Back Custom print Link Text Only Rich Text Print

Entire Section

  • CIR 9 CIR 9 Accounting, Audit and Periodic Reporting of a Fund

    • CIR 9.1 CIR 9.1 Application

      • CIR 9.6.1 CIR 9.6.1

        The Fund Manager of a Domestic Fund must complete and submit a Periodic Fund Return in respect of each Domestic Fund that the Fund Manager manages.

        Derived from DFSA RMI291/2020 (Made 16th December 2020). [VER/30/02-21]

        • CIR 9.6.3 CIR 9.6.3 Guidance

          A Domestic Fund includes an External Fund.

          Derived from DFSA RMI291/2020 (Made 16th December 2020). [VER/30/02-21]

          • CIR 9.1.1 CIR 9.1.1

            (1) This chapter applies to a Fund Manager and a Trustee of a Domestic Fund.
            (2) In this Chapter, references to a "Fund" mean a "Domestic Fund".
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
            [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

            • CIR 9.1.1 Guidance

              The IFR module contains specific requirements relating to reporting that apply to a Fund and its Fund Manager where that Fund is an Islamic Fund.

              Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
              [Amended] DFSA RM107/2012 (Made 23rd December 2012). [VER15/07-12]

        • CIR 9.6.2 CIR 9.6.2

          A Periodic Fund Return referred to in CIR Rule 9.6.1 must be submitted:

          (a) in respect of the period 1 January to 30 June of each year, by 31 July of that year; and
          (b) in respect of the period 1 July to 31 December of each year, by 31 January of the following year.
          Derived from DFSA RMI291/2020 (Made 16th December 2020). [VER/30/02-21]

          • CIR 9.2 CIR 9.2 Preparation of Fund financial statements

            • Financial statements and financial reporting standards

              • CIR 9.2.1

                (1) A Fund Manager of a Fund must prepare financial statements for each financial year of the Fund.
                (2) A Fund Manager must, in respect of a Fund, prepare and maintain all financial statements in accordance with the International Financial Reporting Standards (IFRS) or USGAAP as supplemented by the Statement of Recommended Practice (SORP).
                Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                [Amended] DFSA RM107/2012 (Made 23rd December 2012). [VER15/07-12]
                [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

            • Accounting Records

              • CIR 9.2.2

                A Fund Manager must keep Accounting Records that are sufficient to show and explain transactions and are as such, to:

                (a) be capable of disclosing the financial position of the Fund on an ongoing basis; and
                (b) record the financial position of the Fund as at its financial year end.
                Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                [Amended] DFSA RM126/2013 (Made 14th July 2013). [VER16/07-13]

              • CIR 9.2.3

                Accounting Records must be maintained by a Fund Manager such as to enable the Governing Body and, if appointed, the Trustee or any Persons providing the oversight function of the Fund to ensure that any financial statements prepared by the Fund Manager in relation to the Fund comply with the legislation applicable in the DIFC.

                Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                [Amended] DFSA RM126/2013 (Made 14th July 2013). [VER16/07-13]
                [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

              • CIR 9.2.4

                The Accounting Records must be:

                (a) retained by the Fund Manager or Fund for at least six years from the date to which they relate;
                (b) at all reasonable times, open to inspection by the DFSA or the Registered Auditor of the Fund; and
                (c) capable of reproduction, within a reasonable period not exceeding 3 business days, in hard copy and in English.
                Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                [Amended] DFSA RM126/2013 (Made 14th July 2013). [VER16/07-13]
                [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

          • CIR 9.3 CIR 9.3 Auditors of a Fund

            • CIR 9.6.3 CIR 9.6.3

              The DFSA may direct a Fund Manager to complete and submit a Periodic Fund Return in respect of a different period than the period specified in CIR Rule 9.6.2 (a) or (b), in which case, the Fund Manager must submit the Periodic Fund Return within one month after the end of the period specified by the DFSA.

              Derived from DFSA RMI291/2020 (Made 16th December 2020). [VER/30/02-21]

              • CIR 9.3 Guidance

                1. Article 27(1)(c) of the Law requires every Domestic Fund to have a Registered Auditor appointed to it in accordance with Part 8 of the Regulatory Law and any Rules made for the purposes of that Part.
                2. Part 8 of the Regulatory Law sets out how an Auditor must be appointed to each Domestic Fund and the main duties and functions of the Auditor. This section sets out additional requirements that apply in relation to Registered Auditors of a Fund.
                3. Under Article 97C(1) of the Regulatory Law a Person is prohibited from providing any Audit Service to a Domestic Fund unless that Person is a Registered Auditor.
                Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

