AFN AUT-NOTES Part 7: External Fund Notification Form notes
This section contains information to assist you to complete the External Fund Notification form. Each note relates to a question in the notification form e.g. EX5 below provides information to assist you to complete the question at EX5 of the External Fund Notification form.
Section 1: Declaration
|This section should be completed by all applicants.|
Section 2: Contact details
Please provide the full name of the
The contact person named should be the person who is responsible for the application during this process and who will liaise with the
|EX3.||If you do not have an adviser assisting you with this application, please go to question EX5.|
You may have a professional adviser assisting you with this application. Please tick yes if the
Section 3: External Fund Structure and Investment Policy
Please provide the full name of the
Please tick the applicable boxes. Multiple boxes may be used for any one fund if applicable. The following provides a brief summary regarding the structure of funds expressed in the form:
GLO definition: An open or closed ended company established for the sole purpose of collective investment which is incorporated under the DIFC Companies Law in accordance with the Regulations made under that Law.
GLO definition: A limited partnership established for the sole purpose of collective investment which is formed and registered under the Limited Partnership Law 2006 in accordance with the Regulations made under that Law.
GLO definition: An express trust created solely for collective investment purposes under the Investment Trust Law 2006.
Please specify if your fund is not an investment company, investment partnership or investment trust i.e. it may be a Unit Trust in the UK.
See CIR 3.1.4
See CIR 3.1.5
See CIR 3.1.10.
Please tick the applicable boxes. Multiple boxes may be used for any one fund if applicable. The following provides a brief summary regarding the types of funds expressed in the form:
Essentially the same as a standard mutual fund, such a fund is long-only, unleveraged, with returns driven largely by the performance of the market or an asset class and with no performance-based fees.
A fund investing in an asset class consisting of equity securities and, to a lesser extent, debt in operating companies that are not publicly traded on an exchange
See CIR 3.1.8
See CIR 3.1.2
See CIR 3.1.9
Fund of funds
See CIR 3.1.3
A fund containing a portfolio designed to replicate the performance of a major index or benchmark, capable of being traded like any other exchange-traded security throughout the trading day.
Essentially, a hedge fund specialising in using futures, options on futures, and forwards to implement their investment strategy.
A fund designed to replicate the performance of an index or benchmark (compare ETF).
A private equity fund investing in start-up and (generally) small businesses with significant growth potential and characterised as being high-risk/high-return opportunities.
Real Property (Real Estate)
See CIR 3.1.7
A fund seeking to profit from considered investments in foreign exchange.
Asset classes invested into by the
Please tick the applicable boxes. Multiple boxes may be used for any one fund if applicable. The following provides a brief summary regarding the asset classes expressed in the form:
Shares of ownership in publicly held companies. See GEN A2.1.1 (a)
Property (Real estate)
GLO definition: Land or buildings, whether freehold or leasehold, where the unexpired term of any lease exceeds 20 years.
Money market investments (Bills/Notes/Commercial Paper etc.)
Liquid, short-term, fixed income securities issued by governments or firms
Fixed income securities issued by governments
For definitions see GEN A2.3.1
Basic physical systems and businesses such as water, power, transport systems, communication systems
Credit incl. corporate bonds
Fixed income securities and loans issued by corporations
As an asset class, investments are generally made in microfinance institutions (MFIs) which in turn make micro-loans to new businesses in the developing world.
Investment strategy used by the
Please tick the applicable boxes. Multiple boxes may be used for any one fund if applicable. The following provides a brief summary regarding the investment strategies expressed in the form:
The fund holds only 'long' positions in assets and securities
The fund holds long positions in securities it expects to increase in value and short positions in securities (in the same asset class as the long positions) which it expects to decrease in value or to hedge the long positions against general market exposure.
The fund maintains a net short exposure to the market through a combination of short and long positions.
The fund seeks to avoid any form of overall market exposure by utilising 'matching' long and short positions in different securities in the same market.
The fund invests primarily or exclusively in the securities of a developing country or group of developing countries.
Merger arbitrage (risk arbitrage)
The fund seeks to profit from opportunities arising from extraordinary corporate events such as M&A and Leveraged Buyouts (LBOs) by taking appropriate positions in the securities associated with the event. (see Event driven).
Event driven (special situation)
The fund seeks to exploit pricing inefficiencies that may occur before or after a corporate event, such as a bankruptcy, merger, acquisition, or spinoff. (see Merger arbitrage).
Typically the fund trades pairs (or larger baskets) of stock that its quant models show as having a fairly persistent relationship statistically, shorting the relatively overpriced stock and buying the relatively underpriced stock and profiting from the anticipated convergence.
The fund selects investments and may also execute the trading decision based on quantitative models.
The fund seeks to profit from dividend-paying stocks by holding the relevant stock through the exdividend date while hedging the long position in the stock with in-the-money put options.
A traditional fund that combines a stock component and fixed income component, allowing the fund to switch between a moderate risk weighting (more equity) and a conservative (more fixed income) weighting.
Convertible bond arbitrage
The fund seeks to profit on any mispricing between a convertible bond and its underlying stock.
Fixed income arbitrage
The fund seeks to profit from temporary pricing mismatches between related securities by taking 'off-setting' long and short positions, often with leverage, while limiting exposure to interest rate changes.
The fund seeks to profit from holding securities trading at a discount to par value in firms experiencing financial or operational distress, bankruptcy etc., often by trying to influence the process of restructuring.
The fund seeks to profit from volatility changes in market indices or individual name securities, without being affected by the direction of the price movement.
The fund implements opportunistic trading strategies to profit from shifts in macroeconomic trends.
Typically the fund is organised as separate trading groups, each specialising in a specific investment strategy, with fund capital being allocated dynamically across strategies depending on the expected investment opportunities.
Section 4: External Fund Requirements
|EX13.||This is the jurisdiction in which you have established the fund.|
|EX14.||Please specify the name of the relevant fund laws, rules, regulations which are applicable to the fund in its jurisdiction. This should also include the fund category i.e. exempt fund, public fund, etc.|
|EX15.||Please advise whether you are allowed to target retail clients to invest in the fund in its jurisdiction.|
Please advise what AML legislation applies to the fund in your jurisdiction. As an example for
Please advise whether the jurisdiction in which the fund is domiciled complies with the
|EX18.||The contact person named should be the person who is responsible for the regulatory authorisation and ongoing supervision of the fund.|
|EX19.||Please confirm which entities will distribute the fund.|
(c) Have systems and controls which are adequate to ensure compliance with the requirements that apply to the
(d) Inform theA
(e) Any regulatory risks arising from establishing the
(f) Whether the relevant jurisdiction complies with the FATF or other relevant international standards or requirements.
If you have been granted any waivers or modifications of the
Section 5: Parties to the Fund
Please provide details of any third parties who may provide a service to the fund by way of delegation or outsourcing arrangement. Where relevant, details should include name, address, regulatory status and whether an agreement is in place. These agreements are not required to be submitted to the
Section 6: Compulsory Supporting Documents for a Fund
Please confirm you have attached the Information Memorandum of the
Section 7: Disclosure
|This section should be completed by all applicants.|