UAE Central Bank and Financial Institutions Decree-Law

Article (1) Definitions

General provisions

In the implementation of provisions of this decree-law, and unless the context otherwise requires, the following words and expressions shall have the meanings cited against each: State: The United Arab Emirates (UAE). Government: The UAE Federal Government. Ministry: The Ministry of Finance. Minister: The Minister of Finance. Central Bank: The Central Bank of the United Arab Emirates. Board of Directors: The Board of Directors of the Central Bank. Chairman: The Chairman of the Board of Directors. Governor: The Governor of the Central Bank. Public Sector: The Federal Government, governments of Union member emirates, and their fully owned authorities, and public institutions and companies, which provide public services and do not, primarily, carry on any activities relating to money and financial markets. Government-Related Entities: A juridical person wherein the Government, any of the governments of Union member emirates, or any of their respective subsidiaries, owns more than fifty percent (50%) of its capital. Financial Free Zones: Zones subject to the provisions of Federal Law No (8) of 2004, Regarding Financial Free Zones, and amending laws, or any law replacing it. Regulatory Authorities in the State: The Central Bank, the Securities and Commodities Authority. Licensed Financial Institutions: Banks, (Re)Insurance Companies, and Other Financial Institutions licensed in accordance with the provisions of this decree-law and the regulations issued in implementation thereof, to carry on a Licensed Financial Activity or more, including those which carry on the whole or a part of their activities and business in accordance with the rules and principles of Islamic Shari`ah. These institutions shall be either incorporated inside the State or a branch or subsidiary inside the State of a financial institution incorporated outside the State or in Financial Free Zones. Banks: Any juridical person licensed in accordance with the provisions of this decree-law and the regulations issued in implementation thereof, to primarily carry on the activity of taking deposits in addition to any of the Licensed Financial Activities. Other Financial Institutions: Any Person, except Banks and (Re)Insurance Companies, licensed in accordance with the provisions of this decree-law and the regulations issued in implementation thereof, to carry on a Licensed Financial Activity or more. Islamic Financial Institutions: Banks, Takaful Insurance Companies, and Other Financial Institutions Licensed  in accordance with the provisions of this decree-law and the regulations issued in implementation thereof, to carry on the whole or a part of their activities and business in accordance with the rules and principles of the Islamic Shari`ah. Higher Shari`ah Authority: The Authority referred to in Article (24) of this decree-law.     Licensed Financial Activities: The financial activities subject to Central Bank licensing and supervision, which are specified in Article (61) of this decree-law and the regulations issued in implementation thereof. Shari`ah-compliant Activities and Business: The activities and business conducted by an Islamic Financial Institution or any entity that falls under the mandate of the Higher Shari`ah Authority, in accordance with the rules and principles of Islamic Shari`ah. Designated Infrastructure: Any Financial Market Infrastructure designated by the Central Bank as systemically important, in accordance with the provisions of this decree-law and the regulations issued in implementation thereof. Financial Market Infrastructure: A multilateral financial infrastructure system among Participant Persons, including the operator of the system, used for the purposes of clearing, settling or recording payments, securities, derivatives, or other financial transactions. Such Financial Market Infrastructure shall be established, operated, licensed or overseen by any of the Regulatory Authorities in the State. Settlement Institution: In respect of a Financial Market Infrastructure, means a Person who provides any of the following: 1. Settlement accounts to the Participant Persons and to any Central Counterparty in financial markets, within a Clearing and Settlement System, in order to settle Transfer Orders through such infrastructure, and may provide credit facilities for settlement purposes, if necessary. 2. Settlement services for any Retail or wholesale Payment System. Default Arrangements: In respect of a Financial Market Infrastructure, means the arrangements in place within such infrastructure to mitigate systemic and other types of risk, in the event of a Participant Person is unable, or likely to become unable to meet his obligations in respect of a Transfer Order. This includes any arrangements that have been enforced by such infrastructure’s operator or its Settlement Institution for any of the following: 1. Netting of obligations owed to or by a Participant Person. 2. Closing out of open financial position of a Participant Person. 3. Realization of collateral securities to secure payment of obligations owed by the Participant Person. Transfer Order: In respect of a Financial Market Infrastructure, shall mean any of the following: 1. Instructions by a Participant Person to place funds at the disposal of another Participant Person, to be transferred on a book-entry basis, in the accounts of the Settlement Institution for a Clearing and Settlement System. 2. Instruction to place funds in another manner within the control of a Participant Person, in accordance with the rules and procedures of the Financial Market Infrastructure. 3. Instructions for discharge from obligation to pay, for the purposes of the operational rules of a Clearing and Settlement System. 4. Instructions by a Participant Person to either settle an obligation by transferring a book-entry security, or transferring those securities. 5. Instructions by a Participant Person that result in the assumption or discharge of retail operations payment obligation. Participant Person: In respect of a Financial Market Infrastructure, means any Person who is party to the arrangements for which such infrastructure has been established. Designated Functions: Functions of the Authorized Individual at, or for the benefit of, a Licensed Financial Institution of influential nature on the institution’s activities. Authorized Individual: Any natural person authorized in accordance with the provisions of this decree-law, to carry on any of the Designated Functions.   