The following terms and phrases shall have the definitions assigned to them for the purpose of this Regulation:
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| a. | Affiliate: an entity that, directly or indirectly, is controlled by, or is under common control with another entity. The term control as used herein shall mean the holding, directly or indirectly, of voting rights in another entity, or of the power to direct or cause the direction of the management of another entity;
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| b. | Agent: a Juridical Person who is contracted to offer, grant, market, sell, intermediate and/or process a Short-Term Credit with a Borrower on behalf of a Finance Company or a Bank;
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| c. | Aggregate Funding: the total amount of debt capital that a Finance Company borrows from external sources, including its Parent Company. This includes, but is not limited to,
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| d. | Aggregate Liabilities: the total amount of onbalance sheet and off-balance sheet liabilities of a Finance Company;
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| e. | AML Law: means Decree Federal Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations and Cabinet Decision No. (10) of 2019 Concerning the Implementing Regulation of Decree Federal Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations, as amended, and any instructions, guidelines and notices issued relating to their implementation;
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| f. | Authorized Individual: any natural person authorized in accordance with the provisions of the Central Bank Law, to carry on any of the Designated Functions;
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| g. | Bank: any juridical person licensed in accordance with the provisions of the Central Bank Law, to primarily carry on the activity of taking deposits, and any other licensed financial activities;
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| h. | Borrower: a UAE resident Person who is granted a Short-Term Credit;
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| i. | Central Bank: the Central Bank of the United Arab Emirates;
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| j. | Central Bank Law: Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organisation of Financial Institutions and Activities, as amended;
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| k. | Commercial Companies Law: Federal Decree Law No. 32 of 2021 on Commercial Companies, as amended;
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| l. | Confidential Data: account or other information relating to a Finance Company customer or employee, who is or can be identified, either from the confidential data or from the confidential data in conjunction with other information that is in, or is likely to come into, the possession of a person, organization, or process that is granted access to the confidential data;
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| m. | Controlling Influence: the relationship between a Parent Company and a Subsidiary, where the Parent Company holds a minimum of 50% of the Subsidiary’s share capital or has control over it via, for example, the composition of the board of directors, or via a similar relationship between any natural or Juridical Person or company;
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| n. | Credit Exposure: the value of a funded and unfunded exposure and unused committed lines that are subject to any credit risks, such as default or credit rating downgrade;
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| o. | Credit Information Agency: Al Etihad Credit Bureau and any credit information agency established for the purpose of credit reporting requirements in the UAE;
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| p. | Credit Report: is a collection of historical credit data from various financial institutions, utility companies, government, etc., on individuals and companies in the UAE;
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| q. | Crowdfunding: is solicitation of funds from persons through a platform for a specific purpose;
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| r. | Designated Functions: functions of the Authorized Individual at, or for the benefit of, a Licensee of influential nature on the institution’s activities;
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| s. | Duty of Care: the duty of a member of the board of directors to act on an informed and prudent basis in decisions with respect to the Finance Company;
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| t. | Duty of Loyalty: the duty of a member of the board of directors to act in the interest of the Finance Company;
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| u. | Factoring: (as defined in Federal Decree-Law No. 16/2021 on Factoring and Transfer of Civil Accounts Receivable) a transaction whereby the assignor transfers the current or future debtor ’ s accounts receivable, or both, to an assignee, or agrees that the assignee maintains and collects entries related to the transferred accounts receivable and provides protection to the assignee in case the debtor breaches the payment;
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| v. | Fee: Any fees, charges, penalties and commissions incurred on a product and/or service by a Borrower;
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| w. | Finance Lease: (as defined in Federal Law No. 8/2018 on Finance Lease) a relationship whereby the lessor owns the leased property for rental purposes and leases it to the lessee for a specified period under a separate contract in accordance with the provisions of the Federal Law, while granting the latter the right of choosing to own the leased property in accordance with the provisions hereof;
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| x. | Financing: permitted activities as referred to in Article 10 of this Regulation;
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| y. | Finance Company: a conventional finance company and/or an Islamic Finance Company;
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| z. | Fitness and Probity or Fit and Proper: professional requirements and personal integrity requirements addressed to the board of directors and Senior Management in this Regulation;
