• CIPR Chapter 4 CIPR Chapter 4 Obligations of all authorised firms — advertisements, personal contact with customers, and initial disclosure document

    • CIPR Part 4.1 CIPR Part 4.1 Preliminary

      • CIPR 4.1.1 Application of Chapter 4

        This Chapter applies to an authorised firm in its dealings with customers (other than eligible counterparties).

        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.1.2 How Chapter 4 is meant to operate

        This Chapter is intended to apply to an authorised firm in a way that is appropriate and proportionate, taking into account, for example, the means used for communicating an advertisement, and the information that an advertisement is intended to convey to a customer.

        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

    • CIPR Part 4.2 CIPR Part 4.2 Advertisements — general requirements

      • CIPR 4.2.1 Meaning of advertisement

        In these rules:

        advertisement means a communication made using any medium (for example, brochure, telephone call, the internet, email and presentation) if the purpose or effect of the communication is:

        (a) to promote or advertise:
        (i) 1 or more specified products; or
        (ii) a regulated activity (or an activity that would be a regulated activity if it was carried on in or from the QFC); or
        (b) to invite or induce any person:
        (i) to enter into an agreement with any person in relation to a specified product; or
        (ii) to engage in a regulated activity (or an activity that would be a regulated activity if it was carried on in or from the QFC).
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.2.2 Advertisements — compliance confirmation

        Before an authorised firm makes or approves an advertisement, the firm must ensure that a member of the firm's senior management (within the meaning given by CTRL, rule 2.3.1) reviews the advertisement, and confirms in a durable medium that he or she is satisfied that it complies with this Part.

        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.2.3 Advertisements for Shari'a-compliant products

        (1) An authorised firm must not make or approve an advertisement for a product or service that is represented as being Shari'a-compliant unless the product or service has been approved by the firm's Shari'a supervisory board. If the product was developed by another authorised firm or regulated financial institution, the product must also have been approved by that firm or institution's Shari'a supervisory board.
        (2) An advertisement for a product or service that is represented as being Shari'a-compliant must specify the firm whose Shari'a supervisory board approved the product or service and the date on which the approval was given.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.2.4 Content of advertisements

        (1) If an authorised firm makes or approves an advertisement, it must ensure that:
        (a) the advertisement is clear, fair and not misleading;
        (b) the promotional purpose of the advertisement is clearly identifiable;
        (c) the advertisement does not omit anything if the result of the omission is that the advertisement contravenes paragraph (a);
        (d) every material statement of fact in the advertisement can be substantiated;
        (e) if the advertisement includes a material statement of fact, the statement is sufficiently up to date to ensure that the advertisement does not contravene paragraph (a);
        (f) if the advertisement is about a regulated activity or specified product that places a customer's capital at risk, it makes the risk clear;
        (g) if the advertisement is about a regulated activity or specified product with a complex charging structure, or in relation to which the firm will receive 2 or more elements of remuneration — the advertisement contains enough information taking into account the needs of the recipients;
        (h) the advertisement does not mention an approval or authorisation of the Regulatory Authority unless the Authority has given the approval or authorisation in a durable medium;
        (i) the advertisement is not misleading about any of the following:
        (i) the authorised firm's independence or the independence of the advice that it provides;
        (ii) the firm's ability to provide the advertised product or service;
        (iii) the scale of the firm's activities;
        (iv) the extent of the firm's resources;
        (v) the nature of the involvement of the firm or any other person in the product or service;
        (vi) the scarcity of the product or service;
        (vii) the past performance or possible future performance of the product or service;
        (j) if the advertisement contains acronyms or initialisms, it states what the letters stand for; and
        (k) the advertisement describes a product or service as free only if the entire product or service is available free to a customer.

