Entire Section
Part 7 Part 7 Marketing of Domestic and Foreign Funds
Guidance
1. Part 7 of the Law sets out the overarching provisions that apply to theOffer (also called marketing) ofUnits of bothDomestic andForeign Funds ; and in the case of the latter, whereUnits of suchFunds are marketed in or from theDIFC .2. Article 50 of the Law contains theMarketing Prohibition . Under this prohibition, noPerson is permitted toOffer aUnit of aFund to prospective or existingUnitholders unless:a. aProspectus that complies with the relevant requirements in the Law and theRules is made available to the person to whom theOffer is made;b. thePerson making theOffer of theUnit is either theFund Manager of theFund or anAuthorised Firm whose licence authorises it to do so; andc. theOffer is made in accordance with the applicable requirements in the Law or theRules .3. Article 19 of the Law defines the activities that constitute anOffer . Under this Article, aPerson is to be regarded as making anOffer of aUnit if he:a. makes an offer to anotherPerson which, if accepted, would give rise to a contract for the issue or sale ofUnits by him or by anotherPerson with whom he has made arrangements for the issue or sale of theUnits ; orb. invites anotherPerson to make an offer which, if accepted by him, would give rise to a contract for the issue or sale ofUnits by him or by anotherPerson with whom he has made arrangements for the issue or sale of theUnits ,whether or not the offer or invitation referred to in Article 19(2)(a) or (b) is made by way of a financial promotion of theUnits ..4. Rules CIR 4.1.3 and CIR 4.1.4 exclude from being treated asOffers anyTransactions undertaken by anAuthorised Firm where suchTransactions areExecution-only Transactions , orTransactions for the purposes of managing aDiscretionary Portfolio for aClient , or for the purposes of redeeming aUnit of aFund for aClient . Similarly, an offer made by anAuthorised Firm to aMarket Counterparty is also excluded from being anOffer . Finally, CIR Rule 4.1.5 excludes an offer of aUnit of aPassported Fund from being treated as anOffer where theDIFC is theHost Jurisdiction . This is because such an offer will be subject to the requirements in theHome Jurisdiction . As a result, such excludedTransactions and offers do not attract the marketing prohibition in Article 19 of the Law and the requirements in both the Law and this module relating to the marketing ofUnits .5. This Part of the module sets out the detailed requirements that apply to theOffer ofUnits ofDomestic andForeign Funds , includingProspectus disclosure, under respective chapters. The Rules in this chapter supplement provisions of COB which also govern the carrying on ofFinancial Service activities by anAuthorised Firm , except where otherwise provided.6. With the exception of Part 2 of the Markets Law 2012, that Law andRules made for the purpose of that Law govern the listing of theUnits of aFund and continuous disclosure obligations that apply to in relation toListed Funds .Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM93/2012 (Made 14th June 2012). [VER14/06-12]
[Amended] RM235/2019 (Made 20th February 2019). [VER24/02-19]CIR 14 CIR 14 Marketing of Domestic Funds and Prospectus Disclosure
CIR 14.1 CIR 14.1 Prospectus Disclosure for Domestic Funds
CIR 14.1 Guidance
1. While aPerson is required by virtue of Article 50(1) of the Law when making anOffer of aUnit of aDomestic Fund to anotherPerson to make available to that otherPerson aProspectus , the obligation to produce aProspectus is imposed under Article 51(a) of the Law on theFund Manager of aDomestic Fund .2. This chapter sets out the detailed requirements that apply to theFund Manager who is obliged to produce aProspectus , and the obligations and liabilities relating toProspectuses , as well as the obligation relating to making available aProspectus which applies to the activity of making anOffer ofUnits .3. Some requirements relating toProspectus disclosure are common to allDomestic Funds . However, in other areas, particularly relating to the content of disclosure required in aProspectus , and the manner of distribution, different requirements apply depending on whether theFund is aPublic Fund ,Exempt Fund orQualified Investor Fund . Further, specialist class ofFunds attract additional disclosure requirements that are unique to their activities. This chapter sets out those requirements and where necessary by reference to the types and classes ofDomestic Funds .4. Article 14(2) of the Law provides that the requirements relating toDomestic Funds do not apply to anExternal Fund (i.e. aFund established in a jurisdiction other than theDIFC by aDFSA licensedFund Manager ), unless otherwise provided in the Law orRules . As a result, the generalProspectus requirements set out in the Law and this module do not apply toExternal Funds , except that:a. any offer document prepared for the purposes of complying with the requirements applicable in the jurisdiction in which theExternal Fund is established is regarded as aProspectus for the purposes of the requirements relating to theOffer ofUnits of such aFund in or from theDIFC (see Article 50(3)(c) of the Law); andb. theDFSA has the power to prescribe any additional disclosure to be included in such a document (see Article 51(2) of the Law).Those requirements are specified in Rules CIR 14.2.4–CIR 14.2.7.5. If aDomestic Fund is aPassported Fund and theDIFC is theHome Jurisdiction of theFund , certain requirements relating to theProspectus for theFund are specified in the Fund Protocol Rules (FPR), rather than in this chapter. These include requirements relating to the form of the disclaimer in theProspectus , the minimum contents of theProspectus and the need for a Key Investor Information Document (KIID) that summarises the key features of theFund and is in both Arabic and English. This chapter cross-refers to requirements in thoseRules where applicable.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]
[Amended] RM235/2019 (Made 20th February 2019). [VER24/02-19]Application
CIR 14.1.1 CIR 14.1.1
(1) This chapter applies, subject to (4), to:(a) aFund Manager of aDomestic Fund ;(b) eachDirector or partner of theFund Manager ;(c) if theFund Manager is aCorporate Director , the individuals who areDirectors of thatCorporate Director ; and(d) if theFund has aGoverning Body , each member of that body.(2) This chapter also applies to anAuthorised Firm , and each of itsDirectors or partners, where such aFirm is not theFund Manager and undertakes the marketing ofUnits of aDomestic Fund .(3) This chapter also applies to other specifiedPersons to the extent so specified.(4) Only this Rule and the following requirements in this chapter apply to, or in relation to, aQualified Investor Fund :(a) CIR Rule 14.2.1;(e) Rules in section 14.6.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]
[Amended] DFSA RMI 323/2022 (Made 27th April 2022). [VER33/06-22]CIR 14.1.1 Guidance
1. AnExternal Fund Manager must also comply with the requirements in this chapter, because it is managing aDomestic Fund (i.e. aFund established or domiciled in theDIFC — See Article 13(2)(a) of the Law).2. A Fund that is an Incorporated Cell of an Incorporated Cell Company (i.e. a Fund on a Fund Platform) will be a Domestic Fund as the Incorporated Cell is established under the DIFC Companies Law and the ICC Regulations.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]
[Amended] DFSA RMI248/2019 (Made 18th December 2019) [VER26/12-19].CIR 14.2 CIR 14.2 General Requirements Relating to Prospectuses
CIR 14.2.1 CIR 14.2.1
