Disclosure Requirements - Dubai (NASDAQ Dubai)

20.04.2017

Disclosure Category: 1

Under the terms of Article 42 of the Dubai International Financial Centre (DIFC) Law No.1 of 2012 (“Markets Law 2012") and Chapter 4.3 of the Dubai Financial Services Authority (DFSA) Market Rules (“MKT”), CBL may fall under the obligation to disclose, to the NASDAQ Dubai CSD and/or to issuers of securities listed on NASDAQ Dubai, the identity and holdings of customers.

The articles of association of particular issuers and the prospectus governing the listing of a specific instrument on NASDAQ Dubai may also specify circumstances under which the issuer may request disclosure.

Consent

In order to comply with the legislation as mentioned above, customers entering into transactions in the NASDAQ Dubai market, consent and are hereby deemed to consent to disclosure and to the appointment of the requestor (for example, the listed company or its agent) as their attorney-in-fact, under power of attorney, to collect from CBL such information as is required to be disclosed.

Disclosure requirements

Customers are advised that local laws and regulations may require CBL to disclose securities holding information and the identity of the final beneficial owners of certain securities. Generally, CBL will provide its subcustodian with the required information upon receipt of a request to do so.

Background and legal basis

General rules and regulations relating to disclosure requirements are detailed in Article 42 of the Dubai International Financial Centre (DIFC) Law No.1 of 2012 (“Markets Law 2012"), with additional guidance contained in Chapter 4.3 of the Dubai Financial Services Authority (DFSA) Market Rules (“MKT”). Article 42 and Chapter 4.3 also cover the rules regarding disclosure requirements.

All NASDAQ Dubai CSD participants (including CBL’s appointed local custodian) are governed by the “CSD Terms and Conditions for Custodians”, whose Section 7.6 requires all NASDAQ Dubai CSD participants to provide any information that the CSD may request from time to time, including, without limitation, country specific information with respect to each beneficial owner of deposited securities within a given time frame.

Pursuant to Section 7.7, NASDAQ Dubai CSD participants are required to divulge beneficial owner information contained in a Disclosure Report to the relevant issuer, its registrar and its agents, to the DFSA, to NASDAQ Dubai and to any other governmental or regulatory authority, body or person that has the responsibility for the supervision or regulation of any activity or other financial service or for law enforcement purposes.

Individual prospectuses issued by companies to fulfil listing criteria for the NASDAQ Dubai may also contain specific clauses authorising the issuer to demand disclosure of beneficial owners in line with requirements stipulated in Rule 9.

NASDAQ Dubai CSD participants are required to submit a report on holdings held through their participant account to the CSD and/or issuers by the deadline initially communicated by the requestor. The contents of the report generally include the name of the final beneficiary, the nationality of the final beneficiary and the number of units held.

Sanctions

Failure to disclose final beneficiary details will result in NASDAQ Dubai contacting the CSD participant in order to obtain the direct contact details of the underlying entity that failed to disclose.

Obligation to report threshold crossings

It is each shareholder’s obligation to monitor their shareholding and to file a report with the Dubai Financial Services Authority (DFSA) and the listed company within five days of acquiring a holding of 5% or more of the voting shares of the listed company. Any further change of 1% increase or decrease triggers a report to the DFSA and the listed company.

Shareholders could face regulatory action in the event of failure to comply with the above requirements. Such regulatory action could be in the form of monetary penalties or a public censure and could lead to banning from transacting on the market in the case of repeated non-compliance.