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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 8 Transfer Schemes and Winding Up 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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  • Part 8 Transfer Schemes and Winding Up of Domestic Funds

    • CIR 16 Transfer Schemes Relating to Domestic Funds

      • CIR 16.1 Application of the Regulatory Law

        • CIR 16.1 Guidance

          1. Pursuant to Part 9 of the Regulatory Law 2004, a FundG may be transferred in whole or in part to another body in accordance with that Part.
          2. The DFSAG may make RulesG for the purposes of that Article pursuant to the power conferred under Article 113 of the Regulatory Law 2004.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • CIR 16.1.1

          This Chapter applies to a Fund ManagerG and, where appointed, the TrusteeG of a Domestic FundG and, if the FundG is an Umbrella FundG using the form of a Protected Cell CompanyG , in respect of each cell as if though each cell is a separate FundG .

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

        • CIR 16.1.2

          Pursuant to Article 113 of the Regulatory Law 2004, the DFSAG prescribes, in CIR Rule 16.1.3, the modification to Part 9 of that Law necessary for the purposes of transferring a Fund'sG property or liability to another FundG .

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

        • CIR 16.1.3

          (1) Part 9 of the Regulatory Law 2004 is to be read and, to have effect, as if it were subject to the provisions set out in this Rule.
          (2) Where, for the purpose of a transfer scheme, it is proposed that the property of a FundG should become the property of another FundG or the property of a Sub-FundG of an Umbrella FundG , the proposal must not be implemented without the sanction of a Special ResolutionG of the UnitholdersG in the FundG , unless (3) applies.
          (3) Where, for the purposes of a transfer scheme, it is proposed that Fund PropertyG attributable to a Sub-FundG of an Umbrella FundG should become the property of another FundG , the proposal must not be implemented without the sanction of:
          (a) a Special ResolutionG of the UnitholdersG in the Sub-FundG of that Umbrella FundG ; and
          (b) in the case of an Umbrella FundG that does not use the form of a Protected Cell CompanyG , unless implementation of the transfer scheme is not likely to result in any material prejudice to the interests of the UnitholdersG in any other Sub-FundG of that Umbrella FundG , a Special ResolutionG of the UnitholdersG of other Sub-FundsG of that that Umbrella FundG .
          (4) If it is proposed that a FundG or a Sub-FundG of an Umbrella FundG should receive property, other than its first property pursuant to a transfer scheme, or an arrangement equivalent to a scheme of arrangement entered into with some other FundG or Sub-FundG , or a Body CorporateG , the proposal must not be implemented without the sanction of a Special ResolutionG of the UnitholdersG in the relevant FundG or Sub-FundG and, in the case of an Umbrella FundG which is not in the form of a Protected Cell CompanyG , the class or classes of UnitsG related to the Sub-FundG , unless (5) applies.
          (5) In (4), if the Fund ManagerG and if appointed the TrusteeG agree that the receipt of the property concerned for the account of the FundG :
          (a) is not likely to result in any material prejudice to the interest of the UnitholdersG of the FundG ;
          (b) is consistent with the objectives of the FundG or Sub-FundG of an Umbrella FundG ; and
          (c) could be effected without any breach of the requirements relating to the borrowing and investment restrictions relating to the FundG or Sub-FundG in CIR chapter 10.5;
          then the transfer may be effective and the issue of UnitsG in exchange for assets as part of a transfer scheme may be undertaken.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
          [Amended] RM158/2015 (Made 9th December 2015). [VER19/02-16]

    • CIR 17 Winding Up of Domestic Funds

      • CIR 17 Guidance

        Part 8 of the Law sets out all the provisions relating to transfer schemes and the winding up of FundsG . Article 61(c) enables the DFSAG to prescribe additional circumstances to those contained in the Law in relation to when a FundG may be wound up. This section contains such RulesG .

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

      • CIR 17.1 Application

        • CIR 17.1.1

          This Chapter applies to a Fund ManagerG and, where appointed, the TrusteeG of a Domestic FundG and, if the FundG is an Umbrella FundG using the form of a Protected Cell CompanyG , in respect of each cell as though each cell is a separate FundG .

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

        • CIR 17.1.2

          Pursuant to Article 61(c) of the Law, the DFSAG prescribes in this chapter the additional circumstances in which a Domestic FundG may be wound up.

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

        • CIR 17.1.3

          (1) Upon the happening of any of the events specified in (2) and not otherwise, the Fund ManagerG and, if appointed the TrusteeG must cease to issue, sell, cancel or redeem UnitsG in the FundG or to invest or borrow for the FundG and proceed to wind up the FundG in accordance with the Law and this section.
          (2) The events referred to in (1) are:
          (a) in response to a request made to the DFSAG by the TrusteeG , Fund ManagerG or other member of its Governing BodyG for the removal of a FundG from the list of registered FundsG , the DFSAG has agreed, albeit subject to there being no material change in any relevant factor, that, on the conclusion of the winding up of the FundG , the DFSAG will accede to that request;
          (b) the expiration of any period specified in the ConstitutionG as the period at the end of which the FundG is to terminate; or
          (c) the effective date of a duly approved transfer scheme, which is to result in the FundG that is subject to the transfer scheme being left with no property.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

          • CIR 17.1.3 Guidance

            The grounds for winding up of a Domestic FundG under this RuleG are in addition to the grounds specified in the Law. Under Article 64(1)(a) and (b) of the Law, a FundG which is no longer commercially viable or the purpose of which is either already accomplished or cannot be accomplished can be wound up. Similarly, under Article 34(3) of the Law, if a Domestic FundG which is an Exempt FundG or a Qualified Investor FundG can no longer meet the relevant conditions to be classified as a FundG of that type, the Fund ManagerG of such a FundG must either register it as a Public FundG (or alternatively reconstitute it as an Exempt FundG if it is a Qualified Investor Fund)G or it must be wound up.

