The final text of the UAE’s long-awaited new Investment Funds Regulation (the Regulation) has been approved by the Board of the UAE Securities and Commodities Authority (the SCA). The Regulation will take effect as SCA Board Resolution No. 37 of 2012 on the Regulation of Investment Funds following publication in the Official Gazette in late August or early September. The Regulation, substantially revised since a first draft was issued for public comment in January 2011 (the Draft Regulation), retains several provisions that significantly alter the regulatory regime governing investment funds.
Highlights of the Regulation include:
- Primary responsibility for overseeing the licensing, regulation and marketing of investment funds in the UAE has been transferred from the Central Bank of the UAE to the SCA
- SCA approval is now required for the establishment of a local fund and for the marketing of a foreign fund to investors in the UAE
- The marketing of a foreign fund to investors in the UAE requires the appointment of a locally licensed placement agent
The Regulation marks a significant step in the development of the regulatory framework governing investment funds in the UAE — both in terms of establishing local funds and the marketing within the UAE of interests in foreign funds — and forms part of the UAE’s drive towards a “twin peaks” regulatory model.