MKT 6 MKT 6 Listed Funds
MKT 6.1 MKT 6.1 Application
This chapter applies to:(a) every
Reporting Entityof a Listed Fund; and(b) any other Personspecified in the Rules.
MKT 6.2 MKT 6.2 General Requirements
Personmay have the Units of a Fundadmitted to an Official List of Securitiesonly if:(a) in the case of a Domestic Fund, it is a Public Fund; and(b) in the case of a Foreign Fund:(i) it is a Designated Fundfrom a Recognised Jurisdiction; or(ii) it is a Fund approved by the DFSAas a Fund subject to equivalent regulation as that applying to a Public 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 a
Property Fund, it is a closed-ended investment vehicle and 60% or more of the Fund's assets comprise Real 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).
MKT 6.2.2 MKT 6.2.2
Where an obligation applies to a
Reporting Entityof a Fundunder a provision of this chapter, except where expressly provided otherwise, the Governing Bodyof the Reporting Entitymust ensure compliance with that obligation.
MKT 6.2.2 Guidance
In the case of an
Investment Company( Fund) which has as its Fund Managera licensed Corporate Director, the Reporting Entityof that Fundis its Corporate Director. See CIR section 8.1A for details relating to Corporate 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 Guidance1. The
Prospectusrequirements including content and structure in chapter 2 of this module do not apply to Prospectuses relating to Unitsof Funds. Prospectusrequirements 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 to Fund Prospectuses.2. However, under Article 14(1)(b) of the Law, a Prospectusis required for the purposes of admitting any Securities, including Units, to trading on an Authorised Market Institution. The Rules in this section 6.3 are designed to enable a Personseeking to have Unitsof a Fundadmitted to trading on an Authorised Market Institutionto be able to use a Prospectusprepared in accordance with the requirements in the Collective Investment Law 2010 and the Rules in the CIR module if it is a Domestic Fund. In the case of Foreign Funds, the offer documents prepared in accordance with the requirements in a foreign jurisdiction will be acceptable in the circumstances prescribed in this section.
MKT 6.3.1(1) A
Personintending to have Unitsadmitted to trading on an Authorised Market Institutionmust, subject to (2), (3) and (4), submit to the DFSA:(a) a completed application using the appropriate form set out in AFN and the relevant fee prescribed in FER;(b) a Prospectusrelating to the Fund ("Fund Prospectus") which:(i) complies with, in the case of a Domestic Fund, the requirements in the Collective Investment Law 2010 and CIR that apply to a Public Fundand, where that Fundis also an Islamic Fund, the additional requirements in IFR chapter 6;(ii) is prepared, in the case of a Foreign Fund, in accordance with the requirements in Rule 6.3.3; and(iii) contains, unless it is an Islamic Listed Fund, a prominent disclaimer in bold, on the front page of the Prospectus, as follows:
DFSAdoes not accept responsibility for the content of the information included in the Prospectus, including the accuracy or completeness of such information. The liability for the content of the Prospectuslies with the Issuerof the Prospectusand other Persons, such as Experts, whose opinions are included in the Prospectuswith their consent. The DFSAhas also not assessed the suitability of the Securitiesto which the Prospectusrelates to any particular investor or type of investor. If you do not understand the contents of this Prospectusor are unsure whether the Securitiesto which the Prospectusrelates are suitable for your individual investment objectives and circumstances, you should consult an authorised financial advisor."(c) where subsequent drafts or versions of the Fund Prospectusare submitted, a marked up version showing changes from the previous version submitted to the DFSA;(d) if information is incorporated in the Fund Prospectusby reference to another document, a copy of that other document;(e) the identity of the Personwho is or intends to be the Reporting 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 the DFSAduring business hours; and(g) any other information that the DFSAmay require.(2) The application in (1) must be submitted to the DFSA:(a) in the case of an applicant who has not made a previous Prospectus Offer, at least  business days prior to the intended date on which the applicant expects the Prospectusto be approved;(b) in other cases, at least  business days before the intended date on which the applicant expects the Prospectusto be approved; and(c) in the case of a Supplementary Prospectus, as soon as is reasonably possible.(3) In the case of a Supplementary 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 a Domestic Fund, a Supplementary Prospectuswhich meets the requirements in the Collective Investment Law 2010 and the CIR Rules; and where that Fundis an Islamic Fund, the additional requirements in IFR; and(ii) in the case of a Foreign 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 a Passported Fund, the following disclaimer must be used instead of the disclaimer specified in (1)(b)(iii):
"This is an
Approved Prospectusfor the purposes of admitting Securities, including units, to trading on an Authorised Market Institutionin the Dubai International Financial Centre.
