Entire Section

  • CIR 8 CIR 8 Management and Operation of A Fund

    • CIR 8 Guidance

      While most of the provisions in this chapter are of general application to all Domestic Funds, in a few instances, some provisions which are specific to a certain type of Domestic Fund, for example a Public Fund, are retained in this Part. The DFSA has, instead of removing such provisions to CIR Part 5 which contains provisions applicable to specific types of Domestic Funds, retained them in this Part because those requirements are integral to the main provisions applying to all Domestic Funds and therefore need to be read together.

      Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
      [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]
      [Amended] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

    • CIR 8.1 CIR 8.1 General Management duties

      • Application

        • CIR 8.1.1 CIR 8.1.1

          (1) This chapter applies to a Fund Manager, and if appointed the Trustee, of a Domestic Fund, except as provided in (3) and (4) or where otherwise provided in this chapter.
          (2) This chapter also applies, where expressly provided, to a Fund Administrator or Eligible Custodian of a Domestic Fund.
          (3) Only this Rule and CIR Rules 8.1A.1, 8.1A.2, 8.3.1(2) in the case of a Venture
          Capital Fund, 8.4.1(1)(a), 8.6A.1 and 8.10.1 in this chapter apply to, or in relation to, a Qualified Investor Fund.
          (4) CIR Sections 8.3 and 8.4, other than CIR Rules 8.3.1(2) and 8.4.1(1)(a), of this chapter do not apply to a Fund Manager of a Venture Capital Fund that is an Exempt Fund.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
          [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]
          [Amended] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]
          [Amended] DFSA RMI279/2020 (Made 28th October 2020). [VER29/11-20]

          • CIR 8.1.1 Guidance

            1. Article 22 of the Law requires the Fund Manager of a Domestic Fund to manage the Fund in accordance with the Fund's Constitution and its most recent Prospectus and to perform the functions conferred on it by the Constitution and the Law. In doing so, the Fund Manager is required under that Article to comply with any conditions or restrictions on its Licence as well as any limitations or requirements imposed by or under the Law or Rules.
            2. Article 38 of the Law 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. There is an additional obligation on Fund Managers of all Open-ended Domestic Funds to have adequate systems and controls to address liquidity risks in such Fund—see CIR Rule 8.6A.1.
            3. The requirements in this chapter apply to External Fund Managers in the same manner as they apply to Fund Managers of Domestic Funds, unless otherwise provided. External Fund Managers and External Funds attract additional requirements, which are set out in CIR chapter 6.
            4. This chapter sets out more detailed obligations of the Fund Manager, and where appointed the Trustee, of a Domestic Fund with regard to:
            a. Duties relating to Fund Property;
            b. Conflicts of interests;
            c. Valuation of Fund;
            d. Determination of single price;
            e. Issue and redemption of Units;
            f. Unitholder register;
            g. Meetings of Governing Body and Unitholders;
            h. Approvals and notifications;
            i. Maintenance of records;
            j. Capital;
            k. Delegations and outsourcing; and
            l. Charges and expenses.
            5. When a Fund Manager manages Funds that are Incorporated Cells of an ICC, the Fund Manager is subject to the additional duties under chapter 6A (as well as the duties in this chapter). The Fund Manager will need to ensure that it meets all of its obligations relating to each Fund on the Fund Platform, even if some activities or functions of the Fund Manager are carried out by the Fund Platform.
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
            [Amended] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]
            [Amended] DFSA RMI248/2019 (Made 18th December 2019) [VER26/12-19].

    • CIR 8.1A CIR 8.1A Corporate Director

      • Application

        • CIR 8.1A.1

          This chapter applies to:

          (a) an Investment Company which elects to have its sole Corporate Director act as its Fund Manager; and
          (b) that Corporate Director.
          Derived from DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

      • Requirements relating to a Corporate Director

        • CIR 8.1A.2 CIR 8.1A.2

          (1) The Investment Company must:
          (a) not have any directors other than a Corporate Director; and
          (b) have Articles of Association that permit the company to appoint that Corporate Director as its Fund Manager.
          (2) The Corporate Director must ensure that:
          (a) the requirements in (1) are met;
          (b) it is registered under the Companies Law of the DIFC;
          (c) it has at least two individuals appointed as its directors; and
          (d) it does not act as the Fund Manager of any Fund other than the Investment Company or Manage Assets for another Person.
          [Derived from] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

          • CIR 8.1A.2 Guidance

            1. The Companies Regulations permit Investment Companies to have a sole corporate director. An Investment Company has the option to be internally managed, by having that corporate director act as its Fund Manager. Alternatively, an Investment Company has the option to have an 'external' Fund Manager. In both cases, the Fund Manager must be licensed and is legally accountable to Unitholders in the Fund (i.e., to its shareholders) for the proper management of the Fund (i.e. the Fund Property).
            2. A Corporate Director of an Investment Company, which elects to be internally managed, is required to meet all the other requirements that are applicable to an applicant for a Fund Manager's Licence, including the capital requirements (in PIB), and the adequate systems and controls requirements (in GEN). However, as such a Corporate Director can only act as the Fund Manager of the Investment Company (and not of any other Funds), the systems and controls requirements would apply proportionately to the nature and scale of the activities of that company.
            3. A Corporate Director that is a Fund Manager may delegate and outsource its functions and activities in the same manner and subject to the same requirements as other Fund Managers. A Corporate Director who outsources functions cannot thereby delegate responsibility for meeting the Fund Manager's duties and obligations and its legal accountability to investors in the Fund. Please refer to GEN Rules 5.3.21 and 5.3.22 and CIR Rule 8.12.4 for outsourcing and delegation requirements applicable to Fund Managers.
            Derived from DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

