DFSA Collective Investment Rules (CIR)

CIR/VER36/05-24

1 – Application and Interpretation

1.1 – Application

1.1.1 The Rules in this module (CIR):

• are made for the purposes of the Collective Investment Law 2010 and the Investment Trust Law 2006; and
• apply to every Person to whom the legislation in (a) applies except as otherwise provided.

Guidance

1. Article 1 of the Collective Investment Law 2010 provides as follows:
   1. “(a) This Collective Investment Law 2010 repeals and replaces the Collective Investment Law 2006 (the Previous Law) and may be cited as the “Collective Investment Law of 2010” (this Law).
   1. (b) Except where otherwise provided in the Rules, anything done or omitted to be done pursuant to or for the purposes of the Previous Law is deemed to be done or omitted to be done pursuant to or for the purposes this Law.
   1. (c) Without limiting the generality of Article 1(b), such repeal shall not affect:
      1. (i) any right, privilege, remedy, obligation or liability accrued to or incurred by any person; or
      1. (ii) any investigation or legal or administrative proceeding commenced or to be commenced in respect of any right, remedy, privilege, obligation or liability,

under the Previous Law and, any such investigation or legal or administrative proceeding may be instituted, continued or enforced, including any penalty, fine or forfeiture, under this Law.

• The DFSA may, by Rules, prescribe any transitional or saving provisions as are or are deemed necessary to give effect to, or to facilitate, the transition from the Collective Investment Law 2006 to this Law.”

1.1.2 CIR applies to every Person who carries on, or intends to carry on, in or from the DIFC the Financial Services of:

• Managing a Collective Investment Fund;
• Providing Fund Administration to a Fund;
• Providing Custody to a Fund; or
• Acting as the Trustee of a Fund.

1.1.3 CIR applies to every Person who is, or intends to be:

• a Fund Manager;
• an External Fund Manager;
• a member of the Governing Body;
• a director of a Corporate Director;
• an Eligible Custodian;
• a Trustee; and
• an oversight provider.

1.1.4

1. CIR also applies to an Authorised Firm other than a Representative Office that:
   1. (a) provides a Financial Service; or
   1. (b) undertakes a Transaction in or from the DIFC;

in relation to a Domestic Fund or Foreign Fund.

• In the case of a Representative Office, only the Rules in chapter 15 apply.

Guidance

In regard to Rule 1.1.4(2), a Representative Office is authorised under its Licence to market, among other financial products, the Units of Foreign Funds, however, the scope of such marketing is limited to marketing the Units of the Foreign Funds that fulfil the criteria set out under REP section 4.7 as appropriate.

1.1.5

1. CIR also applies to a Fund whether or not it has a separate legal personality.
2. Where a Rule imposes an obligation on a Fund, each Director, Partner or other Person charged with the management of that Fund must take reasonable steps to ensure compliance with the requirement by the Fund.

Guidance

1. The Rules in this module (CIR) establish a regime to regulate Domestic Funds, which may be Public Funds, Exempt Funds or Qualified Investor Funds. Domestic Funds include External Funds as defined in Article 14(1) of the Law. In addition, this module also regulates Fund Managers, which include External Fund Managers as defined in Article 20(5) of the Law.
2. CIR also applies to marketing and selling of Units of Foreign Funds in or from the DIFC and to the provision of a Financial Service to a Foreign Fund where any such activity is undertaken by an Authorised Firm. In that regard, the COB Rules also apply to the provision of Financial Services by an Authorised Firm.
3. If a Domestic Fund or Foreign Fund intends to list its Units on an Authorised Market Institution (AMI), it will need to comply with the relevant Rules in the MKT module and the AMI’s listing Rules in respect of Domestic Funds. Exempt Funds and Qualified Investor Funds cannot be listed.

A Public Property Fund is required to be a Closed-ended and Listed Fund and to be structured as an Investment Company or an Investment Trust. A Property Fund that is an Exempt Fund or QIF can be either Open-ended or Closed-ended.