This Practice Note aims at raising awareness about the regulatory risks which retail and investment banks, brokerage firms, investments funds, and any other financial institution are exposed to for not complying with DIFC rules and regulations while exercising their activities in the DIFC.

As of the initial meeting with potential clients, each financial institution carries significant risks related to licensing requirements, client classification and investment suitability.

The provision of financial services in or from the DIFC is regulated by a hefty regulation, including, DIFC Law No. 1/2004 (the Regulatory Law) and the rules and regulations issued by the Dubai Financial Services Authority (DFSA) such as the Conduct of Business Module (COB) and the General Module (GEN) of the DFSA Rulebook.

• Financial Services Prohibition principle: prohibits any company or individual to provide financial services in or from the DIFC.