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  • Consultation Paper No. 14 Consultation Paper No. 14 Rules for Listed Funds

    June 2005

    THE DUBAI Financial Services AUTHORITY ("DFSA") CONSULTATION PAPER ADDRESSED TO PARTIES INTERESTED IN THE DEVELOPMENT OF Financial Services AND MARKETS Regulation WITHIN DUBAI'S FINANCIAL FREE ZONE (THE "DIFC")

    1. Introduction

    This paper consults on the DFSA's proposed Rules for Listed Funds for inclusion in the Offered Securities module (OSR) of the DFSA Rulebook. These Rules are attached as Annex A.

    This paper also consults on associated changes to other parts of the DFSA Rulebook. The changes to the Glossary module (GLO) of the DFSA Rulebook are set out in Annex B.

    The draft rules are published for consultation purposes only. Please note that, although the draft rules are in near final form, the DFSA reserves the right to amend the drafts at its sole discretion. The rules will be made under powers contained in the Regulatory Law 2004.

    Comments are invited on any aspect of the regime proposed in this paper, on both the principles and the detailed drafting. The DFSA would be particularly interested to have the views of firms considering using the proposed rules and views on how this regime compares with those in other major centres. In the light of the comments received, the DFSA may determine to adopt in whole, or in part, the proposals outlined in these papers, or may amend the proposals.

    Anyone wishing to submit comments should provide details of the organisation he or she represents. The names of commentators and the content of their submissions may be published on the DFSA website and in other documents to be published by the DFSA. If you wish your name to be withheld from publication, please indicate this when you make your submission.

    Any comments should be addressed to:
    Mr Nicholas Alves
    Legal Counsel
    DFSA
    PO Box 75850
    Dubai, UAE

    or e-mailed to nalves@dfsa.ae

    All comments should be provided in writing, on or before 26 July 2005.

    2. Background and context

    The draft rules in relation to Listed collective investment funds and the associated changes to other parts of the DFSA Rulebook need to be considered in the context of the core Financial Services laws - the Regulatory Law 2004, the Markets Law 2004.

    The DFSA previously consulted upon these Rules in Consultation Paper No. 12 (October 2004). A number of material changes have since been made to that version of the Rules and these are highlighted in this Consultation Paper. The OSR module came into force on 19 April 2005 without provisions in relation to Listed Funds. The reason for this was that the DFSA wanted to further progress the proposed Collective Investment Fund (CIF) regime before implementing the OSR regime for such funds. Sufficient progress in relation to the proposed Collective Investment Fund regime has been achieved for the DFSA to consult on the proposed amendments to the OSR module.

    The Collective Investment Fund regime is expected to be in effect in the 1st Quarter of 2006 at which time certain amendments will need to be carried out to the OSR module to lift the restrictions in regard to collective investment funds. The purpose of these restrictions is to provide a holding regime pending the completion of the CIF regime. The essence of the holding regime is that funds originating from outside the DIFC may be listed on an Exchange and promoted within the DIFC but only to Authorised Firms and by Authorised Firms to their Clients.

    The current OSR module may be viewed on the DFSA's website and the previous Consultation Paper No. 12 may be viewed in the archive section although please note that the made Rules now in force may in certain respects differ considerably from the Rules proposed in the Consultation Paper. It is also worth noting that the Markets Law 2004 was amended on 19 April 2005.

    3. The DFSA rulebook

    The core Financial Services laws provide the DFSA with a wide range of powers, including powers to make rules and to issue Guidance. This Guidance is not binding on the DFSA, nor does it create a "safe harbour" protecting those who comply with it from action for breach of the underlying rule.

    The rules together make up a Rulebook containing a number of modules. The DFSA Rulebook may be viewed on the DFSA's website (www.dfsa.ae) along with all the DIFC Laws and Regulations.

    The DFSA has power to waive or modify rules, and is prepared to use this to adapt the rules to specific circumstances which may arise.

    4. Interpreting the rulebook

    Defined terms are identified throughout the Rulebook by the capitalisation of the initial letter of a word or of each word in a phrase and are defined in the Glossary (GLO). Please note that Annex B contains further definitions. Unless the context otherwise requires, where capitalisation of the initial letter is not used, an expression has its natural meaning.

