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  • MKT 1 MKT 1 Introduction

    • MKT 1.1 MKT 1.1 Application

      • MKT 1.1.1 MKT 1.1.1

        (1) The Rules in this module (MKT) are made for the purposes of the Markets Law 2012 and apply to every Person to whom that legislation applies.
        (2) Without limiting the generality of (1), this module applies to:
        (a) a Person making an Offer of Securities to the Public except in relation to Units of a Fund;
        (b) a Person applying to have Securities admitted to trading on an Authorised Market Institution;
        (c) a Person specified in Rule 2.10.1 as liable for the content of a Prospectus;
        (d) a Reporting Entity;
        (e) a Person who is a Related Party;
        (f) a Person who is a Restricted Person;
        (f) a Person who is a Connected Person; and
        (g) a Person appointed as a sponsor, compliance adviser or other expert adviser of a Reporting Entity.
        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

        • MKT 1.1.1 Guidance

          See Article 49(1) of the Markets Law for appointment of sponsors, compliance advisers and other advisers for Reporting Entities upon a direction by the DFSA.

          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

      • MKT 1.1.2

        Where a Rule prescribes a requirement on a Reporting Entity or an Undertaking, each Director, Partner or other Person charged with the management of that Reporting Entity or Undertaking must take all reasonable steps within its control to secure compliance with the requirement by the Reporting Entity or Undertaking.

        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

      • MKT 1.1.3 MKT 1.1.3

        Where a Rule prescribes a requirement relating to a Director, Partner or Employee of a Reporting Entity or an Undertaking:

        (a) the Director, Partner or Employee, as the case may be, must take all reasonable steps within his control to secure compliance with the requirement; and
        (b) the Reporting Entity or Undertaking must take all reasonable steps to ensure compliance with the requirement by the Director, Partner or Employee.
        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

        • MKT 1.1.3 Guidance

          Application to listed funds

          1. Where Units of a Fund are admitted to trading on an Authorised Market Institution, such a Fund is a Listed Fund. Where Units of a Fund that are Security Tokens are admitted to trading on an Alternative Trading System, but are not admitted to trading on an Authorised Market Institution or a Regulated Exchange, such a Fund is defined as an ATS Traded Fund. A reference to a Reporting Entity in relation to a Listed Fund or an ATS Traded Fund is a reference to the Fund Manager of that Fund, unless another Person has been declared by the DFSA as the Reporting Entity of the Fund.
          2. Accordingly, any obligations of a Reporting Entity of a Listed Fund or an ATS Traded Fund are, unless the context requires otherwise, obligations imposed on the Reporting Entity in respect of the Listed Fund or the ATS Traded Fund, as the case may be (see Article 38(2) of the Law). Therefore, the obligations imposed by this Law and the Rules apply to the Governing Body of the Reporting Entity and to every member of the Governing Body in the manner specified in MKT Rules 1.1.2 and MKT 1.1.3.

          Waivers and modifications

          3. The DFSA may, pursuant to Article 9 of the Law, waive or modify the application of the provisions in the Law where it considers appropriate or desirable in the interests of the DIFC to do so and, in accordance with the procedures set out in Guidance 4 below.
          4. Generally, the DFSA will exercise the Article 9 power sparingly and only in circumstances where there is a clearly demonstrated case for granting a waiver or modification of the Law, such as:
          a. to alleviate any undue regulatory burden on a Person in complying with the requirements in the Law in circumstances where investor protection intended by the relevant provisions is not reduced; or
          b. to apply to a Person upon request (i.e. on a consent basis) the provisions of the Law which, without a modification, will not apply to that Person. For example, an Exempt Offeror (i.e. a Person such as a government or government instrumentality included in the DFSA's Exempt Offeror List in App5) who is not subject to the Prospectus disclosure and the liability regime in the Law and the Rules may apply to the DFSA for a modification to Article 14 of the Law so that it can make a Prospectus Offer of its Securities in accordance with the relevant Prospectus disclosure and liability regime in the Law and the Rules.
          5. The DFSA also has the power, pursuant to Article 25 of the Regulatory Law 2004, to waive or modify the Rules. The Regulatory Policy and Process (RPP) module gives further information on how to seek a waiver or modification.
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
          [Amended] DFSA RM120/2013 (Made 14th July 2013). [VER4/07-13]
          [Added] DFSA RMI313/2021 (Made 30th June 2021). [VER18/10-21]