(1) TheProspectus must not contain any provision which is unfairly prejudicial to the interests ofUnitholders generally or to theUnitholders of any class ofUnits .(2) For the purposes of the information that must be included in aProspectus pursuant to Article 52 of the Law:(a) such information must be material information; and(b) information is material if it is either:(i) within the knowledge of theDirectors or partners of theFund Manager ; or(ii) which suchDirectors or partners ought reasonably have obtained by making reasonable enquiries.(3) TheProspectus must, except as provided in (4), be in the English language.(4) The Key Investor Information Document (KIID) for aPassported Fund must be in both Arabic and English.(5) The expiry date of aProspectus must be no later than 12 months after the date of theProspectus .(6) A reference to aDirector in thisRule includes theCorporate Director of anInvestment Company , and the individual directors of thatCorporate Director .Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]
[Amended] RM235/2019 (Made 20th February 2019). [VER24/02-19]CIR 14.2.1 Guidance
In conducting inquiries relating to the obligations under (2), a
Fund Manager must give particular regard to the information which would be required and expected by aRetail Client in order to make an informed decision about the merits of investing and the extent and characteristics of risk.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]Supplementary and Replacement Prospectuses
Guidance
1. Article 52(4) of the Law requires aFund manager to issue, if, at any time after the issue of aProspectus there is a material change affecting any matter contained in theProspectus or a significant new matter arises, a Supplementary or aReplacement Prospectus in the manner prescribed in theRules .2. Under Article 50(3) of the Law, any reference in the Law and theRules to aProspectus includes anInformation Memorandum of anExempt Fund and any Supplementary orReplacement Prospectus , unless otherwise provided. Accordingly, all requirements that apply to aProspectus apply equally to each of those documents except where stated otherwise.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]CIR 14.2.2
(1) Where aFund Manager , for the purpose of Article 52(4) of the Law, issues aSupplementary Prospectus , theFund Manager must:(a) clearly identify in theSupplementary Prospectus theProspectus that it supplements, the revisions to thatProspectus , the date of any material change or new matter giving rise to any revision, and the date of the document which must be the date of filing with theDFSA ;(b) if it is aPublic Fund , file a copy with theDFSA ;(c) provide a copy to eachPerson who applied forUnits under the previousProspectus after the earliest date of any material change or new matter giving rise to the revision; and(d) ensure theSupplementary Prospectus is made available in the same media and through the same channels as, and together with, the previousProspectus .(2) Where aFund Manager , for the purpose of Article 52(3) of the Law, issues aReplacement Prospectus , theFund Manager must:(a) clearly state that it is aReplacement Prospectus , and identify theProspectus that it replaces, the date and nature of any material change or new matter giving rise to the replacement, the expiry date, and the date of the document which must be the date of filing with theDFSA ;(b) if it is aPublic Fund , file a copy with theDFSA ; and(c) provide a copy to eachPerson who applied forUnits under the previousProspectus after the earliest date of any material change or new matter giving rise to the replacement.(3) The expiry date of aSupplementary Prospectus orReplacement Prospectus under (1) or (2) must be the same as that of theProspectus it supplements or replaces.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]CIR 14.2.3
When a
Supplementary Prospectus orReplacement Prospectus of aPublic Fund has been filed with theDFSA and made available in accordance with CIR Rule 14.2.4, theFund Manager must:(a) inform anyPerson who applied forUnits on the basis of the previousProspectus after the earliest date of a material change or new matter giving rise to the issue of theSupplementary Prospectus orReplacement Prospectus of their right to confirm or retract any application made on the basis of thatProspectus and to obtain a refund of monies paid, and the manner in which to do so; and(b) allow any suchPerson a period of at least seven days from the date of receipt of theSupplementary Prospectus orReplacement Prospectus in which to so confirm or retract his application.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]Prospectus of an External Fund
CIR 14.2.4
A
Fund Manager or otherAuthorised Firm must notOffer in or from theDIFC aUnit of anExternal Fund to aRetail Client unless theUnits of theExternal Fund can be offered, under the requirements applying to thatFund in the jurisdiction in which theFund is established, to retail investors.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]CIR 14.2.5 CIR 14.2.5
Where a
Fund Manager or otherAuthorised Firm Offers aUnit of anExternal Fund to aPerson , it must make available to thatPerson at the time of theOffer a copy of a currentProspectus relating to theFund which contains the additional requirements in CIR Rule 14.2.6.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]CIR 14.2.5 Guidance
Under Article 50(3)(c) of the Law, a
Prospectus includes, in the case of anExternal Fund theUnits of which are marketed in or from theDIFC , any prospectus or other disclosure document prepared in accordance with the laws applicable to thatFund in the jurisdiction in which theFund is established or domiciled.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]CIR 14.2.6 CIR 14.2.6
(1) TheProspectus of anExternal Fund made available by theFund Manager or otherAuthorised Firm making theOffer of theUnits of thatFund in or from theDIFC must be in the English language.(2) TheProspectus must contain in a prominent position, or have attached to it, a statement that clearly:(a) describes the jurisdiction in which theFund is established and the legislation in that jurisdiction that applies to theFund ;(b) states the name of the relevantFinancial Services Regulator in that jurisdiction;(c) describes the regulatory status accorded to theFund by thatRegulator ;(d) includes the following warning:"This Prospectus relates to a Fund which is not subject to any form of regulation or approval by the Dubai Financial Services Authority ("DFSA").The DFSA has no responsibility for reviewing or verifying any Prospectus or other documents in connection with this Fund. Accordingly, the DFSA has not approved this Prospectus or any other associated documents nor taken any steps to verify the information set out in this Prospectus, and has no responsibility for it.The Units to which this Prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers should conduct their own due diligence on the Units.If you do not understand the contents of this document you should consult an authorised financial adviser.";and(e) if theOffer is not directed toRetail Clients , includes a prominent statement to that effect to be incorporated within the warning in (d).(3) If Units of an External Fund are Security Tokens, the Prospectus must contain information equivalent to that specified in MKT App 7 in respect of those Units.(4) If 10% or more of the gross asset value of the Fund Property of an External Fund consists, or will consist, of Investment Tokens, the Prospectus must include information equivalent to that specified at MKT App 7 in respect of the Investment Tokens.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Added] DFSA RMI314/2021 (Made 30th June 2021). [VER32/10-21]CIR 14.2.6 Guidance
Where a material part of the Fund Property of an External Fund consists of Tokens other than Investment Tokens, the DFSA considers that the Prospectus of that Fund should contain information relating to those Tokens that is equivalent to the information specified in MKT App 7. Such information is likely to be relevant under Article 52(2) of the Law, which requires disclosure of all the information a person and his professional advisers would reasonably require and expect to find in the Prospectus to make an informed decision to become a Unitholder of the Fund.
