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(2 versions)
Jul 14 2013 - Apr 2 2016Apr 3 2016 onwards

MKT A1.2.2

Whole Section PDF

The definitive version of DFSA handbook text is the PDF version as that is the text of the instrument as made and published by the DFSA.

To view past versions of this module in PDF format, please visit the Archive.

(1) The reference to an "issuer" in this App1 is a reference to the PersonG offering SecuritiesG under the ProspectusG as specified in Rule 1.1.1 (2)(a) and (b).
(2) An issuer must include the specified information in relation to the SecuritiesG identified with a in this table which are the subject of the relevant ProspectusG .
(3) If an asterisk is used when identifying a Security, the requirement to provide the item of information for that SecurityG is qualified as specified in the relevant item.
  CONTENTS OF PROSPECTUS — SECURITIES NOTE Shares Warrants Over Shares Debebtures Warrants Over Debebtures Certificates Over Shares Certificates Over Debentures Structured Product
1.1 Risk factors

Prominent disclosure of risks factors material to the SecuritiesG being offered and/or admitted to trading in order for investors to assess the risks associated with investing in the SecuritiesG , which must be disclosed prominently in a separate section headed "Risk Factors" and include the following information:

(a) the nature of the risks involved in investing in the SecuritiesG :

(b) any material risks associated with investing in the issuer;

(c) any risks associated with the assets to be acquired using the proceeds of the offer;

(d) the effect that the material risks may have on the IssuerG including how the risk could affect the business, operating results and financial condition of the IssuerG ;

(e) any steps proposed by the IssuerG to mitigate or manage the risks;

(f) general and specific risks relating to the industry or jurisdiction in which the IssuerG operates; and

(g) any other material risks that are not included in the above.
1.2 Reasons for the offer

Reasons for the offer and, where applicable:

(a) the estimated net amount of the proceeds broken into each principal intended use and presented by order of priority of such uses;

(b) if the issuer is aware that the anticipated proceeds will not be sufficient to fund all the proposed uses, statement about the amount and sources of other funds needed; and
* √    
  (c) details with regard to the use of the proceeds, in particular when they are being used to acquire assets, other than in the ordinary course of business, to finance announced acquisitions of other businesses, or to discharge, reduce or retire indebtedness of the issuer.

*The information in 1.2 (a) and (b) is not required to be included for DebenturesG that have a denomination of US $100,000 or more per SecurityG .
1.3 Financial condition

To the extent not included in the Registration StatementG , a description of the issuer's financial condition, changes in financial condition and results of operations for each year and interim period, for which historical information is required, including causes of any material changes from year to year in the financial information to the extent necessary for an understanding of the issuer's business as a whole.
1.4 Working capital statement

A statement by the DirectorsG of the IssuerG that in their opinion the working capital is sufficient for the Issuer'sG present requirements, or, if not how it proposes to provide the additional working capital needed.
1.5 Creditworthiness of the issuer

(a) Sufficient information to enable an investor to form an opinion concerning the creditworthiness of the issuer such as:

(i) earnings coverage ratio;

(ii) any relevant credit ratings; and

(iii) any other risk factors that may affect the Issuer'sG ability to fulfil its obligations under the SecuritiesG to investors.
  (b) A statement of capitalization and indebtedness (distinguishing between guaranteed and unguaranteed, secured and unsecured indebtedness), including indirect and contingent indebtedness, as of a date no earlier than 90 days prior to the date of the Securities NoteG .      
1.6 Guarantees

(a) Information about any bank or other guarantees attaching to the SecuritiesG and intended to underwrite the issuer's obligations including the details relating to:

(i) any conditionality on the application of the guarantee in the event of any default under the terms of the SecurityG ; and

(ii) any power of the guarantor to veto changes to the SecurityG holders' rights.

