Consultation paper 23 - Listed Funds, PE, VC, REIT framework...(a) introduce definitions of a...

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Astana Financial Services Authority Consultation Paper No. 23 of 2019 2 May 2019 Proposed revisions to AIFC investment funds framework

Transcript of Consultation paper 23 - Listed Funds, PE, VC, REIT framework...(a) introduce definitions of a...

Page 1: Consultation paper 23 - Listed Funds, PE, VC, REIT framework...(a) introduce definitions of a Venture Capital Fund and a Private Equity Fund; (b) limit the types of Funds that may

AstanaFinancialServicesAuthority

ConsultationPaperNo.23of2019

2May2019

ProposedrevisionstoAIFCinvestmentfundsframework

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1. The Astana Financial Services Authority (AFSA) has issued this Consultation Paper toinvite public comments on the proposed amendments intended to be made to theframeworkforinvestmentfundsintheAstanaInternationalFinancialCentre(AIFC).TheproposedrulesareinfullcompliancewiththeAIFClegalandregulatoryframework.TheproposedamendmentsaresetoutintheAnnexurestothisPaper.

2. The proposals in this Consultation Paper will be of interest to Fund Managers,individuals,financialorganizationsandinvestorswhoareinterestedindoingbusinessintheAIFC.

3. Allcommentsshouldbeinwritingandsenttotheaddressoremailspecifiedbelow. Ifsendingyourcommentsbyemail,pleaseuse“ConsultationPaperNo23”inthesubjectline.Youmay, ifrelevant, identifytheorganisationyourepresentwhenprovidingyourcomments. The AFSA reserves the right to publish, including on its website, anycommentsyouprovide,unlessyouexpressly requestotherwise.CommentssupportedbyreasoningandevidencewillbegivenmoreweightbytheAFSA.

4. Thedeadlineforprovidingcommentsontheproposalsis1June2019.Oncewereceiveyourcomments,weshallconsiderifanyrefinementsarerequiredtotheproposals.

5. Commentstobeaddressedbypost:

PolicyandStrategyDivisionAstanaFinancialServicesAuthority(AFSA)55/17MangilikElavenue,blockC3.2,Nur-Sultan,Kazakhstanoremailedto:[email protected]:+77172613626

6. TheremainderofthisConsultationPapercontainsthefollowing:

(a) backgroundtotheproposals;(b) thelistofkeyelementsoftheamendedrules;(c) Annex1:TheamendmentstotheAIFCFinancialServicesFramework

Regulations.(d) Annex2:TheamendmentstotheAIFCGlossary.(e) Annex3:TheamendmentstotheAIFCMarketRules.(f) Annex4:TheamendmentstotheAIFCCollectiveInvestmentSchemeRules.(g) Annex5:TheamendmentstotheAIFCAuthorisedMarketInstitutionRules.(h) Annex6:TheamendmentstotheAIFCGeneralRules.(i) Annex7:TheamendmentstotheAIFCConductofBusinessRules.(j) Annex8:TheamendmentstotheAIFCIslamicFinanceRules.

Introduction

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The AFSA intends to enhance the legislative framework governing investment funds in the AIFC. This legislation comprises regulations and rules covering, inter alia, the creation, registration, management, operation, modification, transfer and termination processes of different types, forms and uses of investment fund vehicles in the AIFC. The AFSA's objectives are to ensure that this framework for investment funds:

(a) best meets the needs of the AIFC and the regions it serves;

(b) does not pose risks to the regulatory objectives of the AFSA; and

(c) is developed in line with the investment funds legislation of relevant leading jurisdictions.

The continued development of the investment funds available in the AIFC, and the introduction of new types of investment fund vehicles to the AIFC, is a key policy focus of the AFSA. The AFSA has considered the views of AIFC participants and other key stakeholders in determining what changes to make to the investment funds framework at this stage in the AIFC's evolution. Consequently, it is now consulting on the following changes to the investment funds framework:

(a) the introduction of a Listed Funds regime;

(b) the introduction of Venture Capital and Private Equity Funds regimes; and

(c) the introduction of a Real Estate Investment Trust regime.

In addition to the foregoing, the AFSA expects to consult on the development of existing investment funds regimes shortly.

Background

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1. LISTED FUNDS

1.1 The AFSA proposes to develop a Listed Funds regime which will permit Funds to be admitted to the Official List and their Units to be admitted to trading on an Authorised Investment Exchange. The Listed Funds regime will initially apply to Domestic Funds or Foreign Funds managed by Domestic Fund Managers. This regime is expected to be expanded to include Domestic Funds managed by Foreign Fund Managers shortly. The Listed Funds regime will also apply to Overseas Listed Funds to which the AIFC Collective Investment Scheme Rules (CIS) do not apply, provided that the Foreign Fund Managers of such Funds are formally "recognised" by the AFSA.

1.2 The AFSA is now consulting on proposed amendments to the CIS, the AIFC Market Rules (MAR), the AIFC Financial Services Framework Regulations (FSFR) and the AIFC Glossary (GLO) to include substantive rules in relation to Listed Funds. In addition, the AFSA is consulting on proposed consequential amendments to the AIFC Authorised Market Institution Rules (AMI), the AIFC General Rules (GEN), the AIFC Conduct of Business Rules (COBS) and the AIFC Islamic Finance Rules (IFR) which will be required to support the proposed Listed Funds regime. Such amendments include:

(a) adding a new standalone rule in MAR in relation to Listed Funds;

(b) incorporating the existing Market Abuse and Market Disclosure rules in MAR into the new Listed Funds regime;

(c) expanding the content requirements for Offering Materials set out in the CIS so that they apply to Listed Funds; and

(d) expanding certain provisions to include Listed Funds and Units of a Listed Fund.

Question 1: Do you have any concerns regarding the introduction of a Listed Funds regime in the AIFC?

Question 2: Do you have any comments on the proposed legislation?

2. VENTURE CAPITAL AND PRIVATE EQUITY FUNDS

2.1 In order to best meet the needs of the AIFC, the AFSA proposes that separate categories for Venture Capital Funds and Private Equity Funds should be established as Specialist Funds in the CIS.

2.2 For clear rules to be established in relation to Venture Capital Funds and Private Equity Funds, amendments will need to be made to the CIS and GLO to:

KEYELEMENTSOFTHEPROPOSEDRULES

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(a) introduce definitions of a Venture Capital Fund and a Private Equity Fund;

(b) limit the types of Funds that may hold themselves out as being a Venture Capital Fund or a Private Equity Fund; and

(c) expand the content requirements for Offering Materials set out in the CIS to include a description of the safekeeping arrangements (which will be applicable to all Funds).

Question 3: Do you have any concerns regarding the introduction of Venture Capital and Private Equity Funds regimes in the AIFC?

Question 4: Do you have any comments on the proposed legislation?

3. REAL ESTATE INVESTMENT TRUSTS

3.1 In order to best meet the needs of the AIFC, the AFSA proposes that a separate category for Real Estate Investment Trusts should be established as a Specialist Fund in the CIS.

3.2 The AFSA is now consulting on amendments to the CIS and GLO introducing provisions:

(a) establishing the qualifying criteria that a Fund must meet in order to define itself as a Real Estate Investment Trust;

(b) clarifying which chapters of the CIS will apply to Real Estate Investment Trusts;

(c) requiring the Fund Manager of a Real Estate Investment Trust to appoint a Property Manager to provide Real Estate Management and Servicing Activities;

(d) requiring the Fund Manager of a Real Estate Investment Trust to differentiate between revaluation surplus and capital gains on disposal of Real Property and to determine whether either shall be considered to be income for the purpose of distribution to Unitholders;

(e) allowing Fund Managers of Real Estate Investment Trusts to establish and own special purpose vehicles for the purpose of holding Real Property, provided that the Real Estate Investment Trust legally and beneficially owns not less than 60% of the shares, and is entitled to exercise directly or indirectly at least 60% of the voting rights, of the special purpose vehicle;

(f) ensuring that a Real Estate Investment Trust that earns profits from Real Property held in special purpose vehicles will distribute all such profits to the Real Estate Investment Trust;

(g) allowing a Real Estate Investment Trust to borrow only for investment purposes or to meet its short term working capital, provided aggregate

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borrowings are limited to a maximum of 60% of the Real Estate Investment Trust's net asset value;

(h) expanding the content requirements for Offering Materials set out in the CIS to include a description of how a Real Estate Investment Trust intends to acquire and hold its investments in Real Properties;

(i) allowing non-cash consideration for the purchase of Units in Real Estate Investment Trusts that are Exempt Funds; and

(j) limiting the percentage of a Real Estate Investment Trust's assets that can be deployed for the purposes of property refurbishment, retrofitting and renovation.

Question 5: Do you have any concerns regarding the introduction of a Real Estate Investment Trust regime in the AIFC?

Question 6: Do you have any comments on the proposed legislation?

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Annex 1 to the Consultation Paper No. 23

Inthisdocument,theunderliningindicatesanewtextandthestrikingthroughindicatesdeletedtextintheproposedamendments

----------------------------------------------------------------------------------------------

FINANCIAL SERVICES FRAMEWORK REGULATIONS

AIFC REGULATIONS No. 18 OF 2017

CONSOLIDATED VERSION ([***] 2019)

Astana, Kazakhstan

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Part6.CAPITALMARKETS

Chapter1.AuthorisedMarketInstitutions…

54.EnforcementofBusinessRules

(1) IfaPersonwhoisunderanobligationtocomplywithorenforceanyofanAuthorisedMarketInstitution’sBusinessRulesfailstomeetthatobligation,anapplicationtotheAIFCCourtmaybemadeby:

(a) theAFSA;or

(b) theAuthorisedMarketInstitution;or

(c) theoperatorofaclearingandsettlementfacilitywithwhichtheAuthorisedMarketInstitutionhasclearingandsettlementarrangements;or

(d) aPersonaggrievedbythefailure.

(2) AftergivinganopportunitytobeheardtotheapplicantandthePersonagainstwhomtheorderissought,theAIFCCourtmaymakeordersgivingdirectionsto:

(a) thePersonagainstwhomtheorderissought;or

(b) ifthatPersonisaBodyCorporate,thedirectorsoftheBodyCorporate;or

(c) ifthatPersonisaListedFund,theFundManageroftheListedFund,

aboutcompliancewith,orenforcementof,theBusinessRules.

(3) Forthepurposesofthissection,ifaBodyCorporateoraFundManagerfailstocomplywithorenforceprovisionsoftheBusinessRulesofanAuthorisedMarketInstitution,aPersonwhoholdsSecuritiesofthatBodyCorporateorUnitsofthatListedFund,asapplicable,thatareabletobetradedonamarketoperatedbytheAuthorisedMarketInstitutionistakentobeaPersonaggrievedbythefailure.

(4) TheremaybeothercircumstancesinwhichaPersonmaybeaggrievedbyafailureforthepurposesofthissection.

58.AFSApowertogivedirectionstoanAuthorisedMarketInstitution

Withoutlimitingtheapplicationofsection95(ExerciseofsupervisorypowersbytheAFSA),theAFSAmaydirectanAuthorisedMarketInstitutionto:

(a) closethemarketorfacilitiesoperatedbyanAuthorisedMarketInstitutioninaparticularmannerorforaspecifiedperiod;or

(b) suspendtransactionsonthemarketorthroughthefacilitiesoperatedbytheAuthorisedMarketInstitution;or

(c) suspendtransactionsinSecurities,UnitsofaListedFundorPrivateE-currenciesconductedonthemarketorthroughthefacilitiesoperatedbytheAuthorisedMarketInstitution;or

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(d) prohibittradinginSecurities,UnitsofaListedFundorPrivateE-currenciesconductedonthemarketorthroughthefacilitiesoperatedbytheAuthorisedMarketInstitution;or

(e) deferforaspecifiedperiodthecompletiondateoftransactionsconductedonthemarketorthroughthefacilitiesoperatedbytheAuthorisedMarketInstitution;or

(f) prohibitaspecifiedPersonfromundertakinganytransactionsonthefacilitiesoperatedbytheAuthorisedMarketInstitution;or

(g) doanyactorthing,ornotdoanyactorthing,inordertoensureanorderlymarket,orreducerisktotheAFSA’sobjectives.

Chapter2.OfferofSecurities…

61.DefinitionofanOfferofSecurities

AnOfferofSecuritiesmeansacommunicationtoanyPersoninanyformorbyanymeans,presentinginformationonthetermsoftheOfferandtheSecuritiesoffered,soastoenableaninvestortodecidewhetherornottobuyorsubscribetothoseSecuritiesbutexcluding:

(a) anycommunicationinconnectionwiththetradingofSecuritiesadmittedtotradingonanAuthorisedInvestmentExchange;or

(b) anycommunicationmadeforthepurposesofcomplyingwiththeon-goingreportingrequirementsoftheAFSAoranAuthorisedMarketInstitution;or

(c) anyothercommunicationprescribedintheRulesbytheAFSA.

Guidance:OffersofUnitsofaListedFund

Fortheavoidanceofdoubt,thisChapter2doesnotapplytotheOfferofUnitsofaListedFund.WhileaUnitofaListedFundis,ingeneralterms,atypeofsecurity,itisnotaSecurityforthepurposesoftheFrameworkRegulations(asdefinedintheGlossary(GLO))oranyotherAIFCFinancialServicesRegulationsorRulestowhichGLOapplies.RulesinrelationtotheOfferofUnitsofaListedFundaresetout,interalia,intheAIFCCollectiveInvestmentSchemeRules.FundManagersshouldalsorefertotheapplicableBusinessRules.

