51. Requirement to have Business Rules

An Authorised Market Institution must establish rules (“Business Rules”) governing relations between itself and the participants in the market and dealing with such matters as may be prescribed for this purpose in rules by the AFSA.

52. Approval and consultation on Business Rules

(1) An Authorised Market Institution may only bring its Business Rules and any amendment thereto into effect after such rules have been approved by the AFSA.

(2) The AFSA may require an Authorised Market Institution to make its Business Rules and any amendment thereto available for public consultation prior to their becoming effective.

53. Legal effect of Business Rules

The Business Rules (other than Listing Rules) of an Authorised Market Institution have effect as a contract:

• (a) between the Authorised Market Institution and each participant in the market; and
• (b) between a participant and each other participant; under which each of those Persons agrees to observe the Business Rules to the extent that they apply to the Person and to engage in conduct that the Person is required by the Business Rules to engage in.

54. Enforcement of Business Rules

(1) If a Person who is under an obligation to comply with or enforce any of an Authorised Market Institution’s Business Rules fails to meet that obligation, an application to the AIFC Court may be made by:

1. (a) the AFSA; or
2. (b) the Authorised Market Institution; or
3. (c) the operator of a clearing and settlement facility with which the Authorised Market Institution has clearing and settlement arrangements; or
4. (d) a Person aggrieved by the failure.

(2) After giving an opportunity to be heard to the applicant and the Person against whom the order is sought, the AIFC Court may make orders giving directions to:

1. (a) the Person against whom the order is sought; or
2. (b) if that Person is a Body Corporate, the directors of the Body Corporate; or
3. (c) if that Person is a Listed Fund, the Fund Manager of the Listed Fund, about compliance with, or enforcement of, the Business Rules.

(3) For the purposes of this section:

1. (a) if a Body Corporate fails to comply with or enforce provisions of the Business Rules of an Authorised Market Institution, a Person who holds Securities of that Body Corporate that are able to be traded on a market operated by the Authorised Market Institution is taken to be a Person aggrieved by the failure;
2. (b) if a Fund Manager of a Listed Fund fails to comply with or enforce provisions of the Business Rules of an Authorised Market Institution in respect of that Listed Fund, a person who holds Units in that Listed Fund is taken to be a Person aggrieved by the failure.

(4) There may be other circumstances in which a Person may be aggrieved by a failure for the purposes of this section.

55. Persons eligible for Membership

(1) Subject to such further admission criteria as the AFSA may prescribe by Rules, an Authorised Market Institution may only admit as a Member:

• (a) an Authorised Firm; or
• (b) a Recognised Non-AIFC Member; or
• (c) a Person that is a Body Corporate which intends to undertake Commodity derivative or Environmental Instrument transactions on the relevant Authorised Market Institution by carrying on such activities for its own account or for another Body Corporate which is in the same Group as the Person, provided that any such member of the Group for which the Person intends to act is a wholly-owned Subsidiary of a Holding Company within the Group or is the Holding Company itself
• (d)   any Person (whether or not referred to in (c)) by providing that Person with access to the facility, on which Investment Tokens are traded or cleared or both traded and cleared, in respect of only trading or clearing of Investment Tokens.

(2) An Authorised Person engaged in the activity of Operating a Private E-currency Business may only admit as a Member a Person who satisfies admission criteria set out in its Membership Rules and which is either:

• (a) an Authorised Firm;
• (b) a Recognised Non-AIFC Member; or
• (c) a body corporate or an individual (natural person) that carries on the activity solely as principal.

56. AFSA power to require report from an Authorised Market Institution

Without prejudice to its powers under section 96 (Power to gather information), the AFSA may require, at such frequency and in such manner and in such form as it may prescribe in Rules, an Authorised Market Institution to provide the AFSA with a report or reports relating to the conduct of or the performance of the regulatory functions of an Authorised Market Institution, including but not limited to a report or reports addressing:

• (a) ongoing compliance of the Authorised Market Institution with the terms of its Licence; or
• (b) complaints received and dealt with and disciplinary matters arising and dealt with; or
• (c) adequacy and performance of systems and controls; or
• (d) financial matters concerning the operation of the Authorised Market Institution.

