1) The following activities shall be considered financial activities subject to Central Bank licensing and supervision in accordance with the provisions of this decretal law:

• a. Taking deposits of all types, including Shari`ah-compliant deposits.
• b. Providing credit facilities of all types.
• c. Providing funding facilities of all types, including Shari`ah-complaint funding facilities.
• d. Providing currency exchange and money transfer services.
• e. Providing monetary intermediating services.
• f. Providing stored values services, electronic retail payments and digital money services.
• g. Providing virtual banking services.
• h. Arranging and/or marketing for Licensed Financial Activities.
• i. Acting as a principle in financial products that affect the financial position of the Licensed Financial Institution, including but not limited to foreign exchange, financial derivatives, bonds and sukuk, equities, commodities, and any other financial products approved by the Central Bank.

2) The Board of Directors shall:

• a. Classify and define Licensed Financial Activities and the practices relating thereto.
• b. Add activities or practices to the list of Licensed Financial Activities mentioned in item (1) of this article, or delete activities or practices from the list, or amend them, following coordination and agreement with the Regulatory Authorities in the State, through the Financial Activities Committee referred to in Article (66) of this decretal law.

3) In case a Licensed Financial Institution wishes to carry on activities licensed by Regulatory Authorities in the State or the regulatory authorities in other jurisdictions, other than the activities referred to in item (1) of this article, such institution must obtain approval of the Central Bank, prior to obtaining licensing from the concerned regulatory authority.

1) A technical committee named the 'Financial Activities Committee' shall be established in the Ministry by a Cabinet resolution, chaired by the Ministry and include in its membership a representative of each of the Regulatory Authority in the State. The mentioned committee shall look into and provide opinion on any proposal to regulate a financial activity other than those mentioned in the laws of regulatory authorities. The resolution shall specify the committee’s terms of reference and the mechanism for discharge of its functions.

2) The approval of the concerned regulatory authority shall be obtained in case the financial activities committee suggest adding a specific financial activity not mentioned in its law to the list of activities under its licensing and regulation.

1) Any Person may, in accordance with the regulations issued by the Board of Directors, submit to the Central Bank an application for a license to carry on one or more Licensed Financial Activities or addition of one or more Licensed Financial Activities to an issued license.

2) The Board of Directors shall issue rules, regulations and standards, and determine conditions for granting license to carry on Licensed Financial Activities, including the following:

• a. Fit and proper criteria.
• b. Resources required for carrying on the activity.
• c. Control and monitoring systems.

3) The Board of Directors may add any requirements or conditions to be fulfilled by the applicant for license, at its own discretion and as it deems appropriate for safeguarding public interest.

1) A licensed financial institution must carry on its business within the scope of the license granted to it.

2) No Person may represent that it is a Licensed Financial Institution, if such is not the case

1. The application for license or expansion of its scope shall be decided on within a period not exceeding sixty (60) working days from the date of satisfying the requirements and conditions of the license. The lapse of such period without reply shall be deemed rejection of the application.
2. The Central Bank may request the applicant to meet the requirements and conditions of the license within the period it determines.
3. The Central Bank may reject the application or request the addition of any financial activity at its sole discretion, according to the absorptive capacity of the financial sector of the State and the requirements of the domestic market. The decision issued in this regard shall be final and not appealable before the Grievances and Appeals Committee.
4. The applicant shall be notified of the substantiated rejection decision by means of an official notice within a period not exceeding twenty (20) days from the date of its issuance.

1) The Board of Directors may impose conditions or restrictions, or otherwise change or cancel conditions or restrictions imposed on a license for carrying on Licensed Financial Activities.

2) The Board of Directors may, before issuing the decision mentioned in item (1) of this article, request the concerned financial institution to provide its opinion on the reasons for the decision, within such period as specified.

3) The licensed financial institution shall be notified, officially, of the reasoned decision within a period not exceeding twenty (20) working days from date of its issue. The notice shall include the following:

• a. Content of the decision.
• b. Reasons for the decision.
• c. Effective date of the decision.
• d. A statement advising the licensed financial institution of its right to submit a grievance against the decision, by applying to the Grievances & Appeals Committee, in accordance with the provisions of this decretal law.

1) The Board of Directors may suspend, withdraw, or revoke a license issued to a Licensed Financial Institution, in the following cases:

• a. If the Licensed Financial Institution ceased to meet, or breached one or more of the conditions or restrictions imposed on the license.
• b. If the Licensed Financial Institution breached any of the State’s established laws and regulations, or the regulations, rules, standards, instructions, and guidelines issued by the Central Bank.
• c. If the Licensed Financial Institution failed to take any measures or actions determined or prescribed by the Central Bank.
• d. If the Licensed Financial Institution ceased to carry on one or more of the Licensed Financial Activities, for a period exceeding one year.
• e. If the business or operations were ceased for a period exceeding one year.
• f. If the Central Bank considered, at its own discretion, that the full or partial withdrawal, revocation, or suspension of the license, was necessary for achieving its objectives and discharging its functions.
• g. If the concerned Licensed Financial Institution submitted an application for full or partial suspension or revocation of the license.
• h. If the Licensed Financial Institution’s liquidity or solvency was at risk.
• i. If the capital of the Licensed Financial Institution fell below the minimum required in accordance with the provisions of this decretal law, or the regulations, rules, or standards issued by the Central Bank.
• j. If the Licensed Financial Institution merged with another financial institution.
• k. If the Licensed Financial Institution was declared bankrupt.

