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Article (6) Applying for a License

C 112/2018 Effective from 24/4/2018
  1. 6.1 The conducting of Financing activities in the U.A.E. is prohibited unless licensed by the Central Bank to do so.
     
  2. 6.2 Conducting Financing activities is restricted to Juridical Persons. The application must specify the range of activities for which the License is requested and must include the following:
     
    1. 6.2.1 A statement identifying the nature and scope of the types of activities, mentioned in Article 10 of this Regulation, that a new Finance Company proposes to undertake. In addition, the statement must specify any plans the applicant may have with regard to the future developments of these kinds of business, as well as details regarding the applicant's arrangements related to managing its business.
       
    2. 6.2.2 A feasibility study identifying the target market, the services to be provided, the business model and the strategy of the Finance Company, in addition to a three-year feasibility study that includes at least the following:
       
      1. Financing activities and products to be launched;
         
      2. Estimated financial statements, projected annual revenue and expenses, financial margins and targeted growth rates, taking into account Central Bank requirements according to Article 11 and Article 12 of this Regulation;
         
      3. Projected start-up costs and financing thereof;
         
      4. Projected ongoing financing of operations;
         
      5. The risk factors;
         
      6. A summary of the corporate structure, legal form and corporate governance standards adopted by the Finance Company;
         
      7. Branches to be established by the Finance Company; and
         
      8. A recruitment plan with the projected number of employees, including those of U.A.E. nationality. The Central Bank may set specific requirements for the share of employees of the Finance Company who are U.A.E. nationals.
         
    3. 6.2.3 The names, addresses, nationalities and share holdings of the shareholders, in addition to a certified copy of the memorandum and articles of association after the completion of the establishment procedures, as per the provisions of the Commercial Companies Law. For the shareholders who are U.A.E. nationals, U.A.E. identity cards are required in addition to a list of family members and their relationship to the founding members. For expatriate shareholders, passport and valid residency visa copies and U.A.E. identity cards are required. If the founding members are Juridical Persons, then constitutional documents duly legalized are required.
       
    4. 6.2.4 Organizational structure showing the main departments, sections, lines of reporting, authorities and responsibilities. This structure should be appropriate, balanced, and acceptable to the Central Bank.
       
    5. 6.2.5 Curriculum vitae of persons recommended for board of directors and Senior Management positions. The Central Bank may decide to interview nominees.
       
    6. 6.2.6 A certificate issued by a U.A.E. Bank indicating that the license applicant holds at least 25 million United Arab Emirates Dirhams of its paid up capital in deposits; in addition, an undertaking to deposit the remaining balance of the minimum required paid-up capital immediately after obtaining a preliminary approval from the Central Bank.
       
    7. 6.2.7 A letter of unconditional guarantee by one of the U.A.E. Banks, issued to the Central Bank, for an amount equivalent to the minimum required paid-up capital. This letter of guarantee must be renewable automatically until the required minimum paid-up capital is paid in full. The letter of guarantee shall be released upon the request of the founding shareholders in the following cases:
       
      1. Payment of the required minimum amount of paid-up capital in cash;
         
      2. Withdrawal of the License application; or
         
      3. Rejection of the License application by the Central Bank.
         
    8. 6.2.8 An undertaking to abide by the provisions of the Central Bank Law, the Commercial Companies Law and Federal Law No. (6) of 1985 regarding Islamic Banks, Financial Institutions and Investment Companies as well as the provisions of this Regulation and any decisions, instructions, directives, circulars or correspondence issued by the Central Bank with regard to Financing activities.
       
    9. 6.2.9 An undertaking to make available records and documents to be supervised, examined and reviewed by the Central Bank, as well as an undertaking to comply with all anti-money laundering laws and regulations and any other resolutions or instructions issued by the Central Bank in this regard.
       
    10. 6.2.10 Any other information and/or documents requested by the Central Bank for the purpose of deciding on the application for a License.
       
  3. 6.3 The applicants might apply for either a conventional finance company License or an Islamic Finance Company License. As such, Islamic windows in conventional finance companies are prohibited.
     
  4. 6.4 The legal form of a Finance Company must be in one of the forms stipulated in the Commercial Companies Law. It shall be subject to Central Bank licensing, supervision and examination, as per the provisions of the Central Bank Law.