57. AFSA power to impose requirements on an Authorised Market Institution

Without limiting the powers available to the AFSA under Part 8 (Supervision), the AFSA may direct an Authorised Market Institution to do or not do specified things that the AFSA considers are necessary or desirable or to ensure the integrity of the AIFC financial markets, including but not limited to directions:

1. (a)requiring compliance with any duty, requirement, prohibition, obligation or responsibility applicable to an Authorised Market Institution; or
2. (b)requiring an Authorised Market Institution to act in a specified manner in relation to a transaction conducted on or through the facilities operated by an Authorised Market Institution, or in relation to a specified class of transactions; or
3. (c)requiring an Authorised Market Institution to act in a specified manner or to exercise its powers under any rules that the Authorised Market Institution has made; 
4. (d) [intentionally omitted] 
5. (e) [intentionally omitted] 

58. AFSA power to give directions to an Authorised Market Institution

Without limiting the application of section 95 (Exercise of supervisory powers by the AFSA), the AFSA may direct an Authorised Market Institution to:

1. (a)close the market or facilities operated by an Authorised Market Institution in a particular manner or for a specified period; or
2. (b)suspend transactions on the market or through the facilities operated by the Authorised Market Institution; or
3. (c)suspend transactions in Investments conducted on the market or through the facilities operated by the Authorised Market Institution; or
4. (d)prohibit trading in loans or Investments conducted on the market or through the facilities operated by the Authorised Market Institution; or
5. (e)defer for a specified period the completion date of transactions conducted on the market or through the facilities operated by the Authorised Market Institution; or
6. (f)prohibit a specified Person from undertaking any transactions on the facilities operated by the Authorised Market Institution; or
7. (g)do any act or thing, or not do any act or thing, in order to ensure an orderly market, or reduce risk to the AFSA’s objectives.

59. Liability of Authorised Market Institutions and their Employees

Neither an Authorised Market Institution nor any Employee of an Authorised Market Institution may be held liable for anything done or omitted to be done in the performance or discharge or purported performance or discharge of their respective duties and regulatory functions if the act or omission is shown to have been committed or omitted in good faith.

60. Prohibition – Offer of Securities

A Person must not make an Offer of Securities except as provided in Rules made by the AFSA

61. Definition of an Offer of Securities

An Offer of Securities means a communication to any Person in any form or by any means, presenting information on the terms of the Offer and the Securities offered, so as to enable an investor to decide whether or not to buy or subscribe to those Securities but excluding:

1. (a) any communication in connection with the trading of Securities admitted to trading on an Authorised Investment Exchange; or
2. (b) any communication made for the purposes of complying with the on-going reporting requirements of the AFSA or an Authorised Market Institution; or
3. (c) any other communication prescribed in the Rules by the AFSA.

Guidance: Offers of Units in a Listed Fund

For the avoidance of doubt, this Chapter 2 does not apply to the Offer of Units in a Listed Fund. While a Unit of a Listed Fund is, in general terms, a type of security, it is not a Security for the purposes of the Framework Regulations (as defined in the Glossary (GLO)) or any other AIFC Financial Services Regulations or Rules to which GLO applies. Rules in relation to the Offer of Units in a Listed Fund are set out, inter alia, in the AIFC Collective Investment Scheme Rules. Fund Managers should also refer to the applicable Business Rules.

62. Prohibition – Admission to trading

A Person may not have Securities or Units in a Listed Fund admitted to trading on an Authorised Investment Exchange unless:

1. (a) such Investments have been admitted to the Official List maintained by the Authorised Investment Exchange; and
2. (b) in relation to Securities, a Prospectus in relation to the relevant Securities containing the information prescribed for this purpose by the AFSA has been approved by the Authorised Investment Exchange; and
3. (c) in relation to Units in Listed Funds other than Overseas Listed Funds:
4. (i) the Fund is a Non-Exempt Fund under the AIFC Collective Investment Scheme Rules; and

(ii) there are Offering Materials in relation to the relevant Units and the Authorised Investment Exchange has satisfied itself that such Offering Materials satisfies the requirements in AIFC Collective Investment Scheme Rules.