    • MKT 1.2 MKT 1.2 Overview of the Module

      • MKT 1.2 Guidance

        Offers of securities — chapter 2

        1. Chapter 2 contains:
        a. the requirements applicable to a Person who:
        i. makes an Offer of Securities to the Public (other than in respect of Units, which are covered by the Prospectus and other requirements in the Collective Investment Law 2010 and the CIR Rules); and
        ii. applies to have Securities admitted to trading on an Authorised Market Institution, or to have Security Tokens admitted to trading on an Alternative Trading System (other than the admission to trading of Units, or Security Tokens that are Units, which is governed by the requirements in chapter 6);
        b. the types of Exempt Offers (i.e. Securities which can be offered to the public without a Prospectus), Exempt Securities (i.e. Securities which can be admitted to trading on an Authorised Market Institution without a Prospectus) and Exempt Communications (i.e. communications relating to Securities which are not treated as a Prospectus);
        c. the requirements and procedures relating to the approval of a Prospectus by the DFSA;
        d. the requirements and procedures relating to the structure and content of a Prospectus including:
        i. when material may be incorporated into a Prospectus by reference; and
        ii. liability for the content of a Prospectus including the liability of Experts and other Persons whose reports or opinions are included in a Prospectus with their consent for such inclusion; and
        e. the circumstances in which the DFSA may accept an offer document prepared in accordance with the legislation applicable in a jurisdiction other than the DIFC as sufficient for the purposes of meeting the Prospectus requirements in the Law and the Rules.

        Governance of reporting entity — chapter 3

        2. Chapter 3 covers a wide range of corporate governance requirements applicable to Reporting Entities including:
        a. 7 high-level Corporate Governance Principles, with best practice standards relating to those principles which apply on a 'comply or explain' basis and which are set out in MKT App4;
        b. Directors' duties, including acting in good faith and applying due diligence and care in the discharge of their duties and functions;
        c. provisions to ensure fair treatment of shareholders in the conduct of affairs of the company, such as provisions relating to communication with shareholders, exercise of pre-emption rights, reduction of share capital and a list of matters that require approval by a majority of shareholders in voting; and
        d. provisions to address conflicts of interest. For example individuals involved in the senior management of the Reporting Entity (such as executive Directors and other senior executives, called "Restricted Persons"), are prohibited from dealing in the Securities of the Reporting Entity during "close periods", unless prior clearance for those dealings is obtained. Similarly, Persons who qualify as Related Parties of the Reporting Entity are prohibited from entering into commercial transactions with the Reporting Entity unless certain requirements are followed.

        Market disclosure — chapter 4

        3. Every Reporting Entity is required to disclose to the market certain types of information either relating to the Securities of the Reporting Entity or the Reporting Entity itself. Such disclosure is designed to ensure that the markets are continually updated with information that is likely to have an impact on the price of the Securities so that investors can make an informed judgement about those Securities. For this purpose, Chapter 4 requires disclosure of Inside Information, with carve-outs for non-disclosure of commercially sensitive information for a limited period, as well as disclosures of interests held by Persons in positions of control or influence relating to a Reporting Entity (such as controllers and their associates, called "Connected Persons"), and the disclosure of Directors' material interests in the Reporting Entity. The means by which disclosure of the information required to be provided to the markets are also specified in this chapter.

