• COLL Part 5.1 COLL Part 5.1 Transactions with Affected Persons—QFC Schemes

    • COLL 5.1.1 Who is an Affected Person for a QFC Scheme?

      An affected person for a QFC scheme is any of the following:

      (a) the operator;
      (b) the independent entity;
      (c) a member (however described) of the governing body of the operator, the independent entity or, for a CIC or CIP, the scheme;
      (d) any standing independent valuer of the scheme;
      (e) any investment adviser for the scheme;
      (f) a person to whom functions of the operator or independent entity in relation to the scheme are outsourced;
      (g) the auditor of the scheme;
      (h) any associated person for any person mentioned in paragraphs (a) to (g);
      (i) a unitholder with 5% or more in value of all the units then in issue.

      Note Governing body, standing independent valuer, investment adviser, function and associated person are defined in the glossary. CIC and CIP are defined in r 1.3.7 and r 1.3.8 respectively.
      Amended by QFCRA RM/2016-1 (as from 19th September 2016)

    • COLL 5.1.2 Transactions with Affected Persons—General Rule for All QFC Schemes

      (1) This rule applies to a transaction by the operator of a QFC scheme in relation to the scheme property if the transaction is with an affected person.
      (2) The operator must ensure that the transaction—
      (a) is on terms at least as favourable to the scheme as any comparable transaction on normal commercial terms negotiated at arm's length with an independent third party; and
      (b) does not breach any other provision of this part; and
      (c) is not prohibited by the constitutional document or the latest filed prospectus.

      Note Constitutional document is defined in r 3.1.1. Breach and latest filed prospectus are defined in the glossary.
      Derived from QFCRA RM/2010-05 (as from 1st January 2011)

    • COLL 5.1.3 Transactions with Affected Persons—Prior Notice to Unitholders of QFC Schemes

      (1) Subject to subrule (3), this rule applies to a proposed transaction by the operator of a QFC scheme in relation to the scheme property if the transaction is with an affected person.
      (2) The operator must not enter into the transaction unless the operator has given the unitholders prior written notice of the transaction (or transactions that include the transaction), including an explanation of how rule 5.1.2 has been complied with in relation to the transaction (or the transactions).

      Example of written notice

      notice given in the scheme's latest filed prospectus
      (3) This rule does not apply to a REIT if the transaction is for the acquisition or sale of an immovable in Qatar and all of the conditions in rule 12.6.10 are satisfied.
      Amended by QFCRA RM/2016-1 (as from 19th September 2016)

    • COLL 5.1.4 Transactions with Affected Persons—Transactions Involving 5% or More of QFC Scheme's Net Asset Value

      (1) Subject to subrule (4), this rule applies to a proposed transaction by the operator of a QFC scheme in relation to the scheme property if—
      (a) the transaction is with an affected person; and
      (b) the total consideration for, or value of, the transaction (or the transaction and all earlier such transactions within the last 12 months) is 5% or more of the latest net asset value of the scheme, as disclosed in the scheme's latest audited accounts.

      Note Net asset value is defined in the glossary.
      (2) The operator must not enter into the transaction unless the unitholders have given prior approval to the transaction at a general meeting in accordance with the constitutional document. If the scheme is a property fund, the approval may be by ordinary resolution of the unitholders.
      (3) For subrule (2), the operator must give notice to unitholders of the results of the voting in relation to the approval. The notice must be given as soon as practicable after the general meeting.
      (4) This rule does not apply to a REIT if the transaction is for the acquisition or sale of an immovable in Qatar and all of the conditions in rule 12.6.10 are satisfied.
      Amended by QFCRA RM/2016-1 (as from 19th September 2016)

    • COLL 5.1.5 Transactions with Affected Persons—Details Required for QFC Scheme's Annual Reports