        Guidance

        Accordingly, initial meetings with customers may not be advertised as a "free financial review" or "free financial plan" or similar expressions.
        (2) If an authorised firm makes or approves an advertisement that is to be published in a durable medium, the firm must ensure that the advertisement contains all of the following information:
        (a) the firm's name;
        (b) either the firm's address or a contact (for example, a web site) from which the address is available;
        (c) the date of issue and, if applicable, the expiry date, of the advertisement;
        (d) either of the following statements about the firm's authorisation:
        (i) "Authorised by the Qatar Financial Centre Regulatory Authority";
        (ii) "Authorised by the QFC Regulatory Authority";

        Note Either of these statements is also required in the firm's business documents — see GENE, rule 3.1.2.
        (e) in the case of a co-branded financial product, the name and regulatory status of the other firm or each of the other firms.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.2.5 Advertisements made by another person

        An authorised firm must ensure that an advertisement that was made for it by another person contains the names of both the firm and the other person.

        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.2.6 Withdrawal of non-compliant advertisements

        If an authorised firm becomes aware that an advertisement does not comply, or no longer complies, with this Part, the firm must withdraw the advertisement as soon as practicable by either:

        (a) ceasing to make the advertisement and informing any customer that the firm knows to be relying on it that the advertisement is withdrawn; or
        (b) withdrawing its approval and informing any customer that the firm knows to be relying on it that the advertisement is withdrawn.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.2.7 Presentation of advertisements

        (1) Before an authorised firm makes or approves an advertisement, it must ensure that the advertisement:
        (a) is accurate and, in particular, does not emphasise any potential benefits of a specified product (or regulated activity) without also giving a fair and prominent indication of any relevant risks;
        (b) is sufficient for the needs of the average individual to whom it is addressed or by whom it is likely to be received, and is presented in plain English and in a way that he or she is likely to understand; and
        (c) does not disguise, diminish or obscure important information, statements or warnings.
        (2) If the firm is a tied agent of a product provider for a particular product or service, the firm must disclose that fact in all of its advertisements for the product or service.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.2.8 Comparisons in advertisements

        If an authorised firm makes or approves an advertisement that contains a comparison or contrast, it must ensure that:

        (a) the comparison is meaningful and is presented in an objective and balanced way;
        (b) the sources of the information used for the comparison are stated;
        (c) the key facts and assumptions used to make the comparison are included; and
        (d) nothing material to the comparison is omitted.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.2.9 Advertisements with references to past performance

        (1) If an authorised firm makes or approves an advertisement that includes or refers to the past performance of a regulated activity or specified product, it must ensure that:
        (a) the performance information is not the most prominent feature of the advertisement;
        (b) the performance information:
        (i) covers at least the last 5 years, or the entire period for which the regulated activity or specified product has been offered, but never less than 3 consecutive years; and
        (ii) is based on complete 12-calendar-month periods; and
        (c) the reference period, basis and source of the performance information are clearly stated.
        (2) The firm must ensure that any document that contains information on past performance contains the following warning:
        Warning: Past performance is not a reliable guide to future performance.
        The warning must appear near the information on past performance, and may not be provided by way of a footnote.
        (3) The firm must make and retain a detailed record of how the past performance information was calculated.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.2.10 Advertisements with future performance forecasts

        (1) If an authorised firm makes or approves an advertisement that includes or refers to a forecast of the future performance of a regulated activity or specified product, it must ensure that:
        (a) the forecast is not based on, and does not refer to, simulated past performance;
        (b) the forecast is based on reasonable assumptions supported by objective data; and
        (c) the forecast is based on net performance (that is, the effect of commissions, fees or other charges (applied by any party) is fully taken into account in the forecast) and is not based on gross performance.