    Every provision in the Rulebook must be interpreted in the light of its purpose. The purpose of any provision is to be gathered first and foremost from the text of the provision in question and its context among other relevant provisions. A provision means every type of provision, including Rules and Guidance.

    Where reference is made in the Rulebook to another provision of the Rulebook or other DIFC legislation, it is a reference to that provision as amended from time to time. If a provision in the Rulebook refers to a communication, notice, agreement, or other document 'in writing' then, unless the contrary intention appears, it means in legible form and capable of being reproduced on paper, irrespective of the medium used. Expressions Related to writing must be interpreted accordingly. Any reference to 'dollars' or '$' is a reference to United States Dollars unless the contrary intention appears. References to Articles made throughout the Rulebook are references to Articles in the Regulatory Law 2004 unless otherwise stated.

    Unless the contrary intention appears:

    • words in the Rulebook importing the masculine gender include the feminine gender and words importing the feminine gender include the masculine; and
    • words in the Rulebook in the singular include the plural and words in the plural include the singular.

    Unless the contrary intention appears, a day or business day refers to:

    • in relation to anything done or to be done in (including to be submitted to a place in) the u.a.e. any day which is not a Friday or Saturday or an official u.a.e. Bank holiday; and
    • in relation to anything done or to be done by reference to a market outside the u.a.e. any day on which that market is normally open for business.

    5. Purpose and summary of the material provisions of the OSR Rules in relation to collective investment funds.

    The purpose of the Rules set out in the OSR module is to provide the necessary operational detail in relation to the framework created by Parts 3 and 4 of the Markets Law 2004. In addition, the OSR module provides the detailed Rules in relation to Parts 5 and 6 of the Markets Law 2004 which apply to Persons on an ongoing basis who have utilised either Part 3 or 4 of the Markets Law 2004 (or both). In general the amendments to the OSR module are intended to facilitate the Listing of Funds and to specify disclosure requirements and implement Corporate Governance and Directors' dealing requirements. Accordingly, the proposed changes to the OSR module are as follows:

    • the addition of Guidance under OSR rule 2.3.1 to clarify the position in relation to funds.
    • for the avoidance of doubt OSR rule 8.2.3 has been amended so that a Reporting Entity can disclose confidential information to the custodian of the fund to which it owes its obligations.
    • the Connected Person concept is defined in the Markets Law 2004 as a Person with specific connections to the Reporting Entity. From a regulatory perspective, in relation to Listed Funds, the DFSA will be interested in persons with an interest in the Listed Fund itself rather than the Reporting Entity, therefore a different concept was created for Listed Funds. The obligations are the same as currently exist in the OSR Rules, the amendments only ensure that the correct entity is identified.
    • Consequential amendments have been made to the application provision in OSR rule 9.1.1.
    • In Appendix 1 and 2 some additional Guidance has been added for clarity and a new Section to Appendix 2, namely OSR A2.3 (disclosures relating to Listed Funds) has been added.
    • Appendix 3 has been amended in much the same way and a new Section namely, OSR A3.3 (consent of holders of Units - events requiring consent of holder of units) has been added. OSR rule A3.3.1 has been amended to include Listed Funds.
    • OSR rule A4.1.1(2) applies the Corporate Governance and Directors dealings to Listed Funds which are Body Corporates.
    • Annex B contains the new definitions.

    • Annex A Offered Securities Rules (OSR)

      This Annex sets out the proposed amendments to VER1/04-05 of the OSR module.

      In this Annex, underlining indicates new text and striking through indicates deleted text.

      OSR 2 Offers of Securities

      OSR 2.3 Prohibition on offers

      OSR 2.3.1

      A Person must not Offer Units in or from the DIFC to any Person other than to an Authorised Firm.

      OSR 2.3.1 Guidance

      1. The prohibition will remain in place until such time as a collective Investment law and rules are in force and thereby create a regime for Offering Units other than through Authorised Firms in accordance with OSR rule 2.2.1(2)(b).
      2. Mere Listing of a Unit would not amount to an Offer in accordance with OSR rule 2.2.1(2)(a).
      3. See also Guidance note 5 above OSR rule 2.3.1.

