Executive Regulation of the Investment Law No. 25 of 2002

Minister of Economy and Commerce,

Having reviewed the amended Basic Statute, specifically Articles (33, 34); Having reviewed the Commercial Companies Law issued by Law No. (5) of 2002; Having reviewed Law No. (25) of 2002 concerning Investment Funds; Having reviewed the Emiri Decision No. (29) of 1996 concerning decisions of the Council of Ministers submitted to the Emir for ratification and issuance; Having reviewed the proposal of the Central Bank of Qatar and the recommendation of the Qatar Stock Exchange; Having reviewed the Council of Ministers' approval of this Decision project in its regular meeting (18) of 2004, held on 12/5/2004,

Has decided the following:

Article (1)

The provisions of the Executive Regulation of the Investment Funds Law attached to this Decision shall be implemented.

Article (2)

All competent authorities shall implement this Decision within their respective jurisdictions. It shall be enforced from the date of its publication in the Official Gazette.

Mohammed bin Ahmed bin Jassim Al Thani Minister of Economy and Commerce

Issued in Doha on: 21/4/1425 AH Corresponding to: 9/6/2004 AD

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Executive Regulation of the Investment Funds Law

Chapter One

Definitions

Article (1)

In the application of the provisions of this Regulation, the following words and expressions shall have the meanings indicated alongside each, unless the context requires otherwise:

No.	Term	Meaning
(1)	The Ministry	The Ministry of Economy and Commerce.
(2)	The Minister	The Minister of Economy and Commerce.
(3)	The Bank	The Central Bank of Qatar.
(4)	The Governor	The Governor of the Bank.
(5)	The Law	Law No. (25) of 2002 concerning Investment Funds.
(6)	Closed Fund	An investment fund that issues a fixed number of investment units constituting its capital, with a specified number of investors for a specific purpose and duration according to its Articles of Association.
(7)	Open Fund	An investment fund that issues a non-fixed number of investment units according to its Articles of Association.
(8)	Investor	A natural or legal person subscribing to investment units.
(9)	Public Offering	A public invitation to subscribe to the fund's capital.

(10) Domestic Investments: Investments of funds in financial papers and instruments, or in real estate, projects, or other financial investments, within Qatar. (11) Foreign Investments: Investments of funds in financial papers and instruments, or in real estate, projects, or other financial investments, outside Qatar.

Chapter Two

Licensing Conditions and Procedures

Article (2)

To license the establishment of a fund, the applicant must be a bank or an investment company that has been practicing its work in Qatar for at least three years, and its Articles of Association must permit the management and investment of others' funds. The Bank may, as an exception, exempt some banks and investment companies from the duration condition according to the controls it specifies.

Article (3)

The applicant must submit a fund establishment application to the Bank on the form prepared by the Bank, accompanied by the fund's Articles of Association and all documents and papers specified by the Bank. The Bank shall study and decide on the license application for a fund whose activity is limited to foreign investments within thirty days from the date of submission. If the license application concerns a fund wishing to invest its funds in domestic investments, or in both domestic and foreign investments, the Bank shall refer it to the Minister within thirty days from the date of submission, accompanied by its opinion, for a decision within fifteen days at most from the date of referral. In all cases, the expiration of the two periods mentioned in the previous paragraphs without a decision on the application shall be considered a rejection. In case of approval, the Minister, in consultation with the Minister of Finance and the Governor, may determine the percentage of participation for non-Qataris wishing to participate in funds dealing in Qatari shares, real estate, and projects. The Bank shall issue the license and notify the applicant of the final decision by letter with proof of receipt.

Article (4)

In case the Bank rejects the application to establish foreign investment funds, the applicant may appeal the rejection decision to the Bank within thirty days from receiving the rejection notice or the expiration of the period prescribed for deciding on the application. The Bank's decision on the appeal shall be final. In case the Minister rejects the application to establish domestic investment funds, or both domestic and foreign investment funds, the applicant may appeal to the Bank within thirty days from receiving the rejection notice or the expiration of the period prescribed for deciding on the application. The Bank shall refer the appeal to the Minister within seven days from the date of submission, and the Minister's decision on the appeal shall be final. In all cases, the Bank shall notify the appellant of the final decision within fifteen days from the date of its issuance.

