• INMA Chapter 3 INMA Chapter 3 General prudential requirements

    • INMA Part 3.1 INMA Part 3.1 General

      • INMA 3.1.1 Governing body's responsibilities

        (1) An INMA firm’s governing body must consider whether the minimum financial resources required by these rules are adequate to ensure that there is no significant risk that the firm’s liabilities cannot be met as they fall due. The firm must obtain additional financial resources if its governing body considers that the minimum required does not adequately reflect the risks of its business.
        (2) The governing body is also responsible for:
        (a) ensuring that the management of the firm’s financial resources is part of the firm’s overall risk management, and is aligned with the nature, scale and complexity of its business and its risk profile and risk appetite;
        (b) ensuring that the firm has, at all times, financial resources of the kinds and amounts required by these rules; and
        (c) monitoring the adequacy and appropriateness of the firm’s systems and controls and the firm’s compliance with them.
        Derived from QFCRA RM/2014-4 (as from 1st January 2015).

      • INMA 3.1.2 Systems and controls

        (1) An INMA firm must have adequate systems and controls to enable it to calculate and monitor its financial resources, and its compliance with the requirements of this Chapter.
        (2) The systems and controls must be in writing and must be appropriate for the nature, scale and complexity of the firm's business and its risk profile.
        (3) The systems and controls must enable the firm to show at all times whether it complies with this Chapter.
        (4) The systems and controls must enable the firm to manage its financial resources in anticipation of events or changes in market conditions.
        (5) The firm must have contingency arrangements to maintain or increase its financial resources in times of stress.
        Derived from QFCRA RM/2014-4 (as from 1st January 2015).

    • INMA Part 3.2 INMA Part 3.2 Financial resources — general principles

      • INMA 3.2.1 INMA 3.2.1 Financial resources — LLCs and limited partnerships

        (1) An INMA firm incorporated under the Companies Regulations 2005 or the Limited Liability Partnership Regulations 2005 must at all times have financial resources of the kinds and amounts required by, and calculated in accordance with, these rules.
        (2) An INMA firm to which subrule (1) applies must also have, at all times, additional financial resources that are adequate for the nature, scale and complexity of its business to ensure that there is no significant risk that its liabilities cannot be met as they fall due.
        Derived from QFCRA RM/2014-4 (as from 1st January 2015).

        • INMA 3.2.1 Guidance

          1 An INMA firm's governing body should assess whether the minimum financial resources required by these rules are adequate for the firm's business. The firm should maintain additional financial resources if its governing body considers that the required minimum financial resources are not adequate for the risks of the firm's business.
          2 This rule does not apply to an INMA firm that is a branch.

      • INMA 3.2.2 Financial resources — branches

        An INMA firm that is a branch must ensure that:

        (a) it has, and maintains, at all times, access to financial resources that are adequate to ensure that there is no significant risk that its liabilities in Qatar cannot be met as they fall due; and
        (b) it complies with the prudential requirements set by its home financial services regulator.

        Note Home financial services regulator is defined in the glossary.
        Derived from QFCRA RM/2014-4 (as from 1st January 2015).

    • INMA Part 3.3 INMA Part 3.3 Minimum capital and liquid assets requirements

      • INMA 3.3.1 Application of Part 3.3

        (1) This Part does not apply to an INMA firm that is a branch.

        Guidance

        The entity of which such a firm is a branch would be subject to regulatory requirements about capital and other financial resources in its home jurisdiction.
        (2) If an INMA firm is also authorised under BANK or IBANK, and the firm complies with the capital requirements under whichever of those Rules applies, the firm is taken to comply with this Part.
        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • INMA 3.3.2 References to particular currencies

        In these rules, the specification of a sum of money in a particular currency is also taken to specify the equivalent sum in any other currency at the relevant time.

        Derived from QFCRA RM/2014-4 (as from 1st January 2015).

      • INMA 3.3.3 Minimum paid-up share capital

        (1) An INMA firm must have paid-up share capital of at least the amount specified, by reference to the activity that the firm is (or is to be) authorised to conduct, in table 3.3.3. If the firm is (or is to be) authorised to conduct more than 1 such activity, it must have the higher or highest of the relevant amounts of paid-up share capital.

        Table 3.3.3 Minimum paid-up share capital

        Activity Minimum paid-up share capital (QR)
        Dealing in investments (if limited to dealing as agent) 1.8 million
        Managing investments 1.8 million
        Providing custody services 1.8 million
        Operating a collective investment scheme 1.8 million
        Providing custody services in relation to a collective investment scheme 35 million
        Providing scheme administration 900,000
        Arranging deals in investments 900,000
        Arranging the provision of custody services 900,000
        Arranging financing facilities 900,000
        Advising on investments 900,000
        (2) If the Regulatory Authority considers that, because of the nature, scale and complexity of a particular INMA firm's business, the firm should hold higher paid-up share capital than is required by subrule (1), the authority may at any time require the firm to hold a specified higher amount of paid-up share capital.

