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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Rulebook Modules
Collective Investment Rules (CIR) [VER24/02-19]
Sourcebook Modules
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  • CIR App 1 Delegation And Outsourcing

    • CIR A1.1 Application

      • CIR A1.1.1

        (1) This Appendix (App 1) applies to a Fund ManagerG and if appointed the TrusteeG in relation to every:
        (a) Delegation AgreementG ; and
        (b) Outsourcing AgreementG .
        made or entered into pursuant to these RulesG .
        (2) This Appendix does not apply to 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 A1.2 Mandatory Provisions

      • CIR A1.2.1

        (1) A Fund ManagerG or TrusteeG must ensure that any agreement specified in Rule A1.1.1:
        (a) sets out the functions or activities and service standards that will be applied to the carrying out of such functions or activities;
        (b) provides that the Service ProviderG cannot in turn, delegate any activities delegated to it, or outsource any functions outsourced to it, without prior approval of the Fund ManagerG or TrusteeG as applicable;
        (c) requires the Service ProviderG to:
        (i) maintain records to show and explain transactions in relation to each activity or function performed in relation to the FundG ;
        (ii) maintain such records in a manner to enable the Fund ManagerG or TrusteeG to prepare accounts in compliance with these RulesG and any other applicable legislation;
        (iii) retain the records for at least six years from the date to which they relate;
        (iv) keep the records, at all reasonable times, open to inspection by the DFSAG , the Fund'sG AuditorG and any PersonG providing the oversight function for the FundG ; and
        (v) ensure that the records are, if requested by the DFSAG , capable of reproduction within a reasonable period not exceeding 3 days, in hard copy and in English.
        (2) A Fund ManagerG or TrusteeG must ensure that a Delegation AgreementG contains an undertaking by the Service ProviderG to:
        (a) comply with any DFSAG RulesG applicable to the activity; and
        (b) disclose to the DFSAG and to the Fund ManagerG or TrusteeG , as the case may be, any material information that it would disclose to its Financial Services RegulatorG , if relevant, in relation to the conduct of the activity.
        (3) A Fund ManagerG or TrusteeG must maintain records of all agreements, and any instructions given to a Service ProviderG under the terms of an agreement, for at least six years.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

        • CIR A1.2.1 Guidance

          1. Other RulesG may also impact on the contents of a Delegation AgreementG or Outsourcing AgreementG . For instance, consideration should be given to GEN Rule 5.3.21 and accompanying Guidance.
          2. Without limiting the application of any RulesG , the DFSAG expects that any agreement would include as a minimum:
          a. unambiguous descriptions and definitions of the activities or functions to be provided by the Service ProviderG and the duties of both parties;
          b. an agreed standard between the parties or resources and services supported as necessary by performance measures in accordance with the applicable RulesG ;
          c. the requirement for regular detailed reporting to a specified frequency from the Service ProviderG 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 Service ProviderG to fulfil its duties; and
          e. the requirement for an annual review (at a minimum) of the performance of the Service ProviderG .
          Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

    • CIR A1.3 Provisions Relating to Eligible Custodians

      • CIR A1.3.1

        (1) A Fund ManagerG or TrusteeG must ensure that a Delegation AgreementG in relation to Providing CustodyG will:
        (a) require that the title of any account of the Eligible CustodianG to hold Fund PropertyG sufficiently distinguishes that account from any account containing Investments belonging to the Eligible CustodianG , and is in the form requested by the Fund ManagerG or TrusteeG ;
        (b) require that the Fund'sG InvestmentsG will only be credited and withdrawn in accordance with the instructions of the Fund ManagerG or TrusteeG ;
        (c) require, subject to (2), that the Eligible CustodianG will hold the Fund'sG InvestmentsG separately from assets belonging to the Eligible CustodianG ;
        (d) set out the arrangements for recording and registering the FundsG , claiming and receiving dividends and other entitlements and interest and the giving and receiving of instructions;
        (e) require the Eligible CustodianG to deliver a statement to the Fund ManagerG or TrusteeG (including the frequency of such statement), which details the Fund'sG InvestmentsG deposited to the account;
        (f) require, subject to (2), that all the InvestmentsG standing to the credit of the account are held by the Eligible CustodianG as the agent of the Fund ManagerG or the TrusteeG and the Eligible CustodianG is not entitled to combine the account with any other account or to exercise any charge, mortgage, lien, right of set-off or counterclaim against InvestmentsG in that account in respect of any sum owed to the Eligible CustodianG on any other account of the Fund ManagerG , TrusteeG or any other PersonG ; and
        (g) detail the extent of liability of the Eligible CustodianG in the event of default.
        (2) Neither the Fund ManagerG nor the TrusteeG is required to meet the requirements in (1) (c) and (f), where either the Eligible CustodianG or any other PersonG acting as the prime broker of the FundG does so in compliance with the requirements in CIR Rule 13.6.3.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]

    • CIR A1.4 Provisions Relating to Fund Administration

      • CIR A1.4.1

        A Fund ManagerG or TrusteeG must ensure that a Delegation AgreementG in relation to Providing Fund AdministrationG requires that the Service ProviderG 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 the Service ProviderG has control over bank accounts kept for the purposes of the FundG , the accounts must be conducted strictly in accordance with the Fund Manager'sG instructions and any agreed mandate with the bank.
        Derived from RM72/2010 (Made 11th July 2010). [VER13/07-10]