l. If the Licensed Financial Institution’s officers, employees, or representatives refused to cooperate with Central Bank officers, representatives, or examiners or abstained from providing required information, statements, documents, or records.

m. If the license of a foreign Licensed Financial Institution was revoked, or if it was put under liquidation at its domicile, or if the businesses of its branch, companies or Representative Offices in the State were wound down.

2) The Licensed Financial Institution shall be notified, officially, of the reasoned withdrawal, cancellation or suspension decision within a period not exceeding twenty (20) working days from date of its issue. The notice shall include the following:

• a. Content of the decision.
• b. Reasons for the decision.
• c.Effective date of the decision.
• d. A statement advising the Licensed Financial Institution of its right to submit a grievance against the decision, by applying to the Grievances & Appeals Committee, in accordance with the provisions of this decretal law.

3) The decision issued by the Central Bank shall, following decision on the grievance or appeal, if presented to the Grievances & Appeals Committee, or expiry of the period specified in item (2) of this article, be published in two local newspapers, one in Arabic and another in English, and on the Central Bank’s official website. Such decision may also be announced by any other means if necessary

1) Entities other than Banks licensed in accordance with the provisions of this decretal law may not use, in their business addresses or advertisements, the expressions “Bank”, “Masraf” or any other expression derived therefrom or similar thereto, in any language, and in any way which may mislead the public as to the nature of its business.

2) The following entities shall be not be subject to the provisions of item (1) of this article:

• a. Monetary authorities and Central Banks.
• b. Any federation or association established for protection of Banks’ interests.
• c. Any other institution exempted by the Board of Director.

1) An electronic register named “Register of Licensed Financial Institutions” shall be created in the Central Bank, to which names of Licensed Financial Institutions and all their data and any amendments thereto, shall be entered. A decision setting the rules and conditions for entry to such register shall be issued by the Board of Directors. Decision to license such institutions and any amendments thereto, shall be published in the Official Gazette. This register shall be published on the Central Bank’s official website.

2) A Licensed Financial Institution may not commence any Licensed Financial Activity except after its name was entered to the register.

3) Proceeds of licensing and entry to the register fees shall be deposited in a special account with the Central Bank. A decision shall be issued by the Board of Directors organizing operation of the account, and setting rules for withdrawing funds from it.

1) Banks shall take the form of public joint- stock companies, with incorporating law or decree so permits. Branches of foreign banks operating in the State, and specialized banks with low risks that are determined according to the conditions and rules set by the Board of Directors shall be exempt from this requirement.

2) Other Financial Institutions may take the form of joint- stock companies or limited liability companies, in accordance with the rules and conditions issued by the Board of Directors.

3) Exchange Houses and monetary intermediaries may be a sole proprietorship, or take any other legal form in accordance with the rules and conditions issued by the Board of Directors.

The Board of Directors shall establish regulations on the minimum capital requirement for Licensed Financial Institutions, and conditions and instances of increase or decrease of capital, and shall determine its risk-based requirements, and the necessary actions to be taken in case of capital shortfall, in addition to the measures taken by the Central Bank in this regard.

1) Without prejudice to the financial and commercial activities restricted to UAE nationals prescribed in any other law, the Board of Directors shall determine the conditions and controls for ownership of shares of Banks incorporated in the State and shareholdings contribution in their capital, and in all cases the national shareholding must not be less than sixty percent (60%).

2) The Board of Directors may determine the conditions, controls for percentage of ownership of shares and shareholdings contribution in the capital of Other Financial Institutions incorporated in the State by nationals and foreigners.

1) Licensed Financial Institutions shall seek Central Bank approval for amendments to their memorandum or articles of association. Such amendments shall only take effect after they were entered into the register.

2) The Central Bank shall decide on the application. Should the Central Bank decided to reject the application to enter the amendment, the matter shall be presented to the Board of Directors whose decision in that respect shall be final.

1) Licensed Financial Institutions that carry on all or part of their activities and businesses in accordance with the provisions of Islamic Shari`ah may carry on the Licensed Financial Activities mentioned in article (65) of this decretal law, whether for their account or for the account of or in partnership with third parties, provided such activities and businesses are Shari`ah-compliant. The Board of Directors shall issue regulations specifying the activities, conditions, rules, and operating standards for these institutions, in a manner commensurable with the nature of the license granted to them.

