1.1.1 Conditions for admission of Securities to trading and offer of Securities admitted or sought to be admitted to the Official List of an Authorised Investment Exchange

(1)    An Authorised Investment Exchange may not admit Securities to trading unless:

(a)    the Securities have been admitted to the Official List maintained by the Authorised Investment Exchange in accordance with section 66 of the Framework Regulations; and

(b)    subject to MAR 1.2 (Exemptions), there is a Prospectus in relation to the relevant Securities that satisfies the requirements of this Part and has been approved by the Authorised Investment Exchange.

(2)   Subject to MAR 1.2 (Exemptions), an Authorised Investment Exchange may not permit the offer of Securities, admitted or sought to be admitted to the Official List, in or from the AIFC, unless there is a Prospectus in relation to the relevant Securities that satisfies the requirements of MAR 1.1.1(1)(b).

1.1.2. Conditions for the offer of Securities by way of placement

(1)The Issuer may not offer Securities by way of placement (other than Securities admitted or sought to be admitted to the Official List of an Authorised Investment Exchange) in or from the AIFC, and an Authorised Firm may not conduct, facilitate or participate in such an offer, unless:

1. (a)      there is a Prospectus in relation to the relevant Securities that satisfies the requirements of this Part and has been approved by the AFSA; or
2. (b)      the offer satisfies one and one only of the conditions mentioned in subsection (2) below; or
3. (c)      the offer satisfies one or more of conditions (a), (b) and (m) in subsection (2) below.

(2)      The conditions mentioned in subsection (1)(b) above are the following:

1. (a)    the offer is made to or directed at only Accredited Investors; or
2. (b)    the offer is directed at fewer than 50 Retail Investors in any 12-month period; or
3. (c)    the offer is directed at investors who acquire Securities for a total consideration of at least USD100,000 (or an equivalent amount in another currency) per Person for each separate offer; or
4. (d)    the Securities being offered are denominated in amounts of at least USD100,000 per unit (or an equivalent amount in another currency); or
5. (e)    the total aggregate consideration for the Securities offered is less than USD100,000 (or an equivalent amount in another currency) calculated over a period of 12 months; or
6. (f)     the Securities offered are Shares which are issued in substitution for Shares of the same class as already issued, where the issue of the new Shares does not involve any increase in the issued Share capital; or
7. (g)    the Securities offered are convertibles issued under a Prospectus to existing members or creditors of the Issuer or a member of its Group and there is no additional consideration to be paid; or
8. (h)    the Securities offered are offered in connection with a Takeover and an informational document is made available which is considered by the AFSA as being equivalent to that of a Prospectus; or
9. (i)     the Securities offered are offered, allotted or to be allotted in connection with a merger if an informational document is available which is considered by the AFSA as being equivalent to that of a Prospectus; or
10. (j)     the Securities offered are offered, allotted or to be allotted in connection with a rights issue where:
11. (i)     the Securities are of a class subject to Reporting Entity disclosure; and
12. (ii)     a document is made available to offerees containing information on the number and nature of the Securities including rights attaching to those Securities and the reasons for and details of the offer; or
13. (k)    the Securities offered are Shares which are offered, allotted or to be allotted to existing Shareholders free of charge or dividends paid out in the form of Shares of the same class as the Shares in respect of which the dividends are paid, and a document is made available to offerees containing information on the number and nature of the Shares and the reasons for and details of the offer; or
14. (l)     the Securities offered are offered, allotted or to be allotted to an existing or former Director or Employee, or any close relative of such a Director or Employee, of the Issuer or a member of the same Group as the Issuer and:
15. (i)     the Issuer or the member of the Group already has its Securities admitted to trading on a Regulated Exchange; and
16. (ii)     a document is made available to the offerees containing information on the number and nature of the Securities and the reasons for and details of the offer; or
17. (m)   the offer is made to and directed at Retail Investors, provided that the total aggregate consideration for the offer of Securities made under this subsection to Retail Investors is not more than USD5,000,000 (or an equivalent amount in another currency) calculated over a period of 12 months; or
18. (n)    the offer is made only through the Authorized Crowdfunding Platform to and directed at only Investors or lenders who are Clients of the Authorised Crowdfunding Platform within the limits set out in AMI.