      OSR 8.2 Continuous disclosure

      OSR 8.2.1

      (1) A Reporting Entity must make timely disclosure of Material Information, including the relevant matters set out in App2in accordance with this chapter.
      (2) A Reporting Entity must ensure that its disclosure is complete, true, plain and not misleading, false or deceptive.
      (3) The Reporting Entity must, subject to OSR section 8.3, disclose any matters as soon as reasonably practicable:
      (a) where App2 requires market disclosure, by way of an announcement made:
      (i) on the website of the Reporting Entity;
      (ii) to the DIFX or such other entity created by the DIFX for the purpose of public dissemination; and
      (iii) to the DFSA; or
      (b) otherwise, as required by App2.

      OSR 8.2.1 Guidance

      The disclosure to the DIFX, regardless of whether the Securities are traded on that Exchange, is of particular significance given the requirement by the DFSA that the DIFX make all announcements publicly available through on-line sources and by dissemination to the media.

      OSR 8.2.2

      If a Reporting Entity fails to comply with an obligation to disclose any information under this chapter, the DFSA may:

      (a) require the Reporting Entity to disclose the information; or
      (b) take such other steps as it considers appropriate;
      if it considers that to do so would be in the interests of the DIFC.

      OSR 2.2.2 Guidance

      1. Under Article 22 of the Markets Law 2004, a Reporting Entity must make disclosures to the market in the circumstances prescribed by the Offered Securities Rules. This chapter, together with App2, sets out the obligations of Reporting Entities to make disclosures and provides Guidance in relation to Price Sensitive Information.

      OSR 8.2.3

      (1) A Reporting Entity must not disclose any information it is required to disclose by OSR rule 8.2.1 to any other Person prior to the market disclosure in accordance with OSR rule 8.2.1(3) of such information except in strict confidence to:
      (a) its advisors, underwriters or sponsors;
      (b) the custodian of the Listed Fund to which the information relates;
      (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, including prospective underwriters or sponsors of an issue of Securities, providers of finance or loans or the placement of the balance of a rights issue not taken up by shareholders;
      (e) the DFSA or another Financial Services Regulator where such disclosure is necessary or desirable for the regulator to perform its functions;
      (f) a Person to whom the Reporting Entity discloses information in accordance with a lawful requirement; or
      (g) a Person to whom the information is disclosed in the necessary course of the business of the Reporting Entity.
      (2) A Reporting Entity must advise such recipients, except the DFSA, in writing, prior to them receiving the information, that the information is confidential and that they and any Person privy to the information should not deal in the relevant Securities, or any other Related Investment, before the information has been made available to the market.

      OSR 9 Disclosure of Interests

      OSR 9.1 Application

      OSR 9.1.1

      This chapter applies to:

      (a) a Connected Person;
      (b) a Person when he ceases to be a Connected Person;
      (c) a Person who has a significant interest; as defined in OSR rule 9.3.1, in a Listed Fund; or
      (d) a Person when he ceases to have a significant interest, as defined in OSR rule 9.3.1, in a Listed Fund.

      OSR 9.2.3

      (1) Reports filed by Connected Persons must be filed with the DFSA and the relevant Reporting Entity and disclosed by the Reporting Entity in accordance with OSR rule 8.2.1(3).
      (2) Reports filed by Connected Persons must contain the following information:
      (a) the date on which the Transaction or other event giving rise to the filing requirement was effected;
      (b) the date on which on which the filing requirement was made; and
      (c) the price, amount and Class of Investments concerned in relation to the Transaction or other event and the previous and new Financial Interest of the Person in the Reporting Entity.