              • Appointment and Termination of Auditors

                • CIR 9.3.1 CIR 9.3.1

                  A Fund Manager must:

                  (a) notify the DFSA of the appointment of a Registered Auditor to the Fund by completing and submitting the appropriate form in AFN;
                  (b) prior to the appointment of the Registered Auditor, take reasonable steps to ensure that the Registered Auditor has the required skills, resources and experience to audit the type of Fund for which the Registered Auditor has been appointed; and
                  (c) ensure that the Registered Auditor, at the time of appointment and for the duration of the engagement is registered with the DFSA as a Registered Auditor.
                  Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                  [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

                  • CIR 9.3.1 Guidance [Deleted]

                    [Deleted] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

                • CIR 9.3.2

                  A Fund Manager must notify the DFSA immediately if the appointment of the Registered Auditor is or is about to be terminated, or on the resignation of the Fund's Registered Auditor, by completing and submitting the appropriate form in AFN.

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

                • CIR 9.3.3

                  A Fund Manager must appoint a Registered Auditor to fill any vacancy in the office of Registered Auditor and ensure that the replacement Registered Auditor can take up office at the time the vacancy arises or as soon as reasonably practicable.

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

                • CIR 9.3.4 CIR 9.3.4

                  (1) A Fund Manager must take reasonable steps to ensure that the Registered Auditor and the relevant audit staff of the Registered Auditor are independent of, and not subject to, any conflict of interest with respect to the Fund Manager, the Trustee or the Fund.
                  (2) A Fund Manager or Trustee must notify the DFSA if it becomes aware, or has reason to believe, that the Registered Auditor or the relevant audit staff of the Registered Auditor are no longer independent of the Fund Manager, the Trustee or the Fund, or have a conflict of interest which may affect their judgement in respect of 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 9.3.4 Guidance

                    1. A Fund Manager should consider whether there is any financial or personal relationship between it or any of its relevant Employees and the Registered Auditor or any of the relevant Employees of the Registered Auditor that may affect the judgement of the Registered Auditor when conducting an audit of the Fund or complying with all its legal obligations, including the Regulatory Law, AUD, AML and other relevant modules of the DFSA Rulebook.
                    2. A Fund Manager should consider rotating the appointed relevant staff of the Registered Auditor on a regular basis to ensure that the relevant staff of the Registered Auditor remain independent.
                    Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                    [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

                • CIR 9.3.5 [Deleted]

                  [Deleted] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

              • Co-operation with Auditors

                • CIR 9.3.5

                  A Fund Manager must take reasonable steps to ensure that it and its Employees:
                  (a) provide any information to its Registered Auditor that its Registered Auditor reasonably requires, or is entitled to receive as Registered Auditor;
                  (b) give the Registered Auditor right of access at all reasonable times to relevant records and information within its possession;
                  (c) allow the Registered Auditor to make copies of any records or information referred to in (b);
                  (d) do not interfere with the Registered Auditor's ability to discharge its duties;
                  (e) report to the Registered Auditor any matter which may significantly affect the financial position of the Fund; and
                  (f) provide such other assistance as the Registered Auditor may reasonably request it to provide.
                  Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                  [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

                • CIR 9.3.6

                  A Trustee must take reasonable steps to ensure that it and its Employees act in compliance with Rule 9.3.5(a)–(f).

                  [Added] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

                • CIR 9.3.7

                  A Fund Manager must, in writing, require any Person to whom the Fund Manager has delegated or outsourced any functions to co-operate with the Fund's Registered Auditor in accordance with the provisions specified in CIR Rule 9.3.5.

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

              • Function of the Registered Auditor

                • Guidance [Deleted]

                  [Deleted] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

                • CIR 9.3.8

                  A Fund Manager must, in writing, require its Registered Auditor to:

                  (a) conduct an audit of the Fund's financial statements in accordance with the requirements of the relevant standards published by the International Auditing and Assurance Standards Board (IAASB); and
                  (b) produce a Fund Auditor's Report on the audited financial statements in accordance with AUD App5.
                  Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                  [Amended] DFSA RM107/2012 (Made 23rd December 2012). [VER15/07-12]
                  [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

                • CIR 9.3.9 [Deleted]

                  [Deleted] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

            • CIR 9.4 CIR 9.4 Periodic Reports

              • Annual and Interim Reports

                • CIR 9.4.1

                  (1) In order to provide the Unitholders with relevant and up-to-date information about the performance and management of a Fund, a Fund Manager must, subject to (2), produce one interim report and one annual report in respect of each Fund it operates in accordance with the Rules in this section.
                  (2) The Fund Manager of a Qualified Investor Fund is not required to comply with the requirements in (1) relating to the production of an interim report for that Fund unless there has been a material change relating to the Fund during the relevant period.
                  (3) For the purposes of (2), the relevant period in relation to a Qualified Investor Fund is the 6 month period referred to in Rule 9.4.2(4).
                  Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                  [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