Article (5)

The fund shall be registered in the Investment Funds Register at the Ministry upon request by the licensee, accompanied by:

• 1- The license certificate.
• 2- A copy of the fund's Articles of Association.

The Ministry shall issue a certificate of registration, and the fund shall acquire legal personality from the date of registration.

Article (6)

The Bank shall issue a license certificate bearing its number, the fund's name, the founder's name, the type of fund, its duration, its capital, subscription units, the percentage of non-Qatari participation, and any other data the Bank deems appropriate. The license certificate shall be recorded in a special register prepared by the Bank for this purpose, containing the following data:

• 1- License number, date, and registration number at the Ministry.
• 2- Founder's name.
• 3- Fund manager's name.
• 4- Investment custodian's name.
• 5- Auditor's name.
• 6- Fund name and duration.
• 7- Fund capital and number and value of subscription units.
• 8- Any other data the Bank deems appropriate, in accordance with the provisions of the Law and this Regulation.

Chapter Three

Fund Capital and Subscription Procedures

Article (7)

The fund's capital shall be divided into investment units of equal nominal value, in Qatari Riyals or any other currency specified in the Articles of Association, and shall be offered for public or private subscription. Subscription to the fund's capital shall not be made with in-kind discounts of any kind. The value of subscribed units must be paid in cash, in a single installment, unless the fund's Articles of Association stipulate payment in installments.

Article (8)

The fund shall issue a certificate for the subscribed units to each investor, signed by the legal representative of the founder or the fund manager. The certificate shall not be issued until the full value of the subscribed investment units is paid in cash. The certificate must include the following main data:

• 1- Subscriber's name as stated in the identity document.
• 2- Fund name, license number, and registration number.
• 3- Number of subscribed investment units and their nominal value.

Article (9)

The Articles of Association of a closed fund shall determine the fixed amount of the fund's capital, while the Articles of Association of an open fund shall determine the maximum limit of variable capital units that can be issued.

Article (10)

The capital of either fund shall not be increased except within the limits and controls specified in its Articles of Association.

Article (11)

The subscription prospectus for the fund must include the following data:

• 1- Fund name, license number, and registration number.
• 2- Fund manager's name, qualifications, and experience.
• 3- Other data specified in Article (18) of this Regulation.
• 4- Any other explanatory information about the nature of the investment and its risks, which the founder deems important to disclose to investors.

The founder must record investors' receipt of the subscription prospectus, along with a copy of the fund's Articles of Association.

Article (12)

The founder shall invite the public to subscribe to the fund through publication in local newspapers, in addition to any other media deemed appropriate. The invitation shall specify the start date for receiving subscription requests, the closing date, subscription limits and conditions, and the bank that will receive subscription requests and funds. In the case of private subscription, the invitation shall be directed to investors according to the method specified in the fund's Articles of Association. Subscription to the fund shall be conducted by investors preparing and signing subscription requests according to forms specified by the founder for this purpose. The form must include the investor's name, address, and personal data, the names of the fund, the institution, the investment custodian, and the fund manager, the number and value of investment units the investor wishes to subscribe to, and any other important conditions or data. The subscription request must also include a declaration by the investor that they have reviewed the fund's Articles of Association and the subscription prospectus and agreed to their contents.

Article (13)

The investment custodian, or the entity receiving subscription requests and funds, must deliver to the investor a receipt for the value of the funds paid and the number and value of the investment units the investor wishes to subscribe to. The subscription window for the fund shall not be closed after the period specified in the subscription invitation expires. The founder may extend this period by a similar maximum period if all offered investment units are not covered. After the specified period expires, the subscription window shall be closed. The founder and fund manager shall, upon completion, deliver subscription certificates or documents within fifteen days from the date of closing the subscription window.

Article (14)

If the specified subscription period expires without full coverage of the offered investment units, the founder, with the Bank's approval, may reduce the fund's capital to the extent covered, provided the reduction does not be less than (50%) of the total value of the units offered for subscription. In case of reduction, the founder must change all documents, the fund's system, and issued documents to conform to the new status, and notify the Bank and the Ministry.

