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May 2 2010 onwards

Part 3: Amendments to Markets Law 2004



16. The Markets Law 2004 is amended as prescribed in this Part.
17. In relation to Article 8(2)(b):
(a) renumber and reposition the provision as Article 8(2)(c);
(b) after the words "Rules in relation to the" delete "administration and operation" and replace with "maintenance"; and
(c) after the words "Official List of Securities" delete "by Authorised Market Institutions" and replace with "which will be contained in the Offered Securities Rules".
18. Renumber and reposition Article 8(2)(c) as Article 8(2)(b).
19. Articles 17 to 19 are repealed, and replaced with:
"17. Maintaining an Official List of Securities
(1) Subject to (2), an Official List of Securities for an Authorised Market Institution may be maintained by either the Authorised Market Institution or the DFSA.
(2) An Authorised Market Institution may maintain an Official List of Securities provided it has an endorsed Licence authorising it to maintain an Official List of Securities.
(3) The DFSA may maintain an Official List of Securities where:
(a) the Authorised Market Institution does not wish to maintain an Official List of Securities;
(b) it has refused to grant an endorsement to an Authorised Market Institution to maintain an Official List of Securities; or
(c) it has suspended or withdrawn an endorsement from an Authorised Market Institution to maintain an Official List of Securities.
(4) An Authorised Market Institution when maintaining an Official List of Securities shall comply with the relevant requirements in the Law, its listing rules, the Offered Securities Rules and any other legislative requirement.
(5) An Authorised Market Institution shall not permit trading of Investments on its facilities unless those Investments:
(a) are admitted to, and not suspended from, an Official List of Securities maintained by it or the DFSA; or
(b) meet the requirements set out in Rules made for the purpose of this Article.
(6) The DFSA may make Rules prescribing appropriate transitional arrangements when transferring an Official List of Securities from an Authorised Market Institution to the DFSA or from the DFSA to an Authorised Market Institution.
17A. Application for an endorsement
(1) An application for an endorsement on a Licence authorising an Authorised Market Institution to maintain an Official List of Securities may be made to the DFSA by:
(a) the Authorised Market Institution; or
(b) an applicant for a Licence to operate as an Authorised Market Institution.
(2) The DFSA may, in its absolute discretion, grant or refuse to grant an application for an endorsement.
(3) When granting or refusing to grant an endorsement the DFSA shall consider whether an Authorised Market Institution has listing rules that meet the requirements in Article 22 and whether it complies with any other relevant requirement imposed by Law or Rules.
(4) Upon refusing to grant an endorsement, the DFSA shall, without undue delay, inform the applicant in writing of such refusal and, if requested by the applicant, the reasons for such refusal.
17B. Suspension or withdrawal of an endorsement
(1) The DFSA may at any time by written notice suspend or withdraw the endorsement on the Licence of an Authorised Market Institution to maintain an Official List of Securities.
(2) The DFSA may act under Article 17B(1) on its own initiative or at the request of an Authorised Market Institution.
(3) Subject to Article 17B(4), the DFSA may only suspend or withdraw the endorsement on a Licence on its own initiative if it has given the Authorised Market Institution a suitable opportunity to make representations in person and in writing to the DFSA in relation to the proposed changes.
(4) The requirement imposed on the DFSA under Article 17B(3) shall not apply in the case of a suspension of an endorsement on a Licence if the DFSA concludes that any delay likely to arise as a result of such requirement is prejudicial to the interests of the DIFC.
(5) Where pursuant to Article 17B(4), the DFSA suspends an endorsement without providing a prior opportunity to make representations, the DFSA shall:
(a) provide the relevant Authorised Market Institution with an opportunity to make representations in person and in writing to the DFSA within a period of fourteen days or such further period as may be allowed from the date on which the endorsement is suspended; and
(b) provide a response to any such submission and make any consequential direction without undue delay.
(6) The DFSA may give any third party who has a direct interest in the matter an opportunity to make representations to the DFSA if the DFSA considers it desirable to do so.
17C. Admission to an Official List of Securities maintained by an Authorised Market Institution
(1) This Article applies where an Authorised Market Institution maintains an Official List of Securities.