(b) Disclosure by the guarantor of the information about itself as if it were the issuer of the same type of SecurityG that is the subject of the guarantee.
2.1 General information relating to Securities              
  (a) A description of the type and class of the SecuritiesG being offered and/or admitted trading, including any identification number (ISIN) or code applicable to the Securities.
  (b) An indication whether the SecuritiesG are in certificated form or book-entry form and if it is the latter, the name and address of the entity maintaining the records.
  (c) A summary of any restrictions relating to transferability of the SecuritiesG , the arrangements for settlement of transfers and any limitations of those rights and procedures for the exercise of such rights, including those specified in 2.2 and 2.3.
  (d) Any legislation under which the SecuritiesG have been created.
  (e) The currency of the SecuritiesG issue.
  (f) The ranking of the SecuritiesG being admitted to trading, including summaries of any clauses that are intended to affect ranking or subordinate the SecurityG to any present or future liabilities of the issuer.        
  (g) The maturity date and arrangements for the amortisation of the DebentureG , including the repayment procedures. Where advance amortisation is contemplated, on the initiative of the issuer or of the holder, it must be described, stipulating amortisation terms and conditions.        
  (h) Information regarding representation of DebentureG holders including an identification of the organisation representing the investors and provisions applying to such representation. Indication of where investors may have access to the contracts relating to these forms of representation.        
2.2 Dividends

Information relating to dividend rights including:

(a) a description of the Issuer'sG policy on dividend distributions and any restrictions thereon;

(b) the amount of the dividend per SecurityG , or underlying SecurityG if applicable, for each financial year for the period covered by the historical financial information, adjusted where the number of SecuritiesG , or underlying SecuritiesG if applicable, in the IssuerG has changed, to make it comparable;

(c) fixed date(s) on which the dividend entitlement arises;

(d) if relevant, time limit after which entitlement to dividend lapses and an indication of the PersonG in whose favour the lapse operates;

(e) any dividend restrictions; and

(f) the rate of dividend or method of its calculation, periodicity and cumulative or non-cumulative nature of payments.
2.3 Interest Rate and Yield

(a) Where there is a nominal rate of interest or rate of return and provisions relating to rate of interest or rate of return payable, information including:

(i) the date from which rate of interest or rate of return becomes payable and the due dates for rate of interest or rate of return; and

(ii) the time limit on the validity of claims to rate of interest or rate of return and repayment of principal.

(b) Where the rate is not fixed, information including:

(i) a description of the underlying on which it is based and of the method used to relate the two;

(ii) a description of any market disruption or settlement disruption events that affect the underlying;

(iii) adjustment rules with relation to events concerning the underlying; and

(iv) the name of the calculation agent.

(c) An indication of yield.
2.4 Other rights

Information relating to other rights including:
  (a) voting rights;      
  (b) pre-emption rights in relation to offers for subscription of SecuritiesG of the same class;      
  (c) right to share in the issuer's profits;      
  (d) rights to share in any surplus in the event of liquidation of the IssuerG ;      
  (e) redemption rights, if any; and
  (f) conversion rights, if any.      
3.1 Terms and conditions of the offer

The terms and conditions of the offer including:
  (a) the number of SecuritiesG offered;
  (b) the price or price range of the SecuritiesG ; * √    
  (c) the identity of the seller of the SecuritiesG where the PersonG making the Prospectus OfferG is not the issuer;      
  (d) the various categories of potential investors to which the SecuritiesG are offered. If the offer is being made simultaneously in two or more markets, and if a tranche has been or is being reserved for certain of these, indicate any such tranche and the category of investors for whom it is offered; * √    
  (e) a description of any material interests and conflict of interests relating the affairs of the issuer, detailing the PersonsG involved and the nature of such interests;
  (f) the Offer PeriodG , including the opening and closing dates; * √    
  (g) the manner of allocation of SecuritiesG to applicants including the manner in which SecuritiesG are allotted in the event of over subscription;      
  (h) proposed date for allotment of SecuritiesG ;
  (i) where the SecuritiesG to be offered confer the right to subscribe for new SecuritiesG by existing holders of SecuritiesG in the issuer, details of such rights, including a statement of the maximum number of SecuritiesG which would be created if the rights were exercised in full;      
  (j) the effect the issuance of the SecuritiesG will have on the capital structure of the IssuerG ;      
  (k) particulars of any commissions or other fees to be paid by the issuer in relation to the offer;      
  (l) all relevant details of the appointment of an underwriter on a firm commitment basis, including the nature of the obligations of the underwriter, quotas, plan of distribution, commission and, if a portion of the offer is not covered, a statement of the portion not covered; * √    
  (m) all relevant details of the appointment of placing agents appointed on a 'without a firm commitment' basis or under a “best efforts” arrangement, including quotas and placing commission; * √    
  (n) details of the entities which have a firm commitment to act as intermediaries in secondary trading, providing liquidity through bid and offer rates and description of the main terms of their commitment;      
  (o) methods of payment for the SecuritiesG , particularly as regards the paying up of SecuritiesG which are not fully paid or are payable by instalments; * √    
  (p) in the event of the offer not proceeding, the details of the procedure and means under which the money obtained from applicants will be returned;      
  (q) process for notification to applicants of the amount of SecuritiesG allotted and indication whether dealing may begin before notification is made; * √    
  (r) provided applicants are allowed to withdraw their subscription, an indication of the period during which an application may be withdrawn;      
  (s) in the case of new SecuritiesG , a statement of the resolutions, authorisations and approvals by virtue of which the SecuritiesG have been or will be created and/or issued;
  (t) the details of any ConvertibleG , including an indication of the conditions governing the procedures for conversion, exchange or subscription;      
  (u) the procedure for the exercise of any right of pre-emption, the negotiability of subscription rights and the treatment of subscription rights not exercised; * √    
  (v) if advisors to the issuer are connected with the offer, a statement of the professional or other capacity in which such advisors have acted; and
  (w) the name and address of any paying agents and depository agents in each country.