    • CIR 8.2 CIR 8.2 Duties in Relation to Fund Property

      • Fund Manager

        • CIR 8.2.1

          (1) A Fund Manager must make decisions as to the constituents of the Fund Property that are in accordance with the Constitution of the Fund and investment objectives and policy stated in the Prospectus.
          (2) A Fund Manager must take all steps and execute all documents to ensure that transactions relating to the Fund Property are properly entered into for the account of the relevant Fund or Sub-Fund.
          (3) A Fund Manager of an Investment Trust must ensure that instructions it gives to the Trustee in relation to the Fund Property are in accordance with the agreement creating the Investment Trust, the Fund's Constitution, and the Prospectus.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • CIR 8.2.2 CIR 8.2.2

          (1) In the case of an Investment Company or an Investment Partnership, the Fund Manager is responsible to the Unitholders for the safekeeping of the Fund Property.
          (2) Without removing the generality of the obligation under (1) and subject to (3), a Fund Manager must, in the case of a Fund which is an Investment Company or Investment Partnership:
          (a) delegate the activity of Providing Custody in relation to the Fund Property to a Service Provider who is an Eligible Custodian; and
          (b) comply with the delegation procedures set out in CIR section 8.12 in relation to such a delegation.
          (3) The requirement in (2) does not apply to:
          (a) a Property Fund in respect of Real Property:
          (i) that is held by the Fund Manager or by an Incorporated Cell Company in accordance with CIR Rule 13.4.2 or CIR 13.4.2A; or
          (ii) for which the Fund Manager has made adequate alternative arrangements in accordance with CIR Rule 13.4.2B;
          (b) a Private Equity Fund where the Fund Manager has made adequate alternative arrangements that are in accordance with CIR Rule 13.3.1; or
          (c) an Exempt Fund where the Fund Property:
          (i) comprises of an interest in the operation of a Real Property asset (such as an investment in an infrastructure project); and
          (ii) the Fund Manager makes alternative arrangements to ensure that the Fund Property is clearly distinguishable as belonging to the Fund, and is segregated from the assets of the Fund Manager and from the assets of any other Fund which the Fund Manager manages.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
          [Amended] RM158/2015 (Made 9th December 2015). [VER19/02-16]
          [Amended] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]
          [Amended] DFSA RMI248/2019 (Made 18th December 2019) [VER26/12-19].

          • CIR 8.2.2 Guidance

            1. CIR Section 8.12 of this module governs the power of a Fund Manager to delegate certain of its Financial Service activities, and to outsource its functions.
            2. Where a Fund invests in infrastructure projects (for example, the development of public facilities such as roads, railways or bridges), the interest acquired by the Fund may not necessarily be suited to the conventional forms of holding custody of Real Property. Where this is the case, a Fund Manager may use adequate alternative custody arrangements that meet the requirements in CIR 8.2.2(3)(c)(2)(ii).
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
            [Amended] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

      • Trustee

        • CIR 8.2.3 CIR 8.2.3

          In the case of an Investment Trust:

          (a) the Trustee of the Fund must hold the Fund Property in trust for the Unitholders and accordingly is responsible to the Unitholders for the safekeeping of the Fund Property;
          (b) the legal title of the Fund Property must be registered with the Trustee except in the case of a Property Fund investing in Real Property where the Trustee has made adequate alternative arrangements that are in accordance with CIR Rule 13.4.2B; and
          (c) the Trustee must not act on instructions of the Fund Manager in relation to the Fund Property if such instructions are not in accordance with the agreement creating the Investment Trust, the Fund's Constitution, or the Prospectus.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
          [Amended] RM158/2015 (Made 9th December 2015). [VER19/02-16]

          • CIR 8.2.3 Guidance

            CIR Section 8.12 of this module governs the power of a Trustee to delegate certain of its Financial Service activities, and to outsource its functions.

            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • Eligible Custodian

        • CIR 8.2.4

          For the purposes of the Rules in this module, except as provided in CIR Rule 8.2.5, an Eligible Custodian is a Person who is a separate legal entity from the Fund Manager and who also meets one of the following criteria:

          (a) an Authorised Firm whose Licence authorises it to Provide Custody Services;
          (b) an Authorised Firm that is a Bank;
          (c) an Authorised Market Institution;
          (d) a legal entity that is authorised to provide custody services, and is supervised, by a Financial Services Regulator in the State;
          (e) a legal entity that is authorised to provide custody services, and is supervised, by a Financial Services Regulator in a Recognised Jurisdiction;
          (f) a legal entity where it, or its holding company, is authorised to provide custody services and is supervised by a Financial Services Regulator in another jurisdiction which is a Zone 1 country; or
          (g) a legal entity that is authorised or recognised by a Financial Services Regulator to operate as an exchange or a clearing house in a Recognised Jurisdiction;
          (h) a legal entity that is:
          (i) controlled and wholly owned by one or more of the national governments of the five member states of the Gulf Cooperation Council, other than the State; and
          (ii) authorised to provide custody services, and supervised, by a Financial Services Regulator of at least one of the national governments specified in (i).
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
          [Amended] RM158/2015 (Made 9th December 2015). [VER19/02-16]
          [Amended] RM235/2019 (Made 20th February 2019). [VER24/02-19]

        • CIR 8.2.5

          For a Public Fund (other than a Property Fund) that is a Passported Fund, the Eligible Custodian must be a Person who meets the requirements in FPR Rule 6.5.3.

