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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Recognised Jurisdictions and Funds
Declaration Notices
Financial Markets Tribunal
Rulebook Modules
Islamic Finance Rules (IFR) [VER14/12-19]
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases

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IFR 6.2.1 Guidance

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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.

Past version: effective from Jul 11 2010 - Aug 20 2014.
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1. In appointing a Shari'a Supervisory BoardG for the purposes of IFR Rule 6.2.1(1), the Fund ManagerG should consider the previous experience and qualifications of the proposed Shari'a Supervisory BoardG members to assess whether the proposed Shari'a Supervisory BoardG member is competent to advise on the activities undertaken by the Islamic FundG . If the Fund ManagerG is appointing the same Shari'a Supervisory BoardG as it has appointed to the firm pursuant to IFR Rule 6.2.1(2), the Fund ManagerG should still consider whether the requirements in both Rule IFR 3.5.1(1) and IFR 6.2.1(1) are met in respect of that board.
2. If the Fund ManagerG is relying on Shari'a screening methodologies such as the Dow Jones Shari'a index, such screening is generally regarded as widely accepted and accessible. However, if less widely known methodologies are used, the Fund ManagerG should be able, upon request by the DFSAG , to demonstrate to the satisfaction of the DFSAG the grounds on which it considers the particular methodology used to be acceptable and reliable.
3. Although the Fund ManagersG of Exempt FundsG are not subject to the requirement for the appointment of a Shari'a Supervisory BoardG for an Exempt FundG , they would need to ensure that the Exempt FundsG they manage continue to meet the applicable Shari'a requirements applicable to the FundG . They may use a member of the Shari'a Supervisory BoardG appointed at the firm level for the purposes of ascertaining compliance with the Shari'a requirements. The manner in which they demonstrate to the UnitholderG of the Exempt FundG as to how they achieve such compliance is a matter left to negotiation (i.e. subject to contractual terms) between the UnitholdersG and the Fund ManagerG .
4. An External Fund Manager may not be able to take advantage of IFR 6.2.1(2), unless it has a Shari'a Supervisory Board appointed at the firm level. In contrast the Fund Manager of an External Fund will be able to use its Shari'a Supervisory BoardG to meet the Shari'a Supervisory BoardG requirement relating to the FundG as set out in IFR 6.2.1(2).
Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
[Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]