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Whole SectionText only Print Print Manager Link


  Versions
(1 version)
 
Feb 25 2019 onwards

FPR 1.3.1



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.

In this module the terms and abbreviations listed in the table below have the following meanings:

AgentG A Licensed PersonG appointed by the Fund ManagerG of a Passported FundG to PromoteG the UnitsG of that FundG .
Authority The Securities and Commodities AuthorityG (SCA), the Financial Services Regulatory AuthorityG (FSRA) or the Dubai Financial Services AuthorityG (DFSA).
Domestic FundG or FundG Any arrangement that:
(a) is established or domiciled in the UAEG ; and
(b) is a "collective investment fund" as defined under the legislation administered by the DFSAG or the FSRAG or an "investment fund" as defined under the legislation administered by the SCAG .
Fund ManagerG The PersonG licensed by a Home RegulatorG to manage or operate a Domestic FundG .
Home RegulatorG
(a) In relation to a FundG , the Authority that is responsible for regulating the FundG in the JurisdictionG where the FundG is established or domiciled; and
(b) In relation to the Fund ManagerG of a FundG , the Authority that is responsible for regulating the Fund ManagerG in the JurisdictionG where the FundG is established or domiciled.
Home JurisdictionG In relation to a FundG , the JurisdictionG in which the FundG is established or domiciled.
Host JurisdictionG In relation to a Passported FundG , a JurisdictionG into which the Passported FundG may be PromotedG under these RulesG .
Host RegulatorG In relation to a Passported FundG , the Authority in the JurisdictionG into which the FundG may be PromotedG (Host Jurisdiction) under these RulesG
JurisdictionG The UAEG (excluding the Financial Free ZonesG ), the Dubai International Financial CentreG or the Abu Dhabi Global MarketG .
Licensed PersonG A PersonG who is licensed or otherwise authorised by an Authority to Promote FundsG .
Passported FundG A Domestic FundG that is registered on its Home Jurisdiction's RegisterG of Passported FundsG .
PersonG Any natural person, body corporate or body unincorporated, including a company, partnership, unincorporated association, government or state.
PromoteG

Promoted

Promotion

Promoting
The marketing and sale of units of a Passported FundG to investors domiciled in the UAEG by means of any form of communication including a direct or indirect public offering or private placement performed by:
(a) the Fund ManagerG ;
(b) an AgentG ; or
(c) any other Licensed PersonG .
In this definition "sale" includes any arranging, dealing and advising activities in relation to the units.
Private FundG A Domestic FundG where:
(a) the initial subscription paid by a PersonG to become a UnitholderG of the FundG is no less than $50,000; and
(b) participation in the FundG is restricted to UnitholdersG who are Qualified InvestorsG .
Public FundG A Domestic FundG where:
(a) UnitsG of the FundG are offered to PersonsG in any of the JurisdictionsG by way of a public offer; or
(b) any UnitholderG of the FundG is a Retail ClientG .
Qualified InvestorG Any PersonG who is either a:
(a) "Deemed" Qualified InvestorG ;
(b) "Service-based" Qualified InvestorG ; or
(c) "Assessed" Qualified InvestorG .
"Deemed" Qualified Investor

A PersonG is a "deemed" Qualified InvestorG if the PersonG falls within any of the following paragraphs and has not opted to be classified as a Retail ClientG :

(a) a supranational organisation whose members are either countries, central banks or national monetary authorities;
(b) a properly constituted government, government agency, central bank or other national monetary authority of any country or jurisdiction;
(c) a public authority or state investment body;
(d) an investment exchange or a clearing house that is authorised by an Authority or a financial services regulator outside the UAEG ;
(e) a PersonG who is authorised to carry on a financial service by an Authority or by a financial services regulator;
(f) the management company of a regulated pension fund;
(g) a PersonG which, as at the date of its most recent financial statements, met at least two of the following requirements:
(i) a balance sheet total of US$20 million;
(ii) a net annual turnover of US$40 million; or
(iii) own funds or called up capital of at least US$2 million,
or, in each case, equivalent amounts in another currency;
(h) a Collective Investment FundG or a regulated pension fund;
(i) a body corporate whose shares are listed or admitted to trading on any exchange of an IOSCO member country;
(j) any other institutional investor whose main activity is to invest in financial instruments, including an entity dedicated to the securitisation of assets or other financial transactions;
(k) a trustee of a trust which has, or had during the previous twelve months, assets of at least US$10,000,000, or an equivalent amount in another currency. An individual trustee on the board of such a trust is only a "deemed" Qualified InvestorG in relation to that particular trust;
(l) a single family office with respect to its activities carried on exclusively for the purposes of, and only in so far as it is, carrying out its duties as a single family office; or
(m) a subsidiary or a parent of any of the PersonsG described in 1(a)–(l).
"Service-based" Qualified Investor