                • CIR 9.4.2

                  (1) A Fund Manager must produce the required annual report and interim report as follows:
                  (a) an annual report within four months after the end of each annual accounting period; and
                  (b) an interim report within two months after the end of each interim accounting period.
                  (2) For the purposes of (1), the first annual accounting period of a Fund begins:
                  (a) in the case of a Public Fund, on the date of registration by the DFSA; or
                  (b) in the case of an Exempt Fund or a Qualified Investor Fund, on the date of notification to the DFSA; and
                  ends 12 months later. Thereafter, annual accounting periods cover the period between each subsequent financial year end.
                  (3) Notwithstanding the requirement in (2), a Fund Manager may, subject to the prior approval of the DFSA, produce the Fund's reports and financial statements in accordance with the Fund Manager's reporting periods.
                  (4) For the purposes of (1), an interim accounting period is the period covering:
                  (a) 6 months after the date of registration of the Fund with the DFSA in the case of a Public Fund, or the date of notification to the DFSA in the case of an Exempt Fund or Qualified Investor Fund; and
                  (b) 6 months after the anniversary of each annual accounting period.
                  (5) If a Fund intends to change its annual or interim accounting period, the Fund Manager must:
                  (a) obtain written confirmation from its Registered Auditor that the change of its annual accounting period would not result in any significant distortion of the financial position of the Fund; and
                  (b) obtain the DFSA's prior consent before implementing the change.
                  (6) For a Fund which is an Umbrella Fund, the Fund Manager must prepare an interim report for each Sub-Fund, but this is not necessary for the Umbrella Fund as a whole.
                  (7) The Fund Manager must prepare the annual and interim reports of the Fund in accordance with CIR Rule 9.2.1.
                  (8) The reports must:
                  (a) be supplied free of charge to Unitholders;
                  (b) be available in English,
                  (c) be sent to the DFSA; and
                  (d) if the Fund is a Public Fund, be available for inspection free of charge during ordinary office hours at a place specified.
                  Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                  [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

                • CIR 9.4.3

                  The Fund Manager must take reasonable steps to ensure that the interim and annual reports for a Fund or the Sub-Funds of an Umbrella Fund are clear, complete and true and contain information for the relevant period and:

                  (a) the name of the Fund or Sub-Fund, its stated investment objectives, the policy of achieving those objectives and a brief assessment of its risk profile;
                  (b) a review of the Fund's or Sub-Fund's investment activities and investment performance during the period;
                  (c) sufficient information to enable Unitholders to form a view on where the portfolio is invested at the end of the period and the extent to which that has changed over the period; and
                  (d) any other significant information which would reasonably enable Unitholders to make an informed judgment on the activities of the Fund or Sub-Fund during the period and the results of those activities at the end of the reporting period.
                  Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

              • Contents of the Interim Report

                • CIR 9.4.4

                  The Fund Manager must produce an interim report which contains:

                  (a) the total expense ratio at the end of the period;
                  (b) particulars of any material issues raised by the Eligible Custodian and, if applicable, the Trustee, the investment committee or any Person providing oversight in relation to the Fund; and
                  (c) matters required to be included in the Fund Manager's report under CIR Rule 9.4.9.
                  Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

              • Contents of the Annual Report

                • CIR 9.4.5

                  An annual report of a Fund, other than a Fund which is an Umbrella Fund, must contain:

                  (a) the full audited financial statements for the annual accounting period;
                  (b) the report produced by the Registered Auditor in accordance with CIR Rule 9.3.8(b);
                  (c) the report of the Fund Manager in accordance with CIR Rule 9.4.9;
                  (d) if the Fund is a Public Fund, the comparative table in accordance with Rule CIR 9.4.10; and
                  (e) if the Fund is a Public Fund, the Oversight report in accordance with CIR Rule 10.3.13.
                  Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                  [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

                • CIR 9.4.6

                  An annual report on a Fund which is an Umbrella Fund must contain:

                  (a) for each Sub-Fund:
                  (i) the full audited financial statements for the annual accounting period;
                  (ii) the report of the Fund Manager in accordance with CIR Rule 9.4.9; and
                  (iii) if the Fund is a Public Fund, the comparative table in accordance with CIR Rule 9.4.10;
                  (b) an aggregation of the financial statements required by (a)(i) for each Sub-Fund;
                  (c) the report produced by the Registered Auditor in accordance with CIR Rules 9.3.8(b); and
                  (d) if the Fund is a Public Fund, the Oversight Report in accordance with CIR Rule 10.3.13.
                  Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                  [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