        Accounting periods, financial reports and auditing — chapter 5

        4. Every Reporting Entity is required to prepare and file certain annual, semi-annual and other periodic financial reports relating to the financial position of the Reporting Entity. Such reports are required to be prepared in accordance with the specified internationally accepted accounting standards and, in the case of annual financial reports, required to be audited. The requirements relating to the preparation and audit of the financial statements and the disclosure of such reports within specified periods are set out in Chapter 5.

        Listed Funds and ATS Traded Funds — chapter 6

        5. Chapter 6 contains, with the exception of the requirements in chapters 7 (sponsors) and 8 (systems and controls), all the requirements applicable to a Reporting Entity of a Listed Fund or an ATS Traded Fund. These requirements, while mirroring the requirements applicable to other Reporting Entities, have been tailored to take account of the characteristics of Funds. These include:
        a. general requirements applicable to Listed Funds and ATS Traded Funds;
        b. Prospectus requirements for the purposes of having Units of a Fund admitted to trading on an Authorised Market Institution, or Security Tokens that are Units of a Fund admitted to trading on an Alternative Trading System;
        c. governance requirements applicable to Listed Funds and ATS Traded Funds;
        d. market disclosure of information relating to Listed Funds and ATS Traded Funds; and
        e. financial reporting requirements applicable to Listed Funds and ATS Traded Funds.

        Sponsors and compliance advisers — chapter 7

        6. The DFSA has the discretion to require the appointment of a sponsor, compliance adviser or other expert adviser by a Reporting Entity, including that of a Listed Fund or an ATS Traded Fund. Chapter 7 contains the requirements relating to the appointment of such sponsors, compliance advisers and other expert advisers, and the obligations that apply to such Persons and the Reporting Entity where such sponsors or compliance advisers are appointed.

        Systems and controls — chapter 8

        7. Chapter 8 sets out the systems and controls a Reporting Entity, including a Reporting Entity of a Listed Fund or an ATS Traded Fund, must have in order to be able to comply with the requirements applicable to that Person.

        Listing Rule — chapter 9

        8. Chapter 9 sets out the DFSA's Listing Rules.

        Transitional provisions — chapter 10

        9. Chapter 10 sets out the transitional provisions necessary to facilitate the transition from the Markets Law 2004 to the Law for certain debt Securities, as the new requirements are different from those under which such debt Securities were admitted to an Official List of Securities but were not traded on an Authorised Market Institution.
        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
        [Amended] DFSA RMI313/2021 (Made 30th June 2021). [VER18/10-21]

    • MKT 1.3 MKT 1.3 General

      • MKT 1.3.1

        A reference in this MKT module to:

        (a) "the Law", is a reference to the Markets Law 2012;
        (b) "this module", is a reference to this MKT module; and
        (c) "Rules", except where otherwise provided, is a reference to the Rules in this module.
        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

      • MKT 1.3.2

        Where a Reporting Entity is referred to in this module as a Reporting Entity in respect of a specified class of Securities, it is a reference to a Person who has become a Reporting Entity by:

        (a) making an Offer of Securities to the Public;
        (b) having Securities admitted to trading on an Authorised Market Institution; or
        (c) having Security Tokens admitted to trading on an Alternative Trading System,
        of that particular specified class of Securities.
        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
        [Amended] DFSA RMI313/2021 (Made 30th June 2021). [VER18/10-21]

      • Definition of a Small or Medium-Sized Enterprise (SME)

        • MKT 1.3.3 MKT 1.3.3

          (1) An Applicant is a SME under this module if:
          (a) it is applying for the admission of its Shares to the List; and
          (b) the aggregate market value of all of its listed Shares on admission is reasonably expected to be less than $250 million.
          (2) A Listed Entity is a SME under this module if:
          (a) the aggregate market value of all of its listed Shares on admission was less than $250 million; and
          (b) it has not ceased to be a SME under (3).
          (3) A Listed Entity ceases to be a SME for the purposes of (2)(b), if the average aggregate market value of its listed Shares has exceeded $500 million for 90 consecutive days.
          Derived from RMI273/2020 (Made 26th February 2020). [VER16/04-20]

