SINGLE FAMILY OFFICE RULESVER 1 – DEC 2013

CONTENTS

1. GENERAL PROVISIONS................................................................................31.1 Application..............................................................................................31.2 Purpose...................................................................................................31.3 Interpretation..........................................................................................3

2. SINGLE FAMILY OFFICES.............................................................................42.1 Key terms................................................................................................42.2 Basic Concepts........................................................................................42.3 Key Requirements...................................................................................42.4 Licence to conduct SFO Activities............................................................52.5 Designated Representative.....................................................................7

3. CHANGE OF STATUS...................................................................................83.1 Amendments to Articles of Association...................................................83.2 Revocation of registration as a Single Family Office................................83.3 Transfer of Shares...................................................................................9

APP 1 PRESCRIBED FORMS...........................................................................10APP 2 PRESCRIBED FEES..............................................................................11

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1. GENERAL PROVISIONS 1.1 APPLICATIONThese Rules apply to every Person to whom the Single Family Office Regulations apply.

1.2 PURPOSEThe purpose of these Rules is to provide further detail in respect of the operation of the Single Family Office Regulations and to provide in particular for:

(A) the licensing of Single Family Offices by the QFC Authority;

(B) the recognition of Eligible Firms;

(C) the procedure for amending the Articles of Association of a Single Family Office;

(D) the requirements on a Single Family Office before it registers a transfer of Shares; and

(E) the process by which the CRO may revoke the registration of a Company as a Single Family Office.

These Rules should be read in conjunction with the Single Family Office Regulations.

1.3 INTERPRETATIONIn these Rules:

(A) defined terms are identified by the capitalisation of the initial letter of the word or phrase; and

(B) defined terms have the same meaning as they have in the Single Family Office Regulations, QFC Companies Regulations, QFC Authority Regulations, QFCA Rules, any other related QFC regulations or rules as relevant to the context in which they are used.

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2. SINGLE FAMILY OFFICES 2.1 KEY TERMS2.1.1 WHAT IS A SINGLE FAMILY OFFICE?

A Single Family Office is a body corporate established within the QFC for the sole purpose of providing services to and carrying on activities in relation to a Single Family in accordance with the Single Family Office Regulations.

2.1.2 WHAT IS A SINGLE FAMILY?

A Single Family is a family made up of a group of individuals all of whom are the bloodline descendants of a common ancestor or their spouses (including widows and widowers, whether or not remarried), and subject to such other limitations or conditions agreed with or specified by the QFC Authority.

Note: The Single Family Office Regulations provide further definitions for “Family Entity” and “Family Fiduciary Structure”.

2.1.3 WHO IS A DESIGNATED REPRESENTATIVE?

A Designated Representative is a natural person appointed by a Single Family Office in accordance with Article 20 of the Single Family Office Regulations to act as a point of contact for the QFC Authority. The function of the Designated Representative is a Registered Function for the purpose of the QFCA Rules.

2.2 BASIC CONCEPTS2.2.1 SCOPE OF LICENCE

A Single Family Office may only carry out SFO Activities to the extent that it is permitted to carry out such activities under its Licence. A Single Family Office may not carry on any Regulated Activity in or from the QFC without the prior authorisation of the Regulatory Authority. A Single Family Office may only provide services to a Single Family and must not hold itself out to or solicit business from third parties.

2.3 KEY REQUIREMENTS2.3.1 LICENCE

An application to the QFC Authority for a Licence to conduct SFO Activities must be accompanied by a letter from an Eligible Firm which confirms that various threshold conditions for the granting of a Licence have been fulfilled. The Rules in 2.4 set out the process for seeking a Licence, the criteria that the QFC Authority will apply in determining whether to grant a Licence and the conditions pursuant to which an entity in or outside the QFC may act as an Eligible Firm.

2.3.2 REGISTRATION

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A Company may be registered by the CRO as a Single Family Office under Article 16 of the Single Family Office Regulations if:

(A) it fulfils all the requirements for incorporation under the Companies Regulations;

(B) it fulfils the requirements under the Single Family Office Regulations, namely the requirements under Article 19 relating to the Articles of Association of the Company; and

(C) it has received a Licence from the QFC Authority to conduct SFO Activities.