      OSR 9.3 Significant interest in a Listed Fund

      OSR 9.3.1

      (1) A Person has a significant interest in a close ended type of Listed Fund if that Person:
      (a) owns or beneficially owns Units carrying more than 5% of votes attached to all voting Units of the Listed Fund;
      (b) is a Director or is involved in the senior management of the Listed Fund; or
      (c) is a Director or is involved in senior management of any Person who owns or beneficially owns voting Units carrying more than 5% of the votes attached to all voting Units of the Listed Fund.
      (2) If a Person:
      (a) acquires or ceases to have a significant interest in a close ended type of Listed Fund; or
      (b) has a significant interest in a close ended type of Listed Fund and there is a movement of at least 1% in that Person's Unit holding;
      such a Person must file a report containing the information referred to in (4) with the DFSA and the Reporting Entity of that Listed Fund.
      (3) The Reporting Entity must disclose the information in the report in accordance with OSR rule 8.2.1(3).
      (4) The information to be given in the report in accordance with (2) is:
      (a) the name and registered address of the Listed Fund;
      (b) the Person's name and address;
      (c) the date on which the Transaction or other event giving rise to the report was effected; and
      (d) the price, amount and Class of Units concerned in relation to the Transaction or other event and the previous and new significant interest of the Person in the Listed Fund.

      OSR App 4 Corporate Governance and Directors' Dealings

      OSR A4.1 Application

      OSR A4.1.1

      (1) This appendix applies to:
      (a) a Reporting Entity that has or has had Shares admitted to an Official List of Securities by an Authorised Market Institution or has made a Prospectus Offer of Shares; and
      (b) the Directors of such a Reporting Entity.
      (2) In relation to a Listed Fund which is a Body Corporate:
      (a) the corporate governance provisions of this appendix apply to the Listed Fund and to its Directors; and
      (b) in this appendix, a reference to a Reporting Entity must be construed as a reference to the Listed Fund and a reference to a shareholder must be construed as a reference to a Member or a holder of Units in the Listed Fund.

      OSR App 7 Price Sensitive Information

      OSR A7.1 Guidance in relation to section A2.1

      OSR A4.1 Guidance

      Price Sensitive Information

      1. This document provides Guidance on the interpretation of the continuing obligations relating to Price Sensitive Information.
      2. The DFSA recognises the importance to the market of accurate, up-to-date information about Reporting Entities and Listed Funds. Reporting Entities are therefore required to disseminate unpublished Price Sensitive Information without delay as part of the "continuing obligations" of Reporting Entities under the Offered Securities Rules.
      3. A Reporting Entity must ensure that any Price Sensitive Information is disclosed to the market as a whole and must take all reasonable care to ensure that such information is sufficiently detailed and not misleading, false or deceptive. The information must be released without delay and in the manner required by chapter 9 of the Offered Securities Rules.

      Identifying Price Sensitive Information...........

      Information not in the market

      6. The Offered Securities Rules require information to be disclosed to the market by way of an announcement made on the web-site of the Reporting Entity and by such other means as the DFSA may prescribe.
      7. Price Sensitive Information that is al available to the market, such as interest rate changes, does not need to be announced unless it has an unexpected or unusual effect on the Reporting Entity and Listed Fund.
      8. The obligation of a Reporting Entity to announce Price Sensitive Information is not discharged where a Fee must be paid for access to the information or it is not a matter of general knowledge that the information can be obtained. In cases of doubt a Reporting Entity should consult with the DFSA.

      Exemptions from the duty to disclose information

      9. Article 24 of the Markets Law 2004 provides exemptions to the requirement to provide disclosure of Price Sensitive Information where disclosure would be unduly detrimental to the interests of the Reporting Entity or Listed Fund or where the information to be disclosed is commercially sensitive. Reporting Entities should ensure that any such information is kept confidential within the Reporting Entity. In these circumstances, the Reporting Entity should deliver without delay to the DFSA a notification requesting non-disclosure as set out in OSR rule 8.3 of the Offered Securities Rules.

      Persons to whom Price Sensitive Information may be disclosed

      10. Under OSR rule 8.2.3 of the Offered Securities Rules, a Reporting Entity may only disclose Price Sensitive Information, in strict confidence, to its advisors, an agent employed to release the information, Persons with whom it is negotiating with a view to effecting a Transaction or raising finance or where the information is disclosed in the necessary course of business of the Reporting Entity or the Listed Fund. It is likely that Price Sensitive Information will be made known to certain Employees of the Reporting Entity or Listed Fund. A Reporting Entity must put in place procedures to ensure that Employees do not disclose such information, whether or not inadvertently, and that Employees are adequately trained in the handling of Price Sensitive Information.

