• Section 9 Section 9 Directors and Secretary

    • Article 49 - Appointment of Directors

      (1) An Investment Club shall have at least one director. Where an Investment Club has one director, that director shall exercise the powers of the board of directors.
      (2) No person shall be a director who:
      a. is an individual under the age of 18 years;
      b. is disqualified from being a director in the QFC or in any other place;
      c. is an undischarged bankrupt in any country; or
      d. is a Body Corporate.
      (3) The first directors of an Investment Club shall be those named in the incorporation document and thereafter the directors, subject to the provisions of these Regulations and any other Regulations, shall be appointed and removed and shall hold and vacate office as provided in the articles of association of the Investment Club.
      (4) The particulars of each director appointed, removed or who resigns and any change in the particulars of the directors of an Investment Club from time to time, shall be registered with the CRO in the Prescribed Form and no later than 21 days after such change, together with payment of any Prescribed Fee. For each director appointed these particulars shall include his Name, date of birth, Address, nationality, occupation, any directorships held by him or which have been held by him within the last 5 years and shall be accompanied by or include a written declaration signed by the director that he is qualified to act as a director pursuant to these Regulations.
      (5) The articles of association of an Investment Club may provide for a director to appoint an alternate to attend meetings in the absence of the director who appointed him and to vote in his place.
      Derived (as from 20th December 2016).

    • Article 50 - Removal of Directors

      (1) Notwithstanding anything in its articles of association or in any agreement between the Investment Club and the director and without prejudice to any other power to remove a director which may exist apart from this Article 50, an Investment Club may by Ordinary Resolution at a general meeting remove a director before the expiration of his period of office, provided that notice of any such meeting shall be served on the director concerned not less than 21 days before the meeting and such director shall be entitled to be heard at such meeting.
      (2) The removal of a director from office by resolution of the Members of the Investment Club under Article 50(1) shall be without prejudice to any rights of that director to compensation or damages in respect of the termination of his appointment as director.
      Derived (as from 20th December 2016).

    • Article 51 - Powers of Directors

      The directors of an Investment Club may collectively exercise all powers of the Investment Club in accordance with its articles of association, save to the extent that these Regulations or any other Regulations or any rules made by the QFC Authority or the Investment Club's articles of association require any such powers to be exercised by the Members of the Investment Club.

      Derived (as from 20th December 2016).

    • Article 52 - Duties of Directors

      (1) A director of an Investment Club owes a duty to the Investment Club to comply with the following provisions of this Article and shall, unless his failure to comply with any such duty shall be approved or ratified by an Ordinary Resolution of the Investment Club, be liable to compensate the Investment Club for any loss suffered by the Investment Club and to account to the Investment Club for any profit, gain or benefit obtained by the director in consequence of any such failure.
      (2) A director shall:
      a. act honestly and in good faith with a view to the best interests of the Investment Club;
      b. act in accordance with the articles of association of the Investment Club and decisions of the Investment Club taken in accordance with these Regulations and the articles of association and not delegate any of his powers or fail to exercise his independent judgement in relation to any exercise of his powers, except where authorised by these Regulations or the articles of association or any such decisions;
      c. exercise the care, diligence and skill that a reasonably prudent person with the knowledge, skill and experience which may reasonably be expected of a director in his position and any additional knowledge, skill and experience which he has would exercise in comparable circumstances;
      d. not use for his own or anyone else's benefit any property or information of the Investment Club or any opportunity of the Investment Club of which he becomes aware in the performance of his functions as a director; and
      e. not accept any benefit from a third party which is conferred because of his position as a director or by reason of his doing or not doing anything as a director, unless the benefit is incidental to the proper performance of his functions as a director or there is no real possibility of the benefit resulting in a conflict of interest on the part of the director.
      Derived (as from 20th December 2016).

