Entire Section

  • CIR App 5 CIR App 5 Constitution of a Domestic Fund

    • CIR A5.1 CIR A5.1 Contents of Constitution

      • CIR A5.1.1

        (1) The Constitution of a Domestic Fund must contain all the information prescribed in the following table except where it is an Exempt Fund, in which case, it must contain the information specified in A, C, D, F, G, H, K and M.
        (2) The requirements in the following table do not apply in respect of the Constitution of a Qualified Investor Fund.

        A General Information
          The following information:
        (1) The name of the Fund.
        (2) The Fund Manager's and, if the Fund is structured as an Investment Trust, the Trustee's name and the principal place of business in the DIFC as recorded by the Registrar of Companies.
        (3) That the Fund is a Domestic Fund, the Constitution of which is governed by the laws of the DIFC.
        (4) That the Fund is a Public Fund, or Exempt Fund, as the case may be.
        (5) The legal form of the Fund and whether it is open or closed ended.
        (6) If the Fund is a specialist class of a Fund as defined in CIR chapter 3 of this module, the relevant specialist class, and if applicable, that the Fund is an Islamic Fund and consequently the Fund's entire business operations are conducted in accordance with Shari'a.
        (7) If the Fund is managed by an External Fund Manager, that fact and the details of the Appointed Fund Administrator or Custody Provider of the Fund.
        (8) If the Fund is an External Fund, the name of the jurisdiction in which the Fund is domiciled.
        B General Statements
          The following information:
        (1) The Fund Manager is responsible, pursuant to the Law, for all operations concerning the Fund and may from time to time delegate activities or outsource functions, but not the responsibility for conducting those activities and functions, to another Person in accordance with the CIR Rules.
        (2)
        (a) The Fund Property is entrusted to the Fund Manager and the Fund Manager remains responsible for the property even when an Eligible Custodian holds the legal title to the Fund Property; or
        (b) The Fund Property is held on trust by the Fund's Trustee, as the case may be.
        (3) Whether the duration of the Fund is limited and, if so, for how long.
        (4) That fees, charges and other expenses of the Fund may be taken out of Fund Property and the basis for determination of the quantum of such fees, charges and other expenses.
        (5) The maximum and minimum sizes of the Fund's capital, if any.
        (6) That the Unitholders are not liable for the debts of the Fund, unless the applicable legislation prescribes otherwise and, if so, those circumstances.
        (7) That a Unitholder is not liable to make any further payment after he has paid the price of his Units and that no further liability can be imposed on him in respect of the Units he holds.
        (8) That payments to the Fund Manager, Trustee, any Eligible Custodian, or the Person providing the oversight function (including a Shari'a Supervisory Board) by way of remuneration are authorised to be paid (in whole or in part) out of the Fund Property.
        C Where the Fund is a Trust
          The following information:
        (1) The Trust Deed is made under and governed by the Investment Trust Law 2006 and:
        (a) is binding on each Unitholder as if he had been a party to it and that he is bound by its provisions; and
        (b) authorises and requires the Fund Manager and the Trustee to do the things required or permitted of them by its terms and the Investment Trust Law 2006 and the Law.
        (2) Subject to the provisions of these Rules:
        (a) the Fund Property (other than sums held to the credit of the distribution account) is held by the Trustee on trust for the Unitholders according to the number of Units held by each Unitholder or, where relevant, according to the number of individual shares in the Fund Property represented by the Units held by each Unitholder; and
        (b) the sums standing to the credit of any distribution account are held by the Trustee on trust to distribute or apply in accordance with these Rules relating to income.
        D Investment Objectives
         
        (1) Information covering the investment objectives of the Fund and in particular:
        (a) whether the aim of the Fund is to spread investment risks and, if a Property Fund, whether the Fund invests in a single property;
        (b) the types of Investments or assets in which it and (where applicable) each Sub-Fund may invest; and
        (c) if the Fund is a specialist class of Fund, the class of Fund.
        (2) Details of any investment, borrowing or stock lending restrictions or, in the event that there are no such restrictions, a statement to that effect.
        E Units in the Fund
          A statement specifying:
        (a) the classes of Units which the Fund may issue; and
        (b) the rights attaching to Units of each class (including any provisions for the expression in two or more denominations of such rights).
        F Limitations
          Details as to:
        (a) the provisions relating to any restrictions on the right to redeem Units in any class; and
        (b) the circumstances in which the issue of the Units of any particular class may be limited.
        G Income and distribution
         
        (1) Details of who is carrying out the calculation, transfer, allocation and distribution of income for any class of Unit issued and outstanding during the accounting period.
        (2) Information regarding the provision for the payment of income, if any, and the date on which such distribution shall be made.
        H Base currency
          A statement specifying the base currency of the Fund.
        I Meetings
          Details of the procedures for the convening of meetings and the procedures relating to resolutions, voting and the voting rights of Unitholders.
        J Oversight arrangements
          Details of the oversight arrangements, and if the Fund is an Islamic Fund, details of its Shari'a Supervisory Board.
        K Termination and suspension
          Details as to:
        (a) the grounds under which the Fund Manager may initiate a suspension of the Fund and any associated procedures; and
        (b) the methodology for determining the rights of Unitholders to participate in the Fund Property on winding up.
        L Modification of the Constitution documents
          Details of the manner in which alterations to the Constitution may be made.
        M Responsibility statement
          A statement that nothing in the Constitution has the effect of exempting the Fund Manager and, if the Fund is structured as an Investment Trust, the Trustee, from any liability to Unitholders imposed under DIFC law and the Rules.
        N Other relevant matters
          Details of those matters which enable the Fund, Fund Manager or any Person providing the oversight function of the Fund to obtain any privilege or power conferred by the Rules which is not otherwise provided for in the Constitution.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
        [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]
        [Amended] RM158/2015 (Made 9th December 2015). [VER19/02-16]