• COLL 9 COLL 9 Suspension, Winding up and Transfer Schemes—QFC Schemes

    • COLL Part 9.1 COLL Part 9.1 Suspension and Restart of Dealings—QFC Schemes

      Note for Part 9.1

      Nothing in this Part diminishes the power of the exchange where units are listed (or the power of the regulator of that exchange) to suspend, in accordance with its rules, trading in the listed units.

      Amended by QFCRA RM/2016-1 (as from 19th September 2016)

      • COLL 9.1.1 Suspension and Restart of Dealings—All QFC Schemes

        (1) The operator of a QFC scheme may, with the prior agreement of the independent entity, temporarily suspend dealings in all units or a class of units if, because of exceptional circumstances, it is in the interests of all the unitholders of the scheme to do so.

        Note Deal and class are defined in the glossary.
        (2) If the independent entity requires the operator to suspend dealings in all units or a class of units, the operator must do so without delay.
        (3) The independent entity may make a requirement under subrule (2) if, because of exceptional circumstances, it is in the interest of all the unitholders of the scheme to do so.
        (4) The operator and independent entity must ensure that the suspension continues only for as long as it is justified having regard to the interests of all the unitholders in the scheme.
        (5) If the operator suspends dealings under subrule (1) otherwise than because of a requirement of the independent entity under subrule (2), the operator must—
        (a) immediately tell the Regulatory Authority orally, giving its reasons for the suspension; and
        (b) give written confirmation to the authority of the suspension and its reasons for the suspension within 1 business day.

        Examples for this rule on 'within 1 business day'
        See examples to rule 4.1.4 (2) on the meaning of 'within 1 business day'.
        (6) If the operator suspends dealings under subrule (1) because of a requirement of the independent entity under subrule (2), the independent entity must—
        (a) immediately tell the Regulatory Authority orally, giving the reasons for its action; and
        (b) give written confirmation to the authority of the suspension, and its reasons for its action, within 1 business day.
        (7) If the operator suspends dealings under subrule (1) or (2), the operator must—
        (a) notify the unitholders about the suspension immediately but within 1 business day after the day dealing is suspended; and
        (b) from time to time publish (on its website or by other general means) sufficient information to keep unitholders appropriately informed about the suspension, including, if known, its likely duration.
        (8) Notification under subrule (7) (a) must—
        (a) tell the unitholders about the exceptional circumstances that resulted in the suspension; and
        (b) be clear, fair and not misleading; and
        (c) tell the unitholders how to obtain the information it is required to publish under subrule (7) (b).
        (9) During the suspension—
        (a) none of the obligations under part 8.1 (Dealing—QFC schemes) apply; but
        (b) the operator must as far as practicable comply with all relevant provisions of part 8.2 (Valuation and pricing—QFC schemes).
        (10) The suspension of dealings must end as soon as practicable after the exceptional circumstances mentioned in subrule (1) or (3) cease.
        (11) The operator or independent entity must—
        (a) review the suspension at least every 28 days; and
        (b) tell the Regulatory Authority about the results of the review immediately, but within 1 business day after conducting the review.
        (12) If the operator or independent entity becomes aware of any material change in circumstances that may affect the continuation of the suspension, the operator or independent entity must tell the Regulatory Authority immediately, but within 1 business day.
        (13) The Regulatory Authority may, at any time, direct the operator to end the suspension.
        (14) The operator must immediately comply with the direction.
        (15) If the operator decides to restart dealings, the operator must—
        (a) immediately tell the Regulatory Authority about the decision orally; and
        (b) give written confirmation to the authority of its decision within 1 business day.
        (16) The operator may agree, during the suspension, to deal in units at a price calculated by reference to the first valuation point after restarting dealings.
        (17) However, if the scheme is a QFC qualified investor scheme that operates limited redemption arrangements, and the exceptional circumstances have affected a valuation point, the operator must fix an additional valuation point as soon as possible after restarting dealings.

        Note 1 Limited redemption arrangements and valuation point are defined in the glossary.

