3.3.3 Minimum paid-up share capital (1) An INMA firm must have paid-up share capital of at least the amount specified, by reference to the activity that the firm is (or is to be) authorised to conduct, in table 3.3.3. If the firm is (or is to be) authorised to conduct more than 1 such activity, it must have the higher or highest of the relevant amounts of paid-up share capital. Table 3.3.3 Minimum paid-up share capital Activity Minimum paid-up share capital (QR) Dealing in investments (if limited to dealing as agent) 1.8 million Managing investments 1.8 million Providing custody services 1.8 million Operating a collective investment scheme 1.8 million Providing custody services in relation to a collective investment scheme 35 million Providing scheme administration 900,000 Arranging deals in investments 900,000 Arranging the provision of custody services 900,000 Arranging financing facilities 900,000 Advising on investments 900,000
(2) If the Regulatory Authority considers that, because of the nature, scale and complexity of a particular INMA firm’s business, the firm should hold higher paid-up share capital than is required by subrule (1), the authority may at any time require the firm to hold a specified higher amount of paid-up share capital. Note Paid-up share capital (for firms that are not companies) is defined in the glossary. 3.3.4 Net liquid assets requirement (1) An INMA firm must have, at all times, net liquid assets at least equal in value to 25% of the firm’s annual operating expenditure. Net liquid assets is the amount by which the total value of the firm’s liquid assets exceeds the total value of its current liabilities. Note Annual operating expenditure is defined in rule 3.3.6. (2) If the Regulatory Authority considers that because of the nature, scale and complexity of a particular INMA firm’s business, the firm should hold a greater amount of net liquid assets than is required by subrule (1), the authority may at any time require the firm to hold net liquid assets to a specified higher percentage of its annual operating expenditure. 3.3.5 Calculating total liquid assets (1) Liquid assets means: (a) cash on hand, and demand deposits, term deposits accessible on demand, and money otherwise deposited with a bank; and (b) highly liquefiable investments that the Regulatory Authority determines to be appropriate to count as liquid assets (but subject to any direction of the authority about a haircut to be applied).
(2) If an INMA firm has recalculated its annual operating expenditure in accordance with subrule (1), it must submit the recalculation to the Regulatory Authority within 7 days of doing so, and must seek approval for it from the authority. The authority may object to the recalculation within 30 days of receiving it and may direct the firm to revise its net liquid assets requirement accordingly. 3.3.8 Application of rule 3.3.4 to financial groups (1) If an INMA firm is part of a financial group, the financial group must comply with rule 3.3.4 on a consolidated basis. (2) The financial group of an INMA firm is made up of: (a) the firm; (b) any subsidiary (direct or indirect) of the firm, if the subsidiary belongs to a sector of the financial industry; and (c) any entity that the Regulatory Authority directs the firm to include. Note The instructions for preparing returns divide the financial industry into the following sectors: banking, non-life insurance, life insurance, financial services, equity investments and non-equity investments. (3) An INMA firm may apply to the Regulatory Authority for approval to exclude an entity from its financial group. The authority will grant such an approval only after the firm satisfies the authority that inclusion of the entity would be misleading or inappropriate for the purposes of supervision. Guidance The Regulatory Authority would consider a range of factors when requiring an INMA firm to treat another entity as part of its financial group. These factors would include regulatory risk factors, including direct and indirect participation,
6.1.5 Holding custody investments (1) An INMA firm holds or controls custody investments if: (a) the investments are directly held by the firm; (b) they are held in an account in the firm’s name; or (c) they are held by a person, or in an account in the name of a person, controlled by the firm. (2) For subrule (1): (a) a person holds a custody investment if the document of title for the investment is in the person’s physical possession, or legal title to the investment is registered in the person’s name; (b) a person controls an account if the account is operated in accordance with the person’s instructions; and (c) an INMA firm controls a person if the person is inclined to act in accordance with the firm’s instructions. 6.1.6 Nominee A nominee is a body corporate whose business consists solely of acting as a nominee holder of relevant investments or other property.