    • Article 53 - Directors' Interests

      (1) A director of an Investment Club who has a direct or indirect interest of which he is aware in a transaction entered into or proposed to be entered into by an Investment Club or by a Subsidiary of the Investment Club, shall disclose to the directors of the Investment Club the nature and extent of his interest.
      (2) The disclosure required under Article 53(1) shall be made as soon as practicable but no later than 10 days after the director becomes aware of the circumstances from which his duty to make the disclosure arises.
      (3) An interest solely through a holding of less than 10 percent of the shares in a Body Corporate listed on any stock exchange shall not constitute an interest requiring disclosure under this Article 53.
      (4) A notice in writing given to the Investment Club by a director (including a sole director) that he is to be regarded as interested in any transaction with a specified person and specifying the reason why he is to be regarded as so interested is sufficient disclosure of his interest in any such transaction entered into after the notice is given.
      (5) Where a director fails to disclose an interest of his under this Article 53 the director shall, unless the transaction is confirmed by an Ordinary Resolution at a general meeting of the Investment Club at which the nature of the director's interest in the transaction was properly disclosed, be liable to account to the Investment Club for any profit, gain or benefit obtained by the director in connection with the transaction.
      (6) A sole director of an Investment Club who is required by this Article 53 to disclose any interest shall record the nature and extent of his interest in writing in a register which shall be kept at the Investment Club's registered office and shall be made available there for inspection by any Member and the Investment Club's auditor without charge during the office hours of the Investment Club.
      Derived (as from 20th December 2016).

    • Article 54 - Prohibition of Financial Assistance to Directors

      (1) Without the consent of any Member or Members holding in the aggregate not less than 90 percent of the total voting rights of all the Members having the right to vote at any meeting of the Members it shall not be lawful for an Investment Club to make a loan or similar form of financial assistance to any person who is its director or a director of its Holding Company, or to enter into any guarantee or provide security in connection with any financial assistance made to such person as aforesaid by any other person provided that nothing in this Article 54 shall apply to either:
      a. subject to Article 54(2) anything done to provide any such person as aforesaid with funds to meet expenditure incurred or to be incurred by him for the purposes of the Investment Club or for the purpose of enabling him properly to perform his duties as an Officer of the Investment Club; or
      b. any financial assistance prescribed in rules made by the QFC Authority.
      (2) The proviso stated at Article 54(1)(a) shall not authorise the making of any financial assistance, or the entering into of any guarantee, or the provision of any security, except either:
      a. with the prior agreement of the Investment Club given at a general meeting at which the purposes of the expenditure and the amount of the financial assistance or the extent of the guarantee or security, as the case may be, are disclosed; or
      b. on condition that, if the approval of the Investment Club is not given as aforesaid at or before the next following annual general meeting, the financial assistance shall be repaid or the liability under the guarantee or security shall be discharged, as the case may be, within 6 months from the conclusion of that meeting.
      (3) Where the approval of the Investment Club is not given as required by any such condition, the directors authorising the making of the financial assistance, or entering into the guarantee, or the provision of security, shall be jointly and severally liable to indemnify the Investment Club against any loss arising therefrom.
      (4) For the purposes of this Article 54 a financial assistance shall not be deemed to have been made in the ordinary course of business of an Investment Club if it has not been made on normal commercial terms including in respect of interest rates, repayment terms and security.
      (5) Financial assistance shall be deemed to be financial assistance to a director if it is made to or in favour of:
      a. a spouse or child of a director; or
      b. a Body Corporate of which a director or his spouse or child (or any of them together) owns or controls directly or indirectly more than 20 percent of the share capital.
      Derived (as from 20th December 2016).

    • Article 55 - Payment to Directors for Loss of Office

      (1) It is not lawful for an Investment Club to make to a director of the Investment Club any payment by way of compensation for loss of office, or as consideration for or in connection with his retirement from office, without particulars of the proposed payment (including its amount) being disclosed to Members of the Investment Club and the proposal being approved by Ordinary Resolution. This Article 55 does not affect the ability of an Investment Club to pay compensation to a director in connection with the termination of his employment by the Investment Club.
      (2) Where a payment which is unlawful under this Article 55 is made to a director, he shall be liable to repay it to the Investment Club, unless and until the provisions of this Article are subsequently complied with.
      Derived (as from 20th December 2016).

    • Article 56 - Validity of Acts of Director

      The acts of a director are valid notwithstanding any defect that may afterwards be found in his appointment or qualification.

      Derived (as from 20th December 2016).