(2) An Authorised Market Institution may grant admission of Securities to an Official List of Securities in accordance with its listing rules and where it is satisfied that the requirements of its listing rules, the Offered Securities Rules and any other requirements it or the DFSA has imposed are or will be complied with.
(3) An Authorised Market Institution shall notify an applicant in writing of its decision in relation to the application for admission of Securities to an Official List of Securities.
(4) The DFSA may, by written notice:
(a) object to the admission by an Authorised Market Institution of Securities to an Official List of Securities; or
(b) impose, vary or withdraw conditions or restrictions on the admission by an Authorised Market Institution of Securities to an Official List of Securities;

where it is in the interests of the DIFC to do so or the DFSA reasonably considers, for a reason relating to the issuer of the Securities or to the Securities, that:
(i) granting the Securities admission to the Official List of Securities would be detrimental to the interests of persons using the facilities or otherwise dealing in the Securities;
(ii) the requirements of the listing rules have not been complied with;
(iii) any requirement imposed by the DFSA has not been complied with; or
(iv) the issuer of the Securities has failed to comply with any obligations to which he is or was subject to in relation to having a listed or traded Security in the DIFC or another jurisdiction.
(5) Where the DFSA objects to the admission of Securities to an Official List of Securities in accordance with Article 17C(4)(a), the Authorised Market Institution shall not admit the Securities to the Official List of Securities.
(6) Where the DFSA imposes conditions or restrictions on the admission by an Authorised Market Institution of Securities to an Official List of Securities in accordance with Article 17C(4)(b), the Authorised Market Institution shall not admit the Securities to the Official List of Securities unless it complies with the conditions and restrictions.
(7) Where, pursuant to Article 17C(4), the DFSA has objected to the admission of a Security to an Official List of Securities or imposed a condition or restriction, the DFSA shall:
(a) provide the applicant and the Authorised Market Institution an opportunity to make representations in person and in writing to the DFSA within the period of 14 days, or such further period as may be allowed, from the date on which such written notice was provided; and
(b) provide a response to any such submission, and make any necessary consequential variation, withdrawal or amendment of the objection, condition or restriction without undue delay.
(8) An Authorised Market Institution shall have, for the purposes of maintaining an Official List of Securities, listing rules that meet the requirements prescribed in Article 18.
17D. Admission to an Official List of Securities maintained by the DFSA
(1) This Article applies where the DFSA maintains an Official List of Securities.
(2) The DFSA may grant Securities admission to an Official List of Securities in accordance with the Law and the Offered Securities Rules and where the DFSA is satisfied that the requirements of the Offered Securities Rules and any other requirements it has imposed are and will be complied with.
(3) The DFSA may impose, vary or withdraw conditions or restrictions on the admission of Securities to an Official List of Securities.
(4) The DFSA shall notify the applicant in writing of its decision in relation to the admission of Securities to an Official List of Securities in accordance with the Offered Securities Rules.
(5) The DFSA shall have, for the purposes of maintaining an Official List of Securities, listing rules contained in the Offered Securities Rules that meet the requirements prescribed in Article 18.
18. Listing Rules Requirements
(1) The listing rules of an Authorised Market Institution or the DFSA shall include rules in relation to:
(a) applications for admission to an Official List of Securities;
(b) requirements to be met before Securities may be granted admission to an Official List of Securities;
(c) agreements in connection with admitting Securities to an Official List of Securities;
(d) the enforcement of those agreements in (c);
(e) the suspension and de-listing of Securities from an Official List of Securities;
(f) the imposition on any person of obligations to observe specific standards of conduct or to perform, or refrain from performing, specified acts, reasonably imposed in connection with the admission of Securities to an Official List of Securities or continued admission of Securities to an Official List of Securities;
(g) penalties or sanctions which may be imposed by an Authorised Market Institution or the DFSA for a breach of the listing rules;
(h) procedures or conditions which may be imposed, or circumstances which are required to exist, in relation to matters which are provided for in the listing rules;
(i) dealing with possible conflicts of interest that might arise when a person seeks to have Securities admitted to an Official List of Securities;
(j) such other matters as are necessary or desirable for the proper operation of the listing rules and process; and
(k) any other matters prescribed by the Rules made by the DFSA for the purpose of this Article.
