Bahrain Collective Investment Schemes Regulations: Contents

Regulation Governing Collective Investment Schemes June 2003
Principles of Supervision, Operation and Marketing with respect to Collective Investment Schemes
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Repurchase, Redemption, Unit Certificates and other Provisions

15. The Agency shall be given prior notice of, and shall be invited to attend, all ordinary and extraordinary general meetings for a scheme.
16. Units in a scheme must be redeemed, repurchased, reimbursed or repaid (as may be appropriate) at the request of the share participants and in accordance with the scheme documents.
17. Unless the Agency gives its specific prior written agreement, the minimum subscription price on issue for a unit shall be BD100 (or equivalent) per unit for a scheme established in Bahrain, and US$2,000 (or equivalent) per unit for a scheme established outside Bahrain.
18. Units shall be created or sold, and redeemed, repurchased, reimbursed or repaid (as may be appropriate), in accordance with the scheme documents and at a price arrived at by dividing the net asset value of the scheme by the number of units outstanding; such sale price may be increased by duties and charges as are agreed in advance with the Agency.
19. Units may not be created unless the equivalent of the net issue price is paid into the assets of the scheme. This shall not preclude the distribution of bonus units. Furthermore, units may not be created or canceled during a period of suspension thereof, or if such creation or cancellation would not be in the interests of the scheme and the scheme participants.
20. The value of the assets of a scheme shall be based, in the case of officially quoted securities, on the last known stock exchange quotation unless such quotation is not representative of such value. For securities not so quoted, and for securities which are so quoted but for which the latest quotation is not representative, the value shall be based on the estimated realisation value. The method of valuation for other types of asset shall be agreed with the Agency.
21. Scheme participants shall be informed of any significant decline in the net asset value of a scheme and the reasons therefor.
22. The scheme documents shall determine the frequency of the calculation of the issue and repurchase and other appropriate prices of the units of such scheme.
23. Without prejudice to paragraph 22 and at least once a month, an independent auditor approved by the Agency must ensure that (i) the calculation of the value of the units in a scheme is effected in accordance with the formula relevant thereto, and (ii) the schemes assets are invested in accordance with these Principles, the scheme documents and the Agency's directions.
24. The repurchase, redemption, reimbursement or repayment (as may be appropriate) of units in a scheme may, in accordance with its scheme documents, be temporarily suspended. Suspension may be provided for only where exceptional circumstances so require it, and where justified in the interests of the scheme and the scheme participants. In addition, the Agency may permit, or require such suspension if it considers such action is, or would be, in the interests of the scheme, the scheme participants or the public.
25. The Agency, and competent authorities in States in which the units of the scheme are marketed, shall he notified, without delay, of any action taken pursuant to paragraph 24.
26. Scheme participants shall, in accordance with the scheme documents, either(i) be issued with registered certificates representing one or more units of the scheme or, alternatively, (ii) be provided with written confirmation of entry in a register for such units which shall be kept current and up-to-date at all times and shall contain full details of the names and addresses of the scheme participants, the number of units held thereby and the date of acquisition of such units. Such register shall be available for inspection by the scheme participants at a set place and at set times. Such certificates or written confirmation shall constitute prime facie evidence of title to units in a scheme. In all other respects, the certificates and register shall be, in form and substance, satisfactory to the Agency.
27. The scheme documents, shall amongst other things and as may be appropriate:
(i) lay down the conditions for the replacement of the relevant persons and provide rules to ensure the protection of the scheme and the scheme participants on the event of such replacement;
(ii) provide for the remuneration and expenditure of the relevant persons, and the method of calculation thereof; and
(iii) provide for the conditions and manner of application of income.
28. The Agency shall satisfy itself as to the experience and standing of all relevant, and other, persons and shall be notified in advance of any changes in the identity thereof.
29. The Agency's prior approval must be obtained to the form and content of all the scheme documents.
30. Appropriate procedures shall be established to prevent conflicts of interest arising as a result of the staff of the relevant persons of a scheme dealing in the units of such scheme.
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