A PersonG is a "Service-based" Qualified InvestorG if:

(a) the financial service provided to that PersonG is "Advising on Investments" or "Arranging Credit";
(b) the service is provided for the purposes of corporate structuring and financing; and
(c) the PersonG has not opted to be classified as a Retail ClientG .
"Assessed" Qualified Investor

A PersonG is an "assessed" Qualified InvestorG if the PersonG falls within any of the following paragraphs and has not opted to be classified as a Retail ClientG :

Individuals

(1) An individual is an "assessed" Qualified InvestorG if:

(a) the individual has net assets of at least US$1,000,000 (or an equivalent amount in another currency), the calculation of which must:
(i) exclude the value of that person's primary residence; and
(ii) include any assets held directly or indirectly by that PersonG ; and
(b) either:
(i) the individual is, or has been, in the previous two years, an employee in a professional position in a Person authorised to carry on a financial service by an Authority or by a financial services regulator outside the UAEG ; or
(ii) the individual appears, on reasonable grounds, to have sufficient experience and understanding of relevant financial markets, products or transactions and any associated risks.
(2) Any legal structure or vehicle, such as an undertaking, trust or foundation, is an "assessed" Qualified InvestorG if it is set up solely for the purpose of facilitating the management of an investment portfolio of an individual assessed as meeting the requirements in (1).

(3) An individual who has a joint account (a "joint account holder") with an individual assessed as meeting the requirements in (1) (the "primary account holder") is an "assessed" Qualified InvestorG if:

(a) the joint account holder is a family member of the primary account holder;
(b) the account is used for the purposes of managing investments for the primary account holder and the joint account holder; and
(c) the joint account holder has confirmed in writing that investment decisions relating to the joint account are generally made for, or on behalf of, him by the primary account holder.
(4) An individual classified as a Qualified InvestorG may operate a joint account with more than one family member. Provided that each such family member meets the requirements set out in (3) above, they may all be classified as Qualified InvestorsG .

(5) A legal structure or vehicle of a Qualified InvestorG which is itself classified as a Qualified InvestorG may not opt to be treated as a Retail ClientG , as that right belongs to the Qualified Investor for whose purposes the vehicle is set up.

(6) A family member of a Qualified InvestorG classified as a Qualified Investor under (3) above does not per se have a right to opt to be classified as a Retail ClientG with regard to the operation of the joint account.

(7) A family member of a Qualified InvestorG classified as a Qualified InvestorG under (3) may withdraw his confirmation given to have decisions on behalf of him made by the Qualified InvestorG who is the primary account holder of the joint account. An Authorised PersonG must ensure that once such a withdrawal is made, the withdrawing individual is no longer classified as a Qualified InvestorG .

Undertakings

(8) An undertaking is an "assessed" Qualified InvestorG if the undertaking:

(a) has own funds or called up capital of at least US$1,000,000 (or an equivalent amount in another currency); and
(b) appears, on reasonable grounds, to have sufficient experience and understanding of relevant financial markets, products or transactions and any associated risks.
(9) An undertaking is an "assessed" Qualified InvestorG if the undertaking has a controller, holding company, a subsidiary or a joint venture partner which meets the requirement to be an "assessed" Qualified InvestorG under (1), (2) or (4), or a "deemed" Qualified InvestorG .
Register of Passported FundsG
(a) In relation to the DFSAG , the register of Passported FundsG maintained by the DFSAG ; and
(b) In relation to another Authority, the register of Passported FundsG maintained by that Authority.
Retail Investor A PersonG who is not classified as a Qualified InvestorG
Unit A unit in or a share representing the rights or interests of a UnitholderG in a FundG .
UnitholderG In relation to a FundG , any holder of a UnitG in the FundG or of any right or interest in such a UnitG , and whose name is entered on the Fund'sG register in relation to that UnitG .
Derived from RMI233/2019 (Made 20th February 2019). [VER1/02-19]