        Guidance

        In the case of a packaged investment product, the other charges would include charges applied at the level of the underlying funds and any sub-funds of those funds.
        (2) The firm must ensure that any document that includes or refers to illustrations or information on future performance forecasts must also contain the following warning:
        Warning: These figures are estimates only. They are not a reliable guide to the future performance of this investment.
        The warning must appear near the information on future performance, and may not be provided by way of a footnote.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.2.11 Advertisements for packaged investment products

        (1) In relation to the past performance of a packaged investment product, an authorised firm must ensure that, where relevant, the performance information is given on:
        (a) an offer-to-bid basis (which must be stated), if there is an actual return or comparison of performance with other investments;
        (b) an offer-to-offer, bid-to-bid or offer-to-bid basis (which must be stated), if there is a comparison of performance with an index or with movements in the price of units; or
        (c) a single-pricing basis (which must be stated) with allowance for fees and charges.
        (2) If the pricing policy of the product changes during the period for which performance information is presented, the firm must ensure that the prices used include the adjustments necessary to remove any distortions resulting from the change in the pricing policy.
        (3) If an authorised firm gives information in a durable medium about the simulated performance of a packaged investment product, the information:
        (a) must be based on a simulated performance that is relevant to the performance of the product;
        (b) must not be selected so as to exaggerate the success or disguise the lack of success of the product;
        (c) must state the source of the information; and
        (d) must indicate whether, and to what extent, transaction costs, interest and taxation have been taken into account.
        (4) The firm must ensure that any advertisement that contains illustrations or information on simulated performance also contains the following warning:
        Warning: These figures are estimates only. They are not a reliable guide to the future performance of this investment.
        The warning must appear near the information on simulated performance, and may not be provided by way of a footnote.
        (5) The firm must make and retain a detailed record of how the simulated performance information was calculated.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.2.12 Advertisements describing products as guaranteed

        An authorised firm must ensure that an advertisement does not describe a product as guaranteed or partly guaranteed unless:

        (a) there is a legally enforceable agreement with a guarantor that undertakes to meet, to whatever extent is stated in the advertisement, a customer's claim under the guarantee;
        (b) the firm has made, and can show that it has made, an assessment of the value of the guarantee;
        (c) the advertisement clearly states the name of the guarantor and the level, nature and extent of the limitations of the guarantee; and
        (d) if the guarantor is a partner, employee, shareholder or associate of the firm, or an entity within the same corporate group as the firm, the advertisement states that fact.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

    • CIPR Part 4.3 CIPR Part 4.3 Personal contact with customers

      • CIPR 4.3.1 Personal visits — retail customers

        (1) An authorised firm must not make an unsolicited personal visit, at any time, to a retail customer.
        (2) An authorised firm may make a personal visit to a retail customer only if the customer has consented to the visit. The firm must obtain the customer's consent separately for each visit and must retain a record of each consent.
        (3) A customer's consent to a visit is effective for subrule (2) only if the customer has specifically consented:
        (a) to the purpose or purposes for the visit; and
        (b) to the time and date for the visit.
        (4) Subrules (1) and (2) do not apply to a visit required in connection with the settlement of an insurance claim made by the customer, or the administration of an existing insurance contract entered into by the customer.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.3.2 Telephone contacts — retail customers

        (1) An authorised firm may make unsolicited telephone contact with a retail customer only in the following cases:
        (a) the firm has, within the previous 12 calendar months, provided the customer with a product or service similar to the product or service that is the purpose of the telephone contact;
        (b) the customer holds a product that requires the firm to maintain contact with the customer, and the contact is about the product;
        (c) the customer has previously consented in a durable medium to being contacted by telephone by the firm.
        (2) An authorised firm may make telephone contact with a retail customer only between the hours of 09.00 and 21.00, Saturday to Thursday (and not on a religious, public or bank holiday), unless the customer agrees otherwise.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.3.3 Conduct of personal visits and telephone contacts