          Derived from RM235/2019 (Made 20th February 2019). [VER24/02-19]

    • CIR 8.3 CIR 8.3 Conflicts of Interest

      • CIR 8.3.1 CIR 8.3.1

        (1) The Fund Manager and, if it is a Fund structured as an Investment Trust, the Trustee, must take reasonable steps to ensure that in any dealing in relation to the Fund Property such dealings do not give rise to a conflict of interest.
        (2) Where a conflict of interest arises, whether in dealings with Related Parties or otherwise, the Fund Manager and, if appointed, the Trustee, must disclose to the Unitholders the nature of the conflict and how the conflict will be managed.
        (3) The Fund Manager must take reasonable steps to establish and implement remuneration policies and practices which:
        (a) are consistent with sound and effective risk management of the Funds it manages; and
        (b) do not, to the extent practicable, encourage risk-taking inconsistent with the investment objectives and risk profile of such Funds.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
        [Amended] RM195/2016 (Made 7th December 2016). [VER22/02-17]
        [Amended] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

        • CIR 8.3.1 Guidance

          GEN Rule 4.2.12 (Principle 12) requires an Authorised Firm to have remuneration structures and strategies which are well aligned with the long term interests of the firm, and are appropriate to the nature, scale and complexity of its business. That requirement is extended under CIR Rule 8.3.1(3) to cover remuneration practices relating to Funds which a Fund Manager manages.

          [Derived from] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

      • Related Party Transactions

        • CIR 8.3.2 CIR 8.3.2

          (1) A Fund Manager must not enter into a Related Party Transaction unless it is in accordance with the requirements in this Rule.
          (2) A Fund Manager must ensure that any Related Party Transaction is on terms at least as favourable to the Fund as any comparable arrangement on normal commercial terms negotiated at arm's length with an independent third party.
          (3) The Fund Manager must, before entering into a Related Party Transaction:
          (a) issue to the Unitholders a circular containing the details of the proposed transaction; and
          (b) obtain Unitholders' prior approval by Special Resolution, or by ordinary resolution in the case of a Property Fund, in respect of the proposed transaction if the total consideration or value of the transaction is 5% or more of the most recent net asset value of the Fund as disclosed in the latest published audited accounts of the Fund.
          (4) The Fund Manager must:
          (a) if Unitholder's prior approval is required pursuant to (3)(b), issue a notice to Unitholders providing details of the results of the Unitholders' voting at the general meeting as soon as practicable after the meeting;
          (b) include, in the Fund's next published interim or annual report, a brief summary of the Related Party Transaction, and certification that the requirements in these Rules have been met for the transaction; and
          (c) include, in the annual report of the Fund, the total value of any Related Party Transactions, their nature and the identities of the Related Parties with whom such transactions were made. Where there is no such transaction conducted during the financial year covered by the annual report, an appropriate negative statement to that effect must be made in the annual report.
          (5) The requirements in (3) and (4)(a) do not apply in relation to an Exempt Property Fund.
          (6) The requirements in (3) and (4)(a) do not apply to a Public Property Fund in respect of a Related Party Transaction if:
          (a) the transaction is for the acquisition or sale of Real Property in the State; and
          (b) all of the conditions in CIR Rule 13.4.11A(1) are met.
          (7) The requirements in (3) and (4) do not apply to the Fund Manager of an ETF in relation to the appointment of a Price Information Provider, who is a Related Party, where such an appointment occurs at the time of establishment of the ETF.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
          [Amended] RM158/2015 (Made 9th December 2015). [VER19/02-16]
          [Amended] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

          • CIR 8.3.2 Guidance

            1. If a Fund Manager of an Exchange Traded Fund (ETF) has an arrangement with a Related Party, for that Related Party to provide an index or benchmark, then the Fund Manager is required to also treat that arrangement as a Related Party Transaction (see CIR Rule 13.9.5) and comply with CIR Rule 8.3.2 in relation to the transaction.
            2. An ETF Fund Manager is not required to comply with the requirements in CIR Rule 8.3.2(3) and (4) in relation to a Price Information Provider (PIP), who is a Related Party and provides a custom made index or other benchmark which the ETF tracks, if that appointment takes place at the time of establishing the ETF. This is because, generally, there are no investors in the Fund at that time to give the prior approval that is envisaged.
            3. However, such an ETF Fund Manager does need to comply with the arm's length transaction requirement in CIR Rule 8.3.2(2) and, also, disclose in the Fund Prospectus that it tracks a custom made index, or other benchmark, provided by a Related Party PIP (under CIR Rule 14.4.8(d)).
            4. In relation to a Fund on a Fund Platform, the definition of a Related Party in GLO includes any other Fund on the Fund Platform.
            Derived from DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]
            [Amended] DFSA RMI248/2019 (Made 18th December 2019) [VER26/12-19].

      • Best Execution and Fair Allocation

        • CIR 8.3.3 CIR 8.3.3

          Without limiting the generality of the obligations of the Fund Manager including those in Rules CIR 8.3.1 and CIR 8.3.2, the Fund Manager's systems and controls must include policies and procedures which are designed to ensure that:

          (a) when executing or procuring execution of trades for or on behalf of the Fund, the transactions are executed:
          (i) as soon as reasonably practicable after a decision to effect a transaction has been made; and
          (ii) on the best terms available at the time of dealing;
          (b) where the Fund Manager undertakes investment transactions for or on behalf of a Fund which it operates and one or more other Funds or Clients, there is timely and fair allocation of trades to each Fund and Client;
          (c) trading of the investment portfolio forming part of the Fund Property is not excessive in light of the Fund's investment objective as stated in its Constitution and the most recently issued Prospectus; and
          (d) any underwriting arrangements it undertakes are carried out in the best interest of the Fund.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

          • CIR 8.3.3 Guidance

            1. For the purposes of (a), a Fund Manager's procedures should take into account matters such as the market in which the trade is to be executed, the kind and size of the transaction concerned and type of services provided by the executing broker that has been selected. A Fund Manager's procedures should be adequate to demonstrate that when the transaction was executed, it was done at the best price available. For this purpose, a Fund Manager may require a print out of a computer screen containing information about the price available at the time of the execution to be maintained.
            2. For the purposes of (b), a Fund Manager should have a policy in place which demonstrates how it achieves timely and fair allocation of trades. For example, where a Fund Manager places an order on behalf of a number of Funds it operates, its policy should state the basis of allocation of trades to each Fund and, where any deviation from that policy occurs, record the reasons for such deviations.
            3. For the purposes of (c), a Fund Manager's policies and procedures should encompass requirements such as maintenance of sufficient records to demonstrate that any brokerage, commissions or other benefits directly or indirectly derived from any transactions it has undertaken on behalf of the Fund are not unusual, when considered in light of industry practice. However, where there are other requirements relating to disclosure of benefits, a Fund Manager should comply with those requirements separately, as maintenance of records for the purposes of this Rule may not be sufficient to discharge those obligations.
            4. For the purposes of (d), where a Fund Manager seeks to underwrite or participate in an initial public offering, its policies should ensure that it does not do so in a manner that is in any way detrimental to the Fund. The Fund Manager will also need to ensure that the best execution obligations under (a) are met.
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

