CIR App 7 CIR App 7 Content of a Public Fund Prospectus
CIR A7.1 CIR A7.1 Application
This table applies to the
Personsreferred to in Rule 14.1.1(1).
Public Fundis to be a Listed Fund, there are additional requirements applicable to such a Fundunder section 6.3 of the MKTmodule. If such a Fundis to be an Islamic Fund, please refer to section 6.5 of the IFRmodule. See also CIR 14.3.3(2).
Prospectusfor a Public Fundmust contain the information prescribed in the following table.
Prospectusis required to contain all the information an investor would reasonably require and expect to find in a Prospectusto be able to make an informed decision. CIRcontains additional disclosure for Public Funds. This Table sets out the key mandatory disclosures required in a Public Fund Prospectusunder the Law, CIRand IFR, including for specialist classes of Public Funds. Mandatory disclosure for all Public Funds 1. Persons Responsible for the Prospectus 1.1(a) Names and details of all Personsresponsible for the information given in the Prospectus.(b) If some Personsare responsible for only certain parts of the Prospectus(e.g. Experts), an indication of the relevant parts for which they are responsible. 1.2 A statement from the Personsreferred to in 1.1 that, having taken due care to ensure that such is the case, the information included in the Prospectus(or the part of the Prospectusfor which the Personis responsible) is, to the best of their knowledge, accurate, and contains no material omissions likely to impact on the accuracy of the information in the Prospectus(or the relevant part). 1.3
A prominent statement in the front page of the
Prospectusas follows:"This Prospectusrelates to a DIFC Fundin accordance with the Collective Investment Law 2010 and Rules of the Dubai Financial Services Authority (" DFSA").
DFSAhas no responsibility for reviewing or verifying any Prospectusor other documents in connection with this Domestic Fund. Accordingly, the DFSAhas not approved this Prospectusor any other associated documents, nor taken any steps to verify the information set out in this Prospectus, and has no responsibility for it.
Unitsto which this Prospectusrelates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the Unitsoffered should conduct their own due diligence on the Units.
If you do not understand the contents of this document you should consult an authorised financial adviser."
2. Document Status 2.1
A prominent statement that:(a) the document is the
Prospectusof the Public Fund;(b) it contains information valid as at the date of the signing of the Prospectusby the Personsreferred to in 1.1; and(c) no Unitswill be issued on the basis of the Prospectusafter the expiry date specified in the Prospectus. 2.2 The location where a copy of the Prospectusis available free of charge. 3. Summary Document 3.1
The information required under CIR Rule 14.3.1(d), i.e.:(a) information to clearly identify the
Fundand its classification;(b) a short description of the Fund's investmentobjectives and investmentpolicy for achieving those objectives;(c) past performance presentation or, where relevant, performance scenarios;(d) costs and associated charges; and(e) risk/reward profile of the investment, including appropriate guidanceand warnings in relation to the risks associated with investments, in the relevant Fund. 4. The name and description of the Fund 4.1(a) The name of the Fundand whether the Fundis a Public Fundestablished in the DIFCor an External Fund.(b) If the Fundis a specialist class of Fundas defined in chapter 3, the relevant specialist class of the Fund.(c) The legal form of the Fund(whether it is an Investment Company, Investment Partnership or Investment Trust) and, if not attached to the Prospectus, where the Fund's Constitutionand any amending instrumentto it may be inspected and copies of them may be obtained.(d) Whether the Fundis an Open-ended or Closed-ended Fundas defined in Article 18A of the Law.(e) The base currency of the Fundand, where relevant, the maximum and minimum sizes of the Fund'scapital. 4.2(a) The effective date of commencement of the Fund'soperations.(b) If the duration of the Fundis limited, that duration.(c) The circumstances in which the Fundmay be wound up under the Law and the Rules in this module and a summaryof the procedure for, and the rights of Unitholdersunder, such a winding up. 4.3(a) The basis upon which Personsare eligible to participate in the Fundand, where applicable, the minimum initial investment.(b) A statement that the Unitholdersare not liable for the debts of the Fundunless the applicable legislation prescribes otherwise and, if so, a statement specifying those circumstances. 5. Investment objectives and policy of the Fund 5.1