      (1) If the operator of a QFC scheme enters into any transaction with an affected person in relation to the scheme property during an annual accounting period, the scheme's annual report, or the scheme's annual long and short reports, for the period must include—
      (a) a summary of the total value of transactions with affected persons in relation to the scheme property during the period; and
      (b) a summary of the nature of the transactions; and
      (c) a summary of the identities of the affected persons; and
      (d) if the unitholders voted at a general meeting held during the period to approve a transaction with an affected person — details of the approval and the results of the voting in relation to the approval; and
      (e) a written certificate by the operator stating that each transaction was in accordance with these rules and the scheme's constitutional document.
      (2) If the operator of a QFC scheme does not enter into a transaction with an affected person in relation to the scheme property during an annual accounting period, the scheme's annual report, or the scheme's annual long and short reports, for the period must include a statement to that effect.
      Amended by QFCRA RM/2016-1 (as from 19th September 2016)

    • COLL 5.1.6 Transactions with Affected Persons—Additional Restrictions for QFC Retail Schemes

      (1) The operator of a QFC retail scheme must take reasonable care to ensure that the following transactions, arrangements or agreements are not entered into:
      (a) the putting of cash on deposit by the scheme with an affected person, unless that person is an authorised firm or regulated financial institution and the transaction complies with the arm's length requirement in subrule (2);

      Note Deposit, authorised firm and regulated financial institution are defined in the glossary.
      (b) the lending of money by an affected person to or for the scheme, unless the affected person is an authorised firm or regulated financial institution and the transaction complies with the arm's length requirement in subrule (2);
      (c) the dealing in property by an affected person with or in relation to the scheme (or the independent entity acting for the scheme), unless subrule (3) applies;

      Note Deal is defined in the glossary.
      (d) the vesting of property (other than cash) by an affected person in the scheme (or with the independent entity acting for the scheme) against the issue of units in the scheme, unless—
      (i) subrule (3) applies; or
      (ii) the purpose of the vesting is for—
      (A) all or part of the property of a corporation or another collective investment scheme to become the first property of the QFC retail scheme; and
      (B) holders of shares or units in the corporation or other collective investment scheme to become the first unitholders in the QFC retail scheme;

      Note Corporation is defined in the glossary.
      (e) the acquisition of scheme property by an affected person from the scheme (or the independent entity acting for the scheme), unless subrule (3) applies or the acquisition is otherwise permitted by the constitutional document or under these rules;

      Note See r 8.1.20 (Issue or redemption otherwise than for cash—QFC retail schemes).
      (f) a stock lending arrangement or repo agreement with or in relation to the scheme, unless the transaction complies with the arm's length requirement in subrule (2).

      Note Stock lending arrangement and repo agreement are defined in the glossary.
      (2) A transaction mentioned in subrule (1) (a), (b) or (f) must be as favourable to the scheme as any comparable arrangement on normal commercial terms negotiated at arm's length between the affected person and an independent third party.
      (3) A transaction does not breach subrule (1) (c), (d) or (e) if the transaction complies with—
      (a) subrule (4) (the best execution on-exchange requirement); or
      (b) subrule (5) (the independent valuation requirement); or
      (c) subrule (6) (the arm's length transaction requirement).
      (4) For subrule (3), the transaction complies with this subrule (the best execution on-exchange requirement) if—
      (a) the property is an approved derivative or approved security; and

      Note Approved derivative is defined in r 7.1.8. Approved security is defined in r 7.1.9.
      (b) the transaction is effected under the rules of the relevant market with or through a person who is bound by those rules; and
      (c) there is written evidence of the effecting of the transaction and its terms; and
      (d) the operator has taken all reasonable steps to ensure that the transaction is effected on the terms that are the best available for the scheme.
      (5) For subrule (3), the transaction complies with this subrule (the independent valuation requirement) if—
      (a) the value of the property is certified in writing for the purpose of the transaction by a person approved by the independent entity as—
      (i) independent of any affected person; and
      (ii) qualified to value property of the relevant kind; and
      (b) the independent entity is of the opinion that the terms of the transaction are not likely to result in any material prejudice to unitholders.
      (6) For subrule (3), the transaction complies with this subrule (the arm's length transaction requirement) if—
      (a) the property is not an approved derivative or approved security; and
      (b) it is not reasonably practicable to comply with subrule (5) (the independent valuation requirement); and
      (c) the independent entity has reliable evidence that the transaction is or will be on terms that comply with the arm's length requirement in subrule (2).
      Derived from QFCRA RM/2010-05 (as from 1st January 2011)