MENA Asset Management Survey 2012 - National Bank of Abu Dhabi

Regulatory Trends
In article 35, clause 1, dealing with promotion of foreign funds, the text was amended to
“the fund is established in a foreign country and subject to the oversight of a regulator
similar to SCA” while previously it read: “To be founded and licensed in a foreign State
and shall be subject to the supervision of a control authority similar to the State Authority
or in a free zone in the State”.
In article 35, the third clause which had appeared in the draft is not present. Clause 3 in
the earlier version read: “the Fund shall contract with local companies licensed by the
Authority and the official bodies in the State so as to enable it to fulfil all the tasks
associated with the Fund and correspond to its articles of association and its prospectus,
including an authorized promoter and distributor of the Fund by the Authority to conduct
promotions and underwriting the subscriptions”. This may, however, be dealt with in
investment management regulations which is expected to be issued soon.
Articles were added specifying language of fund documents to be in Arabic and while
English versions may be prepared, the Arabic version would prevail in the event of a
difference.
Article 38 specifying which entities are eligible to be promoters of foreign funds was
expanded beyond banks to include investment companies licensed by the Central Bank
and companies licensed for this purpose by SCA.
Article 39, clause 1, dealing with obligations of promoters stated “the local promoter for
a foreign fund shall exert due diligence when selecting the foreign mutual fund to be
promoted within the UAE and follow up the performance of such funds after the
promotion, to safeguard the assets of investors”.
Article 41 introduced minimum subscription amounts per individual investors for foreign
funds specifying:
1. “The minimum subscription per a single investor in the units of foreign mutual fund
approved by SCA to be promoted in a private offering shall be the limit set out in the
Offer Document, provided that it may not be less than (AED 500,000) five hundred
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