Sufficient information to enable a
Unitholderor potential Unitholderto understand the investment objectives of the Fundand its investment policy for achieving those investment objectives, including:(a) the general nature of the portfolio assets and any intended specialisation;(b) the policy for the spreading of risk in the Fund Propertyincluding an explanation of any potential risks identified;(c) the Fund'spolicy in relation to the exercise of borrowing powers;(d) the Fund'spolicy in relation to the use of Derivativesfor speculation or hedging purposes; and(e) whether the Fund'spolicy envisages remaining not fully invested at all times – and a description of such circumstances. 5.2 A description of how the investment objectives and policy stated under 5.1 may be varied, and the circumstances in which such variation requires the approval of Unitholders. 5.3
Fund Propertyis to be invested in Unitsin Fundswhich are managed by the Fund Manageror an Associateof the Fund Manager, a statement of:(a) the maximum amount of investmentsin each Fund;(b) the basis and amount of the charges in respect of the transactions referred to in (a), if not al disclosed under any other section of the Prospectus; and(c) the extent to which such charges will be reimbursed to the Fund. 5.4 The profile of a typical investor for whom the Fundis designed. 6. Investment restrictions 6.1(a) A statement of any investment restrictions applicable to the Fund.(b) An indication of how the Unitholdersin the Fundwill be informed of the actions taken by the Fund Managerin the event of a breach of the investment restrictions. 7. Information about the rights attached to Units of the Fund 7.1
Information about:(a) the nature/characteristics of the
Unitsin the Fund(i.e. shares, partnershipinterest or beneficial ownership) and the rights attaching to the Units(e.g. relating to voting and participation in distributions):(b) how Unitholdersmay exercise their voting rights and what they are; and(c) the circumstances where a mandatory redemption, cancellation or conversion of a Unitfrom one class to another is required. 7.2
Fundissues different classes of Units:(a) the names of the relevant classes of Units; and(b) how the rights attaching to one class of Unitsdiffer from the rights attaching to other classes of Units. 7.3
Unitsare held (e.g. in certificated or dematerialised form). 8. The Register of Unitholders 8.1 Address in the DIFCwhere the register of Unitholdersof the Fundis kept and can be inspected by Unitholdersof the Fund. 9. Information about distribution and accounting period 9.1
Details of the accounting and distribution periods and a description of the procedures:(a) for determining and applying income (including how any distributable income is paid); and(b) for dealing with unclaimed distributions.
10. Information about the Fund Manager 10.1(a) The Fund Manager's:(i) name (and, if different, its business name), place of incorporation and date of incorporation;(ii) if the Fund Manageris an External Fund Manager, that fact and the details of the Appointed Fund Administratoror Custody Provider to the Fundunder CIR Rule 6.1.3(a); and(iii) address and, if applicable, that of the Appointed Fund Administratoror Custody Provider, as the case may be, and the registered office in the DIFC.(b) If the Fund Manageris a memberof a Group, the name of its ultimate Holding Companyand the country or territory in which that Holding Company is incorporated.(c) The amount of the Fund Manager's issued share capital and how much of it is paid up.(d) A summaryof the material provisions of the contract between the Fundand its Fund Managerwhich may be relevant to Unitholders, including provisions relating to termination, compensation on termination and indemnity. 10.2(a) In the case of an Investment Company:(i) the names and positions held by the Directorsof the Investment Company (other than those who are the Directorsof the FundManager); and(ii) if the Fund Manageris its Corporate Director, that fact, and the names of the individual Directorsof the Corporate Director.(b) In the case of an Investment Partnership, the names of any General Partners who do not take part in the day-to-day management of the Fund.(c) The manner, amount and calculation of any remunerationof the Personsreferred to in (a) or (b), as applicable. 11. Information about the Trustee of the Fund 11.1
