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Guidance

Past version: effective from 11/07/2010 - 04/07/2012
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1. Part 7 of the Law sets out the overarching provisions that apply to the Offer (also called marketing) of Units of both Domestic and Foreign Funds; and in the case of the latter, where Units of such Funds are marketed in or from the DIFC.
2. Article 50 of the Law contains the Marketing Prohibition. Under this prohibition, no Person is permitted to Offer a Unit of a Fund to prospective or existing Unitholders unless:
a. a Prospectus that complies with the relevant requirements in the Law and the Rules is made available to the person to whom the Offer is made;
b. the Person making the Offer of the Unit is either the Fund Manager of the Fund or an Authorised Firm whose licence authorises it to do so; and
c. the Offer is made in accordance with the applicable requirements in the Law or the Rules.
3. Article 19 of the Law defines the activities that constitute an Offer. Under this Article, a Person is to be regarded as making an Offer of a Unit if he:
a. makes an offer to another Person which, if accepted, would give rise to a contract for the issue or sale of Units by him or by another Person with whom he has made arrangements for the issue or sale of the Units; or
b. invites another Person to make an offer which, if accepted by him, would give rise to a contract for the issue or sale of Units by him or by another Person with whom he has made arrangements for the issue or sale of the Units,
whether or not the offer or invitation referred to in Article 19(2)(a) or (b) is made by way of a financial promotion of the Units..
4. Rules CIR 4.1.3 and CIR 4.1.4 exclude from being treated as Offers any Transactions undertaken by an Authorised Firm where such Transactions are Execution-only Transactions, or Transactions for the purposes of managing a Discretionary Portfolio for a Client, or for the purposes of redeeming a Unit of a Fund for a Client. Similarly, an offer made by an Authorised Firm to a Market Counterparty is also excluded from being an Offer. As a result, such excluded Transactions and offers do not attract the marketing prohibition in Article 19 of the Law and the requirements in both the Law and this module relating to the marketing of Units.
5. This Part of the module sets out the detailed requirements that apply to the Offer of Units of Domestic and Foreign Funds, including Prospectus disclosure, under respective chapters. The Rules in this chapter supplement provisions of COB which also govern the carrying on of Financial Service activities by an Authorised Firm, except where otherwise provided.
6. With the exception of Part 3 of the Markets Law 2004, that Law and Rules made for the purpose of that Law govern the listing of the Units of a Fund and continuous disclosure obligations that apply to in relation to Listed Funds.
Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]