        Note 2 The Regulatory Authority has power under the Financial Services Regulations, art 105 to give certain directions in relation to collective investment schemes (which are called collective investment funds in those regulations), including a direction to cease the issue or redemption of units in the scheme and to wind up the scheme.
        Amended by QFCRA RM/2016-1 (as from 19th September 2016)

    • COLL Part 9.2 COLL Part 9.2 Winding up—QFC Schemes

      • COLL 9.2.1 Application of pt 9.2 to Subschemes of QFC Umbrella Schemes—All QFC Schemes

        This part applies to a subscheme of a QFC umbrella scheme as if—

        (a) a reference to a QFC scheme were a reference to the subscheme; and
        (b) a reference to units were a reference to units in the class or classes related to the subscheme; and
        (c) a reference to a meeting of unitholders were a reference to a meeting of unitholders of the class or classes mentioned in paragraph (b); and
        (d) a reference to a special resolution were a reference to a special resolution passed at a meeting of unitholders mentioned in paragraph (c); and
        (e) a reference to the scheme property were a reference to the scheme property attributed to the subscheme; and
        (f) a reference to liabilities were a reference to liabilities of the scheme attributable to the subscheme; and
        (g) all other necessary changes were made.

        Note Subscheme and umbrella scheme are defined in r 1.2.11.
        Derived from QFCRA RM/2010-05 (as from 1st January 2011)

      • COLL 9.2.2 When Scheme may be Wound up—All QFC Schemes

        A QFC scheme may be wound up—

        (a) by order of the QFC Court under the Insolvency Regulations 2005 or any other regulations in force in the QFC; or
        (b) if not inconsistent with any regulations in force in the QFC or these rules—in the way and circumstances provided in the constitutional document; or

        Note Constitutional document is defined r 3.1.1.
        (c) in the way and in any other circumstances provided by these rules or any other rules made by the Regulatory Authority.
        Derived from QFCRA RM/2010-05 (as from 1st January 2011)

      • COLL 9.2.3 Winding-up Required by Constitutional Document—All QFC Schemes

        (1) The constitutional document of a QFC scheme may provide that the scheme is to be wound up—
        (a) at a stated time; or
        (b) in stated circumstances or on the happening of a stated event.

        Note Constitutional document is defined r 3.1.1.
        (2) However, a provision of the constitutional document that purports to provide that the scheme is to be wound up if a particular person ceases to be the operator or independent entity is of no effect.
        Derived from QFCRA RM/2010-05 (as from 1st January 2011)

      • COLL 9.2.4 Winding-up at Direction of Unitholders—All QFC Schemes

        The unitholders of a QFC scheme may, by special resolution, direct the operator or independent entity to wind up the scheme.

        Note Special resolution is defined in the glossary.

        Derived from QFCRA RM/2010-05 (as from 1st January 2011)

      • COLL 9.2.5 Notification to Regulatory Authority that Scheme not Commercially Viable Etc—All QFC Schemes

        (1) If the operator of a QFC scheme believes, on reasonable grounds, that the scheme is not commercially viable or the scheme's purpose cannot be accomplished, the operator must give the Regulatory Authority notice about the matter immediately, but within 1 business day after the day the operator forms the belief.

        Examples
        See examples to rule 4.1.4 (2) on the meaning of 'within 1 business day'.
        (2) The notice must include the following information:
        (a) the name of the scheme and its registration number given by the Regulatory Authority;
        (b) the size and type of scheme;
        (c) the number of unitholders;
        (d) whether dealing in the scheme's units has been suspended;
        (e) why the operator believes that the scheme is not commercially viable or the scheme's purpose cannot be accomplished;
        (f) what consideration has been given to the scheme entering into a transfer scheme under part 9.3 (Transfer schemes—QFC schemes) with another scheme registered in the QFC or a subscheme of an umbrella scheme registered in the QFC and the reasons why a transfer scheme is not possible;
        (g) whether unitholders have been told of the intention to seek winding-up and, if not, whether and when they will be told of the intention;
        (h) details of any proposed rebate of charges to be made to unitholders who recently purchased units;
        (i) the preferred date for the start of the winding-up.
        (3) The notice must be accompanied by a notice given by the independent entity that includes the following:
        (a) a statement that the independent entity, having taken reasonable care in considering the matter, believes that a transfer scheme under part 9.3 is not practicable;
        (b) an explanation of the other steps that have been considered that would result in the scheme not needing to be wound up;
        (c) confirmation that the operator has exercised its functions in accordance with these rules;

