MKT 1. MKT 1. INTRODUCTION
MKT 1.1 MKT 1.1 Application
MKT 1.1.1(1) The Rules in this module ("MKT") are made for the purposes of the Financial Services and Markets Regulations 2015 ("FSMR") and apply to every Person to whom that legislation applies.(2) Without limiting the generality of (1), this module applies to:(a) a Person making an Offer of Securities to the Public except in relation to Units of a Fund;(b) a Person applying to have Securities admitted to trading on a Recognised Body;(c) a Person specified in Rule 4.10.1 as liable for the content of a Prospectus;(d) a Reporting Entity;(e) a Person who is a Related Party;(f) a Person who is a Restricted Person;(g) a Person who is a Connected Person; and(h) a Person appointed as a Sponsor, compliance adviser or other expert adviser of a Reporting Entity.
Where a Rule prescribes a requirement on a Reporting Entity or an Undertaking, each Director, Partner or other Person charged with the management of that Reporting Entity or Undertaking must take all reasonable steps within its control to secure compliance with the requirement by the Reporting Entity or Undertaking.
MKT 1.1.3 MKT 1.1.3
Where a Rule prescribes a requirement relating to a Director, Partner or Employee of a Reporting Entity or an Undertaking:(1) the Director, Partner or Employee, as the case may be, must take all reasonable steps within his control to secure compliance with the requirement; and(2) the Reporting Entity or Undertaking must take all reasonable steps to ensure compliance with the requirement by the Director, Partner or Employee.
Application to Listed Funds1. Where Units of a Fund are admitted to trading on a Recognised Body, such a Fund is a Listed Fund. A reference to a Reporting Entity in relation to a Listed Fund is a reference to the Fund Manager of that Fund, unless another person has been declared by the Regulator as the Reporting Entity of the Fund.2. Accordingly, any obligations of a Reporting Entity of a Listed Fund are, unless the context requires otherwise, obligations imposed on the Reporting Entity in respect of the Listed Fund. Therefore, the obligations imposed by the FSMR and these Rules apply to the Governing Body of the Reporting Entity and to every member of the Governing Body in the manner specified in Rules 1.1.2 and 1.1.3.
Waivers and modifications3. The Regulator may, pursuant to section 9 of the FSMR, waive or modify the application of the provisions in the FSMR where it considers appropriate or desirable in the interests of the ADGM to do so and, in accordance with the procedures set out in Guidance 4 below.4. Generally, the Regulator will exercise the section 9 FSMR power sparingly and only in circumstances where there is a clearly demonstrated case for granting a waiver or modification of the FSMR, such as:a. to alleviate any undue regulatory burden on a Person in complying with the requirements in the FSMR in circumstances where investor protection intended by the relevant provisions is not reduced; orb. to apply to a Person upon request (i.e. on a consent basis) the provisions of the FSMR which, without a modification, will not apply to that Person. For example, an Exempt Offeror (i.e. a Person such as a government or government instrumentality included in the ADGM's Exempt Offeror List in APP 5) who is not subject to the Prospectus disclosure and the liability regime in the FSMR and these Rules may apply to the Regulator for a modification to section 61 of the FSMR so that it can make a Prospectus Offer of its Securities in accordance with the relevant Prospectus disclosure and liability regime in the FSMR and these Rules.5. The Regulator also has the power, pursuant to section 9 of the FSMR, to waive or modify these Rules. The Guidance and Policies Manual (GPM) gives further information on how to seek a waiver or modification.
MKT 1.2 MKT 1.2 Overview of the module
Listing Rules — chapter 21. Chapter 2 sets out the ADGM's Listing Rules.
Listed funds — chapter 32. Chapter 3 contains, with the exception of the requirements in chapters 5 (Sponsors) and 8 (Systems and Controls), all the requirements applicable to a Reporting Entity of a Listed Fund. These requirements, while mirroring the requirements applicable to other Reporting Entities, have been tailored to take account of the characteristics of Funds. These include:a. general requirements applicable to Listed Funds;b. Prospectus requirements for the purposes of having Units of a Fund admitted to trading on a Recognised Body;c. governance requirements applicable to Listed Funds;d. market disclosure of information relating to Listed Funds; ande. financial reporting requirements applicable to Listed Funds.
Offer of Securities — chapter 43. Chapter 4 contains:a. the requirements applicable to a Person who:i. makes an Offer of Securities to the Public (other than in respect of Units, which are covered by the Prospectus and other requirements in the Fund Rules); orii. applies to have Securities admitted to trading on a Recognised Body (other than the admission to trading of Units, which is governed by the requirements in chapter 3);b. the types of Exempt Offers (i.e. Securities which can be offered to the public without a Prospectus), Exempt Securities (i.e. Securities which can be admitted to trading on a Recognised Body without a Prospectus) and Exempt Communications (i.e. communications relating to Securities which are not treated as a Prospectus);c. the requirements and procedures relating to the approval of a Prospectus by the Regulator;d. the requirements and procedures relating to the structure and content of a Prospectus including:i. when material may be incorporated into a Prospectus by reference; andii. liability for the content of a Prospectus including the liability of Experts and other Persons whose reports or opinions are included in a Prospectus with their consent for such inclusion; ande. the circumstances in which the Regulator may accept an Offer document prepared in accordance with the legislation applicable in a jurisdiction other than the Regulator as sufficient for the purposes of meeting the Prospectus requirements in the FSMR and these Rules.
