Entire Section
MKT 6 MKT 6 Listed Funds and ATS Traded Funds
MKT 6.1 MKT 6.1 Application and Interpretation
MKT 6.1.1
(1) This chapter applies to:(a) everyReporting Entity of aListed Fund ;(b) every Reporting Entity of an ATS Traded Fund; and(c) any otherPerson specified in the Rules.(2) A reference to a Listed Fund in this chapter (including in MKT App 3 which forms part of MKT Rule 6.8.1), is to be read as including a reference to an ATS Traded Fund.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Amended] DFSA RMI313/2021 (Made 30th June 2021). [VER18/10-21]MKT 6.2 MKT 6.2 General Requirements
MKT 6.2.1
(1) A
Person may have theUnits of a Fund admitted to anOfficial List of Securities only if:(a) in the case of aDomestic Fund , it is aPublic Fund ; and(b) in the case of aForeign Fund :(i) it is aDesignated Fund from aRecognised Jurisdiction ; or(ii) it is a Fund approved by theDFSA as a Fund subject to equivalent regulation as that applying to aPublic Fund ; andand it meets the relevant criteria in (2) as applicable.(2) The relevant criteria for the purposes of (1)(b) are:
(a) in the case of a fund that meets the criteria of aProperty Fund , it is a closed-ended investment vehicle and 60% or more of theFund 's assets compriseReal Property ;(b) in the case of a fund that is referred to in its offer documents as an "Exchange Traded Fund " or "ETF ", it complies with CIR Rule 3.1.12; and(c) in the case of a fund that is referred to in its offer documents as an "Islamic Exchange Traded Fund " or "Islamic ETF ", it complies with IFR Rule 6.13.1(2).Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Amended] DFSA RM120/2013 (Made 14th July 2013). [VER4/07-13]
[Amended] DFSA RM219/2018 (Made 22nd February 2018). [VER13/12-18]
MKT 6.2.2 MKT 6.2.2
Where an obligation applies to a
Reporting Entity of aFund under a provision of this chapter, except where expressly provided otherwise, theGoverning Body of theReporting Entity must ensure compliance with that obligation.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.2.2 Guidance
In the case of an
Investment Company (Fund ) which has as itsFund Manager a licensedCorporate Director , theReporting Entity of thatFund is itsCorporate Director . See CIR section 8.1A for details relating toCorporate Directors .Derived from DFSA RM219/2018 (Made 22nd February 2018). [VER13/12-18]
MKT 6.3 MKT 6.3 Prospectus Requirements Relating to a Listed Fund
MKT 6.3 Guidance
1. TheProspectus requirements including content and structure in chapter 2 of this module do not apply toProspectus es relating toUnits ofFunds .Prospectus requirements that apply to Offer of Units of Funds are found in the Collective Investment Law 2010 and the CIR module. See Article 10(1) of the Law which disapplies chapter 2 of this module toFund Prospectuses .2. However, under Article 14(1)(b) of the Law, aProspectus is required for the purposes of admitting anySecurities , includingUnits , to trading on anAuthorised Market Institution , or for admitting Security Tokens to an Alternative Trading System. The Rules in this MKT section 6.3 are designed to enable aPerson seeking to haveUnits of aFund admitted to trading on anAuthorised Market Institution or, where the Units are Security Tokens, to an Alternative Trading System, to be able to use aProspectus prepared in accordance with the requirements in the Collective Investment Law 2010 and the Rules in the CIR module if it is aDomestic Fund . In the case ofForeign Funds , the offer documents prepared in accordance with the requirements in a foreign jurisdiction will be acceptable in the circumstances prescribed in this section.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Added] DFSA RMI313/2021 (Made 30th June 2021). [VER18/10-21]MKT 6.3.1
(1) APerson intending to haveUnits admitted to trading on anAuthorised Market Institution or on an Alternative Trading System (where the Units are Security Tokens) must, subject to (2), (3) and (4), submit to theDFSA :(a) a completed application using the appropriate form set out in AFN and the relevant fee prescribed in FER;(b) aProspectus relating to the Fund ("Fund Prospectus") which:(i) complies with, in the case of aDomestic Fund , the requirements in the Collective Investment Law 2010 and CIR that apply to aPublic Fund , and, where thatFund is also an Islamic Fund, the additional requirements in IFR chapter 6;(ii) is prepared, in the case of aForeign Fund , in accordance with the requirements in MKT Rule 6.3.3; and(iii) contains, unless it is anIslamic Listed Fund , a prominent disclaimer in bold, on the front page of theProspectus , as follows:"The
DFSA does not accept responsibility for the content of the information included in theProspectus , including the accuracy or completeness of such information. The liability for the content of theProspectus lies with theIssuer of theProspectus and otherPersons , such asExperts , whose opinions are included in theProspectus with their consent. TheDFSA has also not assessed the suitability of theSecurities to which theProspectus relates to any particular investor or type of investor. If you do not understand the contents of thisProspectus or are unsure whether theSecurities to which theProspectus relates are suitable for your individual investment objectives and circumstances, you should consult an authorised financial advisor."