Chapter3.Admissiontotrading62.Prohibition–Admissiontotrading

APersonmaynothaveSecuritiesorUnitsofaListedFundadmittedtotradingonanAuthorisedInvestmentExchangeunless:

(a) suchSecuritiesInvestmentshavebeenadmittedtotheOfficialListmaintainedbytheAuthorisedInvestmentExchange;and

(b) inrelationtoSecurities,aProspectusinrelationtotherelevantSecuritiescontainingtheinformationprescribedforthispurposebytheAFSAhasbeenapprovedbytheAuthorisedInvestmentExchange.;and

(c) inrelationtoUnitsinListedFundsotherthanOverseasListedFunds:

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(i) theFundisaNon-ExemptFundundertheAIFCCollectiveInvestmentSchemeRules; and

(ii) thereareOfferingMaterialsinrelationtotherelevantUnitsandtheAuthorisedInvestmentExchangehassatisfieditselfthatsuchOfferingMaterialssatisfiestherequirementsinAIFCCollectiveInvestmentSchemeRules.

Guidance:UnitsofaListedFund

Fortheavoidanceofdoubt,aProspectusisnotrequiredinrelationtoUnitsofaListedFund.TherequirementsinrelationtoOfferingMaterials,whichapplytoUnitsofaListedFund(otherthanOverseasListedFunds),aresetoutintheCIS.TherequirementsinrelationtoOfferingMaterialsforOverseasListedFundswillberegulatedaccordingtotheBusinessRules.

Chapter4.Listing64.MaintaininganOfficialListofSecurities

(1) Subjectto(3),anOfficialListofSecuritiesforanAuthorisedInvestmentExchangemaybemaintainedbyeithertherelevantAuthorisedInvestmentExchangeortheAFSA.

(2) AnAuthorisedInvestmentExchangemust,whenmaintaininganOfficialListofSecurities,complywiththerelevantrequirementsintheseRegulationsandtheRulesmadethereunder.

(3) TheAFSAmay,atanytime,transfertheresponsibilityformaintaininganOfficialListofSecuritieshithertomaintainedbyanAuthorisedInvestmentExchangetotheAFSAwhereitconsidersitnecessaryordesirabletodoso.

(4) AnAuthorisedInvestmentExchangemustnotpermittradingofSecuritiesorUnitsofaListedFundonitsfacilitiesunlessthoseSecuritiessuchInvestmentsareadmittedto,andnotsuspendedfrom,anOfficialListofSecuritiesmaintainedbytheAuthorisedInvestmentExchangeortheAFSAexceptwhereotherwiseprescribedintheRules.

65.ListingRulesRequirements

(1) AnAuthorisedInvestmentExchangemust,whenmaintaininganOfficialListofSecurities,establishandmaintainListingRulesaspartofitsBusinessRules.

(2) TheListingRulesofanAuthorisedInvestmentExchangemustcontainsuchprovisionsasareprescribedintheRules.

(3) WheretheAFSAmaintainsanOfficialListofSecurities,itwill,byRules,prescribetherelevantListingRules.

66.AdmissionofSecuritiesorUnitsinaListedFundtoanOfficialListofSecurities

(1) AnAuthorisedInvestmentExchangeortheAFSAmaygrantadmissionofSecuritiesorUnitsofaListedFundtoanOfficialListofSecuritiesmaintainedbyitonlywhereitissatisfiedthatsuchadmissionisinaccordancewiththerelevantListingRules.

(2) WhereaPersonappliestohaveSecuritiesorUnitsofaListedFundadmittedtoanOfficialListofSecuritiesmaintainedbyanAuthorisedInvestmentExchangeortheAFSA,theAuthorisedInvestmentExchangeortheAFSA,asisrelevant,mustnotifytheapplicantin

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writingofitsdecisioninrelationtotheapplicationforadmissionofSecuritiessuchInvestmentstotheOfficialListofSecurities.

(3) WhereaPersonhasanySecuritiesorUnitsinListedFundsincludedonanOfficialListofSecurities,suchSecuritiesInvestmentsmustbeadmittedtotradingonanAuthorisedInvestmentExchangeassoonaspossible.

(4) WhereanySecuritiesorUnitsinListedFundsincludedinanOfficialListofSecuritiesarenotadmittedtotradinginaccordancewiththerequirementinsection66(3),suchSecuritiesInvestmentsmustberemovedfromtheOfficialListofSecurities.

(5) TheAFSAmay,byRules,prescribeanycircumstancesinwhichSecuritiesorUnitsofaListedFundadmittedtoanOfficialListofSecuritiesneednotcomplywiththerequirementinsection66(3).

67.AFSAobjectiontoadmissionofSecuritiesorUnitsofaListedFundtoanOfficialListofSecurities

(1) WhereanAuthorisedInvestmentExchangemaintainsanOfficialListofSecurities,theAFSAmay:

(a) objecttotheadmissionofSecuritiesorUnitsofaListedFundtosuchanOfficialListofSecurities;or

(b) imposeconditionsorrestrictionsinrespectoftheadmissionofSecuritiesorUnitsofaListedFundtosuchanOfficialListofSecurities,orvaryorwithdrawsuchconditionsorrestrictions,

inthecircumstancesspecifiedinsection67(3).

(2) WheretheAFSAmaintainsanOfficialListofSecurities,theAFSAmay:

(a) refuseanapplicationforadmissionofSecuritiesorUnitsofaListedFundtosuchanOfficialListofSecurities;or

(b) imposeconditionsorrestrictions,inrespectoftheadmissionofSecuritiesorUnitsofaListedFundtosuchanOfficialListofSecurities,orvaryorwithdrawsuchconditionsorrestrictions,

inthecircumstancesspecifiedinsection67(3).

(3) TheAFSAmayexerciseitspowersundersection67(1)or67(2)where:

(a) theAFSAreasonablyconsidersthat:

(i) grantingtheSecuritiesorUnitsofaListedFundadmissiontoanOfficialListofSecuritieswouldbedetrimentaltotheinterestsofPersonsdealingintherelevantSecuritiesorUnitsofaListedFundusingthefacilitiesofanAuthorisedInvestmentExchangeorotherwise;or

(ii) anyrequirementsintheListingRulesasareapplicablehavenotbeenorwillnotbecompliedwith;or

(iii) anyrequirementimposedbytheAFSAhasnotbeenorwillnotbecompliedwith;or

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(iv) theIssueroftheSecuritiesorUnitsofaListedFundhasfailedorwillfailtocomplywithanyobligationsapplyingtoitincludingthoserelatingtohavingitsSecuritiesorUnitsofaListedFundadmittedtoanOfficialListofSecuritiesorlistedortradedinanotherjurisdiction;or

(b) theAFSAotherwiseconsidersitnecessaryordesirabletodoso.

(4) WheretheAFSAobjectstotheadmissionofSecuritiesorUnitsofaListedFundtoanOfficialListofSecuritiespursuanttosection67(3)(a),suchSecuritiesInvestmentsmustnotbeadmittedbyanAuthorisedInvestmentExchangetoitsOfficialListofSecurities.

(5) WheretheAFSAimposesconditionsorrestrictionsontheadmissionofSecuritiesorUnitsofaListedFundtoanOfficialListofSecuritiespursuanttosection67(3)(b),suchSecuritiesInvestmentsmustnotbeadmittedbyanAuthorisedInvestmentExchangetoitsOfficialListofSecuritiesunlessthereiscompliancewiththoseconditionsandrestrictions.

68.SuspendinganddelistingSecuritiesorUnitsofaListedFundfromanOfficialListofSecurities

(1) TheAFSAoranAuthorisedInvestmentExchangemay,inaccordancewithitsListingRules,suspendordelistSecuritiesorUnitsofaListedFundfromitsOfficialListofSecuritieswithimmediateeffectorfromsuchdateandtimeasmaybespecifiedwhereitissatisfiedthattherearecircumstancesthatwarrantsuchactionoritisintheinterestsoftheAIFC.

(2) TheAFSAmaydirectanAuthorisedInvestmentExchangetosuspendordelistSecuritiesorUnitsofaListedFundfromanOfficialListofSecuritieswithimmediateeffectorfromsuchdateandtimeasmaybespecifiedifitissatisfiedtherearecircumstancesthatwarrantsuchactionoritisintheinterestsoftheAIFC.

(3) TheAFSAmaywithdrawadirectionmadeundersection68(2)atanytime.

(4) SecuritiesorUnitsofaListedFundthataresuspendedfromanOfficialListofSecuritiesremainadmittedtoanOfficialListofSecuritiesforthepurposesofthisPart.

(5) TheAFSAmay,byRules,prescribeanyadditionalrequirementsorproceduresrelatingtothedelistingorsuspensionofSecuritiesorUnitsofaListedFundfrom,orrestorationofSecuritiesorUnitsofaListedFundto,anOfficialListofSecurities.

Chapter7.ObligationsofReportingEntities81.DefinitionofReportingEntity

APersonisaReportingEntityifthePerson:

(a) hasSecuritiesorUnitsadmittedtoanOfficialListofSecurities;

(b) istheFundManagerofaListedFund;or

(c) isdeclaredbytheAFSAtobeaReportingEntity.

82.Governance

(1) AReportingEntitymusthaveacorporategovernanceframeworkwhichisadequatetopromoteprudentandsoundmanagementoftheReportingEntityinthelong-terminterestoftheReportingEntityanditsshareholders.

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(2) Forthepurposesoftherequirementinsection82(1),theAFSAmay,byRules,prescribe:

(a) corporategovernanceprinciplesandstandardsthatapplytoaReportingEntity,includinganyrequirementsapplicabletoitsboardofdirectorsandindividualmembers,controllers,employeesoranyotherPersonasappropriate;

(b) requirementsrelatingtofairtreatmentofshareholders;and

(c) provisionstoaddressconflictsofinterests.

(3) Therequirementsinsection82donotapplytoListedFundsorFundManagersofListedFunds.TheAFSAmay,byRules,prescribeanycircumstancesinwhichsuchrequirementsdonotapplytocertainotherReportingEntities.

85.Sponsorsandcomplianceadvisers

(1) TheAFSAmay,whereitconsidersitappropriatetodoso,requirethataReportingEntityoraPersonthatintendstohaveSecuritiesorUnitsofaListedFundadmittedtoanOfficialListofSecuritiesoradmittedtotradingonanAuthorisedInvestmentExchangeappointsanAuthorisedFirmorAccreditedFirmtoactasasponsororcomplianceadviser.

Chapter9.Takeovers88.TakeoverRules

(1) TheAFSAmayprescribebyRules(“theTakeoverRules”):

(a) theproceduresforandobligationsofPersonsinrespectofaTakeoverofaReportingEntityanIssuerwhoseSecuritiesareadmittedtoanOfficialListwithaviewtoensuring:

(i) thatwhereaTakeovertakesplace,itdoessoinanefficient,competitive,fairandinformedmarket;

(ii) thatshareholdersaretreatedfairlyandshareholdersofthesameclassaretreatedthesame;and

(iii) thataTakeoverisconductedinanorderlyframework;

(b) principlestobeobservedbyaPersoninvolvedinaTakeover(“theTakeoverPrinciples”),relatingto,butnotlimitedto:

(i) treatmentofshareholdersandofclassesofshareholdersinaTakeover;

(ii) adequacyoftimeandofinformationprovidedtoshareholderstoenableproperconsiderationofaTakeoverbid;

(iii) avoidanceofthecreationoffalsemarkets;and

(iv) avoidanceofoppressionofminorities.

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(2) APersonwhoisinvolvedinaTakeoverofaReportingEntityanIssuerwhoseSecuritiesareadmittedtoanOfficialListmustcomplywithandobservethespiritandthewordingoftheTakeoverPrinciples.

(3) Therequirementsofsection88donotapplytoListedFunds.

Chapter10.Recognition…

91.RecognisedNon-AIFCMemberandRecognisedNon-AIFCFundManager

(1) APersonlocatedinajurisdictionotherthantheAIFCmayapplytotheAFSAforanorderdeclaringittobeaRecognisedNon-AIFCMember.

(2) Anapplicationundersubsection(1)mustbemadeinsuchmannerastheAFSAmaybyRulesrequire.

(3) TheAFSAmaymakeanorderreferredtoinsubsection(1)if,theapplicantsatisfiestheAFSAthatthefollowingrequirementsaremet:

(a) theapplicantislicensedorotherwiseauthorisedtotradeonorusethefacilitiesofanexchangeorclearinghouseinajurisdictionacceptabletotheAFSA;

(b) theapplicantisregulatedinrespectoftradinginsuchjurisdictionbyaregulatortoastandardsatisfactorytotheAFSA;

(c) thelawandpracticeunderwhichtheapplicantislicensedorotherwiseauthorisedisbroadlyequivalenttotheAFSA’sregulatoryregimeasitappliestoaMember;

(d) whenusingthefacilitiesofanAuthorisedInvestmentExchangeorAuthorisedClearingHouse,theapplicantdoesnotexceedthescopeoftheactivitiesitisauthorisedtocarryonbythoseresponsibleforthesupervisionoftheapplicantinthecountryorterritoryinwhichtheapplicant'sheadofficeissituated;

(e) theapplicanthasagreedtocooperatewiththeAFSAandsubjectitselftosuchpartsofthelegalandregulatoryframeworkadministeredbytheAFSAastheAFSAmayrequire.

(4) TheAFSAwillonlymakeanorderreferredtoinsubsection(1)ifadequatearrangementsexist,orwillexist,forco-operationbetweentheAFSAandthoseresponsibleforthesupervisionoftheapplicantinthecountryorterritoryinwhichtheapplicantortheapplicant'sheadofficeissituated.