Resolution: Restructuring or liquidating any Licensed Financial Institution utilizing the powers of resolution referred to in Articles nos. (142) and (143) of this decree-law, for the purpose of continuing key functions of such institution, maintaining financial stability, and minimum costs for customers, Insured or Beneficiaries, as the case may be. Currency: The State’s official national currency in notes, coins, and digital form, units of which are referred to as the ‘Dirham’. Monetary Base: Includes the following: 1. Issued Currency. 2. Aggregate balances of current accounts and deposits of Licensed Financial Institutions with the Central Bank, including Reserve Requirements, in addition to any other funds deposited with the Central Bank for the purpose of clearing and settlement operations.  3. Outstanding balance of securities and financial instruments issued by the Central Bank. Reserve Requirements: The percentage of qualified liabilities held by deposit-taking Licensed Financial Institutions, which the Central Bank may decide to keep with it, as per the terms and conditions it may determine. Foreign Reserves: Foreign assets held by the Central Bank denominated in any foreign reserve currency and deployed to back its liabilities. Virtual Assets: A digital representation of value or of rights that can be transferred and stored electronically using distributed ledger technology, excluding Currency issued in digital form. Clearing and Settlement System: Any system established for any of the following purposes: 1. Clearing or settlement of payment obligations. 2. Clearing or settlement of obligations to transfer specific book-entry securities, or transfer of such securities. Netting: In respect of a Clearing and Settlement System, and for the purpose of this decree-law, means the conversion of the various obligations owed to or by a Participant Person towards all other Participant Persons in the system, into one net obligation owed to or by the Participant Person.   Retail Payment System: Any fund transfer system and related instruments, mechanisms, and arrangements that typically handles a large volume of relatively low-value payments in such forms as cheques, credit transfers, direct debit, or card payment transactions. Insurance Company (Insurer): Any juridical person, licensed in accordance with the provisions of this decree-law and the regulations issued in implementation thereof to carry on insurance business and activities in the State. Reinsurance Company: Any juridical person licensed in accordance with the provisions of this decree-law and the regulations issued in implementation thereof to carry on reinsurance business and activities. Takaful Insurance: A scheme intended to achieve solidarity and cooperation among a group of participants to address certain risks, whereas each participant makes a contribution to the Takaful Insurance Fund, based on the concept of ‘Tabaru’. Such fund bears the responsibility of paying compensation to those entitled to it in the event that specific risks materialize. Takaful Insurance Company: An Insurance Company that carries on insurance business and activities in accordance with the rules and principles of Islamic Shari`ah, and this decree-law and the regulations issued in implementation thereof. Takaful Insurance Fund: A Fund that is established by a (Re)Takaful Insurance Company or an Insurance Company licensed to carry on Takaful insurance business and activities in accordance with the rules and principles of Islamic Shari`ah, and this decree-law and the regulations issued in implementation thereof. Insured: A Person that enters into an Insurance Policy with an Insurance Company for their benefit, the benefit of the named Insured, or for the benefit of the Beneficiary. Beneficiary: In respect of an Insurance Company, a Person who initially acquired the rights of an Insurance Policy or to whom such rights are legally transferred. Insurance Policy: A contract between an Insurance Company and an Insured setting out the insurance terms, rights and obligations of both contracting parties or the rights of the insurance Beneficiary. The annexes attached to such policy constitute an integral part thereof. Premium: In respect of an Insurance Company, a financial consideration paid or payable by the Insured under the Insurance Policy and is called ‘Contribution’ in Takaful Insurance. Insurance Broker: A juridical person licensed in accordance with the provisions of this decree-law and the regulations issued in implementation thereof, and acts as independent intermediary in insurance and reinsurance business and services between an insurance or reinsurance applicant on one side and any (Re)Insurance Company on the other side, and receives for its efforts commission from the company with which the insurance or reinsurance has been concluded. Insurance Agent: A Person licensed or authorized in accordance with the provisions of this decree-law and the regulations issued in implementation thereof, and approved by the Insurance Company to carry on insurance business and services on its behalf. Technical Provisions: In respect of an Insurance Company, provisions which the Insurance Company shall deduct and retain to cover accrued financial obligations vis-à-vis the Insured or Beneficiaries, pursuant to the provisions of this decree-law. Insurance-Related Professions: Professions carried on by any Person licensed in accordance with the provisions of this decree-law, and the regulations issued in implementation thereof, such as an Insurance Agent, Insurance Broker, surveyor and loss adjuster, insurance consultant, Actuary, health insurance third party administrators, or any other profession related to insurance as determined by the Central Bank. Solvency Margin: In respect of an Insurance Company, a surplus in the value of actual assets over its liabilities to such an extent that enables it to fulfil all its obligations and pay the required insurance claims when due, without impeding its business or weakening its financial position. Actuary: In respect of an Insurance Company, a Person licensed or authorized in accordance with the provisions of this decree-law and the regulations issued in implementation thereof, to determine the value and price of Insurance Policies, and to assess the Technical Provisions, accounts and all matters related thereto. Grievances and Appeals Committee: The committee referred to in Article (167) of this decree-law. Person: A natural or juridical person, as the case may be. Year: The Gregorian calendar year.

