Entire Section

  • Part 4: Part 4: Oversight of Domestic Funds

    • 30. Oversight arrangements

      (1) An Operator of a Domestic Fund which is, or is to be, a Public Fund shall establish and maintain oversight arrangements in accordance with the provisions of this part.
      (2) In addition to the other applicable oversight arrangements, a Domestic Fund which is an Islamic Fund or holds itself out as being an Islamic Fund or otherwise Shari'a compliant shall appoint a Shari'a Supervisory Board.
      (3) The DFSA may make Rules prescribing circumstances in which a Fund will be taken to, or will be taken not to, be holding itself out as being Shari'a compliant or an Islamic Fund.
      (4) The DFSA may make Rules prescribing the appointment, formation, conduct and operation of a Shari'a Supervisory Board.

    • 31. Permitted oversight arrangements

      (1) The DFSA shall make Rules:
      (a) setting out permitted oversight arrangements; and
      (b) prescribing the criteria to be met by a person before being permitted to be appointed to carry out oversight functions.
      (2) Any suitably qualified person appointed to oversee the operation of the Fund must be:
      (a) in the case of a Trustee, independent in accordance with Article 19 of the Investment Trust Law 2006; and
      (b) in any other case, independent in accordance with Article 34.
      (3) The DFSA may, in its absolute discretion, at any time object to the appointment of a person to provide oversight of a Fund and require the Operator to appoint a replacement.
      (4) The DFSA shall notify the Operator of such objection in writing and, where requested by the Operator, the reasons for such objection.

    • 32. Powers and functions

      (1) The person providing oversight for a Fund shall be appointed with powers and functions to:
      (a) monitor the Operator's compliance with the Fund's Constitution and Prospectus and to report on its findings to the Operator;
      (b) monitor the Operator's compliance with any obligation or requirement imposed on the Fund under any legislation administered by the DFSA' including any requirement to establish and maintain proper systems and controls and to report on their findings to the Operator;
      (c) report to the Operator:
      (i) any breach of this Law or any other legislation administered by the DFSA or of any Rule made under those laws which may relate to the Fund;
      (ii) any breach of a term, condition or restriction of its Licence involving the Fund; or
      (iii) any breach of the provisions of the Fund's Constitution or Prospectus;
      of which such persons become aware or which they suspect;
      (d) report to the DFSA if any one of the persons providing oversight is of the view that:
      (i) the Operator has not taken, or does not propose to take, appropriate action to deal with a matter reported under Article 32(1)(c); and
      (ii) on reasonable grounds that the breach has had, or is likely to have, a materially adverse effect on the interests of the Unitholders;
      (e) assess at regular intervals whether the Fund's internal systems and controls are adequate, report to the Operator on the assessment and make recommendations to the Operator about any changes that are considered appropriate or necessary to be made; and
      (f) do any other matter or thing as may be prescribed in the Rules and in the case of a Trustee, under the Investment Trust Law 2006.
      (2) The DFSA may make Rules in respect of any matter relating to the functions and powers of a person providing oversight of a Fund, including Rules as to:
      (a) the power of such persons to commission and rely on independent legal, accounting or other professional advice or assistance;
      (b) the payment of costs and expenses of such persons;
      (c) the proceedings and conduct of meetings, the keeping of minutes, and the making of reports and recommendations;
      (d) the submission of reports by the persons providing oversight of a Fund to the DFSA; and
      (e) the disclosure by the persons providing oversight of a Fund of any interests or circumstances which may conflict with the proper performance of their duties.

    • 33. Duties of a person providing oversight functions

      (1) A person providing oversight of a Fund shall:
      (a) act honestly;
      (b) exercise the degree of care and diligence that a reasonable person would exercise if he were in that person's position;
      (c) not make improper use of information acquired in that position in order to:
      (i) gain an improper advantage for himself or another person; or
      (ii) cause detriment to Unitholders in the Fund;
      (d) not make improper use of his position as such a person to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the Unitholders in the Fund;
      (e) disclose to the Fund's auditor any information pertinent to the auditor's role;
      (f) 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
      (g) carry out or comply with any other duty, not inconsistent with DIFC Law, that is conferred on him by the Fund's Constitution.
      (2) A person providing oversight of a Fund is to take all reasonable steps to assist the DFSA in exercising its powers under Part 5 of the Regulatory Law 2004.

    • 34. Independence

      (1) A person providing oversight in accordance with this part is independent for the purposes of this Part if he:
      (a) is not, and has not been in the previous 2 years, an employee of the Operator or a body corporate in the same group (a "related body corporate");
      (b) is not, and has not been in the previous 2 years, an executive officer of a related body corporate;
      (c) is not, and has not been in the previous 2 years, involved in material business dealings, or in a professional capacity, with the Operator or a related body corporate;
      (d) is not a member of a partnership or a trustee of a trust that is, or has been in the previous 2 years, substantially involved in business dealings, or in a professional capacity, with the Operator or in a related body corporate;
      (e) does not have a material interest in the Operator or a related body corporate; and
      (f) is not a relative or de facto spouse of a person who has a material interest in the Operator or a related body corporate of a kind described in (a) to (e) of this Article.
      (2) Nothing in this Part prevents an eligible person, appointed for the purposes of Article 21(5), from being independent for the purposes of Articles 31(2) or 34 merely by reason of such appointment.