(c) where subsequent drafts or versions of theFund Prospectus are submitted, a marked up version showing changes from the previous version submitted to theDFSA ;(d) if information is incorporated in theFund Prospectus by reference to another document, a copy of that other document;(e) the identity of thePerson who is or intends to be theReporting Entity ;(f) contact details of two individuals who are sufficiently knowledgeable about the content of the document referred to in (b) to be able to answer queries of theDFSA during business hours; and(g) any other information that theDFSA may require.(2) The application in (1) must be submitted to theDFSA :(a) in the case of an applicant who has not made a previousProspectus Offer , at least [20] business days prior to the intended date on which the applicant expects theProspectus to be approved;(b) in other cases, at least [10] business days before the intended date on which the applicant expects theProspectus to be approved; and(c) in the case of aSupplementary Prospectus , as soon as is reasonably possible.(3) In the case of aSupplementary Prospectus , the application for approval must:(a) be made using the appropriate form set out in the AFN module;(b) accompanied by the relevant fee prescribed in the FER module; and(c) include:(i) in the case of aDomestic Fund , aSupplementary Prospectus which meets the requirements in the Collective Investment Law 2010 and the CIR Rules, and where thatFund is anIslamic Fund , the additional requirements inIFR ; and(ii) in the case of aForeign Fund , a document which meets the equivalent requirements applicable in the jurisdiction in which the Fund is established or domiciled.(4) In the case of aPassported Fund , the following disclaimer must be used instead of the disclaimer specified in (1)(b)(iii):
"This is anApproved Prospectus for the purposes of admittingSecurities , including units, to trading on anAuthorised Market Institution in the Dubai International Financial Centre.Notwithstanding that theDFSA has approved the prospectus, theDFSA does not accept responsibility for the content of the information included in theProspectus , including the accuracy or completeness of such information. The liability for the content of theProspectus lies with theIssuer of theProspectus and otherPersons , such asExperts , whose opinions are included in theProspectus with their consent.No other regulatory authority in theUAE has any responsibility for reviewing or verifying this prospectus or any other documents in connection with the promotion of this fund. Accordingly, no such authority in theUAE has approved this prospectus or any other associated documents, nor taken any steps to verify the information set out herein, and therefore no regulatory authority in theUAE has any responsibility for the same.ThisPassported Fund is aPublic Fund and, accordingly, the units thereof may be promoted, including by means of a public offer of the units for public subscription, to persons in [insert relevant Host Jurisdiction(s)].TheDFSA has also not assessed the suitability of theSecurities to which theProspectus relates to any particular investor or type of investor. If you do not understand the contents of thisProspectus or are unsure whether theSecurities to which theProspectus relates are suitable for your individual investment objectives and circumstances, you should consult an authorised financial advisor."Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Amended] DFSA RM120/2013 (Made 14th July 2013). [VER4/07-13]
[Amended] DFSA RM219/2018 (Made 22nd February 2018). [VER13/12-18]
[Amended] DFSA RM238/2019 (Made 20th February 2019). [VER14/02-19]
[Added] DFSA RMI313/2021 (Made 30th June 2021). [VER18/10-21]Approval of a Prospectus
MKT 6.3.2 MKT 6.3.2
(1) TheDFSA will approve aFund Prospectus which has been filed with theDFSA in accordance with Rule 6.3.1 as soon as reasonably practicable where it is satisfied that theProspectus complies with all the requirements applicable to thatProspectus .(2) AFund Prospectus is not anApproved Prospectus for the purposes of Article 14(2) of the Law unless theDFSA has issued to the applicant a notice stating its approval:(a) of theProspectus orSupplementary Prospectus , as the case may be; and(b) in the case of a,Prospectus in (a) comprising multiple documents, of all the multiple documents.(3) The procedures in Schedule 3 to the Regulatory Law apply to a decision of theDFSA under this Rule not to approve aFund Prospectus .(4) If theDFSA decides to exercise its power not to approve aFund Prospectus under this Rule, the applicant may refer the matter to theFMT for review.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Amended] DFSA RM134/2014 (Made 21st August 2014). [VER5/06-14]MKT 6.3.2 Guidance
1. APerson intending to apply to theDFSA for approval of aFund Prospectus pursuant to Rule 6.3.1 should consider submitting a draftProspectus for preliminary review by theDFSA prior to formally submitting theProspectus forDFSA approval. See the RPP Sourcebook for procedures for applying forDFSA approval.2. The approval of aFund Prospectus by theDFSA will not prevent the use by theDFSA of its powers, such as the stop order power in Article 25 of the Law, in circumstances where the need for such action is subsequently identified. For example, if theDFSA becomes aware, after the approval of theFund Prospectus , that it contains any misleading or deceptive information, or it breaches theProspectus provisions in other respects, theDFSA may use its stop order power or take any other action as appropriate in the circumstances.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.3.3
