Application for License to Act As Custodian of Securities

هيئة الأوراق المالية والسلع

Securities & Commodities Authority

Application for license to act as custodian of securities

Name of applicant / 1.
Legal form of the applicant / 2.
Date of establishment of the applicant / 3.
Place and country of establishment / 4.
Registration Number of the applicant (applicable to local companies) / 5.
Number and date of the NOCfrom the Central Bank of UAE to engage in activity of custodian of securities in the UAE (applicableto local and foreign banks and branches of foreign banks). / 6.
Other countries where the applicant or its parent company is licensed to practice the activity of custody of securities. / 7.
Authorized Capital:
Paid-up Capital:
Capital allocated to custody business: / 8.
Dubai Financial Market / Abu Dhabi Securities Exchange / Bank guarantee for minimum of 20 million Dirhams for both markets (if the applicant has been approved by the markets to clear and settle it’s client’s trades) / 9.
Percentage
______
______
______
______
______/ The names of shareholders who own 5% or more of the share capital of the applicant:-
Names
1.______
2.______
3.______
4.______
5______/ 10.
Telephone/Email / Position / Names of the Chairman and members of Board of Directors of the applicant / or the names of the Chairman and members of the Board of Directors of the bank in the country of origin if the license application is for a branch of a foreign bank
1.______
2.______
3.______
4.______
5.______/ 11.
Telephone/Email / Job Title / Names of the executive management of the applicant
1.______
2.______
3.______
4.______
5.______/ 12.
Policy number / Name of the Insurance company / Details of insurance policy to cover liability for damages that may be incurred by the clients due to non-trading risks and professional liability; or those arising from loss, damage or theft of clients’ documents or funds. / 13.
Years of experience / Qualification / Job Title / Names of key staff of the applicant working to provide custody services
1.______
2.______
3.______
4.______/ 14.
Telephone / Email / Person responsible for internal audit and follow-up internal control
Name:______/ 15.
Telephone / Email / Date of start of the audit period / External auditor
Name: / 16.
Address of applicant:
P.O. Box no.:
Telephone no.:
Fax no.:
Web site:
Email: / 17.
Details of Contact Person
Name:
Designation:
Direct phone no.:
Fax no.:
Email: / 18.
______
______
______
______/ Signature of applicant’s authorized person.
Name:
Title:
Filing Date:
/ 19.

List of Required Documents (Must be attested by the relevant authority whenever is needed)

1.Memorandum of association and the articles of association, if the applicant is a shareholding company established in the State and operating in the field of securities

2.Copy of the license issued by the UAE Central Bank to open a branch, if the applicant is a branch of a foreign bank.

3.Copy of the license granted to the parent bank/companyin the country of origin to provide custody services.

4.Copy of the NOC from the UAE Central Bank to provide securities custody services, if the applicant is a local commercial bank, a foreign investment bank, or a branch of a foreign bank.

5.A copy of the resolution of the Board of Directors indicating their approval to the applicantto provide the services of securities custody in the UAE.

6.Copy of the commercial license issued in the UAE.

7.Copy of the receipt for the payment of the licensing fee to the SCA.

8.Copy of the lease contract for the office from where the activity of securities custody is to be practiced in UAE.

9.Copy of the financial statements (if the company is already established) for the last three years or from the date of incorporation, whichever is earlier.

10.Details of the staff involved in the custody services including the name of the general manager or CEO, internal auditor, compliance officer and other staff, along with theirCV,the job description for each, together with the attached undertaking signed by each.

11.Theinternal control Manualoutlining the measures to be taken for protection of client assets and in compliance with the applicable laws and regulations, and describing the process for disaster recovery.

12.Client agreement form prepared in accordance with Article (4/1/b) of Decision No (29/R) concerning the Regulations for Securities CustodyActivity.

13.Copy of manuals which explain technology used by the applicant and the work procedures to keep the clients assets in custody.

14.Copy of contracts and agreements with the providers of software and technical systems necessary to practice the activity of custody of securities.