      Framework for the handling of Price Sensitive Information...........

      11. Responsibility for a Reporting Entity's or Listed Fund's overall policy on the handling of Price Sensitive Information lies with the Directors of the Reporting Entity. Whilst responsibility for compliance with the continuing obligations set out in the Offered Securities Rules lies with the Reporting Entity, Directors should be aware that they may be held personally liable for breach of these rules. The enforcement procedures set out at chapter 11 of the Offered Securities Rules may be implemented against them.

      OSR App 1 Contents of Prospectus

      OSR A1.1 Contents of Prospectus - Information about the Issuer (registration statement)

      OSR A1.1.1

      A Person filing a Prospectus in accordance with OSR rule 4.2.1(1) must provide the following information which are specific disclosure requirements in addition to the general requirements under Article 15 of the Markets Law 2004.

      OSR A1.1.1 Guidance

      A column marked with an "x" indicates that the disclosure requirements apply in relation to that type of Security.

      ..............................

      OSR A1.2 Contents of Prospectus - Information about the Securities (issue note)

      OSR A1.2.1

      A Person filing a Prospectus in accordance with OSR rule 4.2.1(1) must provide the following information which are specific disclosure requirements in addition to the general requirements under Article 15 of the Markets Law 2004.

      OSR A1.1.1 Guidance

      A column marked with an "x" indicates that the disclosure requirements apply in relation to that Security.

      ..............................

      OSR App 2 Continuing Obligations

      OSR A2.1 Continuing obligations - disclosure relating to the reporting entity

      OSR A2.1.1

      On occurrence of an event in the "events" column, a Reporting Entity must make the type of disclosure in accordance with the "requirements" column and the "time" column.

      OSR A2.1.1 Guidance

      1. A column marked with an "x" indicates that the disclosure requirements apply in relation to that Security.
      2. Continuing obligations in relation to disclosure requirements for Listed Funds are located in OSR section A2.3.

      ..............................

      OSR A2.2 Other obligations of a reporting entity

      OSR A2.2.1

      On occurrence of an event in the "events" column, a Reporting Entity must ensure compliance in accordance with the "requirements" column and the "time" column.

      OSR A2.2.1 Guidance

      A column marked with an "x" indicates that the disclosure requirements apply in relation to that Security.

      OSR A2.3 Disclosures relating to Listed Funds

      OSR A2.3.1

      (1) On occurrence of an event in the "event" column, a Reporting Entity of a Listed Fund must make the type of disclosure described in accordance with the "requirements" column and the "time" column.
      (2) In cases where the Listed Fund is in the form of the trust, a Reporting Entity of that Listed Fund must construe the items specified in the event column in an appropriate manner so as to achieve the fundamental purpose of disclosing relevant equivalent information in respect of the trust.

      OSR A2.3.1 Guidance

      A column marked with an "x" indicates that the disclosure requirements apply in relation to those Securities.

