Chairman of the Authority’s Board of Directors’ Resolution No. (33/Chairman) of 2023 Concerning the Regulation of “Financial Recommendations"

§Preamble

The Chairman of the Authority’s Board of Directors’ Resolution No.

(33/Chairman) of 2023 Concerning the Regulation of “Financial

Recommendations”

Article (0) The Chairman of the Securities and Commodities Authority, Having perused:

The Federal Law No. (4) of 2000 concerning the Emirates Securities and Commodities Authority and Market, as amended;

Cabinet Resolution No. (13) of 2000 concerning the Regulation as to the Functioning of the Securities & Commodities Authority, as amended; Cabinet Resolution No. (34M/1F) of 2022 on Restructuring of the Securities and Commodities Authority’s Board of Directors; and The Chairman of the Authority’s Board of Directors’ Resolution No. (13/Chairman) of 2021 on the Regulations Manual of the Financial Activities and Status Regularization Mechanisms, as amended.

Pursuant to the approval of the Board of Directors at its ninth meeting of the eighth round, held on 26/06/2023; And Based on what is required for public interest, Has Decided:

§Article 1 — Definitions

The following words and expressions shall have the meanings assigned thereto in this decision unless the context indicates otherwise:

State: The United Arab Emirates.

Authority: Securities & Commodities Authority.

Market: The securities and commodities market.

The Regulations Manual of the Financial Activities: The Chairman of the Authority’s Board of Directors’ Resolution No. (13/Chairman) of 2021 on the Regulations Manual of the Financial Activities and Status Regularization Mechanisms.

Financial recommendation: The information provided by a natural person to the public and which directly or indirectly includes investment recommendations and advice to buy, sell or hold a financial product, a virtual asset, or a recommendation of a financial service or any issuer, through statements,

expressing opinion or indication about the current or future value or price through traditional or modern mass media, such as the various, written, audio or other social media, or participating in seminars, meetings, or appearing to the public by any other means.

Related Groups: 1- Persons who are linked with an agreement or arrangement for the purpose of ownership, influence, direct or indirect control - by any percentage - on the financial product or virtual asset, the licensed authority, or the issuer subject to the financial recommendation.

2- Minor children.

3- The companies owned by any of the above mentioned persons, which own (30%) of the financial product that is the subject of the financial recommendation, and the subsidiaries or affiliated companies of these companies.

§Article 2 — Scope of Application

1- The provisions of this Resolution shall apply to any person who provides a financial recommendation in accordance with the provisions of this resolution.

2- The provisions of this resolution shall not apply to the financial recommendation that includes publishing the information that was previously approved by the authority or the market.

§Article 3 — [1]

First: It is not permissible to provide financial recommendations except through one of the specified natural persons:

1 - The independent analyst.

2 - The natural person presenting themselves as having financial and technical expertise, influencing market participants, assessed based on:

a. Number of followers, not less than one thousand followers.

b. Work history in the financial or investment field.

c. Based on a track record of issuing professional recommendations multiple times supported by studies and analyses.

d. Referring to or quoting any of their previous recommendations by third- party specialized entities as media outlets.

e. Any other criteria determined by the Authority.

Second: It is prohibited to provide financial recommendations by any of the following natural persons:

1- Employees of entities licensed by the Authority.

2-Members of the Board of Directors, the executive management, and employees thereof.

§Article 4 — Responsibilities of those who provide financial recommendations

First: Registration and Obligations of those who provide financial advice and recommendations with the Authority The individual providing such financial advice and recommendations must register with the authority through its website in accordance with the terms and conditions set by the Authority as follows:

1- Fulfillment of all the data and conditions mentioned in the form prescribed by the Authority on its website.

2- Upload all the required documents.

3- Payment of the registration fee prescribed by the Authority. Second: Obligations related to the identity of those who provide financial advice and recommendations When providing advice and recommendations, the financial advisor must disclose clearly and prominently and in the way approved by the Authority the following information:

1- Identity and job title, and whether he is regulated by the Authority or any similar regulatory authority, or works for or in favor of any licensed or listed entity in the market, . The advisor must state whether he has a qualification or technical, economic or investment experience that qualifies him to provide financial recommendations.

2- The identity of any other person participating with him in the provision of financial advice and financial recommendation and whether the other person participating is regulated by the Authority or any similar regulatory authority or works for or in favor of any licensed or listed entity in the market and whether he has a qualification, technical, economic or investment experience that qualifies him to provide financial recommendations.

Third: Continuing obligations for the provision of financial advice and recommendations:

1- Individuals who provide financial advice and recommendations must provide differentiation between the facts, statistics, interpretations, estimates, opinions, personal experiences, expectations or predictions, or assumptions that have been developed

2- Refraining from giving any misleading or incorrect information. Refrain from making statements that may affect the market value financial products and/or virtual assets or influence a financial service or the issuer or the investors decision . Violations will be punished in accordance with the law.

3- Refraining from receiving any direct or indirect material gain or compensation from the issuer, the licensed entity or the public in exchange for providing such advice or financial recommendation.