    • CIR 8.4 CIR 8.4 Valuation of Fund Property

      • CIR 8.4.1 CIR 8.4.1

        (1) A Fund Manager must:
        (a) ensure that the Fund Property is valued at regular intervals as appropriate to the nature of the Fund, except where such valuation is suspended in any circumstances that are set out in the Fund's Constitution or Prospectus;
        (b) prepare a valuation in accordance with (3) for each relevant type of Unit at each relevant valuation point; and
        (c) as soon as practicable after each valuation point, both publish and make available to the Unitholders and prospective Unitholders of the Fund, the price of the Units of the Fund.
        (2) The value of the Fund Property is the net value of the Fund Property after deducting any expenses and outstanding borrowings, including any capital outstanding on a mortgage of any Real Property.
        (3) The value of the Fund Property must, except as otherwise provided in this section, be determined in accordance with the provisions of the Constitution and the Prospectus, as appropriate.
        (4) For the purposes of (2), any charges that were paid, or would be payable, on acquiring or disposing of the asset must be excluded from the value of that asset.
        (5) A Fund Manager must not make a dilution levy or dilution adjustment unless stated as permitted in the Fund's Prospectus. Such a measure must be applied in a fair manner to reduce dilution and solely for that purpose.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • CIR 8.4.1 Guidance

          1. A dilution levy or adjustment means a charge of such amount or such rate as is determined by a Fund Manager of a Fund to be made for the purpose of reducing the effect of dilution, i.e., the amount of dealing costs incurred, or expected to be incurred, by a Fund Manager, to the extent that these costs may reasonably be expected to result, or to have resulted, from the acquisition or disposal of Investments by the Fund Manager as a consequence (whether or not immediate) of the increase or decrease in the cash resources of the Fund resulting from the issue or cancellation of Units over a period.
          2. Dealing costs referred to in Guidance 1 include both the costs of dealing in an Investment, professional fees incurred, or expected to be incurred, in relation to the acquisition or disposal of Real Property and, where there is a spread between the buying and selling prices of the Investment, the indirect cost resulting from the differences between those prices.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • CIR 8.4.2 CIR 8.4.2

        (1) A Fund Manager must:
        (a) ensure that at each valuation point there are at least as many Units in issue of any class as there are Units registered to Unitholders of that class; and
        (b) not do, or omit to do, anything that is or is reasonably likely to confer on itself a benefit or advantage at the expense of a Unitholder or prospective Unitholder.
        (2) Where a Fund Manager has not complied with (1) or there is any other valuation error, it must correct the error as soon as possible and must reimburse the Fund any costs it may have incurred in correcting the position, subject to any reasonable minimum level for such reimbursement as set out in the Prospectus.
        (3) If the Fund is structured as an Investment Trust:
        (a) the Fund Manager must notify the Trustee of the matters specified in (2);
        (b) the Trustee must also:
        (i) take reasonable steps to ensure that the Fund Manager complies with the matters specified in (1) and (2); and
        (ii) provide any other notification required under these Rules.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • CIR 8.4.2 Guidance

          CIR Appendix 4 (App4) contains guidance on asset valuation and pricing.

          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

    • CIR 8.5 CIR 8.5 Determination of Single Price

      • CIR 8.5.1

        (1) A Fund Manager must take all reasonable steps and exercise due diligence to ensure that the Units in the Fund are correctly priced in accordance with the applicable accounting procedures to ascertain an accurate single price for a Unit.
        (2) The price of a Unit must be calculated on the basis of the valuation in CIR Rule 8.4.1 in a manner that is fair and reasonable as between Unitholders.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • CIR 8.5.2

        (1) A Fund Manager must take immediate action to rectify any breach of CIR Rule 8.4.1 where such breach relates to the incorrect pricing of Units.
        (2) In (1), unless the incorrect pricing in respect of an issue is of minimal significance, the Fund Manager must inform the DFSA, and if appointed, the Trustee or Eligible Custodian or other Persons providing oversight functions in relation to the Fund, of such a rectification.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

    • CIR 8.6 CIR 8.6 Issue and Redemption of Fund Units

      • CIR 8.6.1 CIR 8.6.1

        (1) A Fund Manager of an Open-ended Fund must, within any conditions in its constitution and offer documents:
        (a) at all times during the dealing day, be willing to issue or sell Units in the Fund to any eligible Client; and
        (b) do so in a manner that is fair and reasonable as between all Unitholders and prospective Unitholders for whom the Fund Manager does not have reasonable grounds to refuse such issue or sale.
        (2) A Fund Manager of an Open-ended Fund must, within any conditions in its constitution and offer documents:
        (a) at all times during the dealing day, be willing to effect a redemption of the Units on the request of any Unitholder; and
        (b) do so in a manner fair and reasonable as between redeeming Unitholders and continuing Unitholders.
        (3) On agreeing to a redemption of Units within (2), the Fund Manager must pay the full proceeds of the redemption to the Unitholder within any reasonable period specified in the constitution and offer documents, unless it has reasonable grounds for withholding payment.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
        [Amended] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