    • Article 57 - Senior Executive Function

      (1) Every Investment Club must have a Senior Executive Function, who may also be called the Club Manager and who shall be
      a. a director for the purposes of Article 49 of these Regulations;
      b. shall perform the registered function of the Senior Executive Function as defined in General Rule 11.3 of the QFCA Rules; and,
      c. subject to all the duties, requirements and responsibilities of directors as provided in these Regulations, including but not limited to, those mentioned in Articles 52, 53, 54 and 55.
      (2) The provisions of these Regulations in relation to appointment and removal of directors shall apply to any Senior Executive Function of an Investment Club.
      (3) Article 51 of these Regulations shall apply to any Senior Executive Function of an Investment Club in so far as it does not contravene this Article and the articles of association of the Investment Club.
      (4) The Senior Executive Function shall be in charge of the day to day administration of the Investment Club and shall have full powers to represent the Investment Club in pursuit of its corporate purpose which shall include, but not be limited to:
      a. act in good faith and with reasonable care;
      b. effect all transactions in accordance with the rules and regulations of the relevant jurisdiction or state where the assets are located, and in the event such assets are listed stocks, then also in accordance with the rules and regulations of the relevant market or exchange, and in any event in accordance with the votes of Members;
      c. take all reasonable steps to ensure when executing orders that the best possible result is obtained;
      d. unless resolved otherwise by Special Resolution of the Members, to appoint a Custodian where the Investment Club has Securities in its portfolio, to hold such Securities in safekeeping and to co-operate fully with the Custodian and to provide such information as the Custodian may require to fulfil its duties including settling transactions;
      e. unless resolved otherwise by Special Resolution of Members, to appoint a finance officer or administration officer (refer to Article 76(1)) for the Investment Club;
      f. to appoint one or more brokers who shall be responsible for executing the transactions in Securities;
      g. take all steps to rectify counterparty failure and/or seek compensation in relation to counterparty failure;
      h. periodically report to the Members on the portfolio and the value of the portfolio;
      i. receive and process any Investment Club forms required by CRO from Members; and
      j. in the event that the Members of the Investment Club resolve, as provided in these Regulations, to not appoint an administration officer or a Custodian, then the Senior Executive Function shall arrange for the performance of all of the obligations which would have been undertaken by the administration officer or the Custodian as the case may be, had an administration officer or Custodian been appointed.
      Derived (as from 20th December 2016).

    • Article 58 - Appointment of Secretary

      (1) Every Investment Club shall have at all times an appropriately qualified secretary.
      (2) The first secretary of an Investment Club shall be the person named in the incorporation document, and after that shall be any person appointed by the directors, including one of their number (except that a sole director cannot also be a secretary). A secretary may be removed by the directors of an Investment Club or may resign by the submission of a letter of resignation.
      (3) The particulars of each secretary appointed, removed or who resigns and any change in the particulars of the secretary of an Investment Club from time to time, shall be registered with the CRO in the Prescribed Form, together with payment of the Prescribed Fee, and within 21 days of such change. These particulars shall include his Name, date of birth, Address and nationality.
      Derived (as from 20th December 2016).

    • Article 59 - Exemption, Indemnification and Liability of Officers

      (1) An Investment Club and each Member are taken to indemnify each director of the Investment Club in respect of any liability incurred or sustained by him or her (including any actual liability, costs or expenses reasonable incurred or sustained) in connection with any debt claim, action or obligation of any kind in which he or she becomes involved by virtue of being a director, unless the claim, action, or obligation arises as a result of fraud, gross negligence or wilful default on the part of the director.
      (2) Each Member is taken to indemnify each other Member in respect of any liability incurred or sustained by the other Member (including any actual liability, costs or expenses reasonable incurred or sustained) in connection with any claim or action by a Member against another Member, unless the claim or action arises as a result of fraud, gross negligence or wilful default on the part of the Member the subject of the claim or action.
      (3) Articles 59 (1) and (2) above are subject to any contrary provision in an Investment Club's articles of association.
      (4) Nothing in this article has the effect of indemnifying a person against a liability that by virtue of a rule of law would attach to him or her in relation to fraud or dishonesty. However, the indemnities in Articles 59 (1) and (2) above extend to a liability incurred by a person in defending himself or herself in proceedings whether civil or criminal, in which judgement is given in his or her favour or in which he or she is acquitted.
      Derived (as from 20th December 2016).

    • Article 60 - Insurance of Officers

      An Investment Club may purchase and maintain insurance for the benefit of any Officer of the Investment Club against any liability incurred by him in his capacity as an Officer of the Investment Club or indemnifying such an Officer in respect of any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the Officer may be guilty in relation to the Investment Club or any Subsidiary thereof and nothing in these Regulations shall make any such policy void or voidable.

      Derived (as from 20th December 2016).