APPLICATION FORMS AND NOTICES (AFN) – AUT – STS
For DFSA use only
Form AUT – STS
Applying for Authorisation
Sales and Trading supplement
This supplement must be submitted by applicants applying to conduct any of the following Financial
Services:

Dealing in Investments as Principal

Dealing in Investments as Agent

Advising on Financial Products or Credit

Arranging Credit or Deals in Investments

Providing Custody

Arranging Custody
The Notes for Applicants contains information that may assist you in completing this
supplement. Please refer to the section entitled “Sales & trading” in the notes. Each note is
linked to a specific question in this supplement via a referenced number. Please note the
submission of this supplement is in addition to the submission of the Core Information form.
Where you feel a question in the supplement may have already been answered in the Core
Information form you may provide cross reference to the relevant section.
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AUT – STS/VER1/03-09
APPLICATION FORMS AND NOTICES (AFN) – AUT – STS
SECTION 1: CORPORATE GOVERNANCE, STRATEGY AND BUSINESS MODEL
ST1. Please confirm the business activities you propose to undertake and estimate the
value or percentage of total business that will be:
Activity
Yes
Value or %
Arranging Credit or Deals in Investments
Exchange traded securities including shares, bonds, funds
Exchange traded derivatives including futures, options, forwards,
and spot foreign exchange rolling contracts
Over-the-counter instruments including futures, options, other
derivatives, swaps, money market instruments, bonds
Collective Investment Funds
Advising on Financial Products or Credit
Exchange traded securities including shares, bonds, funds
Exchange traded derivatives including futures, options, forwards,
and spot foreign exchange rolling contracts
Over-the-counter instruments including futures, options, other
derivatives, swaps, money market instruments, bonds
Collective Investment Funds
Dealing in Investments as Agent
Exchange traded securities including shares, bonds, funds
Exchange traded derivatives including futures, options, forwards,
and spot foreign exchange rolling contracts
Over-the-counter instruments including futures, options, other
derivatives, swaps, money market instruments, bonds
Collective Investment Funds
Dealing in Investments as Principal
Exchange traded securities including shares, bonds, funds
Exchange traded derivatives including futures, options, forwards,
and spot foreign exchange rolling contracts
Over-the-counter instruments including futures, options, other
derivatives, swaps, money market instruments, bonds
Other activities and products. Please specify:
ST2. Please specify how senior management and the board will decide on changes to
business strategy; particularly Clients, products, distribution channels.
ST3. Please provide appropriate Transaction flow charts for each type of Transaction that
you will be involved in. Please confirm which exchanges you will be active on, if any.
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AUT – STS/VER1/03-09
APPLICATION FORMS AND NOTICES (AFN) – AUT – STS
Section 2: Financial and operational risks
Risk Management (This section only needs to be completed by applicants carrying out
Dealing in Investments as Agent / Dealing in Investments as Principal. Otherwise
please go to internal control environment below.)
ST4. Please describe how senior management will ensure the risk management function
maintains its independence and effectiveness in relation to your dealing activities.
ST5. Please describe how trading limits are set and monitored. How will you ensure that
your remuneration policies for front office staff do not encourage a culture of excessive risk
taking?
ST6. Please describe the nature and frequency of Trading Book valuation. What risk
mitigating tools will be used to manage risk in this area?
ST7.
For Client trading, please describe how Client Accounts will be managed. How will
you ensure payment or delivery in relation to executed trades? How will you deal
with error trades?
ST8.
Please provide details of any underwriting activities you may carry on.
Internal Control Environment
ST9.
If you will be providing Financial Services to Retail Clients, please provide a copy of
standard Client Agreements.
ST10. How does senior management ensure compliance with record keeping requirements
and in particular the telephone recording requirements?
ST11. Please describe your clearing and settlement arrangements.
Client Assets
ST12. Will you hold Client Money?
ST13. For customer trading, please describe what arrangements you will have in place to
ensure the safeguarding of Client Assets, including custody and Client Money
arrangements.
ST14.How often will reconciliations of client holdings be carried out and who will be
responsible for the reconciliation?
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APPLICATION FORMS AND NOTICES (AFN) – AUT – STS
Providing margin finance
ST15. If you will be providing margin finance, please provide a copy of your margin
financing policy. The policy should include a description of your:

concentration policy;

type of collateral accepted;

criteria for granting margin finance and the interest rate charged;

procedures and personnel responsible for computing margin shortfalls, making
margin calls, and making good shortfalls; and

how often the margin finance policy is reviewed.
Section 3: Conduct of business risks to clients and markets
The next six questions relate to applicants dealing for Retail Clients. If you will not be
dealing for Retail Clients, please go to question ST22.
ST16.
Please describe how senior management and the board will ensure that employees
in Client facing roles are competent and continue to maintain their knowledge and
skills.
ST17. Please describe your Complaint handling process.
ST18. How will you ensure that the Client achieves the best execution for the Transaction?
ST19. What is your policy to ensure and evidence that customer assessments and
considerations of suitability are carried out.
ST20. What is your policy to ensure that the appropriate disclosures are made to Retail
Clients? Relevant areas include marketing materials, fees and commissions, investment
research and inducements.
ST21. If you will be marketing Foreign Funds, how will you ensure that the Funds meet
DFSA requirements?
ST22. How do senior management and the board intend to mitigate the risk of market abuse
occurring through the firm’s activities? Please describe any surveillance undertaken of trading
activity.
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