        Note Exercise and function are defined in the glossary.
        (d) whether the scheme's investment and borrowing powers have been exceeded.
        (4) The Regulatory Authority may, in writing, require the operator or independent entity to provide any further information or documents that the authority reasonably needs in relation to the scheme.
        Derived from QFCRA RM/2010-05 (as from 1st January 2011)

      • COLL 9.2.6 Winding-up by Operator or Independent Entity—All QFC Schemes

        (1) This rule applies if any of the following circumstances (the prescribed circumstances) exist in relation to a QFC scheme:
        (a) on a request by the operator or independent entity for the cancellation of the scheme's registration, the Regulatory Authority agrees in principle that it will cancel the scheme's registration on the completion of the winding-up of the scheme;
        (b) the operator believes, on reasonable grounds, that the scheme is not commercially viable or the scheme's purpose cannot be accomplished;
        (c) if the constitutional document states that the duration of the scheme is limited—the stated duration of the scheme ends;
        (d) the unitholders of the scheme direct the operator or independent entity under rule 9.2.4 (Winding-up at direction of unitholders—all QFC schemes) to wind up the scheme;
        (e) if the scheme is subject to a transfer scheme approved under part 9.3 (Transfer schemes—QFC schemes) under which it is to be left with no property—the transfer scheme commences.
        (2) If any of the prescribed circumstances apply in relation to the QFC scheme—
        (a) the operator and independent entity must cease—
        (i) dealing in the scheme's units; and
        (ii) investing or borrowing for the scheme; and

        Note Dealing and borrowing is defined in the glossary.
        (b) the operator or independent entity (or both) must take the steps necessary to wind up the scheme in accordance with any regulations in force in the QFC that apply to the winding-up, these rules, and any other rules made by the Regulatory Authority that apply to the winding-up.
        (3) If any of the prescribed circumstances mentioned in subrule (1) (a) to (d) apply in relation to the scheme—
        (a) the operator or independent entity must realise the scheme property as soon as practicable; and
        (b) after meeting or making provision for all the scheme's liabilities and the costs of the winding-up, the operator or independent entity must distribute the proceeds of the realisation to the unitholders in proportion to their respective interests in the scheme as at the date the relevant prescribed circumstances happened; and
        (c) any unclaimed net proceeds or other cash (including unclaimed distribution payments) held by the operator or independent entity after the end of 12 months from the day they became payable must be paid into the QFC Court, after meeting or making provision for the costs of paying them into the QFC Court under this paragraph.
        (4) If the operator or independent entity and 1 or more unitholders agree, the requirement to realise the scheme property does not apply to the part of the scheme property proportionate to their entitlement.
        (5) The operator and the independent entity may distribute the part of the scheme property mentioned in subrule (4) to the unitholders mentioned in that subrule, after making the adjustments or provisions that appear appropriate to ensure that the unitholders bear a proportionate share of the liabilities of the scheme and the costs of the winding-up.
        (6) If the prescribed circumstances mentioned in subrule (1) (e) apply in relation to the scheme, the operator or independent entity must wind up the scheme in accordance with the approved transfer scheme.
        (7) As soon as practicable after starting the winding-up, the operator or independent entity must—
        (a) if rule 9.2.4 (Winding-up at direction of unitholders—all QFC schemes) does not apply—tell the unitholders about the winding-up; and
        (b) publish notice of the winding-up in an English and an Arabic language national newspaper and, if the scheme has a website, on the scheme's website.
        (8) If the winding-up is conducted by the operator, the independent entity must approve the terms of the winding-up.
        (9) Not later than 5 business days after the day the winding-up of the QFC scheme is completed, the operator or independent entity must—
        (a) tell the Regulatory Authority about the completion of the winding-up; and
        (b) ask the authority to cancel the scheme's registration.

