Article 23: Termination and Liquidation of the Fund

Article 23: Termination and Liquidation of the Fund

a. The fund manager shall specify the termination provisions of a fund in the Terms and Conditions of the relevant fund.

b. The fund manager must complete the process of selling the fund’s assets and distribute the unitholders’ dues among them prior to the end of the fund’s term.

c. The fund manager may extend the fund’s term to complete the sale process of the fund’s assets or any other event in accordance with the provisions of Articles (64 ) and (94 ) of these Regulations.

d. For the purpose of terminating a fund, the fund manager must prepare a plan and procedures for the termination of the fund consistent with the unitholders interests and must obtain the fund board of directors’ approval – where applicable – on such plan and procedures prior to carrying out any procedure in this regard.

e. The open-ended fund manager must notify the Authority and the unitholders, in writing, of the details of the plan and procedures for the fund termination at least (21) days prior to the intended date for terminating the fund, without prejudice to the Fund’s Terms and Conditions.

f. The fund manager must comply with the plan and procedures for fund’s termination approved as per Paragraph (d) of this Article.

g. The fund manager must notify the Authority and unitholders, in writing, regarding the fund’s termination within (10) days from the end of the fund term in accordance with the requirements in Paragraph (d) of Annex (10) of these Regulations.

h. In case the Fund’s Terms and Conditions provide that the fund will be terminated upon the occurrence of specified events, the fund manager must terminate the fund immediately upon the occurrence of such event and notify the Authority and unitholders in writing within (5) days from the occurrence of a specified event triggering the termination of the fund.

i. In the event of expiry of the fund's term and the fund manager has not completed the sale of the fund’s assets before the expiry of its term, the fund manager must liquidate the assets and distribute the unitholders' dues among them within a period not exceeding (12) months from the date of the expiry of the fund’s term.

j. For the purpose of liquidating a fund, the fund manager must obtain the fund’s board of directors’ approval on the plan and procedures for the liquidation of the fund (where applicable) prior to carrying out any action in this regard.

k. The fund manager must comply with the plan and procedures for fund liquidation approved as per Paragraph (j) of this Article.

l. The fund manager must notify the Authority and the unitholders, in writing, of the end of the fund liquidation within (10) days from the end of the fund liquidation in accordance with the requirements in Paragraph (d) of Annex (10) of these Regulations.

m. The fund manager must treat all unitholders equally during the fund termination or liquidation process, and must take their interests into consideration in accordance with the provisions of the Capital Market Law and its Implementing Regulations.

n. The Fund Manager is not permitted to charge management fees from the commencement date of the fund’s liquidation.

o. The fund manager must immediately upon the end of fund term or liquidation distribute the dues of the unitholders among them, without delay and in a manner that does not conflict with the interest of unitholders and the Fund’s Terms and Conditions.

p. The public fund manager must disclose, on its website and the Exchange’s website or any other website available to the public according to the controls set out by the Authority (where applicable), regarding end of term of the fund or its liquidation period. Moreover, the private fund manager must notify the unitholders of such in the places and means specified in the Fund’s Terms and Conditions.

q. The fund manager must provide the unitholders with the fund termination report, in accordance with the requirements of Annex (14) of these Regulations within a period not exceeding (70) days from the date of completion of its termination or liquidation, including the final audited financial statements of the fund for the period subsequent to the last annual audited financial statements.

r. The Authority may remove the fund manager from the liquidation process in the event of a special fund resolution issued by the unitholders, provided that a replacement liquidator is appointed on the same meeting in which unitholders voted on removing the fund manager.

s. If the fund manager was removed from the liquidation process, it should fully cooperate to transfer liquidation responsibilities to the appointed liquidator. It must also transfer to the appointed liquidator all the documents of the relevant investment fund, that will enable it to complete the liquidation within (20) days from the issuance of the Authority’s resolution to remove the fund manager and appoint a replacement liquidator.

t. The fund manager must notify the unitholders, in writing, in the event where the Authority issues a resolution of the removal of the fund manager and the appointment of a replacement liquidator under Paragraph (r) of this Article.

u. In all cases, the fund manager must notify the Authority and the unitholders, in writing, immediately and without any delay of any material events or developments during the liquidation period of the fund.

v. The traded funds shall be exempted from the requirement to send the written notice to all unitholders mentioned in Paragraphs (e), (g), (h) (l), (t), and (u) of this Article, provided that the announcement for such is made on the fund manager’s website and the Exchange's website. CUSTODY