Guidance: Units in a Listed Fund

For the avoidance of doubt, a Prospectus is not required in relation to Units in a Listed Fund. The requirements in relation to Offering Materials, which apply to Units in a Listed Fund (other than Overseas Listed Funds), are set out in the CIS. The requirements in relation to Offering Materials for Overseas Listed Funds will be regulated according to the Business Rules.

63. Exemptions

The AFSA may, at its discretion and on its own initiative, identify by Rules:

• (a) Exempt Offerors; and
• (b) Exempt Securities to which the prohibition in section 62 does not apply or applies in a modified manner.

64. Maintaining an Official List

(1) Subject to (3), an Official List for an Authorised Investment Exchange may be maintained by either the relevant Authorised Investment Exchange or the AFSA.

(2) An Authorised Investment Exchange must, when maintaining an Official List, comply with the relevant requirements in these Regulations and the Rules made thereunder.

(3) The AFSA may, at any time, transfer the responsibility for maintaining an Official List hitherto maintained by an Authorised Investment Exchange to the AFSA where it considers it necessary or desirable to do so.

(4) An Authorised Investment Exchange must not permit trading of Securities or Units in a Listed Fund on its facilities unless such Investments are admitted to, and not suspended from, an Official List maintained by the Authorised Investment Exchange or the AFSA except where otherwise prescribed in the Rules.

65. Listing Rules Requirements

(1) An Authorised Investment Exchange must, when maintaining an Official List, establish and maintain Listing Rules as part of its Business Rules.

(2) The Listing Rules of an Authorised Investment Exchange must contain such provisions as are prescribed in the Rules.

(3) Where the AFSA maintains an Official List, it will, by Rules, prescribe the relevant Listing Rules.

66. Admission of Securities or Units in a Listed Fund to an Official List

(1) An Authorised Investment Exchange or the AFSA may grant admission of Securities or Units in a Listed Fund to an Official List maintained by it only where it is satisfied that such admission is in accordance with the relevant Listing Rules.

(2) Where a Person applies to have Securities or Units in a Listed Fund admitted to an Official List maintained by an Authorised Investment Exchange or the AFSA, the Authorised Investment Exchange or the AFSA, as is relevant, must notify the applicant in writing of its decision in relation to the application for admission of such Investments to the Official List.

(3) Where a Person has any Securities or Units in Listed Funds included on an Official List, such Investments must be admitted to trading on an Authorised Investment Exchange as soon as possible.

(4) Where any Securities or Units in Listed Funds included in an Official List are not admitted to trading in accordance with the requirement in section 66(3), such Investments must be removed from the Official List.

(5) The AFSA may, by Rules, prescribe any circumstances in which Securities or Units in a Listed Fund admitted to an Official List need not comply with the requirement in section 66(3).

67. AFSA objection to admission of Securities or Units in a Listed Fund to an Official List

(1) Where an Authorised Investment Exchange maintains an Official List, the AFSA may:

1. (a) object to the admission of Securities or Units in a Listed Fund to such an Official List; or
2. (b) impose conditions or restrictions in respect of the admission of Securities or Units in a Listed Fund to such an Official List, or vary or withdraw such conditions or restrictions, in the circumstances specified in section 67(3).

(2) Where the AFSA maintains an Official List, the AFSA may:

1. (a) refuse an application for admission of Securities or Units in a Listed Fund to such an Official List; or
2. (b) impose conditions or restrictions, in respect of the admission of Securities or Units in a Listed Fund to such an Official List, or vary or withdraw such conditions or restrictions, in the circumstances specified in section 67(3).

(3) The AFSA may exercise its powers under section 67(1) or 67(2) where:

1. (a) the AFSA reasonably considers that:
2. (i) granting the Securities or Units in a Listed Fund admission to an Official List would be detrimental to the interests of Persons dealing in the relevant Securities or Units in a Listed Fund using the facilities of an Authorised Investment Exchange or otherwise; or

(ii) any requirements in the Listing Rules as are applicable have not been or will not be complied with; or

(iii) any requirement imposed by the AFSA has not been or will not be complied with; or

(iv) the Issuer of the Securities or Units in a Listed Fund has failed or will fail to comply with any obligations applying to it including those relating to having its Securities or Units in a Listed Fund admitted to an Official List or listed or traded in another jurisdiction; or

1. (b) the AFSA otherwise considers it necessary or desirable to do so.

