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Sub Broker Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes and regulates the relationship between a primary licensed broker and a sub-broker. This document outlines the terms under which the sub-broker is authorized to conduct brokerage activities under the primary broker's license, ensuring compliance with UAE regulatory requirements, particularly those set by the Securities and Commodities Authority (SCA). The agreement covers crucial aspects including scope of services, compensation structure, compliance obligations, risk management, and operational procedures, while incorporating specific UAE regulatory requirements for financial intermediaries.

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What is a Sub Broker Agreement?

The Sub Broker Agreement is essential for financial services firms operating in the UAE who wish to expand their brokerage operations through authorized sub-brokers. This document is particularly relevant in the context of UAE's sophisticated financial markets, where regulatory compliance is strictly enforced by the Securities and Commodities Authority (SCA) and other regulatory bodies. The agreement becomes necessary when a licensed broker wants to authorize another entity or individual to conduct brokerage activities under their license while maintaining control and oversight. It includes detailed provisions for regulatory compliance, operational procedures, commission structures, and risk management, all aligned with UAE federal laws and regulatory requirements. The document is crucial for ensuring clear delineation of responsibilities and maintaining regulatory compliance in the UAE's financial services sector.

What sections should be included in a Sub Broker Agreement?

1. Parties: Identification of the Main Broker and Sub-Broker with full legal names and addresses

2. Background: Context of the agreement, including main broker's authority to appoint sub-brokers and relevant regulatory licenses

3. Definitions: Key terms used throughout the agreement, including regulatory-specific terminology

4. Appointment and Scope: Formal appointment of sub-broker and detailed scope of authorized activities

5. Regulatory Compliance: Obligations to comply with UAE laws, SCA regulations, and other applicable regulatory requirements

6. Sub-Broker Obligations: Detailed responsibilities, performance standards, and conduct requirements

7. Main Broker Obligations: Support, systems access, and other obligations of the main broker

8. Commission Structure: Detailed breakdown of commission arrangements and payment terms

9. Representations and Warranties: Standard and regulatory-specific warranties from both parties

10. Confidentiality: Protection of confidential information and client data

11. Term and Termination: Duration of agreement and grounds for termination

12. Post-Termination Obligations: Responsibilities and restrictions after agreement ends

13. Indemnification: Mutual indemnification provisions and liability allocation

14. Dispute Resolution: Process for resolving disputes under UAE law

15. General Provisions: Standard boilerplate clauses adapted to UAE law requirements

What sections are optional to include in a Sub Broker Agreement?

1. Non-Compete Provisions: Restrictions on competitive activities - include if required by business model

2. Training Requirements: Specific training obligations - include if main broker provides training

3. Marketing and Branding: Rules for using main broker's brand - include if sub-broker will use main broker's branding

4. Insurance Requirements: Specific insurance coverage requirements - include if not covered by main broker's policy

5. Data Protection: Specific data protection obligations - include if handling sensitive client data

6. Anti-Money Laundering: Detailed AML procedures - include if sub-broker handles client funds

7. Electronic Systems Access: Terms for using broker's electronic systems - include if providing system access

8. International Operations: Cross-border activities provisions - include if operating in multiple jurisdictions

What schedules should be included in a Sub Broker Agreement?

1. Schedule 1 - Commission Structure: Detailed breakdown of commission rates, tiers, and calculation methods

2. Schedule 2 - Approved Activities: Comprehensive list of authorized brokerage activities and any restrictions

3. Schedule 3 - Compliance Procedures: Detailed compliance requirements and procedures

4. Schedule 4 - Required Licenses: List of required regulatory licenses and certifications

5. Schedule 5 - Reporting Requirements: Ƶ and procedures for regular reporting

6. Schedule 6 - Service Level Agreement: Performance metrics and service standards

7. Appendix A - Required Forms: Standard forms and documents required for operations

8. Appendix B - Contact Information: Key contacts at both organizations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Publisher

Ƶ

Document Type

Broker Agreement

Cost

Free to use

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