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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Rulebook Modules
Collective Investment Rules (CIR) [VER25/07-19]
Part 4 Core Rules Relating to Establishment and Management of Domestic Funds
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
Notices
Financial Markets Tribunal
Archive

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  • CIR 8.3.2

    (1) A Fund ManagerG must not enter into a Related Party TransactionG unless it is in accordance with the requirements in this Rule.
    (2) A Fund ManagerG must ensure that any Related Party TransactionG is on terms at least as favourable to the FundG as any comparable arrangement on normal commercial terms negotiated at arm's length with an independent third party.
    (3) The Fund ManagerG must, before entering into a Related Party TransactionG :
    (a) issue to the UnitholdersG a circular containing the details of the proposed transaction; and
    (b) obtain Unitholders'G prior approval by Special ResolutionG , or by ordinary resolution in the case of a Property FundG , in respect of the proposed transaction if the total consideration or value of the transaction is 5% or more of the most recent net asset value of the FundG as disclosed in the latest published audited accounts of the FundG .
    (4) The Fund ManagerG must:
    (a) if Unitholder'sG prior approval is required pursuant to (3)(b), issue a notice to UnitholdersG providing details of the results of the Unitholders'G voting at the general meeting as soon as practicable after the meeting;
    (b) include, in the Fund'sG next published interim or annual report, a brief summary of the Related Party TransactionG , and certification that the requirements in these Rules have been met for the transaction; and
    (c) include, in the annual report of the FundG , the total value of any Related Party TransactionsG , their nature and the identities of the Related PartiesG with whom such transactions were made. Where there is no such transaction conducted during the financial year covered by the annual report, an appropriate negative statement to that effect must be made in the annual report.
    (5) The requirements in (3) and (4)(a) do not apply in relation to an Exempt Property FundG .
    (6) The requirements in (3) and (4)(a) do not apply to a Public Property FundG in respect of a Related Party TransactionG if:
    (a) the transaction is for the acquisition or sale of Real PropertyG in the StateG ; and
    (b) all of the conditions in CIR Rule 13.4.11A(1) are met.
    (7) The requirements in (3) and (4) do not apply to the Fund ManagerG of an ETF in relation to the appointment of a Price Information ProviderG , who is a Related PartyG , where such an appointment occurs at the time of establishment of the ETF.
    Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
    [Amended] RM158/2015 (Made 9th December 2015). [VER19/02-16]
    [Amended] DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]

    • CIR 8.3.2 Guidance

      1. If a Fund ManagerG of an Exchange Traded FundG (ETF) has an arrangement with a Related PartyG , for that Related PartyG to provide an index or benchmark, then the Fund ManagerG is required to also treat that arrangement as a Related Party TransactionG (see CIR Rule 13.9.5) and comply with CIR Rule 8.3.2 in relation to the transaction.
      2. An ETFG Fund ManagerG is not required to comply with the requirements in CIR Rule 8.3.2(3) and (4) in relation to a Price Information ProviderG (PIP), who is a Related PartyG and provides a custom made index or other benchmark which the ETFG tracks, if that appointment takes place at the time of establishing the ETFG . This is because, generally, there are no investors in the FundG at that time to give the prior approval that is envisaged.
      3. However, such an ETFG Fund ManagerG does need to comply with the arm's length transaction requirement in CIR Rule 8.3.2(2) and, also, disclose in the Fund ProspectusG that it tracks a custom made index, or other benchmark, provided by a Related PartyG PIP (under CIR Rule 14.4.8(d)).
      Derived from DFSA RM218/2018 (Made 22nd February 2018) [VER23/12-18]