Part 3: Part 3: The Regulatory Authority
Article 10 - Background
This Part of these
Regulations sets out and elaborates on the background to the creation of theRegulatory Authority under theQFC Law , the objectives of theRegulatory Authority , and provisions relating to its constitution and governance.Article 11 - Management and constitution
(1) TheRegulatory Authority must comply with the requirements as to its management and constitution set out in Schedule 1.(2) Without prejudice to any other powers and rights that it may have hereunder or under any other applicable laws orRegulations , theRegulatory Authority shall have the powers and rights and be subject to the duties and obligations set out in Schedule 1.Article 12 - Objectives
(1) TheRegulatory Authority shall exercise its functions and powers under theQFC Law and theseRegulations in accordance with theRegulatory Objectives set out in Article 12(3).(2) TheRegulatory Authority shall be entitled to do, or refrain from doing, such other acts or things as it considers necessary, desirable or appropriate for or incidental to the exercise of its functions and powers in accordance with Article 12(1).(3) The objectives of theRegulatory Authority are:(A) the promotion and maintenance of efficiency, transparency and the integrity of theQFC ;(B) the promotion and maintenance of confidence in theQFC of users and prospective users of theQFC ;(C) the maintenance of the financial stability of theQFC , including the reduction of systemic risk relating to theQFC ;(D) the prevention, detection and restraint of conduct which causes or may cause damage to the reputation of theQFC , through appropriate means including the imposition of fines and other sanctions;(E) the provision of appropriate protection to those licensed to carry on business at theQFC and their clients or customers;
In considering what constitutes appropriate protection, theRegulatory Authority shall take into account:
(i) the financial integrity ofAuthorised Firms through appropriate financial resources requirements complemented by a robust system of internal controls;(ii) the differing degrees of protection which may be appropriate for clients or customers ofAuthorised Firms as a result of their experience, expertise, business and means and the differing degree of information which it may be appropriate to give to such clients or customers;(iii) the differing degree of risk involved in different kinds of investment or transaction; and(iv) the general principle that clients or customers ofAuthorised Firms should take responsibility for their own decisions;(F) the promotion of understanding of the objectives of theQFC amongst users and prospective users of theQFC and other interestedPersons ;(G) ensuring theRegulatory Authority is run with a view to:(i) it operating at all times in accordance with best international standards for financial and business centres of a similar kind; and(ii) establishing and maintaining theQFC as a leading financial and business centre in the Middle East; and(H) minimising the extent to which the business carried on by aPerson carrying onRegulated Activities can be used for the purposes of or in connection withFinancial Crime .
In considering this objective, theRegulatory Authority shall have regard to the desirability ofAuthorised Firms having appropriate systems, controls and procedures to detect and prevent the incidence ofFinancial Crime .(4) Except as set out in theQFC Law or in theseRegulations , theRegulatory Authority shall perform its functions and discharge its duties and determine its own procedures and management in such manner as it shall decide, provided that it shall always operate in compliance with the requirements and provisions of theQFC Law and theseRegulations .(5) For the purposes of Article 12(3) (Regulatory Objectives) and 13(2) (International Competitiveness), theRegulatory Authority shall be entitled to assume that it will fulfill its objectives relating to theQFC by fulfilling those objectives with respect to theFinancial System operating within theQFC .Article 13 - Principles of a Good Regulation
In exercising its functions and powers under the
QFC Law and theseRegulations , theRegulatory Authority shall have regard to:(1) the need to use its resources in the most efficient and economic way;(2) the desirability of facilitating innovation and fostering the international competitiveness of theQFC ;(3) the desirability of fostering competition between those who are subject to regulation by theRegulatory Authority ;(4) the principle that theRegulatory Authority should exercise its powers and functions in a fair and transparent manner;(5) the need to comply with such generally accepted principles of good governance as it is reasonable to regard as applicable to it;(6) the need to balance the burdens and restrictions on firms with the benefit of regulation; and(7) the need to act in accordance with all laws andRegulations to which it is subject.Article 14 - Conflicts
The
Regulatory Authority shall put in place procedures to identify and manage conflicts of interest to which its directors, officers, employees and agents may be subject in the performance of their duties with a view to ensuring, amongst other things, that suchPersons will not play any part in the making of decisions on matters in respect of which they are subject to a material conflict of interest.Article 15 - Powers to issue Rules