(4) Where the AFSA objects to the admission of Securities or Units in a Listed Fund to an Official List pursuant to section 67(3)(a), such Investments must not be admitted by an Authorised Investment Exchange to its Official List.

(5) Where the AFSA imposes conditions or restrictions on the admission of Securities or Units in a Listed Fund to an Official List pursuant to section 67(3)(b), such Investments must not be admitted by an Authorised Investment Exchange to its Official List unless there is compliance with those conditions and restrictions.

68. Suspending and delisting Securities or Units in a Listed Fund from an Official List

(1) The AFSA or an Authorised Investment Exchange may, in accordance with its Listing Rules, suspend or delist Securities or Units in a Listed Fund from its Official List with immediate effect or from such date and time as may be specified where it is satisfied that there are circumstances that warrant such action or it is in the interests of the AIFC.

(2) The AFSA may direct an Authorised Investment Exchange to suspend or delist Securities or Units in a Listed Fund from an Official List with immediate effect or from such date and time as may be specified if it is satisfied there are circumstances that warrant such action or it is in the interests of the AIFC.

(3) The AFSA may revoke a direction given under subsection (2) at any time.

(4) Securities or Units in a Listed Fund that are suspended from an Official List remain admitted to an Official List for the purposes of this Part.

(5) The AFSA may, by Rules, prescribe any additional requirements or procedures relating to the delisting or suspension of Securities or Units in a Listed Fund from, or restoration of Securities or Units in a Listed Fund to, an Official List.

69. Prospectus content

A Prospectus must contain:

• (a) information which is material to an investor for making an informed assessment of:

(i) the assets and liabilities, profits and losses, financial position, and prospects of the Issuer and of any guarantor;

(ii) the rights attaching to the Securities; and

(iii) the reasons for the issuance and its impact on the Issuer; and

• (b) such further information and documents as may be specified by the AFSA pursuant to section 70.

70. AFSA power to prescribe Prospectus content

(1) The AFSA may, by Rules, prescribe the information that must be included in a Prospectus.

(2) The AFSA may, in prescribing the information to be included in a Prospectus, require specific content for a Prospectus of a particular type of Security.

(3) The Issuer or other Person responsible for the issue of a Prospectus must include in the Prospectus all the information required under subsections (1) and (2) that would be reasonable for him to have knowledge of, or acquire through reasonable enquiries.

(4) The AFSA may by Rules prescribe:

• (a) the circumstances in which a Prospectus may incorporate any material by reference; and
• (b) the Persons liable for the content of a Prospectus.

71. AFSA power to approve omission of information

The AFSA may approve the omission from the Prospectus, or constituent parts thereof, of certain information to be included therein, if it considers that any of the following conditions is met:

• (a) disclosure of such information would be contrary to the public interest;
• (b) disclosure of such information would be seriously detrimental to the Issuer or to the guarantor, if any, provided that the omission of such information would not be likely to mislead the public with regard to facts and circumstances essential for an informed assessment of the Issuer or guarantor, if any, and of the rights attached to the securities to which the prospectus relates;
• (c) such information is of minor importance in relation to admission to trading on an Authorised Investment Exchange and would not influence the assessment of the financial position and prospects of the Issuer or guarantor.

72. AFSA power to publish or require publication of information

Where a Person issuing a Prospectus fails to publish any information which that Person is required to publish by or under these Regulations, the AFSA may direct the Issuer to publish such information or in a time frame prescribed by the AFSA or publish such information itself.

73. Obligation to issue a Supplementary Prospectus

If at any time after the issue of a Prospectus there is a significant change in, or a material mistake or inaccuracy affecting any matter contained in the Prospectus or a significant new matter arises, the Issuer or the Person responsible for the issue of the Prospectus must issue a Supplementary Prospectus which provides details of the change, mistake, inaccuracy or new matter.

74. Right to withdraw

(1) Where the obligation to issue a Supplementary Prospectus arises, investors who have already agreed to purchase or subscribe for the Securities before the Supplementary Prospectus is published have the right to withdraw their acceptances. Subject to (2), such right is exercisable within five working days after the issue of the Supplementary Prospectus or such longer period as either the Issuer may decide or the Authorised Investment Exchange or the AFSA may direct.

