• MKT 5. MKT 5. SPONSORS AND COMPLIANCE ADVISERS

    • MKT 5.1 MKT 5.1 Sponsors

      • Application

        • MKT 5.1.1

          This section applies to:

          (a) a Sponsor appointed pursuant to Rule 5.1.2; and
          (b) any Reporting Entity that is required by the Regulator to appoint a Sponsor.

      • Appointment of Sponsors

        • MKT 5.1.2 MKT 5.1.2

          (1) Pursuant to section 83 of the FSMR, the Regulator may, where it considers it appropriate to do so, require a Person who makes or intends to make a Prospectus Offer to:
          (a) appoint a Sponsor in respect of the Prospectus Offer; or
          (b) provide third party certification in respect of any specific matters relating to the Prospectus Offer.
          (2) Where the Regulator requires a Sponsor to be appointed pursuant to (1)(a), the Regulator must:
          (a) do so in sufficient time to enable the Sponsor to comply with the requirements in this Chapter and
          (b) require such appointment to be effective for the Offer Period or such other period as the Regulator determines as appropriate.

          • Guidance

            1. The Regulator may require the appointment of a Sponsor or a compliance adviser as appropriate to the circumstances of an issuance as assessed by the Regulator in its sole discretion. Circumstances which are likely to require the appointment of a Sponsor include an issuance where there is a large retail element. Conversely, a compliance adviser is likely to be required to be appointed where there is a large wholesale element to an issuance.
            2. The Regulator may require the appointment of a Sponsor, or third party certification in respect of any matters relating to an Issuer, in appropriate cases. An example of circumstances in which the Regulator may require the appointment of a Sponsor, or third party signoff, would be where an Issuer does not have a proven track record, such as a start-up.
            3. Generally, the matters in relation to which the Regulator may require third party sign-off pursuant to Rule 5.1.2(1)(b) include matters relating to the adequacy of working capital and systems and controls in place for financial reporting by the Issuer. Such certification should be provided by a third party acceptable to the Regulator. To be acceptable to the Regulator, the third-party should be independent of the Issuer and have relevant expertise relating to the matters on which certification of compliance is to be provided.
            4. In most cases the Person making a Prospectus Offer will be the Issuer of the Securities to which the Prospectus relates. However there may be situations where the Person making a Prospectus Offer, that is the Offeror, is not the Issuer of the Relevant Securities.
            5. In any event, the Sponsor must make certain inquiries and assume certain obligations under these Rules. A Sponsor should therefore be a Person familiar with the requirements of the FSMR and Rules and who has the necessary knowledge, experience, qualifications and resources to assist the Person making the Prospectus Offer to comply with the various requirements.

      • Procedures relating to appointment of Sponsors

        • MKT 5.1.3

          (1) A Person required to appoint a Sponsor must, prior to appointing a Sponsor:
          (a) take reasonable steps to ensure that the proposed Sponsor has the required knowledge, experience, qualifications and resources to carry out its obligations under these Rules; and
          (b) notify the Regulator of the proposed Sponsor's name, its business address and an address in the Regulator for the service of documents.
          (2) If requested by the Regulator, a Person appointing a Sponsor must provide the Regulator with information about the knowledge, experience, qualifications and resources of the appointed or proposed Sponsor.

        • MKT 5.1.4

          (1) A Person must take reasonable steps to ensure that the relevant Sponsor and Employees of the Sponsor are independent and have appropriately managed any conflict of interest that may arise.
          (2) A Person must notify the Regulator if it becomes aware, or has reason to believe, that the Sponsor or relevant Employees of the Sponsor are no longer independent or have a conflict of interest which has not been appropriately managed.

        • MKT 5.1.5

          (1) Where, in the opinion of the Regulator, a Sponsor appointed by a Person is not suitable, or where a Sponsor has not been appointed or has resigned, the Regulator may direct the Person to replace or appoint a Sponsor.
          (2) The Regulator must give both the Person and, if in the Regulator's opinion a Sponsor is not suitable, the Sponsor an opportunity to make representations under the procedures in that Schedule.

      • Obligations of a Sponsor

        • MKT 5.1.6

          A Sponsor appointed pursuant to Rule 5.1.2 must:

          (1) satisfy itself to the best of its knowledge and belief, having made due and careful enquiry that the Person who makes or intends to make a Prospectus Offer has satisfied all applicable conditions for offering Securities and other relevant requirements under the FSMR and these Rules;
          (2) provide to the Regulator any information or explanation known to it in such form and within such time limit as the Regulator may reasonably require for the purpose of verifying whether the Person making the Prospectus Offer complies or has complied, with the applicable requirements in the FSMR and these Rules; and
          (3) take other steps required in writing by the Regulator.

        • MKT 5.1.7

          Where a Sponsor becomes aware of a failure by the Person making the Prospectus Offer to comply with its obligations under the FSMR and these Rules, the Sponsor must without undue delay:

          (1) notify the Person making the Prospectus Offer of the failure and take reasonable steps to ensure it rectifies the failure within a reasonable time; and
          (2) if the Person making the Prospectus Offer does not or is unable to rectify the failure as soon as practicable notify the Regulator of that fact.

      • Duty of care of Sponsors

        • MKT 5.1.8

          A Sponsor has a duty of care to the Person which has made its appointment.

