New UAE Fund Regulation

On 24 July 2012, the UAE Security and Commodities Authority (SCA) issued its? investment funds regulation. The responsibility for the authorisation and supervision of investment funds has been transferred from the UAE Central Bank to SCA.

The regulation applies to the setting-up, management and distribution of domestic investment funds (excluding those set-up in free zones such as the DIFC).

The regulation further applies to the promotion and offering of foreign funds in the UAE. Foreign investment funds, Whether offered publicly or privately placed, need to be authorised by SCA and can only be offered by entities licensed by SCA or the UAE Central Bank. An exception is foreseen in case of private placement by local representative offices of fund companies, provided the minimum subscription amounts to 10 million AED.

Local placement agents have to provide a number of representations to the investors with regards to the foreign investment funds they distribute. The regulation shall become effective only upon publishing in the official gazette.