4- Provide all sources relied upon whilst giving such advice and financial recommendation. Clear disclosure in the event that such sources may be considered unreliable.

5- Statement of how the public can access information related to the basic assumptions, evaluation or methodology and included in the financial

recommendation in a direct and easy manner in the event that he didn’t use models that have intellectual property.

6- Exercise due care to ensure that the financial recommendation is provided objectively, transparently and impartially away from bias and exaggeration. Ensure that the data and information associated with it are clear and up-to-date, and provide a balanced review of potential risks and benefits consistent with the risks of price volatility. Dates shall be clearly indicated in the event that the the financial recommendation includes historical and out dated information.

7- Ensure that any information referred to in a link or footnote will not prevent the investor from understanding the financial recommendation, or lead to confusion or mixture in the information.

8- Clear disclosure that the public shall not assume that the financial recommendation is profitable or equivalent to the expected future performance of the financial product, virtual asset or financial service.

9- Disclosure of the date and time of the price of the financial product or the virtual asset associated with the financial recommendation, and to determine the date and time of the financial recommendation clearly and in a prominent way.

10- Disclosure of the latest financial recommendation issued by him during the previous (12) month period for the same product, virtual asset, financial service or issuer, so that the disclosure shall include the date of publication, the identity of the person participating in the financial recommendation, the target price, the relevant market price at the time of publication, the direction of financial recommendation and the validity period of the target price or the financial recommendation.

11- Disclosure of all differences, when providing information related to comparisons between different investments or between different services, including (as the case may be) the targets of investment, costs, expenses, liquidity, guarantees, insurance, capital fluctuation or return, tax features, various tax effects, and various fees and expenses.

Fourth: Disclosure Obligations of the financial recommendation provider to manage conflicts of interests:

1- Disclosure of all relationships and circumstances that may affect the objectivity of the financial recommendation directly or indirectly, or represent interests or conflicts of interest related to the financial recommendation provider or those who participated therein, or the group associated with any of them, if it is related to the financial recommendation.

2- If the financial recommendation is directly or indirectly related to theissuer, the following shall be included:

A- Disclosure of whether the financial recommendation provider owns more than 0.5% of the issuer's total issued capital.

B. Disclosure of whether the financial recommendation provider or any other person participating therein or the group associated with either of them belongs to the same related group, representing any of the following:

1- Manager or CEO over the previous 12 months with the issuer.

2- A party to an agreement valid for a period of not less than (12) months with the issuer if that agreement is related to the provision of financial or advisory services, without revealing any confidential commercial information.

3- A party to an agreement with the issuer regarding the issuance of the financial recommendation.

Fifth: Obligations related to publication of the financial recommendation by a third party:

1- A natural person who publishes any financial recommendation issued by a third party shall disclose the following to the public:

a. The identity of the third party clearly and prominently.

b. All relationships and circumstances that may be expected to impair the objectivity and impartiality of the financial recommendation, including his own interests or any conflict of interest.

c. The issuance date and time of the original financial recommendation for the first time.

2- A natural person who publishes any summary or part of a financial recommendation issued by a third party shall disclose the following to the public:

a. The summary shall be clear, complete and not misleading.

b. A statement that the provided financial recommendation is just a summary or part of the original financial recommendation.

c. The financial recommendation shall include a clear definition of the original financial recommendation.

d. Ensuring that the information specified in the summary is related to the financial recommendation is directly explained in the summary or the part, and indicates the source of that information, provided that access to that source is free of charge.

3- The natural person, who publishes any financial recommendation issued by a third party that has been modified, shall ensure that the recommendation refers to the amendments in detail, with reference to the source of information related to the original recommendation, provided that access to that source is free of charge.

Sixth: Obligations related to the submission of supporting documents and evidence to the Authority upon request:

The financial recommendation provider shall provide evidence, documents and information that support the financial recommendation issued by him or any obligations specified in this appendix to the Authority upon its request, and within the period specified by the Authority.

§Article 5 — Final Provisions

1- The glossary of terms contained in the Regulations Manual of the Financial Activities applies to the words and expressions contained in the provisions of this decision.

2- The following provisions apply to the financial recommendation provider, in accordance with his legal form as a natural person:

a. Section One of the Regulations Manual of the Financial Activities.

b. Clauses (1), (2), (4), (6) of Article (4) of Chapter Six of Section Two of the Regulations Manual of the Financial Activities.

3- In addition to the penalties stipulated in Section One of the Regulations Manual of the Financial Activities, the Authority may suspend or cancel the registration of the financial recommendation provider in case he violates the provisions of this resolution.

4- The Authority may not accept the registration of the financial recommendation provider if he does not fulfill the requirements mentioned in this resolution or requirements specified in the form.

§Article 6 — Publication

This resolution shall be published in the official gazette and shall be effective as of the next day of its publication.

Mohamed Ali Al Shorafa Al Hammadi

Chairman of Authority Issued in Abu Dhabi on: 03/08/2023

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• [1] - Article (11) has been amended pursuant to the decision of the Chairman of the Board of Directors of the Authority No.(01/R.M) of 2024 issued on 10/01/2024 and enforce on 16/01/2024