Article (2) Scope of Application of this Decree-Law

General provisions

The provisions of this decree-law shall apply to the Central Bank, financial institutions, insurance business, financial activities, and Persons subject to it; and shall not apply to the Financial Free Zones in the State and financial institutions regulated by the authorities of such zones.

Article (3) Independence of the Central Bank

Part One: The Central Bank · Chapter One: Organization, Scope and Objectives of the Central Bank

1. The Central Bank shall be considered a federal public institution having its own body corporate, and enjoying financial and managerial independence, and the required juridical capacity to conduct all business and activities, which ensure attainment of its objectives. The Central Bank shall directly report to the President of the State.  2. The Central Bank shall not be subject to the provisions of laws relating to public finance, tenders and auctions, public accounts and ‘Federal Human Resources’, and its own regulations in these respects shall apply.  3. The functions of the ‘UAE Accountability Authority’ shall be confined to post audit and it shall have no right to interfere in the running of the Central Bank business, or challenge its policies.

Article (4) The Central Bank Headquarters

Part One: The Central Bank · Chapter One: Organization, Scope and Objectives of the Central Bank

Headquarters of the Central Bank and its official address, along with its main branch shall be located in the State’s capital and may, upon Board of Directors approval, establish affiliated entities and open branches, offices and agencies inside and outside the State, and appoint agents and correspondents inside and outside the State.

Article (5) Principal Objectives and Functions of the Central Bank

Part One: The Central Bank · Chapter One: Organization, Scope and Objectives of the Central Bank