Derived from DFSA RMI314/2021 (Made 30th June 2021). [VER32/10-21]CIR 14.2.7 CIR 14.2.7
A
Fund manager or otherAuthorised Firm which makes anOffer of aUnit of anExternal Fund in or from theDIFC must maintain at its place of business or other designated location in theDIFC copies of the relevantProspectus for inspection byClients and by theDFSA during normal business hours.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]CIR 14.2.7 Guidance
In relation to CIR Rule 14.2.7, copies of the
Prospectus may be stored electronically so long asClients and theDFSA have and immediate access.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]CIR 14.3 CIR 14.3 Prospectus Content
Public Fund Prospectus
CIR 14.3.1 CIR 14.3.1
(1) Without limiting the generality of theProspectus disclosure required under Article 52 of the Law, theFund Manager must, in the case of aPublic Fund , include in theFund's Prospectus :(b) if thePublic Fund is aPassported Fund , the information in CIR App 1 ofFPR , including a Key Investor Information Document (KIID);(c) if it is a specialist class of aPublic Fund , any information as is relevant to that specialist class ofFund as set out in CIR section 14.4;(d) aSummary Document containing:(i) information to clearly identify theFund and its classification;(ii) a short description of theFund 's investment objectives and investment policy for achieving those objectives;(iii) past-performance presentation or, where relevant, performance scenarios;(iv) costs and associated charges; and(v) risk/reward profile of the investment, including appropriate guidance and warnings in relation to the risks associated with investments in the relevantFund ;(e) the mandatory statement required under CIR Rule 14.3.3;(f) if Units of the Fund are Security Tokens, information equivalent to that specified in MKT App 7 in respect of those Units;(g) if 10% or more of the gross asset value of the Fund Property consists of Investment Tokens, information equivalent to that specified in MKT App 7 in respect of the Investment Tokens; and(h) if it is an Open-ended Fund, the information relating to the powers available to theFund Manager to address liquidity risks that may arise in theFund , and procedures, including triggers, for the exercise of such powers, required under CIR Rule 8.6A.1(2)(d).(2) A Prospectus may consist of a single document, or a multi-part Prospectus containing:(a) a Summary;(b) information relating to the Fund Manager and Trustee; and(c) information relating to the Fund.(3) If a Prospectus is a multi-part Prospectus, the Fund Manager must ensure that the Prospectus as a whole is up-to-date.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] RM235/2019 (Made 20th February 2019). [VER24/02-19]
[Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]
[Amended] DFSA RMI248/2019 (Made 18th December 2019) [VER26/12-19].
[Amended] DFSA RMI314/2021 (Made 30th June 2021). [VER32/10-21]CIR 14.3.1 Guidance
Where a material part of the Fund Property of a Public Fund consists of Tokens other than Investment Tokens, the DFSA considers that the Prospectus of that Fund should contain information relating to those Tokens that is equivalent to the information specified in MKT App 7. Such information is likely to be relevant under Article 52(2) of the Law, which requires disclosure of all the information a person and his professional advisers would reasonably require and expect to find in the Prospectus to make an informed decision to become a Unitholder of the Fund.
Derived from DFSA RMI314/2021 (Made 30th June 2021). [VER32/10-21][Deleted]
CIR 14.3.2 [Deleted]
[Deleted] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]CIR 14.3.2 CIR 14.3.2 Information Memorandum of an Exempt Fund or a Qualified Investor Fund
CIR 14.3.2 Guidance
1. Under Article 50(3)(a) of the Law, anInformation Memorandum of anExempt Fund or aQualified Investor Fund is aProspectus for the purposes of the Law and theRules unless otherwise provided. In limited circumstances, theRules prescribe additional disclosure to be included in aProspectus of anExempt Fund (for example CIR Rule 13.6.3 where anExempt Fund appoints a prime broker with certain additional powers).2. There is no detailed prescribed disclosure content for theInformation Memorandum of anExempt Fund or aQualified Investor Fund . However, as anInformation Memorandum is aProspectus , it is subject to the disclosure obligation in Article 52(2) of the Law. As a result, aFund Manager of such aFund must include all the information whichProfessional Clients to whom it intends toOffer Units of theFund would reasonably require and expect to find in such aProspectus . This is to enable suchClients to make an informed decision relating to investing in theFund .3. In the case of an Information Memorandum for an Exempt Fund or Qualified Investor Fund with Units that are Security Tokens, or where a material part of the Fund Property consists of Investment Tokens, the DFSA considers that Professional Clients would reasonably require and expect to find in such a Prospectus the information specified in MKT App 7. Where a material part of the Fund Property consists of Tokens other than Investment Tokens, the DFSA considers that Professional Clients would reasonably require and expect to find in such a Prospectus the equivalent of any information specified in MKT App 7 that is relevant to those Tokens.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]
[Added] DFSA RMI314/2021 (Made 30th June 2021). [VER32/10-21]Mandatory Statement
CIR 14.3.3
(1) AFund Manager of aPublic Fund must, except as provided in (1A) and (2), include in theFund's Prospectus , the following statement displayed prominently on its front page:"This Prospectus relates to a DIFC Fund in accordance with the Collective Investment Law 2010 and Rules of the Dubai Financial Services Authority ("DFSA").
The DFSA has no responsibility for reviewing or verifying any Prospectus or other documents in connection with this Domestic Fund. Accordingly, the DFSA has not approved this Prospectus or any other associated documents nor taken any steps to verify the information set out in this Prospectus, and has no responsibility for it.
The Units to which this Prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the Units offered should conduct their own due diligence on the Units.
If you do not understand the contents of this document you should consult an authorised financial adviser."
(1A) For aPublic Fund that is aPassported Fund , instead of the statement referred to in (1), the Fund Manager must include the statement specified in FPR Rule 3.2.3(e).(2) In the case of aPublic Fund which is aListed Fund , theFund Manager must include, instead of the statement referred to in (1), the statement required:(b) under IFR Rule 6.5.1(h), if it is anIslamic Fund .(3) If aFund is anExempt Fund , theFund Manager must include, in addition to the statement referred to in (1), the following statement:"This Information Memorandum is intended for only Professional Clients who can make a minimum subscription of US$50,000 and must not, therefore, be delivered to, or relied on by, a Retail Client or a Professional Client not able to make that minimum subscription."