2) Licensed Financial Institutions mentioned in item (1) of this article shall, in respect of their Shari`ah-compliant businesses and activities initiated on behalf of their customers and not for their own account, be exempted from:

• a. Provisions of item (1) of article (93) of this decretal law.
• b. Provisions of item (2) of article (93) of this decretal law, insofar as such exemption does not contradict the provisions of local legislations applicable in the relevant emirate member of the Union.

1) An independent committee named “Internal Shari`ah Supervision Committee” shall be established within each Licensed Financial Institution that carries on all or part of its activities and businesses in accordance with the provisions of Islamic Shari`ah. Membership of this committee shall consist of experienced specialists in Islamic financial and banking transactions jurisprudence. The said committee shall undertake Shari`ah supervision of all businesses, activities, products, services, contracts, documents, and conduct of business charters of the concerned institution and shall approve them and establish their respective Shari`ah requirements, within the framework of the rules, principles and standards set by the Higher Shari`ah Authority, in order to ensure compliance thereof with Shari`ah. Fatwas or opinions issued by the Committee shall be binding.

2) The Internal Shari`ah Supervision Committee shall be appointed by the general assembly of the concerned Licensed Financial Institution, in accordance with the provisions of the referenced Commercial Companies law. Names of members of the Internal Shari`ah Supervision Committee shall be presented to the Higher Shari`ah Authority for approval, prior to presentation thereof to the general assembly and issuance of decision approving their appointment.

3) Members of the Internal Shari`ah Supervision Committee are prohibited from holding any executive position in the institution referred to in item (1) of this article, or provide services to it outside of the scope of the committee’s assigned functions, nor hold shares or have for themselves or for any of their relatives up to the second degree, any interests associated with it.

4) In cases where disagreement arises, over a Shari`ah opinion, between members of the Internal Shari`ah Supervision Committee, or disagreement between the Internal Shari`ah Committee and the Board of Directors of the concerned financial institution, over the compliance or noncompliance of a particular matter with the provisions of Shari`ah, the disagreement shall be referred to the Higher Shari`ah Authority, whose opinion on the matter shall be final.

5) There shall be established, in each institution referred to in item (1) of this article, a division or internal section, of a size commensurable with the businesses and activities of the concerned institution, to undertake internal Shari`ah audit and monitor compliance of the concerned institution with the fatwas and opinions of the Internal Shari`ah Supervision Committee. Such division or section shall report to the Board of Directors of the concerned institution, and its employees shall not have any executive powers or any responsibilities towards the businesses, activities and contracts which they review or audit from a Shari`ah perspective. The said division/ section shall be headed by a Shari`ah controller appointed by the Board of Directors of the concerned institution.

1) The Internal Shari`ah Supervision Committee shall prepare an annual report to be presented to the general assembly of the Licensed Financial Institution, which carries on all or part of its activities and businesses in accordance with Islamic Shari`ah. The report shall take the form specified by the Higher Shari`ah Authority, and shall indicate the extent of compliance of management of the concerned institution, with the provisions of Islamic Shari`ah, in all its activities, businesses, offered products, contracts entered into, and used documentation. The said report shall include the following:

   a. A statement on the extent of independence of the Internal Shari`ah Supervision Committee in discharge of its functions.

   b. A statement on compliance of policies, accounting standards, financial products and services, operations and activities in general, together with the memorandum, articles of association, and financial statements of the relevant institution, with the provisions of Islamic Shari`ah during the ending financial year.

   c. A statement on the compliance of distribution of profits, bearing of losses, costs, and expenses among the shareholders and investment account holders, with the fatwas and opinions of the Internal Shari`ah Supervision Committee.

   d. A statement on any other breaches to Shari`ah provisions and the controls established by the Higher Shari`ah Authority.

2) The Internal Shari`ah Supervision Committee shall provide the Higher Shari`ah Authority with copy of its report, no later than two (2) months from end of the financial year, in order for the Authority to express its remarks prior to the meeting of the general assembly of the concerned institution

Where a Licensed Financial Institution, which exercises all or part of its business and activities in accordance with Islamic Shari`ah, is subject to the supervision of the State Audit Institution, pursuant to the referenced Re-organization of the State Audit Institution law, the function of the audit institution shall be restricted to post- audit, and shall not interfere in the conduct of business or policies of these institutions.

Where it is established that a financial institution, which carries on all or part of its businesses and activities in accordance with the provisions of Islamic Shari`ah, has conducted businesses that are not compliant with such provisions, as per fatwas and opinions of the Internal Shari`ah Supervision Committee, and the fatwas and opinions of the Higher Shari`ah Authority, the Central Bank shall inform the concerned institution accordingly, after consulting with the Higher Shari`ah Authority, and shall ask the institution to reconcile its position, under the supervision of the Internal Shari`ah Supervision Committee, within thirty (30) working days from date of notification. The Central Bank shall take the appropriate corrective measures and corrective actions in case the concerned institution’s inability to reconcile its position.