1. The Central Bank aims at achieving the following objectives: a. Maintain stability of the national Currency within the framework of the monetary system; b. Contribute to the promotion and protection of the stability of the financial system in the State; and c. Ensure prudent management of the Central Bank’s Foreign Reserves. 2. For the purpose of achieving its objectives, the Central Bank shall have the following functions and powers: a. Establish and implement monetary policy. b. Regulate Licensed Financial Activities, develop and promote proper standards of conduct of business, sound and prudential practices amongst Licensed Financial Institutions in accordance with the provisions of this decree-law and international standards.   c. Issue regulations, standards, circulars, and guidelines to ensure that Licensed Financial Activities are carried on with integrity, prudence and the appropriate level of professional competence, and in manners not detrimental to the interest of customers, Insured, and Beneficiaries. d. Maintain sufficient Foreign Reserves to cover the Monetary Base as per the provisions of this decree-law.  e. Foster sustainable finance in the State and integrate environmental, social, and governance principles into the Central Bank’s business and operations.  f. Monitor and analyze systemic risk in the financial system.  g. Regulate, develop, oversee, and maintain soundness and efficiency of Financial Market Infrastructures.

Article (6) Capital and Reserves

Part One: The Central Bank · Chapter Two: Capital, Reserves and Accounts of the Central Bank

1. The paid-up capital of the Central Bank shall be twenty billion (20,000,000,000) Dirhams.  2. The Central Bank shall maintain a ‘General Reserve Account’ for the purpose of building capital reserves from net profits it realizes annually. The formation, amount and regulation of such reserve shall be determined by a decision of the Board of Directors. 3. The capital of the Central Bank may be increased from time to time, and such increase may be made from the General Reserve Account by a decision issued by the Board of Directors after coordination with the Minister. 4. The capital of the Central Bank may be increased, and such increase may be funded by the Government, pursuant to a federal decree issued based on a proposal by the Board of Directors, after agreement with the Minister and the presentation of the Chairman of the Presidential Court. 5. The capital of the Central Bank shall only be reduced by law.

Article (7) Profits and Losses of the Central Bank

Part One: The Central Bank · Chapter Two: Capital, Reserves and Accounts of the Central Bank

1. The Board of Directors shall, at the end of each financial year, determine the Central Bank’s annual net profits after deducting administrative and operational expenses, and allocating necessary funds for depreciation of assets and reserves, provisions for bad and doubtful debts and end of service indemnity for the staff of the Central Bank, along with the contingencies and other purposes, the Board of Directors may determine, and in general, all other financial expenses normally deducted from net profits by banks.  2. The President of the State shall issue a decision on the amount to be deducted each year from the net profits and transferred to the Government, based on a recommendation from the Board of Directors after agreement with the Minister. 3. Should the reserves of the Central Bank, at the end of the financial year, be insufficient to cover its losses and meet its obligations; the deficit shall be covered by the Government, in accordance with the terms agreed upon between the Central Bank and the Government.

Article (8) Financial Year and Organization of Operations and Accounts

Part One: The Central Bank · Chapter Two: Capital, Reserves and Accounts of the Central Bank

1. The financial year for the Central Bank shall commence on the first day of January and end on the thirty-first day of December of each Year. 2. Operations of the Central Bank shall be conducted, and its balance sheet and accounts shall be organized in accordance with international standards and banking rules and customs. The Central Bank’s operations with third parties shall be considered commercial.

Article (9) Accounts Auditing

Part One: The Central Bank · Chapter Two: Capital, Reserves and Accounts of the Central Bank

The accounts of the Central Bank shall be audited by an auditor or more, selected periodically by the Board of Directors. The Board of Directors shall determine the auditors’ annual remunerations.

Article (10) Required Statements and Accounts Reports

Part One: The Central Bank · Chapter Two: Capital, Reserves and Accounts of the Central Bank

1. Within three (3) months from end of the financial year, the Central Bank shall submit to the Chairman of the Presidential Court an annual report to be presented to the President of the State on the following: a. The final accounts of the Central Bank, ensuring that they reflect its true financial position and a report on its performance, including the budget for the financial year ended, approved by the auditors. The financial position shall be published in the Official Gazette. b. The Central Bank's activities and business during the financial year. c. An overview of monetary, banking, and financial developments in the State. 2. The Central Bank shall provide the Ministry, upon its request, with any of the following: a. A copy of the annual report referred to in item (1) of this article. b. Information that the Minister may request on monetary, banking and financial developments in the State, along with semi-annual reports covering all aspects related to such developments. c. A quarterly statement of the Central Bank's assets and liabilities, which statement shall be published in the Official Gazette.

