Part 11 Part 11 Collective Investment Funds
Chapter 1 Chapter 1 Interpretation
106. Collective Investment Funds(1) In this Part, "Collective Investment Fund" means any arrangements with respect to property of any description, including money, the purpose or effect of which is to enable persons taking part in the arrangements (whether by becoming owners of the property or any part of it or otherwise) to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income.(2) The arrangements must be such that the persons who are to participate ("Unitholders") do not have day-to-day control over the management of the property, whether or not they have the right to be consulted or to give directions.(3) The arrangements must also have both of the following characteristics —(a) the contributions of the Unitholders and the profits or income out of which payments are to be made to them are pooled; and(b) the property is managed as a whole by or on behalf of the Fund Manager.(4) If arrangements provide for such pooling as is mentioned in subsection (3)(a) in relation to separate parts of the property, the arrangements are not to be regarded as constituting a single Collective Investment Fund unless the Unitholders are entitled to exchange rights in one part for rights in another.(5) The Regulator may by Rules provide that arrangements do not amount to a Collective Investment Fund —(a) in specified circumstances; or(b) if the arrangements fall within a specified category of arrangement.
Amended on (13 January, 2020).
Chapter 2 Chapter 2 Registration of Public Funds
107. Registration requirement(1) Every Domestic Fund (including any Sub-Fund, where applicable) which is a Public Fund shall be registered with the Regulator.(2) The Regulator shall register a Public Fund if the Fund (or Sub-Fund) meets all the requirements in this Chapter.(3) The Application for the registration of a Public Fund shall be made to the Regulator by the Fund Manager or, if the Fund is an Investment Trust, jointly by the Fund Manager and the Trustee of that Fund.(4) Such an Application shall —(a) be made in accordance with any applicable Rules made by the Regulator;(b) be made in such manner as the Regulator may direct; and(c) contain, and be accompanied by, such other information as the Regulator may reasonably require.
108. Providing information in relation to the Application(1) The Regulator may require the Fund Manager, and if relevant the Trustee, to provide such further information (in such form and with such verification) as it reasonably considers necessary to enable it to determine the Application.(2) Different directions may be given, and different requirements imposed, in relation to different Applications or categories of Application.(3) The Regulator may require an Applicant to provide information which the Applicant is required to provide to it under this section in such form, or to verify it in such a way, as the Regulator may direct.
109. Rejection of an Application
The Regulator may refuse to grant an Application for registration of a Public Fund if it is not satisfied that the requirements referred to in section 107 have been met.
110. Granting registration(1) The Regulator shall grant the registration to come into effect on a specified date.(2) Where the Regulator registers a Public Fund, it shall, without undue delay, inform the Fund Manager and, if relevant, the Trustee in writing of —(a) that decision; and(b) the date on which the registration shall come into effect.
111. Withdrawal of registration(1) The Regulator may, subject to subsection (2), withdraw the registration of a Public Fund where one or more of the following circumstances apply —(a) the Fund is not operating or has been wound up;(b) any information provided to the Regulator by the Fund Manager or, if Appointed, the Trustee, is false or misleading in a material particular or materially misleading;(c) the Fund Manager or, if Appointed, the Trustee has contravened these Regulations or any Rules made under these Regulations;(d) the Fund Manager or, if Appointed, the Trustee or member of the Fund's Governing Body has not complied with a direction issued by the Regulator under these Regulations;(e) a person other than a member of the Fund's Governing Body, Shari'a Supervisory Board, the Trustee or a person providing oversight functions is exercising significant influence over the Fund, the Fund Manager or any member of the Fund's Governing Body;(f) the Fund Manager is no longer fit and proper to manage the Fund or is incapable of acting as the Fund Manager of the Fund in compliance with these Regulations, any Rules made by the Regulator or the terms of its Constitution;(g) the Trustee is no longer fit and proper to act as Trustee of the Fund or is incapable of acting as Trustee of the Fund in compliance with these Regulations, any Rules made by the Regulator, or the terms of its Constitution; or(h) the Fund Manager or, if Appointed, the Trustee requests the Regulator to withdraw the registration of the Fund on the grounds that the Unitholders have passed a Special Resolution approving the Fund to be deregistered.(2) The Regulator may withdraw the registration of a Fund under subsection (1) only if it considers that —(a) the withdrawal is in the interests of the Unitholders of the Fund; or(b) appropriate steps have been taken or may reasonably be taken to protect the interests of the Unitholders.(3) Where the Regulator has withdrawn, or proposes to withdraw, a registration under this section, it may, by written notice, direct the Fund Manager or, if Appointed, the Trustee to take such steps as the Regulator considers necessary or desirable to protect the interests of Unitholders in the Fund.(4) References in this section to a Fund include references to a Sub-Fund, as applicable.