        (1) When making a personal visit to, or telephone contact with, a customer, the person who makes the visit or contact must immediately do the following things in the order they are set out:
        (a) identify himself or herself by name, and give the name of the authorised firm and the purpose of the visit or telephone contact;
        (b) in the case of a telephone contact that is being recorded, inform the customer so;
        (c) ask whether the customer wishes to continue the visit or telephone contact and if the customer does not wish to continue, end the visit or telephone contact immediately.
        (2) An authorised firm must not conclude a sale during a personal visit or telephone contact that was initiated by the firm.
        (3) An authorised firm must comply with a request from a retail customer not to make a personal visit to, or make telephone contact with, him or her again. The firm must make a record of the request, and must retain the record for at least 6 years after the request.
        (4) An authorised firm must also make an appropriate record of the matters discussed during a personal visit or telephone contact. The firm must retain the record for 6 years after the visit or contact.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

    • CIPR Part 4.4 CIPR Part 4.4 Initial disclosure document

      • CIPR 4.4.1 Initial disclosure documents — general

        (1) An authorised firm must draw up an initial disclosure document and must give a copy of it to every retail customer or business customer, in a durable medium, before providing any service to that customer.
        (2) An initial disclosure document must be a stand-alone document, in type of a reasonable size, and no more than 3 A4 pages long.
        (3) An initial disclosure document must be entitled either initial disclosure document or terms of business. No other title may be used.
        (4) The copy of an authorised firm's initial disclosure document that is given to a customer must be dated, and must be signed by an employee of the firm. The firm may ask a customer to sign a copy, but only as evidence of the customer's having received a copy of the document.
        (5) An authorised firm must ensure that the initial disclosure document that the firm gives a customer contains, in plain English, the information that the firm reasonably considers will be, or is likely to be, appropriate for the customer, taking into account:
        (a) the activities that the firm may conduct with or for the customer; and
        (b) whether the customer is a retail customer or a business customer.
        (6) The information in an initial disclosure document must begin with the information required by rule 4.4.2, and must continue with the sector-specific information required in the particular case.
        (7) An authorised firm must periodically review its initial disclosure document to ensure that all of the information in it is accurate and current.
        (8) If an authorised firm makes a material change to its initial disclosure document that will be relevant to, or will affect, existing customers, it must give a copy of the revised document to all of its existing customers without delay.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.4.2 Initial disclosure documents — content

        (1) An authorised firm's initial disclosure document must begin with the following information in the following order:
        (a) the legal name and business address of the firm, and its trading name if it is different to the legal name;
        (b) the date on which the document came into effect;
        (c) either of the following statements about the firm's authorisation:
        (i) "Authorised by the Qatar Financial Centre Regulatory Authority";
        (ii) "Authorised by the QFC Regulatory Authority";

        Note Either of these statements is also required in the firm's business documents — see GENE, rule 3.1.2.
        (d) information (in plain English) about the regulated activities that the firm is authorised to undertake;
        (e) a statement as to whether or not the firm's regulated activities are conducted in accordance with Shari'a;
        (f) a description (see subrule (2)) of the services that the firm offers;
        (g) information about:
        (i) the firm's internal complaint-handling procedures, including information about how a complaint can be made to the firm; and
        (ii) the customer dispute resolution scheme.
        (2) The description of the firm's services must include details of the nature and scope of the services offered by the firm. The initial disclosure document must also state whether there are any restrictions on the nature and scope of those services (whether as a result of regulatory provisions or the policy of the firm) and if so, must give details of the restrictions.
        (3) Any other information that is required by a provision of these rules to be in the firm's initial disclosure document must follow the information required by subrule (1).
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).

      • CIPR 4.4.3 Amendment of initial disclosure documents

        If an authorised firm's initial disclosure document allows the firm to change the terms of the document without its customers' agreement, the firm must not conduct business with or for a customer on the basis of a changed document unless the firm has given the customer notice, in a durable medium, of the change:

        (a) at least 10 business days before the change is to take effect; or
        (b) if it is impractical to give notice of the change within the period mentioned in paragraph (a) — as early as is practicable.
        Derived from QFCRA RM/2019-2 (as from 1st January 2020).