AUTHORISED FIRMS FAQ

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Answer
collapse Question : 01- Who can apply to become an authorised firm?  ‎(1)

In order to apply for Authorisation a firm must be a Body Corporate or Partnership, which intends to carry on Regulated Activities in or from the QFC.

Applicants can be formed:

  • Inside the QFC by incorporating either under the Companies Regulations or the Limited Liability Partnership Regulations; or
  • Outside the QFC, but using a branch office in the QFC that is registered with the QFC Companies Registration Office.
collapse Question : 02- Should my firm talk to the QFC Authority or Regulatory Authority before submitting an application form?  ‎(1)

Applicants should discuss their proposals with the Regulatory Authority Authorisation Division in the first instance.

Contact the Regulatory Authority on +974-495-6888.
collapse Question : 03- Which application form should I complete for Authorisation?  ‎(1)

Applicants seeking Authorisation by the QFC Regulatory Authority to carry on Regulated Activities must complete and submit to the QFC Regulatory Authority Application form Q02, “Application for Authorisation to Conduct Regulated Activities”.

collapse Question : 04- Where can I get copies of the application form Q02? ‎(1)

​The Application form Q02 is available from the QFC Authority Business Development Department, or from the QFC Regulatory Authority Authorisation Division. The Application forms are also available to download on the QFC Regulatory Authority website.

collapse Question : 05- How long does it take to process an application? ‎(1)

​The QFC Regulatory Authority aims to process applications within three months of receiving all relevant information.

However, this depends largely on the nature, scale and complexity of the business, of the Applicants, as well as the timely submission of information by Applicants and any responses to requests for further information or clarification. The application process is interactive, and may involve correspondence, meetings, reports from third parties, and on-site reviews or inspections. 
collapse Question : 06- How much are the application fees? ‎(1)

The application fee will vary according to the Regulated Activities to be carried on, and the number of employees who will hold Approved Individual status.
The application fee will range from $10,000 to $40,000 depending on the Regulated Activities a firm intends to conduct. The application fee for each Approved Individual is $500. All fees are stated in US dollars.
Details of the application fees are set out in the General Rulebook, which is available on the QFC Regulatory Authority website. The QFC Authority or Regulatory Authority can also provide information about fees in the QFC.

collapse Question : 07- What are the fees if an applicant wants to carry out more than one activity in the QFC? ‎(1)

Under current QFC Regulatory Authority policy, if an applicant wishes to engage in one or more of the enumerated Regulatory Activities, the fee which would apply is the highest of the applicable fees stated in the Fees Table in Appendix 4 of the General Rulebook.

It should be noted that the fees are not cumulative and the Applicant must pay the highest of the corresponding fees relative to the Applicant’s proposed Regulated Activities.
collapse Question : 08- How much are the annual fees? ‎(1)

For the first year, the initial annual fee will be pro-rated to the end of the year. Subsequent year annual fees will be based on the activities outlined in an Authorised Firm’s Scope of Authorisation and the number of Approved Individuals within a firm registered as at the 30 September of the previous year.  

These fees are described in more detail in the General Rulebook, which is available on the QFC Regulatory Authority website.
collapse Question : 09- Can I withdraw an application form? ‎(1)

An Applicant can withdraw an application at any time before the application is granted or refused, by writing to the QFC Regulatory Authority Authorisation Division.  

The written notification should be signed by someone with the appropriate authority. The application fee is not refundable so the Applicant should be sure that it wants to apply before doing so.  

Any applications for Approved Individual status may similarly be withdrawn. 

collapse Question : 10- Does an authorised firm’s authority allow it to operate outside of the QFC? ‎(1)
The Authorisation authorises a firm to carry on activities in or from the QFC.
If an Authorised Firm wishes to establish an additional office outside the QFC, it must comply with the relevant legislation in the area where it proposes to establish, and comply with any restrictions or requirements that other jurisdictions may impose.
For more information of this subject Applicants should read the Policy Statement No.1 ‘QFC Firms Doing Business in the State’, which is available on the QFC Regulatory Authority website.
collapse Question : 11- What does carrying on activities “in or from” the QFC mean? ‎(1)
Carrying on activities in or from the QFC refers to activities carried out in the QFC between two QFC Licensed entities or between a QFC Licensed entity and another party located outside of the QFC, either in the State of Qatar or outside of the State. 
collapse Question : 12- Can an authorised firm operate from within the QFC but have clients outside? ‎(1)
Yes, an Authorised Firm’s Clients may be based locally, regionally and internationally.
collapse Question : 13- Are any regulated activities prohibited? ‎(1)

