Part 3: Part 3: The Regulatory Authority
Article 10 - Background
This Part of these
Regulationssets out and elaborates on the background to the creation of the Regulatory Authorityunder the QFC Law, the objectives of the Regulatory Authority, and provisions relating to its constitution and governance.
Article 11 - Management and constitution(1) The
Regulatory Authoritymust 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 or Regulations, the Regulatory Authorityshall have the powers and rights and be subject to the duties and obligations set out in Schedule 1.
Article 12 - Objectives(1) The
Regulatory Authorityshall exercise its functions and powers under the QFC Lawand these Regulationsin accordance with the Regulatory Objectivesset out in Article 12(3).(2) The Regulatory Authorityshall 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 the Regulatory Authorityare:(A) the promotion and maintenance of efficiency, transparency and the integrity of the QFC;(B) the promotion and maintenance of confidence in the QFCof users and prospective users of the QFC;(C) the maintenance of the financial stability of the QFC, including the reduction of systemic risk relating to the QFC;(D) the prevention, detection and restraint of conduct which causes or may cause damage to the reputation of the QFC, 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 the QFCand their clients or customers;
In considering what constitutes appropriate protection, the
Regulatory Authorityshall take into account:
(i) the financial integrity of
Authorised Firmsthrough 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 of Authorised Firmsas 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 of Authorised Firmsshould take responsibility for their own decisions;(F) the promotion of understanding of the objectives of the QFCamongst users and prospective users of the QFCand other interested Persons;(G) ensuring the Regulatory Authorityis 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 the QFCas a leading financial and business centre in the Middle East; and(H) minimising the extent to which the business carried on by a Personcarrying on Regulated Activitiescan be used for the purposes of or in connection with Financial Crime.
In considering this objective, the
Regulatory Authorityshall have regard to the desirability of Authorised Firmshaving appropriate systems, controls and procedures to detect and prevent the incidence of Financial Crime.(4) Except as set out in the QFC Lawor in these Regulations, the Regulatory Authorityshall 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 the QFC Lawand these Regulations.(5) For the purposes of Article 12(3) (Regulatory Objectives) and 13(2) (International Competitiveness), the Regulatory Authorityshall be entitled to assume that it will fulfill its objectives relating to the QFCby fulfilling those objectives with respect to the Financial Systemoperating within the QFC.
Article 13 - Principles of a Good Regulation
In exercising its functions and powers under the
QFC Lawand these Regulations, the Regulatory Authorityshall 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 the QFC;(3) the desirability of fostering competition between those who are subject to regulation by the Regulatory Authority;(4) the principle that the Regulatory Authorityshould 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 and Regulationsto which it is subject.
Article 14 - Conflicts
Regulatory Authorityshall 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 such Personswill 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) The
Regulatory Authoritymay make rules—(a) with respect to any matter for which it is required or permitted to make rules by any Lawor Regulations; or(b) that it considers necessary or appropriate to facilitate the pursuit, achievement or furtherance of the Regulatory Objectivesor to aid it to Exerciseor enforce its Functionsunder any Lawor Regulations.(2) In particular, the Regulatory Authoritymay make Rules in respect of:(A) the process and requirements for individuals to become approved or other Personsto become authorised to carry on Regulated Activitiesin or from the QFC(including any terms, conditions and requirements applying to such approvals and Authorisationsand the process and requirements for varying or withdrawing such approvals or Authorisations);(B) standards of conduct applicable to particular Personsin the QFC(including standards applicable when those Personsdeal 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 particular Personsin the QFC;(D) the infrastructure, systems, controls and process to be implemented and maintained by particular Personsin the QFC;(E) the safeguarding or protection by particular Personsin the QFCof monies and other assets belonging to their clients or customers;(F) the fees payable by particular Personsin the QFCto the Regulatory Authority(on a periodic basis or in respect of particular circumstances or events);(G) processes, requirements and standards applicable to Personsin the QFCwhen dealing with the Regulatory Authority;(H) the conduct of the Regulatory Authorityand its officers, employees and agents in relation to the exercise of the Regulatory Authority'spowers 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 the Regulatory Authorityunder Schedule 2.(3) The Regulatory Authoritymay 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 these Regulations.(4) Before making any Rules pursuant to Article 15(1), the Regulatory Authorityshall publish the proposed Rules on the Regulatory Authority'swebsite. 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 the Regulatory Authorityand 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 the Regulatory Authoritydetermines 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 the QFCor 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 the Regulatory Authority'swebsite no later than the day on which the relevant Rules come into force.(6) The Regulatory Authoritymay 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 these Regulationsare 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) The