(1) For the purposes of MKT Rule 6.3.1(b)(ii), the offer document relating to theForeign Fund must comply with the requirements:(a) relating to aDesignated Fund in aRecognised Jurisdiction ; or(b) in a jurisdiction which provides a level of regulation relating to the offer which is acceptable to theDFSA .(2) TheDFSA may accept an offer document referred to in (1)(b) subject to such conditions or restrictions imposed by theDFSA as it sees fit.(3) Where an offer document referred to in (1) relates to a Security Token it must also contain additional information equivalent to that specified in MKT App 7.(4) Where the offer document referred to in (1) is not in the English language, it must be accompanied by an English translation acceptable to theDFSA .(5) The procedures in Schedule 3 to the Regulatory Law apply to a decision of theDFSA under this Rule to impose conditions or restrictions.(6) If theDFSA decides to exercise its power under this Rule to impose conditions or restrictions, the applicant may refer the matter to theFMT for review.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Amended] DFSA RM134/2014 (Made 21st August 2014). [VER5/06-14]
[Amended] DFSA RMI313/2021 (Made 30th June 2021). [VER18/10-21]Publication of a Prospectus
MKT 6.3.4
A
Fund Prospectus approved by theDFSA pursuant to Rule 6.3.1 must:(a) be filed with theAuthorised Market Institution on which the Units are to be admitted to trading as soon as possible after theDFSA has granted its approval; and(b) be published in accordance with the requirements in section 6.10.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Amended] DFSA RM171/2016 (Made 10th February 2016). [VER8/04-16]Exempt Offers in Respect of Units
MKT 6.3.5
The prohibition in Article 14(1)(b) of the Law does not apply, subject to the requirement in Rules 6.3.6, to the admission to trading on an
Authorised Market Institution of:(a)Units representing, over a period of 12 months, less than 10 per cent of the number ofUnits of the same class al admitted to trading on the sameAuthorised Market Institution ;(b)Units issued in substitution for Units of the same class al admitted to trading on the sameAuthorised Market Institution , if the issue of Units does not involve any increase in the issued capital;(c) Units offered, allotted or to be allotted to existingUnitholders free of charge, or in respect of dividends paid out in the form ofUnits of the same class as the Units in respect of which the dividends are paid, if:(i) the Units are of the same class as theUnits al admitted to trading on the sameAuthorised Market Institution ; and(ii) a document is made available containing information on the number and nature of theUnits and the reasons for and details of the offer; or(d)Units al admitted to trading on anotherAuthorised Market Institution orRegulated Exchange (the "other market"), where:(i) theUnits of the same class have been admitted to trading and continuously traded on the other market for more than 18 months;(ii) the ongoing obligations for trading on that other market have been complied with; and(iii) there is a summary document in the English language approved by theDFSA and published:(A) containing theKey Information required under Rule 2.5.2(1)(b);(B) stating where the most recent and currentProspectus , if any, can be obtained; and(C) specifying where the financial information published by theIssuer pursuant to its ongoing disclosure obligations of the other market is available.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Amended] DFSA RM120/2013 (Made 14th July 2013). [VER4/07-13]MKT 6.3.6
(1) AllUnits in a class ofSecurities other than those specified in (2) that are admitted to trading, including those specified under MKT Rule 6.3.5, must be traded on anAuthorised Market Institution or aRegulated Exchange .(2) All Units in a class of Securities admitted to trading that are Security Tokens, including those specified under MKT Rule 6.3.5, must be traded on an Alternative Trading System, an Authorised Market Institution or a Regulated Exchange.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Added] DFSA RMI313/2021 (Made 30th June 2021). [VER18/10-21]Financial Promotions
MKT 6.3.7
The
Reporting Entity of aListed Fund must ensure that any financial promotions relating to theUnits of the Fund comply with the requirements relating to financial promotions:(a) in the case of aDomestic Fund , those in the Collective Investment Law 2010 and the CIR Rules; and(b) in the case of aForeign Fund , the equivalent requirements applicable to the Fund in the jurisdiction of its domicile or establishment.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.4 MKT 6.4 Governance Requirements Relating to a Listed Fund
Related Party Transactions
MKT 6.4.1
(1) TheReporting Entity of aListed Fund must ensure that no transaction with respect to theFund Property is entered into with aRelated Party except in accordance with the procedures in (2).(2) For the purposes of (1), aReporting Entity of aListed Fund must:(a) if the Fund is aDomestic Fund , comply with the requirements in the Collective Investment Law 2010 and the CIR Rules relating toRelated Party Transactions ; and(b) if theFund is aForeign Fund , comply with the equivalent requirements applicable to thatFund in the jurisdiction of its domicile or establishment.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Amended] RM194/2016 (Made 7th December 2016). [VER09/02-17]MKT 6.5 MKT 6.5 Market Disclosure Relating to a Listed Fund
Disclosure of Inside Information
MKT 6.5.1 MKT 6.5.1