        • CIR 8.6.1 Guidance

          1. Refer to Article 18A(2) of the Law for the definition of an Open-ended Fund.
          2. The Prospectus of a Public Fund is required to set out, among other things, the dealing days and times in the dealing day on which the Fund Manager will receive requests for the sale and redemption of Units and redemption procedures. The Constitution or offer documents (i.e. the Information Memorandum) of an Open-ended Exempt Fund or QIF may specify the Fund's dealing days, but where it does not do so, the maximum period between dealing days will depend on the reasonable expectations of the target investor group and the particular investment objectives and policy of the Fund.
          3. Capital reductions or share buy-backs that occur in a Closed-ended Fund are not treated as redemptions and resales of Units of Funds based on NAV in the same manner as occurs in the case of an Open-ended Fund as provided in these Rules. See Article 18A(3) of the Law for the definition of a Closed-ended Fund.
          4. The circumstances in which a Fund Manager may withhold redemption proceeds under (3) include where there are any dues from the redeeming Unitholder, such as under any margin lending arrangements.
          5. See Article 37 of the Law for provisions dealing with suspension of dealings of Open-ended Funds.
          6. If an Open-ended Domestic Fund is listed and traded, the redemption and reissue of its Units in the primary market does not generally take place concurrently, unless it is an Exchange Traded Fund (ETF). However, the exchange on which an Open-ended Fund is listed and traded may permit the Fund Manager to offer periodic windows for redemption and reissue of Units of the Fund (which would have to be based on NAV). The DFSA regime allows such windows, subject to disclosure in the Fund's Prospectus and to the relevant exchange as to when such windows would be offered.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
          [Amended] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

    • CIR 8.6A CIR 8.6A Systems and controls for liquidity risk management in Open-ended Funds

      • CIR 8.6A.1 CIR 8.6A.1

        (1) A Fund Manager of an Open-ended Domestic Fund must ensure that the Fund has sufficient liquidity to meet redemption requests as stated in the Fund's Constitution and its most recent Prospectus, as appropriate to the nature and risk profile of the relevant Fund.
        (2) For the purposes of meeting the requirement in (1), the Fund Manager's systems and controls must, at a minimum, contain well-documented and detailed policies and strategies, which:
        (a) include appropriate liquidity buffers and limits on illiquid assets, and the availability of other resources, such as lines of credit;
        (b) take into account:
        (i) the underlying classes of assets of the Fund;
        (ii) if such assets are traded on-exchange, the liquidity in those markets;
        (iii) investors' redemption patterns and behaviour; and
        (iv) any other factors that affect or potentially affect the liquidity of the relevant classes of assets;
        (c) include appropriate mechanisms to measure, monitor, stress test and manage the controls referred to in (a) to assess whether they are adequate, and are operating as intended in both normal and stressed conditions and the procedures available to the Fund Manager to address any gaps and failures identified; and
        (d) include powers available to the Fund Manager to address liquidity stresses which pose, or have the potential to pose, risks to its ability to effect redemptions (such as the power to impose anti-dilution levies, create side pockets to ring-fence illiquid assets and create redemption gates or suspend redemptions), and clear triggers and procedures for exercising such powers.
        Derived from DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

        • CIR 8.6A.1 Guidance

          1. The DFSA expects Fund Managers to take into account the Final Report: "Open-ended Fund liquidity and risk management—Good Practices and Issues for Consideration" issued by OICU-IOSCO in February 2018, (which can be found at http://www.iosco.org/library/pubdocs/pdf/IOSCOPD591.pdf). The DFSA believes that the measures identified in that report would, if adopted by the Fund Managers as appropriate to the nature, scale and complexity of their Funds, would enable such managers to meet their overarching obligations in CIR Rule 8.6A.1.
          2. In the DFSA's view, there are certain specialist classes of Funds which generally do not lend themselves to be Open-ended, such as Private Equity Funds (because of the long-term nature of their investments), and Fund of Funds or Feeder Funds (unless the Funds in which they invest themselves are Open-ended). Conversely, there are Funds which may lend themselves better to being structured as Open-ended Funds offering redemptions, such as Funds investing in transferable securities (e.g. UCITS style Funds), or ETFs—due to the liquidity of the underlying classes of their assets, provided they meet the liquidity risk management controls referred to in CIR Rule 8.6A.1. However, it is a matter for the Fund Manager to objectively assess the liquidity profile of the Fund and associated risks.
          Derived from DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

    • CIR 8.6B CIR 8.6B Confirmation notes

      • CIR 8.6B.1

        (1) When the Fund Manager of a Public Fund Executes a Transaction relating to a Unit of the Fund, it must ensure that a confirmation note is sent to the Unitholder as soon as possible and no later than two business days after the date of Execution of the Transaction.
        (2) The confirmation note must set out:
        (a) the Fund Manager's name and address;
        (b) the Unitholder's name;
        (c) a description of the Fund;
        (d) the date and time of receipt of the request for the Transaction to be executed and the method of payment;
        (e) the nature of the Transaction;
        (f) the number of Units subject to the Transaction;
        (g) the date, time and price at which it was executed;
        (h) the reference valuation date;
        (i) the gross value of the Transaction, including charges for subscribing or net amount after charges for redemptions; and
        (j) the total sum of commissions and expenses charged, and a breakdown of those commissions and charges.
        [Added] RM158/2015 (Made 9th December 2015). [VER19/02-16]

    • CIR 8.7 CIR 8.7 Unitholder Register

      • CIR 8.7.1

        (1) Subject to (5), a Fund Manager must maintain a register of Unitholders.
        (2) The register must contain:
        (a) the name and address of each Unitholder;
        (b) the number of Units including fractions of a Unit of each class held by each Unitholder; and
        (c) the date on which the Unitholder was registered in the register for the Units standing in his name.
        (3) A Fund Manager must take all reasonable steps and exercise all due diligence to ensure that the register is kept complete and up to date.
        (4) A Fund Manager or, if applicable the Appointed Fund Administrator or Appointed Custody Provider, must, subject to (5), make the Unitholder register in electronic or hard copy form available for inspection by Unitholders during normal business hours at the Fund Manager's or Appointed Fund Administrator's place of business in the DIFC or otherwise in a designated location in the DIFC.
        (5) Where a Fund is structured as an Investment Trust, the Trustee must maintain the register of Unitholders in accordance with the requirements in the Investment Trust Law 2006 and make the register in electronic or hard copy form available for inspection by Unitholders during normal business hours at the Trustee's place of business in the DIFC or otherwise in a designated location in the DIFC.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

    • CIR 8.8 CIR 8.8 Meetings of Unitholders

      • CIR 8.8.1

        In the case of a Public Fund, the Fund Manager must hold at least two meetings of the Governing Body of every Public Fund which has such a Body every 12 month period from the date of registration of that Fund with the DFSA.