(2) Investors may exercise the right to withdraw their acceptances if the significant new factor, material mistake or material inaccuracy in (1) arose or was noted before the closing of the offer period or the delivery of the securities, whichever occurs first.

75. Prohibition against misleading and deceptive statements or omissions

(1) A Person must not issue a Prospectus if there is:

• (a) a misleading or deceptive statement in the Prospectus; or
• (b) any material omission from the Prospectus; or
• (c) a significant new matter or a significant change in circumstances is known to the Issuer before the Prospectus is issued.

(2) A Person does not contravene the prohibition in section 75(1) if that Person can prove the circumstances or matters specified in sections 76 or 77.

76. Defence of reasonable inquiries and reasonable belief

A Person does not commit a contravention of section 75(1), if that Person proves that he:

• (a) made all inquiries that were reasonable in the circumstances; and
• (b) after making such inquiries, believed on reasonable grounds that the Prospectus was not misleading or deceptive.

77. Defence of reasonable reliance on information given by another Person

(1) A Person does not commit a contravention of section 75(1) if the Person proves that reasonable reliance was placed by the person on information given by:

• (a) if the Person is not a natural Person, someone other than a member of the Governing Body, or Employee representative of the Person; or
• (b) if the Person is a natural Person, someone other than an Employee representative of the natural Person.

(2) For the purposes of this Part, a Person is not the representative of another Person merely because the Person performs a particular professional or advisory function for that other Person.

78. Statements about future matters

(1) A Person is taken to make a misleading or deceptive statement about a future matter by himself or through his representative, if he, at the time of making the statement or causing the statement to be made, did not have reasonable grounds for making the statement or causing the statement to be made.

(2) The onus for proving that reasonable grounds existed for the purposes of section 78(1) is on the Person who made the statement or caused the statement to be made.

(3) A Person referred to in section 78(2) may rely on the circumstances referred to in section 76 or 77 in order to prove that he had reasonable grounds for making the statement relating to the future matter.

79. Civil compensation

(1) Any Person prescribed in Rules made by the AFSA as being liable for a Prospectus is liable to pay compensation to another Person who has acquired Securities to which the Prospectus relates and who has suffered loss or damage arising from any untrue or misleading statement in the Prospectus or the omission from it of any material matter required to have been included in the Prospectus under these Regulations or Rules made thereunder.

(2) The AFSA may make Rules prescribing circumstances in which a Person who would otherwise be liable under section 79(1) will not be so liable.

(3) Nothing in this section affects the powers, rights or liabilities that any Person may have apart from this section including the power to institute proceedings under section 129 (Action for Damages).

80. Stop orders

If the AFSA is satisfied that an Offer of Securities to the Public would contravene or has contravened these Regulations or the Rules made for the purposes of these Regulations or it is necessary or desirable in the interest of the AIFC, the AFSA may issue a stop order directing that no offer, issue, sale or transfer of the Securities be made for such a period of time as it thinks appropriate.

81. Definition of Reporting Entity

A Person is a Reporting Entity if the Person:

(1) has Securities or Units admitted to an Official List;

(2) is the Fund Manager of a Listed Fund; or

(3) is declared by the AFSA to be a Reporting Entity.

82. Governance

(1) A Reporting Entity must have a corporate governance framework which is adequate to promote prudent and sound management of the Reporting Entity in the long-term interest of the Reporting Entity and its shareholders.

(2) For the purposes of the requirement in section 82(1), the AFSA may, by Rules, prescribe:

1. (a) corporate governance principles and standards that apply to a Reporting Entity, including any requirements applicable to its board of directors and individual members, controllers, employees or any other Person as appropriate;
2. (b) requirements relating to fair treatment of shareholders; and
3. (c) provisions to address conflicts of interests.

(3) The requirements in section 82 do not apply to Listed Funds or Fund Managers of Listed Funds. The AFSA may, by Rules, prescribe any circumstances in which such requirements do not apply to certain other Reporting Entities.

