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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
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Collective Investment Rules (CIR) [VER25/07-19]
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  • Part 3 Fund Functionaries

    • CIR 5 Fund Administrators

      • CIR 5.1 General

        • Application

          • CIR 5.1.1

            (1) Subject to (2), this chapter applies to an Authorised FirmG which is appointed as a Fund AdministratorG to either a Domestic or a Foreign FundG .
            (2) This chapter does not apply to a Fund ManagerG or TrusteeG to the extent that it carries on an activity of Providing Fund AdministrationG within the Financial ServicesG of Managing a FundG or of Acting as the Trustee of a FundG .
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • Compliance with the AML Rules

          • CIR 5.1.2

            The AML module applies to the activities of a Fund AdministratorG in Providing Fund AdministrationG for a Domestic FundG or Foreign FundG as if each reference in AML to a "customer" is a reference to a "UnitholderG " or "prospective UnitholderG " as appropriate to the context.

            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • Client Money and Assets

          • CIR 5.1.3

            A Fund AdministratorG , in Providing Fund AdministrationG for a Domestic FundG or Foreign FundG , must not hold or control monies or assets belonging to third parties in connection with such administration except in the following circumstances:

            (a) holding cheques to the order of a Fund'sG bank account, provided such cheques are securely held for a maximum of three business days prior to being deposited into the relevant Fund'sG bank account or returned to the drawer of the cheque; or
            (b) where a mandate over a Fund'sG or other third party's bank account is granted to a Fund AdministratorG and the mandate has been agreed in writing with the bank concerned, and transfers out of the relevant bank account may be made only in circumstances where the mandate restricts instructions to make such payments to being made solely in accordance with the payment of invoiced fees and expenses, made in accordance with the relevant Fund'sG ConstitutionG and ProspectusG and are not remitted to the account of the Fund AdministratorG except by express instructions of the Fund ManagerG .
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • Delegation and Service Level Agreements

          • CIR 5.1.4

            (1) A Fund AdministratorG of a Domestic FundG for which it is Providing Fund AdministrationG must have a Delegation AgreementG that meets the requirements in CIR App1 with the Fund ManagerG or TrusteeG of the FundG .
            (2) Paragraph (1) does not apply to a Fund AdministratorG of a Qualified Investor FundG .
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
            [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

            • CIR 5.1.4 Guidance

              CIR Section 8.12G of this module governs the delegation of activities by a Fund ManagerG or where appointed the TrusteeG .

              Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

          • CIR 5.1.5

            (1) A Fund AdministratorG of a Foreign FundG for which it is Providing Fund AdministrationG must have a service level agreement with the fund manager of that Foreign FundG setting out the functions and service standards that will be applied to the provision of such administration.
            (2) The agreement in (1) must ensure that the Fund AdministratorG cannot in turn delegate the activities and functions delegated to it by the fund manager of the Foreign FundG unless the sub-delegate has been approved by that fund manager.
            (3) The agreement in (1) must also require the Fund AdministratorG to retain any relevant work or records relating to the delegated activities and functions where the contract is terminated either by the fund manager or the Fund AdministratorG .
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

            • CIR 5.1.5 Guidance

              The DFSAG would expect any agreement required under CIR Rule 5.1.5 to include as a minimum the following provisions:

              a. unambiguous descriptions and definitions of the activities and functions to be provided by the Fund AdministratorG and the duties to be performed by both parties;
              b. an agreed standard in respect of resources and services supported as necessary by performance measures in accordance with the applicable legislation;
              c. the requirement for regular detailed reporting to a specified frequency from the Fund AdministratorG in respect of its duties and activities;
              d. provisions relating to the reporting of relevant events such as technological changes or error reporting and, in particular, any event which undermines the ability of the Fund AdministratorG to fulfil its duties;
              e. the requirement for an annual review (at a minimum) of the performance of the functions by the Fund AdministratorG ; and
              f. provisions relating to records and adequate access by the fund manager, the Fund'sG auditor or any other PersonsG providing control or risk management functions for the FundG , as required by the fund manager or applicable laws to that FundG .
              Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • Record Keeping

          • CIR 5.1.6

            A Fund AdministratorG must maintain records which are sufficient to show and explain transactions in relation to each of the specific activities and functions which are being provided to each FundG , in respect of UnitholdersG or potential UnitholdersG of the FundG as appropriate.

            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

          • CIR 5.1.7

            The records required under CIR Rule 5.1.6 must be:

            (a) capable of demonstrating to the Governing BodyG of the relevant FundG that any accounts prepared comply with the applicable requirements in this module or any other applicable legislation;
            (b) retained by the Fund AdministratorG for at least 6 years from the date to which they relate;
            (c) at all reasonable times, open to inspection by the DFSAG , the Fund'sG AuditorG and any PersonG providing oversight functions for the relevant FundG ; and
            (d) if requested by the DFSAG , capable of reproduction within a reasonable period not exceeding 3 days, in hard copy and in English.
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

    • CIR 6 External Fund Managers and External Funds

      • CIR 6 Guidance

        This chapter sets out the detailed requirements that apply to External Fund ManagersG and External FundsG . Article 20(5) of the Law contains the criteria to be classified as an External Fund ManagerG and Article 14(1) of the Law contains the criteria for an External FundG .