​At the present time, there are no legislative prohibitions placed on the type of Regulated Activities a person may conduct in or from the QFC. This means that a firm may be Authorised to conduct onshore and offshore activities subject to the firm obtaining relevant approvals both within the QFC and, if applicable, in the offshore jurisdiction.

collapse Question : 14- Are there any restrictions on deposit taking in Qatari Riyals by an authorised  firm? ‎(1)
Activities permitted to be carried on in or from the QFC are detailed in schedule 3 of the QFC Law. In terms of Regulated Activities the scope of these activities are wide and include most (if not all) services typically associated with the carrying on of commercial, private and investment banking.
 
There are no banking specific prohibitions such as any restriction on deposit taking or dealing in any specific currencies (including the Qatari Riyal). However, whilst the drafting of the QFC Law is broad relative to the scope of Permitted Activities, as a matter of policy made by the QFC Authority, Banking Business (Deposit Taking and Providing Credit Facilities) with or for Retail Customers resident in Qatar is currently prohibited. 
collapse Question : 15- Are there restrictions on the type of client an authorised firm may have? ‎(1)

At the present time, there are no legislative restrictions placed on the type of Client an Authorised Firm may provide its services to, however, certain activities may be outside the QFC Authority’s strategic focus.

Applicants should discuss their proposal with the QFC Authority Business Development Department, in the first instance.
collapse Question : 16- What are the rules for authorised firms and where can I find them? ‎(1)

The rules for Authorised Firm are grouped into a number of QFC Regulatory Authority Rulebooks according to their subject matter, e.g. Prudential, Governance and Control, Conduct of Business, Anti Money Laundering, etc.

Rulebooks are published following a period of public consultation. Copies of all Rulebooks and Consultation Papers are available here.

collapse Question : 17- How many of the Regulatory rulebooks apply to my firm? ‎(1)
This will depend on the nature of the Regulated Activities to be provided and the capacity in which the firm acts. For this reason, it is essential that the Applicant is familiar with the QFC Regulatory Authority Rulebooks before submitting an application for Authorisation. 
collapse Question : 18- What are the conduct of business rules and do they apply to my firm? ‎(1)
Part 1 of the Conduct of Business Rulebook details certain “behavioural” rules such as the management of conflicts of interest, and requirements in respect of marketing and the making of financial promotions. These rules apply to all Authorised Firms.  
 
Part 2 applies to investment firms and (life) insurance intermediaries.
 
Part 3 applies to insurers and (non-life) insurance intermediaries. 
collapse Question : 19- What is the purpose of the fitness and propriety criteria for authorised firms and what are they? ‎(1)

The Financial Services Regulations provides the QFC Regulatory Authority with the power to make rules setting out the criteria which an Applicant must satisfy before Authorisation can be granted. The Financial Services Regulations states that such criteria shall include the Fitness and Propriety of an Applicant.

The purpose of the Fitness and Propriety criteria is to set out the minimum criteria that an Applicant must meet for it to become and to remain Authorised. The Fitness and Propriety criteria summarises some of the areas that the QFC Regulatory Authority will consider during the assessment of an Applicant for Authorisation. It draws together the parts of the  QFC Regulatory Authority Rulebooks that are relevant to the Applicant, and it is used to determine whether the Applicant is ready, willing and able to comply with all of the appropriate  QFC Regulatory Authority requirements.
 
In relation to an Authorised Firm, the Fitness and Propriety criteria are described in Article 29(2)-(5) of the Financial Services Regulations and chapter 2 of the General Rulebook, which is available on the  QFC Regulatory Authority website.
collapse Question : 20- What financial requirements apply to authorised firms? ‎(1)

Most firms, including insurance brokers and managers, must comply with the Prudential — Investment, Insurance Mediation & Banking Business Rulebook. 

The exception is insurers, who must comply with the Prudential – Insurance Rulebook.
collapse Question : 21- What are the initial capital requirements for authorised firms? ‎(1)

The initial minimum requirements will differ according to the type of business a firm provides. For example:  

*where the entire business is conducted in accordance with Shari’a and the firm operates a Profit Sharing Investment Account.  
 
