• FUNDS 11. FUNDS 11. CONSTITUTION

    • FUNDS 11.1 FUNDS 11.1 Application

      • FUNDS 11.1.1

        (1) This Chapter applies to a Fund Manager and, where appointed, a Trustee of a Domestic Fund.
        (2) Only this Rule and Rules 11.1.2(1)(a), 11.1.2(1)(c), 11.1.2(1)(d), 11.1.2(1)(e), 11.1.3(1)(b), 11.1.3(2) and 11.1.5 apply to a Fund Manager and, where appointed, a Trustee, of a Qualified Investor Fund.

      • General requirements

        • FUNDS 11.1.2 FUNDS 11.1.2

          (1) Every Domestic Fund shall have:
          (a) a written Constitution which complies with these Rules;
          (b) a purpose that is reasonably capable of being successfully carried into effect;
          (c) an auditor appointed in respect of the Fund;
          (d) if it is an Investment Trust, a Trustee appointed to the Fund in accordance with the requirements in the FSMR and these Rules;
          (e) if it is not an Investment Trust, an eligible person with whom the legal title to the Fund Property is registered unless otherwise provided in these Rules; and
          (f) in the case of an open-ended Fund, single pricing for the purposes of redemption and re-issue or sale of Units in the Fund where the price of a Unit is calculated by reference to the net asset value of the property of the Fund to which the Units relate and in accordance with these Rules.
          (2) Any provision in the Constitution of a Domestic Fund is void in so far as it would have the effect of exempting the Fund, the Fund Manager and, if appointed, the Trustee from liability for any failure to discharge their obligations under these Rules, the FSMR, or any rules made for the purposes of these laws.

          • Guidance

            For the purposes of Rule 11.1.2(1)(f), a Fund should be regarded as being open-ended in circumstances where a reasonable investor would, if he were to invest in the Fund: (a) expect that he would, within a reasonable period of time, be able to realise such investment; and (b) be satisfied that his investment would be realised on a basis calculated wholly or mainly by reference to the value of the property of the Fund.

      • Instrument constituting the Fund

        • FUNDS 11.1.3

          (1) The Fund Manager and, in the case of an Investment Trust, both the Fund Manager and the Trustee of a Fund, must ensure that the written Constitution which every Fund is required to have pursuant to Rule 11.1.2:
          (a) contains the statements and disclosures prescribed in the table in APP 5 as are applicable to the Fund; and
          (b) does not contain any provision that is prejudicial to the interests of the Unitholders generally or to the Unitholders of any class of Units.
          (2) The Fund Manager and, in the case of an Investment Trust, both the Fund Manager and the Trustee, are responsible for maintaining the Constitution and for making necessary alterations to it in accordance with the applicable legislation.

        • FUNDS 11.1.4

          (1) A Fund Manager may issue and, in the case of an Investment Trust may instruct the Trustee to issue, such classes of Units as are set out in the Constitution, provided the rights of any class are not unfairly prejudicial to the interests of the Unitholders of any other class of Units in that Fund.
          (2) Units whose issue may be limited can be issued by a Fund Manager if permitted by the Constitution and if in accordance with the conditions set out in the Prospectus, provided that such issue will not materially prejudice any existing Unitholders in the Fund.
          (3) In the case of an Investment Trust, the Trustee must take reasonable measures to ensure, before carrying out the Fund Manager's instructions, that those instructions comply with the requirements in (1) and (2).

      • Name of the Fund

        • FUNDS 11.1.5 FUNDS 11.1.5

          The Fund Manager and, if appointed, the Trustee of a Fund must ensure that the name of the Fund or any Sub-Fund or class of Units in the Fund or Sub-Fund, is not undesirable, misleading or in conflict with the name of another Fund or another Sub-Fund or class of Units in the Fund or Sub-Fund.

          • Guidance

            1. Pursuant to Section 117 of FSMR, the Regulator has the power to make a direction if a name of a Fund, Sub-Fund or class of Units in a Fund is undesirable, misleading or conflicts with a name used by another Fund, Sub-Fund or class of Units of a Fund.
            2. In determining whether to make a direction under these powers, the matters that the Regulator may take into account include whether the name of the Fund, Sub-Fund or class of Units as the case may be:
            a. implies that the Fund, Sub-Fund or class of Units has merits which are not, or might not be, justified;
            b. is inconsistent with the Fund's investment objectives or policy;
            c. might mislead Unitholders or prospective Unitholders into thinking that a Person other than the Fund Manager is responsible for the Fund, Sub-Fund or class of Units of the Fund;
            d. is substantially similar to the name of another Fund in the Abu Dhabi Global Market or elsewhere; or
            e. is in the opinion of the Regulator likely to offend the public.

        • FUNDS 11.1.6 FUNDS 11.1.6

          Before using as part of or in connection with the name of a Fund, Sub-Fund or class of Units in a Fund the words "guaranteed", "protected" or any other words with a similar meaning implying a degree of security in relation to the capital or income, the Fund Manager must demonstrate to the satisfaction of the Regulator that:

          (a) the guarantor has the authority and resources to honour the terms of the guarantee; and
          (b) all the terms of the guarantee and the credentials of the guarantor are clearly set out in detail in the Prospectus and that any exclusions such as force majeure are highlighted.

          • Guidance

            A Fund Manager is not required to satisfy the Regulator regarding use of the word "protected" in relation to the name of either a Protected Cell Company or a Cell of a Protected Cell Company.

            In considering whether to permit a Fund Manager to use the words "guaranteed" or "protected" as part of or in connection with the name of a Fund, Sub-Fund or class of Units in a Fund, the Regulator will also take into account whether the degree of security implied by the name fairly reflects the nature of the arrangements for providing that security.