(4) If anExempt Fund is aPassported Fund , theFund Manager must include, instead of the statement in (1), the statement specified in FPR Rule 3.1.3(d) and the statement referred to in (3).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] RM235/2019 (Made 20th February 2019). [VER24/02-19][Deleted]
CIR 14.3.5 [Deleted]
[Deleted] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]CIR 14.4 CIR 14.4 Additional Prospectus Disclosure for Specialist Funds
Prospectus of a Feeder Fund
CIR 14.4.1
A
Fund Manager of aFeeder Fund must ensure that theFund's Prospectus discloses:(a) a prominent risk warning to prospectiveUnitholders to the fact that they will be subject to higher fees arising from the layered investment structure;(b) the fees arising at the level of:(i) theFeeder Fund itself;(ii) if applicable, theMaster Fund of theFeeder Fund ; and(iii) if applicable, any underlyingFunds into which theMaster Fund invests, to the extent known.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]Prospectus of a Property Fund
CIR 14.4.2
A
Fund Manager of aProperty Fund must ensure that the following information is disclosed in theFund's Prospectus :(a) the nature of the commitment which prospectiveUnitholders will enter into;(b) the risks involved in this type ofFund ;(c) the prominent risk warning which makes reference to circumstances in property markets which can cause difficulties in meeting redemptions;(e) in a prominent position in theProspectus , the redemption procedures;(f) the dividend or income distribution policy;(g) the insurance arrangement for theFund ;(h) a statement with respect to any material policy regarding real property activities;(i) details of transactions or agreements entered into withRelated Parties ;(j) full particulars of the nature and extent of the interest, if any, ofRelated Parties , in the property owned or proposed to be acquired by theFund ;(k) details of significant holders and the number of units held and deemed to be held by each of them;(l) details of principal taxes levied on theFund's income and capital, including tax, if any, deducted on distribution toUnitholders ;(m) a statement to explain the standards according to which the property valuations are conducted; and(n) if applicable, theFund is aREIT and whether the investment vehicle is anInvestment Company or anInvestment Trust .Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] RM158/2015 (Made 9th December 2015). [VER19/02-16]CIR 14.4.3
A
Fund Manager of aPublic Property Fund must also disclose in theFund's Prospectus , in addition to the standard disclosure requirements, in respect of investment limits, the following information:(a) what percentage of theProperty Fund's net assets may consist of property related assets which are not traded in or dealt on markets provided for in theConstitution ;(b) unless theConstitution and theProspectus state that theFund invests in a single property, the maximum percentage of theFund's net assets which may be invested in any single property or, if applicable, the conditions under which theFund may derogate from this restriction;(c) the maximum percentage of theProperty Fund's net assets which may be invested in properties which are vacant, in the process of development or requiring development; and(d) the maximum percentage of theProperty Fund's net assets which may be invested in properties which are subject to a mortgage.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]CIR 14.4.4 CIR 14.4.4
Without limiting any other disclosure obligations of the
Fund Manager under theseRules , aFund Manager of aProperty Fund which is aPublic Fund that invests in a single property must prominently disclose in theProspectus of theFund :(a) that theFund invests in a single property;(b) details relating to the single property such as whether the property comprises individual properties or buildings, whether there are different types of uses of or businesses conducted in the property, and proportions of anticipated income to be derived from the types of uses or occupants of the property; and(c) any risks associated with the investment in the single property, including risks arising from or affecting income to be derived from the uses or occupants of the property.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]CIR 14.4.4 Guidance
A
Fund may be considered to invest in a single property if theFund Property (apart from cash or other assets held for management purposes) comprises a single building (or a single building with ancillary or adjacent buildings) managed by or on behalf of theOperator of theFund as a single enterprise.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]CIR 14.4.4A
Without limiting any other disclosure obligations of the
Fund Manager under these Rules, if theFund Manager of aPublic Property Fund itself acts as custodian ofReal Property in accordance with CIR Rule 13.4.2, it must prominently disclose in theFund's Prospectus :(a) that it acts as custodian of theReal Property ;(b) the risks that may arise as a result of it acting as custodian rather than delegating the function to anEligible Custodian ; and(c) the measures and safeguards it has in place to ensure the proper segregation and protection of theReal Property .[Added] RM158/2015 (Made 9th December 2015). [VER19/02-16]CIR 14.4.4B
Without limiting any other disclosure obligations of the
Fund Manager under these Rules, if theFund Manager of a Public Property Fund has approval to enter intoRelated Party Transactions in accordance with CIR Rule 13.4.11A, it must disclose that fact in theFund's Prospectus .[Added] RM158/2015 (Made 9th December 2015). [VER19/02-16]Prospectus for a Private Equity Fund
CIR 14.4.5
If a
Fund is aPrivate Equity Fund , theFund Manager must provide the following in theFund's Prospectus :(a) a description of the arrangements in place for the safekeeping of monies raised fromUnitholders but not yet invested in the proposed undertaking or venture; and(b) a description of the exit arrangements forUnitholders .Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]Prospectus for a Hedge Fund
CIR 14.4.6
A
Fund Manager of aHedge Fund must prominently disclose to prospectiveUnitholders in theProspectus and any other financial promotions relating to theFund , the following Mandatory Hedge Fund Disclosure Statement:"When considering investment in a Hedge Fund you should consider the fact that some Hedge Fund products use leverage and other speculative investment practices that may increase the risk of investment loss, can be illiquid, may involve complex tax structures, often charge high fees, and in many cases the underlying investments are not transparent and are known only to the Hedge Fund Investment Manager.
Returns from Hedge Funds can be volatile and you may lose all or part of your investment. With respect to single manager products the manager has total trading authority and this could mean a lack of diversification and higher risk. The Hedge Fund may be subject to substantial expenses that are generally offset by trading profits and other income. A portion of those fees is paid to the Hedge Fund Manager."
Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]Risk warning for a Money Market Fund
CIR 14.4.7
A
Fund Manager of aMoney Market Fund that is aPublic Fund must ensure that theFund's Prospectus includes a prominent warning:(a) drawing to the attention of investors the different nature of aUnit in aMoney Market Fund compared to aDeposit ;(b) that the capital of an investment in aMoney Market Fund is not guaranteed; and(c) that the value ofUnits in theMoney Market Fund may fluctuate.[Added] RM158/2015 (Made 9th December 2015). [VER19/02-16]Disclosure about an Exchange Traded Fund (ETF) and associated risks
CIR 14.4.8 CIR 14.4.8
A
Fund Manager of anExchange Traded Fund (ETF) must include in itsProspectus details relating to:(a) the type ofETF and its characteristics;(b) the risks associated with the type ofETF ;(c) the investment methodology and strategies theETF proposes to adopt to track the referenced index or benchmark;(d) a clear description of the relevant indices or other benchmark the ETF is designed to track, timely information about the underlying components (including their liquidity) of the relevant index or the benchmark and, if thePrice Information Provider is aRelated Party , that fact;(e) clear signposts to guide investors to relevant websites or sources of information provided byPrice Information Providers , as specified in CIR A9.1.2(2)(b)(i);(f) information about whether iNAV is made available by the relevant exchange, and if so, how this information can be accessed by investors;(g) information on how the referenced index or benchmark will be tracked and the risks for investors in terms of exposure they have to the underlying index and any counterparty risk;(h) a description of the key elements which may affect the ETF's ability to track fully the relevant index or benchmark, including, but not limited to, transaction costs, illiquid segments, and dividend re-investment;(i) in the case of a synthetic ETF usingDerivatives to replicate the performance of an index or other benchmark:(i) whether theETF uses a funded or unfunded model to replicate the performance of the specified index or benchmark;(ii) if not al disclosed, information relating to the counterparties to the Derivatives transactions, and where collateral is used, details relating to such collateral; and(iii) a description of the risks associated with counterparty default and use of any collateral, the impact of those risks on the ETF's performance and investor returns, and how such risks are to be mitigated;(j) to the extent an ETF is required to have a diversified portfolio, how the ETF proposes to achieve diversification of investments through its investment strategy;(k) if available, information about the past performance of the ETF, measured through its realised tracking difference and annual tracking error information, on the anticipated level of tracking error during normal market conditions, and how this will be effectively minimised; and(l) information about the ETF's Authorised Participant and if it is also a market maker in the ETFUnits in the relevant exchange, that fact.Derived from DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]CIR 14.4.8 Guidance
