Entire Section

  • Part 1: Part 1: General

    • 1. Title

      This Law may be cited as the "Collective Investment Law 2006".

    • 2. Legislative Authority

      This Law is made by the Ruler of Dubai.

    • 3. Application of the Law

      This Law applies in the jurisdiction of the Dubai International Financial Centre.

    • 4. Date of enactment and commencement

      This Law is enacted on the date specified in the Enactment Notice in respect of this Law.

    • 5. Commencement

      This Law comes into force on the date specified in the Enactment Notice in respect of this Law.

    • 6. Interpretation

      The Schedule contains interpretative provisions and a list of defined terms used in this Law.

    • 7. Administration of the Law

      This Law and any legislation made for the purposes of this Law is administered by the DFSA.

    • 8. General power to make Rules

      (1) The DFSA Board of Directors may, and where required under this Law shall, make Rules for the purposes of this Law pursuant to the power conferred under Article 23 of the Regulatory Law 2004.
      (2) Without limiting the generality of Article 23 of the Regulatory Law 2004, the DFSA Board of Directors shall make Rules governing the establishment, management, operations and activities of a Fund, including Rules:
      (a) governing the rights and obligations, including voting rights, of Unitholders;
      (b) governing the powers and duties of a Trustee and the investment and borrowing powers of an Operator including leveraging or gearing and the issue, pricing and redemption of Units;
      (c) governing the appointment, removal, powers and duties of an auditor or eligible custodian of a Fund; and
      (d) governing the preparation, publication and audit of the accounts of a Fund and the preparation and contents of periodic reports.
      (3) Where any legislation made under this Law purports to be made in the exercise of a particular power or powers, it shall be taken also to be made in the exercise of all powers under which it may be made.

    • 9. Consultation

      The DFSA shall publish draft Rules in the manner prescribed under Article 24 of the Regulatory Law 2004.

    • 10. Waivers and Modifications of the Rules

      The DFSA may by written notice provide that one or more provisions of the Rules either:

      (a) shall not apply in relation to a person; or
      (b) shall apply to a person with such modifications as are set out in the written notice;
      as provided for in Article 25 of the Regulatory Law 2004.

    • 11. Application of the Markets Law

      (1) Subject to Article 11(2), the Markets Law 2004 applies to the offer, issue or sale of a Unit or any right or interest in a Unit.
      (2) Part 3 of the Markets Law 2004 and the Offered Securities Rules made for the purpose of that Part do not apply to the offer, issue or sale of a Unit or any right or interest in a Unit.

    • 12. Offer of Units

      (1) A person shall not make an offer of Units in or from the DIFC unless the offer of Units is made in accordance with this Law and the Rules made for the purposes of this Law.
      (2) A person is to be regarded as making an offer of a Unit or any right or interest in a Unit if he:
      (a) makes an offer to another person which, if accepted, would give rise to a contract for the sale of Units by him or by another person with whom he has made arrangements for the sale of Units; or
      (b) invites another person to make an offer which, if accepted by him, would give rise to a contract for the sale of Units by him or by another person with whom he has made arrangements for the sale of Units; and
      (c) the offer or invitation is by way of a financial promotion of the Units.
      (3) For the purposes of Article 12(2), an offer or invitation includes an inducement and a "financial promotion" is an advertisement or any other form of promotion or marketing inviting a person to:
      (a) enter into an agreement;
      (b) offer to enter into an agreement; or
      (c) exercise any rights conferred by a Unit
      to acquire, dispose of, underwrite or convert a Unit.
      (4) In Article 12(3), the financial promotion may be communicated in any manner including, but not limited to, the following:
      (a) orally;
      (b) electronically; or
      (c) in writing.
      (5) For the purposes of Article 12(2) and (3), where an Operator of a Listed Fund discloses information in accordance with the requirements of the Markets Law 2004 or the Offered Securities Rules made thereunder, disclosure of such information is not a financial promotion provided the disclosure of the information does not:
      (a) include an express invitation or offer; or
      (b) expressly encourage a person;
      to engage in any of the activities specified in Article 12(3) (a), (b) or (c).

    • 13. Offers in the DIFC

      An offer of Units is made in the DIFC if the offer:

      (a) is directed at or received by a person (an "offeree") in the DIFC at the time of the making; and
      (b) is capable of acceptance by such an offeree;
      regardless of where any resulting issue or sale occurs.

    • 14. Offers from the DIFC

      An offer of Units is made from the DIFC if:

      (a) the person making the offer is situated in the DIFC;
      (b) the offer is directed at or received by a person (an "offeree") situated, at the time of the making, outside of the DIFC; and
      (c) the offer is capable of acceptance by such an offeree;
      regardless of where any resulting issue or sale occurs.

    • 15. Arrangements constituting a Collective Investment Fund

      (1) A Collective Investment Fund ("Fund") is, subject to Article 16, any arrangements with respect to property of any description, including money, where:
      (a) the purpose or effect of the arrangements are to enable persons taking part in the arrangements (whether by becoming owners of the property or any part of it or otherwise) to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income;
      (b) the arrangements must be such that the persons who are to participate ("Unitholders") in the arrangements do not have day-to-day control over the management of the property, whether or not they have the right to be consulted or to give directions; and
      (c) the arrangements have either or both of the following characteristics:
      (i) the contributions of the Unitholders and the profits or income out of which payments are to be made to them are pooled; or
      (ii) the property is managed as a whole by or on behalf of the Operator of the Fund.
      (2) If the arrangements provide for such pooling as is mentioned in Article 15(1)(c)(i) in relation to separate parts of the property, the arrangement is not to be regarded as constituting a single Fund unless the Unitholders are entitled to exchange rights in one part for rights in another.

    • 16. Arrangements not constituting a Collective Investment Fund

      The DFSA may make Rules excluding certain arrangements or types of arrangements from constituting a Fund.