SCA first published the outline of its planned Promotion and Introduction Regulations (PIRs) in January 2017. It requires any person introducing a UAE investor to a service provider, such as a fund manager, to receive financial services to get SCA approval.
SCA has now released administrative Decision No. (123/TR) of 2017 concerning the regulatory controls for Financial Activities and Services (known as “Decision (123/TR)”).
“It is an updated version of SCA’s 2016 decision dealing with regulatory controls which now sets out the final licensing requirements for the Financial Promoter licence category,” said Tom Bicknell, a partner for law firm Pinsent Masons in Dubai.
Future promoters of financial services in the UAE governed by SCA rules will be required to have five authorised positions – a general manager, promotion manager, compliance officer, risk management officer and discipline officer.
Bicknell said the ‘Promotion Manager’ is a new role unique to the promoter licence whose role is to undertake promotional activities, maintain data and records of products placed and assess the risk profile of customers.
He noted that, subject to certain conditions being met, the last three roles can be fulfilled by one person and can be outsourced.
Approvals seen
Around 25 promoters from the previous regime have been rolled over into the new PIR system, but a number of other IFAs and banks have been trying to get the licence because it is seen as key to offering a full financial planning service to clients.
“We understand from the SCA it has had an influx of new promoter applications and is in the process of assessing these now that Decision (123/TR) has been issued,” Bicknell said.
“IFAs and insurance brokers will need to consider the application of the promoter regime to their business and whether they will be required to obtain the promoter licence as an addition to their current authorisations,” he added.
Promoters proposing to market foreign funds in the UAE must obtain the new SCA licence, and this applies to firms located in the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global market (ADGM) when they wish to approach retail or high net worth individuals who are located in the UAE.