1) The Board of Directors may issue regulations, rules, standards, conditions, and instructions, specifying Designated Functions subject to Central Bank authorization and the individuals who shall be required to obtain Central Bank authorization to undertake them, including fit and proper conditions, and cases of exemption of such conditions and standards.

2) Without prejudice to the provisions of item (1) of this article, Designated Functions subject to Central Bank authorization include those carried out by members of the boards of directors of Licensed Financial Institutions, and their chief executive officers, senior managers, executives, and Authorized Individuals.

3) No individual may undertake any Designated Functions at a Licensed Financial Institution, without obtaining Central Bank’s prior authorization.

4) Licensed Financial Institutions shall take all measures and actions, which ensure that no officer, employee, or any other individual representing them, shall exercise any of the Designated Functions without obtaining prior authorization from the Central Bank.

5) Any Authorized Individual in accordance with the provisions of this article shall abide with limits of powers stated in the authorization.

6) No individual shall introduce himself as an Authorized Individual unless he is authorized by the Central Bank

1) A Licensed Financial Institution may submit an application to the Central Bank for authorization of any individual to undertake any of the Designated Functions or to undertake additional Designated Functions.

2) The Central Bank may require the applicant to provide all information necessary for enabling it to decide on the application.

3) A Licensed Financial Institution shall notify the Central Bank of any material changes relating to the conditions for granting authorization to undertake the Designated Functions.

1) Deciding on application for authorization or extension thereof shall be within a period not exceeding twenty (20) working days from date of meeting all conditions and requirements for authorization. The lapse of this period without decision on the application shall be considered an implicit rejection thereof.

2) The Board of Directors may reject an application for authorization or addition of other Designated Functions to an Authorized Individual if it considered that such rejection would serve public interest or that conditions and requirements for authorization were not fulfilled.

3) The applicant shall be notified, officially, of the rejection decision within a period not exceeding twenty (20) working days from date of its issue. The notice shall include the following:

• a. Content of the decision.
• b. Reasons for the decision.
• c. A statement advising the applicant of his right to submit a grievance against the rejection decision, by applying to the Grievances & Appeals Committee, in accordance with the provisions of this decretal law

1) The Central Bank may decide to add conditions or restrictions to an authorization to undertake Designated Functions.

2) Before issuing the decision referred to in item (1) of this article, the Central Bank may request the concerned Licensed Financial Institution to provide its remarks on the reasons for the decision, within such period as it specifies.

3) The Licensed Financial Institution shall be notified, officially, of the decision within a period not exceeding twenty (20) working days from date of its issue. Such notice shall include the following:

• a. Content of the decision.
• b. Reasons for the decision.
• c. Effective date of the decision.
• d. A statement advising the Licensed Financial Institution of its right to submit a grievance against the decision, by applying to the Grievances & Appeals Committee, in accordance with the provisions of this decretal law.

1) The Central Bank may suspend, withdraw, or revoke the authorization issued to an individual undertaking Designated Functions, by an official notice, in the following cases:

• a. If the Authorized Individual ceased to meet, or breached one or more of the fit and proper criteria and other conditions or restrictions imposed on the authorization to undertake Designated Functions.
• b. If the Authorized Individual violated any of the State’s established laws and regulations or the regulations, rules, standards, or guidelines issued by the Central Bank.
• c. If the Authorized Individual failed to take any measures or actions prescribed by the Central Bank.
• d. If the Central Bank considered, that full or partial withdrawal, revocation, or suspension of the authorization, was necessary for achieving its objectives and discharging its functions.
• e. If the Authorized Individual was declared bankrupt.
• f. If the Authorized Individual refused to cooperate with the officials, representatives, or examiners of the Central Bank, or failed to submit required information or records.

2) In all cases, the authorization shall be revoked in case a cancellation application was submitted by the Licensed Financial Institution where the Authorized Individual works or in case of termination of his relationship with such institution.

3) The Licensed Financial Institution, where the Authorized Individual works shall be notified, in writing, of the decision to withdraw, revoke, or suspend the authorization, within a period not exceeding twenty (20) working days from date of its issue. Such notice shall include the following:

• a. Content of the decision.
• b. Reasons for the decision.
• c. Effective date of the decision.
• d. A statement advising the concerned Licensed Financial Institution and the Authorized Individual of their right to submit a grievance against the decision, by applying to the Grievances & Appeals Committee, in accordance with the provisions of this decretal law.

1) The Central Bank may prohibit any individual from working, or undertaking Designated Functions related to Licensed Financial Activities if it considered that the concerned individual was not fit and proper to work or undertake such Designated Functions.

2) The concerned Licensed Financial Institution shall be notified, officially, of the decision to prohibit the concerned individual from working or undertaking Designated Functions at it, within a period not exceeding twenty (20) working days from date of its issue. Such notice shall include the following:

• a. Content of the decision.
• b. Reasons for the decision.
• c. Effective date of the decision.
• d. A statement advising the Licensed Financial Institution and the concerned individual of their right to submit a grievance against the decision, by applying to the Grievances & Appeals Committee, in accordance with the provisions of this decretal law.