(5) TheAFSAmayprescribebyRulesongoingcriteriawhichaPersonmustsatisfyinordertocontinuetobeaRecognisedNon-AIFCMember.

(6) IfitisnecessaryordesirableinpursuitofitsRegulatoryObjectives,theAFSAmayrevokeorvaryanorderdeclaringaPersontobeaRecognisedNon-AIFCMemberinthecircumstancesandmannerprescribedintheRulesmadeforthepurposesofthissection.

(7) APersonlocatedinajurisdictionotherthantheAIFCmayapplytotheAFSAforanorderdeclaringittobeaRecognisedNon-AIFCFundManager.

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(8) Anapplicationundersubsection(7)mustbemadeinsuchmannerastheAFSAmaybyRulesrequire.

(9) TheAFSAmaymakeanorderreferredtoinsubsection(7)if,theapplicantsatisfiestheAFSAthatthefollowingrequirementsaremet:

(a) theapplicantislicensedorotherwiseauthorisedasafundmanagerinajurisdictionacceptabletotheAFSA;

(b) theapplicantisregulatedinrespectoffundmanagementactivitiesinsuchjurisdictionbyaregulatortoastandardsatisfactorytotheAFSA;

(c) thelawandpracticeunderwhichtheapplicantislicensedorotherwiseauthorisedisbroadlyequivalenttotheAFSA’sregulatoryregimeasitappliestoaDomesticFundManager;

(d) theapplicanthasagreedtocooperatewiththeAFSAandsubjectitselftosuchpartsofthelegalandregulatoryframeworkadministeredbytheAFSAastheAFSAmayrequire.

(10) TheAFSAwillonlymakeanorderreferredtoinsubsection(7)ifadequatearrangementsexist,orwillexist,forco-operationbetweentheAFSAandthoseresponsibleforthesupervisionoftheapplicantinthecountryorterritoryinwhichtheapplicantortheapplicant'sheadofficeissituated.

(11) TheAFSAmayprescribebyRulesongoingcriteriawhichaPersonmustsatisfyinordertocontinuetobeaRecognisedNon-AIFCFundManager.

(12) IfitisnecessaryordesirableinpursuitofitsRegulatoryObjectives,theAFSAmayrevokeorvaryanorderdeclaringaPersontobeaRecognisedNon-AIFCFundManagerinthecircumstancesandmannerprescribedintheRulesmadeforthepurposesofthissection.

Schedule3:MarketActivities…

2.OperatingaClearingHouse

(1) OperatingaClearingHousemeansoperatingafacilitywhereconfirmation,clearanceand/orsettlementoftransactionsinInvestmentsarecarriedoutinaccordancewiththenon-discretionaryrulesofthefacility,underwhichthePersonoperatingthefacility:

(a) becomesaCentralCounterparty(“CCP”);or

(b) providesabook-entrySecuritiesSettlementSystem(“SSS”),

regardlessofwhetherornotsuchaPersonalsooperatesaCentralSecuritiesDepository.

(2) In(1):

(a) “confirmation”meansverifyingthetermsofatransactionandcheckingthatInvestments,cashorboth,includingmargin,areavailabletosecuretheexposurearisingfromthetransaction;

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(b) “clearance”meanstransmittingandreconcilingorderspriortosettlementandestablishingsettlementpositions,includingthecalculationofnetpositionsarisingfromatransactionsinInvestments;and

(c) “settlement”meansthecompletionofatransactionwiththeaimofsecuringthetimelydischarge(whetherbyperformance,compromiseorotherwise)oftherightsandliabilitiesinrelationtothetransaction.

(3) In(1)(a),aPersonoperatesasaCCPwhereit:

(a) ensurestheperformanceofopencontractsrelatingtoInvestmentsmadeonafacilityfortradingSecuritiesorUnitsofaListedFund;and

(b) doessobyinterposingitselfbetweencounterpartiestosuchcontractsbybecomingeitherthebuyertoeveryseller,orthesellertoeverybuyer.

(4) In(1)(b),aPersonoperatesanSSSwhereitoperatesasystemwhichenablesInvestmentsheldinaccountstobetransferredandsettledbybookentryaccordingtoasetofpredeterminedmultilateralrules.

(5) ActingasaCentralSecuritiesDepositoryin(1)meansholdingInvestmentsinuncertificated(dematerialised)formtoenablebookentrytransferofsuchInvestmentsforthepurposesofclearingorsettlementoftransactionsonitsownfacilityandonanyothersimilarfacility.

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Annex 2 to the Consultation Paper No. 23

Inthisdocument,theunderliningindicatesanewtextandthestrikingthroughindicatesdeletedtextintheproposedamendments

----------------------------------------------------------------------------------------------

AIFCGLOSSARY

AIFCACTNO.FR0017OF2018

ConsolidatedVersion([***]2019)

----------------------------------------------------------------------------------------------

Approval Date: [[***] 2019] Commencement Date: [[***] 2019]

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CentralSecuritiesDepository

APersonwhoholdsSecuritiesorUnitsofaListedFundinuncertificated(dematerialised)formsoastoactasarepositoryofownershipentitlementstosuchSecuritiesInvestmentstoenablebookentrytransferofsuchSecuritiesInvestmentsforthepurposesofsettlementoftransactions.

Customer Unlessotherwiseindicated,acustomeris:

(a)Apersonwhere,inrelationtoabusinessrelationshipbetweenthepersonandaRelevantPerson,thereisafirmintentionorcommitmentbyeachpartytoenterintoacontractualrelationshiporwherethereisafirmcommitmentbyeachpartytoenterintoatransaction,inconnectionwithaproductorserviceprovidedbytheRelevantPerson;

(b)AclientofanAuthorisedFirm;

(c)Amember,prospectivemember,oranapplicantforadmissionofsecuritiesInvestmentstotradingonanAuthorisedMarketInstitution;or

(d)ApersonwithwhomaRelevantPersonisotherwiseestablishingorhasestablishedabusinessrelationship.

DirectElectronicAccess

Anyarrangement,suchastheuseoftheMember'stradingcode,throughwhichaMemberortheclientsofthatMemberareabletotransmitelectronicallyordersrelatingtoSecuritiesorUnitsofaListedFunddirectlytothefacilityprovidedbytheAuthorisedMarketInstitutionandincludesarrangementswhichinvolvetheusebyaPersonoftheinfrastructureoftheMemberorparticipantorclientoranyconnectingsystemprovidedbytheMemberorparticipantorclient,totransmittheordersandarrangementswheresuchaninfrastructureisnotusedbyaPerson.

Fund ACollectiveInvestmentSchemeisanarrangementwhichamountstoaFundformedundersection92ofFSFRandCISRules.

InsideInformation Informationofaprecisenaturewhich:

(a)hasnotbeenmadepublic;and

(b)relatesdirectlyorindirectly,tooneormoreIssuersorListedFundsortooneormoreSecuritiesorUnitsinaListedFund;and

(c)would,ifitweremadepublic,belikelytohaveasignificanteffectonthepricesofthoseSecuritiesorUnitsinaListedFundoronthepriceofrelatedderivativeSecuritiesorUnitsinaListedFund.

InsiderDealing (a)Theuse,byaPersonwhopossessesInsideinformation,ofthatinformationbyacquiringordisposingof,foritsownaccountorfortheaccountofathirdparty,directlyorindirectly,SecuritiesorUnitsinaListedFundtowhichthatinformationrelates;or

(b)theuseofInsideInformationbycancellingoramendinganorderconcerningaSecurityorUnitsinaListedFundtowhichtheinformationrelateswheretheorderwasplacedbeforethePersonconcernedpossessedtheInsideInformation;or

(c)theuseofrecommendationsorinducementstoengageinInsiderDealing,wherethePersonusingtherecommendationorinducementknowsoroughttoknowthatitisbasedonInsideInformation.

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ListedFund AFundwhoseUnitshavebeenadmittedtotheOfficialList.

MarketAbuse AsdefinedinMAR5.1and,inrelationtoListedFunds,asappliedpursuanttoMAR7:

(a)unlawfuldisclosureofInsideInformation;and

(b)engagingorattemptingtoengageinInsiderDealing;and

(c)recommendingthatanotherPersonengageinInsiderDealing;and

(d)inducinganotherPersontoengageinInsiderDealing;and

(e)engagingorattemptingtoengageinMarketManipulation;

butnot:

(a)disclosureofInsideInformationmadeinthecourseofaMarketSounding;and

(b)thebehaviourdescribedinMAR5.3.4to5.3.6(andinrelationtoListedFunds,asappliedpursuanttoMAR7);and

(c)acceptedmarketpracticesestablishedunderMAR5.4.4(andinrelationtoListedFunds,asappliedpursuanttoMAR7).

MarketManipulation

TheactivitiessetinMAR5.4.2andtheconductsetoutinMAR5.4.3and,inrelationtoListedFunds,asappliedpursuanttoMAR7.

MarketSounding TheconductsetoutinMAR5.5.1and,inrelationtoListedFunds,asappliedpursuanttoMAR7.

Offer (1)InrelationtoSecuritiesotherthanUnits,anOfferofSecurities.

(2) In relation to Units, an offer of Units. Offer of Units (and "Offered" and"Offering"andsimilartermsshallbeconstruedaccordingly).

OfferofUnits A communication to any Person in any form or by any means, presentinginformationonthetermsoftheofferandtheUnitoffered,soastoenableaninvestor to decide whether or not to buy or subscribe to those Units butexcluding:

(a)(inrelationtoListedFundsonly)anycommunicationinconnectionwiththetradingofUnitsadmittedtotradingonanAuthorisedInvestmentExchange;or

(b)(inrelationtoListedFundsonly)anycommunicationmadeforthepurposesof complying with the on-going reporting requirements of the AFSA or anAuthorisedMarketInstitution;or

(c)anyothercommunicationprescribedintheRulesbytheAFSA.

OfficialList TheOfficialListofSecuritiesandUnitsofListedFundsmaintainedbytheAFSAortherelevantAuthorisedInvestmentExchangepursuanttosection64oftheFrameworkRegulations.

Overseas ListedFund

AFund:

(a)thatisnotestablishedordomiciledintheAIFC;

(b)thatisnotregisteredorrequiredtoberegisteredunderCIS;

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(c)thatismanagedbyaRecognisedNon-AIFCFundManager;and

(d)whoseUnitshavebeenadmittedtotheOfficialList.

PrivateEquityFund AtypeofSpecialistFunddefinedinCIS2.4(b)(ii).

PropertyManager APersonappointedtoprovideRealEstateManagementandServicingActivitiesinrespectofRealProperties.

RealEstateInvestmentTrustorREIT

AtypeofSpecialistFunddefinedinCIS2.4(b)(iv).

RealEstateManagementandServicingActivities

Activitiesrelatingtomanagingandsupervisingrealestateonbehalfoftheowner,including(butnotlimitedto)carryingoutorcontractingfortheprovisionofmaintenance,cleaningandadministrationandappointingofleasingagents,butexcludingsellingorrentingsuchrealestate.

RealProperty Anyformofdirectorindirectinterestinrealestate.

RecognisedNon-AIFCFundManager

APersondeclaredbytheAFSAtobeaRecognisedNon-AIFCFundManagerundersection91oftheFrameworkRegulations.

ReportingEntity APersonwho:

(a)hasSecuritiesorUnitsadmittedtoanOfficialListofSecurities;or;

(b)istheFundManagerofaListedFund;or

(c)isdeclaredbytheAFSAtobeaReportingEntity.

Share A share or stock in the share capital of any Body Corporate or anyunincorporatedbody(excludingaUnit)

VentureCapitalFund

AtypeofSpecialistFunddefinedinCIS2.4(b)(iii).

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Annex 3 to the Consultation Paper No. 23

Inthisdocument,theunderliningindicatesanewtextandthestrikingthrough

indicatesdeletedtextintheproposedamendments

----------------------------------------------------------------------------------------------

AIFC COLLECTIVE INVESTMENT SCHEME RULES

(CIS)

AIFC RULES NO. _ OF 2017

----------------------------------------------------------------------------------------------

Approval Date: [***] 2019] Commencement Date: [***] 2019

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Guidance:Purposeofthisrulebook

Thepurposeofthisrulebook,the“CollectiveInvestmentSchemeRules”,istocomplementtheregulatoryframeworkestablishedbytheFinancialServicesFrameworkRegulations(“theFrameworkRegulations”)asfollows● ToprovidethatcertainarrangementsdonotamounttoCollectiveInvestmentSchemesforthepurposesof

theFrameworkRegulations.● TorequiretheregistrationofcertainCollectiveInvestmentSchemeswiththeAFSAbeforethoseCollective

InvestmentSchemescanbeestablishedorpromoted.● Tomakeprovisionsregarding:

o theconstitution,managementandoperation;ando theinvestmentandborrowingpowers;ando theprocedureforregistration;ando theoperatingdutiesandresponsibilitiesofFundManagers;ando theregistrationofofferingmaterialsandparticularsandreportingrequirements;ando suspensionofdealingsinandterminationofCollectiveInvestmentSchemes.

Guidance:ListedFunds

FundsManagersofListedFundsshouldnotethat,interalia,theAIFCMarketRulescontainsadditionalrulesthatapplytoListedFunds.Inaddition,theBusinessRulesapplytoListedFunds;suchrulesincluderequirementsinrelationtotheconstitution,offeringmaterials,governance,disclosureandotherapplicableprovisionsofListedFunds.TheAIFCCollectiveInvestmentSchemeRulesdonotapplytoOverseasListedFunds.