Fundis an Investment Trust, the following information relating to its Trustee:(a) the name (and, if different, the business name) of the Trustee;(b) the names and addresses of the individuals who are Directorsof the Trustee;(c) the place and date of incorporation of the Trusteeand its registered place of business in the DIFC;(d) whether the Trusteeis to undertake any functions in addition to the custody of the Fund Property(e.g. Fund Administration, independent oversight function); and(e) a summaryof the material provisions in the trust deedbetween the FundManager and the Trusteewhich may be relevant to Unitholders, including provisions relating to the Trustee's remuneration, terms upon which the appointment as Trusteecan be terminated, and compensation on termination and indemnity. 12. Information about the Auditor 12.1(a) The name and address of the Fund'sappointed Registered Auditor.(b) The name and address of the Audit Principalresponsible for the audit of the Fund.(c) If the Prospectusincludes any financial reports of the Fundfor a period where the Registered Auditorwas different, the details referred to in (a) and (b) above relating to that Auditor. 13. Information about the independent oversight provider 13.1 The Personsappointed under CIR Rule 10.3.1 to provide the oversight function (i.e. an Oversight Committee, Eligible Custodianor Trusteeof the Fund). 13.2 In the case of an Oversight Committee, the names and addresses of the individuals appointed to that Committee and their remuneration. 14. Information about the Eligible Custodian 14.1(a) The name and address of the Eligible Custodian.(b) If the Eligible Custodianis the Trusteeof the Fund, a statement to that effect.(c) The regulated status of the Eligible Custodianand the relevant regulator. 14.2 If the Fund Managerdoes not appoint an Eligible Custodianunder circumstances permitted in CIR, a statement to that effect. 15. Information relating to other Service Providers 15.1
Fund Managerdelegates or outsources any of its activities or functions relating to the Fundto a Service Provider:(a) its name;(b) the service or function delegated or outsourced to that Person;(c) by whom the Service Provideris regulated; and(d) the details of the arrangements, including feesand other remunerationpayable to the Service Provider. 15.2
If an investment adviser is retained in connection with the business of the
Fund:(a) its name;(b) by whom it is regulated; and(c) its remuneration. 15.3 If applicable, names and addresses of the banker, lawyer, registrar and any other Personundertaking any significant activities in relation to the Fund. 16. Financial information and reports 16.1
Details as to:(a) when the
Fund'sannual and interim reports will be published; and(b) the address in the DIFCwhere the most recent annual and interim reports may be inspected and their copies obtained. 16.2 If the Fundhas been in operation since its establishment, the historical financial information (and where copies can be obtained) and, if not, a statement to that effect. 16.3 A comprehensive and meaningful analysis of the Fund'sportfolio of investmentsand, if unaudited, a statement to that effect. 16.4 If there is a profit forecast or estimate, information relating to the basis of such forecast or estimate. 17. Remuneration, fees and other charges payable out of the Fund Property 17.1
Clear and concise information in an understandable manner relating to
remuneration, feesand other charges to be paid out of the Fund Propertypayable to:(a) the Fund Manager;(b) the Trusteeof the Fund, if applicable;(c) any Service Providerto the Fund; and(d) any other Personnot covered under (a), (b) or (c). 17.2
In respect of each category of
remuneration, feesand other charges referred to in 17.1, details relating to:(a) the current rates or amounts;(b) the manner of calculation; and(c) when they will accrue and be paid. 17.3(a) Whether the Fund Managerhas the discretion to amend the current remuneration, feesand other charges referred to in 17.1.(b) If so, a description of:(i) the changes to be made (e.g. the introduction of a new category of charges or a change to the basis of an existing charge);(ii) the circumstances in which such a change will be made;(iii) the procedures for making such a change (including the advance notice period to be given to Unitholdersof the proposed change); and(iv) if the change is to be made, when it is intended to take effect. 17.4 If all or any part of the remuneration, feesor other charges referred to in 17.1 are to be treated as a capital charge, a statement to that effect and the basis on which it may be so treated. 18. Valuation of the Fund Property 18.1 Details of:(a) the frequency and times of valuation of the Fund Property, and a description of any circumstances in which Fund Propertymay be specially valued;(b) the valuation principles and method applied for the establishment of the Net Asset Value (NAV) of the Fund Property;(c) any circumstances in which the valuation of the Fund Propertyreferred to in (a) may be suspended; and(d) how the NAV and any suspension of valuation will be communicated to Unitholdersor prospective Unitholders. 18.2