        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • CIR 8.8.2

        The Fund Manager of a Fund other than an Exempt Fund must hold at least one general meeting of the Unitholders of the Fund in every 12 month period (i.e. an annual general meeting). The annual general meeting must be held in the case of a Public Fund within 12 months from the date of registration of the Fund. The annual report required under CIR Rule 9.4.2(1)(a) must be presented at that annual general meeting.

        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
        [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

      • CIR 8.8.3

        (1) The Fund Manager and if appointed the Trustee of a Fund other than an Exempt Fund:
        (a) may convene a general meeting of Unitholders at any time; and
        (b) must convene a general meeting of Unitholders of the Fund immediately upon a request being made by Unitholders in accordance with (2).
        (2) The Unitholders of the Fund may request the Fund Manager, or if appointed the Trustee, to convene a general meeting of Unitholders at any time. Such a request must:
        (a) state the purpose of the meeting;
        (b) be dated;
        (c) be signed by a number of registered Unitholders representing at least one-tenth in value of all of the Units then in issue; and
        (d) be deposited at the place of business of the Fund Manager, or if applicable, the Trustee or Appointed Fund Administrator of the Fund.
        (3) If the Fund is an Investment Trust, the primary responsibility to convene meetings in accordance with this Rule rests with the Fund Manager, failing which, with the Trustee.
        (4) A meeting of Unitholders of a Fund duly convened and held in accordance with the Law and Rules is competent by Special Resolution to require, authorise or approve any act, matter or document in respect of which any such resolution is required. Such a resolution has no other powers or effect.
        (5) Where no Special Resolution is specifically required or permitted by the Law or Rules, any resolution of Unitholders required under the Rules is passed by a simple majority of the votes validly cast for and against the resolution at a general meeting of Unitholders.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • CIR 8.8.4 CIR 8.8.4

        The Fund Manager of an Exempt Fund must hold meetings of Unitholders in accordance with the requirements included in the Fund's Constitution and its most recent Prospectus.

        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • CIR 8.8.4 Guidance

          Exempt Funds are required to have an Information Memorandum under which its Units are marketed to prospective Unitholders by way of private placement. Under Article 50(3) of the Law, such a document is a Prospectus.

          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • Unitholder Meetings Procedures

        • CIR 8.8.5

          (1) A Fund Manager must set out, if it is a Public Fund, in its procedures manual the procedures for holding Unitholder meetings and the conduct of such meetings including but not limited to, the following matters:
          (a) voting rights;
          (b) right to demand a poll;
          (c) proxies;
          (d) minutes; and
          (e) variation of class rights and class meetings.
          (2) The meeting procedures under (1) must comply with the provisions in CIR App2. Any provisions in such procedures that are inconsistent with the procedures in CIR App2 are void.
          (3) In the case of a Public Fund, the Fund Manager must distribute the meetings procedures manual to all Unitholders.
          (4) If the Fund is structured as an Investment Trust, the Fund Manager must obtain the prior approval of the Trustee in respect of its meetings procedures.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
          [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

    • CIR 8.9 CIR 8.9 Approvals and Notifications

      • CIR 8.9.1

        A Fund Manager of a Public Fund must comply with the provisions in CIR App3 in regard to:

        (a) fundamental changes requiring prior approval of the Unitholders;
        (b) significant changes requiring pre-event notification to the Unitholders; and
        (c) notifiable changes, that is, a change other than one in (a) or (b) which requires post notification to the Unitholders.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
        [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

    • CIR 8.10 CIR 8.10 Maintenance of Records

      • CIR 8.10.1

        (1) A Fund Manager must make and retain accounting and other records that are necessary:
        (a) to enable it to comply with Rules in this module; and
        (b) to demonstrate at any time that such compliance has been achieved.
        (2) A Fund Manager must make and retain for a period of six years a record of the Units held, acquired or disposed of, by it, including the classes of such Units, and the balance of any acquisitions and disposals.
        (3) A Fund Manager must make the record available for inspection by the DFSA in the DIFC and, if applicable, the Trustee or appointed Eligible Custodian, free of charge at all times during ordinary office hours and must supply a copy of the record or any part of it.
        (4) Where a Fund Manager makes a dilution levy or dilution adjustment in accordance with CIR Rule 8.4.1(5), it must make and retain for a period of six years from the date such action is taken a record of:
        (a) how it calculates and estimates dilution; and
        (b) its policy and method for determining the amount of any dilution levy or dilution adjustment.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

    • CIR 8.11 CIR 8.11 Capital

      • CIR 8.11.1

        (1) In the case of a Public Fund, if at any time after the size of the Fund's capital has reached the minimum size provided in its Constitution the size of that capital falls below that minimum size, the Fund Manager must immediately notify the DFSA of that fact.
        (2) The notification under (1) must also:
        (a) state the Fund Manager's grounds for believing that the Fund is still commercially viable and the purpose of the Fund can still be accomplished; and
        (b) be accompanied by the relevant Unitholders' resolution supporting the Fund Manager's views in (1); or
        (c) state what steps the Fund Manager has taken or will take to wind up the Fund.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
        [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