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2. CLASSIFICATIONOFFUNDSANDAPPLICATIONOFTHERULES

2.2ExemptFundsandNon-ExemptFunds(a) AnExemptFundisaCollectiveInvestmentSchemetheSecuritiesUnitsofwhich

areofferedOfferedintheAIFConlybywayofaprivateplacement:

(i) toPersonswhoareProfessionalClients;and

(ii) inminimumsubscriptionamountsofUS$250,000.

(b) ANon-ExemptFundisanyCollectiveInvestmentSchemethatisnotanExemptFund.

2.4. SpecialistFunds

(a) AFund(whetheraNon-ExemptFundoranExemptFund)maybeaSpecialistFund.

(b) ThefollowingtypesofFundsareSpecialistFunds:

(i) anIslamicInvestmentFund,whichisaFundwhoseentireoperationsareconducted,orheldoutasbeingconducted,inaShari’ah-compliantmanner;and

(ii) aPrivateEquityFund,whichisanExemptFundthat:

(A) isclosed-ended(unlessotherwiseapprovedbytheAFSA);and

(B) primarilyinvestsinunlistedbusinesses,bymeansofshares,convertibledebtorotherequity-relatedinvestments;

(iii) aVentureCapitalFund,whichisanExemptFundandaDomesticFundthat:

(A) primarilyinvestsintheequitysharecapitalofunlistedbusinesseswhichareatanearlystageofdevelopment;

(B) isclosed-ended;and

(C) limitstotalsubscriptionstoanamountnottoexceedUS$100million(orcurrencyequivalent)orahigheramountapprovedbytheAFSA.

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(iv) aRealEstateInvestmentTrust(orREIT),whichisaFundwhich:

(A) investsatleast80%ofitsassetsininvestmentsinincome-generatingRealProperty,withtheremainderinvestedincashorothersecurities;

(B) derivesatleast50%ofitsnetincomefromtherentalofRealProperty;and

(C) distributestotheUnitholderseachyearatleast80%ofitsauditedannualnetincome;and

(v) anyotherFundwhichcomplieswithanyspecificrulesorguidelinesthatmaybepublishedbytheAFSAfromtimetotimeregardingtherequirementsforspecifictypesofSpecialistFunds.

Guidance

IFRcontainstheadditionalrequirementsthatapplytoaDomesticFundbyvirtueofitbeinganIslamicInvestmentFund.

(c) AFundwhichdoesnotcomplywithanyrequirementsapplicabletospecifictypesofSpecialistFundsmaynotdescribeitselfasaSpecialistFund.

2.5. SecondarytransactionsandexcludedoffersOffersAPersondoesnotmarketaCollectiveInvestmentSchemeintheAIFCforthepurposesoftheseRulesbyofferingOfferingtosellortransferaUnitthatisownedbythatPersoniftheofferOffertosellortransferiscapableofacceptanceonlybythePersontowhomthatofferOfferismade.

2.6. ApplicationoftheseRulesThetablebelowsetsoutwhichchaptersoftheRulesapplytowhichtypesofFundsandFundManagersandCentreParticipants.

Chapter ExemptFund

Non-ExemptFund

FundManager

CentreParticipants

Chapter4–RegistrationrequirementsforallFunds

✓Not4.3

✓ ✓ û

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Chapter5–Marketingrequirements ✓ ✓ ✓ ✓

Chapter6–RulesregardingtheconstitutionandinvestmentpowersofFunds

✓Not6.3or

6.10(exceptthat6.10shallapplytoExemptFundsthatareREITs)

✓ ✓ û

Chapter7–RulesregardingthemanagementandoperationofFunds

✓Not7.4 ✓ ✓ û

Chapter8–Additionalserviceproviders

û

(exceptthat

Chapter8shallapplytoExemptFundsthatareREITs)

✓ ✓ û

Chapter9–Rulesregardingdealingsinopen-endedfundsandliquidity

✓ ✓ ✓ û

Chapter10–Audit,FinancialandValuationRequirements

✓Not10.4or10.5

(exceptthat10.4shallapplytoExemptFundsthatareREITs)

✓ ✓ û

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3. ARRANGEMENTSNOTAMOUNTINGTOACOLLECTIVEINVESTMENTSCHEME

3.13.DebenturesandWarrantsofasingleissuer(a) AnarrangementisnotaCollectiveInvestmentSchemeiftherightsorinterests

oftheparticipantsinthearrangementarerepresentedbyaDebentureorWarrant:

(i) wheretheissueroftheDebentureorWarrantisasingleissuer,andifthatissueris:

(1) aBodyCorporate,itisneitheranopen-endedinvestmentcompanynoraclosed-endedinvestmentcompanytheintentorpurposeofwhichisinvestmentmanagement;or

(2) notaBodyCorporate,therightsandinterestsoftheDebentureorWarrantholderareguaranteedbythegovernmentofanycountryorterritory;and

(ii) which,ifitisaconvertibleSecurity,theunderlyingSecuritiestowhichtheDebentureorWarrantholderisentitledareSharesorDebenturesissued,ortobeissued,bythesameissuerastheissueroftheDebentureorWarrantorsingleotherissuer.

(b) AnarrangementthatisnotaCollectiveInvestmentSchemebyvirtueofRule3.13(a)doesnotbecomeaCollectiveInvestmentSchememerelybecauseoneoftheparticipantsinthearrangementisaperson:

(i) whoseordinarybusinessinvolveshimengaginginanactivitythatisaRegulatedActivityorthatwouldfallwithinanapplicableexclusionfromaRegulatedActivity;and

(ii) whoserightsorinterestsinthearrangementare,orinclude,rightsorinterestsinaswaparrangementunderwhichhefacilitatesthemakingofpaymentstoparticipantswhetherinaparticularamountorcurrencyorataparticulartimeorrateofinterestoralloranycombinationofthosethingsinsettlementoftherightsandinterestsoftheotherparticipantsinthearrangement.

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3.19EmployeerewardschemesAnarrangementisnotaCollectiveInvestmentSchemeifthearrangementisforthepurposesofenablingorfacilitatingtheoperationofanemployeecompensationorrewardschemewherethearrangement:

(a) makesSecuritiessecuritiesavailableonlyto:

(i) anEmployeeorformerEmployeeoftheIssuerorofanothermemberofthesameGroupastheIssuerissuerofsuchsecurities;or

(ii) aCloseRelativeofanysuchEmployee;and

(b) isoperatedbytheIssuerissuerofthesecuritiesorbyamemberofthesameGroupastheIssuerissuerorbyatrusteewho,inpursuanceofthearrangements,holdstheSecuritiessecuritiesissuedbytheIssuerissuerforthebenefitofanyeligiblePersonsreferredtoinRule3.19(a)(i)or(ii).

5.MARKETINGREQUIREMENTS

5.1.ApplicationThischapterappliestoallFundsthatareofferedOfferedtoinvestorsintheAIFC.

5.2.Generalrequirements(a) TheUnitsorothersecuritiesofaNon-ExemptFundmaynotbeofferedOffered

priortotheeffectivedateofregistrationofthatNon-ExemptFundundertheseRules.

(b) CopiesofanyOfferingMaterialsrelatingtoaNon-ExemptFundmustbefiledwiththeAFSApriortotheiruse(includinganyamendmentstothoseOfferingMaterials)andmustcomplywiththecontentrequirementsforOfferingMaterialsspecifiedbytheseRules.

(c) InadditiontotheseRules,anypersonofferingOfferingUnitsorothersecuritiesofaFundmustcomplywiththeRulesregardingFinancialPromotions.

(d) AFundManagerorotherCentreParticipantwhichoffersOffersUnitsorothersecuritiesofanExemptFundisresponsibleforensuringthattherequirementsofthischapterarecompliedwithinrespectofthatFundbeforecommencingtheofferingOfferingofthatFundandmustmaintainappropriatewrittenrecordsverifyingthatcompliancewhichmustbemadeavailabletotheAFSAonrequest.

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5.3.ContentrequirementsforOfferingMaterials(a) AllOfferingMaterialsrelatingtoaFundmustbeclear,fairandnotmisleading.

(b) PriortoinvestinginaFund,apotentialinvestormustbesuppliedwithOfferingMaterialsandotherdocumentationthatcontainalltheinformationwhichapersonandhisprofessionaladviserswouldreasonablyrequireandexpecttobeabletomakeaninformeddecisiontobecomeaUnitholderoftheFund,includingthefollowing:

(i) adescriptionoftheinvestmentobjective,policyandstrategyoftheFund,informationonwhereanymasterfundisestablishedandwheretheunderlyingfundsareestablishediftheFundisafundoffunds,adescriptionofthetypesofassetsinwhichtheFundmayinvest,thetechniquesitmayemployandallassociatedrisks,anyapplicableinvestmentrestrictions,thecircumstancesinwhichtheFundmayuseleverage,thetypesandsourcesofleveragepermittedandtheassociatedrisks,anyrestrictionsontheuseofleverageandanycollateralandassetreusearrangements,andthemaximumlevelofleveragewhichtheFundmayutilise;and

(ii) adescriptionoftheproceduresbywhichtheFundmaychangeitsinvestmentstrategyorinvestmentpolicy,orboth;and

(iii) adescriptionofthemainlegalimplicationsofthecontractualrelationshipenteredintoforthepurposeofinvestment,includinginformationonjurisdiction,ontheapplicablelawandontheexistenceornotofanylegalinstrumentsprovidingfortherecognitionandenforcementofjudgmentsintheterritorywheretheFundisestablished;and

(iv) theidentityoftheFundManager,custodianordepositary,auditorandanyotherserviceprovidersfortheFundandadescriptionoftheirdutiesandUnitholder'srightsinrespectofthosepersons;and

(v) adescriptionofanyfunctionsthathavebeendelegatedbytheFundManagerandanyotheroftheFund'sserviceproviders,theidentificationofeachsuchdelegateandanyconflictsofinterestthatmayarisefromsuchdelegations;and

(vi) adescriptionoftheFund'svaluationprocedureandofthepricingmethodologyforvaluingassets;and

(vii) adescriptionoftheFund'sliquidityriskmanagement,includingtheredemptionrightsbothinnormalandinexceptionalcircumstances,andtheexistingredemptionarrangementswithUnitholders;and

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(viii) adescriptionofallfees,chargesandexpensesandofthemaximumamountsthereofwhicharedirectlyorindirectlybornebyUnitholders;and

(ix) adescriptionofhowtheFundensuresafairtreatmentofUnitholdersand,wheneveraUnitholderobtainspreferentialtreatmentortherighttoobtainpreferentialtreatment,adescriptionofthatpreferentialtreatment,thetypeofUnitholderswhoobtainsuchpreferentialtreatmentand,whererelevant,theirlegaloreconomiclinkswiththeFundortheFundManager;and

(x) thelatestannualreportfortheFund,ifapplicable;and

(xi) theprocedureandconditionsfortheissueandsaleofunitsorsharesoftheFund;and

(xii) thelatestnetassetvalueoftheFundanditsunitsorsharesorthelatestmarketpriceperunitorshareoftheFund;and

(xiii) whereavailable,informationregardingthehistoricalperformanceoftheFund;and

(xiv) ifrelevant,theidentityofanyprimebrokerfortheFundandadescriptionofanymaterialarrangementswiththatprimebrokerandthewaytheconflictsofinterestinrelationtheretoaremanaged,informationaboutthepossibilityoftransferandreuseoftheFund'sassetsbytheprimebroker,andinformationaboutanytransferofliabilitytotheprimebrokerthatmayexist;and

(xv) thetotalamountofleverageemployedbytheFund;and

(xvi) thelifeoftheFund,theabilitytoterminatetheFundandtheprocessbywhichtheFundmaybeterminated;and

(xvii) adescriptionofthearrangementsinplaceforthesafekeepingofcashheldbyoronbehalfoftheFundpendinginvestmentordistributiontoUnitholders.

(c) AllOfferingMaterialsrelatingtoaForeignFundmustincludeinformationonthejurisdictionandregulatoryregimeapplicabletotheForeignFundanditsfundmanager.

(d) IfaFundisaListedFund,theFundManagermustprovideintheFund’sOfferingMaterialsadescriptionofthearrangementsforlistingoftheUnitsandthelistingvenuesonwhichUnitsoftheListedFundmaybetraded.

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(e) IfaForeignFundisrequiredtoprovideasummaryorkeyinformationdocumenttoinvestorsinanyjurisdiction,thatdocumentmustalsobeprovidedtopotentialinvestorsintheAIFC.

(f) Ifatanytime,thereisamaterialchangeaffectinganymattercontainedintheOfferingMaterialsforaFundorasignificantnewmatterarises,theFundmusteitherbeforeorpromptlyfollowingtheeffectivedateofsuchmaterialchangeornewmatter,issueupdatedOfferingMaterialswhichclearlyexplainthematerialchangeorsignificantnewmatter.

(g) AllOfferingMaterialsrelatingtoaFund,includingtheinformationspecifiedinparagraphs(b),(c),(d)and(e)requiredundertheseRules(asapplicable)mustbemadeavailableintheEnglishlanguage.

(h) AllOfferingMaterialsrelatingtoaFundmustincludethefollowingstatementdisplayedprominentlyonitsfrontpage:

"TheAstanaFinancialServicesAuthorityhasnoresponsibilityforreviewingorverifyinganyofferingmaterials,particularsorotherdocumentsinconnectionwiththisFund.Accordingly,theAstanaFinancialServicesAuthorityhasnotreviewed,nortakenanystepstoverify,thisdocument,theinformationitcontains,oranyotherdocumentsrelatingtotheFundandhasnoresponsibilityforit.Thesecuritiestowhichthisdocumentrelatesmaybeilliquidorsubjecttorestrictionsontheirresale.Prospectivepurchasersshouldconducttheirownduediligence.Ifyoudonotunderstandthecontentsofthisdocumentyoushouldconsultanauthorisedfinancialadviser."