Notwithstanding that the
DFSAhas approved the prospectus, the DFSAdoes not accept responsibility for the content of the information included in the Prospectus, including the accuracy or completeness of such information. The liability for the content of the Prospectuslies with the Issuerof the Prospectusand other Persons, such as Experts, whose opinions are included in the Prospectuswith their consent.
No other regulatory authority in the
UAEhas 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 the UAEhas 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 the UAEhas any responsibility for the same.
Passported Fundis a Public Fundand, 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)].
DFSAhas also not assessed the suitability of the Securitiesto which the Prospectusrelates to any particular investor or type of investor. If you do not understand the contents of this Prospectusor are unsure whether the Securitiesto which the Prospectusrelates are suitable for your individual investment objectives and circumstances, you should consult an authorised financial advisor."
Approval of a Prospectus
MKT 6.3.2 MKT 6.3.2(1) The
DFSAwill approve a Fund Prospectuswhich has been filed with the DFSAin accordance with Rule 6.3.1 as soon as reasonably practicable where it is satisfied that the Prospectuscomplies with all the requirements applicable to that Prospectus.(2) A Fund Prospectusis not an Approved Prospectusfor the purposes of Article 14(2) of the Law unless the DFSAhas issued to the applicant a notice stating its approval:(a) of the Prospectusor Supplementary Prospectus, as the case may be; and(b) in the case of a, Prospectusin (a) comprising multiple documents, of all the multiple documents.(3) The procedures in Schedule 3 to the Regulatory Law apply to a decision of the DFSAunder this Rule not to approve a Fund Prospectus.(4) If the DFSAdecides to exercise its power not to approve a Fund Prospectusunder this Rule, the applicant may refer the matter to the FMTfor review.
MKT 6.3.2 Guidance1. A
Personintending to apply to the DFSAfor approval of a Fund Prospectuspursuant to Rule 6.3.1 should consider submitting a draft Prospectusfor preliminary review by the DFSAprior to formally submitting the Prospectusfor DFSAapproval. See the RPP Sourcebook for procedures for applying for DFSAapproval.2. The approval of a Fund Prospectusby the DFSAwill not prevent the use by the DFSAof 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 the DFSAbecomes aware, after the approval of the Fund Prospectus, that it contains any misleading or deceptive information, or it breaches the Prospectusprovisions in other respects, the DFSAmay use its stop order power or take any other action as appropriate in the circumstances.
MKT 6.3.3(1) For the purposes of Rule 6.3.1(b)(ii), the offer document relating to the
Foreign Fundmust comply with the requirements:(a) relating to a Designated Fundin a Recognised Jurisdiction; or(b) in a jurisdiction which provides a level of regulation relating to the offer which is acceptable to the DFSA.(2) The DFSAmay accept an offer document referred to in (1)(b) subject to such conditions or restrictions imposed by the DFSAas it sees fit.(3) Where the offer document referred to in (1) is not in the English language, it must be accompanied by an English translation acceptable to the DFSA.(4) The procedures in Schedule 3 to the Regulatory Law apply to a decision of the DFSAunder this Rule to impose conditions or restrictions.(5) If the DFSAdecides to exercise its power under this Rule to impose conditions or restrictions, the applicant may refer the matter to the FMTfor review.
Publication of a Prospectus
Fund Prospectusapproved by the DFSApursuant to Rule 6.3.1 must:(a) be filed with the Authorised Market Institutionon which the Units are to be admitted to trading as soon as possible after the DFSAhas granted its approval; and(b) be published in accordance with the requirements in section 6.10.
Exempt Offers in Respect of Units
Unitsrepresenting, over a period of 12 months, less than 10 per cent of the number of Unitsof the same class al admitted to trading on the same Authorised Market Institution;(b) Unitsissued in substitution for Units of the same class al admitted to trading on the same Authorised 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 existing Unitholdersfree of charge, or in respect of dividends paid out in the form of Unitsof the same class as the Units in respect of which the dividends are paid, if:(i) the Units are of the same class as the Unitsal admitted to trading on the same Authorised Market Institution; and(ii) a document is made available containing information on the number and nature of the Unitsand the reasons for and details of the offer; or(d) Unitsal admitted to trading on another Authorised Market Institutionor Regulated Exchange(the "other market"), where:(i) the Unitsof 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 the DFSAand published:(A) containing the Key Informationrequired under Rule 2.5.2(1)(b);(B) stating where the most recent and current Prospectus, if any, can be obtained; and(C) specifying where the financial information published by the Issuerpursuant to its ongoing disclosure obligations of the other market is available.