1) A Person shall not hold controlling interest, or increase controlling interest in any Licensed Financial Institution, nor exercise powers, which render him a de facto holder of controlling interest, at the discretion of the Central Bank, unless he obtains Central Bank’s prior approval.

2) A Licensed Financial Institution shall also not allow any Person to hold controlling interest therein, unless it obtains Central Bank’s prior approval.

3) The Board of Directors shall issue regulations, rules, standards, conditions, instructions, and restrictions relating to interests and instances of control.

A Licensed Financial Institution shall not establish any branch or representative office inside the State or in other jurisdictions, or relocate or closedown any existing branch without Central Bank’s prior approval.

1) Licensed Financial Institutions shall:

• a. Provide the Central Bank with reports, information, statements and other documents, which it determined and considered necessary for achieving its objectives and discharge its functions.
• b. Appoint qualified employees and assign them the task of preparing the reports required by the Central Bank.
• c. Take appropriate measures to ensure that the Person assigned, in accordance with the paragraph (b) of this item, obtains the information required for preparation of the reports.

2) Licensed Financial Institutions are prohibited from issuing instructions or directives, or agree with any manager, officer, an employee working for it, an agent representing it, or auditor of its accounts, to decline to provide the Central Bank with the requirements referred to in item (1) of this article.

3) The Central Bank shall establish rules and guidelines for periodical compilation of information from Licensed Financial Institutions.

4) The Central Bank shall determine the nature, forms and frequency of submission of information. Licensed Financial Institutions shall provide such information in accordance with the instructions issued by the Central Bank in this regard.

5) The provisions of this article shall apply to branches of foreign Licensed Financial Institutions operating in the State.

6) The Board of Directors shall issue regulations, rules, standards, and instructions regarding provision of the requirements referred to in this article, and may take all the measures and actions against the concerned institution or any of its employees referred to in paragraph (b) of item (1) of this article.

1) Licensed Financial Institutions, along with their legal representatives, compliance officers, and auditors of accounts shall be responsible for, immediate reporting of any of the following to the Central Bank:

• a. Occurrence of any material or crucial developments, which may impact its activities, structure, or overall position.
• b. Occurrence of any violation to the provisions of this decretal law or the decisions, regulations, or instructions issued in implementation thereof.

2) The aforementioned Persons referred to in item (1) of this article shall not be considered to have breached any of their obligations if they, acting in good faith, filed a report as per provisions of this article, or provided information or opinion to the Central Bank. The Licensed Financial Institution shall not dismiss those mentioned in item (1) of this article without obtaining approval of the Central Bank.

3) The Central Bank shall establish a mechanism for accepting notifications concerning violations referred to in item (1) of this article.

1) Each Licensed Financial Institution shall be required to provide the Central Bank with the statements and reports relating to its financial position.

2) Each Licensed Financial Institution shall be required to provide the Central Bank, within a period not exceeding three (3) months from end of the financial year, or within such period as the Central Bank may specify, with the following:

• a. Copy of the audited balance sheet, showing use of assets and liabilities arising from operations of the concerned institution.
• b. Copy of the audited profit and loss account, and any related notes.
• c. Copy of report of auditors of accounts of the concerned institution.
• d. Copy of report of the board of directors of the concerned institution.

3) The Central Bank may also require the Licensed Financial Institution to provide the following:

• a. Copy of the interim profit and loss account, on semi-annual basis, or for other periods specified by the Central Bank.
• b. Any other additional reports, data or information it deems necessary.

1) A Licensed Financial Institution shall not merge with or acquire any other institution, regardless of its type of activity, nor transfer any part of its liabilities to another Person, without obtaining Central Bank’s prior approval.

2) Without prejudice to the established legislation in the State concerning merger and acquisition, the Board of Directors may issue all regulations, rules, standards, conditions, instructions, and directives pertaining to merger and acquisition.

3) The Licensed Financial Institution shall be notified, officially, of Central Bank’s decision rejecting the proposed merger or acquisition within a period not exceeding twenty (20) working days from date of its issue. The notice shall include the following:

• a. Content of the decision.
• b. Reasons for the decision.
• c. Effective date of the decision.
• d. A statement advising the concerned Licensed Financial Institution of its right to submit a grievance against the decision, by applying to the Grievances & Appeals Committee, in accordance with the provisions of this decretal law.

A Licensed Financial Institution shall not cease to operate, fully or partially or suspend its operations, or cease to carry-on all or part of its Licensed Financial Activities without approval of the majority of its shareholders and approval of the Central Bank.

