COLL 12.1.4 Permissible investments—QFC retail property funds

(1) At least 75% of the gross asset value of a QFC retail property fund must at all times be invested in at least 3 immovables that generate recurrent rental income.

Guidance

The Regulatory Authority expects the choice of immovables to be appropriate for, and consistent with, fund diversification and risk-spreading.
(2) Subject to subrule (3), the remaining 25% of the gross asset value of the fund may be invested (for purposes of liquidity and diversification) in a combination of the following investments:
(a) immovables (whether or not the immovables generate recurrent rental income);
(b) property-related assets;
(c) units in other property funds;
(d) cash;
(e) government or public securities.
(3) For subrule (2):
(a) no more than 5% of the remaining 25% may be invested in a combination of property-related assets and units in other property funds (but only if the investment or investments do not result in a fundamental change in the fund's overall risk profile); and
(b) no more than 5% of the remaining 25% may be invested in assets, units, government or public securities issued by a single issuer.
(4) Subrules (1) to (3) do not apply:
(a) during the initial 6-month period of the fund's operation;
(b) during any period specified for the purpose in the fund's prospectus; or
(c) during any period approved for the purpose by special resolution of the unitholders.
(5) If a REIT invests in property-related assets, units in other property funds, government or public securities under subrule (2), the assets, units or securities must be listed and traded on a recognised exchange (within the meaning of the Banking Business Prudential Rules 2014).

Note In the Banking Business Prudential Rules 2014 recognised exchange means:
(a) one of over 100 exchanges listed in Schedule 1 of those rules (including the major exchanges in the Gulf region); or
(b) an exchange listed in a notice published by the Regulatory Authority on an approved website.
Inserted by QFCRA RM/2016-1 (as from 19th September 2016)