(1) AReporting Entity of aListed Fund must:(a) make timely disclosure ofInside Information in accordance with the requirements in this section; and(b) ensure that the disclosure it makes pursuant to (a) is not misleading, false or deceptive and does not omit anything likely to affect the import of the information.(2) For the purposes of complying with the requirement in (1)(a), theReporting Entity of aListed Fund must, subject to Rule 6.5.4 and 6.5.5, make disclosure to the market as soon as possible and in the manner specified in Rule 6.10.1.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.5.1 Guidance
1. AReporting Entity of aListed Fund is required to discloseInside Information relating to theListed Fund to the market as soon as possible in accordance with the requirements in MKT Section 6.9. In practice, a short period before announcingInside Information is permitted where aReporting Entity is affected by an unexpected event and theReporting Entity needs to clarify the situation or take legal advice so that any information released is accurate and not misleading. Any delay should be limited to a period no longer than is reasonably necessary in the circumstances. Where there is a danger of the information leaking out in the meantime, theReporting Entity should make a holding announcement giving an outline of the subject matter of the announcement, the reasons why a full announcement cannot yet be made and undertaking to make a full announcement as soon as possible.2. For the disclosure to be not misleading, false or deceptive, aReporting Entity of aListed Fund should provide information that is accurate, factual and complete. Any incomplete or inaccurate information, such as omission of relevant information, would be misleading or deceptive. Information should be provided in an easy to understand manner and not for promotional purposes. The use of imprecise and confusing language such as 'double digit' or 'in excess of last year' should be avoided as it does not allow investors to properly assess the information for the purpose of making an informed decision relating to the relevantSecurities 3. A confidentiality agreement should not prevent aReporting Entity from complying with its obligations relating to the disclosure ofInside Information .4. If, for any reason, aReporting Entity of aListed Fund is unable, or unwilling to make a holding announcement it may be appropriate for theReporting Entity to file a report pursuant to MKT Rule 6.5.4(2) and for the trading ofUnits to be suspended until theReporting Entity of theListed Fund is in a position to make an announcement.Identifying
Inside Information relating to aListed Fund 5.Inside Information is defined in Article 63(1)(a) of the Law as:"information in relation toInvestments of a precise nature which:(i) is not generally available;(ii) relates, directly or indirectly, to one or moreReporting Entities or the issuer of theInvestments concerned or to one or more of the Investments; and(iii) would, if generally available, be likely to have a significant effect on the price of theInvestments or on the price of related investments."6. For the purposes of Article 63(1)(a) of the Law, information is considered "precise" if it:a. indicates circumstances that exist or may reasonably be expected to come into existence or an event that has occurred or may reasonably be expected to occur; andb. is specific enough to enable a conclusion to be drawn as to the possible effect of those circumstances or that event on the price ofInvestments or related investments.7. Similarly, information would be likely to have a "significant effect on price" if and only if it is information of that kind which a reasonable investor would be likely to use as part of the basis of his investment decisions.8. TheReporting Entity of aListed Fund is itself best placed to determine whether information, if made public, is likely to have a significant effect on the price of the relevantUnits , as what constitutesInside Information will vary widely according to circumstances.Financial forecasts and expectations
9. Where aReporting Entity of aListed Fund has made a market announcement such as a profit forecast, such forecasts become, as soon as made, factored into the market pricing of the relevantUnits . If theReporting Entity becomes aware that there is likely to be a material difference between the forecast and the true outcome, theReporting Entity should make an announcement correcting the forecast as soon as possible to ensure that the market pricing reflects accurate information.10. In relation to financial forecasts published by aReporting Entity of aListed Fund , theDFSA considers that circumstances giving rise to a variation from the previous one should generally be consideredInside Information and should be disclosed by theReporting Entity as soon as possible. Even where aReporting Entity has not made a previous forecast, circumstances giving rise to a variation of profit or revenue from the previous corresponding reporting period should be disclosed where such circumstances would have a significant effect on the price of relevantSecurities . Generally, a change of 10% or more is a material change, but in some circumstances, a smaller variation may also be disclosable if it would reasonably be considered to have a significant effect on the price of the relevantSecurities 11. In making such disclosure, theReporting Entity of aListed Fund should provide clear details of the extent of the variation. For example, aReporting Entity may indicate that, based on management accounts, its expected net profit will be an approximate amount (e.g. approximately $15 million) or alternatively within a stated range (e.g. between $14m and $16m). Alternatively, aReporting Entity may indicate an approximate percentage movement (e.g. up or down by 35%).Relationship between continuous disclosure and periodic disclosures
