Home   Browse contents   View updates   Search  
     Quick search
Go
   

Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Rulebook Modules
Sourcebook Modules
Consultation Papers
Policy Statements
DFSA Codes of Practice
Amendments to Legislation
Media Releases
Notices
Financial Markets Tribunal
Archive

BackText onlyPrint

You need the Flash plugin.

Download Macromedia Flash Player



  • MKT 1 Introduction

    • MKT 1.1 Application

      • MKT 1.1.1

        (1) The Rules in this module (MKT) are made for the purposes of the Markets Law 2012 and apply to every PersonG to whom that legislation applies.
        (2) Without limiting the generality of (1), this module applies to:
        (a) a PersonG making an Offer of Securities to the PublicG except in relation to UnitsG of a FundG ;
        (b) a PersonG applying to have Securities admitted to trading on an Authorised Market InstitutionG ;
        (c) a PersonG specified in Rule 2.10.1 as liable for the content of a ProspectusG ;
        (d) a Reporting EntityG ;
        (e) a PersonG who is a Related PartyG ;
        (f) a PersonG who is a Restricted PersonG ;
        (f) a PersonG who is a Connected PersonG ; and
        (g) a PersonG appointed as a sponsor, compliance adviser or other expert adviser of a Reporting EntityG .
        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

        • MKT 1.1.1 Guidance

          See Article 49(1) of the Markets Law for appointment of sponsors, compliance advisers and other advisers for Reporting EntitiesG upon a direction by the DFSAG .

          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

      • MKT 1.1.2

        Where a RuleG prescribes a requirement on a Reporting EntityG or an UndertakingG , each DirectorG , PartnerG or other PersonG charged with the management of that Reporting EntityG or UndertakingG must take all reasonable steps within its control to secure compliance with the requirement by the Reporting EntityG or UndertakingG .

        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

      • MKT 1.1.3

        Where a RuleG prescribes a requirement relating to a DirectorG , PartnerG or EmployeeG of a Reporting EntityG or an Undertaking:

        (a) the DirectorG , PartnerG or EmployeeG , as the case may be, must take all reasonable steps within his control to secure compliance with the requirement; and
        (b) the Reporting EntityG or UndertakingG must take all reasonable steps to ensure compliance with the requirement by the DirectorG , PartnerG or EmployeeG .
        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

        • MKT 1.1.3 Guidance

          Application to listed funds

          1. Where UnitsG of a FundG are admitted to trading on an Authorised Market InstitutionG , such a FundG is a Listed FundG . A reference to a Reporting EntityG in relation to a Listed FundG is a reference to the Fund ManagerG of that FundG , unless another PersonG has been declared by the DFSAG as the Reporting EntityG of the Fund.
          2. Accordingly, any obligations of a Reporting EntityG of a Listed FundG are, unless the context requires otherwise, obligations imposed on the Reporting EntityG in respect of the Listed FundG (see Article 38(2) of the Law). Therefore, the obligations imposed by this Law and the RulesG apply to the Governing BodyG of the Reporting EntityG and to every member of the Governing BodyG in the manner specified in Rules 1.1.2 and 1.1.3.

          Waivers and modifications

          3. The DFSAG may, pursuant to Article 9 of the Law, waive or modify the application of the provisions in the Law where it considers appropriate or desirable in the interests of the DIFCG to do so and, in accordance with the procedures set out in Guidance 4 below.
          4. Generally, the DFSAG will exercise the Article 9 power sparingly and only in circumstances where there is a clearly demonstrated case for granting a waiver or modification of the Law, such as:
          a. to alleviate any undue regulatory burden on a PersonG in complying with the requirements in the Law in circumstances where investor protection intended by the relevant provisions is not reduced; or
          b. to apply to a PersonG upon request (i.e. on a consent basis) the provisions of the Law which, without a modification, will not apply to that PersonG . For example, an Exempt OfferorG (i.e. a PersonG such as a government or government instrumentality included in the DFSA'sG Exempt Offeror ListG in App5) who is not subject to the ProspectusG disclosure and the liability regime in the Law and the RulesG may apply to the DFSAG for a modification to Article 14 of the Law so that it can make a Prospectus OfferG of its SecuritiesG in accordance with the relevant Prospectus disclosure and liability regime in the Law and the RulesG .
          5. The DFSAG also has the power, pursuant to Article 25 of the Regulatory Law 2004, to waive or modify the RulesG . The Regulatory Policy and Process (RPP) module gives further information on how to seek a waiver or modification.
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
          [Amended] DFSA RM120/2013 (Made 14th July 2013). [VER4/07-13]

