CIR A9.1.2

(1) A Fund Manager of an ETF may only use an index or other benchmark provided by a Price Information Provider for the purposes referred to in Rule 13.9.3 if it has undertaken appropriate due diligence to ensure that the Price Information Provider, on an on-going basis, meets the requirements set out in (2).
(2) The requirements relating to the Price Information Provider are that:
(a) it has fair and non-discriminatory procedures for establishing prices of Investments which are made public.
(b) it can demonstrate adequate and appropriate transparency over the methodology, calculation and inputs to allow users to understand how the benchmark or index is derived and its potential limitations by:
(i) making publicly available all the rules that govern the methodology, composition, components and value, and relative weighting of securities in each index or benchmark within a reasonable time frame as appropriate to the nature of the index and its users; and
(ii) not making changes to the rules for index compilation without giving advance public notice before any changes are made;
(c) where appropriate, it gives priority to concluded transactions in making assessments and adopts measures to minimise selective reporting;
(d) it is of good standing and repute as an independent and objective price reporting agency or index provider;
(e) it has a sound corporate governance framework;
(f) it has adequate arrangements to avoid its staff having any conflicts of interest where such conflicts have, or are likely to have, a material adverse impact on price establishment process, and in particular, it does not employ ETF staff, for the purposes relating to the creation, development or modification of the index compilation rules and their review; and
(g) it has adequate complaint resolution mechanisms to resolve any complaints about the Price Information Provider's assessment process and methodology.
Derived from DFSA RM218/2018 (Made 22nd February 2018). [VER23/12-18]