*The information in 3.1(b),(d),(f),(l),(m),(o),(q), and (u) is not required to be included for DebenturesG that have a denomination of US $100,000 or more per SecurityG .
3.2 Plan of distribution and allotment

(a) Pre-allotment disclosure relating to:

(i) the division into tranches of the offer including institutional, retail and Issuer'sG employee tranches and any other tranches;

(ii) the conditions under which a claw-back right may be used, the maximum size of such claw-back and any applicable minimum percentages for individual tranches;

(iii) the allotment method or methods to be used for the retail and Issuer'sG employee tranche in the event of an over subscription of these tranches;

(iv) a description of any pre-determined preferential treatment to be accorded to certain classes of investors or certain affinity groups (including friends and family programmes) in the allotment, the percentage of the offer reserved for such preferential treatment and the criteria for inclusion in such classes or groups;

(v) whether the treatment of subscriptions or bids to subscribe in the allotment may be determined on the basis of which intermediary firm they are made through or by a target minimum individual allotment if any within the retail tranche;

(vi) the conditions for the closing of the offer before the end of the Offer PeriodG as well as the date on which the offer may be closed at the earliest; and

(vii) whether or not multiple subscriptions are admitted, and where they are not, how any multiple subscriptions will be handled.

(b) The details of any over-allotment option, including existence and size of the over-allotment option, the period in which the over-allotment option may be exercised and any conditions on exercising such option.
3.3 Price stabilisation

The information required to be disclosed to the market pursuant to the Price Stabilisation ModuleG of the DFSAG Rulebook.
4.1 Audit and source of information including use of expert reports

(a) Where information has been included in the Securities NoteG which has been audited or reviewed by auditors and where auditors have produced a report, reproduction of the report or, with permission of the DFSAG , a summary of the report.

(b) Where information has been sourced from a third party, details of the identify of the source of the information along with a confirmation that the information has been accurately reproduced and that as far as the IssuerG is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

(c) Where a statement or report attributed to a PersonG as an ExpertG is included in the Securities NoteG :

(i) the name, business address, qualifications and any material interest such a PersonG has in the IssuerG ; and

(ii) if the report has been produced at the Issuer'sG request, a statement to the effect that such statement or report is included, in the form and context in which it is included, with the consent of the ExpertG who has authorised the contents of that part of the Securities NoteG .
4.2 Dilution

Information relating to dilution including:

(a) the amount and percentage of immediate dilution resulting from the offer; and

(b) in the case of a offer to existing equity holders, the amount and percentage of immediate dilution if they do not subscribe to the new offer.
4.3 Takeovers
Information relating to any TakeoversG including:

(a) the existence of any mandatory TakeoverG bids and/or squeeze-out, sellout, or poison pill requirements in relation to the SecuritiesG ; and

(b) any public TakeoverG bids by third parties in respect of the Issuer'sG equity, which have occurred during the last financial year and the current financial year, including the price or exchange terms attaching to such offers and the outcome thereof.
4.4 Investments by controllers and any lock-up arrangements

(a) Information, if available to the issuer, whether:

(i) DirectorsG , controllers or the senior management of the issuer intends to subscribe to the offer; and

(ii) any other PersonG intends to subscribe for more than 5% cent of the offer.