(i) AllOfferingMaterialsrelatingtoanExemptFundmustprominentlydisclosethefollowingstatementtoprospectiveUnitholders:

"ThisFundisanExemptFundforthepurposesoftheCollectiveInvestmentSchemeRules.ItisintendedonlyforsophisticatedinvestorsandisnotsubjecttomanyoftherequirementsoftheCollectiveInvestmentSchemeRules."

(j) AllOfferingMaterialsrelatingtoanExemptFundmanagedbyafundmanagerwhichisnotlocatedintheAIFCmustprominentlydisclosethefollowingstatementtoprospectiveUnitholders:

"ThefundmanagerofthisFundisnotsubjecttoregulationbytheAstanaFinancialServicesAuthority."

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6.RULESREGARDINGTHECONSTITUTIONANDINVESTMENTPOWERSOFFUNDS

6.10.SpecificrulesregardinginvestmentinRealPropertybyNon-ExemptFundsandRealEstateInvestmentTrusts

(a) ANon-ExemptFundorRealEstateInvestmentTrustmayinvestinRealPropertyifexpresslypermittedtodosoby,andinaccordancewithanylimitscontainedin,theFund'sinvestmentpolicy.

(b) BeforeaNon-ExemptFundorRealEstateInvestmentTrustinvestsinanypieceofRealPropertyorpriortodisposingofapieceofRealProperty,therelevantFundManagermustappointanindependentprofessionalValuerwithrelevantexpertisetoensurethattherelevantRealPropertyisexpertlyvalued.

(c) TheFundManagermustensurethattheValuerprocuresthepropervaluationofallRealPropertyheldbytheNon-ExemptFundorRealEstateInvestmentTrust,onthebasisofafullvaluationwithphysicalinspectionincluding,wheretheRealPropertyisorincludesabuilding,aninternalinspectionatleastonceayear.

(d) IfanyeventoccurswhichmayonreasonablegroundshaveamaterialeffectonthevaluationoftherelevantpropertytheFundManagermustconsultwiththeValuerwithaviewtoarrangingafreshvaluationbeforeanyUnitsintheNon-ExemptFundorRealEstateInvestmentTrustareissuedorredeemedafterthedateoftheevent.

(e) TheFundManagermustrequirethatanyvaluationbytheValuerisonthebasisofa'openmarketvalue'oftherelevantRealPropertyconsistentwithanauthoritativetextsuchasthecurrenteditionoftheRoyalInstituteofCharteredSurveyors'AppraisalandValuationStandards("RedBook")orsimilarpractitionerstextusedbysurveyors.

6.11.RulesrelatingtoRealEstateInvestmentTrusts

(a) AFundManager,oranyotherPersonmakinganOfferofaUnitofaFundorotherwisemarketingaFund,mustnotincludetheterm"RealEstateInvestmentTrust"or"REIT"orrefertoaFundorotherwiseholdoutaFundasbeingaRealEstateInvestmentTrustoraREIT,unlessitisaFundwhichcomplieswithRule2.4(b)(iv).

(b) IfatanytimeduringitsoperationoftheRealEstateInvestmentTrust,therequirementsinRule2.4(b)(iv)arenotmet,theFundManagermust

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immediatelynotifytheAFSAofthefailuretomeettherequirementsintheseRules,andofwhatmeasureshavebeenorwillbetakentoremedythebreach.Ifthebreachisnotremediedwithinsixmonths,theFundwillceasetomeetthecriteriaofbeingaRealEstateInvestmentTrust.TheFundManagershallnotifyUnitholderspromptly:

(i) ofitbecomingawarethattheFundisreasonablylikelytoceasetoqualifyasaRealEstateInvestmentTrust(suchnoticetoincludetheexpecteddateofsuchcessation);and

(ii) onthedateofsuchcessation.

(c) TheFundManagerofaRealEstateInvestmentTrustisresponsibleforappointingaPropertyManagerfortheRealEstateInvestmentTrustandsuchPropertyManagershalleitherbea:

(i) athirdpartythatispermittedunderlaworregulation(whereapplicable)toprovideRealEstateManagementandServicingActivities;or

(ii) asubsidiaryoftheFundManager,whichhasbeenestablishedforthepurposeofcarryingonRealEstateManagementandServicingActivities.

(d) TheFundManagerofaRealEstateInvestmentTrustmustensurethatitdistributestotheUnitholderseachyearanamountequaltonotlessthan80%ofitsauditedannualnetincome.

(e) TheFundManagerofaRealEstateInvestmentTrustmustdetermineifany:

(i) revaluationsurpluscreditedtoincome,or

(ii) gainsondisposalofRealProperty,

shallformpartoftheannualnetincomefordistributiontoUnitholders.

(f) ARealEstateInvestmentTrustmayonlyuseleverageorborrow:

(i) inaggregate,uptoamaximumof60%ofitsnetassetvalue(asdeterminedatthetimeofdrawdownoffunds);and

(ii) forinvestmentpurposesortomeetitsshort-termworkingcapital.

(g) ARealEstateInvestmentTrustispermittedtoown,anditsFundManagerispermittedtoestablish,specialpurposevehiclesforthepurposeofholdingRealProperty,providedthataRealEstateInvestmentTrustmustowndirectlyorindirectlynotlessthan60%oftheshares,andbeentitledtoexercisedirectlyorindirectlyatleast60%ofthevotingrights,ofanysuchspecialpurposevehicle.

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(h) WhereaRealEstateInvestmentTrustholdsanyRealPropertyviaoneormorespecialpurposevehicles,theFundManagermustensurethateachspecialpurposevehicledistributestotheFundallofitsnetincometothemaximumextentpermittedbythelawsandregulationsofthejurisdictionwherethespecialpurposevehicleisestablished.

(i) AFundManagerofaRealEstateInvestmentTrustthatisanExemptFundshallbepermittedtoacceptnon-cashconsiderationforthepurchaseofUnitsintheRealEstateInvestmentTrust,subjecttocomplyingwithRule6.11(l).Non-cashconsiderationforthepurchaseofUnitsisnotpermittedinRealEstateInvestmentTruststhatareNon-ExemptFunds.

(j) RealEstateInvestmentTrustsarenotpermittedtoinvestinpropertyunderdevelopment.

(l) AFundManagerofaRealEstateInvestmentTrustmustincludeintheFund’sOfferingMaterials:

(i) adetaileddescriptionofhowtheFundintendstoacquireandholditsinvestmentsinRealProperties(includingthemaximumnumberofspecialpurposevehiclesthroughwhichRealPropertiesmaybeheld);

(ii) themaximumpercentageoftheRealEstateInvestmentTrust'sassets(byreferencetotheRealEstateInvestmentTrust'snetassetvalue)thatmaybedeployedforthepurposesofpropertyrefurbishment,retrofittingandrenovation,orastatementthatnosuchactivitiesarepermitted;and

(iii) (whereapplicableunderRule6.11(i)),astatementthattheFundManagermayacceptnon-cashconsiderationforthepurchaseofunitsintheRealEstateInvestmentTrustandadescriptionofthelock-upperiod(ifany)applicabletoUnitsacquiredfornon-cashconsideration.

6.12.RulesrelatingtoPrivateEquityFunds

AFundManager,oranyotherPersonmakinganOfferofaUnitofaFundorotherwisemarketingaFund,mustnotincludetheterm"PrivateEquityFund"orrefertoaFundorotherwiseholdoutaFundasbeingaPrivateEquityFundunlessitisaFundwhichcomplieswithRule2.4(b)(ii).

6.13.RulesrelatingtoVentureCapitalFunds

AFundManager,oranyotherPersonmakinganOfferofaUnitofaFundorotherwisemarketingaFund,mustnotincludetheterm"VentureCapitalFund"orrefertoaFund

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orotherwiseholdoutaFundasbeingaVentureCapitalunlessitisaFundwhichcomplieswithRule2.4(b)(iii).

7.RULESREGARDINGTHEMANAGEMENTANDOPERATIONOFFUNDS

7.2.Generalmanagementduties(a) AFundManagermust:

(i) managetheFundincludingtheFund'spropertyinaccordancewiththeFund'sConstitutionanditsmostrecentofferdocumentsOfferingMaterials;

8.ADDITIONALSERVICEPROVIDERS

8.1.ApplicationThischapterappliestoallFundManagerslocatedintheAIFCinrespectofallNon-ExemptFundsandRealEstateInvestmentTrustsmanagedbythoseFundManagers.

10. AUDIT,FINANCIALANDVALUATIONREQUIREMENTS

10.4.AuditorofaNon-ExemptFundandaRealEstateInvestmentTrust(a) EveryNon-ExemptFundandRealEstateInvestmentTrustmustappointan

externalauditortoconductanauditoftheFund'sannualfinancialstatementsinaccordancewiththerequirementsoftherelevantstandardspublishedbytheInternationalAuditingandAssuranceStandardsBoard(IAASB)andtoproduceanauditor'sreportonthoseauditedfinancialstatements.

(b) AFundManagermustpriortotheappointmentoftheauditor,takereasonablestepstoensurethattheauditorhastherequiredskills,resourcesandexperiencetoauditthetypeofNon-ExemptFundand/orRealEstateInvestmentTrustforwhichtheauditorhasbeenappointed.

(c) AFundManagermustnotifytheAFSAoftheappointment,resignationorterminationofanauditorofaNon-ExemptFundoraRealEstateInvestmentTrust.

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(d) ANon-ExemptFundandaRealEstateInvestmentTrustmustappointanauditortofillanyvacancyintheofficeofauditorandensurethatthereplacementauditorcantakeupofficeatthetimethevacancyarisesorassoonasreasonablypracticable.

(e) ANon-ExemptFundandaRealEstateInvestmentTrustmusttakereasonablestepstoensurethattheauditorandtherelevantauditstaffoftheauditorareindependentof,andnotsubjectto,anyconflictofinterestwithrespecttotheFundManageroranyotherserviceprovidertotheFund.

(f) AFundManagermustnotifytheAFSAifitoranyNon-ExemptFundorRealEstateInvestmentTrustthatitmanagesbecomesaware,orhasreasontobelieve,thattheauditorortherelevantauditstaffoftheauditoroftherelevantNon-ExemptFundorRealEstateInvestmentTrustarenolongerindependentoftheFundManageroranyotherserviceprovidertotheNon-ExemptFundorRealEstateInvestmentTrust,orhaveaconflictofinterestwhichmayaffecttheirjudgementinrespectoftheNon-ExemptFundorRealEstateInvestmentTrust.

(g) AFundManagermusttakereasonablestepstoensurethatitanditsemployees:

(i) provideanyinformationtotheNon-ExemptFund'sorRealEstateInvestmentTrust'sauditorthattheauditorreasonablyrequires,orisentitledtoreceiveasauditor;

(ii) givetheauditorrightofaccessatallreasonabletimestorelevantrecordsandinformationwithinitspossessionregardingtheFundandallowtheauditortomakecopiesofthoserecordsandinformation;

(iii) donotinterferewiththeauditor'sabilitytodischargeitsdutiesinrespectoftheNon-ExemptFundorRealEstateInvestmentTrust;

(iv) reporttotheauditoranymatterwhichmaysignificantlyaffectthefinancialpositionoftheNon-ExemptFundorRealEstateInvestmentTrust;and

(v) providesuchotherassistanceastheauditormayreasonablyrequestittoprovide.

(h) AFundManagermust,inwriting,requireanyPersontowhomtheFundManagerhasdelegatedoroutsourcedanyfunctionstoco-operatewiththeNon-ExemptFund'sorRealEstateInvestmentTrust'sauditorinaccordancewiththeprovisionsspecifiedin(g).

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Annex 4 to the Consultation Paper No. 23

Inthisdocument,theunderliningindicatesanewtextandthestrikingthroughindicatesdeletedtextintheproposedamendments

----------------------------------------------------------------------------------------------

AIFC MARKET RULES

(MAR)

AIFC RULES NO. FR0003 OF 2017

Consolidated Version

_________________

----------------------------------------------------------------------------------------------

Approval Date: [[***] 2019] Commencement Date: [[***] 2019]

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Guidance:PurposeandapplicationofMARThepurposeoftherulesandguidancesetoutinMARistoprovidethenecessarydetailinrelationto:

a. themannerinwhichSecuritiesmaybeofferedforsale;b. theconditionsforadmissionofSecuritiestotrading;c. ExemptOfferorsandExemptSecurities;d. thecontentofaProspectus;e. theapprovalandpublicationofaProspectus;f. ProspectusLiability;g. CorporateGovernancePrinciples;h. ObligationsofReportingEntitiesincluding:

i. theobligationtopreparefinancialstatements;andii. theobligationtoappointasponsororcomplianceadviserifrequiredbytheAFSA;

i. MarketAbuse;andj. MarketDisclosure;andk. theconditionsforadmissionofUnitstotradingandtheapplicationoftheMarketAbuseandMarketDisclosureRulestoListedFunds,UnitsofListedFunds,andFundManagersofListedFunds.

TheapplicationoftheRulesinMARisstatedinrespectofeachRuleorapparentfromthecontext.However,bywayofsummary:

• MAR1(OfferofSecurities)isapplicabletoallpersonswhomayseektohaveSecuritiesadmittedtotradingortoofferSecuritiesbywayofplacementandtoallpersonswhomaybeliableforthecontentsofaProspectus(asidentifiedinMAR1.9.1).