Details of:(a) how the single price of
Unitsof the Fund, and if there are different classes of Unitsin the Fund, the single price of each class of Units, will be determined, including whether a forward or historic pricebasis is to be applied; and(b) details as to how the prices of Unitswill be published following each valuation. 19. Redemption and resale of Units in Open-ended Funds 19.1
In the case of an
Open-ended Fund, details of:(a) the dealing days and the times in the dealing day on which the Fund Managerwill receive requests for redemption and resale of Units;(b) the procedures for carrying out:(i) redemption, reissue and resale of Units; and(ii) the settlement of transactions;(c) the steps required to be taken by a Unitholderin redeeming Unitsbefore he can receive the proceeds, including any relevant notice periods, and the circumstances and periods in which a deferral of payment may be applied;(d) the circumstances in which the redemption of Unitsmay be suspended;(e) if applicable, details of the minimum number or value of each type of Unitin the Fundwhich:(i) any one Personmay hold; and(ii) may be the subject of any one transactionof issue, resale or redemption by the Fund Manager;(f) the circumstances and procedures if the Fund Managermay carry out inspecie redemptions; and(g) the circumstances in which the further issue of Unitsin any particular class may be limited and the procedures relating to this. 19.2
Fund Managermakes any charges on sale or redemption of Units, details of the charging structure and how notice will be provided to Unitholdersof any change in the relevant charge. 19.3
Fund Managermakes a dilution levy or dilution adjustment, how such levy or adjustment is calculated and applied to redemptions to ensure fair treatment of outgoing and remaining Unitholders. 19.4
If any class of
Unitholdersis subject to any limitations relating to further issue of Unitsof that class, procedures relating to how such restrictions are applied. 20. Liquidity risk management in Open-ended Funds 20.1 Information relating to the powers available to the Fund Managerto address liquidity risksthat may arise in the Fundand the procedures, including triggers, for the exercise of such powers, required under CIR Rule 8.6A.1(2)(d). 21. Listing and trading of Fund Units 21.1 Whether the Fund's Unitsare intended to be listed and traded and, if so, the date and the exchangeon which the Unitsare to be admitted to trading. 21.2 Timeframe within which the listing and trading is intended to occur. Additional mandatory disclosure for specialist classes of Public Funds 1. Islamic Fund 1.1 A statement that all the operations in relation to the Fundwill be conducted in accordance with Shari'a. 1.2
Instead of the statement referred to in 1.3 under 'Mandatory disclosure for all
Public Funds', a statement as follows:"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. The DFSAhas also not assessed the suitability of the Securities to which the Prospectusrelates to any particular investor or type of investor and has not determined whether they are Shari'a compliant. If you do not understand the contents of this Prospectusor are unsure whether the Securities to which the Prospectusrelates are suitable for your individual investment objectives and circumstances, you should consult an authorised financial advisor." 1.3 The names of the membersof the Shari'a Supervisory Boardand their qualifications and experience. 1.4 If, pursuant to IFR 6.2.1(2), the Shari'a Supervisory Boardappointed to the Fundis also the Shari'a Supervisory Boardof the Fund Manager, a statement to that effect. 1.5 If the Funddoes not have a Shari'a Supervisory Boardappointed to it pursuant to IFR 6.2.1(3), what widely acceptable screening methodologies are used by the Fundto ensure Shari'a compliance when making investmentsfor the Fundand the board that has approved them. 1.6 If applicable, the manner and frequency of Shari'a reviews. 1.7 How earnings or assets prohibited by Shari'a will be disposed of. 1.8 Whether Zakah is the responsibility of the Fundor the responsibility of the Unitholders. 1.9 The additional disclosure, if applicable, prescribed under IFR section A1.1 of App 1. 2. Feeder Fund 2.1
