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  • MKT 7 Sponsors and Compliance Advisers

    • MKT 7.1 Sponsors

      • Application

        • MKT 7.1.1

          This section applies to:

          (a) a sponsor appointed pursuant to Rule 7.1.2; and
          (b) any Reporting EntityG that is required by the DFSAG to appoint a sponsor.
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

      • Appointment of Sponsors

        • MKT 7.1.2

          (1) Pursuant to Article 49(1) of the Law, the DFSAG may, where it considers it appropriate to do so, require a PersonG who makes or intends to make a Prospectus OfferG to:
          (a) appoint a sponsor in respect of the Prospectus OfferG ; or
          (b) provide third party certification in respect of any specific matters relating to the Prospectus OfferG .
          (2) Where the DFSAG requires a sponsor to be appointed pursuant to (1)(a), the DFSAG must:
          (a) do so in sufficient time to enable the sponsor to comply with the requirements in this Part; and
          (b) require such appointment to be effective for the Offer PeriodG or such other period as the DFSAG determines as appropriate.
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

          • MKT 7.1.2 Guidance

            1. The DFSAG may require the appointment of a sponsor, or third party certification in respect of any matters relating to an IssuerG , in appropriate cases. An example of circumstances in which the DFSAG may require the appointment of a sponsor, or third party signoff, would be where an IssuerG does not have a proven track record, such as a start-up.
            2. Generally, the matters in relation to which the DFSAG may require third party sign-off pursuant to Rule 7.1.2(1)(b) include matters relating to the adequacy of working capital and systems and controls in place for financial reporting by the IssuerG . Such certification should be provided by a third party acceptable to the DFSAG . To be acceptable to the DFSAG , the third-party should be independent of the IssuerG and have relevant expertise relating to the matters on which certification of compliance is to be provided.
            3. In most cases the PersonG making a Prospectus OfferG will be the IssuerG of the SecuritiesG to which the ProspectusG relates. However there may be situations where the PersonG making a Prospectus OfferG , that is the offeror, is not the IssuerG of the relevant SecuritiesG .
            4. In any event, the sponsor must make certain inquiries and assume certain obligations under the RulesG . A sponsor should therefore be a PersonG familiar with the requirements of the Law and RulesG and who has the necessary knowledge, experience, qualifications and resources to assist the PersonG making the Prospectus OfferG to comply with the various requirements.
            5. The DFSA'sG Policy Statement 1/2012 on Appointment of a Sponsor describes in greater detail the role and regulatory obligations of a sponsor and the kind of knowledge, experience, qualifications and resources the DFSAG expects a sponsor to have. The Policy explains that although a sponsor has certain regulatory obligations of its own, as prescribed in this module, its principal role is to assist a PersonG making a Prospectus OfferG to comply with its regulatory responsibilities relating to that offer. In the Policy Statement, the DFSAG confirms that a PersonG making a Prospectus OfferG does not, and cannot, avoid or diminish its regulatory obligations related to Offering SecuritiesG simply because it is required to have a sponsor. The regulatory obligations of the PersonG making the Prospectus OfferG are not transferred to the sponsor but remain the responsibility of the PersonG making the offer.
            Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
            [Amended] DFSA RM120/2013 (Made 14th July 2013). [VER4/07-13]

      • Procedures Relating to Appointment of Sponsors

        • MKT 7.1.3

          (1) A PersonG required to appoint a sponsor must, prior to appointing a sponsor:
          (a) take reasonable steps to ensure that the proposed sponsor has the required knowledge, experience, qualifications and resources to carry out its obligations under the RulesG ; and
          (b) notify the DFSAG of the proposed sponsor's name, its business address and an address in the DIFCG for the service of documents.
          (2) If requested by the DFSAG , a PersonG appointing a sponsor must provide the DFSAG with information about the knowledge, experience, qualifications and resources of the appointed or proposed sponsor.
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

        • MKT 7.1.4

          (1) A PersonG must take reasonable steps to ensure that the relevant sponsor and EmployeesG of the sponsor are independent and have appropriately managed any conflict of interest that may arise.
          (2) A PersonG must notify the DFSAG if it becomes aware, or has reason to believe, that the sponsor or relevant EmployeesG of the sponsor are no longer independent or have a conflict of interest which has not been appropriately managed.
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