Unitsin a class of Securitiesadmitted to trading including those specified under Rule 6.3.5 must be traded on an Authorised Market Institutionor a Regulated Exchange.
Reporting Entityof a Listed Fundmust ensure that any financial promotions relating to the Unitsof the Fund comply with the requirements relating to financial promotions:(a) in the case of a Domestic Fund, those in the Collective Investment Law 2010 and the CIR Rules; and(b) in the case of a Foreign Fund, the equivalent requirements applicable to the Fund in the jurisdiction of its domicile or establishment.
MKT 6.4 MKT 6.4 Governance Requirements Relating to a Listed Fund
Related Party Transactions
MKT 6.4.1(1) The
Reporting Entityof a Listed Fundmust ensure that no transaction with respect to the Fund Propertyis entered into with a Related Partyexcept in accordance with the procedures in (2).(2) For the purposes of (1), a Reporting Entityof a Listed Fundmust:(a) if the Fund is a Domestic Fund, comply with the requirements in the Collective Investment Law 2010 and the CIR Rules relating to Related Party Transactions; and(b) if the Fundis a Foreign Fund, comply with the equivalent requirements applicable to that Fundin the jurisdiction of its domicile or establishment.
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) A
Reporting Entityof a Listed Fundmust:(a) make timely disclosure of Inside Informationin 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), the Reporting Entityof a Listed Fundmust, 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.
MKT 6.5.1 Guidance1. A
Reporting Entityof a Listed Fundis required to disclose Inside Informationrelating to the Listed Fundto the market as soon as possible in accordance with the requirements in Section 6.9. In practice, a short period before announcing Inside Informationis permitted where a Reporting Entityis affected by an unexpected event and the Reporting Entityneeds 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, the Reporting Entityshould 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, a Reporting Entityof a Listed Fundshould 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 relevant Securities3. A confidentiality agreement should not prevent a Reporting Entityfrom complying with its obligations relating to the disclosure of Inside Information.4. If, for any reason, a Reporting Entityof a Listed Fundis unable, or unwilling to make a holding announcement it may be appropriate for the Reporting Entityto file a report pursuant to Rule 6.5.4(2) and for the trading of Unitsto be suspended until the Reporting Entityof the Listed Fundis in a position to make an announcement.
Inside Informationrelating to a Listed Fund5. Inside Informationis defined in Article 63(1)(a) of the Law as:
"information in relation to
Investmentsof a precise nature which:(i) is not generally available;(ii) relates, directly or indirectly, to one or more Reporting Entitiesor the issuer of the Investmentsconcerned 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 the Investmentsor 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 of Investmentsor 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. The Reporting Entityof a Listed Fundis itself best placed to determine whether information, if made public, is likely to have a significant effect on the price of the relevant Units, as what constitutes Inside Informationwill vary widely according to circumstances.
Financial forecasts and expectations9. Where a
Reporting Entityof a Listed Fundhas made a market announcement such as a profit forecast, such forecasts become, as soon as made, factored into the market pricing of the relevant Units. If the Reporting Entitybecomes aware that there is likely to be a material difference between the forecast and the true outcome, the Reporting Entityshould 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 a Reporting Entityof a Listed Fund, the DFSAconsiders that circumstances giving rise to a variation from the previous one should generally be considered Inside Informationand should be disclosed by the Reporting Entityas soon as possible. Even where a Reporting Entityhas 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 relevant Securities. 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 relevant Securities11. In making such disclosure, the Reporting Entityof a Listed Fundshould provide clear details of the extent of the variation. For example, a Reporting Entitymay 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, a Reporting Entitymay indicate an approximate percentage movement (e.g. up or down by 35%).
