CHAPTER 10 – Recognition
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.