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| aa. | Foreign Funding: any borrowing or acceptance of deposits from any corporate entity incorporated outside of the U.A.E. and its free zones;
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| ab. | Free Zone: all free zones in the UAE except the financial free zones;
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| ac. | Higher Sharia’a Authority: the Authority established by the Central Bank to ensure implementation of Islamic Sharia’a provisions at financial institutions carrying on their entire activities or part thereof in accordance with Islamic Sharia’a provisions;
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| ad. | Independent Member of the Board: a member of the board of directors who does not have any management responsibilities within the Finance Company and is not under any undue influence, internal or external, or ownership, that would impede the board member’s exercise of objective judgment, including but not limited to a relationship with the Finance Company, any of its Senior Management, external auditor, significant shareholders, subsidiaries or affiliates that could lead to financial or other benefit, in addition to other conditions that the Central Bank may specify from time to time;
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| ae. | Islamic Finance Company: a Central Bank licensed company engaged in Financing activities whose memorandum and articles of association include a commitment to apply Sharia'a provisions and to conduct its activities as per those provisions;
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| af. | Juridical Person: a Juridical Person in accordance with Article 92 of Federal Law No. 5 of 1985 Concerning the Issuance of the Civil Transactions Law. For the purpose of this Regulation, this definition only refers to Juridical Persons in the U.A.E.;
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| ag. | License: authorization issued by the Central Bank to conduct the business of Finance Companies or Restricted Licence Finance Companies;
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| ah. | Licensee: a Juridical Person licensed by the Central Bank to conduct Financing activities per the provisions of this Regulation;
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| ai. | Material Business Activity: an activity of the Finance Company that has the potential, if disrupted, to have a significant impact on the Finance Company’s business operations or its ability to manage risks effectively;
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| aj. | Outsourcing: an agreement with another party either within or outside the UAE, including a party related to the Licensee, to perform on a continuing basis an activity which currently is, or could be, undertaken by the Licensee itself;
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| ak. | Parent Company: an entity (the 'first entity') which:
| 1. | holds a majority of the voting rights in another entity (the 'second entity');
| | 2. | is a shareholder of the second entity and has the right to appoint or remove a majority of the board of directors or managers of the second entity; or
| | 3. | is a shareholder of the second entity and controls alone, pursuant to an agreement with other shareholders, a majority of the voting rights in the second entity.
| | | or;
| | 4. | if the second entity is a subsidiary of another entity which is itself a subsidiary of the first entity.
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| al. | Principal Shareholder: any shareholder of a Finance Company who owns, directly or indirectly, 5% or more of shareholdings of a Finance Company;
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| am. | Regulations: any resolution, regulation, circular, rule, standard or notice issued by the Central Bank;
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| an. | Related Entities: any of the following:
| 1. | Two or more natural or Juridical Persons who, unless shown otherwise, constitute a single risk because one of them, directly or indirectly, has control over the other or others, or can exercise a Controlling Influence over the other party in making financial and operating decisions; or
| | 2. | Two or more natural or Juridical Persons between whom there is no relationship of control but who are to be regarded as constituting a single risk because they are so inter-related that, if one of them were to experience financial problems, the other or all of the others would be likely to encounter repayment difficulties;
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| ao. | Restricted Licence Finance Company: a Juridical Person licensed by the Central Bank to conduct the licensed financial activity of granting Short-Term Credit only;
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| ap. | Senior Management: the executive management of the Finance Company or Restricted Licence Finance Company responsible and accountable to the board of directors for the sound and prudent day-to-day management of the Finance Company or Restricted Licence Finance Company, generally including, but not limited to, the chief executive officer, chief financial officer, chief risk officer and heads of the compliance and internal audit functions;
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| aq. | Short-Term Credit: any credit which is granted to a Borrower for a period of not more than twelve (12) months, for the express purposes of purchasing specified, identifiable goods or services, without interest being charged nor a lien being placed against collateral nor a security deposit being required from the Borrower;
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| ar. | Subsidiary: an entity (the 'first entity') is a subsidiary of a Finance Company (the 'second entity') if the second entity:
| 1. | holds a majority of the voting rights in the first entity;
| | 2. | is a shareholder of the first entity and has the right to appoint or remove a majority of the board of directors or managers of the first entity; or
| | 3. | is a shareholder of the first entity and controls alone, pursuant to an agreement with other shareholders, a majority of the voting rights in the first entity.
| | | or;
| | 4. | if the first entity is a subsidiary of another entity which is itself a subsidiary of the second entity;
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| as. | U.A.E. Banks: all banks licensed by the Central Bank.
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