However, the actual ongoing capital requirements will depend on the nature and scale of a firm’s business, and the consequent variable risks faced by the firm in areas such as credit risk, market risk and (for Islamic Financial Institutions) displaced commercial risk.
 
The Rules become increasingly complex as the Authorised Firm’s activities become more complex, so it is essential that the Authorised Firm has the appropriate expertise and understanding to apply the relevant rules to its business. All figures are stated in US Dollars.

 

collapse Question : 22- How do the prudential rules relate to branch offices? ‎(1)

The prudential rules apply to the entity wherever it is based. If an Authorised Firm carries on Regulated Activities in the QFC through a branch office, in appropriate circumstances the  QFC Regulatory Authority may waive the operation of certain rules or specified parts of certain rules.  

In this respect, the  QFC Regulatory Authority may seek to rely on a firm’s home state regulator when it comes to prudential supervision, provided it is satisfied that the rules are broadly equivalent to those of the  QFC Regulatory Authority, and that appropriate arrangements exist or are expected to exist within the relevant home state regulator.
 
Where this is not possible in the short term, it may be more practical to form a subsidiary entity, although the  QFC Regulatory Authority may nevertheless need to take into account any group supervision arrangements that may exist. Applicants should discuss with the  QFC Regulatory Authority at an early stage through which entity they are proposing to apply. 
 
Some of the prudential rules may also apply directly to the branch office and may involve submission of certain reporting statements relevant to the branch office itself.
collapse Question : 23- Are there rules relating to the holding of client money and insurance money? ‎(1)

There are detailed rules concerning Client Money and Insurance Money and when it must be segregated by Authorised Firms. The rules generally apply to all the firms who are not banks or insurers (money held by a bank, for example, may meet the definition of Deposit which is subject to different requirements). There are specific requirements for insurance brokers and managers.

The detailed rules on Client Money and Insurance Money are contained in chapter 2 and chapter 7 of the Assets Rulebook, which is available on the  QFC Regulatory Authority website.
 
It should also be noted that firms whose Authorisation authorises it to carry on only arranging and advising activities must not hold Client Money or Insurance Money. These restrictions are set out in the section 2.5 of the General Rulebook.
collapse Question : 24- Is the senior management of an authorised firm subject to particular requirements? ‎(1)

Authorised Firms are expected to exercise high standards of governance and controls. All firms must have clear reporting lines and controls in place in order to ensure that the business is managed in an effective manner and that senior management take clear responsibility for the firm’s activities. These standards are outlined in the Controls Rulebook, which is available on the QFC Regulatory Authority website 

In addition, certain senior managers (as well as certain directors, partners and other mandatory positions) will be required to be approved by the QFC Regulatory Authority where their activities fall into the definition of a Controlled Function, defined in the Individuals Rulebook, which is available on the QFC Regulatory Authority website. 
collapse Question : 25- What is expected in terms of systems and controls? ‎(1)

​Authorised Firms must have effective procedures and controls to manage its business to a high standard and to comply with all of the QFC Regulatory Authority Rules, including but not limited to: conduct of business, anti money laundering, compliance monitoring and risk management. These requirements are relevant to all firms regardless of whether they are reliant on complex IT systems or have simpler, manually based systems.  

The extent of an Authorised Firm’s systems and controls will depend on the nature, scale and complexity of its business.
collapse Question : 26- What are the ongoing supervision and reporting requirements? ‎(1)
Once a firm is Authorised, it must comply with all applicable Rules. The  QFC Regulatory Authority will review and test compliance on an ongoing basis.  
Authorised Firms must also submit various financial reporting forms and other reports or notifications as well as approval or notification requirements in respect of proposed new Controllers. A summary of the reporting and notification requirements is provided in the General Rulebook. 
collapse Question : 27- Is the granting of authorisation made public? ‎(1)

Yes, the QFC Regulatory Authority is a transparent regulator and is required under Article 18 of the Financial Services Regulations to make public certain registers and other information.  

The QFC Regulatory Authority makes public its register of Authorised Firms, which is a database of all firms Authorised to carry on Regulated Activities. It details the name of the Authorised Firm, the Regulated Activities it is Authorised to conduct, any conditions or restrictions applying to the Authorised Firm and a breakdown of the Specified Products in respect of which it may conduct Regulated Activities.
 
The public registers are available on the QFC Regulatory Authority website.