(3)      The following requirements apply to any offer of Securities to Retail Investors by way of placement conducted under subsections (2)(a) through (2)(m) of MAR 1.1.2:

1. (a)   the Issuer shall make available to each Investor at a reasonable time prior to the purchase of Securities the opportunity to ask questions and receive answers concerning the terms and conditions of the offering and to obtain any additional information which the Issuer possesses or can acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished under this section;
2. (b)   the Issuer, and/or the Authorised Firm conducting, facilitating or participating in such an offer, shall take reasonable steps to verify the status of the Investors;
3. (c)   the Issuer shall, if Retail Investors are participating in the offering, give any Retail Investor disclosure documents that contain the necessary information which is material to an investor for making an informed investment decision; and
4. (d)   the Issuer shall file a notice on the results of the offer with the AFSA within 30 days after the sale of Securities in the offering.

(4)      Where any Securities are offered by way of placement under subsections (2)(a) through (2)(m) of MAR 1.1.2, neither the Issuer nor any person acting on its behalf shall offer or sell the Securities by any form of general solicitation or general advertising, including, but not limited to, the following:

1. (a)    any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, and
2. (b)    any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

(5)      For the purposes of subsection (4) above, the advertisement made on the Issuer’s website or website of the Authorised Firm, which facilitates such an offer, is not considered as general solicitation or general advertising.

(6)      For the purposes of MAR 1.1.2:

1. (a)    “Accredited Investor” means:
2. (i)     any natural person who acquires or intends to acquire Securities for a total consideration of at least USD100,000 (or an equivalent amount in another currency) per Person for each separate offer; or
3. (ii)     an Authorised Person; or
4. (iii)    a Body Corporate.
5. (b)    “Retail Investor” means any natural person that is not an Accredited Investor, provided that the aggregate amount in current value of Securities which are the subject of the offer that were sold by the offeror to each Retail Investor, during the 12-month period preceding the date of any offer made under this rule, does not exceed the greater of USD2,000 or 10 percent of the annual income or 5 percent of net worth of such Retail Investor (excluding the value of the primary residence), whichever is lesser, but not to exceed a maximum aggregate amount sold of USD100,000.

Guidance

To verify the status of the investors Issuers, and/or the Authorised Firm which facilitates such an offer, could rely on Retail Investors’ self-certification (for example, questionnaires where investors self-report their income and net worth).

1.2.1. Exempt Offerors

The AFSA may publish a list from time to time identifying bodies to which the requirement in MAR 1.1.1 does not apply

1.2.2. Exempt Securities

(1)      An Authorised Investment Exchange may admit Securities to trading, and permit the offer of Securities (admitted or sought to be admitted to the Official List) in or from the AIFC, without a Prospectus, if such Securities satisfy one or more of the conditions specified below:

1. (a)      the offer is made to or directed at only Accredited Investors (as defined in MAR 1.1.2(6)(a)); or
2. (b)      the Securities being offered are issued and registered in the AIFC and the offer is directed at fewer than 50 investors in any 12-month period; or
3. (c)      the offer is directed at investors who acquire Securities for a total consideration of at least USD100,000 (or an equivalent amount in another currency) per Person for each separate offer; or
4. (d)      the Securities being offered are denominated in amounts of at least USD100,000 per unit (or an equivalent amount in another currency); or
5. (e)      the total aggregate consideration for the Securities offered is less than USD5,000,000 (or an equivalent amount in another currency) calculated over a period of 12 months; or
6. (f)Securities fungible with Securities already admitted to trading on the same Authorised Investment Exchange, provided that they represent, over a period of 12 months, less than 10% of the number of Securities already admitted to trading on the Authorised Investment Exchange; and
7. (g)      Shares resulting from the conversion or exchange of other Securities or from the exercise of the rights conferred by other Securities, where:
8. (i)     the resulting Shares are of the same class as the Shares already admitted to trading on the same Authorised Investment Exchange; and
9. (ii)     the resulting Shares represent, over a period of 12 months, less than 20% of the number of Shares of the same class already admitted to trading on the same Authorised Investment Exchange; and
10. (h)      Shares issued in substitution for Shares of the same class already admitted to trading on the same Authorised Investment Exchange, where the issuing of such Shares does not involve any increase in the issued capital; and
11. (i)Securities offered in connection with a Takeover by means of an exchange offer, provided that a document is made available to the public in accordance with MAR 1.7, containing information describing the transaction and its impact on the Issuer; and
12. (j)Securities offered, allotted or to be allotted in connection with a merger or a division, provided that a document is made available to the public in accordance with MAR 1.7, containing information describing the transaction and its impact on the Issuer; and
13. (k)      Shares offered, allotted or to be allotted free of charge to existing shareholders, and dividends paid out in the form of Shares of the same class as the Shares in respect of which such dividends are paid provided:
14. (i)     that the said Shares are of the same class as the Shares already admitted to trading on the same Authorised Investment Exchange; and
15. (ii)     that a document is made available to offerees containing information on the number and nature of the Shares and the reasons for and details of the offer or allotment; and
16. (l)Securities offered, allotted or to be allotted to existing or former Directors or Employees by their employer or an affiliated undertaking, provided:
17. (i)     that the said Securities are of the same class as the Securities already admitted to trading on the same Authorised Investment Exchange; and
18. (ii)     that a document is made available to offerees containing information on the number and nature of the Securities and the reasons for and detail of the offer or allotment; and
19. (m)     Securities already admitted to trading on another Authorised Investment Exchange, Recognised Non-AIFC Market Institution or other Equivalent Regulated Exchange (“the other market”), where:
20. (i)     the Securities, or Securities of the same class, have been admitted to trading and continuously traded on the other market for more than 18 months; and
21. (ii)     the ongoing obligations for trading on that other market have been complied with; and
22. (iii)    the Person requesting the admission to trading of the Securities under this exemption makes available to the public in accordance with MAR 1.7.6 a Prospectus Summary in accordance with MAR 1.4 (Prospectus Summary) in the English language, which is approved by the Authorised Investment Exchange and which states where the most recent Prospectus can be obtained and where the financial information published by the Issuer pursuant to its ongoing disclosure obligations is available. For the purpose of this sub-clause, references to a “Prospectus” in MAR 1.4.1, MAR 1.4.4 and MAR 1.4.7 shall be deemed references to a “Prospectus Summary” and the provisions of MAR 1.4.1(c), MAR1.4.4(a)(iv) and (b)(i) shall not apply.

(2)      For the purposes of MAR 1.2.2 (1)(m):

1. (a)    “Equivalent”, in relation to a Regulated Exchange, means that the AFSA has determined, either on the application of an Issuer or upon its own initiative, that investors in Securities admitted to trading on the facilities of such Regulated Exchange are afforded protection equivalent to that which they would be afforded, if the Issuer were required to comply with MAR 1.1.1(1) without regard to MAR 1.2.2(1)(m), having regard to the law and practice of the country or territory in which the head office of the Regulated Exchange is situated and to its rules and practice; and
2. (b)    the AFSA may publish a list from time to time identifying Regulated Exchanges it has determined to be Equivalent.

1.2.3 Limitations

1. (1)      The exemptions in MAR 1.2.2(1) from (a) through (e) shall not apply to an offer of Equity Securities if such offer could lead to the immediate or deferred admission to trading on an Authorised Investment Exchange over a period of 12 months of more than 10 % of the number of Shares of the same class, to which such Equity Securities are linked, already admitted to trading on the same Authorised Investment Exchange, without a Prospectus being published.
2. (2)      Offerors relying on the exemptions in MAR 1.2.2(1) from (a) through (e) must comply with the requirements of MAR 1.1.2(4) and (5) relating to limitation of general solicitation or general advertising, as if they were directly referred to therein.