(1) TheRegulatory Authority may make rules—(a) with respect to any matter for which it is required or permitted to make rules by anyLaw orRegulations ; or(b) that it considers necessary or appropriate to facilitate the pursuit, achievement or furtherance of theRegulatory Objectives or to aid it toExercise or enforce itsFunctions under anyLaw orRegulations .(2) In particular, theRegulatory Authority may make Rules in respect of:(A) the process and requirements for individuals to become approved or otherPersons to become authorised to carry onRegulated Activities in or from theQFC (including any terms, conditions and requirements applying to such approvals andAuthorisations and the process and requirements for varying or withdrawing such approvals orAuthorisations );(B) standards of conduct applicable to particularPersons in theQFC (including standards applicable when thosePersons deal with particular types of client or customer (or prospective client or customer) or when carrying on particular types of business);(C) the levels and types of resources (including financial resources and human resources) to be maintained by particularPersons in theQFC ;(D) the infrastructure, systems, controls and process to be implemented and maintained by particularPersons in theQFC ;(E) the safeguarding or protection by particularPersons in theQFC of monies and other assets belonging to their clients or customers;(F) the fees payable by particularPersons in theQFC to theRegulatory Authority (on a periodic basis or in respect of particular circumstances or events);(G) processes, requirements and standards applicable toPersons in theQFC when dealing with theRegulatory Authority ;(H) the conduct of theRegulatory Authority and its officers, employees and agents in relation to the exercise of theRegulatory Authority's powers and the performance of its functions, including the exercise of its powers relating to supervision, investigation, intervention and disciplinary proceedings, as appropriate; and(I) duties, powers and functions conferred on or delegated to theRegulatory Authority under Schedule 2.(3) TheRegulatory Authority may also issue standards, principles or codes of practice which, unless otherwise stated in such standards, principles or codes shall constitute Rules for the purpose of theseRegulations .(4) Before making any Rules pursuant to Article 15(1), theRegulatory Authority shall publish the proposed Rules on theRegulatory Authority's website. The publication shall contain the following information:(A) the draft text of the proposed Rules;(B) the date on which the Rules will come into force; and(C) an invitation to make comments to theRegulatory Authority and the date by which comments must be received.(5) The procedures set out in Article 15(4) shall not apply to the making of Rules if theRegulatory Authority determines that the delay in bringing such Rules into force that would arise as a consequence of compliance with Article 15(4) would be contrary to the interests of theQFC or if such amendments are minor or inconsequential. In such circumstances the information that would otherwise be required to be published pursuant to Article 15(4) shall be published on theRegulatory Authority's website no later than the day on which the relevant Rules come into force.(6) TheRegulatory Authority may also issue such other consultative documents, open letters, policy statements, information notices, discussion documents and undertake such other forms of consultation and discussion as it thinks appropriate.(7) Rules issued under theseRegulations are binding on those to whom they are expressed to apply.(8) References in this Article to "making Rules" shall be construed as including making amendments to existing Rules.Amended by QFC Reg 2010-2 (as from 9th December 2010) Article 16 - Waiver or modification of Rules
(1) TheRegulatory Authority may, on the application of aPerson or its own initiative and by written notice, declare that a provision of anyRules —(a) applies to thePerson with the modifications mentioned in the notice; or(b) does not apply in relation to thePerson .(2) TheRegulatory Authority must be satisfied, when giving a notice under Article 16(1) in relation to aPerson , that:(A) either:(i) the burden experienced by thatPerson in complying with the relevantRule would significantly outweigh the benefits that theRule was intended to achieve; or(ii) compliance with theRule would not achieve or further the purpose for which the relevantRule was made; and(B) the notice would not result in undue risk toPersons whose interests theRule is intended to protect.(3) A written notice under Article 16(1) may be given subject to conditions.(4) Unless theRegulatory Authority is satisfied that it is inappropriate or unnecessary to do so, it must publish a written notice issued under Article 16 in such a way (including publication on its website) as it considers appropriate for bringing the notice to the attention of:(A) those likely to be affected by it; and(B) others who may be likely to become subject to a similar notice.(5) TheRegulatory Authority may on theApplication of thePerson to whom it applies, or on its own initiative:(A) revoke a written notice; or(B) vary a written notice.(6) With respect to the publication of a revocation or variation, Article 16(4) applies analogously.(7) TheRegulatory Authority may issueRules , in particular with respect to the provision of a written notice and the procedures in relation thereto.(8) Any decision of theRegulatory Authority with respect to the granting or refusal of a waiver or modification ofRules pursuant to Article 16 may be referred to theAppeals Body by thePerson to whom the waiver or modification relates (or would relate if granted).Amended by QFC Reg 2010-2 (as from 9th December 2010) Article 17 - Guidance