(b) The details of any lock-up arrangements relating to PersonsG exercising senior management functions of the issuer, including the PersonsG subject to such lock-up and the procedures involved and the period of the lock up.

(c) Information about whether there is or could be a material disparity between the price of the SecuritiesG offered pursuant to the offer and the effective cash cost to DirectorsG and the senior management of the issuer (Related PersonsG ) of the SecuritiesG acquired by such PersonsG in transactions during the past year or which such PersonsG have the right to acquire, and if so, a comparison of the cost to the public and Related PersonsG in their acquisition of SecuritiesG .
5.1 (a) The proposed dates for:

(i) admission to an Official List of SecuritiesG ; and

(ii) admission to trading on an Authorised Market InstitutionG ;

(iii) admission to listing or trading by a Financial Service RegulatorG or Regulated ExchangeG ; and

(iv) any other such comparable event in respect of the SecuritiesG .
  (b) The actual dates on which:

(i) the SecuritiesG were admitted to an Official List of SecuritiesG ;

(ii) the SecuritiesG were admitted to trading on an Authorised Market InstitutionG ;

(iii) the SecuritiesG were listed or admitted to trading by a Financial Services RegulatorG or Regulated ExchangeG ; and

(iv) any other such comparable event took place in respect of the SecuritiesG .
  (c) An estimate of the total expenses related to the admission to trading        
6.1 Certificates and structured products

Information about:

(a) the legislation under which the CertificatesG or Structured ProductsG and the underlying SecuritiesG or assets have been created and of the courts of competent jurisdiction in the event of litigation including details of the consequences in event of default occurring in respect of the underlying SecuritiesG ;

(b) in the case of Structured ProductsG , a statement setting out the type of the underlying factors to which the Structured ProductG is referenced and details of where information on the underlying factor can be obtained;

(c) whether it is possible to obtain a conversion of the CertificatesG or Structured ProductsG into the underlying SecuritiesG or assets, and if so, the procedure for such conversion, and commission and costs involved with such a conversion;

(d) the provisions relating to the rights attaching and benefits attaching to the underlying SecuritiesG , including:

(i) any voting rights and the conditions on which the issuer of the CertificatesG or Structured ProductsG may exercise the voting rights and measures envisaged to obtain the instructions of the CertificateG or Structured ProductG holders; and

(ii) any right to participate in profits and any liquidation surplus;

(e) the names and addresses of the paying agents and trustees and fiscal agents in relation to the creation of the CertificateG or Structured ProductG ;

(f) the amount of the commissions and costs to be borne by the CertificateG or Structured ProductG holders in connection with the payment of coupons or other income and the creation of additional certificates;

(g) the name and credit rating of the ultimate underwriter or obligor(s) against whom the SecurityG holder faces credit risk in relation to the CertificateG or Structured ProductG ;

(h) a description of the tax arrangements with regard to any taxes and charges to be borne by the CertificateG or Structured ProductG holders and levied in the jurisdictions where the CertificatesG or Structured ProductsG are issued;

(i) a statement confirming that under the laws governing the issuer's activities the underlying SecuritiesG or assets would not form part of the Issuer'sG assets in the event of bankruptcy or insolvency of the issuer and that there is no credit risk to the IssuerG attaching to the Certificates or Structured ProductsG ; and

(j) the names of banks with which the main accounts relating to the underlying SecuritiesG or assets are held.
7.1 If the SecuritiesG or the underlying SecuritiesG are asset backed, describe all the material attributes of the asset backed SecuritiesG , including:

(a) information about the assets backing the SecuritiesG including:

(i) where the assets are equity SecuritiesG that are admitted to trading on an exchange, a description of the SecuritiesG , a description of the market in which the SecuritiesG are traded and the frequency with which prices of the relevant SecuritiesG are published;