(2) Applications for the admission of Securities to an Official List of Securities shall be made by the issuer of the Securities, or by a third party on behalf of and with the consent of the issuer of the Securities.
(3) An Authorised Market Institution shall only amend its listing rules in accordance with the Rules made by the DFSA for this purpose.
(4) Subject to Article 18(5) the DFSA may by written notice direct an Authorised Market Institution to:
(a) make listing rules within a specified period; or
(b) amend specified listing rules in the manner and within the period prescribed.
(5) The DFSA may only direct an Authorised Market Institution in accordance with Article 18(4) if it has first requested the Authorised Market Institution to make or amend specified listing rules and the Authorised Market Institution has failed to comply with that requirement within the period specified by the DFSA in its request.
19. Suspending and delisting Securities from an Official List of Securities
(1) The DFSA or an Authorised Market Institution may, in accordance with its listing rules, suspend or delist Securities from an Official List of Securities with immediate effect or from such date and time as may be specified where it is satisfied that there are circumstances that warrant such action or it is in the interests of the DIFC.
(2) The DFSA may by written notice direct an Authorised Market Institution to suspend or delist Securities from an Official List of Securities with immediate effect or from such date and time as may be specified if it is satisfied there are special circumstances that warrant such action or it is in the interests of the DIFC.
(3) The DFSA shall provide the written notice under Article 19(2) without undue delay to the Reporting Entity and the Authorised Market Institution and where requested by the Reporting Entity or the Authorised Market Institution shall provide the reasons for the decision.
(4) Subject to (5), the DFSA may only exercise its power under Article 19(1) and (2) if it has given the Reporting Entity and the Authorised Market Institution a suitable opportunity to make representations in person and in writing in relation to the proposed suspension or delisting.
(5) The requirements imposed on the DFSA in Article 19(4) shall not apply:
(a) in relation to the suspension by the DFSA of Securities from an Official List of Securities; or
(b) in the case of a direction by the DFSA to an Authorised Market Institution to suspend Securities,
where the DFSA concludes that any delay likely to arise as a result of such requirements is prejudicial to the interests of the DIFC.
(6) Where pursuant to Article 19(5)(b) the DFSA has:
(a) suspended a Security from an Official List of Securities; or
(b) directed an Authorised Market Institution to suspend Securities from an Official List of Securities;

without providing a prior opportunity to make representations, the DFSA shall:
(i) provide the relevant Reporting Entity and the Authorised Market Institution an opportunity to make representations in person and in writing to the DFSA within the period of 14 days, or such further period as may be agreed, from the date on which such direction or suspension was made; and
(ii) provide a response to any such submission, and make any necessary consequential direction, variation or withdrawal of the direction, without undue delay.
(7) The DFSA may by written notice withdraw a direction made under Article 19(2) at any time.
(8) Securities that are suspended from an Official List of Securities are still admitted to an Official List of Securities for the purposes of Parts 4, 5 and 6 of this Law.
19A. Jurisdiction of the Regulatory Appeals Committee

The Regulatory Appeals Committee has jurisdiction to hear and determine any appeal in relation to a decision of the DFSA to:
(a) refuse an application for an endorsement under Article 17A;
(b) suspend or withdraw an endorsement under Article 17B;
(c) object to the admission of Securities to an Official List of Securities under Article 17C;
(d) impose, vary or withdraw a condition or restriction under Articles 17C and 17D;
(e) refuse an application for admission to an Official List of Securities under Article 17D;
(f) suspend or delist Securities from an Official List of Securities under Article 19; or
(g) direct an Authorised Market Institution to suspend or delist Securities admitted to an Official List of Securities under Article 19."
20. In the Schedule, paragraph 3, the defined term "Official List of Securities" is amended after the words "Authorised Market Institution" by insertion of "or the DFSA".
21. Article 42 is repealed, and replaced with:
"42 Insider dealing
(1) A person who is an insider shall not, in the DIFC or elsewhere, directly or indirectly, deal, or attempt to deal, in an Investment of a Reporting Entity, or in a related investment, on the basis of inside information.
(2) In this Article "Investment" does not include commodity derivatives."