            A2.3
      Item Event Requirement Time
        Price Sensitive Information in relation to a Listed Fund    
      1.
      (a) Material developments relating to the Units that may constitute Price Sensitive Information;
      (b) Any change in the business, financial condition, performance or expectation of performance that may constitute Price Sensitive Information; and
      (c) Impending or strategic developments or matters in the course of negotiations where there is reason to believe that a breach of confidence has or is likely to occur in relation to Price Sensitive Information.
      Market disclosure of the development or change as the case may be, including all Price Sensitive Information relating to it. Without delay.
      2. Belief that a breach of confidence has occurred or is likely to occur in relation to Price Sensitive Information. Disclosure to the DFSA of the breach or likely breach, including all Price Sensitive Information relating to it. Without delay.
        The Governing Body of the Reporting Entity or Listed Fund    
      3. Any change to the Governing Body of the Reporting Entity or of the Listed Fund including:
      (a) the appointment of a new Director or Partner;
      (b) the resignation, retirement or removal of an existing Director or Partner; and
      (c) changes to any important functions or executive responsibilities of a Director or Partner.
      Market disclosure of:
      (a) the effective date of the change (if it has been decided);
      (b) whether the position is executive or non-executive;
      (c) whether the position is considered to be independent; and
      (d) the nature of any functions or responsibility of the position.
      Without delay.
      4. Information in respect of a new Director or Partner. Market disclosure of:
      (a) all directorships or Partnerships past or present held by the Director or Partner in any other Body Corporate, Partnership in the previous five years;
      (b) the professional qualifications and experience of the Director or Partner;
      (c) details of the process by which the Director or Partner was selected;
      (d) any unspent convictions relating to serious criminal offences;
      (e) any bankruptcies or individual voluntary arrangements;
      (f) any compulsory liquidations, creditors voluntary liquidations, company voluntary arrangements, receivership or any composition or arrangement with its creditors generally or any Class of its creditors of any Issuer where such an individual was a Director or Partner at the time of or within the 12 months preceding such events; and
      (g) any public criticisms or disqualifications of the individual by statutory or regulatory authorities and whether the individual has ever been disqualified by a Court from acting as a Director of a Body Corporate or from acting in the management or conduct of the affairs of any Body Corporate or Listed Fund, if there are no such details to be disclosed, that fact.
      Within 7 days of the appointment.
      5. Shari'a supervisory board

      Where a Shari'a supervisory Board has been appointed details of any changes to the membership of the Shari'a supervisory Board.
      Market disclosure of:
      (a) the identity, qualifications and experience of any new Shari'a supervisory Board members;
      (b) the identity of any Shari'a supervisory Board Members who resign or are dismissed;
      (c) the effective date of the change; and
      (d) reasons for the change in membership.
      Without delay.
      6. A breach of directors' dealing rules in Appendix 4. Disclosure to the DFSA of the nature, content and details of the breach. Without delay
      7. Transactions undertaken which could result in:
      (a) any significant Investments or material change to a significant Investment outside the stated Investment strategy of the Listed Fund (being any Investments equal to or greater than 5 per cent of the net asset value of the fund); or
      (b) the incurring of any significant debt outside the usual and ordinary course of business of the Listed Fund (being debt with an amount equal to or greater than 5 per cent of the net asset value of the fund) taking into account the stated Investment strategy.
      Market disclosure relating to:
      (a) Any decision to enter into such a transaction;
      (b) Any material change or new matter affecting any matter contained in an earlier disclosure; and
      (c) A full description of the event, activity or Transaction proposed or effected as the case may be.
      Without delay.
      8.
      (a) A Transaction other than a Transaction of a revenue nature in the ordinary course of business between a Reporting Entity and a Person with a significant interest, Associate or Group Director ;
      (b) Any arrangements pursuant to which a Reporting Entity and a Person with a significant interest, Associate or Group Director each invests in, or provides finance to a Member of its Group;
      (c) A Transaction other than a Transaction of a revenue nature in the ordinary course of business between a Reporting Entity and any Person who exercises significant influence over the Reporting Entity; or
      (d) Any Transaction described by (a) and (b) between a Reporting Entity and any Person who is (or was within the 12 months preceding the date of the transaction) a Person with a significant interest or Associate or Group Director.
      Market disclosure of nature, content and details of any transactions. Without delay.
      9. Any decision to declare, recommend or pay any dividend or to make any other distribution on the Units or any decision not to declare, recommend or pay any dividend which would otherwise have been expected to have been declared, recommended or paid in the normal course of events. Market disclosure of the decision, including the rate and amount of and record date for the dividend or other distribution or the grounds for the decision in relation to non-payment. Without delay and in any event no later than 5 days prior to the record date or the date of expected distribution.
      10. A listing of the same Units on an Exchange outside the DIFC. Market disclosure of the listing. Without delay.
      11. Any information required to be disclosed, in relation to Units also listed on an Exchange outside the DIFC, under the market disclosure requirements in the other jurisdiction which is not al required to be disclosed in relation to the listing in the DIFC. Market disclosure of the information subject to market disclosure in another jurisdiction. Without delay.
      12. Any change of custodian or depositary in relation to the Listed Fund. Market disclosure of the new custodian or depository and any implication/effect of this change. Without delay.
      13. Annual report and annual financial statements of the Listed Fund. Market disclosure of the annual report and annual financial statements.