1) The Board of Directors shall, for the purposes of prudential supervision, issue necessary instructions and directives to a particular Licensed Financial Institution, or to a number of Licensed Financial Institutions within a specific category, relating to:

• a. Compliance with Central Bank instructions and directives relating to prudential ratios determined by the Board of Directors, regarding capital adequacy and liquidity or any other purposes.
• b. Compliance with the required provisions, or processing of specific assets.
• c. Adherence to limits of large exposures.
• d. Adherence to limits of exposures to related parties.
• e. Satisfying any additional requirements relating to reporting.

2) The Central Bank may take any additional actions to those mentioned in item (1) of this article.

3) The Central Bank may instruct any subsidiary of a Licensed Financial Institution to take particular actions, or refrain from carrying on particular activities, in the following cases:

• a. If the Central Bank is the consolidated regulatory authority of the entities referred to in this item.
• b. If the Central Bank decided that such instruction is necessary for the exercise of effective and consolidated prudential supervision of the entities referred to in this item.

4) The instructions and directives referred to in item (3) of this article may include the following:

• a. Require the subsidiary of the concerned Licensed Financial Institution to suspend provision of particular services, or carrying on particular businesses or activities, or even closing down any of its offices or branches outside the State, if such services, businesses or activities may expose the concerned Licensed Financial Institution to additional risk, or to risks that cannot be managed effectively and appropriately.
• b. Require the subsidiary of the concerned Licensed Financial Institution to take all necessary actions to remove any impediments that may hinder effective consolidated supervision.

The Central Bank may set limits to which deposit-taking Licensed Financial Institutions shall adhere to in their operations, which include the following:

1) The maximum amount of total discount operations or loans and advances the Licensed Financial Institution is allowed to conduct, as of a certain date.

2) The maximum amount the Licensed Financial Institution may lend to a single Person, relative to its own funds.

3) Any other limits the Central Bank may determine.

1) The Central Bank shall establish a general framework for governance of Licensed Financial Institutions, and shall issue rules and regulations relating to organization of works of their boards of directors and shall determine the conditions to be met by nominees for membership of their boards of directors, and the requirements and conditions for appointment of their senior staff; provided that Licensed Financial Institutions listed in the State’s financial markets shall adhere to the minimum requirements of corporate governance set by the concerned regulatory authority.

2) Licensed Financial Institutions must obtain Central Bank’s prior approval for appointment, nomination of any Person for membership of their boards of directors or renewal of his membership, and appointment or renewal of the employment contract of any of their senior staff.

3) The Board of Directors may, as may be required to safeguard public interest, reject any Person’s nomination, appointment, or renewal of his membership in the board of directors of a Licensed Financial Institution, and may also reject appointment or renewal of the employment contract of any of its senior staff.

The Central Bank shall prepare an electronic guide, which would include all regulations, rules, standards, decisions, and circulars issued by the Central Bank in accordance with the provisions of this decretal law. Such guide shall be published and regularly updated on the Central Bank’s website.

The regulations, decisions, and circulars issued by the Central Bank in accordance with the provisions of this decretal law shall have no retroactive effect, and shall not prevent implementation of agreements concluded between Licensed Financial Institutions and their customers prior to their issuance. The Central Bank shall determine the required transitional period for Licensed Financial Institutions to reconcile their respective positions, according to the provisions of this decretal law.

1) The Central Bank may, at any time, dispatch any of its staff or any third party authorized to act on its behalf to Licensed Financial Institutions and their owned companies or subsidiaries, if it deemed necessary to ensure soundness of their financial positions, and their compliance with the provisions of this decretal law and the regulations and decisions issued in implementation thereof, and other established laws and regulations in the State.

2) In case of the conduct of examination of companies owned by Licensed Financial Institutions and their subsidiaries, which are regulated by any of the Regulatory Authorities in the State or in other jurisdictions, the Central Bank shall coordinate with the concerned regulatory authority in this regard.

3) The Central Bank may, in coordination with the concerned agencies in the State, inspect premises of any Person suspected of carrying on any of the financial activities referred to in Article (65) of this decretal law, without a license. The Central Bank may, in this respect, require the suspected Person to provide all information, documents, and records relating to the unlicensed financial activities, and may seize such information, documents, and records.

4) Licensed Financial Institutions, their owned companies and subsidiaries shall provide the staff referred to in item (1) of this article with all information, records, books, accounts, documents and data relating to the subject of examination, along with any information he may ask for, on timely basis.

5) Central Bank staff may, within the framework of the examination process, summon any related Person, on the time and place they may determine, to provide information, data, documents, or records relating to the examination process.

6) The Board of Directors may issue regulations, rules, standards, directives and instructions relating to mechanisms and procedures for examination of Licensed Financial Institutions.

7) The Central Bank may take all measures and actions it deems appropriate for achieving its objectives and discharging its functions, and may particularly take the following actions, if it was found that a violation to the provisions of this decretal law, or the regulations and decisions issued in implementation thereof, has occurred:

• a. Impose restrictions on some of the operations or activities carried on by the concerned Licensed Financial Institution.
• b. Require the concerned Licensed Financial Institution to take necessary actions to rectify the situation immediately.
• c. Appoint a specialized expert, or a qualified Central Bank employee, to advice the concerned Licensed Financial Institution or supervise, or oversee some of its operations, for a period specified by the Central Bank. The concerned Licensed Financial Institution shall pay remunerations of such appointee if he is an expert from outside the Central Bank.
• d. Take any other action or measure, or impose any penalties it deems appropriate.

