Sweeping new Securities and Commodities Authority client-centric rules seen by International Investment will put the 36 existing licensed financial consultancy firms on a one-year deadline to comply, while applications in the pipeline will be made void effectively putting a freeze on licenses issued for at least 12 months.
The SCA chairman’s key decisions in the new ‘Regulations Manual of the Financial Activities and Status Regularization Mechanisms’ are dated 9 May 2021, and the licensed firms must comply “within a period not more than one year from the date, in which this decision came into effect”.
It also referred to applications previously submitted to the SCA which were “not completed or will be adjudicated before the date, in which this decision came into effect, shall be void”, International Investment can reveal.
Refrain from participating in any activity that shall conflict with the interests of the company or the clients.
“The applicant shall amend its application according to the new provisions and requirements without paying a new application fee, or withdraw its application if he desires to refrain from the same with his right to recover the application fee paid by him”, it said.
The manual highlights under its Article 4 general principles section six different areas which the financial consultants must abide by, in language which is very different to previous rules:
1‐ Honesty and integrity: Refrain from participating in any activity that shall conflict with the interests of the company or the clients, that shall affect the work or regularity of the work of the capital market institutions, or that shall represent illegal or unacceptable work according to the professional standards or the companyʹs instructions. Moreover, maintain the confidentiality of the information and data related to the clients and professional tasks and practicing the jobs that are allowed to be practiced together after obtaining the Authorityʹs approval and without conflict of interests and tasks.
2‐ Skills, due diligence, and care: Practicing the works skillfully and exerting due diligence efforts and due effective care when performing the job.
3‐ Good behavior: The applicable professional behavioral standards in any of the capital market institutions shall be complied with when practicing the job.
4‐ Dealing with the Authority: The dealing with the Authority shall be in an appropriate, transparent, and cooperative method such as notifying the Authority immediately of any essential information or significant and necessary data.
5‐ Effective administrative: Exerting due and reasonable efforts to ensure regulation, administration, and control of the licensed bodyʹs works effectively when practicing the administration tasks.
6‐ Compliance: Exerting due efforts to comply with the applicable legislation in the state.
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The activation of these new rules comes against the backdrop of the planned merger of the Insurance Authority (IA) and Central Bank of the UAE, following the previous speculation that the SCA would be merging with the IA.
The latter possibility that did not materialize means that advisers need two licenses for fully holistic financial planning in the UAE because the IA license covers the protection products needed to sell to clients and the investment products are covered by the SCA.
The 36 firms listed on the SCA website as having the financial consultancy license are:
- ADCB Securities- Trading and Clearing Member
- HSBC Bank Middle East Limited
- AL HILAL BANK
- EMIRATES INVESTMENT BANK
- ABACUS FINANCIAL CONSULTANTS LLC
- SHUAA CAPITAL PSC
- Allied Investment Partners PJ S C
- NATIONAL RESOURCES FOR FINANCIAL CONSULTING L.L.C
- Mondial Dubai LLC
- Acuma LLC
- Dexter Capital Financial Consultancy LLC
- Al Bashayer Investment
- Global Quest Capital LLC
- Synergy Financial LLC
- DENOVO CORPORATE ADVISORS MENA LLC
- Al Mal Capital PSC
- The National Investor PJ S C
- NOOR CAPITAL PJSC
- CONTINENTAL FINANCIAL SERVICES
- MARKET MAKER ADVISORS FINANCIAL ADVISORS LLC
- Gulf Islamic Investments L.L.C
- ABSOLUTE RETURN INVESTMENT ADVISORS -ARIA
- Genero Capital LLC
- CREDENCE INTERNATIONAL FINANCIAL CONSULTANCY LLC
- BH Mubasher Financial Services P S C
- Trust Financial Consultancy LLC
- 29 K Financial Analysis & Consultancy LLC
- Indigo Financial Analysis and Consultancy LLC
- FAB Securities- Trading and Clearing Member
- Al Ramz Capital – Trading and Clearing Member
- SEGURO PRIVATE WEALTH FINANCIAL CONSULTANCY L.L.C
- AL HILAL CAPITAL FINANCIAL SERVICES
- NEXUS FINANCIAL ADVISERS L.LC
- GWM Financial Planning Limited
- CENTURY FINANCIAL CONSULTANCY AND ANALYSIS LLC
- AHR Financial Consultation and Financial Analysis LLC
Courtesy: International Investment