Through this Regulation, the Central Bank is amending Article 3(c) of the Exchange Business Regulation. This amendment also replaces the previous amendment to Article 3(c), contained in Article 1 of Central Bank Board of Director’s Resolution 61/6/2016.

This Regulation applies to all Licensed Persons to which the Exchange Business Regulation applies.

The objective of this Regulation is to amend Article 3(c) of the Exchange Business Regulation in order to enhance the regulatory and supervisory framework for Exchange Business in the United Arab Emirates.

1.1 Central Bank: The Central Bank of the United Arab Emirates.

1.2 Exchange Business: as defined in the Exchange Business Regulation.

1.3 Licensed Person: any natural or judicial person authorised to conduct Exchange Business under the Exchange Business Regulation.

1.4 Exchange Business Regulation: the Central Bank Regulation titled ‘Regulations re Licensing and Monitoring of Exchange Business’ issued by Central Bank Notice No. 1/2014 on 6 January 2014 and amendments thereof

2.1 Article 3(c) of the Exchange Business Regulation is hereby deleted and replaced with the following text:

“1. An undertaking to provide, in case the application is approved, and prior to issuing a license, an unconditional and irrevocable bank guarantee drawn in favour of the Central Bank, issued by a Bank licensed by the Central Bank or an unconditional and irrevocable deposit of unencumbered cash funds held in an account at the Central Bank in lieu thereof. The value at any point of time of either of the above, shall not be less than the higher of either:

a) one hundred (100) percent of the minimum Paid Up Capital required as specified in Article (4.2)(a) of these Regulations; or

b) five (5) percent of the full amount equal to the average monthly remittance value of the previous financial year.

2. In the case of carrying on payment of wages activity, the value of payments using WPS shall be restricted to the bank guarantee drawn in favour of the Central Bank according to the Standards for the Regulations Regarding Licensing and Monitoring of Exchange Business.”.

3.1 Any Licensed Person, which breaches or is likely to breach any regulatory obligation in this Regulation must immediately notify the Central Bank in writing.

4.1 Violation of any provision of this Regulation and any accompanying Standards may be subject to supervisory action and sanctions as deemed appropriate by the Central Bank.

4.2 Any Licensed Person not meeting the requirements of this Regulation upon its coming into force, may be subject to business restrictions until fully compliant with the requirements of Article 3(c) and must obtain written approval from the Central Bank on an agreed plan setting out clear time frames and deliverables in order to reach full compliance.

5.1 The Regulatory Development Division of the Central Bank shall be the reference for interpretation of the provisions of this Regulation.

6.1 This Regulation repeals and replaces Article 3(c) of the Exchange Business Regulation and the previous amendment made to Article 3(c) of the Exchange Business Regulation, contained within Article 1 of the Central Bank Board of Directors’ Resolution No. 61/6/2016 issued on 25/8/2016.

7.1 This Regulation shall be published in the Official Gazette in both Arabic and English and shall come into effect one month from the date of publication.