    • CIR 8.12 CIR 8.12 Delegation and Outsourcing

      • CIR 8.12 Guidance

        1. This section sets out the general requirements that apply to a Fund Manager, or where appointed the Trustee, of a Domestic Fund where it delegates or outsources any Financial Service activity or function to another Person. Such a Person is defined as a "Service Provider" for the purposes of this module.
        2. Under Article 24 of the Law and Article 24 of the Investment Trust Law 2006, a Fund Manager or where appointed the Trustee of a Fund respectively may, subject to any restriction in the Constitution of the Domestic Fund and any provisions of the Rules, delegate any of its Financial Service activities or outsource any of its functions to a Service Provider, which may be located in or outside the DIFC.
        3. Fund Managers of Domestic Funds structured as an Investment Company or Investment Partnership are required under CIR Rule 8.2.2(2) to delegate the activity of Providing Custody to an Eligible Custodian. This obligation does not apply where there are adequate alternative arrangements. This chapter sets out the circumstances in which the obligation under CIR Rule 8.2.2(2) does not apply.
        4. A Fund Manager or Trustee 'outsources' a function relating to the operation of the Fund where the function, whether or not relating to a Financial Service activity, is contracted to be performed by a Service Provider. Where the extent of any such function or functions is such that they effectively constitute the carrying on of a Financial Service activity, the DFSA will consider this to comprise a 'delegation' of the Financial Service.
        5. If the Fund Manager or the Trustee delegates any activities or outsources any functions, the Fund Manager or the Trustee remains liable to the Unitholders for any acts or omissions of the Service Provider as if they were the acts or omissions of the Fund Manager or Trustee.
        6. The Rules permitting the use of a Service Provider do not relieve the Fund Manager or the Trustee from their obligations, including any restrictions on delegation or outsourcing arising from the Fund's Constitution or Prospectus.
        7. Rules GEN 5.3.21 and GEN 5.3.22 also govern outsourcing of functions and activities by an Authorised Firm. Those Rules are not disapplied by this section.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • Fund Manager

        • CIR 8.12.1 CIR 8.12.1

          In accordance with the Delegation Agreement, the Fund Manager:

          (a) must register the legal title of the Fund Property with the Eligible Custodian; and
          (b) may give instructions to the Eligible Custodian to deal with the Fund Property.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

          • CIR 8.12.1 Guidance

            See CIR Rule 8.2.4 for the definition of an Eligible Custodian

            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • CIR 8.12.2 CIR 8.12.2

          (1) Subject to the requirements in CIR Rule 8.12.4, a Fund Manager may delegate one or both of the Financial Service activities of Providing Fund Administration and Managing Assets to a Service Provider.
          (2) For the purposes of (1), and in relation to Providing Fund Administration for a Public Fund, the Service Provider must be:
          (a) a Person authorised by the DFSA to carry on the activity of Providing Fund Administration; or
          (b) a Person who is lawfully entitled in a Zone 1 jurisdiction or Recognised Jurisdiction to carry on in that jurisdiction the activities of:
          (i) asset pricing and Fund valuation;
          (ii) issuing and redemption of Units; and
          (iii) record keeping and maintaining the Unitholders register.
          (3) For the purposes of (1), and in relation to Managing Assets, the Service Provider must be:
          (a) a Person authorised by the DFSA to carry on the activity of Managing Assets; or
          (b) a Person who is authorised by a Financial Services Regulator in a Zone 1 jurisdiction or Recognised Jurisdiction to carry on an equivalent activity in that jurisdiction.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

          • CIR 8.12.2 Guidance

            As CIR Rule 8.12.2(2) only applies in relation to a Public Fund, a Fund Manager of an Exempt Fund may make other appropriate arrangements in respect of the provision of Fund Administration.

            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
            [Amended] RM158/2015 (Made 9th December 2015). [VER19/02-16]

      • Trustee

        • CIR 8.12.3

          (1) Subject to CIR Rules 8.12.4, a Trustee may, with the prior written consent of the Fund Manager, delegate one or both of the Financial Service activities of Providing Fund Administration and Providing Custody to a Service Provider.
          (2) For the purposes of (1), and in relation to Providing Fund Administration for a Public Fund, the Service Provider must be:
          (a) a Person authorised by the DFSA to carry on the activity of Providing Fund Administration; or
          (b) a Person who is lawfully entitled in a Zone 1 jurisdiction or Recognised Jurisdiction to carry on in that jurisdiction the activities of:
          (i) asset pricing and Fund valuation;
          (ii) issuing and redemption of Units; and
          (iii) record keeping and maintaining the Unitholders register.
          (3) For the purposes of (1), and in relation to Providing Custody, the Service Provider must be an Eligible Custodian.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • Delegation and Outsourcing Process and Requirements

        • CIR 8.12.4 CIR 8.12.4

          (1) When delegating, a Fund Manager or Trustee must:
          (a) carry out due diligence on a proposed Service Provider to ensure eligibility prior to effecting a delegation of a Financial Services activity; and
          (b) comply with the requirements in GEN chapter 5 of GEN and CIR App1 and ensure that any delegation is made in a written Delegation Agreement as prescribed in CIR App1.
          (2) Delegation to a Service Provider does not relieve the Fund Manager or Trustee from accountability for the proper conduct of a delegated activity.
          (3) The DFSA may, as a condition on a Fund Manager's or Trustee's Licence, require the delegation of one or more specified Financial Service activities to a Service Provider.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

          • CIR 8.12.4 Guidance

            The DFSA may impose a condition under CIR Rule 8.12.4(3) when, for example, it considers that a Fund Manager is unable to conduct the activity under its own Licence.