Disclosure of:(a) a prominent risk warning to prospective
Unitholdersto the fact that they will be subject to higher feesarising from the layered investment structure;(b) the feesarising at the level of:(i) the Feeder Funditself;(ii) if applicable, the Master Fundof the Feeder Fund; and(iii) if applicable, any underlying Fundsinto which the Master Fundinvests, to the extent known. 3. Property Fund 3.1
Fundis investing in:(a) Real Propertyonly;(b) Securities issued by Bodies Corporate whose main activities are investing in, dealing in, developing or redeveloping Real Propertyonly; or(c) a combination of (a) and (b). 3.2(a) What percentage of the Property Fund'snet assets may consist of propertyrelated assets, referred to in 3.1(b), which are not traded in or dealt on markets provided for in the Constitution.(b) Unless the Constitutionand the Prospectusstate that the Fundinvests in a single property, the maximum percentage of the Fund'snet assets which may be invested in any single propertyor, if applicable, the conditions under which the Fundmay derogate from this restriction.(c) The maximum percentage of the Property Fund'snet assets which may be invested in properties which are vacant, in the process of development or requiring development.(d) The maximum percentage of the Property Fund'snet assets which may be invested in properties which are subject to a mortgage. 3.3
For investment in
Real Property:(a) the countries or territories in which the Fundmay invest;(b) the types of Real Propertyin which the Fundmay invest and the policy in relation to encumbrances and lease period, if applicable;(c) the policy of the Fund Managerin relation to insurance of Real Propertyforming part of the Fund Property;(d) the risks involved in this type of Fund;(e) details of the Property Fund'sappointed valuer under CIR Rule 13.4.18(1);(f) a statement to explain the standards according to which the propertyvaluations are conducted;(g) a statement with respect to any material policy regarding Real Propertyactivities;(h) details of significant holders and the number of Unitsheld and deemed to be held by each of them;(i) details of principal taxes levied on the Fund'sincome and capital, including tax, if any, deducted on distribution to Unitholders; and(j) if the Fundis a REIT, whether the investment vehicle is an Investment Company or an Investment Trust. 3.4
Fundis a single Property Fund:(a) a prominent statement that the Fundinvests in a single property;(b) the details relating to the single property, such as whether the propertycomprises individual properties or buildings, whether there are different types of uses or businesses conducted in the property, and proportions of anticipated income to be derived from the types of uses or occupants of the property; and(c) any risks associated with the investment in the single property, including risks arising from or affecting income to be derived from the uses or occupants of the property. 3.5
Fund Manageritself acts as the custodian of Real Property, in accordance with CIR Rule 13.4.2:(a) a prominent statement that it acts as the custodian of the Real Property;(b) disclosure of risks that may arise as a result of it acting as custodian rather than delegating the function to an Eligible Custodian; and(c) the measures and safeguards it has in place to ensure the proper segregation and protection of the Real Property. 3.6
Disclosure of:(a) details of any transactions or agreements entered into with
Related Parties;(b) full particulars of the nature and extent of the interest, if any, of Related Partiesin the propertyowned or proposed to be acquired by the Fund; and(c) whether the Fund Managerhas Unitholderapproval to enter into Related Party Transactions, in accordance with CIR Rule 13.4.11A; and 4. Hedge Fund 4.1
A prominent warning as follows:
"When considering investment in a
Hedge Fundyou should consider the fact that some Hedge Fundproducts use leverage and other speculative investment practices that may increase the risk of investment loss, can be illiquid, may involve complex tax structures, often charge high fees, and, in many cases, the underlying investmentsare not transparent and are known only to the Hedge Fund Investment Manager.
