Administrative Resolution No. (48/CEO) of 2023 On the Executive Controls of Some Provisions Stipulated in the Regulations Manual of the Financial Activities issued under the Chairman of Authority’s Board of Directors’ Resolution No. (13/Chairman) of 2021

§Preamble

Administrative Resolution No. (48/ CEO) of 2023 On the Executive Controls of Some Provisions Stipulated in the Regulations Manual of the Financial Activities issued under the Chairman of Authority’s Board of Directors’ Decision No. (13/Chairman) of 2021 Chief Executive Officer,,, Having reviewed:

-Federal Law No. (4) of 2000 concerning the Emirates Securities and Commodities Authority and Market, as amended, -Cabinet Decision No. (13) of 2000 concerning the Regulation as to the Functioning of the Securities and Commodities Authority, as amended, -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, -And based on what is required for public interest, Resolved:

§Article 1

In implementation of the second chapter/ fourth section/ clause 21/ first/13/B, of the regulations manual of the financial activities, and without prejudice to the other outsourcing provisions, the licensed entity shall verify that the employee assuming the outsourcing tasks at the outsourced entity, while performing his task for more than one licensed entity of the same category, meets the following conditions:

1-Works with licensed entities, which represent a single financial group. 2-Able to perform his task and allocate sufficient time for each licensed entity. 3-Works independently and separately, without any conflict of interest, provided that this shall be proven by each licensed entity.

§Article 2

In implementation of the second chapter/ fourth section/ clause 21/ fourth, of the regulations manual of the financial activities, and without prejudice to the other outsourcing provisions, the outsourced entity, in case it intends to provide its services to more than one licensed entity, shall comply with the following:

1.In the event that it provides outsourcing services for more than one licensed entity of the same category:

a.Refrain from providing outsourcing services for more than (3) licensed entities.

b.With an exception to clause (A), the outsourced entity may provide outsourcing services for more than (3) licensed entities, in cases where such entities represent a single financial group.

2.In the event that it provides outsourcing services for more than one licensed entity of various categories:

Verify that its employee is performing his tasks confidentially, independently and separately for each licensed entity.

§Article 3 — [1]

First: Limit of control:

In implementation of Part Two / Chapter Five / Article (6) /Item (First/2) and (Second/1) of the Regulations Manual of Financial Activities, the limit of control means the ability to direct the company’s management and policies and control the financial and operational policies, including the control of the formation of Board of Directors/Board of Managers, electing the majority of its members, control of senior management appointments, or by owning shares that constitute voting rights of 30% or more in the company.

Second: Conditions for the Authority’s approval to reach the control Threshold: In implementation of Part Two/Chapter Five/Article (6)/Item (First/2) and (Second/1) of the Regulations Manual of Financial Activities, the following is required for approval to reach the control limit:

1- Approval conditions for the licensed entity to reach the control limit set by the Authority over a company licensed by a peer regulatory authority or over any other company not licensed by the Authority nor by a peer regulatory authority similar to the Authority.

A.The licensed entity must continue to meet the capital adequacy requirements, and the partnership or contribution does not adversely affect those requirements. B. it has been proven that the licensed entity requesting approval along with any of its board members, senior management, board of managers, or partners have not committed any violations related to market manipulation or measures to combat money laundering and terrorist financing during the last two years. C.The controlled entity does not have a headquarters or branch in a country classified as high risk by the Financial Action Task Force (FATF). D. Obtaining a no-objection letter from the regulatory authority for the entities licensed by it, provided that the no-objection letter includes a statement indicating the consent of the regulatory authority to cooperate with the Authority in any investigation or inspection of the records of the licensed entities. This requirement applies if the regulatory authority did not sign the Multilateral Memorandum of Understanding (MMOU).

2- Conditions for approving Control of the licensed entity by any person A. If the controlling entity of the licensed entity is another licensed entity, the controlling entity must fulfill the same conditions specified in Clause (Second/1/A, B) of this Article.

B.If the licensed entity is controlled by a person other than a licensed entity, the following is required:

1. The controlling entity does not have a headquarters or branch in a country classified as high risk by the Financial Action Task Force (FATF).

2. The controlling entity does not negatively affect the activity and performance of the licensed entity. The Authority can will assess and evaluate this through the following criteria:

A. Identifying the principal activities of the controlling entity, the background and record of the controlling person, including members of its board of directors, partners, senior management, or other officials associated with the controlling entity, and the degree of influence that the controlling person can exercise over the licensed entity and/or its activities.

B. The extent to which the standards of fit and proper for legal and natural person contained in Chapter Two of the Regulations Manual of Financial Activities are met.

3- A condition required to be met to grant approval to the controlling partner or shareholder in the licensed entity to reach the controlling limit over another licensed entity, the partner or shareholder should not negatively affect the activity and performance of the licensed entity they control, or the additional licensed entity they wish to control. The Authority will assess and evaluate this by verifying the partner or shareholder's adherence to fit and proper standards. Third: The Authority reserves the right to grant or reject approval even if the above conditions are met according to its discretion in favor of the public interest. Fourth: In all cases, the licensed entity and the controlling entity must adhere to any other applicable legislation regarding acts of control, competition and acquisition.

Fifth: The licensed entity, the partner, or the shareholder controlling the licensed entity shall be obligated to do the following:

1-Obtaining the Authority’s approval in accordance with the above conditions before increasing the control limit approved by the Authority. The Authority may reject the request, impose any additional conditions it deems appropriate, or maintain the previous approval.

2-Notifying the Authority immediately if the control limit decreases beyond the limit approved by the Authority.

§Article 4

This resolution shall be published in the Official Gazette and shall come into effect from the day following the date of its issuance.

Maryam Buti Al Suwaidi

Chief Executive Officer Issued in Abu Dhabi on 07/07/2023

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• [1] - Article (3) has been amended pursuant to the Administrative Resolution No. (29/CEO) of 2024 Regarding amending Administrative Resolution No. (48/ CEO) of 2023 regarding the executive controls for some provisions in the Regulations Manual of Financial Activities issued pursuant to the resolution of the Chairman of the Authority’s Board of Directors No. (13/ Chairman) of 2021 issued on 08/05/2024 enforce on date 01/06/2024.