Regulatory Policy - Applications for the use of Restricted Words (February 2017)

Summary

This is a CIMA regulatory policy (dated February 2017) explaining how the Authority decides whether to permit the use of 'restricted words' in the names or descriptions of businesses. Certain words are restricted under the Banks and Trust Companies Law, Building Societies Law, Companies Management Law, Cooperative Societies Law, Insurance Law, Mutual Funds Law and Securities Investment Business Law (collectively the 'Regulatory Laws') because they suggest a connection to a regulated financial sector, another entity, government, or royalty. The policy sets out the criteria CIMA uses to assess name similarity and potential public confusion for regulated entities, and separately the criteria for allowing unregulated entities to use words associated with regulated sectors.

Who the Policy Applies To

• Regulated entities: Entities already regulated by CIMA may be told to change a name that improperly resembles another entity's name or falsely suggests a government/royal connection or special status.
• Unregulated entities: Entities wishing to use a word suggesting a connection to banking, trust, insurance, mutual fund, or securities business must apply to and obtain approval from CIMA before using such a word, since unauthorized use could constitute an offence under the Regulatory Laws.

Assessment Factors and Approval Conditions

• Factors weighed: CIMA considers the degree of resemblance, likelihood of public confusion, nature of business activities, and group/brand relationships.
• Conditions on approval: CIMA may attach conditions to any approval, such as prohibiting the approved entity from engaging in regulated-type activities and requiring it to supply further information on request.

Application Requirements

• Required submissions: Applicants must submit the proposed word, reasons for its use, a description of business activities, incorporation details, constitutional documents, and organisational charts where relevant.

Key obligations

• Unregulated entities must apply to and obtain CIMA's approval before using a restricted word associated with a regulated sector.
• Applications for use of a restricted word should be submitted in advance of actual use, as unauthorized use may constitute an offence under the Regulatory Laws.
• Applicants must submit specified information/documents: the proposed restricted word, reasons for its use, a detailed description of actual or proposed business activities, when and where the business will be/has been carried on, date and place of incorporation, certified true copies of constitutional documents, an organisational chart (where applicable), contact information, and any other information CIMA may require.
• A regulated entity may be required by the Authority to change its name if it is contrary to the prohibitions on identical/similar names or false suggestions of government/royal connection or special status.
• An entity granted approval to use a restricted word may be subject to conditions, including not engaging in activities akin to regulated activities and providing additional information to CIMA on request to verify compliance with those conditions.

Applies to

Regulated Entities (licensed or registered under the Regulatory Laws), Unregulated Entities seeking to use a restricted word, banks and trust companies, building societies, companies management entities, cooperative societies, insurance entities, mutual funds, securities investment business entities

Deadlines

• prior to use: Unregulated entities must apply for and obtain CIMA approval before using a restricted word; applications should be made in advance of use.