Article (15)

[Note: The source text jumps from Article 14 to Article 15 in Chapter 4, but Article 15 in Chapter 3 seems to be missing or merged. Based on the text provided, the following paragraph appears to be the continuation of Article 14 or a separate provision regarding cancellation, though labeled as Article 15 in the source structure for Chapter 4. The text provided says "بالتغيير، وتزويدهما بنسخ من المستندات والوثائق المعدلة..." which translates to "Upon modification, and providing them with copies of the modified documents..." This seems to be a fragment. However, looking at the source, Article 15 in Chapter 4 is about Founder Obligations. The text fragment "يعتبر الترخيص بالصندوق لاغياً إذا انتهت مدة الاكتتاب دون تغطية (٥٠٪)..." (The fund license shall be considered void if the subscription period expires without covering (50%)...) appears to be part of the subscription rules. I will translate the text as provided, noting the structure.]

Correction based on source text flow: The source text has a fragment at the end of Article 14's section or start of next. "بالتغيير، وتزويدهما بنسخ من المستندات والوثائق المعدلة، ليتم إجراء التعديل اللازم في سجلاتها." (Upon modification, and providing them with copies of the modified documents, to make the necessary amendments in their records.) Then: "يعتبر الترخيص بالصندوق لاغياً إذا انتهت مدة الاكتتاب دون تغطية (٥٠٪) من قيمة وحدات الاستثمار المطروحة، مضافاً إليها أي عائد تم تحقيق خلال فترة الاحتفاظ بها، وذلك خلال خمسة عشر يوماً على الأكثر من تاريخ إقفال باب الاكتتاب، وعلى المصرف إخطار الوزارة لطلب الصندوق من سجل صناديق الاستثمار لديها." (The fund license shall be considered void if the subscription period expires without covering (50%) of the value of the offered investment units, plus any return achieved during the holding period, within fifteen days at most from the date of closing the subscription window, and the Bank shall notify the Ministry to remove the fund from its Investment Funds Register.)

Chapter Four

Founder's Obligations and Responsibilities

Article (15)

The founder must do the following:

• 1- Obtain the necessary license from the Bank to establish the fund and register the fund with the Ministry.
• 2- Draft the fund's Articles of Association, investment policies, and risk management policies.
• 3- Appoint the fund manager, investment custodian, auditor, and any consultants or experts the fund employs, and contract with them, determining their fees, commissions, and other benefits, as specified in the fund's Articles of Association.
• 4- Supervise the work of the fund manager and investment custodian, direct them, and verify their compliance with the provisions of the Law and this Regulation, and the instructions issued by the Bank, that the fund's operations and investment management proceed properly and in accordance with its Articles of Association and investment policies.
• 5- Organize the subscription process for the fund, allocate investment units, issue documents, supervise them, and verify that they do not conflict with the provisions of the Law, this Regulation, and the fund's Articles of Association.
• 6- Take necessary measures regarding any violations committed by the fund manager or investment custodian, within the limits permitted by the fund's Articles of Association and the instruction circulars according to the provisions of the Law and this Regulation.
• 7- Monitor the valuation process of the fund's investment units and verify their announcement according to the standards specified for this purpose, in accordance with the provisions of this Regulation, the fund's Articles of Association, and the subscription prospectus.

Article (16)

The founder wishing to list the fund's investment units in the market must obtain prior approval from the market and the Bank in accordance with the applicable laws and systems. The fund whose investment units are listed for trading in the market shall be subject to the applicable provisions, controls, conditions, and instructions issued by the Bank in this regard.

Article (17)

The founder, or any of its directors or employees, is prohibited from obtaining any benefit, profit, or advantage through its management and supervision of the fund's affairs and drawing its policies, except for the fees or commissions specified in the Articles of Association.

Article (18)

The founder is responsible before the Ministry, the Bank, and the market for the fund's performance, financial status, and investors' rights therein, in accordance with the provisions of the Law, this Regulation, the fund's Articles of Association, and the subscription prospectus.