22. Articles 43 (1) and (2) are repealed, and replaced with:
"(1) An insider shall not, other than in the necessary course of business, disclose inside information to another person.
(2) An insider shall not procure another person to deal in the Investments or related investments in which the insider has inside information."
23. Article 45 is repealed , and replaced with:
"45. Definitions for this Part
(1) In this Part, in relation to Investments, or related investments, "inside information" means:
(a) information of a precise nature which:
(i) is not generally available;
(ii) relates, directly or indirectly, to one or more Reporting Entities of the Investments concerned or to one or more of the Investments; and
(iii) would, if generally available, be likely to have a significant effect on the price of the Investments or on the price of related investments.
(2) In (1)(a) information is precise if it:
(a) indicates circumstances that exist or may reasonably be expected to come into existence or an event that has occurred or may reasonably be expected to occur; and
(b) is specific enough to enable a conclusion to be drawn as to the possible effect of those circumstances or that event on the price of Investments or related investments.
(3) In (1)(a)(iii) information would be likely to have a significant effect on price if and only if it is information of the kind which a reasonable investor would be likely to use as part of the basis of his investment decisions.
(4) In (1)(a) information about a person's pending orders in relation to an Investment or related investment is also inside information.
(5) In (1)(a)(i) information which can be obtained by research or analysis conducted by, or on behalf of, users of a market is to be regarded, for the purposes of this Part, as being generally available to them.
(6) In this Part "insider" means a person who has inside information:
(a) as a result of his membership of the administrative, management or supervisory bodies of a relevant Reporting Entity;
(b) as a result of his holding in the capital of the relevant Reporting Entity;
(c) as a result of having access to the information through the exercise of his employment, profession or duties;
(d) as a result of his criminal activities; or
(e) which he has obtained by other means and which he knows, or could reasonably be expected to know, is inside information.
(7) In this Part, in relation to an Investment (the "First Investment"), a "related investment" means another Investment whose price or value depends, in whole or in part, on the price or value of the First Investment."
24. Article 48(2) is repealed , and replaced with:
"(2) A person shall not be found to have contravened Article 42 if:
(a) the person establishes that he reasonably believed that the inside information had been disclosed to the market in accordance with this Law or the Rules;
(b) the dealing occurred in the legitimate performance of an underwriting agreement for the Investments or related investments in question;
(c) the dealing occurred in the legitimate performance of its functions as a liquidator or receiver;
(d) the dealing is undertaken solely in the course of the legitimate performance of his functions as a market maker;
(e) the person executes an unsolicited client order in Investments or related investments while in possession of inside information without contravening Article 43 or otherwise advising or encouraging the client in relation to the transaction;
(f) the dealing is undertaken legitimately and solely in the context of that person's public takeover bid for the purpose of gaining control of that Reporting Entity or proposing a merger with that Reporting Entity; or
(g) the sole purpose of the Reporting Entity acquiring its own shares was to satisfy a legitimate reduction of share capital or to redeem securities in accordance with the Rules.
(3) A person shall not be found to have contravened Article 43 if:
(a) the person establishes that the information was disclosed by him in accordance with any requirement of the law or a court order; or
(b) the person establishes that he reasonably believed that the inside information had been disclosed to the market in accordance with this Law or the Rules."
25. Insert a new Article 48(3):
"(3) A person shall not be found to have contravened Article 43 if:
(a) the person establishes that the information was disclosed by him in accordance with any requirement of the law or a court order; or
(b) the person establishes that he reasonably believed that the inside information had been disclosed to the market in accordance with this Law or the Rules."
26. Article 49 is repealed , and replaced with:
"49 Chinese wall arrangements

A person does not contravene Article 42 by dealing in Investments or related investments if:
(a) it had in operation at that time an effective information barrier which could reasonably be expected to ensure that the inside information was not communicated to the person or persons who made the decision to deal and that no advice with respect to the transaction or agreement was given to that person or any of those persons by an insider; and
(b) the information was not communicated and no such advice was given."
27. Delete the text in Article 50 and replace with "[Deleted]"
28. In Schedule 1 paragraph 2 subparagraph (f) delete the words "under the Law" after "Chief Executive" and replace with "as notations to the Rules".