          • MKT 1.3.3 Guidance

            1. The terms “Applicant” and “Listed Entity” are defined in MKT Rule 9.1.1(2).
            2. MKT Rule 1.3.3 defines when an Applicant or Listed Entity is a SME. Under that Rule, such an Applicant or Listed Entity will be a SME unless the average aggregate market value of its listed shares exceeds $500 million for 90 consecutive days. If that occurs, it will cease to be a SME and will need to meet the same continuing obligations as any other Listed Entity.
            3. The DFSA may specify, for the purposes of the SME definition, the appropriate method to be used to calculate the aggregate market value of the Shares of an Applicant or a Listed Entity. A SME should have in place appropriate systems and controls to monitor the average aggregate market value of its listed Shares to determine if it ceases to be a SME under MKT Rule 1.3.3(3). If a Listed Entity ceases to be a SME it is required under MKT Rule 4.6.1 and MKT App2 to disclose that fact to the market.
            4. The DFSA may modify the application of the SME definition in MKT Rule 1.3.3 in relation to a particular Applicant or Listed Entity, where it is satisfied that it is appropriate in the circumstances to do so. For example, if an Applicant is likely:
            (a) to exceed the threshold in MKT Rule 1.3.3(1)(b), but can demonstrate that it is appropriate to treat it as a SME because of its limited operating history and early stage of its development; or
            (b) to fall below the threshold in MKT Rule 1.3.3(1)(b), but can demonstrate that it should not be treated as a SME because it has an established track record and business.
            Derived from RMI273/2020 (Made 26th February 2020).[VER16/04-20]

    • MKT 1.4 MKT 1.4 Interpreting the Rulebook

      • MKT 1.4 Guidance

        Interpretation

        1. Every provision in the Rulebook must be interpreted in the light of its purpose. The purpose of any provision is to be gathered first and foremost from the text of the provision in question and its context among other relevant provisions.
        2. When this section refers to a provision, this means every type of provision, including Rules and Guidance.
        3. Where reference is made in the Rulebook to another provision of the Rulebook or other DIFC legislation, it is a reference to that provision as amended from time to time.
        4. Unless the contrary intention appears:
        a. words in the Rulebook importing the masculine gender include the feminine gender and words importing the feminine gender include the masculine; and
        b. words in the Rulebook in the singular include the plural and words in the plural include the singular.
        5. If a provision in the Rulebook refers to a communication, notice, agreement, or other document 'in writing' then, unless the contrary intention appears, it means in legible form and capable of being reproduced on paper, irrespective of the medium used. Expressions related to writing must be interpreted accordingly.
        6. Any reference to 'dollars' or '$' is a reference to United States Dollars unless the contrary intention appears.
        7. Unless stated otherwise, a day means a calendar day. If an obligation falls on a calendar day which is either a Friday or Saturday or an official State holiday in the DIFC, the obligation must take place on the next calendar day which is a business day.

        Defined terms

        8. Defined terms are identified throughout the Rulebook by the capitalisation of the initial letter of a word or of each word in a phrase and are defined in the Glossary (GLO). Unless the context otherwise requires, where capitalisation of the initial letter is not used, an expression has its natural meaning.
        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
        [Amended] DFSA RM120/2013 (Made 14th July 2013). [VER4/07-13]

    • MKT 1.5 MKT 1.5 Complaints Against the DFSA

      • MKT 1.5 Guidance

        1. A Person who feels he has been adversely affected by the manner in which the DFSA has carried out its functions may make a complaint to the DFSA about its conduct or the conduct of its Employees.
        2. A complaint must be in writing and should be addressed to the Chief Executive of the DFSA. The complaint will be dealt with by the DFSA in a timely manner.
        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]