Chapter Five

Fund's Articles of Association

Article (18)

The fund shall have Articles of Association that include in particular the following data:

• 1- Fund name.
• 2- Founder's name and address.
• 3- Investment custodian's name and address.
• 4- Type of fund (open or closed).
• 5- Fund's objective and nature of activity.
• 6- Fund's duration.
• 7- Fund capital value and conditions and controls for its increase or decrease.
• 8- Limits on the number of investment units that can be issued.
• 9- Number of investment units in the subscription and the nominal value of the unit.
• 10- Minimum and maximum subscription limits for investment units per investor.
• 11- Conditions required in the fund manager.

Article (19)

• 12- Type of subscription (public or private) and its procedures.
• 13- System, dates, and conditions for redeeming the value of investment units.
• 14- Method and dates for valuing investment units, and method for calculating net asset value.
• 15- Policies for calculating and deploying profits or capital risks, and investment returns.
• 16- Investment and risk management policies.
• 17- Mechanism for guaranteeing invested capital or return, for funds that guarantee capital or a return lower than the capital.
• 18- Rights, obligations, and responsibilities of the founder, fund manager, and investment custodian, and the fees and commissions prescribed for each.
• 19- Rights and obligations of unit holders.
• 20- How to disclose the fund's activities, financial status, and business results periodically.
• 21- Fund's fiscal year.
• 22- Data and financial statements the fund is committed to preparing and disclosing.
• 23- How to amend the fund's Articles of Association.
• 24- Cases in which the fund is liquidated, and liquidation procedures.
• 25- How the auditor is appointed, and the determination of their term, fees, and duties.
• 26- Any other data the Bank deems appropriate to add in accordance with the Law.

Chapter Six

Fund Management

Article (19)

The fund shall be managed by a manager appointed by the founder with the Bank's approval, and in coordination with the market, if the fund's investment units are to be listed for trading in the market. The manager must meet the following conditions:

• 1- Be of specialization, competence, and experience in the field of investment.
• 2- Not be among the members of the founder's board of directors, or one of its executive directors.
• 3- Not have a final judgment in a crime involving honor and trust, unless their reputation has been restored.
• 4- Not have been declared bankrupt, or suspended from paying debts.
• 5- Not have been dismissed disciplinarily from their previous job, or prohibited disciplinarily from practicing the profession.
• 6- Be of good reputation and honorable conduct.

If the manager is a legal entity, its activity of managing investment funds must be among its objectives according to its Articles of Association.

Article (20)

The fund manager must, in managing the fund's funds, adhere to the investment and risk management policies specified in the fund's Articles of Association, and commit to honesty and diligence in protecting the interests and funds of the fund in every action or measure taken, and to hedge risks related to the fund's activity, and to comply with all supervisory instructions issued by the founder or the Bank in this regard. The manager must, in particular, do the following:

• 1- Prepare periodic reports on the fund's activity, financial status, and activity results, in the manner and at the times specified in the fund's Articles of Association and subscription prospectus, in addition to any other reports specified by this Regulation, or requested by the Bank, or reports requested by the market management for funds traded therein.
• 2- Disclose to investors, whenever necessary, data, information, or developments that have a material effect on the value of their investments, or on the risks related to the fund's activity.
• 3- Keep regular accounting records and books, according to applicable laws and customs, to record and control the fund's transactions, and keep supporting documents, with accounting policies and procedures conforming to international accounting standards.
• 4- Fulfill its obligations and duties, and the investment custodian, and the contract concluded between the founder, and the contract concluded between the founder, and the contract concluded between the founder, and the fund's Articles of Association.

Article (21)

The fund manager is prohibited from doing the following:

• 1- Using the fund's funds in any activity contrary to the fund's activity.
• 2- Obtaining for himself or any of the fund's employees any benefit, profit, or advantage from the operations he conducts on behalf of the fund, other than his fees and commissions, specified in the contract concluded between the fund founder, or specified in its Articles of Association.