• MAR2(GovernanceofReportingEntities)appliestoReportingEntitiesotherthanaReportingEntitythatisaListedFundoraFundManagerofaListedFund(initscapacityassuch).

• MAR3(FinancialReports)appliestoReportingEntitiesotherthanaReportingEntitythatisaListedFundoraFundManagerofaListedFund(initscapacityassuch).

• MAR4(SponsorsandComplianceAdvisers)appliestoReportingEntities(otherthanaReportingEntitythatisaListedFundoraFundManagerofaListedFund(intheircapacityassuch))andanypersonwhointendstohaveSecuritiesadmittedtoanOfficialListofSecuritiesoradmittedtotradingonanAuthorisedInvestmentExchange,aswellastosponsorsandcomplianceadvisersappointedbythem.

• MAR5(MarketAbuse)appliestoallpersonswithoutlimitation.• MAR6(MarketDisclosure)appliestoReportingEntities.

• MAR7(ListedFunds)isapplicabletoallpersonswhomayseektohaveUnitsadmittedtotradingandappliestoListedFunds,UnitsofListedFunds,andFundManagersofListedFunds.

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2GOVERNANCEOFREPORTINGENTITIES

2.1.Application

Guidance:DefinitionofReportingEntity

Section81oftheFrameworkRegulationsprovides:

APersonisaReportingEntityifthePerson

(a) hasSecuritiesorUnitsadmittedtoanOfficialListofSecurities;or

(b) istheFundManagerofaListedFund;or

(bc) isdeclaredbytheAFSAtobeaReportingEntity.

Thissection2oftheMARwillnotapplytoaReportingEntitythatisaListedFundortheFundManagerofListedFund(initscapacityassuch),andtheCISandtheBusinessRulesprescribethegovernancerequirementsforListedFunds.

UnderAMI3.2.3and3.6.6aPersonwhoseekstohaveSecuritiesadmittedtotradingonanAuthorisedInvestmentExchangeandtheIssuerofSecuritiesadmittedtoanOfficialListmaintainedbyanAuthorisedInvestmentExchangemustgiveenforceableundertakingstotheAFSAtosubmitunconditionallytothejurisdictionoftheAFSAinrelationtoanymatterswhichariseoutoforwhichrelatetoitsuseofthefacilitiesoftheAuthorisedMarketInstitution,includingbutnotlimitedtorequirementsinMARrelatingtoReportingEntities.

3FINANCIALREPORTSGuidance:FinancialreportingrequirementsforListedFunds

Thissection3oftheMARwillnotapplytoaReportingEntitythatisaListedFundortheFundManagerofListedFund(initscapacityassuch),andtheCISandtheBusinessRulesprescribethefinancialreportingrequirementsforListedFunds.

4SPONSORSANDCOMPLIANCEADVISERS

4.1Sponsors

4.1.1AppointmentofsponsorsWheretheAFSAchoosestoexercisethepowerundersection85oftheFrameworkRegulationstorequireaReportingEntityoraPersonthatintendstohaveSecuritiesadmittedtoanOfficialListofSecuritiesoradmittedtotradingonanAuthorisedInvestmentExchangetoappointanAuthorisedFirmorAncillaryServicesProvidertoactasasponsor,theAFSAwillnotifytherelevantPersoninwriting.

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7 LISTEDFUNDS7.1.1Application

Thispartappliesto:

(a) aListedFund;and

(b) aFundManagerofaListedFund.

7.1.2ConditionsforadmissionofUnitstotradingAnAuthorisedInvestmentExchangemaynotadmitUnitstotradingunless:

(a) theUnitshavebeenadmittedtotheOfficialListmaintainedbytheAuthorisedInvestmentExchangeinaccordancewithsection66oftheFrameworkRegulations;and

(b) inrelationtoUnitsofListedFundsotherthanOverseasListedFunds:

(i) theFundisaNon-ExemptFundregisteredundertheAIFCCollectiveInvestmentSchemeRules;

(ii) thereareOfferingMaterialsinrelationtotherelevantUnitsandtheAuthorisedInvestmentExchangehassatisfieditselfthatsuchOfferingMaterialssatisfiestherequirementsinAIFCCollectiveInvestmentSchemeRules.

Guidance:ListingExemptFunds

ExemptFundsmaybeadmittedtotheOfficialList,butnottotrading,astheycanonlybeofferedonaprivateplacementbasistocertaininvestors.

7.1.3ApplicationofMARtoListedFundsThefollowingpartsofMARshallgenerallyapplytoListedFunds,withallnecessarymodifications(suchthatreferencesto"Security"or"Securities"shallbereadasreferencesto"UnitinaListedFund"or"UnitsinaListedFund",respectively;referencestothe"Issuer"shallbereadasreferencestothe"ListedFund";andreferencesto"ReportingEntity"shallbeareferenceto"theListedFundanditsFundManager"(exceptthesecondreferenceto"ReportingEntityinRule6.1.1shallbeareferencetothe"ListedFund"only):

(a) MAR5(MarketAbuse);

(b) MAR6(MarketDisclosure).

ThefollowingpartsofMARshallnotapplytoListedFunds,oraReportingEntitythatistheFundManagerofListedFund(initscapacityassuch):

(c) MAR1(OfferofSecurities);

(d) MAR2(GovernanceofReportingEntities);

(e) MAR3(FinancialReports);and

(f) MAR4(SponsorsandComplianceAdvisors).

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7.1.4DisclosureofFinancialReportsandValuationTheFundManagerofaListedFund(otherthananOverseasListedFund)mustdisclosetothemarketanyinterimandannualreportsandanyvaluationsthattheListedFundisrequiredtoprepareanddisclosetoUnitholdersunderCIS10promptlyontheirbeingavailable.

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Annex 5 to the Consultation Paper No. 23

Inthisdocument,theunderliningindicatesanewtextandthestrikingthrough

indicatesdeletedtextintheproposedamendments

----------------------------------------------------------------------------------------------

AIFCAUTHORISED MARKET INSTITUTION RULES

(AMI)

AIFC RULES NO. FR0002 OF 2017

Consolidated Version ([***] 2019)

----------------------------------------------------------------------------------------------

Astana International Financial Centre, Astana

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Guidance:PurposeandapplicationofAMI

TherulesandguidanceinAMIcomplementChapter2ofPart3oftheFrameworkRegulations(LicensingofAuthorisedMarketInstitutions)andPart6oftheFrameworkRegulations(CapitalMarkets). AMI also contains rules in relation to the supervision of Authorised MarketInstitutions which complement the provisions in Part 8 of the Framework Regulations(Supervision of Authorised Persons) and Chapter 7 of the GEN rulebook (Supervision). ThepurposeoftherulesandguidanceinAMIistosetout:

• the licensing requirements, or standards, which an applicant must satisfy to begranted a Licence to carry on either of the Market Activities of Operating anInvestment Exchange,Operating Private E-currency Trading Facility andOperating aClearingHouse;

• thevariousregulatory functionsthatanAuthorisedMarket Institutionmustperformin relation to admitting Securities orUnits of a Listed Fund to trading, operating anOfficialListandenforcingitsBusinessRules;and

• thesupervisoryregimetowhichsuchanAuthorisedMarketInstitutionwillbesubjecton an ongoing basis, including requirements in respect of its relationship with theAFSA.

TheapplicationoftherulesinAMIisasfollows:

• Chapter 1 contains introductory provisions applicable to all Authorised MarketInstitutions.

• Chapter2containsrulesandguidanceapplicabletoallAuthorisedMarketInstitutions.

• Chapter3containsadditionalrulesandguidanceapplicabletoAuthorisedInvestmentExchanges.

• Chapter 4 contains additional rules and guidance applicable to Authorised ClearingHouses(includingAuthorisedCentralCounterparties).

• Chapter 5 contains rules in relation to the supervision of Authorised MarketInstitutions.

• Chapter6containsadditional rulesandguidanceapplicable toAuthorisedPrivateE-currencyTradingFacility.

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2.RULESAPPLICABLETOALLAUTHORISEDMARKETINSTITUTIONS

2.3.1. Conflictsofinterest–coreobligationAn Authorised Market Institution must take reasonable steps, including themaintenanceofadequatesystemsandcontrols,governanceand internalpoliciesandprocedures,toensurethattheperformanceofitsregulatoryfunctionsisnotadverselyaffectedbyitscommercialinterests.

Guidance:regulatoryfunctionsofAuthorisedMarketInstitutionTheregulatoryfunctionsofanAuthorisedMarketInstitutioninclude,asappropriate:

• its obligations under AMI to monitor and enforce compliance with its membershiprules,BusinessRules,DirectElectronicAccessRules;

• itsobligationtoprevent,detectandreportmarketabuseorfinancialcrime;and• its obligations in respect of admission of Securities or Units of a Listed Fund to an

OfficialList,toTradingortoClearing.

2.5.1. RequirementtoprepareBusinessRulesSave where the AFSA otherwise directs, an Authorised Market Institution mustestablish and maintain Business Rules governing relations between itself and theparticipantsinthemarket,includingbutnotlimitedto:

(a) MembershipRules,preparedinaccordancewith AMI 2.6, governing theadmissionofMembersandanyotherPersonstowhomaccesstoitsfacilitiesisprovided;

(b) DirectElectronicAccessRules,preparedinaccordancewithAMI2.7,settingoutthe rules and conditions pursuant to which its Members may provide theirclients with Direct Electronic Access to the Authorised Market Institution’stradingsystems;

(c) DefaultRules,preparedinaccordancewitheitherAMI3.5orAMI4.6,governingactionthatmaybetakeninrespectofunsettledMarketContracts intheeventofaMemberbeing,orappearingtobe,unabletomeetitsobligations;

(d) AdmissiontoTradingRules,preparedinaccordancewithAMI3.2orAMI6.3,orAdmissiontoClearingRules,preparedinaccordancewithAMI4.1,governingtheadmissionofSecurities,UnitsofaListedFundorPrivateE-currenciestotrading,orclearingandsettlement,asappropriatetoitsfacilities;

(e) Listing Rules, prepared in accordance with AMI 3.6, setting out the rules andconditions applicable to a Personwhowishes to have Securities or Units of aListedFundincludedinanOfficialListofSecurities;and

(f) anyothermattersnecessaryfortheproperfunctioningoftheAuthorisedMarketInstitutionandthefacilitiesoperatedbyit.

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The requirements in (c) and (e) do not apply to the Authorised Private E-currencyTradingFacility.

2.7.1DirectElectronicAccessDirect Electronic Access means any arrangement, such as the use of the Member'strading code, through which a Member or the clients of that Member are able totransmitelectronicallyordersrelatingtoSecurities,UnitsofaListedFundorPrivateE-currency directly to the facility provided by the Authorised Market Institution andincludesarrangementswhich involve theusebyaPersonof the infrastructureof theAuthorisedPrivateE-currencyTradingFacilityortheMemberorparticipantorclientoranyconnectingsystemprovidedby theAuthorisedPrivateE-currencyTradingFacilityorMember or participant or client, to transmit the orders and arrangementswheresuchaninfrastructureisnotusedbyaPerson.

3.RULESAPPLICABLETOAUTHORISEDINVESTMENTEXCHANGES

3.1SystemsandControls

3.1.3. PubliclyavailabledataonqualityofexecutionsAn Authorised Investment Exchangemustmake available to the public, without anycharges, data relating to the quality of execution of transactions on the AuthorisedInvestmentExchangeonat leastanannualbasis. Reportsmust includedetailsaboutprice, costs, speed and likelihood of execution for individual Securities or Units of aListedFund.

3.1.6. TicksizeregimesTheAuthorisedInvestmentExchangemustadoptaticksizeregimeinrespectofeachtypeofSecurityorUnitofaListedFundtradedoneachtradingvenueoperatedbyit.Theticksizeregimemust:

(a) becalibratedtoreflecttheliquidityprofileoftheSecuritiessuchInvestmentsindifferent markets and the average bid-ask spread taking into account thedesirability of enabling reasonably stable prices without unduly constrainingfurthernarrowingofspreads;and

(b) beabletoadapttheticksizeforeachSecuritysuchInvestmentappropriately.

Shortsellingandpositionmanagement(a) An Authorised Investment Exchange must have in place effective systems,

controlsandprocedurestomonitorandmanage:

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(i) Short selling in shares, debentures and any other similar SecuritiesInvestments;and

(ii) Risksarisingfrompositionconcentrations.

(b) Forthepurposesof(a),anAuthorisedInvestmentExchangemusthaveadequatepowersover itsMembers tomitigate theprobability and impactof risk to theorderlyfunctioningofitsfacilitiesarisingfromunsettledpositionsinSecuritiesorUnitsofListedFund.

(3) Short selling for the purposes of this Rule constitutes the sale of a share,debentureorothersimilarSecuritiesInvestmentbyaPersonwhodoesnotownthe share, debenture or other similar Securities Investment at the point ofenteringintothecontracttosell.

3.2.AdmissionofSecuritiestotrading

3.2.1AdmissiontoTradingRulesAnAuthorisedInvestmentExchangemustmakeclearandtransparentrulesconcerningtheadmissionofSecuritiesorUnitsofaListedFundtotradingonitsfacilities.

3.2.2.ContentofAdmissiontoTradingRulesTherulesoftheAuthorisedInvestmentExchangemustensurethat:

(a) Securities or Units of a Listed Fund admitted to trading on an AuthorisedInvestment Exchange’s facilities are capable of being traded in a fair, orderlyandefficientmanner;

(b) Securities or Units of a Listed Fund admitted to trading on an AuthorisedInvestmentExchange’sfacilitiesarefreelynegotiable;and

(c) contracts for derivatives admitted to trading on an Authorised InvestmentExchange’sfacilitiesaredesignedsoastoallowfortheirorderlypricingaswellasfortheexistenceofeffectivesettlementconditions.