(2) A PSIA may be restricted or unrestricted. A restricted PSIA is a PSIA that is subject to a restriction as to where, how or for what purpose the investment funds may be invested. Note 1 For the Rules relating to unrestricted PSIAs—see BANK. Note 2 For guidance on the treatment of PSIAs as restricted or paragraphs 12 and 13 of AAOIFI’s Statement of Concepts of Financial Accounting for Islamic Banks and Financial Institutions. See also Appendix D of Financial Accounting Standard FAS 5. (3) In this Chapter: owner of a PSIA includes a PSIA manager that owns the PSIA that it manages. Note The PSIA manager is generally the owner of the PSIA, but an owner can outsource the management of the PSIA to another person. 9.1.3 Policies—PSIAs An Islamic INMA firm’s policies must include the following: (a) how to ensure that PSIAs are managed in accordance with their IAHs’ instructions; (b) how to ensure that the funds of PSIAs are invested in accordance with the firm’s terms of business; (c) the priority of the investment of the PSIA owners’ funds and those of the IAHs; (d) how the interests of the IAHs are safeguarded; (e) the basis for allocating expenses and profits or losses to IAHs; (f) how provisions and reserves against equity and assets will be applied;
Glossary (see rule 1.1.3) AAOIFI means the Accounting and Auditing Organisation for Islamic Financial Institutions. accounting standards include accounting rules, principles, practices and conventions. advising on investments includes: (a) the regulated activity described in FSR, Schedule 3, Part 2, paragraph 11; and (b) advising on Islamic investments. advisory firm has the meaning given by rule.5.1.2(1). approved representative, of an INMA firm, has the meaning given by COND, rule 2.2.3 (1). approved website means a website that is approved under the Interpretation and Application Rules 2005, rule 3.1.2. arranging deals in investments includes: (a) the regulated activity described in FSR, Schedule 3, Part 2, paragraph 5; and (b) arranging deals in Islamic investments. arranging financing facilities includes: (a) arranging credit facilities—that is, the regulated activity described in FSR, Schedule 3, Part 2, paragraph 7; and (b) arranging Shari’a-compliant financing facilities. arranging the provision of custody services includes: (a) the regulated activity described in FSR, Schedule 3, Part 2, paragraph 9; and (b) arranging the provision of custody services in relation to Islamic investments.
associate of an INMA firm means any other entity in the same corporate group as the firm. authorisation means an authorisation granted under FSR, Part 5. authorised firm (or firm) means a person that has an authorisation. BANK means the Banking Business Prudential Rules 2014. branch means the local office in the QFC of a legal person incorporated outside the QFC. business customer (of an investment business firm) has the same meaning as in COND. business day means a day that is not a Friday, a Saturday, or a public or bank holiday in Qatar. cheque includes a payable order of any other kind. client bank account has the meaning given by rule 5.5.1. client money has the meaning given by rule 5.2.2. client money distribution rules means the provisions of Part 5.10. client money protection rules means the provisions of Part 5.5. CM requirement has the meaning given by rule 5.9.1. CM resource has the meaning given by rule 5.9.1. COLL means the Collective Investment Schemes Rules 2010. collective investment scheme has the same meaning as in COLL. COND means the Conduct of Business Rules 2007. corporate group: an INMA firm’s corporate group is made up of: (a) the firm; (b) any parent entity of the firm; (c) any subsidiary (direct or indirect) of the firm; and (d) any subsidiary (direct or indirect) of a parent entity of the firm. CTRL means the Governance and Controlled Functions Rules 2012. custody investment has the meaning given by rule 6.1.4.
home financial services regulator for an entity means the regulator responsible for the prudential regulation of the entity in the jurisdiction where the entity’s authorisation or licence was granted. IAH means investment account holder of a restricted PSIA. IBANK means the Islamic Banking Business Prudential Rules 2015. IFRS means the International Financial Reporting Standards, as amended and in force from time to time. independent entity has the same meaning as in COLL. INMA firm means an authorised firm to which, under rule 1.1.4, these rules apply. investments includes Islamic investments. investment and advisory business means the business of conducting, in or from the QFC, any of the activities mentioned in rule 1.1.4. investment business firm has the meaning given by rule 5.1.2(1). Islamic financial institution means an authorised firm whose authorisation includes a condition that the whole of the firm’s business must be conducted in accordance with Shari’a. Islamic INMA firm has the meaning given by rule 9.1.1 (1). Islamic investments has the meaning given by rule 1.1.3A (2). jurisdiction means any kind of legal jurisdiction, and includes, for example: (a) the State of Qatar; (b) a foreign country (whether or not an independent sovereign jurisdiction), or a state, province or other territory of such a foreign country; and (c) the QFC or a similar jurisdiction. legal person means an entity (other than an individual) on which the legal system of a jurisdiction confers rights and imposes duties, and