2.3.3 DESIGNATED REPRESENTATIVE

A Single Family Office is obliged to appoint a Designated Representative to act as a point of contact with the QFC Authority. The appointment of the Designated Representative is not subject to the approval of the QFC Authority but the Single Family Office is required to ensure that the proposed person meets certain criteria. The QFC Authority may require the Single Family Office to appoint an alternative Designated Representative if for any reason it considers that a Designated Representative does not satisfy or has ceased to satisfy these criteria.

2.4 LICENCE TO CONDUCT SFO ACTIVITIES2.4.1 APPLICATION TO CONDUCT SFO ACTIVITIES

An applicant seeking permission to conduct SFO Activities must:

(A) complete the Prescribed Form in Appendix 1 and file it with the QFC Authority;

(B) attach a letter from an Eligible Firm complying with the requirements of Article 18 of the Single Family Office Regulations;

(C) attach a statement signed by the applicant or its Designated Representative containing the information set out in Article 15.5 of the Single Family Office Regulations;

(D) provide such additional material as may be required by the QFC Authority; and

(E) pay the Prescribed Fee stated in Appendix 2 to the QFC Authority.

2.4.2 ELIGIBLE FIRM

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(1) For the purposes of Articles 18 and 22.2 of the Single Family Office Regulations an Eligible Firm means:

(A) an entity established in the QFC with a Licence to provide accounting, tax, legal or management services;

(B) subject to (2), an entity established in the QFC with a Licence to provide services other than those stated in (A);

(C) subject to (3), an entity established in a jurisdiction other than the QFC.

(2) Before the QFC Authority recognises a letter issued by an entity established in the QFC with a Licence to provide services other than those stated in (1)(A), the incorporators (in the case of Article 18) or the Single Family Office (in the case of Article 22.2) must satisfy the QFC Authority that:

(A) the entity has the necessary expertise to opine on the matters stated in the letter required by either Article 18 or Article 22.2 as appropriate;

(B) the entity has adequate professional indemnity insurance which provides cover in respect of the work required; and

(C) it meets any other requirements prescribed by the QFC Authority.

(3) Before the QFC Authority recognises a letter issued by an entity established outside the QFC, the incorporators (in the case of Article 18) or the Single Family Office (in the case of Article 22.2) must satisfy the QFC Authority that:

(A) the entity has the necessary expertise to opine on the matters stated in the letter required by either Article 18 or Article 22.2 as appropriate;

(B) the entity is subject in its home jurisdiction to licensing and ongoing monitoring of the relevant aspects of its activities;

(C) the body or bodies that granted the entity’s licence and monitors its activities are able to exercise sufficient disciplinary actions over the applicant;

(D) the entity has adequate professional indemnity insurance which provides cover in respect of work undertaken in the QFC; and

(E) the entity meets any other requirements prescribed by the QFC Authority.

2.4.3 LICENSING CRITERIA

When assessing an application to conduct SFO Activities, the QFC Authority may consider any of the following criteria, as well as any other criteria which

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in its sole discretion it considers relevant in order to further the QFC Authority's Objectives as set out in Article 5 of the QFC Law:

(A) the background and history of the applicant;

(B) the fitness and propriety of individuals performing the Senior Executive Function, Money Laundering and the Terrorist Financing Reporting Function and the Designated Representative function;

(C) the fitness and propriety of the Persons who control the applicant;

(D) the procedures and resources with which it will ensure compliance with the AML/CFT Rules;

(E) the professional memberships, if any, held by individuals employed by the applicant;

(F) the ownership of the applicant, including the identity of all Persons who control the applicant;

(G) with respect to the holding of Client Money, the procedures by which it proposes to ensure compliance with LFAR;

(H) the adequacy of business continuity arrangements and IT systems upon which the applicant intends to rely; and

(I) such other criteria as the QFC Authority may consider relevant or necessary.

2.5 DESIGNATED REPRESENTATIVE2.5.1 APPLICATION OF GENERAL RULES

A Single Family Office must comply with the following General Rules in the QFCA Rules in respect of a Designated Representative:

(A) 12 - Notification of Registered Functions;

(B) 13 - Fitness and Propriety;

(C) 14 - Competence, Training and Supervision; and

(D) 15 - Performance of Registered Functions.