Regulatory Authoritymay, on the application of a Personor its own initiative and by written notice, declare that a provision of any Rules—(a) applies to the Personwith the modifications mentioned in the notice; or(b) does not apply in relation to the Person.(2) The Regulatory Authoritymust be satisfied, when giving a notice under Article 16(1) in relation to a Person, that:(A) either:(i) the burden experienced by that Personin complying with the relevant Rulewould significantly outweigh the benefits that the Rulewas intended to achieve; or(ii) compliance with the Rulewould not achieve or further the purpose for which the relevant Rulewas made; and(B) the notice would not result in undue risk to Personswhose interests the Ruleis intended to protect.(3) A written notice under Article 16(1) may be given subject to conditions.(4) Unless the Regulatory Authorityis 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) The Regulatory Authoritymay on the Applicationof the Personto 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) The Regulatory Authoritymay issue Rules, in particular with respect to the provision of a written notice and the procedures in relation thereto.(8) Any decision of the Regulatory Authoritywith respect to the granting or refusal of a waiver or modification of Rulespursuant to Article 16 may be referred to the Appeals Bodyby the Personto 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) The
Regulatory Authoritymay give Guidanceconsisting of such information and advice as it considers appropriate:(A) with respect to the operation of the QFC Law, these Regulations, any Rulesor any Related Regulations;(B) with respect to any matters relating to functions of the Regulatory Authority;(C) for the purpose of meeting the Regulatory Objectives; and(D) with respect to any other matters about which it appears to the Regulatory Authorityto be desirable to give information or advice.(2) Guidanceissued by the Regulatory Authoritymay be given generally, to a class of Authorised Firm, or to any Authorised Firmor other Personindividually. Such Guidancemay be issued either at the request of the Personseeking such Guidanceor by the Regulatory Authorityon its on initiative.(3) If the Regulatory Authorityproposes to give Guidanceto Personsgenerally, or to a class of Authorised Firm, in relation to Rulesto which those persons are subject, Articles 15(4) and (5) (Publicity Requirements) apply to the proposed Guidanceas it applies to proposed Rules.(4) Guidanceissued by the Regulatory Authorityis indicative of the view of the Regulatory Authorityat the time and in the circumstances in which it was given and is non-binding.(5) The Regulatory Authoritymay make Rulesprescribing the procedures pursuant to which Personsor particular types of Personsmay apply to the Regulatory Authorityfor Guidanceand any fees payable by such Personsin respect of such Applications.(6) Unless the Regulatory Authorityis satisfied that it is inappropriate or unnecessary to do so, it must publish Guidancewhich is given generally or to a class of Authorised Firmor Personin such a way (including on the Regulatory Authority'swebsite) as it considers appropriate for bringing the Guidanceto the attention of:(A) those likely to be affected by it; and(B) others who may be likely to become subject to similar Guidance.
Article 18 - Public records(1) The
Regulatory Authorityshall make the following information available to the public during normal working hours:(A) Regulationsissued under the QFC Law;(B) Rulesissued by the Regulatory Authorityand any proposed Rulesto the extent required by Article 15(4);(C) waivers or modifications of Rulesto the extent required by Article 16(4);(D) Guidanceto the extent required by Article 17(6) and proposed general Guidanceto the extent required by Article 17(3);(E) consultative documents, open letters, information notices, policy statements and open discussion documents issued by the Regulatory Authority;(F) details of all Authorised Firmstogether with such other information relating to the Regulated Activitiesthat such Authorised Firmsare authorised to carry on as the Regulatory Authorityconsiders appropriate;(G) details of all Approved Individualsrecording the full name of each Approved Individual, any previous names of the Approved Individual, the name of the Authorised Firm(s) for or on behalf of whom the Approved Individualperforms Controlled Functions, the Controlled Functionsthat the Approved Individualis registered to perform and such other information as the Regulatory Authorityconsiders 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 the Appeals Bodyor expiry of any applicable right to appeal);(I) details of decisions by the Appeals Body;(J) if the Regulatory Authorityconsiders it appropriate, information concerning conditions or requirements imposed on the Authorised Firmsor Approved Individualsand the withdrawal of any Authorisationsor approvals whether as a result of the own initiative powers of the Regulatory Authorityor otherwise;(K) the Regulatory Authority'spolicy on penalties;(L) the Regulatory Authority'sannual report; and(M) such other information consistent with the Regulatory Objectivesas the Regulatory Authorityconsiders 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 the Regulatory Authorityconsiders appropriate provided that the Regulatory Authorityshall also publish quarterly details of the Regulationsand Rulesreferred to in Article 18(1)(A)-(B) issued during the preceding quarter. The Regulatory Authoritymay publish such information with or without charge.(3) The Regulatory Authorityshall 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 the Financial Systemor would be unfair to any Personor Persons(other than the Regulatory Authorityitself) 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 following
