5.1. Application

(a) Rules 5.2(c) and 5.3 (excluding 5.3(b)(i) and (j)) apply to all Funds (whether Exempt or Non-Exempt Funds) that are Offered to investors in the AIFC.

(b) Rules 5.2(b) and 5.3(b)(i) and (j) apply to Exempt Funds only.

(c) Rule 5.2(a) applies to Non-Exempt Funds only.

5.2. General requirements

The following requirements apply:

• (a) In respect of Non-Exempt Funds:
• (i) The Units or other securities of a Non-Exempt Fund may not be Offered prior to the effective date of registration of that Non-Exempt Fund under these Rules.
• (ii) Copies of any Offering Materials relating to a Non-Exempt Fund must be filed with the AFSA prior to their use (including any amendments to those Offering Materials) and must comply with the content requirements for Offering Materials specified by these Rules.
• (b) In respect of Exempt Funds:
• (i) The Units or other securities of an Exempt Fund managed by a Foreign Fund Manager may not be Offered prior to the date of registration of that Exempt Fund to the AFSA under these Rules.
• (ii) A Fund Manager or other Centre Participant which Offers Units or other securities of an Exempt Fund is responsible for ensuring that the requirements of this chapter are complied with in respect of that Fund before commencing the Offering of that Fund and must maintain appropriate written records verifying that compliance which must be made available to the AFSA on request.
• (c) In respect of all Funds (Exempt and Non-Exempt Funds):
• (i) Any person Offering Units or other securities of a Fund must comply with the Rules regarding Financial Promotions.

5.3. Content requirements for Offering Materials

(a) All Offering Materials relating to a Fund must be clear, fair and not misleading.

(b) Prior to investing in a Fund, a potential investor must be supplied with Offering Materials and other documentation that contain all the information which a person and his professional advisers would reasonably require and expect to be able to make an informed decision to become a Unitholder of the Fund, including the following:

1. (i) a description of the investment objective, policy and strategy of the Fund, information on where any master fund is established and where the underlying funds are established if the Fund is a fund of funds, a description of the types of assets in which the Fund may invest, the techniques it may employ and all associated risks, any applicable investment restrictions, the circumstances in which the Fund may use leverage, the types and sources of leverage permitted and the associated risks, any restrictions on the use of leverage and any collateral and asset reuse arrangements, and the maximum level of leverage which the Fund may utilise; and
2. (ii) a description of the procedures by which the Fund may change its investment strategy or investment policy, or both; and
3. (iii) a description of the main legal implications of the contractual relationship entered into for the purpose of investment, including information on jurisdiction, on the applicable law and on the existence or not of any legal instruments providing for the recognition and enforcement of judgments in the territory where the Fund is established; and
4. (iv) the identity of the Fund Manager, custodian or depositary, auditor and any other service providers for the Fund and a description of their duties and Unitholder's rights in respect of those persons; and
5. (v) a description of any functions that have been delegated by the Fund Manager and any other of the Fund's service providers, the identification of each such delegate and any conflicts of interest that may arise from such delegations; and
6. (vi) a description of the Fund's valuation procedure and of the pricing methodology for valuing assets; and
7. (vii) a description of the Fund's liquidity risk management, including the redemption rights both in normal and in exceptional circumstances, and the existing redemption arrangements with Unitholders; and
8. (viii) a description of all fees, charges and expenses and of the maximum amounts thereof which are directly or indirectly borne by Unitholders; and
9. (ix) a description of how the Fund ensures a fair treatment of Unitholders and, whenever a Unitholder obtains preferential treatment or the right to obtain preferential treatment, a description of that preferential treatment, the type of Unitholders who obtain such preferential treatment and, where relevant, their legal or economic links with the Fund or the Fund Manager; and
10. (x) the latest annual report for the Fund, if applicable; and
11. (xi) the procedure and conditions for the issue and sale of units or shares of the Fund; and
12. (xii) where available, the latest net asset value of the Fund and its units or shares or the latest market price per unit or share of the Fund; and
13. (xiii) where available, information regarding the historical performance of the Fund; and
14. (xiv) if relevant, the identity of any prime broker for the Fund and a description of any material arrangements with that prime broker and the way the conflicts of interest in relation thereto are managed, information about the possibility of transfer and reuse of the Fund's assets by the prime broker, and information about any transfer of liability to the prime broker that may exist; and
15. (xv) the total amount of leverage employed by the Fund; and
16. (xvi) the life of the Fund, the ability to terminate the Fund and the process by which the Fund may be terminated; and
17. (xvii) a description of the arrangements in place for the safekeeping of cash held by or on behalf of the Fund pending investment or distribution to Unitholders.