        • MKT 7.1.5

          (1) Where, in the opinion of the DFSAG , a sponsor appointed by a PersonG is not suitable, or where a sponsor has not been appointed or has resigned, the DFSAG may direct the PersonG to replace or appoint a sponsor.
          (2) The procedures in Schedule 3 to the Regulatory Law apply to a decision of the DFSAG under this Rule. The DFSAG must give both the PersonG and, if in the DFSA'sG opinion a sponsor is not suitable, the sponsor an opportunity to make representations under the procedures in that Schedule.
          (3) If the DFSAG decides to exercise its power under this Rule, the PersonG may refer the matter to the FMTG for review.
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
          [Amended] DFSA RM134/2014 (Made 21st August 2014). [VER5/06-14]

          • [Deleted]

            [Deleted] DFSA RM134/2014 (Made 21st August 2014). [VER5/06-14]

      • Obligations of a Sponsor

        • MKT 7.1.6

          A sponsor appointed pursuant to Rule 7.1.2 must:

          (a) satisfy itself to the best of its knowledge and belief, having made due and careful enquiry that the PersonG who makes or intends to make a Prospectus OfferG has satisfied all applicable conditions for offering SecuritiesG and other relevant requirements under the Law and the RulesG ;
          (b) provide to the DFSAG any information or explanation known to it in such form and within such time limit as the DFSAG may reasonably require for the purpose of verifying whether the PersonG making the Prospectus OfferG complies or has complied, with the applicable requirements in the Law and the RulesG ; and
          (c) take other steps required in writing by the DFSAG .
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

        • MKT 7.1.7

          Where a sponsor becomes aware of a failure by the PersonG making the Prospectus OfferG to comply with its obligations under the Law and the RulesG , the sponsor must without undue delay:

          (a) notify the PersonG making the Prospectus OfferG of the failure and take reasonable steps to ensure it rectifies the failure within a reasonable time; and
          (b) if the PersonG making the Prospectus OfferG does not or is unable to rectify the failure as soon as practicable notify the DFSAG of that fact.
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

      • Duty of Care of Sponsors

        • MKT 7.1.8

          A sponsor has a duty of care to the PersonG which has made its appointment.

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

      • Co-operation with Sponsors

        • MKT 7.1.9

          A PersonG who is required to appoint a sponsor in respect of a Prospectus OfferG must take reasonable steps to ensure that it and its EmployeesG :

          (a) provide such assistance as the sponsor reasonably requires to discharge its duties;
          (b) give the sponsor right of access at all reasonable times to relevant records and information;
          (c) do not interfere with the sponsor's ability to discharge its duties;
          (d) do not provide misleading or deceptive information to the sponsor; and
          (e) report to the sponsor any matter which may significantly affect the financial position of the PersonG issuing the SecuritiesG or the price or value of the SecuritiesG .
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

        • MKT 7.1.10

          A sponsor must notify the DFSAG of any non co-operation by the PersonG making the Prospectus OfferG or the EmployeesG of that PersonG .

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

      • Termination of Appointment

        • MKT 7.1.11

          Where a PersonG who is required to appoint a sponsor dismisses the sponsor, the PersonG must advise the DFSAG in writing without delay of the dismissal, giving details of any relevant facts and circumstances.

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

        • MKT 7.1.12

          Where a sponsor resigns, it must advise the DFSAG in writing without delay of the resignation, giving details of any relevant facts and circumstances.

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

    • MKT 7.2 Compliance Advisers

      • Application

        • MKT 7.2.1

          This section applies to a Reporting EntityG that is required by the DFSAG to appoint a compliance adviser.

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

          • MKT 7.2.1 Guidance

            1. The requirement for the appointment of a compliance adviser is designed to ensure that a Reporting EntityG is aware of and complies with its continuing obligations under the Law and this module. A compliance adviser should therefore be a PersonG familiar with the requirements of the Law and this module and should have the necessary knowledge, experience, qualifications and resources to assist a Reporting EntityG to comply with its regulatory obligations.
            2. The DFSA'sG Policy Statement 2/2012 on Appointment of Compliance Adviser describes in greater detail the purpose of a compliance adviser and the circumstances in which the DFSAG is likely to require a Reporting EntityG to appoint a compliance adviser. The Policy also describes how a compliance adviser can assist a Reporting EntityG to meet its obligations in the Law and this module generally, and specifically the continuing obligations prescribed in this section. The Policy explains that the compliance adviser does not take on any regulatory obligations or potential regulatory liability of its own under the Law or this module if it agrees to act as a compliance adviser to a Reporting EntityG . The relationship between the Reporting EntityG and compliance adviser is a contractual one similar to one with any other professional adviser. In the Policy Statement the DFSAG confirms its view that the compliance adviser role is merely to advise and assist the Reporting EntityG to comply with its continuing regulatory responsibilities, all of which remain the responsibility of the Reporting EntityG .
            Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]
            [Amended] DFSA RM120/2013 (Made 14th July 2013). [VER4/07-13]