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3. CHANGE OF STATUS 3.1 AMENDMENTS TO ARTICLES OF ASSOCIATION(1) Article 19.5 provides that a Single Family Office must give no less than

twenty-one days' prior written notice to the QFC Authority of any proposal to amend its Articles of Association and that the QFC Authority may consult with the QFC Authority and Regulatory Authority as appropriate and object to the proposed amendment if it is not in line with the status of a Single Family Office.

(2) A Single Family Office must provide notice to the QFC Authority of such proposed amendment using the Prescribed Form in Appendix 1 and pay the Prescribed Fee stated in Appendix 2 to the QFC Authority.

(3) The Single Family Office’s application must include:

(A) a copy of the proposed amended Articles of Association;

(B) a detailed description of the reasons for the proposed amendment;

(C) confirmation that the proposed amended Articles of Association still comply with the requirements of Article 19.2 and 19.3; and

(D) an explanation as to why the proposed amendment is in line with the status of the Company as a Single Family Office.

(4) The twenty-one day period prescribed in Article 19.5 will not begin until the Single Family Office submits an application conforming in all respects to the above criteria.

3.2 REVOCATION OF REGISTRATION AS A SINGLE FAMILY OFFICE

(1) The CRO may revoke the registration of a Company as a Single Family Office:

(A) on the application of the Single Family Office itself if the condition in (3) is met; or

(B) on the application of the QFC Authority.

(2) The CRO shall revoke the registration of a Company as a Single Family Office by amending the public register so as to remove the words "SFO Activities" from the section indicating the business activities of the Company.

(3) A Single Family Office may not apply to the CRO for the revocation of its registration as a Single Family Office until it has complied with Article 26.3 (a) to (d) of the Single Family Office Regulations and been issued with an amended Licence by the QFC Authority and, where applicable, an authorisation by the QFC Regulatory Authority.

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(4) A Single Family Office applying to the CRO for the revocation of its registration as a Single Family Office must:

(A) complete the Prescribed Form in Appendix 1 and file it with the CRO;

(B) provide such additional material as may be required by the CRO; and

(C) pay the Prescribed Fee stated in Appendix 2 to the CRO.

(5) The CRO may not deregister a Single Family Office on the application of the Single Family Office itself unless it has received written notice from the QFC Authority confirming that the Single Family Office is no longer performing SFO Activities.

3.3 TRANSFER OF SHARES(1) Article 19.4 of the Single Family Office Regulations provides that the

Articles of Association of a Single Family Office must provide that no transfer of shares in the Single Family Office shall take effect unless the QFC Authority has confirmed in writing that it is satisfied that the transfer will not affect the status of the Single Family Office.

(2) A Single Family Office applying for the QFC Authority’s confirmation under Article 19.4 must:

(A) complete the Prescribed Form in Appendix 1 and file it with the QFC Authority;

(B) provide such additional material as may be required by the QFC Authority; and

(C) pay the Prescribed Fee stated in Appendix 2 to the QFC Authority.

(3) Before the QFC Authority confirms that it does not object to such a transfer, the Single Family Office must satisfy the QFC Authority that the proposed transfer will not affect the status of the Single Family Office.

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APP 1 PRESCRIBED FORMS For the purpose of the Single Family Office Regulations and these Rules the Prescribed Forms are listed in the table below.

Purpose Relevant Article or Rule Form

Application to conduct SFO Activities Rule 2.4.1 Q01

Application to amend the Articles of Association of a Single Family Office Rule 3.1 Q07

Application for the revocation of registration of a Single Family Office Rule 3.2 Q07

Application for QFC Authority’s confirmation relating to a transfer of shares Rule 3.3 Q07

Application for the incorporation and registration of a Single Family Office Article 15 CRO1

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APP 2 PRESCRIBED FEES For the purpose of the Single Family Office Regulations and these Rules the Prescribed Fees are listed in the table below.

PurposeRelevant Article or Rule

FeeUSD

Application to conduct SFO Activities Rule 2.4.1 5000Application to amend the Articles of Association of a Single Family Office Rule 3.1 200

Application for the revocation of registration of a Single Family Office Rule 3.2 Nil

Application for QFC Authority’s confirmation relating to a transfer of shares Rule 3.3 Nil

Application for the incorporation and registration of a Single Family Office Article 15 Nil

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