Section One: The Board of Directors: Article (11) Members of the Board of Directors

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section One

The Central Bank shall be managed by a Board of Directors of seven (7) members, including the Chairman and the Governor.

Article (12) Members Appointment

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section One

1. Members of the Board of Directors shall be appointed by a federal decree based on recommendation of the Cabinet, and shall serve for a four (4) year term renewable for similar periods. The federal decree designates from among the members of the Board of Directors one or more deputy Chairman. 2. The Chairman and the Governor, shall each have the rank of minister.  3. The Chairman shall issue a decision defining the powers of his deputies. 4. Notwithstanding the provisions of item three (3) of this article, should the Chairman be absent or his post became vacant, his deputy shall replace him; and should both the Chairman and his deputies be absent or their posts became vacant, the Governor shall replace them.

Article (13) Membership Conditions

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section One

A member of the Board of Directors shall satisfy the following conditions: 1. Must hold UAE nationality; 2. Have experience in economic, financial, or banking affairs; 3. Not have been declared bankrupt or failed to repay his debts; 4. Not have been convicted, of a felony or a misdemeanor involving moral turpitude or dishonesty, unless rehabilitated; 5. Not an active minister, except the Chairman;  6. Not a member of the ‘Federal National Council’; 7. Not holding any position, a job or board of directors’ membership of any institution licensed by any of the Regulatory Authorities in the State or by any of the regulatory authorities in the Financial Free Zones; and 8. Not an auditor of accounts of a Licensed Financial Institution, nor owner, agent, or partner in any accounts audit firm.

Article (14) Resignation or Vacancy of Position

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section One

1. A member of the Board of Directors appointed in accordance with Article (12) of this decree-law may seek approval of his resignation by a written request submitted to the Chairman. A federal decree accepting such resignation shall be issued upon the Chairman’s recommendation. 2. Should the resignation of a member of the Board of Directors is accepted, or his seat become vacant for any reason whatsoever prior to the expiry of his term of office, a successor shall be appointed, in accordance with the membership conditions referred to in Article (13) of this decree-law, for the remaining term of office of the Board of Directors.

Article (15) Termination of Membership

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section One

1. Membership of the Board of Directors terminates upon end of the term of office without renewal, death, or resignation. Membership of the Board of Directors may also be terminated by a federal decree, based on the Cabinet approval, in any of the following cases: a. If the member committed a material misconduct or breach while performing his duties. b. If the member absented himself from three (3) consecutive meetings of the Board of Directors without the Board of Directors’ approval, unless such absence was due to his being on an official assignment, annual or sick leave, or due to any other acceptable reason. c. If the member no longer satisfies any of the membership conditions referred to in Article (13) of this decree-law. d. If the member was rendered incapable of performing his functions, for any reason whatsoever. 2. Where term of office of members of the Board of Directors has expired without renewal, members of the Board of Directors shall continue to perform their functions until such time new members were appointed to replace them. The decisions issued by the Board of Directors during this period shall be considered valid and enforceable.

Article (16) Powers and Functions of the Board of Directors

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section One

The Board of Directors shall, within the limits of the provisions of this decree-law, exercise all powers required for achieving the objectives for which the Central Bank has been established.  The Board of Directors shall, in particular, exercise the following:   1. Approve regulations, standards, instructions and business controls to perform its functions and jurisdictions, and take all measures and actions necessary to enforce the provisions of this decree-law. 2. Approve the monetary management framework of the Central Bank, as per the established monetary system. 3. Approve and oversee implementation of polices for deployment and management of the Central Bank’s Foreign Reserves and other assets.  4. Approve polices and regulations to mitigate systemic risk in the financial system, as a whole.   5. Approve regulations, standards, guidelines and policies regulating Licensed Financial Institutions and the conduct of Licensed Financial Activities and decide on related matters, including regulations and procedures relating to supervision and oversight thereof at both individual and consolidated levels. 6. Determine conditions and rules for granting licenses to carry on Licensed Financial Activities and authorizations to undertake Designated Functions. 7. Approve regulations, controls, and procedures for countering money laundering and combating terrorism financing. 8. Decide on matters relating to issuance of the Currency and its withdrawal from circulation. 9. Take necessary actions, procedures and impose administrative penalties against any Person violating the provisions of this decree-law, and regulations issued in implementation thereof. 10. Approve rules and regulations for maintaining integrity and efficiency of Financial Market Infrastructures licensed, established, developed, or operated by the Central Bank.     11. Approve the Central Bank’s policies, including the organizational structure and the administrative, human resources, financial systems, risk, compliance and technical guidelines, and determine powers and competences.  12. Approve rules for the Central Bank strategies, and institutional governance, including a set of rules and regulations aimed at achieving performance quality and excellence.    13. Approve settlements and reconciliations relating to Central Bank’s business. 14. Approve the Central Bank’s draft annual budget and any variations thereto during the year. 15. Approve the Central Bank’s annual final accounts and the amount of net annual profits. 16. Deal with all other matters deemed within its powers and are conducive to achievement of the objectives of the Central Bank and the discharge of its functions, in accordance with the provisions of this decree-law. 17. Any other responsibilities assigned by the President of the State.

