates on which the provisions in this section come into effect.

    • Chapter 4 Chapter 4 Transaction Reporting

      • 149. Obligation to report transactions

        (1) Authorised Persons which execute transactions in Financial Instruments shall report complete and accurate details of such transactions to the Regulator as quickly as possible, and no later than the close of the following Business Day.
        (2) A Crypto Asset Exchange shall report details of transactions in Accepted Crypto Assets traded on its platform which are executed, or reported, through its systems.
        (3) The obligation laid down in subsection (1) and (2) shall apply to —
        (a) Financial Instruments which are admitted to trading or traded on a Recognised Investment Exchange or MTF or for which a request for admission to trading has been made;
        (b) Financial Instruments where the underlying is a Financial Instrument traded on a Recognised Investment Exchange or MTF; and
        (c) Financial Instruments where the underlying is an index or a basket composed of Financial Instruments traded on a Recognised Investment Exchange or MTF;
        regardless of whether or not such transactions are carried out on the Recognised Investment Exchange or MTF.
        (3) The operator of a Recognised Investment Exchange or MTF shall report details of transactions in Financial Instruments traded on its platform which are executed through its systems by a firm which is not subject to this section in accordance with subsection (1).
        (4) The Regulator may make Rules specifying —
        (a) the information to be included in reports made under subsection (1); and
        (b) the manner in which such reports are to be made.
        Amended on June 25, 2018