            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
            [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]

        • CIR 17.1.4

          (1) In a case falling within CIR Rule 17.1.3(2)(c), the Fund ManagerG and if appointed the TrusteeG of the FundG must wind up the FundG in accordance with the approved transfer scheme.
          (2) In any other case falling within CIR Rule 17.1.4 or specified in Article 64(1) or Part 8 of the Law:
          (a) the FundG manager or TrusteeG must, as soon as practicable after the FundG falls to be wound up, realise the Fund PropertyG ;
          (b) after paying therefrom or retaining adequate provision for all liabilities properly so payable and for the costs of the winding up, the Fund ManagerG must distribute the proceeds of that realisation to the UnitholdersG (upon production by them of such evidence as the Fund ManagerG may reasonably require as to their entitlement thereto) proportionately to their respective interests in the FundG as at the date of the relevant event referred to in CIR Rule 17.1.3; and
          (c) any unclaimed net proceeds or other cash (including unclaimed distribution payments) held by the Fund ManagerG or TrusteeG after the expiration of twelve months from the date on which they became payable must be paid by the Fund ManagerG or TrusteeG into court, subject to the Fund ManagerG or TrusteeG having a right to retain any expenses incurred by it relating to that payment.
          (3) Where the Fund ManagerG or TrusteeG and one or more UnitholdersG agree, the requirement of (2) to realise the Fund PropertyG does not apply to that part of the property proportionate to the entitlement of such UnitholdersG . The Fund ManagerG or TrusteeG may distribute that part in the form of property, after making adjustments or retaining provisions as appear to the Fund ManagerG or TrusteeG appropriate for ensuring that, that or those UnitholdersG bear a proportional share of the liabilities and costs.
          (4) The Fund ManagerG or TrusteeG must as soon as practical after the winding up or termination has commenced:
          (a) if the UnitholdersG have not initiated the winding up under Article 63 of the Law, inform the Unitholders of the winding up or termination; and
          (b) publish a notice of the winding up or termination in one English and one Arabic language national newspaper and if the FundG has a website, on the Fund'sG website.
          (5) On completion of the winding up in respect of the events referred to in CIR Rule 17.1.3(2)(b) or (c) or Article 64(1) of the Law, the Fund ManagerG or TrusteeG must notify the DFSAG in writing of that fact and at the same time the Fund ManagerG or TrusteeG must require the DFSAG to revoke the relevant registration.
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • Accounting and Reports During Winding Up

          • CIR 17.1.5

            (1) Subject to any order of the court, and subject to (2) and (3), while a FundG is being wound up, whether under CIR Rule 17.1.3 or otherwise:
            (a) the annual and half-yearly accounting periods continue to run;
            (b) the provisions concerning annual and interim allocation of income continue to apply; and
            (c) annual and half-yearly reports continue to be required.
            (2) Where for any annual or half-yearly accounting period the Fund ManagerG , after consulting the AuditorG and the DFSAG , has taken reasonable care to determine that timely production of an annual or half-yearly report is not required in the interests of the UnitholdersG or the DFSAG , the Fund ManagerG or TrusteeG may direct that immediate production of the report by the AuditorG may be dispensed with.
            (3) The period in question in (2) must be reported on together with the following period in the next report prepared for the purposes of (1) or (4).
            (4) At the conclusion of the winding up, the accounting period then running is regarded as the final annual accounting period.
            (5) Within two calendar months after the end of the final accounting period, the annual reports of the Fund ManagerG must be published and sent to each PersonG who was a UnitholderG immediately before the end of the final accounting period.
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • Funds that are not Commercially Viable

          • CIR 17.1.6

            (1) If the Fund ManagerG of a FundG believes on reasonable grounds that the FundG is not commercially viable or the purpose of the FundG cannot be accomplished, the Fund ManagerG must notify the DFSAG and include the information specified in (2).
            (2) The information referred to in (1) is:
            (a) name of the FundG ;
            (b) size and type of FundG ;
            (c) number of UnitholdersG ;
            (d) whether dealing in the Fund'sG UnitsG has been suspended;
            (e) why the request is being made;
            (f) what consideration has been given to the FundG entering into a transfer scheme with another FundG and the reasons why a transfer scheme is not possible;
            (g)
            i) whether UnitholdersG have been informed of the intention to seek winding up or revocation; and
            (ii) if not, when they will be informed;
            (h) details of any proposed preferential switching rights offered or to be offered to UnitholdersG if it is an Umbrella FundG ;
            (i) details of any proposed rebate of charges to be made to UnitholdersG who recently purchased UnitsG ;
            (j) where the costs of winding-up will fall;
            (k) a statement obtained from the TrusteeG or Eligible CustodianG or other PersonsG providing the oversight function if the FundG is a Public FundG or a statement from the AuditorG if the FundG is an Exempt FundG or a Qualified Investor FundG :
            (i) that the Fund ManagerG , having taken reasonable care in considering the matter, is certain that a transfer scheme is not practical;
            (ii) an explanation of what steps have been considered that would result in the FundG not needing to wind up;
            (iii) confirmation that the Fund ManagerG has carried out its function and duties in accordance with the Law and RulesG ; and
            (iv) whether the Fund'sG investment and borrowing powers have been exceeded;
            (l) the preferred date for the commencement of the winding up; and
            (m) any additional information considered relevant to the DFSA'sG consideration.
            (3) The DFSAG may request further information after receipt of the notification.
            Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]
            [Amended] DFSA RM137/2014 (Made 21st August 2014). [VER17/06-14]