                • CIR 9.4.7

                  (1) Where a Fund is required to appoint an investment committee pursuant to CIR Rule 13.3.1(1) or CIR 13.4.3, the annual report must also include a report by that committee.
                  (2) Where a Fund is a Hedge Fund, the annual report must also include a report of its Eligible Custodian.
                  Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
                  [Amended] RM158/2015 (Made 9th December 2015). [VER19/02-16]

                • CIR 9.4.8

                  The Fund Manager must ensure that the financial statements give a true and fair view of the net income and the net gains and the losses on the Fund Property of the Fund, or, the Sub-Fund, for the annual accounting period in question and the financial position of the Fund or Sub-Fund as at the end of that period.

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

              • Fund Manager's Report

                • CIR 9.4.9

                  The matters set out in (a) to (h) must be included in any Fund Manager's report:

                  (a) a restatement of the investment objectives of the Fund;
                  (b) a restatement of the policy for achieving those objectives;
                  (c) a review of the investment activities, including in relation to (a) and (b), during the period to which the report relates;
                  (d) particulars of any fundamental change requiring prior approval by Unitholder meeting made since the date of the last report;
                  (e) particulars of any significant change requiring pre-event notification since the date of the last report;
                  (f) any other information which would enable Unitholders to make an informed judgement on the development of the activities of the Fund during this period and the results of those activities as at the end of that period;
                  (g) for a report on an Umbrella Fund, the information required in (a) to (h) must be given for each Sub-Fund if it would vary from that given in respect of the Umbrella Fund as a whole; and
                  (h) for a Fund which invests a substantial proportion of its assets in other Funds, a statement as to the maximum proportion of management fees charged to the Fund itself and to other Funds in which that Fund invests.
                  Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

              • Comparative Table

                • Guidance

                  In presenting past performance information, the DFSA recommends that Fund Managers follow the Global Investment Performance Standards (GIPS) issued by Institute of Chartered Financial Analysts of the USA.

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

                • CIR 9.4.10

                  The comparative table for the annual report for a Public Fund must set out:

                  (a) the performance record over the last five calendar years, or if the Fund has not been in existence during the whole of that period, over the whole period in which it has been in existence, showing:
                  (i) the highest and the lowest price of a Unit of each class in issue during each of those years; and
                  (ii) the net income distributed or, for accumulation Units, allocated for a Unit of each class in issue during each of those years, taking account of any sub-division or consolidation of Units that occurred during that period;
                  (b) as at the end of each of the last three annual accounting periods or all of the Fund's annual accounting periods, if less than three:
                  (i) the total net asset value of the Fund Property at the end of each of those years;
                  (ii) the net asset value per Unit of each class; and
                  (iii) for a report of the directors of an Investment Company, the number of Units of each class in issue; or
                  (iv) for a report of the Fund Manager of any other Fund, the number of Units of each class in existence or treated as in existence; and
                  (c) if, in the period covered by the table:
                  (i) the Fund Manager has been the subject of any event such as a transfer scheme having a material effect on the size of the Fund, but excluding any issue or cancellation of Units for cash; or
                  (ii) there have been changes in the investment objectives of the Fund;
                  an indication, related in the body of the table to the relevant year in the table, of the date of the event or change in the investment objectives and a brief description of its nature.
                  Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

            • CIR 9.5 CIR 9.5 Table Illustrating Content of the Annual Report

              • CIR 9.5 Guidance

                Type of Report CIR Ref Public Funds Exempt Funds QIF
                Annual and interim reports CIR 9.4.2 √ √ Annual Report only. An interim report is required only if there has been a material change during the interim accounting period
                Fund Manager's Report CIR 9.4.9 √ √ √
                Fund Auditor's Report CIR 9.3.8(b) √ √ √
                Oversight Report CIR 10.3.13 √ Not applicable Not applicable
                Comparative Table CIR 9.4.10 √ Not applicable Not applicable
                Eligible Custodian Report CIR 9.4.7(2) Hedge Funds only Hedge Funds only Hedge Funds only
                Investment Committee CIR 13.3.1 & CIR 13.4.3 Private Equity Funds and Property Funds Private Equity Funds and Property Funds Not applicable

                This table illustrates the different content requirements for reports of a Domestic Fund.

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

            • CIR 9.6 Periodic Fund Return