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SCA issues regulations for investment funds

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The United Arab Emirates’ Security and Commodities Authority (SCA) has issued board’s resolution No. 37 of 2012 concerning the rules of investment funds.

The decision was signed by Sultan bin Saeed Al Mansoori (pictured), Minister of Economy and SCA chairman.
The announcement was made by Abdullah Al Turifi, chief executive of SCA, who says the resolution will enter into force on the day after its publication in the Official Gazette.

“The resolution is part of the SCA’s endeavor to issue new investment products and diversify the investment tools available to traders in the markets. It will boost the investment climate in the local markets and help attract new investments and liquidity. The new regulations will be a pillar and a prerequisite for creating a market maker who keeps balance in the country’s markets.”
In addition to definitions, the implementation system and rules of setting up investment funds and promoting them, the system includes 48 articles split into four chapters. The first chapter deals with local funds: the setting up of local funds, licensing applications, cancellation, eligibility, correspondence, document of a fund’s issuance, statement of a fund’s issuance, amendments of the fund’s issuance, investment policies of local funds, investment in commodities, prohibition of the receipt of funds, subscription in the fund units, the practicing of a fund’s activities, issuing fund units, issuing and trading fund units, evaluating the assets and pricing fund units, distribution and recovery of fund units, fund assets, lending and borrowing a fund and its finances, a fund’s financial reports, the General Assembly of owners of fund units, a fund’s board of directors, authorities of the board of directors, disclosure and provision of information, conflict of interests, a fund’s memberships on the boards of directors of companies, control and inspection of investment fund and expiration of a fund.
The second chapter includes a number of articles related to general obligations of investment fund’s service providers, obligations of the investment director, tasks of the management services company, and tasks of the custodian.
The third chapter deals with the promotion of foreign investment funds inside the country, terms and conditions of promoting foreign investment funds inside the country through IPOs, promoting foreign investment funds inside the country through IPOs, promotion requests, local promoters, obligations of local promoters of foreign funds, means of promotion and identification of investors who are not promoted yet, as well as the minimum value of subscription per investor.
The fourth chapter includes the final provisions such as provisions of investment funds of special nature, the appeal of the authority’s decisions, offences and penalties, fees, as well as the reconciliation of an existing fund.

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