8) Licensed Financial Institutions shall be required to pay all costs of examination and investigations process outsourced, by the Central Bank, to a third party, in case its violation to the provisions of this decretal law, and the regulation and decisions issued in implementation thereof, has been established.

The Central Bank may dispatch one or more of its examiners or experts, to undertake examination of entities of national Licensed Financial Institutions operating abroad, in collaboration and coordination with the concerned regulatory authorities in those jurisdictions;

Such would include entities of national Licensed Financial Institutions operating in Financial Free Zones in the State, in cooperation and coordination with the supervisory authorities of the concerned Financial Free Zone.

The Central Bank may assign an expert or a Person qualified in the area of Licensed Financial Activities, to provide it with a report on a subject specified by the Central Bank, relating to direct and indirect businesses and activities of a particular Licensed Financial Institution. Such would be carried out in accordance with the conditions and procedures established by the Central Bank, and at the expense of the entities referred to in this article.

Central Bank staff designated per decision issued by the Minister of Justice, in coordination with the Governor, shall, in establishing acts occurring in violation of the provisions of this decretal law, have the capacity of judicial officers.

1) Without prejudice to the provisions of the Civil Procedures Law, the Central Bank may request intervention in any lawsuit filed with judicial authorities to which a Licensed Financial Institution is party.

2) Law enforcement and other concerned authorities shall notify the Central Bank of any investigations or proceedings initiated against Licensed Financial Institutions. The Central Bank may provide such authorities with any clarifications, statements, or information it deems appropriate in this regard.

The financial year for a Licensed Financial Institution shall begin on the first of January and end on the thirty first of December of each year, except for the first financial year, which begins from date of registration of the institution and shall end at the end of the following financial year.

1) Branches of foreign Licensed Financial Institutions shall maintain separate accounts for all their operations in the State, including the balance sheet and profit & loss account.

2) Branches and sections of a local or foreign Licensed Financial Institution operating in the State, shall, for the purposes of bookkeeping, constitute one financial institution.

1) Each Licensed Financial Institution operating in the State shall, every year, appoint an auditor or more, from amongst the auditors approved by the Central Bank, for auditing its accounts. Should the concerned Licensed Financial Institution fail to appoint an auditor, the Central Bank shall appoint an auditors for the concerned institution and determine its remunerations, which shall be paid by the concerned institution.

2) The functions of the auditors shall include preparation of a report on the balance sheet and the profit and loss accounts for the shareholders. The auditors shall state in their report whether the annual balance sheet and profit and loss accounts are true and fair, and whether the concerned Licensed Financial Institution has provided them with all the information and clarifications requested for performance of their mission. The concerned Licensed Financial Institution shall, at least twenty (20) working days before convening of the general assembly, provide the Central Bank with copy of the auditors’ report, along with copy of the balance sheet and the profit and loss account.

3) The general assembly of a Licensed Financial Institution may not be convened prior to receipt of Central Bank’s remarks on the report. The Central Bank may, within ten (10) working days from date of receipt of the report referred to in item (2) of this article, issue a decision not to approve the profits proposed for distribution to shareholders, if a shortfall in provisions was found, or a decline in the capital adequacy ratio from the established minimum requirement was established, or any reservation indicated in the auditors’ report or from the Central Bank, and deemed to have impact on distributable profits.

4) The auditors’ report, together with the report of the board of directors of the Licensed Financial Institution shall be read to the shareholders at the annual general assembly where the concerned institution is incorporated in the State. Such institution shall provide the Central Bank, within twenty (20) work days from date of convening of the general assembly, with three (3) copies of each report. If the concerned Licensed Financial Institution was incorporated in another jurisdiction, a copy of the auditors’ report shall be forwarded to its head office, and three (3) copies thereof shall be submitted to the Central Bank within twenty (20) working days from date of its issue.

5) The auditors shall not be represented in the board of directors of the Licensed Financial Institution, which appointed it to audit its accounts, nor have one of its staff appointed as employee, or act as advisor to the same institution.

6) A Licensed Financial Institution shall not extend credit facilities, of any type, to the auditors of its accounts. An auditor approved by the Central Bank may not commence its functions at a Licensed Financial Institution, unless any obligations it may have towards such institution were settled.

7) The auditors shall be responsible for the contents of their report on the financial statements of the concerned Licensed Financial Institution. If failure to properly perform their assigned duties or violation of provisions of this decretal law and the regulations and decisions issued in implementation thereof was established, the Central Bank may take any necessary measures or procedures, in collaboration and coordination with the concerned authorities in the State to strike their names from the established registers. The Central Bank may, at its own discretion, take any administrative or legal actions against the negligent or violating auditors.