(1) TheRegulatory Authority may giveGuidance consisting of such information and advice as it considers appropriate:(A) with respect to the operation of theQFC Law , theseRegulations , anyRules or anyRelated Regulations ;(B) with respect to any matters relating to functions of theRegulatory Authority ;(C) for the purpose of meeting theRegulatory Objectives ; and(D) with respect to any other matters about which it appears to theRegulatory Authority to be desirable to give information or advice.(2)Guidance issued by theRegulatory Authority may be given generally, to a class ofAuthorised Firm , or to anyAuthorised Firm or otherPerson individually. SuchGuidance may be issued either at the request of thePerson seeking suchGuidance or by theRegulatory Authority on its on initiative.(3) If theRegulatory Authority proposes to giveGuidance toPersons generally, or to a class ofAuthorised Firm , in relation toRules to which those persons are subject, Articles 15(4) and (5) (Publicity Requirements) apply to the proposedGuidance as it applies to proposedRules .(4)Guidance issued by theRegulatory Authority is indicative of the view of theRegulatory Authority at the time and in the circumstances in which it was given and is non-binding.(5) TheRegulatory Authority may makeRules prescribing the procedures pursuant to whichPersons or particular types ofPersons may apply to theRegulatory Authority forGuidance and any fees payable by suchPersons in respect of suchApplications .(6) Unless theRegulatory Authority is satisfied that it is inappropriate or unnecessary to do so, it must publishGuidance which is given generally or to a class ofAuthorised Firm orPerson in such a way (including on theRegulatory Authority's website) as it considers appropriate for bringing theGuidance to the attention of:(A) those likely to be affected by it; and(B) others who may be likely to become subject to similarGuidance .Article 18 - Public records
(1) TheRegulatory Authority shall make the following information available to the public during normal working hours:(A)Regulations issued under theQFC Law ;(B)Rules issued by theRegulatory Authority and any proposedRules to the extent required by Article 15(4);(C) waivers or modifications ofRules to the extent required by Article 16(4);(D)Guidance to the extent required by Article 17(6) and proposed generalGuidance to the extent required by Article 17(3);(E) consultative documents, open letters, information notices, policy statements and open discussion documents issued by theRegulatory Authority ;(F) details of allAuthorised Firms together with such other information relating to theRegulated Activities that suchAuthorised Firms are authorised to carry on as theRegulatory Authority considers appropriate;(G) details of allApproved Individuals recording the full name of eachApproved Individual , any previous names of theApproved Individual , the name of theAuthorised Firm (s) for or on behalf of whom theApproved Individual performsControlled Functions , theControlled Functions that theApproved Individual is registered to perform and such other information as theRegulatory Authority considers appropriate;(H) public censures and the results of other enforcement or disciplinary actions pursuant to Part 9 (Disciplinary and Enforcement Powers) (subject to completion of any applicable appeal at theAppeals Body or expiry of any applicable right to appeal);(I) details of decisions by theAppeals Body ;(J) if theRegulatory Authority considers it appropriate, information concerning conditions or requirements imposed on theAuthorised Firms orApproved Individuals and the withdrawal of anyAuthorisations or approvals whether as a result of the own initiative powers of theRegulatory Authority or otherwise;(K) theRegulatory Authority's policy on penalties;(L) theRegulatory Authority's annual report; and(M) such other information consistent with theRegulatory Objectives as theRegulatory Authority considers to be relevant in connection with its functions.(2) The information referred to in Article 18(1) may be kept and made available in such form and manner as theRegulatory Authority considers appropriate provided that theRegulatory Authority shall also publish quarterly details of theRegulations andRules referred to in Article 18(1)(A)-(B) issued during the preceding quarter. TheRegulatory Authority may publish such information with or without charge.(3) TheRegulatory Authority shall not be obliged to make information available to the public or otherwise publish it if it believes that to do so would not be in the public interest or in the interests of theFinancial System or would be unfair to anyPerson orPersons (other than theRegulatory Authority itself) to whom such information relates (in whole or in part).Article 19 - Confidentiality
(1) Subject to Article 20(5) (Information relating to requests from Overseas Regulators) the followingPersons shall not disclose anyConfidential Information received by them in theExercise of theirFunctions otherwise than as permitted by Article 19(3) and (4):(A) theRegulatory Authority , or any of its officers, employees, agents or contractors;(B) anyNominated Person nominated or approved by theRegulatory Authority to undertake a report pursuant to Article 49;(C) any externalInvestigator appointed by theRegulatory Authority pursuant to Article 50 (Appointment of Investigators) and 51 (Investigations of Companies);(E) anyIndependent Person appointed to undertake a review under paragraph 23 of Schedule 1 (Review of Regulatory Authority) or deal with complaints against theRegulatory Authority in accordance with paragraph 25 of Schedule 1 (Complaints against the Regulatory Authority); nor(F)Persons undertaking an Inquiry pursuant to paragraph 24 of Schedule 1 (Inquiry relating to the Financial System),(2) The restriction on disclosure ofConfidential Information referred to in Article 19(1) shall also apply to anyPerson (other than thePerson to whom the duty of confidentiality is owed) coming into possession of suchConfidential Information .