      The annual report must include in respect of the financial year to which it relates:
      (a) review of operations during the year and the results of those operations;
      (b) details of any significant changes in the Listed Fund's State of affairs during the financial year;
      (c) the Listed Fund's principal activities during the year and any significant changes in the nature of those activities during the year;
      (d) details of any matter or circumstance that has arisen since the end of the year that has significantly affected or may significantly affect:
      (i) the Listed Funds' operations in future financial years;
      (ii) the results of those operations in future financial years; or
      (iii) the Listed Fund's State of affairs in future financial years; and
      (e) likely developments in the Listed Funds operations in future financial years and the expected results of those operations;
      (f) A statement by the auditors that the accounts give a true and fair view of the State of the Listed Fund's affairs, profit and loss and additional information as may be required.
      The annual financial statements must be audited by an independent, competent and qualified auditor in accordance with the International Auditing and Assurance Standards Board Financial or other standards acceptable to the DFSA or where appropriate, AAOIFI standards.
      If the Listed Fund is a sub-fund of an umbrella fund, the financial statements must comprise consolidated financial statements of the sub-fund and umbrella fund.
      As soon as possible after the accounts have been approved but no later than 90 days after the end of the financial period.
      14. Compliance with corporate governance. Market disclosure in the annual report of a statement of how the Listed Fund has applied the corporate governance provision in App4, and where it has not, provide an explanation. As soon as possible after the accounts have been approved but no later than 120 days after the end of the financial period.
      15. Preliminary financial results. Market disclosure of preliminary financial results. Without delay, but no later than 30 minutes before the market opens on the day after Governing Body approval.
      16. Interim financial statements.
      (a) A Listed Fund must publish a semi-annual financial statement for the first six months of each financial year or period; and
      (b) If the figures have either been audited or reviewed by the auditors, comments to this effect should be included.
      Without delay and in any event no later than sixty days of the end of the period to which the statement relates.
      17. Change of accounting Reference Date in respect of the Listed Fund. Market disclosure of previous and proposed accounting Reference Date, and reasons for the change. Without delay.
      18. On a change of accounting Reference Date, in respect of the Listed Fund, extending the annual accounting period to more than 14 months. Market disclosure of a second interim report. Within six months of the new accounting Reference Date.
      19. Proposed and new issues of Units. (Except for open ended Listed Funds as a result of issues and redemption in the normal course of business as described in the Prospectus or Offer document) Market disclosure of the Class, number, date of issue, and consideration received for the issue of the Securities and details of changes in share capital. Without delay.
      20. Results of new issues. Market disclosure of confirmation of the results of the issue. Without delay.
      21. Events requiring consent of holders of Securities under App3. Market disclosure of:
      (a) nature, details, contents and effect of the relevant event, activity or transaction; and
      (b) any material change affecting any matter contained in an earlier disclosure.
      Without delay.
      22. Any resolution passed by the Directors or Partners of the Listed Fund other than a resolution concerning ordinary business of the Listed Fund. Market disclosure of the resolution. Without delay.
      23. Insolvency/winding up:
      (a) the presentation of any winding-up petition, the making of any winding-up order or the appointment of an administrator, liquidator or the commencement of any proceedings under the Insolvency Law in respect of the Listed Fund; or
      (b) the passing of any resolution by the Listed Fund or any Members of the Listed Fund that it be wound up by way of members' or creditors' voluntary winding-up, or the occurrence of any event or termination of any period of time which would cause a winding-up.
      Market disclosure of the:
      (a) time and date of the presentation, details of the order, appointment, resolution or other event;
      (b) identity of the petitioner or other Person at whose instigation the event occurs;
      (c) Court or tribunal responsible for making any order; and
      (d) administrator or liquidator appointed.
      Without delay.
      24. Change in the legal structure of the Listed Fund Market disclosure of any proposed change in the legal structure of the Listed Fund. Without delay
      25. Change in Fees (including management Fees by whatever named called) or Charges imposed on holders of Units. Market disclosure of any change in the Fee structure of a Listed Fund. Without delay
      26. Change in the Investment management of the Listed Fund Market disclosure of any proposed change in the Investment management of the Listed Fund. Without delay

      OSR App3 Consent of Holders of Securities

      OSR A3.1 Consent of holders of Securities - events requiring consent of holders of securities

      OSR A3.1.1

      The holders of the Securities in a Reporting Entity must give consent as specified in the "threshold for decision" column in order for a Reporting Entity to undertake the action referred to in the "event" column of this section.

