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  • Part 2: Offer of Securities

    • Chapter 1: Application

      • 10. Application of this Part to Collective Investment Funds

        (1) The provisions in Part 2 of this Law and the Rules made for the purpose of that Part shall not apply to a person in relation to making an Offer of a Unit as defined in Article 19 of the Collective Investment Law 2010.
        (2) The provisions in Part 2 of this Law and the Rules made for the purpose of that Part shall apply to a person who has or intends to have Units admitted to trading on an Authorised Market Institution in the manner and circumstances specified in this Law and prescribed in the Rules.

    • Chapter 2: General Prohibitions and Definitions

      • 11. General Prohibition

        (1) A person shall not:
        (a) make an Offer of Securities to the Public in or from the DIFC; or
        (b) have Securities admitted to trading on an Authorised Market Institution,
        except as provided in this Law and the Rules made for the purposes of this Law.
        (2) Without limiting the generality of its powers, the DFSA may, by written notice:
        (a) exclude the application of any requirements; or
        (b) deem any Investment which is not a Security to be a Security for the purposes of this Law and the Rules,
        subject to such terms and conditions as it may consider appropriate.

      • 12. Definition of an Offer of Securities to the Public

        An Offer of Securities to the Public means a communication to any person in any form or by any means, presenting information on the terms of the offer and the Securities offered, so as to enable an investor to decide to buy or subscribe to those Securities but excluding:

        (a) any communication in connection with the trading of Securities admitted to trading on an Authorised Market Institution;
        (b) any communication made for the purposes of complying with the on-going reporting requirements of the DFSA or an Authorised Market Institution; or
        (c) any other communication prescribed in the Rules as an Exempt Communication.

      • 13. Exempt Offerors

        (1) The prohibition in Article 11(1) does not apply to any:
        (a) Securities of an Exempt Offeror; or
        (b) Securities which are unconditionally and irrevocably guaranteed by an Exempt Offeror.
        (2) For the purposes of Article 13(1), an Exempt Offeror is a recognised government or other person included in the list of Exempt Offerors maintained by the DFSA in the Rules.
        (3) The DFSA may, at its discretion and on its own initiative, include any person in the list of Exempt Offerors maintained by it in circumstances where the requirements prescribed by the DFSA in the Rules are met.

    • Chapter 3: Prospectus Requirement

      • 14. Obligation to issue a Prospectus

        (1) A person shall not, subject to Article 14(3):
        (a) make an Offer of Securities to the Public in or from the DIFC; or
        (b) have Securities admitted to trading on an Authorised Market Institution,
        unless there is an Approved Prospectus in relation to the relevant Securities.
        (2) For the purposes of Article 14(1):
        (a) a Prospectus is an Approved Prospectus if it is approved by the DFSA in accordance with the requirements prescribed in the Rules; and
        (b) a reference to a Prospectus in the Law or the Rules is a reference to an Approved Prospectus, unless the context requires otherwise.
        (3) The requirement in Article 14(1) does not apply:
        (a) to an Offer of Securities to the Public where that offer is an "Exempt Offer" as prescribed in the Rules; or
        (b) to any Securities to be admitted to trading on an Authorised Market Institution if those Securities are "Exempt Securities" as prescribed in the Rules.
        (4) For the purposes of this Part and the Rules made for the purposes of this Part, unless the context requires otherwise:
        (a) a reference to a Prospectus Offer is a reference to both the making of an Offer of Securities to the Public and to having Securities admitted to trading on an Authorised Market Institution;
        (b) a reference to an "offeror" is a reference to the person making a Prospectus Offer; and
        (c) a reference to a Prospectus in respect of a person who has or seeks to have Units of a Fund admitted to trading on an Authorised Market Institution is a reference:
        (i) in the case of a Domestic Fund, to a Prospectus under the Collective Investment Law 2010 and the Collective Investment Rules; and
        (ii) in the case of a Foreign Fund, to a Prospectus prepared in accordance with the requirements prescribed in the Rules.
        (5) A Prospectus includes a Supplementary Prospectus, except where otherwise provided in this Law or the Rules

      • 15. Prospectus content

        (1) A Prospectus shall contain all the information which an investor would reasonably require and expect to find in a Prospectus for the purpose of making an informed assessment of:
        (a) the assets and liabilities, financial position, profits and losses, and prospects of the issuer and any guarantor; and
        (b) the nature of the Securities and the rights and liabilities attaching to those Securities.
        (2) Without limiting the generality of the obligation in Article 15(1), the DFSA may, by Rules, prescribe the information that must be included in a Prospectus.
        (3) The DFSA may, in prescribing the information to be included in a Prospectus, require specific content requirement for a Prospectus of a particular type of Securities.
        (4) The issuer or other person responsible for the issue of a Prospectus shall include in the Prospectus all the information required under Article 15(1) and (2) as it would be reasonable for him to have knowledge of, or acquire through reasonable enquiries.
        (5) The DFSA shall, by Rules, prescribe:
        (a) the circumstances in which a Prospectus may incorporate any material by reference; and
        (b) the persons liable for the content of a Prospectus.