Relationship between continuous disclosure and periodic disclosures12. Periodic disclosures by
Reporting Entitiesof Listed Fundsare 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, a Reporting Entityof a Listed Fundmay become aware of Inside Informationpreviously unknown to it, or information which was previously insufficiently precise to warrant disclosure. In such circumstances a Reporting Entityof a Listed Fundshould not defer releasing that information until the periodic disclosure or other documents is finalised. In such circumstances, a Reporting Entityshould make an announcement containing the Inside Informationas soon as possible. Unitsof the same class admitted to trading in more than one jurisdiction14. A Reporting Entityof a Listed Fundwith Unitsof the same class admitted to trading in more than one jurisdiction should ensure that the release of announcements containing Inside Informationis co-ordinated across jurisdictions. If the requirements for disclosure are stricter in another jurisdiction than in the DIFC, the Reporting Entitymust ensure that the same information is released in the DIFCas in that other jurisdiction.15. A Reporting Entityof a Listed Fundshould not delay an announcement in the DIFCin order to wait for a market to open in another jurisdiction
For the purposes of Article 41(5) of the Law, a
Reporting Entityof a Listed Fundmay delay market disclosure of Inside Informationso 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 a Personprior to market disclosure, it is made in accordance with the requirements in Rule 6.5.3.
MKT 6.5.3 MKT 6.5.3(1) For the purposes of Rule 6.5.2(b), a
Reporting Entityof a Listed Fundmay selectively disclose Inside Informationto a Personprior to making market disclosure of such information only if:(a) it is for the purposes of the exercise by such a Personof his employment, profession or duties;(b) that Personowes to the Reporting Entitya duty of confidentiality, whether based on law, contract or otherwise; and(c) the Reporting Entityhas provided to that Person, except where that Personis the DFSA, a written notice as specified in (3).(2) For the purposes of (1)(a), the Personswhose 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 or Personsproviding oversight function of the Listed Fund;(c) an agent employed to release the information;(d) Personswith whom it is negotiating with a view to effecting a transaction or raising finance;(e) the DFSAor another Financial Services Regulatorwhere such disclosure is necessary or desirable for the regulator to perform its functions;(f) a Personto whom the Reporting Entitydiscloses information in accordance with a lawful requirement;(g) a major Unitholder of the Reporting Entity; or(h) any other Personto whom it is necessary to disclose the information in the ordinary course of business of the Reporting Entity.(3) For the purposes of (1)(c), the Reporting Entitymust, before making disclosure to a Person, provide to that Persona 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 any Personhaving access to the information through the recipient does not deal in the relevant Securities, or any other related Investment, or disclose such information without legitimate reason, prior to market disclosure of that information by the Reporting.(4) Where a Reporting Entitymakes selective disclosure of Inside Informationpursuant 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 any Personor Personsother than those to whom the selective disclosure was made.
MKT 6.5.3 Guidance1. It is likely that
Inside Informationwill be made known to certain Employees of the Reporting Entityor the Listed Fund. A Reporting Entityshould put in place procedures to ensure that those Employeesdo not disclose such information, whether or not inadvertently, and that Employeesare adequately trained in the identification and handling of Inside Information.2. Rule 6.5.3 does not excuse a Reporting Entityfrom its overriding obligation to disclose Inside Informationas soon as possible pursuant to Rule 6.5.1. A Reporting Entitywhich proposes to delay public disclosure of Inside Informationshould refer to Rule 6.5.4, which sets out the limited disclosure exceptions permitted.
MKT 6.5.4(1) A
Reporting Entityof a Listed Fundneed not, subject to (2), make disclosure of information pursuant to Rule 6.5.1, where, in the reasonable opinion of the Reporting Entity, the disclosure required by that Rule would:(a) be unduly detrimental to the legitimate interests of the Reporting Entityor the Listed Fundas is applicable; or(b) disclose commercially sensitive material.(2) Where a Reporting Entityof a Listed Fundintends not to make the disclosure pursuant to (1), it must immediately file with the DFSAa 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) The DFSAmay:(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 the Reporting Entity.(4) Where a confidential report is filed with the DFSAunder (2), the Reporting Entityneed not comply with the requirements in Rule 6.5.1 during the period permitted by the DFSApursuant to (3), unless or until one of the following occurs:(a) the DFSAdirects the Reporting Entityto comply with Rule 6.5.1;(b) the Reporting Entitybecomes aware that there is a material change of circumstances that renders the reason for non-disclosure of the information no longer valid; or(c) the Reporting Entitybecomes aware or has reasonable grounds to suspect that the relevant Inside Informationhas or may have come to the knowledge of any Personor Personsother 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 the DFSAunder (3) or (4)(a).(6) If the DFSAdecides to exercise its power under (3) or (4)(a), the Reporting Entitymay refer the matter to the FMTfor review.