      OSR A3.1.1 Guidance

      A column marked with an "x" indicates that the disclosure requirements apply in relation to that Security.

      ..............................

      OSR A3.2 Consent of holders of Securities - events requiring consent of holders of Securities to vote

      OSR A3.2.1

      The holders of the Securities in a Reporting Entity must give consent as specified in the "threshold for decision" column in order for a Reporting Entity to undertake the action referred to in the "event" column..

      OSR A3.2.1 Guidance

      A column marked with an "x" indicates that the disclosure requirements apply in relation to that Security.

                A3.2
      Item Event Threshold for decision Shares Certificates Over Shares Units
      1. The removal or appointment of a Director or Partner to the Governing Body by an Issuer. Majority. X X X
      2. The removal of an auditor by an Issuer. Majority. X X X

      OSR A3.3 Consent of holders of Securities - other events giving rise to the right of holders of Securities to vote

      OSR A3.3.1

      The holders of the Securities in a Reporting Entity or Listed Fund must give consent as specified in the "threshold for decision" column in order for a Reporting Entity to undertake the action referred to in the "event" column.

                         
      Item Event Threshold for decision Shares Warrants over Shares Debentures Warrants over Debentures Certificates over Shares Certificates over Debentures Units
      1. Any alteration by the Issuer of the nature of or rights attached to a Class of its Securities. Majority of the Class of Securities which are to be varied and the majority of any Class of Securities which are negatively affected. X X X X X X X

      OSR A3.4 Consent of holders of Units - events requiring consent of holder of Units

      OSR A3.4.1

      The holders of the Units in a Listed Fund must give consent as specified in the "threshold for decision" column in order for a Reporting Entity to undertake the action referred to in the "event" column.

           
      Item Event Threshold for decision
      1. An alteration of the constitutional documents of the Listed Fund including any alteration to the memorandum of association, articles of association, byelaws or any other Instrument constituting the Listed Fund. Majority.
      2. An alteration of the authorised or issued Share capital of the Listed Fund. Majority.
      3. The granting of Issuers' Directors' service contracts for a period longer than three years. Majority.
      4. The granting of Units components to the Reporting Entities or Listed Funds' Directors' or Employees' compensation schemes. Majority.
      5. The granting of authority to the Governing Body of the Listed Fund or Reporting Entity to allot Units. Majority.
      6. The dis-application by the Issuer of pre-emption rights on an issue of Shares. Majority.
      7. The placing of the Listed Fund into voluntary liquidation. Majority.
      8. The approval of Related party transactions where:
      (a) the Reporting Entity is agreeing to acquire or dispose of assets to or from a Director, Associate or a Person with a significant interest and where the amount involved is greater than five per cent of the net asset value of the existing net assets of the Listed Fund;
      (b) agreeing to acquire or dispose of an interest in a Person in which a Person with a significant interest or Associate of the Listed Fund is a shareholder, where the amount involved is equal to or greater than five per cent of the net book value of the existing net asset value of the Listed Fund; or
      (c) any series of transactions within a 12 month period would collectively fall or would fall within (a) or (b);
      but the following Related party transactions that may fall under (a), (b) or (c) do not require approval:
      (d) the issue of new Securities for cash or pursuant to the exercise of conversion or subscription rights attaching to Securities where existing Shareholders have had the opportunity to subscribe for such Securities;
      (e) transactions made in accordance with an Employees' share scheme or long-term incentive scheme.
      Majority.

    • Annex B Glossary Module (GLO)

      Glossary

      Listed Fund

      A Collective Investment Fund which has been admitted to the Official List of Securities of an Authorised Market Institution.