• Chapter 5 Chapter 5 Accepting Deposits

    • The activity

      • 38. Assets Requirement

        (1) This section applies if—
        (a) the Regulator imposes an Assets Requirement on a person being given a Financial Services Permission;
        (b) an Assets Requirement is imposed on an Authorised Person; or
        (c) an Assets Requirement previously imposed on such a person is varied.
        (2) A person on whom an Assets Requirement is imposed is referred to in this section as "A".
        (3) "Assets Requirement" means a requirement imposed under section 35—
        (a) prohibiting the disposal of, or other dealing with, any of A's assets (whether in the Abu Dhabi Global Market or elsewhere) or restricting such disposals or dealings; or
        (b) that all or any of A's assets, or all or any assets belonging to Customers but held by A or to A's order, must be transferred to and held by a trustee approved by the Regulator.
        (4) If the Regulator—
        (a) imposes a requirement of the kind mentioned in subsection (3)(a); and
        (b) gives notice of the requirement to any institution with whom A keeps an account; the notice has the effects mentioned in subsection (5).
        (5) Those effects are that—
        (a) the institution does not act in breach of any contract with A if, having been instructed by A (or on A's behalf) to transfer any sum or otherwise make any payment out of A's account, it refuses to do so in the reasonably held belief that complying with the instruction would be incompatible with the requirement; and
        (b) if the institution complies with such an instruction, it shall be liable to pay to the Regulator an amount equal to the amount transferred from, or otherwise paid out of, A's account in contravention of the requirement.
        (6) If the Regulator imposes a requirement of the kind mentioned in subsection (3)(b), assets held by a person as trustee in accordance with the requirement shall not, while the requirement is in force, be released or dealt with except with the consent of the Regulator.
        (7) If, while a requirement of the kind mentioned in subsection (3)(b) is in force, A creates a Charge over any assets of A held in accordance with the requirement, the Charge is (to the extent that it confers security over the assets) void against the liquidator and any of A's creditors.
        (8) Assets held by a person as trustee ("T") are to be taken to be held by T in accordance with any requirement mentioned in subsection (3)(b) only if—
        (a) A has given T written notice that those assets are to be held by T in accordance with the requirement; or
        (b) they are assets into which assets to which paragraph (a) applies have been transposed by T on the instructions of A.
        (9) Subsections (6) and (8) do not affect any equitable interest or remedy in favour of a person who is a beneficiary of a trust as a result of a requirement of the kind mentioned in subsection (3)(b).
        Amended on (13 January, 2020).

    • Exclusions

      • 39. Sums paid by certain persons

        (1) A sum is not a Deposit for the purposes of paragraph 38 if it is —
        (a) paid by any of the following persons —
        (i) an Authorised Person who has permission to Accept Deposits, or to Effect Contracts of Insurance or Carry Out Contracts of Insurance as Principal;
        (ii) the International Bank for Reconstruction and Development;
        (iii) the International Finance Corporation; and
        (iv) the International Monetary Fund;
        (b) paid by a person other than one mentioned in sub-paragraph (a) in the course of carrying on a business consisting wholly or to a significant extent of lending money;
        (c) paid by one Body Corporate to another at a time when both are members of the same Group or when the same individual is a majority Shareholder of both of them or when both are or propose to become participators in a Joint Enterprise and the sum is paid for the purpose of or in connection with that enterprise;
        (d) paid by a person who, at the time when it is paid, is a Close Relative of the person receiving it or who is, or is a Close Relative of, a Director or manager of that person or who is, or is a Close Relative of, a Controller of that person; or
        (e) paid by a person by way of investment in a restricted Profit Sharing Investment Account.
        (2) In the application of sub-paragraph (d) to a sum paid by a Partnership, that sub-paragraph is to have effect as if, for the reference to the person paying the sum, there were substituted a reference to each of the Partners.
        Amended on (13 January, 2020).

      • 40. Sums received by lawyers etc.

        (1) A sum is not a Deposit for the purposes of paragraph 38 if it is received by a practising lawyer acting in the course of his profession.
        (2) In sub-paragraph (1), "practising lawyer" means a lawyer who is qualified to act as such under the laws of any jurisdiction.

      • 41. Sums received in consideration for the issue of debt financial instruments

        (1) Subject to sub-paragraph (2), a sum is not a Deposit for the purposes of paragraph 38 if it is received by a person as consideration for the issue by him of any investment of the kind specified by paragraphs 88, 89 or 90.
        (2) The exclusion in sub-paragraph (1) does not apply to the receipt by a person of a sum as consideration for the issue by him of commercial paper unless —
        (a) the commercial paper is issued to persons —
        (i) whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses; or
        (ii) who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses; and
        (b) the redemption value of the commercial paper is not less than 150,000 US Dollars (or an amount of equivalent value denominated wholly or partly in a currency other than US Dollars), and no part of the commercial paper may be transferred unless the redemption value of that part is not less than 150,000 US Dollars (or such an equivalent amount).
        (3) In sub-paragraph (2), "commercial paper" means an investment of the kind specified by paragraph 88, 89 or 90 having a maturity of less than one year from the date of issue.

      • 42. Other exclusions

        (1) A person who carries on an activity of the kind specified by paragraph 38 is not to be regarded as doing so by way of business if —
        (a) he does not hold himself out as Accepting Deposits on a day-to-day basis; and
        (b) any Deposits which he accepts are accepted only on particular occasions, whether or not involving the issue of any Financial Instruments.
        (2) In determining for the purposes of sub-paragraph (1)(b) whether Deposits are accepted only on particular occasions, regard is to be had to the frequency of those occasions and to any characteristics distinguishing them from each other.
        (3) A sum is not a Deposit for the purposes of paragraph 38 if it is received by a person who is —
        (a) an Authorised Person with a Financial Services Permission to carry on the Regulated Activities specified in paragraphs 4, 12, 16, 56, 59, 60 or 61 (or, in so far as it relates to such activities, the activity specified in paragraph 64); or
        (b) an Exempt Person in relation to any such activity,
        in the course of, or for the purposes of, carrying on any such activity (or any activity which would be such an activity but for any exclusion made by this Schedule) with or on behalf of the person by or on behalf of whom the sum is paid.