See also the
Guidance under CIR Rule 13.9.6 for types of ETFs, including synthetic ETFs, funded and unfunded, and the definitions of iNAV inGLO .Derived from DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]Disclosure relating to ETF's cost structure
CIR 14.4.9
A
Fund Manager of anExchange Traded Fund (ETF) must include in itsProspectus sufficient information to enable investors to clearly understand:(a) the ETF's cost structure, covering:(i) any performance fees of theFund Manager , if applicable;(ii) its operational costs; and(iii) if applicable, costs of underlyingtransactions (such as swaps, brokerage commissions and additional costs associated with leverage or use of collateral, and the rebalancing of the portfolio costs); and(b) any revenue derived by theFund Manager through the use of the ETF's portfolio assets, and how that revenue is distributed between theETF and theFund Manager .[Added] DFSA RM218/2018 (Made 22nd February 2018). [VER23/12-18]Prospectus for a Fund on a Fund Platform
CIR 14.4.10
A Fund Manager of a Fund that is an Incorporated Cell of an Incorporated Cell Company (ICC) must ensure that the Fund Prospectus includes information that:
(a) the Fund is an Incorporated Cell of an ICC;(b) the Fund, being an Incorporated Cell:(i) is a separate legal entity to the ICC and to any other Incorporated Cells of the ICC; and(ii) does not have a subsidiary or holding company relationship to the ICC;(c) the ICC, which is the Fund Platform, contains the infrastructure needed by the Fund Manager for managing the Fund; and(d) the Fund Manager is:(i) responsible for the sound and prudent operation of the Fund Platform; and(ii) liable for any acts or omissions of the Fund Platform in respect of the Fund.Prospectus of a Venture Capital Fund
CIR 14.4.11 CIR 14.4.11
A Fund Manager of a Venture Capital Fund must ensure that the Fund’s Prospectus includes a prominent risk warning disclosing that the small to medium size businesses in which the Fund invests are highly illiquid investments, are likely to need to be held for a considerable period by the Fund, and also are likely to have a high rate of failure as they are usually new businesses.Derived from DFSA RMI279/2020 (Made 28th October 2020). [VER29/11-20]CIR 14.4.11 Guidance
1. An Information Memorandum issued by a Fund Manager of a Venture Capital Fund is a Prospectus (see Article 50(3)(a) of the Law).2. The obligation under Article 52(2) of the Law for a Prospectus to include “all the information which an investor would reasonably require and expect to find in a prospectus to make an informed decision to become a member of the Fund” will, among other things, require disclosure of any inherent risks in the proposed investment strategy and the types of investments proposed. If the proposed investment strategy or the types of investment instruments of the Fund are complex, we expect the Prospectus to potential investors for the need to seek professional advice.Derived from DFSA RMI279/2020 (Made 28th October 2020). [VER29/11-20]CIR 14.4.12 CIR 14.4.12
(1) A Fund Manager of a Venture Capital Fund must ensure that the Fund’s Prospectus sets out clearly any legal requirements that ordinarily apply to Fund Managers and their Funds, but which are, by DFSA Rules, disapplied to the Fund Manager in relation to the Venture Capital Fund.(2) A Fund Manager is not required under (1) to disclose that a requirement is disapplied if it voluntarily complies in full with the disapplied provision.Derived from DFSA RMI279/2020 (Made 28th October 2020). [VER29/11-20]CIR 14.4.12 Guidance
Examples of legal requirements that do not apply in relation to a Venture Capital Fund and therefore should be clearly set out in the Prospectus under CIR Rule 14.4.12 include not having to appoint an Eligible Custodian, not having an internal audit function and not having a Finance Officer.Derived from DFSA RMI279/2020 (Made 28th October 2020). [VER29/11-20]Prospectus of a Credit Fund
CIR 14.4.13
A
Fund Manager of aCredit Fund must ensure that the Fund’s Prospectus includes:(a) a prominent risk warning disclosing the information set out in CIR Rule 13.12.13;(b) information about the specific lending strategy of theFund ;(c) information about the extent to which the Fund intends to be concentrated with respect to individual entities, geographic locations and sectors and risks arising from any proposed concentrations;(d) its risk diversification strategy as required under CIR Rule 13.12.9; and(e) whether borrowing by theFund is permitted and, if so, the limitations on borrowing including those set out in CIR Rule 13.12.11.Derived from DFSA RMI 323/2022 (Made 27th April 2022). [VER33/06-22]CIR 14.5 CIR 14.5 Obligation Relating to Making a Prospectus Available
CIR 14.5.1 CIR 14.5.1
(1) AFund Manager of aDomestic Fund must make theFund's most recentProspectus available free of charge to anyUnitholder and to anyPerson who is eligible to invest in theFund when making anOffer to issue or sell aUnit of theFund to such aPerson , and, in any case, must not enter into aTransaction relating to the issue or sale of aUnit of theFund with aPerson unless thatTransaction results from anExcluded Offer as defined in CIR section 4.1 of this module.(2) AFund Manager of aDomestic Fund which is anExempt Fund or aQualified Investor Fund must not, and must not cause any otherPerson to, make anOffer ofUnits of such aFund in a manner that would result in a breach of the requirements in Article 16(4) or (5) of the Law as is applicable to thatFund .Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]CIR 14.5.1 Guidance
1. CIR Section 4.1 of this module contains the definitions ofExcluded Offers , such asExecution-only Transactions andTransactions with marketCounterparties .2. AFund Manager should note the requirements in Article 50(1) of the Law. Accordingly, aProspectus drawn up pursuant to CIR Rule 14.1.3 should be made available to prospectiveUnitholders for as long as theOffer is open and once theOffer is closed, theFund Manager's obligation to make theProspectus available would cease.3. Articles 16(4) and (5) of the Law set out the conditions that must be satisfied forExempt Funds andQualified Investor Funds . In particular, these articles require thatUnits in anExempt Fund or aQualified Investor Fund may only beOffered for issue or sale by means of aPrivate Placement withProfessional Clients .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 14.5.2
(1) Where anAuthorised Firm Offers aUnit of aDomestic Fund to aPerson it must make available to thatPerson a copy of the most recentProspectus at the time of theOffer or before effecting theTransaction in relation to theUnits , unless thatTransaction results from anExcluded Offer as defined in CIR section 4.1 of this module.(2) AnAuthorised Firm must not make anOffer ofUnits of anExempt Fund or aQualified Investor Fund in a manner that would result in a breach of the requirements in Articles 16(4) or (5) of the Law as is applicable to thatFund .Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]CIR 14.5.3 CIR 14.5.3
A
Fund Manager and anAuthorised Firm making anOffer of aUnit of aFund meet the requirement in CIR Rule 14.5.1(1) or CIR Rule 14.5.2(1) as is relevant by:(a) maintaining at its place of business in theDIFC copies of the relevantProspectus for inspection byClients and by theDFSA during normal business hours; or(b) being able to advise readily of a location in theDIFC where copies of theProspectus are available.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]CIR 14.5.3 Guidance
Copies of the
Prospectus may be stored electronically so long asClients and theDFSA have and immediate access.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]CIR 14.6 CIR 14.6 Responsibility for Prospectus
Prescribed Persons
CIR 14.6.1
(1) For the purposes of Article 58(1) of the Law, the followingPersons are prescribed as being responsible for aProspectus :(a) theFund Manager ;(b) where theFund is aBody Corporate which does not have a soleCorporate Director acting as itsFund Manager , eachPerson who is aDirector of thatBody Corporate at the time when theProspectus is filed;(c) where theFund is anInvestment Undertaking , eachPerson who is authorised to be named, and is named, in theProspectus as aDirector ,General Partner or member of theGoverning Body or as having agreed to become such aPerson of thatFund either immediately or at a future time;(d) eachPerson who accepts, and is stated in theProspectus as accepting, responsibility for, or for any part of, theProspectus ;(e) eachPerson who is deemed to accept responsibility for any part of aProspectus under theseRules ; and(f) eachPerson not falling within any of the foregoing paragraphs who has authorised the contents of, or of any part of, theProspectus .(2) APerson who has accepted responsibility for, or authorised, only part of the contents of anyProspectus , is responsible only for that part and only if it is included in, or substantially in, the form and context to which he has agreed.(3) Nothing in (1) makes aPerson responsible for any part of aProspectus by reason only of giving advice as to its contents in a professional capacity to aPerson specified in (1)(a) to (f).Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM218/2018 (Made 22nd February 2018). [VER23/12-18]Exceptions from Liability
CIR 14.6.2
The circumstances set out in the Rules in this section are prescribed for the purposes of Article 58(2) of the Law.
Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]CIR 14.6.3
(1) APerson , with the exception of theFund Manager , will not incur any liability under Article 58(1) of the Law for any loss in respect ofUnits caused by any such statement or omission if, at the time when theProspectus was filed for registration or the notification to theDFSA , pursuant to Articles 28 or 34 as is relevant, was made or given he believed on reasonable grounds, having made any enquiries as were reasonable, that the statement was true and not misleading or that the matter whose omission caused the loss was properly omitted and:(a) he continued in that belief until the time when theUnits were acquired;(b) they were acquired before it was reasonably practicable to bring a correction to the attention ofPersons likely to acquire theUnits in question;(c) before theUnits were acquired he had taken all such steps as it was reasonable for him to have taken to ensure that a correction was promptly brought to the attention ofPersons likely to acquire theUnits in question; or(d) theUnits were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused.(2) APerson will not incur any liability under Article 58(1) of the Law for any loss in respect ofUnits caused by a statement purporting to be made by or on the authority of anotherPerson as an expert which is, and is stated to be, included in theProspectus with that otherPerson's consent at the time when theProspectus was filed for registration or the notification to theDFSA pursuant to Article 56 was given, if he believed on reasonable grounds that the otherPerson was competent to make or authorise the statement and had consented to its inclusion in the form and context in which it was included and:(a) he continued in that belief until the time when theUnits were acquired;(b) they were acquired before it was reasonably practicable to bring the fact that the expert was not competent or had not consented to the attention ofPersons likely to acquire theUnits in question;(c) before theUnits were acquired he had taken all such steps as it was reasonable for him to have taken to secure that that fact was promptly brought to the attention ofPersons likely to acquire theUnits in question; or(d) theUnits were acquired after such a lapse of time that, in the circumstances, he ought reasonably to be excused.(3) Without prejudice to (1) and (2), aPerson will not incur any liability under Article 58(1) of the Law for any loss in respect of anyUnits caused by any such statement or omission as is there mentioned if:(a) before theUnits were acquired a correction or, where the statement was such as is mentioned in (2), the fact that the expert was not competent or had not consented had been published in a manner calculated to bring it to the attention ofPersons likely to acquire theUnits in question; or(b) he took all such steps as it was reasonable for him to take to secure such publication and believed on reasonable grounds that such publication had taken place before theUnits were acquired.(4) APerson will not incur any liability under Article 58(1) of the Law for any loss resulting from a statement made by an officialPerson or contained in a public official document which is included in theProspectus if the statement is accurately and fairly reproduced.(5) APerson will not incur any liability under Article 58(1) of the Law if thePerson suffering the loss acquired theUnits in question with knowledge:(a) that the statement was false or misleading;(b) of the omitted matter or of the change; or(c) of the new matter or inaccuracy.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]Experts
CIR 14.6.4
For the purposes of Article 58 of the Law, an expert is prescribed as a
Person accepting responsibility for any statement or report reproduced (in whole or in part) in aProspectus with thatPerson's written consent.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]CIR 14.6.5
A
Fund Manager must:(a) keep a record of any consent received under CIR Rule 14.5.4; and(b) include a statement in theProspectus that the expert has consented to the reproduction of his statement or report.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]CIR 15 CIR 15 Marketing of Foreign Funds
CIR 15.1 CIR 15.1 Access to Foreign Funds and Availability of Prospectus
CIR 15.1 Guidance
1. Rules CIR 4.1.3 and CIR 4.1.4 exclude from being treated asOffers anyTransactions undertaken by anAuthorised Firm where suchTransactions areExecution-only Transactions , orTransactions for the purposes of managing aDiscretionary Portfolio for aClient , or for the purposes of redeeming aUnit of aFund for aClient . Similarly, an offer made by anAuthorised Firm to aMarket Counterparty is also excluded from being anOffer . Finally, CIR Rule 4.1.5 excludes an offer of aUnit of aPassported Fund under theFund Protocol , where theDIFC is theHost Jurisdiction , from being treated as anOffer . This is because such an offer will be subject to the requirements of theHome Jurisdiction . As a result, such excludedTransactions and offers do not attract the marketing prohibition in Article 50 of the Law and the requirements in both the Law and this module relating to the marketing ofUnits .2. Article 54(1) of the Law prohibits theOffer ofUnits of aForeign Fund unless one of three specified criteria in that Article are met, i.e.a. theForeign Fund meets either:i. the criteria for aDesignated Fund in aRecognised Jurisdiction ; orii. other criteria prescribed in theRules ;b. theAuthorised Firm has a reasonable basis for recommending theUnit of theForeign Fund as suitable for the particularClient to whom theOffer is made; orc. theForeign Fund is a type ofFund that:i. has itsUnits offered to persons only by way of a private placement;ii. has itsUnits offered to persons who meet the criteria to be classified asProfessional Clients ; andiii. requires an initial subscription of at least US$50,000 to be paid by a person to become aUnitholder in theFund .3. Under Article 54(2) of the Law, theDFSA has the power to prescribe any additional criteria, requirements or conditions that apply to theOffer ofUnits of aForeign Fund , including disclosure that must be included in aProspectus and the legal form and structure of theFund such as being Open-ended or Closed ended or listed or not. This section contains additional criteria and requirements prescribed pursuant to Article 54(2) of the Law.4. TheDFSA has specified thatPassported Funds under theFund Protocol for which theDFSA is theHost Regulator , areDesignated Funds for the purposes of Article 54(1)(a)(i) of theLaw . The effect of that designation is that anAuthorised Firm mayOffer aUnit of such aForeign Fund . CIR Rule 15.1.1 specifies which requirements in this chapter apply to anAuthorised Firm marketing such aPassported Fund .Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM218/2018 (Made 22nd February 2018). [VER23/12-18]
[Amended] RM235/2019 (Made 20th February 2019). [VER24/02-19]Application
Clients to Whom Offers of Units of Foreign Funds can be Made
CIR 15.1.1A
An