MKT 6.5.5 MKT 6.5.5
By filing a report under Rule 6.5.4, the
Reporting Entityof a Listed Fundundertakes that the contents of the report and any accompanying documents are true, accurate and not misleading and contain all the information which the DFSAwould reasonably expect to be made aware of in the circumstances of the case.
MKT 6.5.5 Guidance1. Examples of circumstances under which a
Reporting Entityof a Listed Fundmight 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 a Reporting Entityof a Listed Fundto 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. A Reporting Entityis also not permitted to delay disclosure of Inside Informationon 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 the DFSAconsiders that the reliance of permitted exceptions under Rule 6.5.4 is not in the interests of actual or potential investors, market integrity or the DIFC, it may direct the Reporting Entityof a Listed Fundto make either a holding announcement or full market disclosure. The DFSAmay, in addition, require the Authorised Market Institutionin which the Unitsare traded to suspend trading of the relevant Units.
Control of Inside Information
Reporting Entityof a Listed Fundmust establish effective arrangements to deny access to Inside Informationto Personsother than those who require it for the exercise of their functions within the Reporting Entityor the Listed Fund.
Reporting Entityof a Listed Fundmust establish and maintain adequate systems and controls to enable it to identify at all times any Personworking for it under a contract of employment or otherwise, who has or may reasonably be likely to have access to Inside Informationrelating to the Reporting Entityor the Listed Fundas is applicable, whether on a regular or occasional basis.
Reporting Entityof a Listed Fundmust take the necessary measures to ensure that its Directors, Membersof the Governing Bodyand Employeeswho have or may have access to Inside Informationacknowledge the legal and regulatory duties entailed, and are aware of the sanctions attaching to the misuse or improper use or circulation of such information.
Reporting Entityof a Listed Fundmust nominate two individuals to be its main points of contact with the DFSAin relation to continuing disclosure and other obligations under this chapter.
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
Personsconnected to a Reporting Entityto file with the DFSAand the Reporting Entitya report in accordance with the requirements prescribed in the Rules.
MKT 6.6.1(1) For the purposes of Article 42(2) of the Law, a
Personis hereby prescribed as a Connected Personof a Listed Fundif that Person:(a) becomes a member of the Governing Bodyof the Listed Fundor an individual involved in the senior management of either the Reporting Entityof the Fund or a controller of the Reporting Entityof 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 the Unitsof the Fundor of the Trusteeof the Fund.(2) In (1), a Personis a controller of a Reporting Entityif that Person(the first Person), either alone or with the Associatesof that Person, controls the majority of the voting rights in, or the right to appoint or remove the majority of the Boardof, the Reporting Entityor any Personwho has similar control over the first Person, including an ultimate controller of the first Person.(3) For the purposes of determining whether a Personhas control for the purposes of (1), any Securitiesheld by that Personand his Associates, including those in which that Personor Associateof the Personhas a beneficial interest, are deemed as his Securitiesexcept where;(a) any such Securitiesare held by that Personon behalf of another Personwho is not an Associateof that Person; or(b) the Persondoes not have control over the voting rights attaching to the Securitiesbecause some other Personmanages those Securitieson a discretionary basis.
Events that Trigger a Report
Personwho is a Connected Personof a Listed Fundpursuant to Rule 6.6.1, must file the report within 5 business days of:(a) becoming or ceasing to be a Directoror a Personinvolved in the senior management of a controller of the Reporting Entityof the Fundor of the Trusteeof the Fund;(b) acquiring or ceasing to hold either alone or with an Associateof the Person5% of the voting rights attaching to the Unitsof the Fundor of the Trusteeof the Fundor a controller of the Reporting Entityof the Fundor the Trusteeof the Fund; or(c) an increase or decrease of at least 1% of the level of interest previously reported pursuant to (b).
Content of the Report
A report filed by a
Connected Personmust contain the following information:(a) the name and address of the Connected Person;(b) the name and address of the Responsible Entityand its registered address;(c) the name and registered address of the Listed 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 of Securitiesor other Investmentsas is relevant in relation to the transaction or other event and the previous and new level of interest held.
Connected Personfiling a report with the Reporting Entity, the Reporting Entitymust, as soon as possible, disclosure of that report to the market.