Article (22)

• 3- Participating directly or indirectly, or allowing any of the fund's employees, to invest in the fund more than the share allowed to him, which is specified in the fund's Articles of Association or specified by the Bank.
• 4- Borrowing from others on behalf of the fund, unless the fund's Articles of Association permit it.
• 5- Investing the fund's funds in other investment funds managed by it or under its investment custody.
• 6- Investing the fund's funds in participating in the capital of the founder or the fund manager.
• 7- Publishing any false or incomplete data or information, or hiding any important data or information about the fund's activity and financial data.

Article (23)

The fund manager is responsible for any damages suffered by investors resulting from his violation of the provisions of the Law, this Regulation, the fund's Articles of Association, or the instructions issued to him by the Bank, or resulting from his misuse of the powers delegated to him, or negligence or carelessness in performing his duties.

Chapter Seven

Investment Custody

Article (23)

The custody of the fund's funds shall be undertaken by the bank appointed by the founder, in coordination with the Bank, and it must do the following:

Article (24)

• 1- Safeguard the fund's funds and assets, supervise them, open accounts, and keep appropriate records for this purpose.
• 2- Execute transactions and obligations arising from the management and investment of the fund's funds and assets.
• 3- Periodically review all transactions conducted by the fund manager on behalf of the fund, and changes in the rights of unit holders and the investor register.
• 4- According to what is specified in the fund's Articles of Association, and valuing investment units at the specified times, in accordance with the provisions of the Law, this Regulation, and the fund's Articles of Association.
• 5- Notify the founder of any violations by the fund manager discovered by him during the performance of his duties.

Article (25)

The investment custodian is prohibited from doing the following:

• 1- Combining investment custody with fund management.
• 2- Directly or indirectly owning any of the investment units in the fund.
• 3- Having any common interests with the fund manager, unless disclosed to the founder, and which do not affect his neutrality and independence in performing the tasks entrusted to him.
• 4- Obtaining for himself or any of his employees any benefit, profit, or advantage through performing the task entrusted to him, other than the fees and commissions agreed upon in the contract concluded between the founder, or specified in the fund's Articles of Association.

Article (26)

[Note: The source text has "أن ينشر أي بيانات..." which is a fragment. It likely continues from Article 25 or is a separate prohibition. Translating as a prohibition based on context.] He is prohibited from publishing any data or information about the fund's activity and business results, and investors' rights, other than those authorized for him to publish according to his specific tasks in the fund's Articles of Association, in accordance with the provisions of the Law and this Regulation.

Chapter Eight

Financial Data, Final Accounts, and Investors' Rights

Article (26)

Each fund shall have a fiscal year of twelve months, the start and end of which shall be determined by the fund's Articles of Association.

Article (27)

After the fund prepares a report, at least every three months, according to the times specified in its Articles of Association, the auditor shall review it, including a statement of the fund's activity and financial data. He shall also prepare an annual report signed by the auditor on the financial data and final accounts of the fund as specified in its Articles of Association, and in accordance with international accounting standards, within a period not exceeding two months from the date of the end of the fiscal year.

Article (28)

The fund's annual financial data must be published in at least one local daily newspaper during this period.

Article (29)

The fund manager must provide the Bank with copies of all financial reports prepared by the fund, before disclosing or publishing them for a sufficient period specified by the Bank. The Bank may request the founder or fund manager to reprepare the financial data if it appears that they are incorrect or do not sufficiently disclose the fund's financial status and activity results.

Article (30)

The redemption of the value of subscription units, whether at the end of the fund's duration or during its activity period, shall be subject to the conditions, controls, and times specified in the fund's Articles of Association, and the redeemed units shall be valued according to the valuation specified in the subscription prospectus. The investment custodian or the founder shall value the investment, whether during the fund's activity period or at the end of its duration, by following one of the valuation methods, according to the times specified in its Articles of Association and subscription prospectus, so that it is on periodic intervals not exceeding three months. The valuation prices must be published in two local newspapers, one of which is issued in the English language. The fund's auditor must be tasked with reviewing the valuation method and procedures, and verifying their conformity with international accounting standards and the fund's Articles of Association.

Article (31)

Owners of investment units in the fund shall have equal rights against the fund in sharing profits and investment losses, and in obtaining a share of the net assets