2.2.17. Accepting Deposits
2.2.17.1. General description
Accepting Deposits is listed in section 17 of Schedule 1 of GEN.
A Firm is accepting deposits if money or funds received as a Deposit:
(a) is lent to other Persons, or
(b) used to finance wholly, or partly, any other activity of the Person accepting the Deposit.
To the extent that any activity constitutes Opening and Operating Bank Accounts such a Regulated Activity is taken to be incorporated within Accepting Deposits.
A Deposit is a sum of money paid on terms:
(a) under which it will be repaid, with or without interest or a premium, and either on demand or at a time or in circumstances agreed by or on behalf of the Person making the payment and the Person receiving it; and
(b) which is not relevant to the provision of property (other than currency) or services or the giving of security.
Money is paid on terms which are relevant to the provision of property or services or the giving of security if:
(a) it is paid by way of advance or part payment under a contract for the sale, hire or other provision of property or services, and is repayable only in the event that the property or services are not in fact sold, hired or otherwise provided;
(b) it is paid by way of security for the performance of a contract or by way of security in respect of loss which may result from the non-performance of a contract; or
(c) without prejudice to (b), it is paid by way of security for the delivery of property, whether in a particular state of repair or otherwise.
An Authorised Firm authorised to carry on the regulated activity of Accepting Deposits is subject to prudential supervision and must comply with AIFC Banking Business Prudential Rules.
Currency regulation
The table below illustrates currency regulation implications if services are offered to residents of Kazakhstan that are not AIFC Participants.
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Are you planning to offer your services to legal entities or natural persons – residents of Kazakhstan that are not AIFC Participants? |
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Yes:
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Your services will be subject to the AIFC Rules on Currency Regulation: |
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Name of allowed activity: |
Accepting deposits from residents of Kazakhstan is prohibited.
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Relevant reference to Schedule 2 to the AIFC Rules on Currency Regulation: |
Not mentioned. The services cannot be offered to residents of Kazakhstan that are not AIFC Participants. |
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Type of currency: |
Not applicable |
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Transaction |
Not applicable |
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Currency reporting |
No specific reporting for a financial service. Transactional reporting may be applicable (see Chapter 4 of PERG for more details).
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No: |
AIFC Rules on Currency Regulation do not apply. |
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For details see Chapter 4 of PERG.
2.2.17.2. Exclusions
Whether or not Accepting Deposits is a Regulated Activity depends on the use to which the money is put.
The activity is caught if money received by way of Deposit is lent to others or if any other activity of the person accepting the Deposit is financed wholly (or to a material extent) out of the capital of, or interest on, money received by way of Deposit.
Anyone concerned that they may be carrying on the Regulated Activity of Accepting Deposits will need to work out whether the sum received is in fact a Deposit.
A sum is not a Deposit if it is paid:
(a) by a Person in the course of carrying on a business consisting wholly or to a significant extent of lending money;
(b) by one company to another at a time when both are members of the same Group;
(c) by an Authorised Firm authorised to carry on the Regulated Activity of Accepting Deposits;
(d) by a Person who is a close relative of the Person receiving it or who is a director, manager or Controller of that Person.
A sum is not a Deposit if it is received:
(a) by a lawyer acting in a professional capacity;
(b) by an accountant acting in a professional capacity;
(c) by an Authorised Firm or an Authorised Market Institution authorised to carry on any one or more of the Regulated Activities defined in Schedule 1 of the GEN, except Accepting Deposits, in the course of or for the purpose of any such Regulated Activity disregarding any applicable exclusions; or
(d) by a Person as consideration for the issue by the person of a Debenture.