        Note Paid-up share capital (for firms that are not companies) is defined in the glossary.
        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • INMA 3.3.4 Net liquid assets requirement

        (1) An INMA firm must have, at all times, net liquid assets at least equal in value to 25% of the firm's annual operating expenditure. Net liquid assets is the amount by which the total value of the firm's liquid assets exceeds the total value of its current liabilities.

        Note Annual operating expenditure is defined in rule 3.3.6.
        (2) If the Regulatory Authority considers that because of the nature, scale and complexity of a particular INMA firm's business, the firm should hold a greater amount of net liquid assets than is required by subrule (1), the authority may at any time require the firm to hold net liquid assets to a specified higher percentage of its annual operating expenditure.
        Derived from QFCRA RM/2014-4 (as from 1st January 2015).

      • INMA 3.3.5 Calculating total liquid assets

        (1) Liquid assets means:
        (a) cash on hand, and demand deposits, term deposits accessible on demand, and money otherwise deposited with a bank; and
        (b) highly liquefiable investments that the Regulatory Authority determines to be appropriate to count as liquid assets (but subject to any direction of the authority about a haircut to be applied).
        (2) In calculating the total value of the firm's liquid assets, no amount may be allowed for any of the following:
        (a) fixed assets;
        (b) any investment, asset or deposit that has been pledged as security or collateral for an obligation or liability;
        (c) receivables;
        (d) cash held in a client bank account;
        (e) deferred tax assets;
        (f) unlisted equity investments;
        (g) any investment by a subsidiary of the firm in the firm's own shares;

        Note Subsidiary is defined in the glossary.
        (h) holdings of investments that are categorised as level 3 under the IFRS fair value hierarchy;
        (i) investments in, and loans to, affiliates and related persons.
        (3) For this rule:

        Note Affiliate and related person are defined in the Glossary.
        Amended by QFCRA RM/2019-4 (as from 1st January 2020).

      • INMA 3.3.6 Calculating annual operating expenditure

        (1) An INMA firm's annual operating expenditure is the annualised total of the expenses for the year to date that arose in the normal course of the firm's business, as reported to the Regulatory Authority in the firm's most recent form BR200.
        (2) If the firm:
        (a) has not yet reported in form BR200; or
        (b) at any time during the current reporting period, was not an INMA firm;
        the firm must base its annual operating expenditure on the budgeted or forecast accounts that it submitted to the Regulatory Authority as part of its application for authorisation (or any application to vary the scope of its authorisation).
        Derived from QFCRA RM/2014-4 (as from 1st January 2015).

      • INMA 3.3.7 Revision of annual operating expenditure

        (1) If an INMA firm:
        (a) expects a significant change in its expenditure (either up or down); or
        (b) changes its authorised activities;
        it must recalculate its annual operating expenditure accordingly.
        (2) If an INMA firm has recalculated its annual operating expenditure in accordance with subrule (1), it must submit the recalculation to the Regulatory Authority within 7 days of doing so, and must seek approval for it from the authority. The authority may object to the recalculation within 30 days of receiving it and may direct the firm to revise its net liquid assets requirement accordingly.
        Derived from QFCRA RM/2014-4 (as from 1st January 2015).

      • INMA 3.3.8 INMA 3.3.8 Application of rule 3.3.4 to financial groups

        (1) If an INMA firm is part of a financial group, the financial group must comply with rule 3.3.4 on a consolidated basis.
        (2) The financial group of an INMA firm is made up of:
        (a) the firm;
        (b) any subsidiary (direct or indirect) of the firm, if the subsidiary belongs to a sector of the financial industry; and
        (c) any entity that the Regulatory Authority directs the firm to include.

        Note The instructions for preparing returns divide the financial industry into the following sectors: banking, non-life insurance, life insurance, financial services, equity investments and non-equity investments.
        (3) An INMA firm may apply to the Regulatory Authority for approval to exclude an entity from its financial group. The authority will grant such an approval only after the firm satisfies the authority that inclusion of the entity would be misleading or inappropriate for the purposes of supervision.
        Derived from QFCRA RM/2014-4 (as from 1st January 2015).

        • INMA 3.3.8 Guidance

          The Regulatory Authority would consider a range of factors when requiring an INMA firm to treat another entity as part of its financial group. These factors would include regulatory risk factors, including direct and indirect participation, influence or contractual obligations, interconnectedness, intra-group exposures, intra-group services, regulatory status and legal framework.

          Derived from QFCRA RM/2014-4 (as from 1st January 2015).

      • INMA 3.3.9 Reductions in paid-up share capital

        An INMA firm must not reduce its paid-up share capital without the Regulatory Authority’s written approval.

        Derived from QFCRA RM/2014-4 (as from 1st January 2015).