      • Appointment of a Compliance Adviser

        • MKT 7.2.2

          The DFSAG may, pursuant to Article 49(1) of the Law, require a Reporting EntityG to:

          (a) appoint a compliance adviser; or
          (b) replace a compliance adviser already appointed.
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

        • MKT 7.2.3

          (1) A Reporting EntityG required to appoint a compliance adviser must, prior to making the appointment:
          (a) take reasonable steps to ensure that the proposed compliance adviser has the required knowledge, experience, qualifications and resources to carry out its obligations under the Rules;
          (b) notify the DFSAG of the proposed compliance adviser's name and business address; and
          (c) take reasonable steps to ensure that the proposed compliance adviser and its relevant EmployeesG are independent and that any conflicts of interest are appropriately managed.
          (2) If requested by the DFSAG , a Reporting EntityG appointing a compliance adviser must provide the DFSAG with such information as it may require including information regarding knowledge, experience, qualifications and resources of the compliance adviser.
          (3) A Reporting EntityG must notify the DFSAG if it becomes aware, or has reason to believe, that the compliance adviser or its relevant EmployeesG have a conflict of interest which has not been appropriately managed.
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

        • MKT 7.2.4

          (1) The DFSAG may, by written notice, require a Reporting EntityG to appoint a compliance adviser for a specified period to assist the Reporting EntityG in meeting its continuing obligations under the Law and the RulesG .
          (2) A Reporting EntityG that is required to appoint a compliance adviser in accordance with the requirements in this section must ensure that a compliance adviser continues to fulfil the role of compliance adviser until such time as the DFSAG advises the Reporting EntityG in writing that a compliance adviser is no longer required.
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

          • [Deleted]

            [Deleted] DFSA RM134/2014 (Made 21st August 2014). [VER5/06-14]

      • Obligations of a Reporting Entity in Relation to its Compliance Adviser

        • MKT 7.2.5

          Where a Reporting EntityG is advised by its compliance adviser that it is failing or has failed to comply with its obligations under the Law and the Rules, the Reporting EntityG must without undue delay:

          (a) take reasonable steps to rectify the failure as soon as practicable; and
          (b) if the Reporting EntityG does not or is unable to rectify the failure as soon as practicable notify the DFSAG of that fact.
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

        • MKT 7.2.6

          A Reporting EntityG must provide to the DFSAG any information in such form and within such time as the DFSAG may reasonably require regarding its compliance adviser or any advice the compliance adviser is providing, or has provided, to the Reporting EntityG regarding its continuing obligations under the Law and the RulesG .

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

        • MKT 7.2.7

          A Reporting EntityG must take reasonable steps to ensure its compliance adviser cooperates in any investigation conducted by the DFSAG including answering promptly and openly any questions addressed to the compliance adviser, promptly producing the originals or copies of any relevant documents and attending before any meeting or hearing at which the compliance adviser is requested to appear.

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

      • Co-operation with Compliance Advisers

        • MKT 7.2.8

          A Reporting EntityG must take reasonable steps to ensure that it and its EmployeesG :

          (a) provide such assistance as the compliance adviser reasonably requires to discharge its duties;
          (b) give the compliance adviser right of access at all reasonable times to relevant records and information;
          (c) do not hinder or interfere with the compliance adviser's ability to discharge its duties;
          (d) do not withhold information that would assist the compliance adviser advising the Reporting EntityG of its duties;
          (e) do not provide misleading or deceptive information to the compliance adviser; and
          (f) report to the compliance adviser any matter which may significantly affect the financial position of the Reporting EntityG or the price or value of the SecuritiesG .
          Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]

      • Termination of Compliance Adviser

        • MKT 7.2.9

          Where a Reporting EntityG dismisses its compliance adviser, the Reporting EntityG must advise the DFSAG in writing without delay of the dismissal, giving details of all relevant facts and circumstances.

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

        • MKT 7.2.10

          Where a compliance adviser resigns, the Reporting EntityG must without delay advise the DFSAG in writing of the resignation, giving details of all relevant facts and circumstances.

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