(3)Confidential Information may be disclosed by theRegulatory Authority or thePersons referred to in Article 19(1) and (2) in the following circumstances:(A) with the consent of thePerson to whom the duty of confidentiality is owed;(B) where such disclosure is permitted or required by or pursuant to theQFC Law , theseRegulations or any otherRegulation conferring powers, duties or functions on theRegulatory Authority ;(C) in response to a legally enforceable demand;(D) where the disclosure is made in good faith for the purposes of the performance or exercise by theRegulatory Authority of any of its functions, duties and powers under theQFC Law , thisRegulation or anyRelated Regulations ;(E) (in the case ofPersons other than theRegulatory Authority ) to theRegulatory Authority ;(F) (in the case of a review or inquiry referred to in Article 19(1)(E) and (F) above), to theCouncil of Ministers ;(G) to theTribunal orAppeals Body in connection with any matter falling within their jurisdiction;(H) to any body, agency or authorityExercising Functions relating to the detection or prevention of money laundering or terrorist financing, whether inside or outsideQatar ; or(I) to any other civil or criminal enforcement agency or authority, whether in theState or internationally; or(J) toOverseas Regulators in accordance with Article 20 (International Relations and Co-operation).(4) In exercising the duties, functions and powers assigned or delegated to theRegulatory Authority as referred to in Schedule 2, paragraph 1, theRegulatory Authority (or any of thePersons referred to in Article 19.1 acting on behalf of theRegulatory Authority ) shall be permitted to disclose to thePerson assigning or delegating such duties, functions and powers only suchConfidential Information as is obtained in the performance of the delegated duties, functions and powers, but not anyConfidential Information obtained otherwise than in such capacity unless such disclosure is permitted in accordance with Article 19(3).Amended by QFC Reg 2010-2 (as from 9th December 2010) Article 20 - International relations and co-operation
(1) TheRegulatory Authority shall foster relations withOverseas Regulators andInternational Regulatory Association s outside theQFC with a view to promoting the highest standards of domestic and international regulation and supervision and providing mutual assistance to ensure the integrity of the international marketplace.(2) TheRegulatory Authority may, in pursuance of Article 20(1), enter into such memoranda of understanding, protocols or similar arrangements (whether or not binding) as it considers appropriate.(3) TheRegulatory Authority mayExercise itsFunctions to cooperate with and provide assistance toOverseas Regulators in theExercise of theirFunctions or in connection with the detection or prevention of money laundering, terrorist financing or otherFinancial Crime .(4) In deciding whether or not toExercise itsFunctions under Article 20(3), theRegulatory Authority may take into account such factors as it considers relevant, including:(A) whether the country or territory of the relevantOverseas Regulators would confer corresponding co-operation and assistance to theRegulatory Authority ;(B) whether the requested co-operation or assistance relates to a breach of law, or other requirement which has no close parallel in theQFC ; and(C) the seriousness of the case and whether it is in the public interest to provide the requested co-operation or assistance.However, theRegulatory Authority may not deny co-operation or assistance solely on the basis that the type of conduct to which a request for co-operation or assistance from the otherOverseas Regulators relates would not result in a violation of theQFC Law , thisRegulation , any otherRegulation or theRules .(5) TheRegulatory Authority will keep confidential any requests for co-operation and assistance received from anotherOverseas Regulator . TheRegulatory Authority will keep confidential anyConfidential Information received from anOverseas Regulator pursuant to a request for co-operation or assistance made by theRegulatory Authority to that otherOverseas Regulator except:(A) to the extent that it uses theConfidential Information for the purposes set out in the request for assistance or co-operation including ensuring compliance with theLaw ,Regulations orRules to which the request relates;(B) to the extent that it uses theConfidential Information for purposes within the general framework of the use stated in the request for assistance or co-operation, including conducting a civil or administrative enforcement proceeding, assisting in a criminal prosecution or conducting any investigation for any purported or suspected contravention of the provisions specified in the request (if the contravention relates to theQFC );(C) with the consent of theOverseas Regulator that has supplied the information or document; or(D) in response to a legally enforceable demand, provided that theRegulatory Authority notifies theOverseas Regulator that has supplied the information or document prior to complying with the demand and asserts such appropriate legal exemptions and privileges with respect to such information as may be available to it.(6) TheRegulatory Authority may decide that it will not exercise its powers under Article 20(3) unless theOverseas Regulator undertakes to make such contribution towards the cost of such co-operation and assistance as theRegulatory Authority considers appropriate.Amended by QFC Reg 2010-2 (as from 9th December 2010) Article 21 - Powers relating to other Regulations
The
Regulatory Authority , in addition to the powers, duties and functions conferred on it under theseRegulations shall have the powers, duties and functions delegated to or conferred on it in accordance with Schedule 2.