Guidance:Fair,orderlyandefficienttradingWhenassessingwhetheraSecurityorUnitofaListedFundiscapableofbeingtradedinafair,orderly and efficient manner, the Authorised Investment Exchange shall take into account,dependingonthenatureoftheSecurityorUnitofaListedFundbeingadmitted,whetherthefollowingcriteriaaresatisfied:(a) thetermsoftheSecurityorUnitofaListedFundareclearandunambiguousandallow

foracorrelationbetweenthepriceoftheSecurityorUnitofaListedFundandthepriceorothervaluemeasureoftheunderlying;

(b) thepriceorothervaluemeasureoftheunderlyingisreliableandpubliclyavailable;and(c) there issufficient informationpubliclyavailableofakindneededtovaluetheSecurity

orUnitofaListedFund.

Guidance:Effectivesettlementconditions

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Whenassessingwhethera contract foraderivative containseffective settlement conditions,theAuthorised InvestmentExchangeshall take intoaccount,dependingonthenatureof thederivativebeingadmitted,whetherthefollowingcriteriaaresatisfied:(a) thearrangementsfordeterminingthesettlementpriceofthederivativeensurethatthis

price properly reflects the price or other value measure of the relevant underlyingInvestment;and

(b) where the settlement of the derivative requires or provides for the possibility of thedelivery of an underlying Security Investment or asset rather than cash settlement,thereareadequatesettlementanddeliveryproceduresforthatunderlyingInvestmentaswellasadequatearrangementstoobtainrelevantinformationaboutthatunderlyingInvestment.

3.2.3.UndertakingtocomplywithAFSArulesAnAuthorisedInvestmentExchangemaynotadmitSecuritiesorUnitsofaListedFundto trading unless the person Person who seeks to have Securities such Investmentsadmittedtotrading:

(a) givesanenforceableundertaking to theAFSA to submitunconditionally to thejurisdictionof theAFSA in relation to anymatterswhichariseoutoforwhichrelate to itsuseof the facilitiesof theAuthorisedMarket Institution, includingbutnotlimitedtorequirementsinMARrelatingtoReportingEntities;

(b) agreesinwritingtosubmitunconditionallytothejurisdictionoftheAIFCCourtsinrelationtoanydisputes,orotherproceedingsintheAIFC,whichariseoutoforrelatetoitsuseofthefacilitiesoftheAuthorisedMarketInstitution;

(c) agrees inwriting to subject itself to theAIFC laws in relation to its use of thefacilitiesoftheAuthorisedMarketInstitution;and

(d) appointsandmaintainsatall times,anagentforserviceofprocess intheAIFCandrequiressuchagenttoacceptitsappointmentforserviceofprocess.

3.2.4.ReviewofcomplianceTheAuthorisedInvestmentExchangemustmaintainarrangementsregularlytoreviewwhether the Securities or Units of a Listed Fund admitted to trading on its facilitiescomplywiththeAdmissiontoTradingRules.

3.2.5.VerificationofcompliancebyissuerswithMarketRulesTheAuthorised Investment Exchangemustmaintain effective arrangements to verifythat issuersofSecuritiesorUnitsofaListedFundadmittedtotradingonaregulatedmarketoperatedbyitcomplywiththeMarketRules.

3.2.6.ArrangementsforaccesstoinformationTheAuthorisedInvestmentExchangemustmaintainarrangementstoassistusersofamarketoperatedby it toobtainaccessto informationmadepublicundertheMarketRules.

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3.3.SuspendingorremovingSecuritiesorUnitsofaListedFundfromtrading

3.3.1.PowertosuspendThe rules of an Authorised Investment Exchange must provide that the AuthorisedInvestmentExchangehasthepowertosuspendorremovefromtradingonitsfacilitiesanySecuritiesorUnitsofaListedFundwhichnolongercompliescomplywithitsrules.

3.3.2. LimitationonpowertosuspendorremoveSecuritiesorUnitsofaListedFundfromtradingAnAuthorised Investment Exchangemaynot suspendor remove from tradingon itsfacilitiesanySecurityorUnitofaListedFundwhichnolongercomplieswithitsrules,where such step would be likely to cause significant damage to the interests ofinvestorsortheorderlyfunctioningofthefinancialmarkets.

3.3.3.SuspensionorremovalfromtradingofassociatedderivativesWheretheAuthorisedInvestmentExchangesuspendsorremovesanySecurityorUnitof a Listed Fund from trading on its facilities, it must also suspend or remove fromtradingon its facilities anyderivative that relates toor is referenced to that SecurityInvestment where that is required to support the objectives of the suspension orremovaloftradingofthatSecurityInvestment.

3.3.4.PublicationofdecisiontosuspendorremoveSecuritiesorUnitsofaListedFundfromtradingWheretheAuthorisedInvestmentExchangesuspendsorremovesanySecurityorUnitof a Listed Fund from trading on its facilities, including any derivative in accordancewithAMI3.3.3,itmustnotifytheAFSAandmakethatdecisionpublic.

3.3.5. Publicationof decision to lift suspensionor re-admit SecuritiesorUnits of a ListedFundtotradingWheretheAuthorisedInvestmentExchangeliftsasuspensionorre-admitsanySecurityorUnitofaListedFundtotradingonitsfacilities,includinganyderivativesuspendedorremovedfromtradinginaccordancewithAMI3.3.3,followingadecisionmadeunderAMI3.3.1,itmustnotifytheAFSAandmakethatdecisionpublic.

3.4.Transparencyobligations

3.4.1.Pre-tradetransparencyobligationAnAuthorisedInvestmentExchangemustmakeavailabletothepubliconacontinuousbasisduringnormaltradinghoursthecurrentbidandofferpricesofSecuritiesorUnitsof a Listed Fund traded on its systems and the depth of trading interests at thoseprices.

GuidanceThe disclosure required by 3.4.1 will depend upon the type of trading system employed,including continuous auction order-book, quote-driven, periodic auction and hybrid tradingsystems.AnAuthorisedInvestmentExchangeshoulddiscussitsproposalsforcompliancewiththisrequirementwiththeAFSA.TheAFSAmaywaiveormodifytherequirementinrespectof

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certaintypesoftradeortypesofSecurityInvestmentpursuanttoSection8oftheFrameworkRegulations.

3.4.2.Post-tradetransparencyobligationAnAuthorised InvestmentExchangemustmakeavailable to thepublic in as close toreal-time as technically possible the price, volume and time of the transactionsexecutedinrespectofSecuritiesorUnitsofaListedFundtradedonitsfacilities.

GuidanceThe AFSAmaywaive ormodify the requirement in AMI 3.4.2 in respect of certain types oftradeortypesofSecurityInvestmentpursuanttoSection8oftheFrameworkRegulations.

Inparticular,subjecttoAMI1.1.2(outsourcing)andtoobtainingtheapprovaloftheAFSA,anAuthorised Investment Exchange may delegate its provision of post-trade information to aregulatorynewsserviceorsimilarthird-partyentity.

3.6.ListingRules3.6.1.GeneralrequirementsrelatingtoListingRules

(1) An Authorised Investment Exchange wishing to admit Securities or Units of aListedFundtoitsownOfficialListofSecuritiesmust:

(a) haveListingRuleswhichcomplywiththerequirementsofAMI3.6.2;and

(b) ensurethatitsListingRulesareapprovedbytheAFSA.

(2) Any amendment to an Authorised Investment Exchange’s Listing Rules must,priortotheamendmentbecomingeffective,havebeen:

(a) made available for a reasonable period of time to the market forconsultation;and

(b) approvedbytheAFSA.

(3) In urgent cases, the AFSA may, on written application by the AuthorisedInvestmentExchange,dispensewiththerequirementin(2)(a).

3.6.2.ContentsofListingRules The Listing Rules of an Authorised Investment Exchange must include

requirementsrelatingto:

(a) procedures for admission of Securities or Units of a Listed Fund to itsOfficialListofSecurities,including:

(i) requirementstobemetbeforeSecuritiessuchInvestmentsmaybegrantedadmissiontoanOfficialListofSecurities;and

(ii) agreements in connection with admitting Securities suchInvestmentstoanOfficialListofSecurities;

(b) proceduresforsuspensionanddelistingofSecuritiesorUnitsofaListedFundfromanOfficialListofSecurities;

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(c) theimpositiononanyPersonofobligationstoobservespecificstandardsof conduct or to perform, or refrain from performing, specified acts,reasonably imposed in connection with the admission of Securities orUnits of a Listed Fund to an Official List of Securities or continuedadmissionofSecuritiessuchInvestmentstoanOfficialListofSecurities;

(d) penalties or sanctions which may be imposed by the AuthorisedInvestmentExchangeforabreachoftheListingRules;

(e) proceduresorconditionswhichmaybeimposed,orcircumstanceswhicharerequiredtoexist,inrelationtomatterswhichareprovidedforintheListingRules;

(f) actual or potential conflicts of interest that have arisen or might arisewhenaPersonseekstohaveSecuritiesorUnitsofaListedFundadmittedtoanOfficialListofSecurities;and

(g) suchothermattersasarenecessaryordesirablefortheproperoperationofthelistingruleprocessandthemarket.

3.6.4. CompliancewithListingRules(1) AnAuthorised InvestmentExchangewhich is permitted tomaintain anOfficial

List of Securities must ensure the function is properly and independentlyoperated.

(2) An Authorised Investment Exchangemust have procedures in place to ensurethat:

(a) itsListingRulesaremonitoredandenforced;and

(b) complaintsregardingPersonssubjecttotheListingRulesareinvestigated.

(3) AnAuthorisedInvestmentExchangemustensurethat:

(a) where appropriate, disciplinary action can be carried out and financialandother typesofpenalties canbe imposedonPersons subject to theListingRules;and

(b) adequateappealproceduresareinplace.

3.6.5. ApplicationforadmissionofSecuritiesorUnitsofaListedFundtoanOfficialListofSecurities(1) Applications for the admission of Securities or Units of a Listed Fund to an

Official List of Securities must be made by the issuer of the Securities suchInvestments,orbyathirdpartyonbehalfofandwiththeconsentoftheissueroftheSecuritiessuchInvestments.

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(2) An Authorised Investment Exchange must, before granting admission of anySecuritiesorUnitsofaListedFundtoanOfficialListofSecuritiesmaintainedbyit:

(a) besatisfiedthattheapplicablerequirements,includingthoseinitsListingRules, have been or will be fully complied with in respect of thoseSecuritiesInvestments;and

(b) complywith the requirements relating tonotification to theAFSA in (4)and(5).

(3) An Authorised Investment Exchangemust notify an applicant in writing of itsdecision in relation to the application for admissionof Securities orUnits of aListedFundtoitsOfficialListofSecurities.

(4) Subjectto(5),atleast5businessdayspriortoanadmissionofSecuritiesorUnitsof a Listed Fund to its Official List of Securities, an Authorised InvestmentExchange must provide the AFSA with notice of the decision and include thefollowinginformationinthenotification:

(a) acopyofthelistingapplication;

(b) a copy of the assessment of the listing application carried out by theExchange;and

(c) anyinformationrequestedbytheAFSA.

(5) An Authorised Investment Exchangemust immediately notify the AFSA of anydecisiontosuspend,restorefromsuspensionorde-listanySecuritiesorUnitsofaListedFundfromitsOfficialListofSecuritiesandthereasonsforthedecision.

3.6.6. UndertakingtocomplywithAFSArulesAnAuthorisedInvestmentExchangemaynotadmitSecuritiesorUnitsofaListedFundtoanOfficialListofSecuritiesunlesstheissuerofSecuritiessuchInvestments:

(a) givesanenforceableundertaking to theAFSA to submitunconditionally to thejurisdictionof theAFSA in relation to anymatterswhichariseoutoforwhichrelate to itsuseof the facilitiesof theAuthorisedMarket Institution, includingbutnotlimitedtorequirementsinMARrelatingtoReportingEntities;

(b) agreesinwritingtosubmitunconditionallytothejurisdictionoftheAIFCCourtsinrelationtoanydisputes,orotherproceedingsintheAIFC,whichariseoutoforrelatetoitsuseofthefacilitiesoftheAuthorisedMarketInstitution;

(c) agrees inwriting to subject itself to theAIFC laws in relation to its use of thefacilitiesoftheAuthorisedMarketInstitution;and

(d) appointsandmaintainsatall times,anagentforserviceofprocess intheAIFCandrequiressuchagenttoacceptitsappointmentforserviceofprocess.

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4.RULESAPPLICABLETOAUTHORISEDCLEARINGHOUSES

4.1.AdmissionofSecuritiesorUnitsofaListedFundtoClearing

4.1.1.AdmissiontoclearingrulesAn Authorised Clearing House must have clear and objective criteria included in itsrules according to which Securities Investments can be cleared or settled on itsfacilities.

4.3.1.CreditRisk(1) AnAuthorisedClearingHousemustestablisharobustframeworktomanageits

creditexposurestoitsparticipantsandthecreditrisksarisingfromitspayment,clearingandsettlementprocesses.

(2) An Authorised Clearing House operating a payment system or SecuritiesSettlementSystemmustcoveritscurrentand,wheretheyexist,potentialfutureexposures to each participant fully with a high degree of confidence usingcollateralandotherequivalentfinancialresources.

