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  • C4-1.3 C4-1.3 Approved Persons

    • General Requirement

      • C4-1.3.1

        Category 4 investment firms must obtain the CBB’s prior written approval for any person wishing to undertake a controlled function in the licensee.

        Added: January 2022

      • C4-1.3.2

        Controlled functions are those of:

        (a) Director;
        (b) Chief Executive, General Manager, Managing Partner or Co-CEO;
        (c) Head of function;
        (d) Compliance officer;
        (e) Money Laundering Reporting Officer; and
        (f) Investment consultant or investment adviser.
        Added: January 2022

      • C4-1.3.3

        Prior approval is required for all controlled functions mentioned in Paragraph C4-1.3.2. Minimum controlled functions required to be appointed and their combinations are subject to the requirements contained Chapter C4-2 of this Module.

        Added: January 2022

    • Definitions

      • C4-1.3.4

        Director is any person who is a member of the licensee’s Board of Directors, and is individually, and collectively with other Directors responsible for directing the affairs and overseeing the activities of the licensee.

        Added: January 2022

      • C4-1.3.5

        The Chief Executive, General Manager, Managing Partner or Co-CEO means a person who is responsible for the conduct of the licensee (regardless of actual title) and its executive management and performance, within the framework of delegated authorities set by the Board.

        Added: January 2022

      • C4-1.3.6

        Compliance officer or head of compliance function is responsible to ensure that the licensee is in compliance with the applicable legal and regulatory requirements of the CBB and any other relevant regulator/authority.

        Added: January 2022

      • C4-1.3.7

        The controlled functions of Money Laundering Reporting Officer/Deputy Money Laundering Reporting Officer are defined under Chapter FC-3.

        Added: January 2022

      • C4-1.3.8

        Head of function means a person who exercises major managerial responsibilities, is responsible for a significant business or operating unit, or has senior managerial responsibility for maintaining accounts or other records of the licensee.

        Added: January 2022

      • C4-1.3.9

        An investment consultant or investment adviser refers to the function of advising a client or potential client with respect to buying, selling, subscribing for or underwriting a particular financial instrument or exercising any right conferred by such a financial instrument.

        Added: January 2022

    • Approved Persons Conditions

      • C4-1.3.10

        Category 4 investment firms seeking an approved person authorisation for an individual, must satisfy the CBB that the individual concerned is ‘fit and proper’ to undertake the controlled function in question. Each applicant applying for approved person status and those individuals occupying approved person positions must comply with the following conditions:

        (a) Has not previously been convicted of any felony or crime that relates to his/her honesty and/or integrity unless he/she has subsequently been restored to good standing;
        (b) Has not been the subject of any adverse finding in a civil action by any court or competent jurisdiction, relating to fraud;
        (c) Has not been adjudged bankrupt by a court unless a period of 10 years has passed, during which the person has been able to meet all his/her obligations and has achieved economic accomplishments;
        (d) Has not been disqualified by a court, regulator or other competent body, as a director or as a manager of a corporation;
        (e) Has not failed to satisfy a judgement debt under a court order resulting from a business relationship; and
        (f) Must have personal integrity, good conduct and reputation;
        (g) Has appropriate qualifications and experience for the controlled function in question.
        Added: January 2022

      • C4-1.3.11

        For the purposes of sub-paragraph C4-1.3.17(g), category 4 investment firms should satisfy the CBB that the controllers, managing partners and the CEO collectively have adequate experience in the related fields, including venture capital, angel investing and entrepreneurship / start-ups for operators of venture capital CIUs.

        Added: January 2022

      • C4-1.3.12

        Approved persons undertaking a controlled function must act prudently, and with honesty, integrity, care, skill and due diligence in the performance of their duties. They must avoid conflicts of interest arising whilst undertaking a controlled function.

        Added: January 2022

    • Prior Approval Requirements and Process

      • C4-1.3.13

        Category 4 investment firms must obtain CBB’s prior written approval before a person is formally appointed to a controlled function. The request for CBB approval must be made by submitting to the CBB the approved persons’ section of the application for authorisation and Curriculum Vitae after verifying that all the information provided is accurate. The following additional documents must be attached with the application:

        (a) A certified copy of the applicant’s passport and national ID card;
        (b) Certified copies of applicant’s educational and professional qualification certificates (with its translation if not in Arabic or English);
        (c) Licensee’s organisation chart (or proposed organisation chart if it is to be amended) clearly showing the proposed applicant’s position and reporting lines in the organisation.
        Added: January 2022

      • C4-1.3.14

        The CBB approval for the Board of director candidates of category 4 investment firms must be obtained prior to issuance of the notice/agenda of the shareholder’s meeting in which the candidates are put forward for election/approval. CBB approval of the candidates does not in any way limit the shareholders’ rights to refuse those put forward for election/approval.

        Added: January 2022

    • Assessment of Application

      • C4-1.3.15

        The CBB will review and assess the application for approved person status to ensure that it satisfies CBB’s ‘fit and proper’ requirements and respond within 15 business days from the date of receiving the application complete with all the required information and documents. The CBB reserves the right to refuse an application for approved person status if it does not satisfy the CBB’s requirements.

        Added: January 2022

      • C4-1.3.16

        Category 4 investment firms or the nominated approved persons may, within 30 calendar days of the notification, appeal against the CBB’s decision to refuse the application for approved person status. The CBB shall decide on the appeal and notify the licensee of its decision within 30 calendar days from submitting the appeal.

        Added: January 2022

    • Notification Requirements and Process

      • C4-1.3.17

        Category 4 investment firms must immediately notify the CBB when:

        (a) An approved person ceases to hold a controlled function together with an explanation as to the reasons why. In such cases, their approved person status is automatically withdrawn by the CBB; or
        (b) In case of any material change to the information provided in the application submitted for an approved person.
        Added: January 2022

      • C4-1.3.18

        If a controlled function falls vacant, the category 4 investment firm must appoint a permanent replacement (after obtaining CBB approval), within 120 calendar days of the vacancy occurring. Pending the appointment of a permanent replacement, the licensee must make immediate interim arrangements to ensure continuity of the duties and responsibilities of the controlled function affected, provided that such arrangements do not pose a conflict of duties. These interim arrangements must be approved by the CBB.

        Added: January 2022

    • Training and Competence

      • C4-1.3.19

        Category 4 investment firms must assess individuals as competent when they have demonstrated the ability to apply the knowledge and skills required to perform a specific controlled function without supervision.

        Added: January 2022

      • C4-1.3.20

        Category 4 investment firms must annually determine the training needs of individuals undertaking controlled functions. It must develop a training plan to address these needs and ensure that training is planned, appropriately structured and evaluated. The training plan of category 4 investment firms must include a programme for continuous professional development training (“CPD”) for their staff.

        Added: January 2022

      • C4-1.3.21

        Category 4 investment firms should make and retain updated records of:

        (a) The criteria applied in assessing the ongoing and continuing competence;
        (b) How and when the competence decision for a staff member was arrived at including any periodic assessments;
        (c) The annual training plan for each controlled function;
        (d) Record of CPD hours undertaken by each approved person;
        Added: January 2022