12. Periodic disclosures byReporting Entities ofListed Funds are required in a number of circumstances, and examples can include interim and annual financial reports and accounts and Prospectuses.13. In the course of preparing these disclosure documents, aReporting Entity of aListed Fund may become aware ofInside Information previously unknown to it, or information which was previously insufficiently precise to warrant disclosure. In such circumstances aReporting Entity of aListed Fund should not defer releasing that information until the periodic disclosure or other documents is finalised. In such circumstances, aReporting Entity should make an announcement containing theInside Information as soon as possible.Units of the same class admitted to trading in more than one jurisdiction14. AReporting Entity of aListed Fund withUnits of the same class admitted to trading in more than one jurisdiction should ensure that the release of announcements containingInside Information is co-ordinated across jurisdictions. If the requirements for disclosure are stricter in another jurisdiction than in theDIFC , theReporting Entity must ensure that the same information is released in theDIFC as in that other jurisdiction.15. AReporting Entity of aListed Fund should not delay an announcement in theDIFC in order to wait for a market to open in another jurisdictionInside information related to the use of Distributed Ledger Technology
16. Inside Information relating directly or indirectly to a Security Token may include matters arising due to the use of Distributed Ledger Technology that are capable of having a significant effect on the price of the Security Token. Such matters may, for example, include an interruption due to the creation of a ‘fork’ on the DLT or it becoming the target of a cyber-attack. A Reporting Entity for a Security Token must ensure that its systems and controls for the identifying, controlling and handling Inside Information are adequate and will operate effectively should such matters arise, including through appropriate disclosure to markets.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Added] DFSA RMI313/2021 (Made 30th June 2021). [VER18/10-21]Delaying Disclosure
MKT 6.5.2
For the purposes of Article 41(5) of the Law, a
Reporting Entity of aListed Fund may delay market disclosure ofInside Information so as not to prejudice its legitimate interests provided that:(a) the delay is not likely to mislead the markets; and(b) if the information is to be selectively disclosed to aPerson prior to market disclosure, it is made in accordance with the requirements in Rule 6.5.3.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]Selective Disclosure
MKT 6.5.3 MKT 6.5.3
(1) For the purposes of Rule 6.5.2(b), aReporting Entity of aListed Fund may selectively discloseInside Information to aPerson prior to making market disclosure of such information only if:(a) it is for the purposes of the exercise by such aPerson of his employment, profession or duties;(b) thatPerson owes to theReporting Entity a duty of confidentiality, whether based on law, contract or otherwise; and(c) theReporting Entity has provided to thatPerson , except where thatPerson is theDFSA , a written notice as specified in (3).(2) For the purposes of (1)(a), thePersons whose exercise of employment, profession or duties may warrant selective disclosure are as follows:(a) its advisers, underwriters, sponsors or compliance advisers;(b) the Trustee, Eligible Custodian orPersons providing oversight function of theListed Fund ;(c) an agent employed to release the information;(d)Persons with whom it is negotiating with a view to effecting a transaction or raising finance;(e) theDFSA or anotherFinancial Services Regulator where such disclosure is necessary or desirable for the regulator to perform its functions;(f) aPerson to whom theReporting Entity discloses information in accordance with a lawful requirement;(g) a major Unitholder of theReporting Entity ; or(h) any otherPerson to whom it is necessary to disclose the information in the ordinary course of business of theReporting Entity .(3) For the purposes of (1)(c), theReporting Entity must, before making disclosure to aPerson , provide to thatPerson a written notice that:(a) the information is provided in confidence and must not be used for a purpose other than the purpose for which it is provided; and(b) the recipient must take reasonable steps to ensure that the recipient or anyPerson having access to the information through the recipient does not deal in the relevantSecurities , or any other related Investment, or disclose such information without legitimate reason, prior to market disclosure of that information by the Reporting.(4) Where aReporting Entity makes selective disclosure ofInside Information pursuant to (1), it must ensure that a full announcement is made to the market as soon as possible, and in any event, when it becomes aware or has reasonable grounds to suspect that such information has or may have come to the knowledge of anyPerson orPersons other than those to whom the selective disclosure was made.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.5.3 Guidance
