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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
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  • IFR 6.11 Islamic Real Estate Investment Trusts (Islamic REITs)

    • IFR 6.11.1

      (1) A Fund ManagerG must ensure that it does not call, or otherwise hold out, a FundG as being an Islamic Real Estate Investment TrustG or as being an Islamic REITG unless it is a Public Property FundG which is constituted in accordance with (2).
      (2) An Islamic REITG is a Public Property FundG which:
      (a) is constituted either as an Investment CompanyG or as an Investment TrustG ;
      (b) is primarily aimed at investments in income generating Real PropertyG which complies with Shari'a principles; and
      (c) distributes to the UnitholdersG at least 80% of its audited annual net income.
      Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
      [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]

    • IFR 6.11.2

      (1) A Fund ManagerG of an Islamic REITG must ensure that it distributes to the UnitholdersG as dividends each year an amount not less than 80% of its audited annual net income.
      (2) The PersonsG providing oversight functions in respect of the FundG must determine if any;
      (a) revaluation surplus credited to income, or
      (b) gains on disposal of Real PropertyG ,
      shall form part of net income for distribution to UnitholdersG .
      Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
      [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]

    • IFR 6.11.3

      Where an Islamic REITG holds any Real PropertyG via one or more Special Purpose VehiclesG , the Fund ManagerG must ensure that each Special Purpose VehicleG distributes to the FundG all of its income as permitted by the laws and regulations of the jurisdiction where the Special Purpose VehicleG is established.

      Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
      [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]

    • IFR 6.11.4

      (1) A Fund ManagerG of an Islamic REITG must ensure, subject to (2), that any investment made in respect of property under development whether on its own or in a joint venture is undertaken only where the REITG intends to hold the developed property upon completion.
      (2) The total contract value of the property under development in (1) must not exceed 30% of the net asset value of the Fund PropertyG of the Islamic REITG .
      Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
      [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]

      • IFR 6.11.4 Guidance

        For the purposes of this Rule, the DFSA would not consider property development activities to include refurbishment, retrofitting and renovation.

        Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]

    • IFR 6.11.5

      A Fund ManagerG of an Islamic REITG may borrow either directly or through its Special Purpose VehicleG up to 50% of the gross asset value of the FundG provided that such borrowings are Shari'a compliant.

      Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
      [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]
      [Amended] RM160/2015 (Made 9th December 2015). [VER9/02-16]

      • IFR 6.11.5 Guidance

        1. The gross asset value of a FundG should be calculated as the total value of the Fund PropertyG based on the most recent valuation under CIR Rule 8.4.1(1), but without making the deductions provided for in the other paragraphs of that Rule.
        2. As there are no specific risks that arise by virtue of a FundG being an Islamic FundG , the prudential requirements that apply to a Category 3 firm as set out in the PIB module apply to such Fund ManagersG . However, if the underlying assets of the FundG are invested in financial products or instruments that are Islamic and have certain features which would raise any prudential risks, it is the responsibility of the Fund ManagerG to address such risks. The DFSA would provide any additional clarifications regarding such matters upon request.
        Derived from DFSA RM69/2010 (Made 1st March 2010). [VER1/03-10]
        [Amended] DFSA RM72/2010 (Made 11th July 2010). [VER2/07-10]
        [Amended] RM160/2015 (Made 9th December 2015). [VER9/02-16]