(c) All Offering Materials relating to a Foreign Fund must include information on the jurisdiction and regulatory regime applicable to the Foreign Fund and its fund manager.

(d) If a Fund is a Listed Fund, the Fund Manager must provide in the Fund’s Offering Materials a description of the arrangements for listing of the Units and the listing venues on which Units of the Listed Fund may be traded.

(e) If a Foreign Fund is required to provide a summary or key information document to investors in any jurisdiction, that document must also be provided to potential investors in the AIFC.

(f) If at any time, there is a material change affecting any matter contained in the Offering Materials for a Fund or a significant new matter arises, the Fund must either before or promptly following the effective date of such material change or new matter, issue updated Offering Materials which clearly explain the material change or significant new matter.

(g) All Offering Materials relating to a Fund, including the information required under these Rules (as applicable) must be made available in the English language.

(h) All Offering Materials relating to a Fund must include the following statement displayed prominently on its front page: "The Astana Financial Services Authority has no responsibility for reviewing or verifying any offering materials, particulars or other documents in connection with this Fund. Accordingly, the Astana Financial Services Authority has not reviewed, nor taken any steps to verify, this document, the information it contains, or any other documents relating to the Fund and has no responsibility for it. The securities to which this document relates may be illiquid or subject to restrictions on their resale. Prospective purchasers should conduct their own due diligence. If you do not understand the contents of this document you should consult an authorised financial adviser."

(i) All Offering Materials relating to an Exempt Fund must prominently disclose the following statement to prospective Unitholders: "This Fund is an Exempt Fund for the purposes of the Collective Investment Scheme Rules. It is intended only for sophisticated investors and is not subject to many of the requirements of the Collective Investment Scheme Rules."

(j) All Offering Materials relating to an Exempt Fund managed by a Foreign Fund Manager must prominently disclose the following statement to prospective Unitholders: "The fund manager of this Fund is not subject to regulation by the Astana Financial Services Authority.

(k)       Information relating to an Umbrella Fund:

1. (i)        Whether the Fund is constituted as a Protected Cell Company or is using contractual arrangements to segregate Sub-Funds.
2. (ii)       A statement that Unitholders may exchange Units of one Sub-Fund for Units in another Sub-Fund of the Umbrella Fund.
3. (iii)      Whether an exchange of Units in one Sub-Fund for Units in another Sub-Fund is treated as a redemption of Units, and resale or reissue of Units in the relevant Sub-Fund, and costs and fees associated with such redemption, resale or reissue.
4. (iv)      Policy for allocating between Sub-Funds any assets of, or costs, charges and expenses payable out of, the Fund Property which are not attributable to any particular Sub-Fund.
5. (v)       Information relating to any cross-liability that may occur between Sub-Funds if the Fund is not using the PCC structure.
6. (vi)      In respect of each Sub-Fund, if the currency is not the base currency of the Umbrella Fund, the currency in which the Fund Property allocated.