Authorised Firm must not, in or from theDIFC ,Offer aUnit of aForeign Fund to aRetail Client unless theUnits of theForeign Fund can be offered, under the home jurisdiction regulation applying to thatFund , to retail investors.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] RM235/2019 (Made 20th February 2019). [VER24/02-19]Prospectus Disclosure Relating to Foreign Funds
CIR 15.1.2 CIR 15.1.2
Where an
Authorised Firm Offers aUnit of aForeign Fund to aPerson , it must make available to thatPerson a copy of a currentProspectus relating to theFund which complies with:(b) for aPassported Fund , the relevant requirements of theHome Jurisdiction , including its relevantFund Protocol rules or regulations.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] RM235/2019 (Made 20th February 2019). [VER24/02-19]CIR 15.1.2 Guidance
Under Article 50(3)(c) of the Law, a
Prospectus includes, in the case of aForeign Fund theUnits of which are marketed in or from theDIFC , any prospectus or other disclosure document prepared in accordance with the laws applicable to thatForeign Fund .Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]CIR 15.1.3 CIR 15.1.3
(1) TheProspectus of aForeign Fund made available by anAuthorised Firm must be in the English language.(2) TheProspectus must contain in a prominent position, or have attached to it, a statement that clearly:(a) describes the foreign jurisdiction and the legislation in that jurisdiction that applies to theFund ;(b) states the name of the relevantFinancial Services Regulator in that jurisdiction;(c) describes the regulatory status accorded to theFund by thatRegulator ;(d) includes the following warning:"This Prospectus relates to a Fund which is not subject to any form of regulation or approval by the Dubai Financial Services Authority ("DFSA").The DFSA has no responsibility for reviewing or verifying any Prospectus or other documents in connection with this Fund. Accordingly, the DFSA has not approved this Prospectus or any other associated documents nor taken any steps to verify the information set out in this Prospectus, and has no responsibility for it.The Units to which this Prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers should conduct their own due diligence on the Units.If you do not understand the contents of this document you should consult an authorised financial adviser.";(e) if theOffer is not directed toRetail Clients , includes a prominent statement to that effect to be incorporated within the warning in (d);(f) in the case of anOffer of aUnit in aMoney Market Fund , contains the risk warning referred to in CIR Rule 14.4.7; and(g) in the case of an Offer of a Unit in a Venture Capital Fund, contains the risk warning referred to in CIR Rule 14.4.11 and the additional disclosure required under CIR Rule 14.4.12.(3) If Units of the Fund are Security Tokens, the Prospectus must contain, or have attached to it, information equivalent to that specified in MKT App 7 in respect of those Units.(4) If 10% or more of the gross asset value of the Fund Property consists of Investment Tokens, the Prospectus must contain, or have attached to it, information equivalent to that specified in MKT App 7 in respect of those Investment Tokens.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] RM158/2015 (Made 9th December 2015). [VER19/02-16]
[Amended] DFSA RMI279/2020 (Made 28th October 2020). [VER29/11-20]
[Added] DFSA RMI314/2021 (Made 30th June 2021). [VER32/10-21]CIR 15.1.3 Guidance
Where a material part of the Fund Property of a Foreign Fund consists of Tokens other than Investment Tokens, the DFSA considers that the Prospectus of that Fund should contain information relating to those Tokens that is equivalent to the information specified in MKT App 7. Such information is likely to be relevant under Article 52(2) of the Law, which requires disclosure of all the information a person and his professional advisers would reasonably require and expect to find in the Prospectus to make an informed decision to become a Unitholder of the Fund.
Derived from DFSA RMI314/2021 (Made 30th June 2021). [VER32/10-21]CIR 15.1.4 CIR 15.1.4
An
Authorised Firm which makes anOffer of aUnit of aForeign Fund must maintain at its place of business or other designated location in theDIFC copies of the relevantProspectus for inspection byClients and by theDFSA during normal business hours.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]CIR 15.1.4 Guidance
In relation to CIR Rule 15.1.4, copies of the
Prospectus may be stored electronically so long asClients and theDFSA have and immediate access.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]Designated Foreign Fund Criteria
CIR 15.1.5 CIR 15.1.5
The criteria prescribed for the purposes of Article 54(1)(a)(i) of the Law to enable an
Authorised Firm toOffer aUnit of aForeign Fund are as follows:(a) theFund is both established and operated in aRecognised Jurisdiction specified in theDFSA's Recognised Jurisdictions Notice and theFund is aDesignated Fund included in thatNotice ;(b) if it is aProperty Fund , the requirements in CIR Rule 15.1.7 are satisfied;(c) if it is anExchange Traded Fund , the requirements in CIR Rule 13.9.1 are satisfied;(d) if it is a Venture Capital Fund, it is a Closed-ended Fund; and(e) if it is aCredit Fund :(i) it is aClosed-ended Fund ;(ii) it satisfies the conditions that would be necessary for it to be anExempt Fund orQualified Investor Fund if it was aDomestic Fund ;(iii) it has in place appropriate policies and procedures for assessing, pricing, granting, managing and acquiring credit;(iv) it has in place an appropriate stress testing programme; and(v) it is subject to regulatory requirements that provide an equivalent level of protection to that provided under CIR section 13.12 and CIR Rule 14.4.13.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM218/2018 (Made 22nd February 2018). [VER23/12-18]
[Amended] DFSA RMI279/2020 (Made 28th October 2020). [VER29/11-20]
[Amended] DFSA RMI 323/2022 (Made 27th April 2022). [VER33/06-22]CIR 15.1.5 Guidance
For the purposes of the
Rules including this Rule, theDFSA has issued and published aRecognised Jurisdictions Notice on its website which sets out the list ofRecognised Jurisdictions and which also specifies theDesignated Funds .Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]Other Foreign Fund criteria
CIR 15.1.6
