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The United Arab Emirates Securities and Commodities Authority (“SCA”) announced that investment funds domiciled outside Mainland UAE (“Foreign Fund”) can now be registered with SCA and marketed in the UAE on a private placement basis. In order to market a Foreign Fund to professional clients in the UAE, fund managers must pay the initial registration fee of AED 12,000, which consists of the non-refundable examination fee of AED 2,000 and AED 10,000 for issuing the approval (which was reduced from AED 35,000 and non-refundable even if the registration was rejected). Fund managers must also appoint a locally licensed marketer/promoter. The approval process will take roughly five (5) working days.
The registration is valid up until 31 December in the year the registration is issued and the renewal fee is reduced from AED 7,500 to AED 5,000. Furthermore, state owned entities are exempt from the applicable rules regarding the marketing of Foreign Funds in the UAE. SCA also noted its plans to put in place a requirement for the SCA registered foreign funds to have a minimum subscription amount of AED 500,000 for each professional investor investing into the fund. This regulation is still not set in stone yet.
SCA reminds the public that foreign funds are not allowed to extend their offer to retail investors however it is foreseen that foreign funds using Abu Dhabi Global Market (“ADGM”), Dubai International Financial Centre (“DIFC”) or Mainland UAE feeder funds to market to Mainland UAE retail investors will be allowed, on the basis that that DIFC or ADGM feeder funds comply with the Passporting Regime and the Mainland UAE feeder funds with SCAs Fund Regulations.
The UAE SCA monitors and regulates the financial market including three (3) stock exchanges: the Dubai Financial Market (“DFM”),the Abu Dhabi Securities Exchange (“ADX”)and the Dubai Gold and Commodities Exchange (“DGCX”). Moreover, SCA oversees all securities related activity inthe country except activities in the financial free zones that are supervised by the Dubai Financial Services Authority (“DFSA”) in DIFC and the Financial Services Regulatory Authority (“FSRA”) in ADGM.