MKT 6.7 MKT 6.7 Disclosure of Material Interests
MKT 6.7 Guidance
Article 43 of the Law requires
Personswith a material interest in the Reporting Entityor Listed Fundto give a notice relating to that interest in accordance with the requirements prescribed in the Rules.
MKT 6.7.1 MKT 6.7.1
This section applies to every member of the
Governing Bodyof a Listed Fund.
MKT 6.7.1 Guidance
In the case of a
Listed Fund, the Reporting Entityis the Fund Manager. However, as the Governing Bodyof a Listed Fundmay include other Personswho exercise powers similar to those that are exercised by Directors of the Fund Manager, the obligations relating to disclosure of material interests extend, in the case of a Listed Fund, to members of its Governing Body.
Definition of a Material Interest
A member of the
Governing Bodyof a Listed Fundhas a material interest in the Listed Fundif that Personhas any interest arising through:(a) the direct or indirect ownership of, or beneficial ownership of, Unitsof the Listed Fund; or(b) any involvement in financial or commercial arrangement with or relating to the Listed Fund.
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 a
Personreferred to in Rule 6.7.2, to the other members of the Governing Bodywithin 5 business days of the material interest arising or changing;(2) A Personreferred 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 that Personmust provide by virtue of being a Connected Personunder section 6.6 and the Personhas complied with the requirement in that section.(3) A notice relating to a material interest must contain:(a) the name and address of the Persongiving the notice;(b) if the material interest relates to a Listed Fund, the name and registered address of the Listed Fund; and(c) the details relating to the material interest, including the date on which the material interest arose or changed.
MKT 6.8 MKT 6.8 Other Matters that Require Market Disclosure
Reporting Entityof a Listed Fundmust disclose to the market the matters specified in App 3.
MKT 6.9 MKT 6.9 Accounting Periods and Financial Reports of Listed Funds
MKT 6.9.1 MKT 6.9.1
Reporting Entityof a Listed Fundmust, in order to comply with the requirements in this section, file with the DFSAthe annual financial report and interim financial report and other statements in respect of the Listed Fund. Such reports and statements must be prepared, in the case of:(a) a Domestic 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) a Foreign Fund, in accordance with the applicable requirements in the jurisdiction in which the Fund is domiciled or established.
MKT 6.9.1 Guidance
Under Rule 6.2.1, a
Foreign Fundcan be admitted to trading on an Authorised Market Institutionif it is either a Designated Fundfrom a Recognised Jurisdictionsor approved by the DFSAas a Fundsubject to equivalent regulation. Accordingly, such Fundswould be subject to financial and periodic reporting requirements that are similar to the financial reporting requirements applicable to Domestic Funds.
MKT 6.9.2(1) A
Reporting Entityof a Listed Fundmust disclose to the market the following:(a) its annual financial report;(b) its interim financial reports; and(c) its preliminary financial results.(2) A Reporting Entitymust 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 the Board.(3) A Reporting Entityof a Listed Fundmust, 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) A Reporting Entityof 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 the ETF, and the performance of the index or other benchmark referenced.
MKT 6.10 MKT 6.10 Manner of Market Disclosure
Reporting Entityof a Listed Fundis 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.
Reporting Entityof a Listed Fundmust retain on its website all information that has been disclosed to the market for a period of one year following publication.
MKT 6.11 MKT 6.11 DFSA Power to Direct Disclosure
MKT 6.11 Guidance
Article 50 of the Law gives the
DFSAthe power to direct a Reporting Entityto disclose specified information to the market or take such other steps as the DFSAconsiders appropriate where it is satisfied that it is in the interest of the DIFCto do so.
MKT 6.11.1(1) The
DFSAwill, pursuant to its power under Article 50(1) of the Law, issue a written notice directing a Reporting Entityof a Listed Fund(a "direction notice") to disclose specified information to the market and to take any other steps as the DFSAconsiders 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 the DFSAreasonably considers that there is or is likely to be a false market in the Unitsof the Listed Fund;(c) where there is a rumour or media speculation in relation to the Reporting Entityor the Listed Fundthat has not been confirmed or clarified by an announcement by the Reporting Entitymade 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 the Units; or(d) where it is in the interests of:(i) actual or potential investors;(ii) market integrity; or(iii) the DIFC.(2) A Reporting Entitywhich receives a direction notice issued pursuant to (1) must comply with the terms of that notice.