Article 52: Offer Requirements for Closed-Ended Investment Traded Fund

Article 52: Offer Requirements for Closed-Ended Investment Traded Fund

a. A fund manager seeking to offer a closed-ended investment traded fund units on the Exchange must submit an application to the Authority that includes the information required under these Regulations, and simultaneously submit an application to the Exchange for listing those units in accordance with the provisions of the Listing Rules.

b. In addition to the requirements set forth in Article (63) of these Regulations, the Fund’s Terms and Conditions must include all necessary information to enable the potential unitholders to make an informed judgement based on sufficient information regarding the investment offered to them, in addition to the following information:

1) Key dates and initial subscription procedures: this section must include the following information:

a. timetable showing the expected dates of the initial offering.

b. description of the initial subscription procedures.

c. the mechanism of the fund manager to allocate units among subscribers.

2) The mechanism of increasing the fund's total assets value, through accepting cash or in-kind contributions, or both.

3) A letter by the fund manager’s legal advisor, who is licensed to practice the profession in the Kingdom, regarding the legal due diligence report in the form set out in Annex

(12) of these Regulations.

4) A letter by the fund manager regarding the due diligence report in the form set out in Annex (13) of these Regulations.

c. When submitting an application for offering, the fund manager must provide the Authority with any contracts related to the fund or the fund's assets management.

d. When submitting an application for offering, the fund manager must provide the Authority with the name of one receiving agents, at least.

e. The fund manager may not offer units publicly without making prior arrangements for listing those units on the Exchange in accordance with the Listing Rules.

f. The approval of the application for offering will only be given by the Authority if:

1. the Authority has received a notification from the Exchange regarding the Exchange's conditional approval of the corresponding application for listing pursuant to the Listing Rules;

2. the conditional approval mentioned under Subparagraph (1) of Paragraph (f) of this Article has not been withdrawn by the Exchange; and

3. the Authority is satisfied that the information contained in the Terms and Conditions is complete and fulfills the requirements of the Capital Market Law and its Implementing Regulations.