Article (17) Formation of Committees and Delegation of Authorities

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section One

1. The Board of Directors may form committees it deems appropriate to assist in the discharge of its functions and jurisdictions in accordance with the provisions of this decree-law.  2. Such committees referred in item (1) of this article may be formed from within the Board of Directors, or from outside the Board of Directors. The Board of Directors may also form advisory boards and committees, which include in their membership Persons from outside the Central Bank, and shall determine the remunerations of members of such boards and committees.  3. The Board of Directors may delegate some of its powers to any committee within the Board of Directors, the Chairman, the Governor, senior executives, or whomsoever deemed appropriate within the Central Bank. 4. The Board of Directors may annually review the terms of reference, performance of the committees, and advisory boards formed in accordance with the provisions of this article, and may take necessary actions to ensure compliance with professional and international standards, codes of conduct and governance.

Article (18) Meetings of the Board of Directors

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section One

1. The Board of Directors shall, upon invitation by the Chairman, hold an ordinary meeting, at least once every sixty (60) days. 2. The Chairman may call the Board of Directors to convene whenever the need arises. 3. The Chairman shall convene the Board of Directors upon request of, at least, three (3) members of the Board of Directors.

Article (19) Meetings Quorum

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section One

1. The Board of Directors meeting shall not be valid unless attended by at least (5) five members, including the Chairman, one of his deputies, or the Governor.  2. Decisions of the Board of Directors shall be adopted by a majority vote of the members present. In case of a tie, the Chairman of the session shall have the casting vote.

Article (20) Remunerations and Entitlements

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section One

The Board of Directors shall establish a regulation regarding remunerations of the Governor and his other entitlements, and the remunerations of the Chairman and members of the Board of Directors. A federal decree, to this effect, shall be issued.

Section Two: Governor of the Central Bank, his Deputies and Assistants: Article (21) Powers and Competencies of the Governor

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section Two

1. Without prejudice to the powers established for the Board of Directors or the Chairman provided herein, the Governor shall be the legal representative of the Central Bank. 2. Without prejudice to any competencies established for the Board of Directors or the Chairman, the Governor shall be responsible for: a. Managing the Central Bank, and conducting its business in general, including managing its day-to-day operations; implementing regulations, directives, rules and internal policies approved by the Board of Directors.   b. Signing on behalf of the Central Bank all instruments, contracts, and documents related to its business. c. Implementing this decree-law, the regulations of the Central Bank and decisions of the Board of Directors. 3. The Governor may delegate some of his powers and competencies to any of his deputies, assistants, or any staff of the Central Bank. 4. It is prohibited for any person in the State, including financial and non-financial free zones, to use the title “Governor” or its equivalent in any language, if this is likely to give the impression or mislead others that he holds the position of Governor of the Central Bank.

Article (22) Appointment of Deputy and Assistant Governors

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section Two

The Governor shall have deputies and assistants with the rank of undersecretary, appointed by federal decree upon the proposal of the Chairman. They shall assist the Governor in exercising his powers. The Governor may delegate to them some of his powers or assign them any other duties or responsibilities.