8) The Central Bank may, at its discretion, require the auditors of a Licensed Financial Institution, or its subsidiaries or affiliates, to submit a report, at the expense of the concerned Licensed Financial Institution, establishing their compliance with the provisions of this decretal law and the regulations issued in implementation thereof.

9) The Board of Directors shall issue regulations and establish a register for approved auditors, authorized to audit the accounts of Licensed Financial Institutions.

1) Each Licensed Financial institution shall publish and display the following information and statements on its website, and in each of its offices and branches in the State:

• a. Copy of its audited balance sheet and profit and loss account, and copy of the auditors’ report. Where a Licensed Financial Institution is incorporated in other jurisdictions, publication of such statements may be carried out in the manner consistent with laws of the concerned jurisdiction.
• b. List of names of members of the board of directors, senior executives and their deputies and assistants.
• c. Names of all wholly or partially owned subsidiaries, or entities related to the concerned Licensed Financial Institution.

2) The Central Bank may, require any Licensed Financial Institution to publish or display any information or statements relating to its accounts, in addition to the requirements stated in item (1) of this article, as it deems appropriate.

1) The Board of Directors shall establish a resolution framework for deposit-taking Licensed Financial Institutions in order to minimize the effect that a deficiency in their financial position may have on the financial system in the State. This includes the effects related to a deficiency in the financial position of companies owned by those Licensed Financial Institutions or their subsidiaries.

2) The resolution framework shall include a set of triggers, both prudential as well as qualitative, which signal material risks that would result in the deficiency of the financial position of the institutions referred to in item (1) of this article. In order to achieve this, the Central Bank shall, at its own discretion, decide any of the following measures and actions for the protection of the concerned institution and its depositors:

• a. Impose a minimum ratio for liquidity of the concerned institution, commensurable with the risks associated with its activities.
• b. Require the concerned institution to provide, as per terms and conditions set by the Board of Directors, additional financial resources for support of its paid-up capital.
• c. Issue a decision to merge the concerned institution with another Licensed Financial Institution.
• d. Permit any Financial Institution to acquire the concerned institution.
• e. Form an interim committee to manage the concerned institution, and authorize such committee to take whatever actions it deems appropriate, as per conditions and controls determined by the Board of Directors, including the possibility of taking the decision to impose a moratorium on all or some of the activities of the concerned institution with immediate effect or within another timeframe as well as consequential actions.
• f. Undertake, over a period specified by the Board of Directors, direct management of the concerned institution, and shall, in this case, substitute management of the concerned institution in exercising all powers, including financial and administrative powers; and the powers and authorities of its board of directors, and its general assembly shall immediately be frozen until expiry of the period of interim management.
• g. Request competent authorities in the State to place the concerned institution under interim custody and seize its assets, property and shareholders rights.
• h. Adopt a decision to request the competent court to pass a decision to liquidate the concerned institution, prepare a plan for liquidation or transfer of its assets and liabilities, as it deems appropriate, along with all related settlements and releases and implement or oversee implementation of the liquidation plan, or adopt a resolution decision, or request the competent court to declare bankruptcy, in accordance with established laws.
• i. Where a decision to merge or liquidate of a Licensed Financial Institution incorporated in another jurisdiction and has a branch operating in the State, the same procedures applicable in the concerned jurisdiction of incorporation shall apply if they provide better protection for customers in the State, unless otherwise agreed with the concerned authority.
• j. Any other measures or actions in accordance with a decision by the Board of Directors.

3) The Central Bank may coordinate with the relevant federal and local authorities before issuance of any decision by the Board of Directors, as per provisions of this article, if necessary. The Central Bank may request the competent judicial authorities to take protective and urgent measures and actions, which would ensure protection of property and interest of investors and depositors, or serve public interest.

1) In case of resolution or liquidation of a Licensed Financial Institution, such an announcement shall be published in the Official Gazette, and in, at least, two local Arabic and English daily newspapers, and for a period not less than three (3) business days.

2) The announcement shall include the following:

• a. A grace period, not be less than three (3) months, allowed to customers of the concerned Licensed Financial Institution to take necessary actions to protect their rights.
• b. Details of the entity assigned for the resolution and its functions or the liquidator and his functions.

3 )If the resolution or liquidation occurred as a result of the Licensed Financial Institution being struck-off the Licensed Financial Institution Register, the Chairman of the Board of Director or his deputized representative shall specify, in the decision to strike- off name of the concerned institution, the date of closing down of the concerned institution, and the entity assigned for resolution or liquidation of any outstanding operations on such date.

The Central Bank shall continue surveillance of operations of any Licensed Financial Institution under resolution or liquidation, until final closure of its offices

The provisions of article nos. (116), (117), and (118) of this decretal law shall not preclude implementation of any established legal provisions in the State, relating to resolution and liquidation.