1.1 Introduction

(1) This Chapter sets out the scope of application of PRU(INV).

(2) These PRU(INV) Rules create:

1. (a) a general financial resources requirement in accordance with Chapter 2;
2. (b) a minimum capital requirement in accordance with Chapter 3; and
3. (c) a minimum net liquid assets requirement in accordance with Chapter 4.

(3) Chapter 5 provides for the requirements in PRU(INV) to apply at the level of the Financial Group of a PRU Investment Firm.

(4) Chapter 6 imposes reporting and notification requirements that relate to the matters covered by these PRU(INV) Rules.

1.2 Commencement

These PRU(INV) Rules commence on 1 January 2018.

1.3 Application of PRU(INV) Rules

(1) These PRU(INV) Rules apply to PRU Investment Firms.

(2) A "PRU Investment Firm" can be either a PRU Dealing Investment Firm or a PRU Intermediary Investment Firm.

(3) A "PRU Dealing Investment Firm" is an entity that has an Authorisation to conduct any of the following regulated activities:

1. (a) Dealing In Investments as Principal; or
2. (b) Dealing In Investments as Agent.

(4) A "PRU Intermediary Investment Firm" is an entity that has an Authorisation to conduct any of the following Regulated Activities:

1. (a) Managing Investments;
2. (b) Managing A Collective Investment Scheme, except for Managing a Collective Investment Scheme in relation to a Corporate Treasury Centre Fund;
3. (c) Providing Custody Services;
4. (d) Arranging Custody Services;
5. (e) Providing Trust Services;
6. (f) Providing Fund Administration;
7. (g) Acting as A Trustee of A Fund;
8. (h) Advising on Investments;
9. (i) Arranging Deals in Investments; or
10. (j) Managing Restricted Profit-Sharing Investment Accounts.

(5) The activities in Rule 1.3(3) and 1.3(4) are referred to as "PRU Investment Business".

(6) These PRU(INV) Rules do not apply to entities that have an Authorisation to conduct any of the following activities unless they are PRU Investment Firms, and the following activities are not PRU Investment Business:

1. (a) Insurance Intermediation;
2. (b) Representative Offices;
3. (c) Market Activities; or
4. (d) Ancillary Services;
5. (e) Operating a Multilateral Trading Facility; or
6. (f) Operating an Organised Trading Facility.

(7) The activities in Rule 1.3(6) are referred to as "Non-PRU(INV) Investment Business".

(8) If a PRU Investment Firm holds both an Authorisation to carry on PRU Investment Business and an Authorisation to carry on Non PRU(INV) Investment Business, it will be subject to these PRU(INV) Rules in relation to the whole of its business, including its Non PRU(INV) Investment Business. However, the AFSA may direct that the PRU Investment Firm will be deemed to satisfy:

1. (a) some or all of these PRU(INV) Rules where it satisfies the rules thatapply to it by reason of the Authorisation to carry on Non PRU(INV) Investment Business; or
2. (b) some or all of the rules that apply to it by reason of the Authorisation to carry on Non-PRU(INV) Investment Business where it satisfies these PRU(INV) Rules.

(9) Where a PRU Investment Firm makes an application to the AFSA for this Rule 1.3(9) to apply, and the AFSA is satisfied that:

1. (a) the PRU Investment Firm is a legal entity that is authorised and regulated to carry out the same regulated activities by the Financial Services Regulator in the jurisdiction in which it is incorporated;
2. (b) the PRU Investment Firm is subject to prudential regulation by that Financial Services Regulator in respect of the whole of its business, including the business carried on through its AIFC Operation; and
3. (c) the level of prudential regulation is at least equivalent to the level of prudential regulation under these PRU(INV) Rules, as assessed by the AFSA, then the AFSA may direct that the PRU Investment Firm shall be an "Externally Regulated PRU Investment Firm".

(10) Chapter 2 applies to an Externally Regulated PRU Investment Firm except as provided otherwise therein. Chapters 3 and 4 of these PRU(INV) Rules do not apply to Externally Regulated PRU Investment Firms. In Chapter 5, only Rule 5.3 applies to Externally Regulated PRU Investment Firms, and in Chapter 6, only Rule 6.6 applies to Externally Regulated PRU Investment Firms.

(11) Irrespective of whether a PRU Investment Firm is an Externally Regulated PRU Investment Firm, it must comply with these PRU(INV) Rules and with the rules of any other Financial Services Regulator, in each case to the extent applicable.

(12) Where it is satisfied that the business of a PRU Dealing Investment Firm is subject to risks that are not adequately addressed by the rules in PRU(INV), the AFSA may direct that PRU(INV) shall not apply to that PRU Dealing Investment Firm and that, instead, that PRU Dealing Investment Firm shall be subject to the rules that it has made in relation to the prudential regulation of entities that have an Authorisation from the AFSA to carry on banking business in the AIFC.