Law No. (25) of 2002 Concerning Investment Funds

Law No. (25) of 2002 Concerning Investment Funds*

We, Hamad bin Khalifa Al Thani, Amir of the State of Qatar, having reviewed the amended Provisional Constitution, particularly Articles (23), (34), and (51) thereof, and the Commercial Companies Law issued by Law No. (11) of 1981, amended by Law No. (9) of 1998, and the Royal Decree-Law No. (15) of 1993 establishing the Qatar Central Bank, amended by Law No. (19) of 1997, and the Royal Decree-Law No. (22) of 1993 organizing the Ministry of Finance, Economy and Trade and defining its competencies, and the Law No. (14) of 1995 establishing the Doha Securities Market, and the Law No. (13) of 2000 regulating foreign capital investment in economic activities, and the Amir's Order No. (1) of 2002 amending the Council of Ministers' composition, and upon the proposal of the Minister of Economy and Trade, and upon the draft law submitted by the Council of Ministers, after consulting the Shura Council, have enacted the following Law:

Article (1) For the purpose of applying the provisions of this Law, the following words and expressions shall have the meanings indicated alongside each of them, unless the context requires otherwise: The Ministry: The Ministry of Economy and Trade. The Minister: The Minister of Economy and Trade. The Bank: The Qatar Central Bank. The Market: The Doha Securities Market. The Fund: A legal entity established in accordance with the provisions of this Law, for investing funds. The Bank (Commercial): Any of the banks operating in the State. The Investment Company: Any financial company licensed by the Bank to conduct investment activities. The Founder: The Bank or licensed Investment Company authorized to establish investment funds. The Fund Manager: The natural or legal person appointed by the Founder to manage the fund. The Investment Custodian: The bank that performs the custody of investment fund assets. Investment Units: The shares constituting the fund's capital. Securities and Financial Instruments: Shares and bonds of Qatari joint stock companies, and government or public authority/institution-issued bonds and treasury bills, or any other securities licensed for trading, and other investment instruments within and outside the State of Qatar, as well as anything recognized by law, custom, or by the Bank as such. Private Subscription: An invitation directed to a specific category or specific persons for subscribing to the fund's capital.

Article (2) Investment funds in securities, financial instruments, and funds may be established and developed in accordance with the provisions of this Law, its executive regulations, and instructions issued by the Bank. Investment funds may also be established to invest funds in real estate and development projects, within and outside the State.

Article (3) A fund operating investments in real estate, funds, and shares outside the State shall be established with a license issued by the Bank. A fund operating investments in shares of Qatari joint stock companies, listed shares on the Market, and real estate within the State shall be established with a license issued by the Bank, following the Minister's approval.

Article (4) The fund's capital shall be divided into equal investment units, and the liability of the owners of these units shall be limited to their share in the capital. The owners of these units may not participate in the fund's asset investment activities. Each unit of the fund's capital shall have a nominal value in Qatari Riyal or any other currency. In all cases, the nominal unit value shall be paid in a lump sum or as required by the fund's constitution.

Article (5) Funds wishing to list their investment units on the Market must obtain approval from both the Market and the Bank, in accordance with applicable laws and regulations. Funds shall be registered after establishment in the Ministry's commercial register under a special fund register. The Founder may establish more than one fund.

Article (6) Each fund shall have a legal personality and financial status independent of the Founder, and the fund's assets may not be seized except to fulfill obligations arising from its investment activities. The Founder may appoint an investment custodian for the fund, in accordance with instructions approved by the Bank. The investment custodian may not own any of the fund's units.

Article (7) Each fund shall have a manager who represents it before the courts and in its relations with third parties, and has the right to sign on its behalf. A member of the Founder's board of directors or one of its executive managers may not serve as the fund manager. The appointment of the fund manager is subject to the Bank's approval, coordinated with the Market in the case of funds whose investment units are listed for trading on the Market.

Article (8) Funds that offer their investment units for trading shall be subject to the laws, regulations, and decisions governing the Market. In all cases, the accounts and activities of funds are subject to the supervision and oversight of the Bank and its issued instructions.

Article (9) Investment units shall be offered for public or private subscription. Non-Qatari natural or legal persons may participate in funds, and the Minister shall determine, in consultation with the Minister of Finance and the Governor of the Bank, their participation ratios in funds dealing in shares, real estate, and Qatari projects.

Article (10) Each fund shall have one or more auditors, each appointed in accordance with the conditions and procedures approved by the Bank.

Article (11) A fund shall terminate upon any of the following grounds:

1. Expiration of its specified term.
2. Fulfillment of the purpose for which it was established.
3. Issuance of a judicial order for its dissolution.
4. Occurrence of a liquidation state stipulated in its constitution.
5. Termination or bankruptcy declaration of the Founder, unless another entity assumes fund management following Bank approval.

Article (12) Without prejudice to any heavier penalty stipulated in another law, anyone who establishes a fund without obtaining a license shall be punished by imprisonment for up to six months and/or a fine not exceeding (5,000) five thousand Riyals per day, or by one of these penalties. The violator shall be required to liquidate the fund, return subscribers' funds, and bear liquidation expenses. Anyone violating any other provision of this Law shall be punished by imprisonment for up to three months and/or a fine not exceeding (50,000) fifty thousand Riyals, or by one of these penalties.

Article (13) The Minister shall issue, based on the Bank's proposal and the Market's recommendation, the executive regulations and decisions implementing this Law, with the executive regulations to be issued within three months from the date of publication of the Law in the Official Gazette. The regulations shall specify the conditions and procedures for licensing and participating in the fund, appealing a decision rejecting fund establishment, rights and obligations of those managing it, appointment and dismissal of auditors, methods for redeeming or trading investment units, the subscription prospectus details, conditions required for both types of subscriptions, rules and procedures followed during fund liquidation, and other procedures related to its activities.

Article (14) All competent authorities shall implement this Law according to their respective jurisdictions. It shall come into force from the date of its publication in the Official Gazette.

Hamad bin Khalifa Al Thani Amir of the State of Qatar

Issued at the Amir's Diwan on: 15 / 6 / 1423 AH Corresponding: 24 / 8 / 2002 AD

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• The Official Gazette, Issue Ten, on October 6 / 2002 AD

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