Article (23) Dedication of Service

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section Two

1. The Governor, his deputies and assistants shall devote their full time to their work at the Central Bank, and none of them shall hold any paid or unpaid position, or be a member of the board of directors of any Licensed Financial Institution, or enter, directly or indirectly, in any contracts concluded by the Public Sector. 2. The prohibitions referred to in item (1) of this article shall not apply to assignments entrusted to any of them by the Government or any of the governments of Union member emirates in the Public Sector, including representation in international conferences, or representation of the Public Sector in the various committees, subject to the approval of the Board of Directors. 3. The prohibitions referred to in item (1) of this article shall not apply to entities and companies established, partnered in, controlled, supervised, or managed by the Central Bank to achieve its objectives and discharge its functions, subject to approval by the Board of Directors.

Section Three: Higher Shari`ah Authority: Article (24) Establishment and Powers of the Higher Shari`ah Authority

Part One: The Central Bank · Chapter Three: Management of the Central Bank · Section Three

1. An authority named Higher Shari`ah Authority attached to the Central Bank shall be established with a membership of not less than five (5) members and not exceeding seven (7) members, of sufficient knowledge, experience in jurisprudence of Islamic financial transactions.  2. The Board of Directors shall approve the Higher Shari`ah Authority’s charter, powers, functions, and competences; and the mechanism for its funding. 3. The Central Bank shall issue a decision to appoint the Higher Shari`ah Authority members in accordance with its charter; and members shall serve for a three (3) years term renewable for similar periods.  4. Islamic Financial Institutions shall bear all expenses of the Higher Shari`ah Authority including remunerations, allowances and expenses of its members, in accordance with the Higher Shari`ah Authority’s charter approved by the Central Bank.     5. The Higher Shari`ah Authority shall establish the Shari`ah rules, controls, standards, and general principles relevant to Shari`ah-compliant Activities and Business, and Shari`ah governance requirements applicable thereto. The Higher Shari`ah Authority shall also undertake supervision and oversight of the internal Shari`ah supervisory committees of Islamic Financial Institutions, referred to in Article (75) of this decree-law. 6. The Higher Shari`ah Authority shall undertake the following:  a. Provide its opinion regarding specific regulatory rules and instructions relating to the operations and activities of Islamic Financial Institutions;  b. Provide its opinion regarding the activities of the Central Bank’s subsidiaries relating to their operations and activities that are compatible with the rules and principles of Islamic Shari`ah;  c. Provide its opinion on sovereign sukuk issuances and other Shari`ah compliant instruments; developed and issued by the Government and governments of Union member emirates, upon their request;  d. Approve Shari`ah compliant monetary and financial instruments developed and issued by the Central Bank and its subsidiaries, directly or indirectly, to manage monetary policy operations and develop Islamic money and capital markets in the State; and e. Exercise its powers and mandates stipulated in applicable laws and regulations in the State.  7. The Higher Shari`ah Authority may issue resolutions and fatwas, upon request from Government-Related Entities and at their own expense, pertinent to their sukuk issuance programs or other Islamic financial structures, if it deems this conducive to the development of Islamic money and capital markets in the State. 8. The resolutions and fatwas of the Higher Shari`ah Authority shall be binding on the internal Shari`ah supervisory committees, referred to in Article (75) of this decree-law as well as on Islamic Financial Institutions, and other entities seeking Higher Shari`ah Authority’s opinion, resolutions and fatwas. 9. The Higher Shari`ah Authority may require special examination or seek the assistance of a specialized entity, if deemed necessary, to conduct Shari`ah audit on Shari`ah-compliant Activities and Business of any Islamic Financial Institution, or any other entity seeking Higher Shari`ah Authority opinion, resolutions and fatwas, or in relation to any instrument approved by the Higher Shari`ah Authority. The Higher Shari`ah Authority shall determine the scope of work and procedures of such specialized entity. The expenses for such engagement shall be borne by the Islamic financial institution or entity requesting such opinion, in accordance with the terms and conditions issued by a decision of the Central Bank.  10. With the exception of the provisions of paragraph (c) of item (6) of this article, no other provisions contained in this Article shall apply to the Government or governments of Union member emirates.