(ii) where the assets contain a material proportion of equity SecuritiesG that are not traded on exchange, a description of the equity SecuritiesG including the type of information required to be disclosed in a ProspectusG if the equity SecuritiesG where SharesG ;

(iii) where the assets comprise obligations that are not traded on an exchange, a description of the principal terms and conditions of the obligations;

(iv) where a material proportion of the assets are secured on or backed by real properly, a valuation report relating to the property setting out both the valuation of the property and cash flow/income stream;

(v) where the assets backing the SecurityG are part of an actively managed pool of assets, the parameters within which investments can be made, details of the entity responsible for such management, terms of such entity's appointment, termination of appointment, and a description its relationship with any other parties to the issue of the Securities; and

(vi) any rights to substitute the assets and a description of the manner in which and the type of assets which may be so substituted, and, if there is any capacity to substitute assets with a different class or quality of assets, a statement to that effect together with a description of the impact of such substitution;

(b) information about the structure of the transaction and the rate of return including:

(i) a description of the structure of the transaction;

(ii) details of the entities participating in the issue and description of the functions to be performed by them;

(iii) a description of the method and date of the sale, transfer, novation or assignment of the assets or of any rights and/or obligations in the assets to the issuer or, where applicable, the manner and time period in which the proceeds from the issue will be fully invested by the issuer;

(iv) the rate of interest or stipulated yield and any premium;

(v) the date of repayment of the principal capital and return on that capital;

(vi) how the cash flow from the assets will meet the issuer's obligations to holders of the SecuritiesG and how payments are collected in respect of the assets; and

(vii) where the return on, and or repayment of the SecurityG is linked to the performance or credit of other assets which are not assets of the issuer, information as set out in paragraph (a) regarding the assets backing the SecurityG , if necessary;

(c) information about the obligors including:

(i) where there is a large number of obligors, a general description of the obligors; and

(ii) where there are only a small number of obligors, a description of each obligor;

(d) information about:

(i) the terms and conditions for the issuance of any additional SecuritiesG or any restrictions on the issuance of additional SecuritiesG ; and

(ii) where the issuer proposes to issue further SecuritiesG backed by the same assets, a prominent statement to that effect, and unless those further SecuritiesG are fungible with, or are subordinated to, those classes of existing debt, a description of how the holders of that class SecuritiesG will be informed;

(e) the nature, order and priority of the entitlements of holders of the SecuritiesG ;

(f) details of arrangements or other matters that may impact repayment of the principal capital or return on that capital to the holders of the SecuritiesG , including:

(i) a description of any relevant insurance policies relating to the assets backing the SecuritiesG ;

(ii) a global overview of the parties to the arrangement in the securitisation programme including information on the direct or indirect ownership of control between those parties;

(iii) if a relationship exists that is material to the issue of the SecuritiesG between the IssuerG , guarantor and the obligor and details of the principal terms of that relationship;

(iv) if the assets backing the SecuritiesG include loans and credit agreements, the principal lending criteria and an indication of any loans which do not meet these criteria and any rights or obligations to make further advances;

(v) an indication of significant representations and collaterals given to the issuer relating to the assets;

(vi) information on any credit enhancements, an indication of where material potential liquidity shortfalls may occur and the availability of any liquidity supports and indication of provisions designed to cover interest/principal shortfalls;

(vii) name and addresses and a brief description of any swap counterparties and other providers of other material forms of credit/liquidity enhancement;

(viii) details of any subordinated debt finance; and

(ix) an indication of any investment parameters for the investment of temporary liquidity surpluses and description of the parties responsible for such investment;

(g) statements by the issuer confirming that the assets backing the SecurityG have characteristics that demonstrate capacity to produce funds to service any payments due and payable of the SecuritiesG ; and

(h) a statement whether or not post issuance transaction information regarding the SecuritiesG to be admitted and the performance of the underlying assets will be reported. If it is to be reported, disclosure of where such information will be reported, where such information can be obtained, and the frequency with which such information will be reported.
Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
[Amended] DFSA RM120/2013 (Made 13th June 2013). [VER4/07-13]
[Amended] DFSA RM171/2016 (Made 10th February 2016). [VER8/04-16]