(3) AnAuthorisedClearingHouseoperatingasaCentralCounterpartymust:

(a) coveritscurrentandpotentialfutureexposurestoeachparticipantfullywith a high degree of confidence using margin and other prefundedfinancialresources;

(b) performstresstests,onaregularbasisasappropriatetothenature,scaleandcomplexityof itsoperations,usingmodelscontainingstandardsandpredeterminedparametersandassumptions;and

(c) atleastmonthly(andmorefrequentlyiftheSecuritiesorUnitsofaListedFundclearedormarketsserveddisplayhighvolatility,becomelessliquid,or when the size or concentration of positions held by its participantsincreasesignificantly),carryoutacomprehensiveandthoroughanalysisofstress testing models, scenarios, and underlying parameters andassumptionsusedtoensurethattheyareappropriatefordeterminingtherequiredlevelofdefaultprotectioninlightofcurrentandevolvingmarketconditions;and

(d) at least annually, conduct an independent review and validation of itsfinancialriskmanagementmodels.

4.5.1.CentralsecuritiesdepositoriesAnAuthorisedClearingHouseactingasaCentralSecuritiesDepositorymust:

(1) have appropriate rules, procedures, and controls, including robust accountingpractices,tosafeguardtherightsofSecuritiesissuersandholdersofSecuritiesor

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Units of a Listed Fund, prevent the unauthorised creation or deletion ofSecurities or Units of a Listed Fund, and conduct periodic and at least dailyreconciliationofissuesofSecuritiesissuesorUnitsofaListedFunditmaintains;

(2) prohibitoverdraftsanddebitbalancesinaccountsofSecuritiesaccountsorUnitsofaListedFund;

(3) maintainSecuritiesorUnitsofaListedFundinanimmobilisedordematerialisedformfortheirtransferbybookentry;

(4) protect assets against custody risk through appropriate rules and proceduresconsistentwithitslegalframework;

(5) ensuresegregationbetweentheCentralSecuritiesDepository’sownassetsandthe securities of its participants and segregation among the securities ofparticipants;and

(6) identify,measure,monitor,andmanageitsrisksfromotheractivitiesthatitmayperform.

5.SUPERVISION

5.2.7.NotificationofadmissiontoorremovalfromtradingWhere an Authorised Investment Exchange proposes to suspend or remove fromtradingoradmit to trading,bymeansof its facilities,aclassofSecurityorUnitsofaListedFundwhichithasnotpreviouslytraded,butislicensedtodoso,itmustgivetheAFSA notice of that event, at the same time as the proposal is communicated toPersonsgrantedaccesstoitsfacilitiesorshareholders,withthefollowinginformation:

(a) adescriptionoftheSecurityInvestmenttowhichtheproposalrelates;and

(b) the name of any clearing or settlement facility in respect of that SecurityInvestment.

5.2.8.NotificationofremovalfromoradmissiontoclearingWhere an Authorised Clearing House proposes to cease clearing or settling, or tocommenceclearingorsettling,bymeansofitsfacilities,aclassofSecurityorUnitsofaListedFundwhich ithasnotpreviously clearedor settled,but is licensed todoso, itmust give the AFSA notice of that event, at the same time as the proposal iscommunicated to Persons granted access to its facilities or shareholders, with thefollowinginformation:

(a) adescriptionoftheSecurityInvestmenttowhichtheproposalrelates;and

(b) thenameofanytradingfacilityinrespectofthatSecurityInvestment.

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Annex 6 to the Consultation Paper No. 23

Inthisdocument,theunderliningindicatesanewtextandthestrikingthrough

indicatesdeletedtextintheproposedamendments

----------------------------------------------------------------------------------------------

AIFC GENERAL RULES

(GEN)

AIFC RULES NO. FR0001 OF 2017

Consolidated Version ----------------------------------------------------------------------------------------------

Approval Date: [***] 2019

Commencement Date: [***] 2019

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1.2.6.Effectivesupervision

InassessingwhetheranapplicantiscapableofbeingeffectivelysupervisedbytheAFSAfor the purposes of section 37(1)(c) of the Framework Regulations, the AFSA willconsider:

(a) thenature,includingthecomplexity,oftheMarketActivitiesthattheapplicantwillcarryon;

(b) if theapplicantseeksa licencetocarryontheMarketActivityofOperatinganExchangeoraPrivateE-currencyTradingFacility,thesize,natureandcomplexityof any markets in respect of which the applicant will offer its facilities as anexchangeincarryingonthatMarketActivity;

(c) if the applicant seeks a licence to carry on theMarket Activity ofOperating aClearingHouse, the complexityof the Securities Investments and transactions,andthesizeofthelikelytransactionvaluesandvolumesinrespectofwhichtheapplicantwilloffer clearingandsettlement services in carryingon thatMarketActivity;

(c) thewayinwhichtheapplicant'sbusinessisorganised;

(d) (iftheapplicant isamemberofaGroup)whethermembershipoftheGroupislikelytopreventtheAFSA’seffectivesupervisionoftheapplicant;and

(e) whethertheapplicantissubjecttoconsolidatedsupervision.

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Annex 7 to the Consultation Paper No. 23

Inthisdocument,theunderliningindicatesanewtextandthestrikingthroughindicatesdeletedtextintheproposedamendments

----------------------------------------------------------------------------------------------

AIFC CONDUCT OF BUSINESS RULES

(COB)

AIFC RULES NO. FR0005 OF 2017

Consolidated Version ([***] 2019)

----------------------------------------------------------------------------------------------

Astana International Financial Centre, Astana

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10.8Offersofsecurities

10.8.1.Generalrequirement

WhenanAuthorisedFirmcarriesoutamandatetomanageanOfferofSecuritiesoranOffer of Units, it must implement adequate internal arrangements to manage anyconflicts of interest thatmay arise as a result of the Authorised Firm’s duty to twodistinctsetsofClientsnamelythecorporatefinanceClientandtheinvestmentClient.

10.8.2.Disclosure

For the purposes of COB 10.8.1, when an Authorised Firm accepts a mandate tomanage an Offer, it must take reasonable steps to disclose to its corporate financeClient:

(a) theprocesstheAuthorisedFirmproposestoadoptinordertodeterminewhatrecommendationsitwillmakeaboutallocationsfortheOffer;

(b) details of how the target investor group, to whom it is planned to Offer theSecuritiesorUnitsinaListedFund,willbeidentified;

(c) theprocessthroughwhichrecommendationsarepreparedandbywhom;and

(d) (ifrelevant)that itmayrecommendplacingSecuritiesorUnits inaListedFundwith a Client of the Authorised Firm for whom the Authorised Firm providesother services, with the Authorised Firm’s own proprietary book, or with anAssociate,andthatthisrepresentsapotentialconflictofinterest.

Schedule2:KEYINFORMATIONANDCONTENTOFCLIENTAGREEMENT

ThekeyinformationwhichanAuthorisedFirmisrequiredtoprovidetoaClientandincludeintheClientAgreementwiththatClientpursuanttoCOB4mustinclude:

(a) thecoreinformationsetoutbelow;and

(b) where relevant, the additional information required for Investment Business and forInvestmentManagement.

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3. ADDITIONALINFORMATIONFORINVESTMENTMANAGEMENTACTIVITIES

Theadditional informationrequiredwhereanAuthorisedFirmactsasanInvestmentManageris:

(a)theinitialvalueofthemanagedportfolio

(b)theinitialcompositionofthemanagedportfolio

(c)theperiodofaccountforwhichperiodicstatementsoftheportfolio

(d)inthecaseofdiscretionaryinvestmentmanagementactivities:

(i) the extent of the discretion to be exercised by the Authorised Firm,including any restrictions on the value of any one Investment or theproportionoftheportfoliowhichanyoneInvestmentoranyparticularkind of Investment may constitute; or that there are no suchrestrictions;

(ii) whethertheAuthorisedFirmmaycommittheClienttosupplementthefundsintheportfolio,andifitmayincludeborrowingonhisbehalf:

(A) thecircumstancesinwhichtheAuthorisedFirmmaydoso;

(B) whether there are any limits on the extent to which theAuthorisedFirmmaydosoand,ifso,whatthoselimitsare;

(C) anycircumstancesinwhichsuchlimitsmaybeexceeded;and

(D) any margin lending arrangements and terms of thosearrangements;

(iii) that the Authorised Firm may enter into Transactions for the Client,eithergenerallyorsubjecttospecifiedlimitation;and

(iv) wheretheAuthorisedFirmmaycommittheClienttoanyobligationtounderwriteorsub-underwriteanyissueorofferforsaleofSecuritiesorUnitsinaListedFund:

(A) whether there are any restrictions on the categories ofSecuritiesorUnits inaListedFundwhichmaybeunderwrittenand,ifso,whattheserestrictionsare;and

(B) whether there are any financial limits on the extent of theunderwritingand,ifso,whattheselimitsare.

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Annex 8 to the Consultation Paper No. 23

Inthisdocument,theunderliningindicatesanewtextandthestrikingthroughindicatesdeletedtextintheproposedamendments

----------------------------------------------------------------------------------------------

AIFCISLAMIC FINANCE RULES

(IFR)

AIFC RULES NO. _ OF 2017

---------------------------------------------------------------------------------------------- Astana International Financial Centre, Astana

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7.8. Additional disclosures in Prospectus theOfferingMaterials of a Non-ExemptIslamicFundGuidance

InadditiontocomplyingwiththerequirementssetoutintheAIFCCISRulesrelevanttoFundProspectustheOfferingMaterials,theFundManagerofaNon-ExemptIslamicFundmustcomplywiththeadditionalrequirementssetoutinthissection.

(1) A Fund Manager of a Non-Exempt Islamic Fund must state in the Fund’sProspectusOfferingMaterials:

(a) that all the operations in relation to the Fund will be conducted inaccordancewithShari’ah;

(b) iftheFundhasaSSBappointedtoit,thenamesofthemembersoftheSSBand their qualifications and experience and, whether or not the FundManager’sSSBisappointedtotheFund;

(c) if the Funddoes not have a SSB appointed to it pursuant to Rule 7.5(3),whatwidelyacceptablescreeningmethodologiesareusedbytheFundtoensure Shari’ah compliance with respect to Investments made for theFund,andtheboardthathasapprovedthem;

(d) ifapplicable,themannerandfrequencyofShari’ahreviews;

(e) howearningsprohibitedbyShari’ahwillbedisposedof;and

(f) whetherZakatistheresponsibilityoftheFundortheresponsibilityoftheUnitholders.

8. OFFERSOFISLAMICSECURITIESANDUNITSINANISLAMICINVESTMENTFUNDTHATISALISTEDFUND

8.1. Application

(1) A Person making Offers of Islamic Securities or Offers of Units in an IslamicInvestmentFundthatisaListedFundinorfromtheAIFCmustcomplywiththerequirements in the AIFC MAR Rules, except to the extent specified in thissectionofIFRRules.

(2) Thissectionof IFRRulesapplies toanyPersonwhoOffers IslamicSecuritiesorOffersofUnitsinanIslamicInvestmentFundthatisaListedFundinorfromtheAIFC.

(3) IslamicSecurities, forthepurposesofthe IFRRules,donot includeUnitsofanIslamicInvestmentFund.

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Guidance

i) TheissueofSecuritiesisnotaRegulatedActivity.However,theOfferofSecuritiesisanactivitytowhich theAIFCFSFRandMARRulesapply.Under theAIFCRegulationsandRules,aPersonmaking an Offer of Securities in or from the AIFC would be subject to a range of disclosurerequirements,unlessexemptbyspecificprovisions.

ii) OffersofIslamicSecuritieswhichareUnitsofanIslamicInvestmentFundarenotsubjecttotherequirements in this section because the AIFC CIS Rules provide for such activities to beregulated.However,OffersofUnitsofanIslamicInvestmentFundthatisalsoaListedFundaresubjecttotheAIFCCISRules,therequirementsofthissectionandtheAIFCMARRules.

iii) ThedefinitionofthetermIslamicSecuritiesisintheAIFCMasterGlossary.

8.3. Continuing disclosures relating to Islamic Securities or Units in an IslamicInvestmentFundthatisaListedFund

(1) The Issueror theReportingEntity responsible foran issueof IslamicSecuritiesand/or the FundManager (in the caseof an Islamic Investment Fund that is aListedFund)must,withoutdelay,disclosetothemarketsandtotheAFSAdetailsof any changes to the membership of its SSB, the identity, qualifications andexperienceofanynewmembersofthatSSBandtheidentityofanySSBmemberwhoresignedorwasdismissed.

(2) AlistedentitywithIslamicSecuritiesorUnitsinanIslamicInvestmentFundthatisaListedFundadmittedtotheOfficialListofSecuritiesmustmaketherequiredmarket disclosures in accordance with the requirements under the applicableAIFC MAR Rules and comply with the other continuing obligations specifiedbelow.

(3) The Issuer or the Reporting Entity responsible for an issue of Islamic equitySecuritiesand/ortheFundManager(inthecaseofanIslamicInvestmentFundthatisaListedFund)mustappointanindependentSSBtoevaluatetheShari’ahcomplianceof those securities andnotify theAFSAof that fact, at least on anannualbasis.

(4) A Reporting Entity and/or the Fund Manager (in the case of an IslamicInvestmentFundthatisaListedFund)mustdisclosetothemarketimmediately,anymaterialchangeinthestatusofShari’ahcomplianceofanyofthesecuritiesforwhichitisresponsibleasaReportingEntity.

(5) In cases, where there is a material change to the structure of the IslamicSecuritiesorUnitsinanIslamicInvestmentFundthatisaListedFundissuedbytheReportingEntityorListedFund,orintheuseofitsproceeds,theReportingEntityorFundManagermusttakeadequatestepstoobtainanddisclosetothemarket,anewShari’ahopinionconsideringthechangedcircumstances.