            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • CIR 8.12.5

          (1) When a Fund Manager or Trustee outsources any function to a Service Provider, it must:
          (a) comply with any relevant requirements in GEN chapter 5 of GEN;
          (b) enter into an Outsourcing Agreement which complies with the requirements in CIR App1; and
          (c) before entering into such agreement, carry out due diligence on the proposed Service Provider to conclude on reasonable grounds that the Person is suitable to perform the relevant functions.
          (2) Outsourcing to a Service Provider does not relieve the Fund Manager or Trustee from accountability for the proper conduct of the outsourced activity.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • Systems and Controls

        • CIR 8.12.6 CIR 8.12.6

          If a Fund Manager or Trustee delegates any activity or outsources any function under this section, it must take reasonable steps to ensure that it implements and maintains systems and controls to monitor the Service Provider.

          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

          • CIR 8.12.6 Guidance

            This Rule supplements the requirements under GEN section 5.3.

            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • Review

        • CIR 8.12.7

          (1) A Fund Manager or the Trustee of a Public Fund, which has delegated any Financial Service activities or outsourced any functions, must conduct a review of the carrying out of the relevant activities or functions by the Service Provider and present the findings of the review to either:
          (a) the Fund's Governing Body every 6 months at the Fund's board meeting; or
          (b) in the case of a Fund structured as an Investment Trust, to the Trustee.
          (2) Notwithstanding the requirement in (1), if a Fund Manager or the Trustee discovers non-compliance in regard to a term of the Delegation Agreement or Outsourcing Agreement, the Fund Manager or the Trustee, as the case may be, must take immediate action to remedy the matter and also notify the DFSA and, as applicable, its Governing Body or the Trustee forthwith.
          (3) For the purposes of (2), the Fund Manager or the Trustee must notify the DFSA only where the non-compliance is material.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

    • CIR 8.13 CIR 8.13 Fees, Charges and Other Levies

      • Permissible Fees, Charges, Levies and Expenses

        • CIR 8.13.1

          (1) A Fund Manager must not make any charge or levy in connection with the issue or sale of Units except in accordance with the Constitution and Prospectus.
          (2) A preliminary or redemption charge must not be made by the Fund Manager unless:
          (a) it is permitted by the Constitution; and
          (b) it is expressed either as a fixed amount or calculated as a percentage of the price of a Unit.
          (3) The preliminary charge must not exceed the amount or rate stated in the current Prospectus in respect of any class of Units.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • CIR 8.13.2

          (1) No payment may be made, or benefit given, to the Fund Manager out of the Fund Property, whether by way of remuneration for its services, reimbursement of expenses or otherwise, unless it is permitted by the Constitution and the Prospectus specifies how it will be calculated, accrued, when it will be paid and the maximum and current rates or amount of such remuneration.
          (2) The Fund Manager must give not less than 90 days written notice of any increase proposed within the parameters of the Constitution and Prospectus.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • CIR 8.13.3

          A Fund Manager must not introduce a new category of remuneration for its services or make any increase in the current rate or amount of its remuneration payable out of the Fund Property unless it has given not less than 90 days written notice of that introduction or increase and of the date of its commencement to the Unitholders and the Unitholders approve such new category by Special Resolution.

          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • Reimbursement of Remuneration and Expenses

        • CIR 8.13.4

          (1) A Fund Manager must take reasonable steps to ensure that no payment is made to a Trustee, an Eligible Custodian or Persons providing oversight function out of the Fund Property, whether by way of reimbursement of expenses or otherwise, except:
          (a) remuneration in respect of services provided and in respect of which the following have been stated in the Prospectus:
          (i) the actual amount or rate of the remuneration together with the current maximum or how these are determined;
          (ii) the periods in respect of which the remuneration is to be paid;
          (iii) how the remuneration is to accrue; and
          (iv) when the remuneration is to be paid; and
          (b) reimbursement of expenses properly incurred by the Trustee, Eligible Custodian or Persons providing oversight functions for performing such functions conferred on the Trustee, Eligible Custodian or other Persons by the Rules.
          (2) Payment under (1)(a) must not be made unless permitted by the Constitution.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • Promotional Payments, Performance Fees and Set Up Costs

        • CIR 8.13.5

          No promotional payment, performance fee or benefit may be made out of or given at the expense of the Fund Property to the Fund Manager unless it is permitted by the Constitution and specified in the Prospectus.

          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • CIR 8.13.6

          Costs of the registration, exemption and incorporation of a Fund and of its initial Offer or issue of Units, including Units in respect of a Sub-Fund, may be amortised over a period not exceeding five years.

          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • Allocation of Payments to Capital or Income

        • CIR 8.13.7

          (1) The Fund Manager and the Trustee or the Persons providing the oversight function may agree that all or any part of any permitted payments, charges and expenses of the Fund may be treated as a capital expense or income expense and allocated to the capital account or income account respectively.
          (2) The Fund Manager must ensure that any agreement in (1) is permitted by the Constitution and specified in the Prospectus in sufficient detail for a Unitholder or a prospective Unitholder to make an informed decision in relation to the allocation of such charges and expenses to be paid from the capital property or the income property as the case may be.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • Payments of Liabilities on Transfer of Assets

        • CIR 8.13.8

          Where the property of a Body Corporate or of another Fund is transferred to a Fund or to the Fund Manager for the account of the Fund or to the Trustee to hold on trust for the Unitholders in consideration of the issue of Units in the Fund to Unitholders in that Body Corporate or in that other Fund, CIR Rule 8.13.9 applies.

          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
          [Amended] RM158/2015 (Made 9th December 2015). [VER19/02-16]

        • CIR 8.13.9

          The Fund Manager or in the case of an Investment Trust, the Trustee, as the successor in title to the property transferred, may pay out of the Fund Property any liability arising after the transfer which, had it arisen before the transfer, could properly have been paid out of the property transferred, but only if:

          (a) there is nothing in the Constitution of the Fund expressly forbidding the payment; and
          (b) the Fund Manager or the Trustee, as the case may be, is of the opinion that proper provision was made for meeting such liabilities as were known or could reasonably have been anticipated at the time of the transfer.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
          [Amended] RM158/2015 (Made 9th December 2015). [VER19/02-16]