Article 49: REITs Buy-back and Sale of Its Units

Article 49: REITs Buy-back and Sale of Its Units

a) For the purpose of applying these regulations, the process of buying-back and selling a RIET fund of its units, in accordance with the provisions of these Regulations, is excluded from the acts and practices mentioned in paragraph (a) of Article (49) of the Capital Market Law.

b) a REIT fund may buy-back its units unless the fund’s terms and conditions stipulate otherwise, in accordance with the following controls:

1. The buy-back of the fund's units is for the purpose of keeping them as treasury units or in order to cancel them.

2. With regards to the provisions of sub-paragraph (3) of paragraph (b) of Article (47) of these Regulations, the percentage of treasury units for the fund shall not exceed (10%) at any time.

3. Issuance of a special fund resolution by the unitholders approving the buy-back process, specifying the maximum number of units subject to the buy-back and its purposes, the sources of financing the buy-back process, and authorising the fund manager to complete the buy-back within a period not exceeding (12) months from the date of the issuance of the referenced special fund resolution. Moreover, unitholders may issue at any time issuing a special fund resolution to change the purposes of the buy-back.

4. Unless the purpose of buying-back the units of the fund is to cancel them, the units buy-backs must be made not exceeding (10%) of the quantity approved at the meeting of the unitholders for buy-back within one trading day, unless the approved quantity, or the remainder of the approved quantity that is not bought-back yet, is less than (10%) of the trading volume of the fund's units the day before the buy-back.

5. The buy-back price shall not exceed (5%) of the market closing price on the day preceding the day on which the buy-back is executed.

6. The buy-back does not result in a decrease in the ownership of public unitholders to less than the liquidity requirements stipulated in the Listing Rules (where applicable) for the units issued by the Fund.

7. The buy-back shall be made through the Exchange and not through a special transaction.

8. The treasury units bought-back by the fund shall have any no voting rights at the unitholders meeting and shall not have any right in fund distributions.

c) A REIT fund may not buy-back its units for use as treasury units except for the following purposes:

1. If the Fund’s Board of Directors or whoever delegate believes that the price of the units in the Exchange is less than their fair value.

2. Swap operations in return for purchase of an asset.

3. Any other purpose approved by the Authority.

d) The REIT fund manager, regarding buy-back of the fund's units, must comply with the following:

1. Disclose on its website and the Exchange’s website, the decision of the Fund’s Board of Directors to approve the Fund’s buy-back of its units, at least half an hour before the start of the trading period for the next day.

2. Call for a meeting of unitholders in accordance with the provisions of paragraph (d) of Article (24) of these Regulations.

e) In the event of a special fund resolution issued by the unitholders approving the buy-back process, The REIT fund manager must this on its website and the Exchange’s website, at least half an hour before the start of the trading period for the next day.

f) The RIETS fund manager must immediately notify the Exchange according to the mechanism determined by the Exchange of the fund's buy-back of its units and the purpose of their buy-back, in order for the Exchange to publish that information in its periodic report on the funds buy-back of their units.

g) The REIT fund manager must include in the annual report of the fund details of the treasury units held by the fund, and details of disposal of these units.

h) A REIT fund may sell its treasury units if the terms and conditions of the fund stipulate that this is permissible, according to the following controls:

1. Executing the sale of treasury units shall not exceed (10%) of the total amount of treasury units to be sold within one trading day, unless the approved quantity, or the remainder of the quantity to be sold is less than (10%) of the trading volume of the fund's units the day before the buy-back.

2. The sale of the treasury units shall be through the Exchange and not through a special transaction. As an exception to this, the sale of these units is not required to be through the Exchange if the purpose of the treasury units is to be used as a compensation in the swaps in exchange for buying an asset in accordance with the terms and conditions of the fund.