Sponsors and compliance advisers — chapter 54. The Regulator has the discretion to require the appointment of a Sponsor, compliance adviser or other expert adviser by a Reporting Entity, including that of a Listed Fund. Chapter 5 contains the requirements relating to the appointment of such Sponsors, compliance advisers and other expert advisers, and the obligations that apply to such Persons and the Reporting Entity where such Sponsors or compliance advisers are appointed.
Market Abuse, Price Stabilisation and Buy-back Programmes — chapter 65. Chapter 6 sets out the ADGM's provisions on Market Abuse, as outlined within the FSMR, and the procedures for Price Stabilisation and Buy-back Programmes.
Market disclosure — chapter 76. Every Reporting Entity is required to disclose to the market certain types of information either relating to the Securities of the Reporting Entity or the Reporting Entity itself. Such disclosure is designed to ensure that the markets are continually updated with information that is likely to have an impact on the price of the Securities so that investors can make an informed judgement about those Securities. For this purpose, chapter 7 requires disclosure of Inside Information, with carve-outs for non-disclosure of commercially sensitive information for a limited period, as well as disclosures of interests held by Persons in positions of control or influence relating to a Reporting Entity (such as Controllers and their associates, called "Connected Persons"), and the disclosure of Directors' notifiable interests in the Reporting Entity. The means by which disclosure of the information required to be provided to the markets are also specified in this chapter.
Systems and controls — chapter 87. Chapter 8 sets out the systems and controls a Reporting Entity, including a Reporting Entity of a Listed Fund, must have in order to be able to comply with the requirements applicable to that Person.
Governance of Reporting Entities — chapter 98. Chapter 9 covers a wide range of Corporate Governance requirements applicable to Reporting Entities including:a. seven high-level Corporate Governance Principles, with best practice standards relating to those principles which apply on a "comply or explain" basis and which are set out in APP 4;b. Directors' duties, including acting in good faith and applying due diligence and care in the discharge of their duties and functions;c. provisions to ensure fair treatment of Shareholders in the conduct of affairs of the Company, such as provisions relating to communication with Shareholders, exercise of pre-emption rights, reduction of Share capital and a list of matters that require approval by a majority of Shareholders in voting; andd. provisions to address conflicts of interest. For example individuals involved in the Senior Management of the Reporting Entity (such as executive Directors and other senior executives, called "Restricted Persons"), are prohibited from dealing in the Securities of the Reporting Entity during "close periods", unless prior clearance for those dealings is obtained. Similarly, Persons who qualify as Related Parties of the Reporting Entity are prohibited from entering into commercial transactions with the Reporting Entity unless certain requirements are followed.
Accounting periods, financial reports and auditing — chapter 109. Every Reporting Entity is required to prepare and file certain annual, semi-annual and other periodic financial reports relating to the financial position of the Reporting Entity. Such reports are required to be prepared in accordance with the specified internationally accepted accounting standards and, in the case of annual financial reports, required to be audited. The requirements relating to the preparation and audit of the financial statements and the disclosure of such reports within specified periods are set out in chapter 10.
MKT 1.3 MKT 1.3 General
A reference in this MKT module to:(1) "this module", is a reference to this MKT module; and(2) "Rules", or "Rulebook", except where otherwise provided, is a reference to the rules in this module.
Where a Reporting Entity is referred to in this module as a Reporting Entity in respect of a specified class of Securities, it is a reference to a Person who has become a Reporting Entity by:(1) making an Offer of Securities to the Public; or(2) having Securities admitted to trading on a Recognised Body, of that particular specified class of Securities.
MKT 1.4 MKT 1.4 Interpreting the Rulebook
Interpretation1. Every provision in the Rulebook must be interpreted in the light of its purpose. The purpose of any provision is to be gathered first and foremost from the text of the provision in question and its context among other relevant provisions.2. When this section refers to a provision, this means every type of provision, including Rules and Guidance.3. Where reference is made in the Rulebook to another provision of the Rulebook or other ADGM legislation, it is a reference to that provision as amended from time to time.4. Unless the contrary intention appears:a. words in the Rulebook importing the masculine gender include the feminine gender and words importing the feminine gender include the masculine; andb. words in the Rulebook in the singular include the plural and words in the plural include the singular.5. If a provision in the Rulebook refers to a communication, notice, agreement, or other document "in writing" then, unless the contrary intention appears, it means in legible form and capable of being reproduced on paper, irrespective of the medium used. Expressions related to writing must be interpreted accordingly.6. Any reference to "dollars" or "$" is a reference to United States Dollars unless the contrary intention appears.7. Unless stated otherwise, a day means a calendar day. If an obligation falls on a calendar day which is either a Friday or Saturday or an official State holiday in the ADGM, the obligation must take place on the next calendar day which is a Business Day.8. Unless stated otherwise, a month means 30 calendar days.
Defined terms9. Defined terms are identified throughout the Rulebook by the capitalisation of the initial letter of a word or of each word in a phrase and are defined in the Glossary ("GLO"). Unless the context otherwise requires, where capitalisation of the initial letter is not used, an expression has its natural meaning.
MKT 1.5 MKT 1.5 Complaints against the Regulator
A Person who feels he has been adversely affected by the manner in which the Regulator has carried out its functions may make a complaint to the head of the ADGM about its conduct or the conduct of its Employees.
A complaint must be in writing and should be addressed to the head of the ADGM. The complaint will be dealt with by the head of the ADGM in a timely manner.