      • Co-operation with Sponsors

        • MKT 5.1.9

          A Person who is required to appoint a Sponsor in respect of a Prospectus Offer must take reasonable steps to ensure that it and its Employees:

          (1) provide such assistance as the Sponsor reasonably requires to discharge its duties;
          (2) give the Sponsor right of access at all reasonable times to relevant records and information;
          (3) do not interfere with the Sponsor's ability to discharge its duties;
          (4) do not provide false, misleading, or deceptive information to the Sponsor; and
          (5) report to the Sponsor any matter which may significantly affect the financial position of the Person issuing the Securities or the price or value of the Securities.

        • MKT 5.1.10

          A Sponsor must notify the Regulator of any non-cooperation by the Person making the Prospectus Offer or the Employees of that Person.

      • Termination of appointment

        • MKT 5.1.11

          Where a Person who is required to appoint a Sponsor dismisses the Sponsor, the Person must advise the Regulator in writing without delay of the dismissal, giving details of any relevant facts and circumstances.

        • MKT 5.1.12

          Where a Sponsor resigns, it must advise the Regulator in writing without delay of the resignation, giving details of any relevant facts and circumstances.

    • MKT 5.2 MKT 5.2 Compliance advisers

      • Application

        • MKT 5.2.1 MKT 5.2.1

          This section applies to a Reporting Entity that is required by the ADGM to appoint a compliance adviser.

          • Guidance

            The requirement for the appointment of a compliance adviser is designed to ensure that a Reporting Entity is aware of and complies with its continuing obligations under the FSMR and this module. A compliance adviser should therefore be a person familiar with the requirements of the FSMR and this module and should have the necessary knowledge, experience, qualifications and resources to assist a Reporting Entity to comply with its regulatory obligations.

      • Appointment of a compliance adviser

        • MKT 5.2.2

          The Regulator may require a Reporting Entity to:

          (1) appoint a compliance adviser; or
          (2) replace a compliance adviser already appointed.

        • MKT 5.2.3

          (1) A Reporting Entity required to appoint a compliance adviser must, prior to making the appointment:
          (a) take reasonable steps to ensure that the proposed compliance adviser has the required knowledge, experience, qualifications and resources to carry out its obligations under these Rules;
          (b) notify the Regulator of the proposed compliance adviser's name and business address; and
          (c) take reasonable steps to ensure that the proposed compliance adviser and its relevant Employees are independent and that any conflicts of interest are appropriately managed.
          (2) If requested by the Regulator, a Reporting Entity appointing a compliance adviser must provide the Regulator with such information as it may require including information regarding knowledge, experience, qualifications and resources of the compliance adviser.
          (3) A Reporting Entity must notify the Regulator if it becomes aware, or has reason to believe, that the compliance adviser or its relevant Employees have a conflict of interest which has not been appropriately managed.

        • MKT 5.2.4

          (1) The Regulator may, by written notice, require a Reporting Entity to appoint a compliance adviser for a specified period to assist the Reporting Entity in meeting its continuing obligations under the Markets Regulations and these Rules.
          (2) A Reporting Entity that is required to appoint a compliance adviser in accordance with the requirements in this section must ensure that a compliance adviser continues to fulfil the role of compliance adviser until such time as the Regulator advises the Reporting Entity in writing that a compliance adviser is no longer required.

      • Obligations of a Reporting Entity in relation to its compliance adviser

        • MKT 5.2.5

          Where a Reporting Entity is advised by its compliance adviser that it is failing or has failed to comply with its obligations under the FSMR and these Rules, the Reporting Entity must without undue delay:

          (1) take reasonable steps to rectify the failure as soon as practicable; and
          (2) if the Reporting Entity does not or is unable to rectify the failure as soon as practicable notify the Regulator of that fact.

        • MKT 5.2.6

          A Reporting Entity must provide to the Regulator any information in such form and within such time as the Regulator may reasonably require regarding its compliance adviser or any advice the compliance adviser is providing, or has provided, to the Reporting Entity regarding its continuing obligations under the FSMR and these Rules.

        • MKT 5.2.7

          A Reporting Entity must take reasonable steps to ensure its compliance adviser cooperates in any investigation conducted by the Regulator including answering promptly and openly any questions addressed to the compliance adviser, promptly producing the originals or copies of any relevant documents and attending before any meeting or hearing at which the compliance adviser is requested to appear.

      • Co-operation with compliance advisers

        • MKT 5.2.8

          A Reporting Entity must take reasonable steps to ensure that it and its Employees:

          (1) provide such assistance as the compliance adviser reasonably requires to discharge its duties;
          (2) give the compliance adviser right of access at all reasonable times to relevant records and information;
          (3) do not hinder or interfere with the compliance adviser's ability to discharge its duties;
          (4) do not withhold information that would assist the compliance adviser advising the Reporting Entity of its duties;
          (5) do not provide false, misleading, or deceptive information to the compliance adviser; and
          (6) report to the compliance adviser any matter which may significantly affect the financial position of the Reporting Entity or the price or value of the Securities.

      • Termination of compliance adviser

        • MKT 5.2.9

          Where a Reporting Entity dismisses its compliance adviser, the Reporting Entity must advise the Regulator in writing without delay of the dismissal, giving details of all relevant facts and circumstances.

        • MKT 5.2.10

          Where a compliance adviser resigns, the Reporting Entity must without delay advise the Regulator in writing of the resignation, giving details of all relevant facts and circumstances.