(1) The criteria prescribed for the purposes of Article 54(1)(a)(ii) of the Law to enable anAuthorised Firm toOffer aUnit of aForeign Fund are as follows:(a) theFund :(i) has both a custodian who meets one of the requirements in (2) and an investment manager who meets one of the requirements in (3); or(ii) has both the custody and investment management activities of theFund being performed by aPerson who meets the requirements in (4); or(iii) theFund has been rated or graded as at least "investment grade" by Moody's, Fitch or Standard & Poor's or such other international rating agency acceptable to theDFSA ;(c) if it is anExchange Traded Fund , the requirements in CIR Rule 13.9.1 are satisfied and(d) if it is aCredit Fund :(i) it is aClosed-ended Fund ;(ii) it satisfies the conditions that would be necessary for it to be anExempt Fund orQualified Investor Fund if it was a Domestic Fund;(iii) it has in place appropriate policies and procedures for assessing, pricing, granting, managing and acquiring credit;(iv) it has in place an appropriate stress testing programme; and(v) it is subject to regulatory requirements that provide an equivalent level of protection to that provided under CIR section 13.12 and CIR Rule 14.4.13.(2) For the purposes of (1)(a)(i), the custodian is thePerson who is responsible for providing safe custody of theFund Property and suchPerson must be:(a) anEligible Custodian ;(b) a member of aGroup that is subject to consolidated supervision by aFinancial Services Regulator in aRecognised Jurisdiction and the activities of the custodian are included within the scope of that supervision;(c) appointed under an agreement by aPerson who is subject to supervision by aFinancial Services Regulator in aRecognised Jurisdiction and the agreement is in accordance with the requirements of thatRegulator ; or(d) aPerson as to whom theAuthorised Firm is satisfied has adequate custody and asset safety arrangements in respect of theForeign Fund after performing due diligence taking into consideration each of the following factors:(i) whether thePerson providing custody is authorised and supervised by aFinancial Services Regulator for the purposes of providing custody;(ii) the extent of segregation of assets;(iii) independence and management of conflicts of interests;(iv) the terms of the safe custody agreement; and(v) periodic reporting requirements.(3) For the purposes of (1)(a)(i), the investment manager is aPerson who makes investment decisions for or on behalf of theFund and must be aPerson who is:(a) authorised and supervised by theDFSA or aFinancial Services Regulator located in aRecognised Jurisdiction in respect of its activities in relation to investment management;(b) a member of aGroup that is subject to consolidated supervision by aFinancial Services Regulator in aRecognised Jurisdiction and the activities of the investment manager are included within the scope of the supervision; or(c) appointed under an agreement by anotherPerson who is subject to supervision by aFinancial Services Regulator in aRecognised Jurisdiction and the agreement is in accordance with the requirements of theRegulator .(4) For the purposes of (1)(a)(ii), thePerson carrying out both the custody and investment management activities of theFund must be aPerson who is:(a) authorised and supervised by theDFSA or aFinancial Services Regulator located in aRecognised Jurisdiction in respect of both of its custody and investment management activities;(b) a member of aGroup that is subject to consolidated supervision by aFinancial Services Regulator in aRecognised Jurisdiction and its custody and investment management activities are included within the scope of that supervision; or(c) appointed under an agreement by anotherPerson who is subject to supervision by aFinancial Services Regulator in aRecognised Jurisdiction and the agreement is in accordance with the requirements of thatRegulator .Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM218/2018 (Made 22nd February 2018). [VER23/12-18]
[Amended] DFSA RMI 323/2022 (Made 27th April 2022). [VER33/06-22Foreign Property Funds
CIR 15.1.7 CIR 15.1.7
A
Foreign Fund meets theProperty Fund condition referred to in Rule CIR 15.1.5(b) or CIR 15.1.6(1)(b) as is applicable where:(a) 60% or more of theFund's assets comprise ofReal Property ,Property Related Assets orUnits in anotherProperty Fund ;(b) theFund is aClosed-ended Fund ; and(c) theUnits of theFund are either:(i) listed and traded on anAuthorised Market Institution or on an exchange regulated in aRecognised Jurisdiction ; or(ii) Offered only by means of aPrivate Placement .Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM218/2018 (Made 22nd February 2018). [VER23/12-18]CIR 15.1.7 Guidance
A Closed-ended legal structure is an investment vehicle used by a
Fund that does not continuously issue or redeemUnits based on the net asset value of theFund .Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM218/2018 (Made 22nd February 2018). [VER23/12-18]Recommendation-Based Offers of Units of Foreign Funds
CIR 15.1.8 CIR 15.1.8
An
Authorised Firm may not make anOffer of aUnit of aForeign Fund to a particularClient under the criteria in Article 54(1)(b) of the Law unless it has made an assessment of the suitability of the investment for thatClient in accordance with COB Rule 3.4.2.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]CIR 15.1.8 Guidance
Under Article 54(1)(b) of the Law, an
Authorised Firm is permitted to make anOffer of aUnit of aForeign Fund if it has a reasonable basis for recommending that the investment in theFund is suitable for the particularClient . To form such an opinion, the firm must undertake the assessment required under COB Rule 3.4.2.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]Offer of Units of Foreign Funds under Article 54(1)(c) of the Law
CIR 15.1.9 CIR 15.1.9
(1) AnAuthorised Firm may not make anOffer of aUnit of aForeign Fund under the criteria in Article 54(1)(c) of the Law unless:(a) it has first satisfied itself on reasonable grounds that theFund meets the criteria specified in Article 54(1)(c)(i), (ii) and (iii) of the Law; and(b) it makes theOffer in a manner that is in accordance with the criteria in Article 54(1)(c)(i) and (ii) of the Law.(2) AnAuthorised Firm that relies on (1) forOffering Units of aForeign Fund must be able to demonstrate to theDFSA that it conducted adequate due diligence to ensure compliance with (1)(a).Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]
[Amended] DFSA RMI308/2021 (Made 30th June 2021). [VER31/09-21]CIR 15.1.9 Guidance
Rule 15.1.9 allows an
Authorised Person to make anOffer of aUnit in aForeign Fund where theFund and theOffer of theUnit satisfy criteria equivalent to those applicable to anExempt Fund orQualified Investor Fund .[Added] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]Periodic Information to DFSA
CIR 15.1.10
(1) AnAuthorised Firm must submit to theDFSA , by the end of January each year, a report regarding anyOffer orTransaction in respect of aUnit of anyDomestic Fund orForeign Fund which has been made during the preceding calendar year.(2) The report required under (1) must include the details of:(a) the name of theFund and itsFund Manager ; and(b) if theFund is aForeign Fund :(i) whether it is aDesignated Fund and, if so, in whichRecognised Jurisdiction it is authorised or approved; and(ii) if it is not aDesignated Fund , the other criteria under which theAuthorised Firm has relied when marketing theUnits of the relevantForeign Fund . .Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
[Amended] DFSA RM168/2016 (Made 10th February 2016). [VER21/04-16]Record Keeping
CIR 15.1.11
(1) Without limiting any requirements under COB, anAuthorised Firm must keep records that are sufficient to demonstrate due compliance with the requirements in theRules in this chapter.(2) The records in (1) must be maintained for a minimum of six years.Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]