Chapter 3 Chapter 3 Notification Requirement Applicable to Exempt Funds and Qualified Investor Funds
112. Notification requirement(1) The Fund Manager of an Exempt Fund or a Qualified Investor Fund shall notify the Regulator at least 14 days prior to the initial Offer to issue Units in the Fund and, in the case of a closed-ended Fund, any subsequent Offer to issue Units in the Fund.(2) Such a notification must be made in the manner prescribed in any Rules made by the Regulator and include the name of the Fund and the type of Fund and any further details required under such Rules made by the Regulator.(3) If a Domestic Fund can no longer meet the conditions to be an Exempt Fund or a Qualified Investor Fund under any Rules made by the Regulator, the Fund Manager of that Fund shall, as soon as practicable, either —(a) in the case of an Exempt Fund, register the Fund as a Public Fund under section 107, or in the case of a Qualified Investor Fund, reconstitute the Fund as an Exempt Fund or register the Fund as a Public Fund under section 107; or(b) apply for the winding-up of that Fund.(4) References in this section to a Fund include references to a Sub-Fund, as applicable.
Chapter 4 Chapter 4 Investment Trusts
113. General prohibition(1) A person shall not enter into an agreement to create a trust for collective investment purposes unless it is an agreement of the kind referred to in section 114.(2) The Regulator may by Rules prescribe circumstances in which the prohibition in subsection (1) does not apply.
114. Creation of an Investment Trust(1) An Investment Trust shall be created by a Trust Deed entered into between —(a) an Authorised Person who has a Financial Services Permission to Manage Assets or Manage a Collective Investment Fund; and(b) an Authorised Person who has a Financial Services Permission to Act as the Trustee of an Investment Trust.(2) The Trustee of an Investment Trust must be independent of the Fund Manager of that Investment Trust. A Trustee will not be independent of a Fund Manager if —(a) the Fund Manager or the Trustee holds, or exercise voting rights in respect of, any Shares of the other;(b) the Fund Manager and the Trustee have a common holding company or a common ultimate holding company;(c) the Fund Manager or the Trustee have Directors on its Governing Body, who are also Directors of the other;(d) the Fund Manager or the Trustee has individuals performing Controlled Functions who are also individuals performing Controlled Functions for the other; or(e) the Fund Manager and the Trustee have been involved in the previous two years in any professional or material business dealings, other than acting as Fund Manager or Trustee respectively of any other Fund.(3) An Investment Trust shall be formed solely for collective investment purposes.(4) The Trust Deed shall —(a) meet all the requirements that apply in respect of the Constitution of a Fund under the Rules made by the Regulator;(b) set out clearly whether the Trustee is to provide the oversight function relating to the Investment Trust;(c) confer on the Trustee all the powers that are necessary for the Trustee to discharge all its duties and perform all its functions under these Regulations and any Rules made by the Regulator; and(d) not contain any provision which conflicts with the requirements in any Rules made by the Regulator.
115. Effect and validity of the Trust Deed(1) The provisions of the Trust Deed are binding on the persons who become Unitholders of the Investment Trust, as if they were a party to the Trust Deed.(2) Any provision of a Trust Deed, which is inconsistent with these Regulations or any Rules made by the Regulator, shall be void.
116. Unitholder liability(1) The Unitholders of an Investment Trust created under these Regulations are not liable for any debts or other liabilities incurred by or in respect of the Investment Trust except to the extent of any amount outstanding for the payment of the Units or interests in the Units at the price at which the Unitholder agreed to acquire the Units or interest in the Units.(2) No action shall be brought by any person against a Unitholder for any debts or other liabilities of, or in respect of, an Investment Trust or any actions or omissions of the Trustee or Fund Manager except to the extent provided in subsection (1).
117. Power to make a Direction
If, in the opinion of the Regulator, the name of a Fund or of a Sub-Fund conflicts with the name of another Fund or Sub-Fund or is undesirable or misleading, it may direct the Fund Manager to change the name of the Fund or the Sub-Fund.
118. Recognised Jursidiction
The Regulator may by Rules designate as a Recognised Jurisdiction any jurisdiction where it is satisfied that the laws and regulations of such jurisdiction are sufficiently equivalent to those of the Abu Dhabi Global Market in as far as they apply to the management and operation of Domestic Funds. The Regulator shall publish and maintain a list of such jurisdictions.