    • MKT 1.2 Overview of the Module

      • MKT 1.2 Guidance

        Offers of securities — chapter 2

        1. Chapter 2 contains:
        a. the requirements applicable to a PersonG who:
        i. makes an Offer of Securities to the PublicG (other than in respect of UnitsG , which are covered by the ProspectusG and other requirements in the Collective Investment Law 2010 and the CIR Rules); and
        ii. applies to have SecuritiesG admitted to trading on an Authorised Market InstitutionG (other than the admission to trading of Units, which is governed by the requirements in chapter 6);
        b. the types of Exempt OffersG (i.e. SecuritiesG which can be offered to the public without a ProspectusG ), Exempt SecuritiesG (i.e. SecuritiesG which can be admitted to trading on an Authorised Market InstitutionG without a ProspectusG ) and Exempt CommunicationsG (i.e. communications relating to SecuritiesG which are not treated as a ProspectusG );
        c. the requirements and procedures relating to the approval of a ProspectusG by the DFSAG ;
        d. the requirements and procedures relating to the structure and content of a ProspectusG including:
        i. when material may be incorporated into a ProspectusG by reference; and
        ii. liability for the content of a ProspectusG including the liability of ExpertsG and other PersonsG whose reports or opinions are included in a ProspectusG with their consent for such inclusion; and
        e. the circumstances in which the DFSAG may accept an offer document prepared in accordance with the legislation applicable in a jurisdiction other than the DIFCG as sufficient for the purposes of meeting the ProspectusG requirements in the Law and the RulesG .

        Governance of Reporting EntityG — chapter 3

        2. Chapter 3 covers a wide range of corporate governance requirements applicable to Reporting EntitiesG including:
        a. 7 high-level Corporate Governance PrinciplesG , with best practice standards relating to those principles which apply on a 'comply or explain' basis and which are set out in App4;
        b. Directors'G duties, including acting in good faith and applying due diligence and care in the discharge of their duties and functions;
        c. provisions to ensure fair treatment of shareholders in the conduct of affairs of the company, such as provisions relating to communication with shareholders, exercise of pre-emption rights, reduction of share capital and a list of matters that require approval by a majority of shareholders in voting; and
        d. provisions to address conflicts of interest. For example individuals involved in the senior management of the Reporting EntityG (such as executive DirectorsG and other senior executives, called "Restricted PersonsG "), are prohibited from dealing in the SecuritiesG of the Reporting EntityG during "close periods", unless prior clearance for those dealings is obtained. Similarly, PersonsG who qualify as Related PartiesG of the Reporting EntityG are prohibited from entering into commercial transactions with the Reporting EntityG unless certain requirements are followed.

        Market disclosure — chapter 4

        3. Every Reporting EntityG is required to disclose to the market certain types of information either relating to the SecuritiesG of the Reporting EntityG or the Reporting EntityG itself. Such disclosure is designed to ensure that the markets are continually updated with information that is likely to have an impact on the price of the SecuritiesG so that investors can make an informed judgement about those SecuritiesG . For this purpose, Chapter 4 requires disclosure of Inside InformationG , with carve-outs for non-disclosure of commercially sensitive information for a limited period, as well as disclosures of interests held by PersonsG in positions of control or influence relating to a Reporting EntityG (such as controllers and their associates, called "Connected PersonsG "), and the disclosure of Directors'G material interests in the Reporting EntityG . The means by which disclosure of the information required to be provided to the markets are also specified in this chapter.

        Accounting periods, financial reports and auditing — chapter 5

        4. Every Reporting EntityG is required to prepare and file certain annual, semi-annual and other periodic financial reports relating to the financial position of the Reporting EntityG . Such reports are required to be prepared in accordance with the specified internationally accepted accounting standards and, in the case of annual financial reports, required to be audited. The requirements relating to the preparation and audit of the financial statements and the disclosure of such reports within specified periods are set out in Chapter 5.