(l)        Information relating to a Feeder Fund:

1. (i)        Whether the Fund is investing in:
2. (A)       Real Property only; or
3. (B)       Securities issued by Bodies Corporate whose main activities are investing in, dealing in, developing or redeveloping Real Property only; or
4. (C)      a combination of (A) and (B).
5. (ii)       What percentage of the Property Fund’s net assets may consist of property related assets, referred to in 3.1(b), which are not traded in or dealt on markets provided for in the Constitution.
6. (iii)      Unless the Constitution and the Offering Materials state that the Fund invests in a single property, the maximum percentage of the Fund’s net assets which may be invested in any single property or, if applicable, the conditions under which the Fund may derogate from this restriction.
7. (iv)      The maximum percentage of the Property Fund’s net assets which may be invested in properties which are vacant, in the process of development or requiring development.
8. (v)       The maximum percentage of the Property Fund’s net assets which may be invested in properties which are subject to a mortgage.
9. (vi)      For investment in Real Property:
10. (A)       the countries or territories in which the Fund may invest;
11. (B)       the types of Real Property in which the Fund may invest and the policy in relation to encumbrances and lease period, if applicable;
12. (C)      the policy of the Fund Manager in relation to insurance of Real Property forming part of the Fund Property;
13. (D)      the risks involved in this type of Fund;
14. (E)       details of the Property Fund’s appointed valuer under CIS 6.10.(b);
15. (F)       a statement to explain the standards according to which the property valuations are conducted;
16. (G)      a statement with respect to any material policy regarding Real Property activities;
17. (H)      details of significant holders and the number of units held and deemed to be held by each of them;
18. (I)        details of principal taxes levied on the Fund’s income and capital, including tax, if any, deducted on distribution to Unitholders; and
19. (J)       if the Fund is a REIT, whether the investment vehicle is an Investment Company or Limited Partnership.
20. (vii)     If the Fund is a single Property Fund:
21. (A)       a prominent statement that the Fund invests in a single property;
22. (B)       the details relating to the single property, such as whether the property comprises individual properties or buildings, whether there are different types of uses or businesses conducted in the property, and proportions of anticipated income to be derived from the types of uses or occupants of the property; and
23. (C)      any risks associated with the investment in the single property, including risks arising from or affecting income to be derived from the uses or occupants of the property.
24. (viii) If the Fund Manager itself acts as the custodian of Real Property, in accordance with CIS 7.3.(e):
25. (A)       a prominent statement that it acts as the custodian of the Real Property;
26. (B)       disclosure of risks that may arise as a result of it acting as custodian rather than delegating the function to an Eligible Custodian; and
27. (C)      the measures and safeguards it has in place to ensure the proper segregation and protection of the Real Property.
28. (ix)      Disclosure of:
29. (A)       details of any transactions or agreements entered into with Related Parties;
30. (B)       full particulars of the nature and extent of the interest, if any, of Related Parties in the property owned or proposed to be acquired by the Fund; and
31. (C)       whether the Fund Manager has Unitholder approval to enter into Related Party Transactions.

(m)       Information relating to an ESG Fund:

(i)     a description of the investment objective, policy and strategy incorporating an ESG Fund’s investment focus;

(ii)    a Fund Manager of an ESG Fund must ensure that Offering Materials do not refer to an “ESG Fund”, or otherwise includes or uses ESG-related or similar terms, unless the Fund meets the criteria in 2.4.1(e);

(iii)  a list of ESG criteria used to measure the attainment of the fund’s ESG focus;

(iv)  a description of the sustainable investing strategy used by the scheme to achieve its ESG focus, the binding elements of that strategy in the investment process, and how the strategy is implemented in the investment process on a continuous basis;

(v)   where the Fund uses a benchmark index to measure the attainment of its ESG focus, an explanation of how the benchmark index is consistent with or relevant to its investment focus;

(vi)  where the Fund uses a benchmark index for financial performance measurement only, a statement of that fact; and

(vii) risks associated with the Fund’s investment focus and strategy;

(viii)          any ESG-related terms used must be clearly defined.