| Article (89) |
A- |
The purpose of the Mutual Fund is to invest the money of the Fund in securities through a professional management on the basis of distributing investment risks. The Fund shall not carry out other activities that are inconsistent with the activities of investing in securities. |
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B- |
The capital of the Mutual Fund shall be composed of the total nominal values of the Fund’s investment units and in accordance with its specified Articles of Association and prospectus, the Fund’s capital may be organized on the basis of a variable capital (open-end) or on the basis of a fixed capital (closed-end). |
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| Article (90) |
A- |
The Mutual Fund’s capital shall be divided into investment units with equal entitlements. Owners of such investment units shall be liable in the amount of their shares in the Fund’s capital. |
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B- |
The investment units shall be in cash and payments for the subscribed in units shall be in one installment upon subscription |
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C- |
The Mutual Fund shall not sell its investment units prior to registering it with the Commission in condition it fulfills the terms and requirements stated in instructions issued for this purpose.
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| Article (91) |
A- |
It shall be prohibited for any person to pool money from others for the purpose of investing in securities as one unit and the investment management of such money, unless through an organized Mutual Fund licensed with the Commission or a Mutual Investment Company licensed as such in accordance with the provisions of this Law and the regulations, instructions and decisions issued pursuant thereto. |
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B- |
The following shall be exempted from the provisions of Paragraph (A) of this Article: |
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1. |
Licensed banks with respect to their banking activities in accordance with legislations in force. |
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2. |
Licensed insurance companies with respect to their insurance activities, in accordance with legislations in force. |
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| Article (92) |
A- |
Mutual Funds may be established by licensed companies to undertake the activities of Investment Management. |
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B- |
The term of the applicant to establish a Mutual Fund is as follows: |
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1. |
To have obtained a license from the Board to undertake the activity of an Investment Manager for a period of no less than two years. |
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2. |
To submit final audited financial statements for each year of the two years preceding submitting the establishment application within the specified period stated in Subparagraph (1). |
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C- |
The Investment Manager shall be the manager of the Mutual Fund. |
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D- |
The Board my exempt the applicant to establish a Mutual Fund from the duration term stated in Subparagraph (1) from Paragraph (B) of this Article, if the applicant is a licensed bank or a financial services company subsidiary to the bank. |
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| Article (93) |
A- |
Every registered Mutual Fund at the Commission shall have a legal personality and an independent financial entity separate from that of the bank or the company that established it and of the investment unit holders. |
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B- |
The Mutual Fund Manager shall represent the Fund on behalf of others, in court and in signature. |
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| Article (94) |
A- |
If so stipulated by its Articles of Association, a Closed-end Fund may transform into an Open-end Fund, subject to making the required adjustments according to the provisions of this Law and the regulations, instructions, and decisions issued pursuant thereto. |
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B- |
An Open-end Fund shall not cease to issue investment units or redeem them in dates specified in its Articles of Association unless approved by the Board. |
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| Article (95) |
A- |
An Open-end Fund shall have the authority to issue and to redeem its investment units. The Fund’s investment units shall not be transferable except through inheritance or succession. |
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B- |
The price at which an Open-end Fund issues or redeems its investment units shall be based on the net asset value of the Openend Fund, in accordance with the principles prescribed in the instructions issued by the Board for this purpose. |
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| Article (96) |
The Investment Manager or the Investment Trustee or the Certified Auditor of a Mutual Fund, or the Subsidiary or Affiliate or Owned Companies thereof shall not have any direct or indirect beneficial investment interest in the Fund. |
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| Article (97) |
A- |
The Board may approve to organize any other form of Mutual Funds in securities. |
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B- |
Matters relevant to organizing any Mutual Funds including its establishment, its registration requirements with the Commission, its capital, its prospectus data, its Articles of Association, its conditions to offer, issue and subscribe in investment units, the 63 rights of its issued investment units, its trading and redemption procedures, its charged fees and commissions, its bases to invest his funds, to appoint officials, to administer its businesses, its service providers, removal of any of them, reasons for termination, merging Funds, liquidation procedures and matters related to its business according to a regulation issued for this purpose. |
| Article (98) |
A- |
Any Mutual Investment Company shall not be registered with the General Companies Controller without having the Commission’s initial and prior to written approval. |
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B- |
The Mutual Investment Company shall not make any amendment to its establishment contract or Articles of Association without having the Commission’s prior to written approval. |
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C- |
Payments for the shares of the Mutual Investment Company shall be in cash in one installment upon subscription in shares. |
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| Article (99) |
The Investment Manager or the Investment Trustee or the Certified Auditor of a Mutual Investment Company or Subsidiary or Affiliate or Owned Companies thereof or members of the Board of Directors or the General Manager or any employee, shall not have any direct or indirect beneficial investment interest in any Mutual Investment Company. |
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| Article (100) |
The issuance, redemption or trading procedures for the shares of a Mutual Investment Company, its capital, its methods of coverage and data that must be available in its establishment contract, its Articles of Association and its prospectus, and how to manage it and administer its investments and the required conditions in its Board of Directors administration and its General Manager and the appointment of an Investment Manager, Investment Trustee and service providers, the removal of any one of them and matters relevant to organizing its businesses shall be specified according to instructions issued by the Board for this purpose. |
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| Article (101) |
The principles and criteria for diversification of the investments of Mutual Funds and a Mutual Investment Company and the acceptable types of dealings therein shall be specified in instructions issued by the Board for this purpose. |
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| Article (102) |
A Certified Auditor shall be contracted with and his duties shall be specified to audit the accounts of a Mutual Fund and of a Mutual Investment Company. |
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| Article (103) |
The Investment Trustee shall assess and follow up the investments of the Mutual Fund and of the Mutual Investment Company so as to ensure their conformity with the investment policy stated in its Articles of Association and in the provisions of this Law and the regulations, instructions and 65 decisions issued pursuant thereto and shall notify the Commission of any violations concerning this. |
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| Article (104) |
The Investment Manager and the Investment Trustee shall be held liable for any mistake or failing to exercise due care or as a result of negligence in their duties and shall bear legal consequences for damages affecting the holders of investment units or shares. |
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