1. It is likely thatInside Information will be made known to certain Employees of theReporting Entity or theListed Fund . AReporting Entity should put in place procedures to ensure that thoseEmployees do not disclose such information, whether or not inadvertently, and thatEmployees are adequately trained in the identification and handling ofInside Information .2. Rule 6.5.3 does not excuse aReporting Entity from its overriding obligation to discloseInside Information as soon as possible pursuant to Rule 6.5.1. AReporting Entity which proposes to delay public disclosure ofInside Information should refer to Rule 6.5.4, which sets out the limited disclosure exceptions permitted.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]Disclosure Exceptions
MKT 6.5.4
(1) AReporting Entity of aListed Fund need not, subject to (2), make disclosure of information pursuant to Rule 6.5.1, where, in the reasonable opinion of theReporting Entity , the disclosure required by that Rule would:(a) be unduly detrimental to the legitimate interests of theReporting Entity or theListed Fund as is applicable; or(b) disclose commercially sensitive material.(2) Where aReporting Entity of aListed Fund intends not to make the disclosure pursuant to (1), it must immediately file with theDFSA a confidential report which:(a) contains all the information which it seeks not to disclose and the reasons for non-disclosure; and(b) is in the English language and, where any documents accompanying the report are not in the English language, an English translation of such documents.(3) TheDFSA may:(a) specify the period during which disclosure of the information included in the confidential report need not be disclosed to the markets; and(b) extend the period referred to in (a) upon application by theReporting Entity .(4) Where a confidential report is filed with theDFSA under (2), theReporting Entity need not comply with the requirements in Rule 6.5.1 during the period permitted by theDFSA pursuant to (3), unless or until one of the following occurs:(b) theReporting Entity becomes aware that there is a material change of circumstances that renders the reason for non-disclosure of the information no longer valid; or(c) theReporting Entity becomes aware or has reasonable grounds to suspect that the relevantInside Information has or may have come to the knowledge of anyPerson orPersons other than by way of selective disclosure made pursuant to Rule 6.5.3(4).(5) The procedures in Schedule 3 to the Regulatory Law apply to a decision of theDFSA under (3) or (4)(a).(6) If theDFSA decides to exercise its power under (3) or (4)(a), theReporting Entity may refer the matter to theFMT for review.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Amended] DFSA RM134/2014 (Made 21st August 2014). [VER5/06-14]MKT 6.5.5 MKT 6.5.5
By filing a report under Rule 6.5.4, the
Reporting Entity of aListed Fund undertakes that the contents of the report and any accompanying documents are true, accurate and not misleading and contain all the information which theDFSA would reasonably expect to be made aware of in the circumstances of the case.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.5.5 Guidance
1. Examples of circumstances under which aReporting Entity of aListed Fund might rely on the exception from disclosure in Rule 6.5.4 include where:a. it would be a breach of law to disclose such information;b. the information is a trade secret;c. there are negotiations in course where the outcome or normal pattern of those negotiations would be likely to be affected by public disclosure;d. the information is provisional and generated for internal management purposes prior to later public disclosure; ore. there are impending developments that could be jeopardised by premature disclosure.2. Rule 6.5.4 does not permit aReporting Entity of aListed Fund to delay public disclosure of the fact that it is in financial difficulty or of its worsening financial condition and is limited to the fact or substance of the negotiations to deal with such a situation. AReporting Entity is also not permitted to delay disclosure ofInside Information on the basis that its position in subsequent negotiations to deal with the situation will be jeopardised by the disclosure of its financial condition.3. Where theDFSA considers that the reliance of permitted exceptions under Rule 6.5.4 is not in the interests of actual or potential investors, market integrity or theDIFC , it may direct theReporting Entity of aListed Fund to make either a holding announcement or full market disclosure. TheDFSA may, in addition, require theAuthorised Market Institution in which theUnits are traded to suspend trading of the relevantUnits .Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]Control of Inside Information
MKT 6.5.6
A
Reporting Entity of aListed Fund must establish effective arrangements to deny access toInside Information toPersons other than those who require it for the exercise of their functions within theReporting Entity or theListed Fund .Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.5.7
A
Reporting Entity of aListed Fund must establish and maintain adequate systems and controls to enable it to identify at all times anyPerson working for it under a contract of employment or otherwise, who has or may reasonably be likely to have access toInside Information relating to theReporting Entity or theListed Fund as is applicable, whether on a regular or occasional basis.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.5.8
A
Reporting Entity of aListed Fund must take the necessary measures to ensure that itsDirectors ,Members of theGoverning Body andEmployees who have or may have access toInside Information acknowledge the legal and regulatory duties entailed, and are aware of the sanctions attaching to the misuse or improper use or circulation of such information.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.5.9
A