        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • CIR 6.1 Requirements for External Fund Managers

        • Application

          • CIR 6.1.1

            This section applies to an External Fund ManagerG .

            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • Subjecting to the DIFC Jurisdiction

          • CIR 6.1.2

            An External Fund ManagerG must:

            (a) be subject to regulation by a Financial Services RegulatorG in a Recognised JurisdictionG or a jurisdiction otherwise acceptable to the DFSAG with respect to its activity of managing FundG ; and
            (b) subject itself to the DIFCG laws and the jurisdiction of the DIFC CourtsG so far as they apply to its activities relating to the Domestic FundG , and, for that purpose, sign the appropriate declaration contained in AFN.
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • Appointment of Fund Administrator/Trustee

          • CIR 6.1.3

            (1) An External Fund ManagerG must:
            (a) appoint to the FundG a Fund AdministratorG or a TrusteeG licensed by the DFSAG (hereafter referred to as the "Appointed Fund Administrator" or "Appointed Trustee") before any UnitsG in that FundG are OfferedG to any PersonG ;
            (b) nominate, and require, the Appointed Fund Administrator or Appointed Trustee, as the case may be, to be its agent in relation to its dealings with the DFSAG and UnitholdersG and prospective UnitholdersG of the FundG ; and
            (c) require the Appointed Fund Administrator or Appointed Trustee to, and for this purpose grant to that PersonG such powers as are necessary to, facilitate:
            (i) if it is an Open-ended FundG , the issue, resale and redemption of the UnitsG of the FundG and the publication of the price at which such issue, resale or redemption will occur as provided under the Law and the RulesG ;
            (ii) the sending to UnitholdersG of the FundG all the reports required under the Law and the RulesG ;
            (iii) access to the ConstitutionG and most recent ProspectusG of the FundG to UnitholdersG and prospective UnitholdersG ;
            (iv) access to the UnitholderG register; and
            (v) access to the books and records relating to the FundG as required by the DFSAG and any person providing the oversight functions of the FundG ,
            in or from a place of business in the DIFC.
            (2) If the FundG is structured as an Investment TrustG , the Fund ManagerG may appoint the TrusteeG as its Appointed Trustee for the purposes of (1).
            (3) An External Fund ManagerG must continue to meet the criteria in Article 20(5) of the Law.
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
            [Amended] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

            • CIR 6.1.3 Guidance

              In addition to the requirements in this chapter which apply to the Appointed Fund Administrator or Appointed Trustee, PersonsG who are appointed to FundsG as Fund AdministratorsG or TrusteesG have other obligations (see for example CIR chapter 5.1).

              Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

      • CIR 6.2 Requirements for External Funds

        • CIR 6.2 Guidance

          Article 14(1) of the Law provides that a FundG is an External FundG if that FundG :

          a. is established in a jurisdiction other than the DIFCG ; and
          b. is managed by a Fund ManagerG which is an Authorised FirmG .
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • Application

          • CIR 6.2.1

            This section applies to the Fund ManagerG of an External FundG .

            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

          • CIR 6.2.2

            The Fund ManagerG of an External FundG must:

            (a) have systems and controls which are adequate to ensure compliance with the requirements that apply to the External FundG in the jurisdiction in which it is established or domiciled; and
            (b) inform the DFSAG of the jurisdiction in which the FundG is or is to be established or domiciled and the nature of regulatory requirements applicable to the FundG in the host jurisdiction.
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

            • CIR 6.2.2 Guidance

              1. A Fund ManagerG of an External FundG is generally not subject to the requirements that otherwise apply to other Domestic FundsG (see Article 14(2) of the Law). However, some limited requirements apply to External FundsG . See for example the disclosure required under Rules CIR 14.2.4CIR 14.2.7. Should such a requirement conflict with any requirements that apply to an External FundG in the jurisdiction in which the FundG is domiciled, the Fund ManagerG may apply to the DFSAG for appropriate waivers or modifications of the DFSAG requirements.
              2. The DFSAG may, upon receipt of the information referred to in CIR Rule 6.2.2(b), assess the desirability of establishing an External FundG in the particular jurisdiction chosen by the Fund ManagerG . Relevant considerations include:
              a. the Fund Manager'sG need to establish the FundG in the particular jurisdiction for reasons such as the physical location of the FundG assets or investor preference;
              b. any regulatory risks arising from establishing the External FundG in the relevant jurisdiction, particularly if the FundG is to be open to retail investors; and
              c. whether the relevant jurisdiction complies with the FATFG or other relevant international standards or requirements.
              Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]