        Listed funds — chapter 6

        5. Chapter 6 contains, with the exception of the requirements in chapters 7 (sponsors) and 8 (systems and controls), all the requirements applicable to a Reporting EntityG of a Listed FundG . These requirements, while mirroring the requirements applicable to other Reporting EntitiesG , have been tailored to take account of the characteristics of FundsG . These include:
        a. general requirements applicable to Listed FundsG ;
        b. Prospectus requirements for the purposes of having UnitsG of a FundG admitted to trading on an Authorised Market InstitutionG ;
        c. governance requirements applicable to Listed FundsG ;
        d. market disclosure of information relating to Listed FundsG ; and
        e. financial reporting requirements applicable to Listed FundsG .

        Sponsors and compliance advisers — chapter 7

        6. The DFSAG has the discretion to require the appointment of a sponsor, compliance adviser or other expert adviser by a Reporting EntityG , including that of a Listed FundG . Chapter 7 contains the requirements relating to the appointment of such sponsors, compliance advisers and other expert advisers, and the obligations that apply to such PersonsG and the Reporting EntityG where such sponsors or compliance advisers are appointed.

        Systems and controls — chapter 8

        7. Chapter 8 sets out the systems and controls a Reporting EntityG , including a Reporting EntityG of a Listed FundG , must have in order to be able to comply with the requirements applicable to that PersonG .

        Listing Rule — chapter 9

        8. Chapter 9 sets out the DFSA'sG Listing RulesG .

        Transitional provisions — chapter 10

        9. Chapter 10 sets out the transitional provisions necessary to facilitate the transition from the Markets Law 2004 to the Law for certain debt SecuritiesG , as the new requirements are different from those under which such debt SecuritiesG were admitted to an Official List of SecuritiesG but were not traded on an Authorised Market InstitutionG .
        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

    • MKT 1.3 General

      • MKT 1.3.1

        A reference in this MKT module to:

        (a) "the Law", is a reference to the Markets Law 2012;
        (b) "this module", is a reference to this MKT module; and
        (c) "Rules", except where otherwise provided, is a reference to the RulesG in this module.
        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

      • MKT 1.3.2

        Where a Reporting EntityG is referred to in this module as a Reporting EntityG in respect of a specified class of SecuritiesG , it is a reference to a PersonG who has become a Reporting EntityG by:

        (a) making an Offer of Securities to the PublicG ; or
        (b) having SecuritiesG admitted to trading on an Authorised Market InstitutionG ,

        of that particular specified class of SecuritiesG .

        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

    • MKT 1.4 Interpreting the Rulebook

      • MKT 1.4 Guidance

        Interpretation

        1. Every provision in the RulebookG must be interpreted in the light of its purpose. The purpose of any provision is to be gathered first and foremost from the text of the provision in question and its context among other relevant provisions.
        2. When this section refers to a provision, this means every type of provision, including RulesG and GuidanceG .
        3. Where reference is made in the RulebookG to another provision of the RulebookG or other DIFCG legislation, it is a reference to that provision as amended from time to time.
        4. Unless the contrary intention appears:
        a. words in the RulebookG importing the masculine gender include the feminine gender and words importing the feminine gender include the masculine; and
        b. words in the RulebookG in the singular include the plural and words in the plural include the singular.
        5. If a provision in the RulebookG refers to a communication, notice, agreement, or other document 'in writing' then, unless the contrary intention appears, it means in legible form and capable of being reproduced on paper, irrespective of the medium used. Expressions related to writing must be interpreted accordingly.
        6. Any reference to 'dollars' or '$' is a reference to United States Dollars unless the contrary intention appears.
        7. Unless stated otherwise, a day means a calendar day. If an obligation falls on a calendar day which is either a Friday or Saturday or an official StateG holiday in the DIFCG , the obligation must take place on the next calendar day which is a business day.

        Defined terms

        8. Defined terms are identified throughout the RulebookG by the capitalisation of the initial letter of a word or of each word in a phrase and are defined in the Glossary (GLO). Unless the context otherwise requires, where capitalisation of the initial letter is not used, an expression has its natural meaning.
        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
        [Amended] DFSA RM120/2013 (Made 14th July 2013). [VER4/07-13]

    • MKT 1.5 Complaints Against the DFSA

      • MKT 1.5 Guidance

        1. A PersonG who feels he has been adversely affected by the manner in which the DFSAG has carried out its functions may make a complaint to the DFSAG about its conduct or the conduct of its EmployeesG .
        2. A complaint must be in writing and should be addressed to the Chief ExecutiveG of the DFSAG . The complaint will be dealt with by the DFSAG in a timely manner.
        Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]