Reporting Entity of aListed Fund must nominate two individuals to be its main points of contact with theDFSA in relation to continuing disclosure and other obligations under this chapter.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.6 MKT 6.6 Disclosure of Interests by Connected Persons of Listed Funds
MKT 6.6 Guidance
Article 42 of the Law requires certain
Persons connected to aReporting Entity to file with theDFSA and theReporting Entity a report in accordance with the requirements prescribed in theRules .Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]Definitions
MKT 6.6.1
(1) For the purposes of Article 42(2) of the Law, aPerson is hereby prescribed as aConnected Person of aListed Fund if thatPerson :(a) becomes a member of theGoverning Body of theListed Fund or an individual involved in the senior management of either theReporting Entity of the Fund or a controller of theReporting Entity of the Fund or the Trustee of the Fund; or(b) owns or beneficially owns voting rights carrying more than 5% of the voting rights attaching to theUnits of theFund or of theTrustee of theFund .(2) In (1), aPerson is a controller of aReporting Entity if thatPerson (the firstPerson ), either alone or with theAssociates of thatPerson , controls the majority of the voting rights in, or the right to appoint or remove the majority of theBoard of, theReporting Entity or anyPerson who has similar control over the firstPerson , including an ultimate controller of the firstPerson .(3) For the purposes of determining whether aPerson has control for the purposes of (1), anySecurities held by thatPerson and hisAssociates , including those in which thatPerson orAssociate of thePerson has a beneficial interest, are deemed as hisSecurities except where;(a) any suchSecurities are held by thatPerson on behalf of anotherPerson who is not anAssociate of thatPerson ; or(b) thePerson does not have control over the voting rights attaching to theSecurities because some otherPerson manages thoseSecurities on a discretionary basis.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Amended] DFSA RM120/2013 (Made 14th July 2013). [VER4/07-13]Events that Trigger a Report
MKT 6.6.2
A
Person who is aConnected Person of aListed Fund pursuant to Rule 6.6.1, must file the report within 5 business days of:(a) becoming or ceasing to be aDirector or aPerson involved in the senior management of a controller of theReporting Entity of theFund or of theTrustee of theFund ;(b) acquiring or ceasing to hold either alone or with anAssociate of thePerson 5% of the voting rights attaching to theUnits of theFund or of theTrustee of theFund or a controller of theReporting Entity of theFund or theTrustee of theFund ; or(c) an increase or decrease of at least 1% of the level of interest previously reported pursuant to (b).Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]Content of the Report
MKT 6.6.3
A report filed by a
Connected Person must contain the following information:(a) the name and address of theConnected Person ;(b) the name and address of theResponsible Entity and its registered address;(c) the name and registered address of theListed Fund ;(d) the date on which the event giving rise to the obligation to file a report occurred;(e) the date on which the filing was made; and(f) the price, amount and class ofSecurities or otherInvestments as is relevant in relation to the transaction or other event and the previous and new level of interest held.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]Market Disclosure
MKT 6.6.4
Upon a
Connected Person filing a report with theReporting Entity , theReporting Entity must, as soon as possible, disclosure of that report to the market.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.7 MKT 6.7 Disclosure of Material Interests
MKT 6.7 Guidance
Article 43 of the Law requires
Persons with a material interest in theReporting Entity orListed Fund to give a notice relating to that interest in accordance with the requirements prescribed in theRules .Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]Application
MKT 6.7.1 MKT 6.7.1
This section applies to every member of the
Governing Body of aListed Fund .Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.7.1 Guidance
In the case of a
Listed Fund , theReporting Entity is theFund Manager . However, as theGoverning Body of aListed Fund may include otherPersons who exercise powers similar to those that are exercised by Directors of theFund Manager , the obligations relating to disclosure of material interests extend, in the case of aListed Fund , to members of itsGoverning Body .Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]Definition of a Material Interest
MKT 6.7.2
A member of the
Governing Body of aListed Fund has a material interest in theListed Fund if thatPerson has any interest arising through:(a) the direct or indirect ownership of, or beneficial ownership of,Units of theListed Fund ; or(b) any involvement in financial or commercial arrangement with or relating to theListed Fund .Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]Content and Procedures Relating to the Notice
MKT 6.7.3
(1) A notice relating to a material interest must, subject only to (2), be given by aPerson referred to in Rule 6.7.2, to the other members of theGoverning Body within 5 business days of the material interest arising or changing;(2) APerson referred to in (1) need not give a notice relating to a material interest if the material interest is required to be included in a report thatPerson must provide by virtue of being aConnected Person under section 6.6 and thePerson has complied with the requirement in that section.(3) A notice relating to a material interest must contain:(a) the name and address of thePerson giving the notice;(b) if the material interest relates to aListed Fund , the name and registered address of theListed Fund ; and(c) the details relating to the material interest, including the date on which the material interest arose or changed.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.8 MKT 6.8 Other Matters that Require Market Disclosure