83. Market disclosure

(1) A Reporting Entity must, subject to section 83(5), make disclosures to the market of information specified by the AFSA in the circumstances prescribed by the Rules.

(2) Without limiting the generality of section 83(1), the AFSA may, by Rules, prescribe the type of information and the circumstances in which such information must be disclosed including:

• (a) financial information;
• (b) Inside Information as defined in section 87(a); and
• (c) any other information or material change which occurs in relation to a Reporting Entity.

(3) Where information is required to be disclosed pursuant to section 83(1), the Reporting Entity must:

• (a) issue a release of information to the market disclosing the information; and
• (b) file a report with the AFSA, in the manner prescribed by the Rules.

(4) Where a Reporting Entity has failed to publish information required to be published pursuant to section 83(1) and the Rules made for the purposes of this section, the AFSA may publish such information in a manner considered appropriate by the AFSA.

(5) The AFSA may, by Rules, prescribe the circumstances in which a Reporting Entity need not comply with the disclosure requirement in section 83(1).

84. Financial reports

The AFSA may prescribe by Rules:

• (a) financial reports to be filed by a Reporting Entity; and
• (b) audit requirements to be observed by a Reporting Entity.

85. Sponsors and compliance advisers

(1) The AFSA may, where it considers it appropriate to do so, require that a Reporting Entity or a Person that intends to have Securities or Units in a Listed Fund admitted to an Official List or admitted to trading on an Authorised Investment Exchange appoints an Authorised Firm or Accredited Firm to act as a sponsor or compliance adviser.

(2) The AFSA may, by Rules, prescribe:

1. (a) the circumstances in which a Reporting Entity is required to appoint a sponsor or compliance adviser;
2. (b) the requirements applicable to the Reporting Entity and to an Authorised Firm or Accredited Firm appointed as a sponsor or compliance adviser; and
3. (c) any other matter necessary to give effect to such appointments.

86. Market Abuse

A Person must not, in the AIFC or elsewhere, directly or indirectly:

• (a) acquire or dispose of, or attempt to acquire or dispose of, for his own account or for the account of a third party, either directly or indirectly, an Investment, on the basis of Inside Information relating to the Investment; or
• (b) disclose Inside Information to another Person otherwise than in the proper course of the exercise of his employment, profession or duties; or
• (c) recommend or induce any Person, on the basis of Inside Information, to acquire or dispose of an Investment to which that information relates; or
• (d) effect, or participate in effecting, transactions or orders to trade (otherwise than for legitimate reasons in conformity with accepted market practice on the relevant market) which:

(i) give, or are likely to give a false or misleading impression as to the supply of, or demand for, or as to the price or value of, one or more Investments; or

(ii) secure the price of one or more Investments at an abnormal or artificial level; or

• (e) effect, or participate in effecting, transactions or orders to trade which employ fictitious devices or any other form of deception or contrivance; or
• (f) disseminate, or cause the dissemination of, information by any means which gives, or is likely to give, a false or misleading impression as to an Investment by a Person who knew or could reasonably be expected to have known that the information was false or misleading.

87. Rules relating to Market Abuse

The AFSA may issue Rules in respect of the scope and effect of section 86, including:

• (a) the meaning of Inside Information;
• (b) particular types of conduct that are to be regarded as contravening or not contravening section 86;
• (c) particular types of conduct that are not to be regarded as contravening section 86; and
• (d) reasons which may or may not be regarded as legitimate, and practices that may or may not be regarded as accepted market practice for the purposes of section 86(d), and such Rules will be binding on all Persons to whom section 86 relates.

88. Takeover Rules

(1) The AFSA may prescribe by Rules (“the Takeover Rules”):

1. (a) the procedures for and obligations of Persons in respect of a Takeover of an Issuer whose Securities are admitted to an Official List with a view to ensuring:
2. (i) that where a Takeover takes place, it does so in an efficient, competitive, fair and informed market;

(ii) that shareholders are treated fairly and shareholders of the same class are treated the same; and

(iii) that a Takeover is conducted in an orderly framework;

1. (b) principles to be observed by a Person involved in a Takeover (“the Takeover Principles”), relating to, but not limited to:
2. (i) treatment of shareholders and of classes of shareholders in a Takeover;

(ii) adequacy of time and of information provided to shareholders to enable proper consideration of a Takeover bid;

(iii) avoidance of the creation of false markets; and

(iv) avoidance of oppression of minorities.