Personsshall not disclose any Confidential Informationreceived by them in the Exerciseof their Functionsotherwise than as permitted by Article 19(3) and (4):(A) the Regulatory Authority, or any of its officers, employees, agents or contractors;(B) any Nominated Personnominated or approved by the Regulatory Authorityto undertake a report pursuant to Article 49;(C) any external Investigatorappointed by the Regulatory Authoritypursuant to Article 50 (Appointment of Investigators) and 51 (Investigations of Companies);(D) any Auditorsand Actuariesreferred in Part 15 (Appointment of Auditors and Actuaries)(E) any Independent Personappointed to undertake a review under paragraph 23 of Schedule 1 (Review of Regulatory Authority) or deal with complaints against the Regulatory Authorityin accordance with paragraph 25 of Schedule 1 (Complaints against the Regulatory Authority); nor(F) Personsundertaking an Inquiry pursuant to paragraph 24 of Schedule 1 (Inquiry relating to the Financial System),(2) The restriction on disclosure of Confidential Informationreferred to in Article 19(1) shall also apply to any Person(other than the Personto whom the duty of confidentiality is owed) coming into possession of such Confidential Information.(3) Confidential Informationmay be disclosed by the Regulatory Authorityor the Personsreferred to in Article 19(1) and (2) in the following circumstances:(A) with the consent of the Personto whom the duty of confidentiality is owed;(B) where such disclosure is permitted or required by or pursuant to the QFC Law, these Regulationsor any other Regulationconferring powers, duties or functions on the Regulatory 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 the Regulatory Authorityof any of its functions, duties and powers under the QFC Law, this Regulationor any Related Regulations;(E) (in the case of Personsother than the Regulatory Authority) to the Regulatory Authority;(F) (in the case of a review or inquiry referred to in Article 19(1)(E) and (F) above), to the Council of Ministers;(G) to the Tribunalor Appeals Bodyin connection with any matter falling within their jurisdiction;(H) to any body, agency or authority Exercising Functionsrelating to the detection or prevention of money laundering or terrorist financing, whether inside or outside Qatar; or(I) to any other civil or criminal enforcement agency or authority, whether in the Stateor internationally; or(J) to Overseas Regulatorsin accordance with Article 20 (International Relations and Co-operation).(4) In exercising the duties, functions and powers assigned or delegated to the Regulatory Authorityas referred to in Schedule 2, paragraph 1, the Regulatory Authority(or any of the Personsreferred to in Article 19.1 acting on behalf of the Regulatory Authority) shall be permitted to disclose to the Personassigning or delegating such duties, functions and powers only such Confidential Informationas is obtained in the performance of the delegated duties, functions and powers, but not any Confidential Informationobtained 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) The
Regulatory Authorityshall foster relations with Overseas Regulatorsand International Regulatory Associations outside the QFCwith 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) The Regulatory Authoritymay, 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) The Regulatory Authoritymay Exerciseits Functionsto cooperate with and provide assistance to Overseas Regulatorsin the Exerciseof their Functionsor in connection with the detection or prevention of money laundering, terrorist financing or other Financial Crime.(4) In deciding whether or not to Exerciseits Functionsunder Article 20(3), the Regulatory Authoritymay take into account such factors as it considers relevant, including:(A) whether the country or territory of the relevant Overseas Regulatorswould confer corresponding co-operation and assistance to the Regulatory Authority;(B) whether the requested co-operation or assistance relates to a breach of law, or other requirement which has no close parallel in the QFC; and(C) the seriousness of the case and whether it is in the public interest to provide the requested co-operation or assistance.However, the Regulatory Authoritymay 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 other Overseas Regulatorsrelates would not result in a violation of the QFC Law, this Regulation, any other Regulationor the Rules.(5) The Regulatory Authoritywill keep confidential any requests for co-operation and assistance received from another Overseas Regulator. The Regulatory Authoritywill keep confidential any Confidential Informationreceived from an Overseas Regulatorpursuant to a request for co-operation or assistance made by the Regulatory Authorityto that other Overseas Regulatorexcept:(A) to the extent that it uses the Confidential Informationfor the purposes set out in the request for assistance or co-operation including ensuring compliance with the Law, Regulationsor Rulesto which the request relates;(B) to the extent that it uses the Confidential Informationfor 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 the QFC);(C) with the consent of the Overseas Regulatorthat has supplied the information or document; or(D) in response to a legally enforceable demand, provided that the Regulatory Authoritynotifies the Overseas Regulatorthat 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) The Regulatory Authoritymay decide that it will not exercise its powers under Article 20(3) unless the Overseas Regulatorundertakes to make such contribution towards the cost of such co-operation and assistance as the Regulatory Authorityconsiders appropriate. Amended by QFC Reg 2010-2 (as from 9th December 2010)
Article 21 - Powers relating to other Regulations
Regulatory Authority, in addition to the powers, duties and functions conferred on it under these Regulationsshall have the powers, duties and functions delegated to or conferred on it in accordance with Schedule 2.