Returns from Hedge
Fundscan be volatile and you may lose all or part of your investment. With respect to single manager products, the manager has total trading authority and this could mean a lack of diversification and higher risk. The Hedge Fundmay be subject to substantial expenses that are generally offset by trading profits and other income. A portion of those feesis paid to the Hedge Fund Manager." 4.2
An explanation of the types of strategies to be employed by the
Fund Managerand the associated risks. 5. Umbrella Fund 5.1
Fundis constituted as a Protected Cell Companyor is using contractual arrangements to segregate Sub-Funds. 5.2
A statement that
Unitholdersmay exchange Unitsof one Sub-Fundfor Unitsin another Sub-Fundof the Umbrella Fund. 5.3
Whether an exchange of
Unitsin one Sub-Fundfor Unitsin another Sub-Fundis treated as a redemption of Units, and resale or reissue of Unitsin the relevant Sub-Fund, and costs and fees associated with such redemption, resale or reissue. 5.4
Policy for allocating between
Sub-Fundsany assets of, or costs, charges and expenses payable out of, the Fund Propertywhich are not attributable to any particular Sub-Fund. 5.5
Information relating to any cross-liability that may occur between
Sub-Fundsif the Fundis not using the PCC structure. 5.6
In respect of each
Sub-Fund, if the currency is not the base currency of the Umbrella Fund, the currency in which the Fund Propertyallocated to it will be valued and the price of Unitscalculated and payments made. 6. Money Market Fund 6.1
A prominent warning:(a) drawing to the attention of investors the different nature of a
Unitin a Money Market Fundcompared to a Deposit;(b) that the capital of an investment in a Money Market Fundis not guaranteed; and(c) that the value of Unitsin the Money Market Fundmay fluctuate. 7. Exchange Traded Fund ("ETF") 7.1
Disclosure of:(a) the type of ETF and its characteristics;(b) the risks associated with the type of ETF;(c) the investment methodology and strategies the ETF proposes to adopt to track the referenced index or benchmark;(d) the relevant indices or other benchmark the ETF is designed to track, and the underlying components (including their liquidity) of the relevant index or benchmark;(e) relevant websites or sources of information provided by
Price Information Providers, including the methodology, composition, components and value, and relative weightings, relating to the indices or benchmarks;(f) whether iNAV is made available by the relevant exchangeand, if so, how this information can be accessed by investors;(g) how the referenced index or benchmark will be tracked and the risks for investors in terms of the exposurethey have to the underlying index and any counterparty risk;(h) the key elements which may affect the ETF's ability to track fully the relevant index or benchmark, including, but not limited to, transactioncosts, illiquid segments, and dividend re-investment;(i) in the case of a synthetic ETF using Derivativesto replicate the performance of an index or other benchmark:(i) whether the ETF uses a funded or unfunded model to replicate the performance of the specified index or benchmark;(ii) the counterparties to the Derivativestransactions and, where collateralis used, details relating to such collateral; and(iii) the risks associated with(j) if the ETF is required to have a diversified portfolio, how the ETF proposes to achieve diversification of counterpartydefault and use of any collateral, and their impact on the ETF's performance and investor returns, and how such risks are to be mitigated; investmentsthrough its investment strategy;(k) if available, information about the past performance of the ETF, measured through its realised tracking difference and annual tracking error information, on the anticipated level of tracking error during normal market conditions, and how this will be effectively minimised;(l) the exchangeon which the ETF is admitted to trading;(m) the Authorised Participant/s (AP) on the relevant exchange; and(n) the Price Information Provider(PIP) of the index or other benchmark which the ETF tracks and, if the PIP is a Related Party, a statement to that effect. 7.2
Sufficient information to enable investors to understand:(a) the ETF's cost structure, covering:(i) any performance
feesof the Fund Manager, if applicable;(ii) its operational costs; and(iii) if applicable, costs of underlying transactions (such as swaps, brokerage commissions and additional costs associated with leverage or use of collateral, and the rebalancing of the portfolio costs); and(b) any revenue derived by the Fund Managerthrough the use of the ETF's portfolio assets, and how that revenue is distributed between the ETF and the Fund Manager. Additional mandatory disclosure for Funds on a Fund Platform 1. A Fund Manager of a Fund that is an Incorporated Cell of an Incorporated Cell Company must ensure that the Fund Prospectus includes information that:(a) the Fund is an Incorporated Cell of an ICC;(b) the Fund, being an Incorporated Cell:(i) is a separate legal entity to the ICC and to any other Incorporated Cells of the ICC; and(ii) does not have a subsidiary or holding company relationship with the ICC;(c) the ICC, which is the Fund Platform, contains the infrastructure needed by the Fund Manager for managing the Fund; and(d) the Fund Manager is:(i) responsible for the sound and prudent operation of the Fund Platform; and(ii) liable for any acts or omissions of the Fund Platform in respect of the Fund.