15.Copy of the insurance policy against liability for damages that may be incurred by the clients due to non-trading risks and professional liability; or those arising from loss, damage or theft of clients’ documents or funds, as mentioned initem 4 of the License Application Form.

16.Copy of the bank guarantee if the applicant is a member of the clearing house of the markets (as per item 10 of the License Application Form).

17.A statement issued by the applicant’s legal advisor or attorney describing any legal cases, potential legal liabilities or fines/penalties related to the applicant.

18.A statement signed by the Chairman of the Board of Directors of the applicant indicating:

The historical record of the applicant, particularly if the applicant or any of its subsidiary, sister or associate companies, including board members and employees, has ever been denied license by any securities exchange, securities authority, or other governmental agency.
Whether the applicant or any of its subsidiary, sister or associate companyhas ever been a subject of any judicial sentences or disciplinary or penal actions by any regulatory bodies or markets.

19.An audited copy of the applicant’s annual financial statements for the past three years (or of the parent company in case the application is submitted by one of its branches). The summary form of the financial position for the past 3 years must also be completed, as per the following format:

Year / Income from Operations / Net Profit

Conditions for Licensing of Securities Custodians

To license the activity of securities custody, the following conditions must be met:

The license applicant must be a legal person in one of the following forms:

A shareholding company established in the State and operating in the field of securities.
A local commercial bank, foreign investment bank or a branch of a foreign bank provided that the parent bank is licensed to practice this activity; and subject to approval by the UAE Central Bank in any such cases.

The paid-up capital or the capital allocated for this activity should not be less than (50) million Dirhams or the equivalent thereto in any other currency.
To present a proof of insurance against liability for damages that may be incurred by the clients due to non-trading risks and professional liability; or those arising from loss, damage or theft of clients’ documents or funds as deemed appropriate at the discretion of the Authority.
Availability of electronic software and technical systems necessary to practice the activity of custody of securities in accordance with conditions and specifications set forth by the Market and approved by the Authority.
Availability of necessary specialist technical and administrative expertise and competencies in those are in charge of managing and practicing the duties of custodians; who must also be of good reputation and not convicted for any felony against honor or integrity unless rehabilitated.
Availability of an internal control system that ensures sound implementation of the law, regulations and resolutions issued pursuant thereto and the applicable bylaws in the markets. The Authority must be informed of the name of the person in charge of internal audit and follow up on internal control and to report every violation against the provisions of the law, regulations and resolutions issued pursuant thereto and the applicable bylaws in markets.

Practicing custody through an independent department to ensure independency of the used systems and communication lines dedicated to this practice in order to prevent any conflict of interests.

Payment of the licensing fees in the amount of (500,000) Dirhams.

(AED 500,000 for the full year or proportional to the remaining months in the calendar year in case the license is granted during the year. Note that part of a month is considered as a full month).

Any additional conditions or requirements as determined by the Authority in line with the public interest requirements.

The market may, pursuant to the its bylaws, entrust a custodian with the settlement of liabilities of its clients upon its request, in which case said custodian shall be bound by all the obligations of the clearance member. The bylaws of the Market shall specify the amount of bank guarantee payable in favor of the clearing house provided that the said amount is not less than (20) million Dirhams. The amount of guarantee shall increase equably with the increase in the value of trading committed to be settled. If the custodian is registered in more than one market, the said bank guarantee may be divided such that it shall not be, under any circumstances, less than (20) million Dirhams. The Market’s board of directors may approve a guarantee of a third party such as the broker provided that the Market’s bylaws shall specify the duties and responsibilities of both the broker and custodian in the settlements.

Attestation

Messrs./ Securities and Commodities Authority

I ………………………………………………, of a ……………… nationality, attest in my capacity as ………………………………. in ………………………………………… company/Bank/ Branch, that I am:-

a)A natural person of a full legal capacity.

b)Of a good conduct and behavior, and have not been given a custodial sentence for an offence of dishonor or breach of trust without having been rehabilitated.

c)Not in a state of cessation of payment of my commercial debts.

d)Not previously been declared bankrupt without being rehabilitated.

signature

LD-LR-008