MKT 6.9 MKT 6.9 Accounting Periods and Financial Reports of Listed Funds
MKT 6.9.1 MKT 6.9.1
A
Reporting Entity of aListed Fund must, in order to comply with the requirements in this section, file with theDFSA the annual financial report and interim financial report and other statements in respect of theListed Fund . Such reports and statements must be prepared, in the case of:(a) aDomestic Fund , in accordance with the requirements relating to the annual and interim reports under the Collective Investment Law 2010 and the CIR Rules; and(b) aForeign Fund , in accordance with the applicable requirements in the jurisdiction in which the Fund is domiciled or established.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.9.1 Guidance
Under Rule 6.2.1, a
Foreign Fund can be admitted to trading on anAuthorised Market Institution if it is either aDesignated Fund from aRecognised Jurisdictions or approved by theDFSA as aFund subject to equivalent regulation. Accordingly, suchFunds would be subject to financial and periodic reporting requirements that are similar to the financial reporting requirements applicable toDomestic Funds .Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]Market Disclosure
MKT 6.9.2
(1) AReporting Entity of aListed Fund must disclose to the market the following:(a) its annual financial report;(b) its interim financial reports; and(c) its preliminary financial results.(2) AReporting Entity must make the market disclosure required in (1) within the following time periods:(a) in relation to its annual financial report, as soon as possible after the accounts have been approved, but no later than 120 days after the end of the financial period;(b) in relation to its semi-annual financial report, as soon as possible and in any event no later than 60 days after the end of the period to which the report relates; and(c) in relation to its preliminary financial results, as soon as possible but no later than 30 minutes before the market opens on the day after the approval of theBoard .(3) AReporting Entity of aListed Fund must, where there is a change to its accounting reference date, disclose to the market:(a) the change to its accounting reference date as soon as possible; and(b) a second interim report within six months of the old accounting reference date if the change of the accounting reference date extends the annual accounting period to more than 14 months.(4) AReporting Entity of an Exchange Traded Fund (ETF ) must:(a) disclose in its financial reports referred to in (1), the size of the tracking error at the end of the period under review; and(b) include a statement in its annual report explaining:(i) any divergence between the anticipated and realised tracking error for the relevant period; and(ii) the annual tracking difference between the performance of theETF , and the performance of the index or other benchmark referenced.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Amended] DFSA RM219/2018 (Made 22nd February 2018). [VER13/12-18]MKT 6.10 MKT 6.10 Manner of Market Disclosure
MKT 6.10.1
Where a
Reporting Entity of aListed Fund is required to make market disclosure of information pursuant to a provision in this chapter, such information must be disclosed to the market in accordance with the requirements in Section 4.7.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.10.2
A
Reporting Entity of aListed Fund must retain on its website all information that has been disclosed to the market for a period of one year following publication.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.11 MKT 6.11 DFSA Power to Direct Disclosure
MKT 6.11 Guidance
Article 50 of the Law gives the
DFSA the power to direct aReporting Entity to disclose specified information to the market or take such other steps as theDFSA considers appropriate where it is satisfied that it is in the interest of theDIFC to do so.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]MKT 6.11.1
(1) TheDFSA will, pursuant to its power under Article 50(1) of the Law, issue a written notice directing aReporting Entity of aListed Fund (a "direction notice") to disclose specified information to the market and to take any other steps as theDFSA considers appropriate:(a) where it fails to comply with an obligation to disclose any information under the Law and the Rules;(b) to correct or prevent a false market if theDFSA reasonably considers that there is or is likely to be a false market in theUnits of theListed Fund ;(c) where there is a rumour or media speculation in relation to theReporting Entity or theListed Fund that has not been confirmed or clarified by an announcement by theReporting Entity made in accordance with Rule 6.5.1 and such rumour or media speculation is or is reasonably likely to have an impact upon the price of theUnits ; or(d) where it is in the interests of:(i) actual or potential investors;(ii) market integrity; or(iii) theDIFC .(2) AReporting Entity which receives a direction notice issued pursuant to (1) must comply with the terms of that notice.Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Amended] RM163/2015 (Made 9th December 2015). [VER7/02-16]