Part 3: Part 3: Operating Domestic Funds
24. The Operator of a Fund(1) An Operator shall:(a) operate the Fund in accordance with its Constitution and Prospectus;(b) perform the functions conferred on it by the Fund's Constitution and by or under this Law; and(c) manage the Fund Property, held for or within the Fund.(2) An Operator shall comply with any requirement imposed by or under legislation administered by the DFSA relevant to its approval or authorisation to operate the Fund.
25. Interests in the Fund
The DFSA may make Rules prescribing financial limits and other related matters in respect of the interests an Operator may acquire and hold in its Fund.
26. Duties of the Operator and its officers, employees and agents(1) In exercising its powers and carrying out its duties, the Operator of a Domestic Fund shall:(a) act honestly;(b) exercise the degree of care and diligence that a reasonable person would exercise if he were in the Operator's position;(c) act in the best interests of the Unitholders and, if there is a conflict between the Unitholders' interests and its own interests, give priority to the Unitholders' interests;(d) treat the Unitholders who hold interests of the same class equally and Unitholders who hold interests of different classes fairly;(e) not improperly make use of information acquired through being the Operator in order to:(i) gain an advantage for itself or another person; or(ii) cause detriment to the Unitholders in the Fund;(f) ensure that Fund property is:(i) clearly identified as Fund property; and(ii) held separately from the property of the Operator and the property of any other Fund;(g) report to the DFSA any breach of this Law or relevant provisions of any other legislation administered by the DFSA, or of any Rules made under those laws , that:(i) relates to the Fund; and(ii) has had, or is likely to have, a materially adverse effect on the interests of Unitholders;as soon as practicable after it becomes aware of the breach;(h) comply with any other duty or obligation as may be prescribed by or under this Law or any other legislation administered by the DFSA; and(i) carry out or comply with any other duty, not inconsistent with DIFC Law, that is conferred on the Operator by the Fund's Constitution.(2) An officer, employee or agent of the Operator shall:(a) not make improper use of information acquired through being such an officer, employee or agent of the Operator in order to:(i) gain an advantage for himself or another person; or(ii) cause detriment to Unitholders in the Fund;(b) not make improper use of his position as such an officer, employee or agent to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the Unitholders in the Fund;(c) comply with any other duty or obligation as may be prescribed by or under this Law or any other legislation administered by the DFSA; and(d) carry out or comply with any other duty, not inconsistent with DIFC Law, that is conferred on him by the Fund's Constitution.
27. Retirement or removal of an Operator(1) The DFSA may make Rules prescribing the manner and circumstances in which:(a) an Operator may retire;(b) Unitholders in a Fund may resolve to remove an Operator;(c) the DFSA may withdraw an Operator's Licence;(d) a new Operator may be appointed to a Fund; and(e) a temporary Operator may be appointed to a Fund pending the choice or appointment of a new Operator.(2) A person cannot be chosen or appointed as a new Operator or temporary Operator unless such a person meets the relevant requirements of Article 17(2)(a) and (b).
28. Orders of the Court relating to retirement or removal(1) Where an Operator seeks to retire from a Domestic Fund and a new Operator cannot be found, the Court may, on application of the Operator, the Trustee, a Unitholder in the Fund, or the DFSA, make one or more of the following orders:(a) an order for the appointment of a temporary Operator;(b) an order for the winding up of the Fund; or(c) any other order as the Court considers just and equitable and in the interests of the Fund and of its Unitholders.(2) If:(a) a Domestic Fund does not have an Operator that meets the requirements of this Law or any Rules made under this Law; or(b) in the event of misconduct, default or breach of duty by the Operator, the Court considers that it is just and equitable and in the interests of the Fund and of its Unitholders to make such an order;the Court may, on application of the DFSA, the Trustee or a Unitholder in the Fund, make one or more of the following orders:(c) an order for the appointment of a new or temporary Operator;(d) an order for the winding up of the Fund; or(e) any other order as the Court considers appropriate.
29. Appointment of service providers to carry out certain functions(1) An Operator may, subject to any restriction in the Domestic Fund's Constitution and subject to any Rules made for the purposes of this Article, delegate any of its activities or outsource any of its functions, to another person (a "service provider").(2) The DFSA may make Rules:(a) specifying which activities can or cannot be delegated and to whom;(b) specifying which functions can or cannot be outsourced and to whom;(c) prescribing eligibility criteria for service providers;(d) prescribing certain activities or functions which must be performed in the DIFC and by whom;(e) as to any requirement, process and procedure for notification to or approval by the DFSA of the appointment of a service provider to carry out any activity or function;(f) governing the duties, obligations and requirements of the Operator and of any of its service providers in relation to a Domestic Fund or a class or category of Domestic Fund; and(g) prescribing the manner or circumstances in which a service provider may perform an activity or a function.(3) Where the Operator delegates an activity or outsources a function, the Operator remains responsible to Unitholders for any acts or omissions of the service provider as if they were the acts or omissions of the Operator even if they were acting fraudulently or outside the scope of their authority or engagement.