(2) A Person who is involved in a Takeover of an Issuer whose Securities are admitted to an Official List must comply with and observe the spirit and the wording of the Takeover Principles.

(3) The requirements of section 88 do not apply to Listed Funds.

89. Recognition of Non-AIFC Market Institutions

(1) A Person which operates an investment exchange, clearing house from a place of business in a jurisdiction other than the AIFC may apply to the AFSA for an order declaring it to be a Recognised Non-AIFC Investment Exchange or Recognised Non-AIFC Clearing House as appropriate (together “Recognised Non-AIFC Market Institutions”).

(2) An application under subsection (1) must be made in such manner as the AFSA may by Rules require.

(3) The AFSA may make an order referred to in subsection (1) if, having regard to the law and practice of the country or territory in which the applicant's head office is situated and to the rules and practice of the applicant, it appears to the AFSA that the following requirements are met:

• (a) investors are afforded protection equivalent to that which they would be afforded if the body concerned were required to comply with the relevant requirements for the licensing of an Authorised Market Institution in Chapter 2 of Part 3;
• (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 to co‐operate with the AFSA by the sharing of information and in other ways;
• (d) adequate arrangements exist for co‐operation between the AFSA and those responsible for the supervision of the applicant in the country or territory in which the applicant or the applicant's head office is situated.

90. Exemption for Recognised Non-AIFC Market Institutions from General Prohibition

(1) An Recognised Non-AIFC Investment Exchange will not be deemed to be carrying on any Market Activity or Regulated Activity in the AIFC where such activity:

• (a) is carried on as a part of the Recognised Non-AIFC Investment Exchange's business as an investment exchange; or
• (b) 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) An Recognised Non-AIFC Clearing House will not be deemed to be carrying on any Market Activity or Regulated Activity in the AIFC where such activity:

• (a) is carried on for the purposes of, or in connection with, the provision of clearing services by the Recognised Non-AIFC Clearing House; or
• (b) is carried on for the purposes of, or in connection with, the provision by the Recognised Non-AIFC Clearing House of services designed to facilitate the provision of clearing services by another Person.

91. Recognised Non-AIFC Member

(1) A Person located in a jurisdiction other than the AIFC may apply to the AFSA for an order declaring it to be a Recognised Non-AIFC Member.

(2) An application under subsection (1) must be made in such manner as the AFSA may by Rules require.

(3) The AFSA may make an order referred to in subsection (1) if, the applicant satisfies the AFSA that the following requirements are met:

• (a) the applicant is licensed or otherwise authorised to trade on or use the facilities of an exchange or clearing house in a jurisdiction acceptable to the AFSA;
• (b) the applicant is regulated in respect of trading in such jurisdiction by a regulator to a standard satisfactory to the AFSA;
• (c) the law and practice under which the applicant is licensed or otherwise authorised is broadly equivalent to the AFSA’s regulatory regime as it applies to a Member;
• (d) when using the facilities of an Authorised Investment Exchange or Authorised Clearing House, MTF Operator, OTF Operator, or Digital Asset Trading Facility Operator the applicant does not exceed the scope of the activities it is authorised to carry on by those responsible for the supervision of the applicant in the country or territory in which the applicant's head office is situated;
• (e) the applicant has agreed to cooperate with the AFSA and subject itself to such parts of the legal and regulatory framework administered by the AFSA as the AFSA may require.

(4) The AFSA will only make an order referred to in subsection (1) if adequate arrangements exist, or will exist, for co-operation between the AFSA and those responsible for the supervision of the applicant in the country or territory in which the applicant or the applicant's head office is situated.

(5) The AFSA may prescribe by Rules ongoing criteria which a Person must satisfy in order to continue to be a Recognised Non-AIFC Member.

(6) If it is necessary or desirable in pursuit of its Regulatory Objectives, the AFSA may revoke or vary an order declaring a Person to be a Recognised Non-AIFC Member in the circumstances and manner prescribed in the Rules made for the purposes of this section.