        Note Business day is defined in the glossary.
        (10) This rule is subject to any order of the QFC Court.
        Derived from QFCRA RM/2010-05 (as from 1st January 2011)

      • COLL 9.2.7 Accounting and Reports During Winding-up—All QFC Schemes

        (1) While a QFC scheme is being wound up, whether under rule 9.2.6 (Winding-up by operator or independent entity—all QFC schemes) or otherwise—
        (a) the annual accounting periods and half-yearly accounting periods of the scheme continue to run; and
        (b) the provisions of these rules about annual and interim allocation of income continue to apply to the scheme; and
        (c) reports to unitholders and the Regulatory Authority continue to be required in relation to the scheme.
        (2) However, if the operator, after consulting the scheme's auditor and the Regulatory Authority, decides on reasonable grounds that timely preparation of a report under these rules is not required in the interest of unitholders or the Regulatory Authority, the operator may dispense with preparation of the report within the time otherwise required by these rules.
        (3) A period to which subrule (2) applies must be covered in the next relevant report required under these rules.
        (4) At the completion of the winding-up, the accounting period then running is regarded as the final annual accounting period.
        (5) Within 2 months after the end of the final annual accounting period, the final report of the operator must be sent to the Regulatory Authority and each person who was a unitholder immediately before the end of the final annual accounting period.
        (6) This rule is subject to any order of the QFC Court.
        Derived from QFCRA RM/2010-05 (as from 1st January 2011)

    • COLL Part 9.3 COLL Part 9.3 Transfer Schemes—QFC Schemes

      • COLL 9.3.1 Purpose—pt 9.3

        The purpose of this part is to make rules under the Financial Services Regulations, article 103 modifying those regulations, part 16 (Control of Business Transfers) in relation to QFC schemes.

        Derived from QFCRA RM/2010-05 (as from 1st January 2011)

      • COLL 9.3.2 Transfer Schemes—All QFC Schemes

        (1) Financial Services Regulations, part 16 is modified in accordance with the following provisions of this rule.
        (2) If, for the purpose of a relevant scheme, it is proposed that scheme property of a QFC scheme should become the property of another scheme registered in the QFC or the property of a subscheme of a QFC umbrella scheme registered in the QFC, the proposal must not be implemented without the approval of a special resolution of the unitholders of the first scheme, unless subrule (3) applies.

        Note Subscheme and umbrella scheme are defined in r 1.2.11. Special resolution is defined in the glossary.
        (3) If, for the purpose of a relevant scheme, it is proposed that scheme property attributable to a subscheme (the first subscheme) of a QFC umbrella scheme (the first umbrella scheme) should become the property of another scheme registered in the QFC or another subscheme of a QFC umbrella scheme registered in the QFC (whether or not of the first umbrella scheme), the proposal must not be implemented without the approval of—
        (a) a special resolution of the unitholders in the first subscheme; and
        (b) a special resolution of the unitholders of units in the first umbrella scheme, unless implementation of the scheme is not likely to result in any material prejudice to the interests of the unitholders in any other subscheme of the first umbrella scheme.
        (4) If it is proposed that a QFC scheme or a subscheme of a QFC umbrella scheme should receive property (other than its first property) under a relevant scheme, or an arrangement equivalent to a scheme of arrangement, that is entered into by another scheme registered in the QFC, by a subscheme of an umbrella scheme registered in the QFC or by corporation, the proposal must not be implemented without the approval of a special resolution of the unitholders of the first scheme or of the class or classes of units related to the first subscheme (as appropriate).

        Note Corporation is defined in the glossary.
        (5) However, if the operator and either the independent entity or auditor of the scheme agree that the receipt of the property by the scheme or subscheme as mentioned in subrule (4)—
        (a) is not likely to result in any material prejudice to the interests of the unitholders of the scheme; and
        (b) is consistent with the investment objectives, strategies and policy of the scheme or subscheme; and
        (c) could be effected without breaching chapter 6 (Investment and borrowing—QFC qualified investor schemes) or chapter 7 (Investment and borrowing—QFC retail schemes);

        the property may be transferred to the scheme or subscheme, and units may be issued in exchange for the property, as part of the relevant scheme without the approval of a special resolution.
        (6) To remove any doubt, relevant scheme has the meaning given by the Financial Services Regulations, article 94 (4).
        Derived from QFCRA RM/2010-05 (as from 1st January 2011)