Entire Section

  • IFR 6.1 IFR 6.1 Application

    • IFR 6.1.1 IFR 6.1.1

      (1) This section applies in the case of a Domestic Fund:
      (a) which is an Islamic Fund, to its Fund Manager and where appointed, its Trustee;
      (b) which is an Umbrella Fund with one or more Islamic Sub-Funds, to its Fund Manager and where appointed, its Trustee in respect of those Sub-Funds; or
      (c) which is an Islamic Fund on a Fund Platform, to the Fund Manager using the Fund Platform, in respect of that Fund.
      (2) The requirements that apply to a conventional Fund under the Collective Investment Law 2010 and CIR apply equally to an Islamic Fund, except as otherwise provided in this chapter.
      (3) The requirements in MKT chapter 6 that apply to a conventional Listed Fund apply equally to an Islamic Fund, if it is or is to be a Listed Fund, except as otherwise provided in this chapter.
      (4) In this chapter, except where otherwise provided, any reference to a Fund is to an Islamic Fund, to an Islamic Sub-Fund of an Umbrella Fund, or to an Islamic Fund on a Fund Platform, as the case may be and any reference to a Fund Manager is a reference to a Fund Manager of such a Fund.
      Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
      [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]
      [Amended] DFSA RM272/2010 (Made 11th July 2010). [VER2/07-10]
      [Amended] DFSA RM220/2018 (Made 22nd February 2018). [VER13/12-18]
      [Amended] DFSA RMI249/2019 (Made 18th December 2019). [VER14/12-19]

      • IFR 6.1.1 Guidance

        1. While the CIR module contains the key requirements relating to the management and operation of conventional Collective Investment Funds, this module sets out the additional requirements that apply where such a Fund is managed or held out as being managed as an Islamic Fund. There are other requirements that applying to such firms which are found in other modules of the DFSA rulebook, such as the GEN module, COB module and PIB module.
        2. While section 3 contains the requirements that apply to Authorised Firms which are Fund Managers of Collective Investment Funds, the requirements in this section mainly focuses on Shari'a compliance related requirements that apply at the Fund level. For example, while the systems and controls required under IFR section 3.3 relate to the systems and controls that a firm must have in order to comply with its Shari'a obligations, IFR Rule 6.1.3 sets out systems and controls that must be established and maintained at the Fund level.
        Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
        [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]

    • Systems and Controls

      • IFR 6.1.2 IFR 6.1.2

        (1) The Fund Manager of a Fund must establish and maintain systems and controls which ensure that its management of the Fund and the Fund Property is Shari'a compliant.
        (2) A Fund Manager may, where it is practicable to do so, include the systems and controls required under (1) within those it is required to establish and maintain pursuant to IFR Rule 3.3.1.
        Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
        [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]

        • IFR 6.1.2 Guidance

          1. Article 38 of the Collective Investment Law 2010 requires the Fund Manager to establish and maintain systems and controls, including, but not limited, to financial and risk controls to ensure sound management of the Fund in accordance with the Fund's Constitution and its most recent Prospectus, taking due account of the nature, scale and complexity of the Fund's investments and operations.
          2. IFR Rule 3.3.1 requires a Fund Manager of Islamic Funds to establish and maintain systems and controls to ensure its Shari'a compliance.
          [Added] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]

    • Fund's Constitutional Documents

      • IFR 6.1.3 IFR 6.1.3

        (1) The Fund Manager of a Domestic Fund that is a Public Fund must ensure that its Fund's Constitution and Prospectus are, and remain, approved by the Fund's Shari'a Supervisory Board.
        (2) The Fund Manager of an Exempt Fund must ensure that the Fund's Constitution and Prospectus are, and remain, approved by the Fund Manager's Shari'a Supervisory Board.
        Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
        [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]
        [Amended] DFSA RM139/2014 (Made 21st August 2014). [VER8/06-14]

    • Islamic Financial Business Policy and Procedures Manual

      • Guidance

        A Fund Manager may, instead of having a separate Islamic Financial Business policy and procedures manual both at the firm level and at the Fund level, maintain a single Islamic Financial Business policy and procedures manual for the firm and the Funds it manages.

        Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
        [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]

      • IFR 6.1.4

        The Fund Manager of a Fund must implement and maintain an Islamic Financial Business policy and procedures manual for the Fund which addresses the following matters:

        (a) the manner in which the compliance function will be undertaken, in respect of Shari'a compliance;
        (b) the manner in which the Shari'a Supervisory Board will oversee and advise in regard to the Islamic Financial Business conducted by the Fund Manager;
        (c) the manner in which Shari'a Supervisory Board fatwas, rulings and guidelines will be recorded, disseminated and implemented and the internal Shari'a review undertaken;
        (d) the manner in which disputes between the Shari'a Supervisory Board and the Fund Manager in respect of Shari'a compliance will be addressed;
        (e) the process for approving those internal systems and controls which are in place to ensure not only that the Islamic Financial Business is carried out in compliance with Shari'a, but that information is disseminated to Unitholders in an appropriate manner; and
        (f) the manner in which conflicts of interest will be identified and managed, including as prescribed in IFR Rule 6.2.4.
        Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
        [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]