      • 16. DFSA power to publish information

        Where a person making a Prospectus Offer fails to publish any information which that person is required to publish pursuant to this Law or the Rules made for the purposes of this Law, the DFSA may publish such information in the manner prescribed in the Rules.

      • 17. Use of foreign offer documents

        No person shall use any offer document produced in accordance with the legislation applicable in another jurisdiction for the purposes of making a Prospectus Offer except in the circumstances prescribed in the Rules.

      • 18. Obligation to issue a Supplementary Prospectus

        If at any time after the issue of a Prospectus there is a significant change in, or a material mistake or inaccuracy affecting any matter contained in the Prospectus or a significant new matter arises, the issuer or the person responsible for the issue of the Prospectus shall issue a Supplementary Prospectus which:

        (a) provides details of the change, mistake, inaccuracy or new matter; and
        (b) complies with the requirements in Article 15(1).

      • 19. Financial Promotions

        No person shall issue a Financial Promotion in respect of Securities which are the subject of a Prospectus Offer except in accordance with the requirements specified in the Rules.

    • Chapter 4: Misleading and Deceptive Statements or Omissions

      • 20. Prohibition against misleading and deceptive statements or omissions

        (1) A person shall not make a Prospectus Offer if there is:
        (a) a misleading or deceptive statement in:
        (i) the Prospectus;
        (ii) any application form that is attached to or accompanies the Prospectus; or
        (iii) any other communication that relates to the Prospectus Offer, or the application form;
        (b) any material omission from the Prospectus, application form or any other document as required by this Law or the Rules; or
        (c) a significant new matter or a significant change in circumstances that requires a Supplementary to be issued.
        (2) A person does not contravene the prohibition in Article 20(1) if that person can prove the circumstances or matters specified in Articles 21 or and 22.

      • 21. Defence of reasonable inquiries and reasonable belief

        A person does not commit a contravention of Article 20(1), if that person proves that he:

        (a) made all inquiries that were reasonable in the circumstances; and
        (b) after making such inquiries, believed on reasonable grounds that the Prospectus was not misleading or deceptive.

      • 22. Defence of reasonable reliance on information given by another person

        (1) A person does not commit a contravention of Articles 20(1) if the person merely proves that he placed reasonable reliance on information given to him by:
        (a) if the person is not a natural person, someone other than a member of the governing body, employee or agent of the person; or
        (b) if the person is a natural person, someone other than an employee or agent of the natural person.
        (2) For the purposes of this Part, a person is not the agent of a person merely because he performs a particular professional or advisory function for the person.

      • 23. Statements about future matters

        (1) A person is taken to make a misleading or deceptive statement about a future matter whether by himself or through his agent, if he, at the time of making the statement or causing the statement to be made, did not have reasonable grounds for making the statement or causing the statement to be made.
        (2) The onus for proving that reasonable grounds existed for the purposes of Article 23(1) is on the person who made the statement or caused the statement to be made.
        (3) A person referred to in Article 23(2) may rely on the circumstances referred to in Article 21 or 22 in order to prove that he had reasonable grounds for making the statement relating to the future matter.

      • 24. Civil compensation

        (1) Any person prescribed in Rules made by the DFSA as being liable for a Prospectus is liable to pay compensation to another person who has acquired Securities to which the Prospectus relates and who has suffered loss or damage arising from any untrue or misleading statement in the Prospectus or the omission from it of any material matter required to have been included in the Prospectus under the Law or Rules.
        (2) The DFSA may make Rules prescribing circumstances in which a person who would otherwise be liable under Article 24(1) will not be so liable.
        (3) Nothing in this Article affects the powers, rights or liabilities that any person may have apart from this Article including the power to institute proceedings under Article 94 of the Regulatory Law 2004.

      • 25. Stop orders

        (1) If the DFSA is satisfied that an Offer of Securities to the Public would contravene or has contravened this Law or the Rules made for the purposes of this Law or it is in the interest of the DIFC, the DFSA may issue a stop order directing that no offer, issue, sale or transfer of the Securities be made for such a period of time as it thinks appropriate.
        (2) The procedures in Schedule 3 to the Regulatory Law 2004 apply to a decision of the DFSA under this Article.
        (3) If the DFSA decides to exercise its power under this Article, the offeror may refer the matter to the FMT for review.