1.3.1. Prospectus Structure

A Prospectus may be structured either as:

1. (a)     multiple documents comprising:
2. (i)       a Prospectus Summary as set out in MAR 1.4; and
3. (ii)      a Registration Document as set out in MAR 1.5.1 containing all the information relating to the Issuer; and
4. (iii)     a Securities Note as set out in MAR 1.5.2 containing the information concerning the Securities to be admitted to trading on an Authorised Investment Exchange; or
5. (b)    a single document containing a Prospectus Summary as set out in MAR 1.4 and all the information required to be included in the Registration Document and the Securities Note; or
6. (c)    for an offer of Shares, a single document containing all the information required to be included in the Registration Document and the Securities Note in relation to the offer of Shares, provided that the expected aggregate market value of such Shares (together with any other Equity Securities admitted to trading on all Regulated Exchanges) at the time of admission to trading does not exceed USD200,000,000 (or an equivalent amount in another currency) (REMS Shares). A Prospectus in relation to REMS Shares must include a prominent disclaimer that the Issuer is eligible to rely on concessions granted to it as set out in MAR, which exclude such Issuer from being required to prepare a Prospectus Summary and disclose certain other information in its Registration Documents and Securities Notes.

1.3.2. Risk factors

The information in a Prospectus must include:

• (a) risks which are relevant to the Issuer and/or the Securities and which are material for taking an informed investment decision, as corroborated by the content of the Registration Document and Securities Note; and
• (b) where there is a guarantee attached to the Securities, the material risk factors pertaining to the guarantor to the extent that they are relevant to the guarantor’s ability to fulfil its commitment under the guarantee.

Guidance: risk factors

(1) The materiality of the risk factors should be based on the probability of their occurrence and the expected magnitude of their negative impact.

(2) The assessment of the materiality of the risk factors may also be disclosed by using a qualitative scale of low, medium or high.

(3) Each risk factor should be adequately described, explaining how it affects the Issuer or the Securities.

(4) The risk factors should be presented in a limited number of categories depending on their nature. In each category the most material risk factors must be mentioned first.

(5) Risk factors should also include those resulting from the level of subordination of a Security and the impact on the expected size or timing of payments to holders of the Securities in the event of bankruptcy, or any other similar procedure.

1.3.3. Final offer price and amount of Securities

Where the final offer price and/or amount of Securities to be offered, whether expressed in number of Securities or as an aggregate nominal amount, cannot be included in the Prospectus the following must be included in the Prospectus:

• (a) the maximum price and/or the maximum amount of Securities, as far as they are available; or
• (b) the valuation methods and criteria, and/or conditions, in accordance with which the final offer price is to be determined and an explanation of any valuation methods used.

1.3.4. Clarity of the information

The information in a Prospectus must be written and presented in an easily analysable, concise and comprehensible form, taking into account the nature of the Issuer, the type of Securities and the circumstances of the Issuer.

1.3.5. Incorporation by reference

Information that is required to be contained in a Prospectus (apart from information required to be contained in a Prospectus Summary) may be incorporated by reference, provided that:

• (a) the source of information is publicly available on a continuing basis; and
• (b) the information is clearly set out and easily accessible in that source; and
• (c) the information is in the English language; and
• (d) the information can be accessed without charge; and
• (e) the reference contains sufficient information to enable an investor to decide whether to obtain the information or any part of it. Guidance: incorporation by reference Information that may generally be incorporated by reference includes instruments or statute of incorporation of a company, annual reports, periodic financial reports and listing particulars.

1.4.1. Contents of the Prospectus Summary

The Prospectus Summary must:

• (a) provide the key information that investors need in order to understand the nature and the risks of the Issuer, the guarantor and the Securities;
• (b) contain information that is accurate, fair, clear and not misleading and which is consistent with other parts of the Prospectus;
• (c) not contain cross references to other parts of the Prospectus or incorporate information by reference.

1.4.2. Layout of the Prospectus Summary

The Prospectus Summary must be:

• (a) drawn up as a short document written in a concise manner and of a maximum length of seven sides of A4-sized paper when printed; and
• (b) written in a language and a style that facilitate the understanding of the information, in particular, in language that is clear, non technical, concise and comprehensible for investors; and
• (c) presented and laid out in a way that is easy to read, using characters of readable size.

1.4.3. Sections of the Prospectus Summary

The Prospectus Summary must be made up of the following four sections:

• (a) an introduction, containing warnings; and
• (b) key information on the Issuer; and
• (c) key information on the Securities; and
• (d) (where relevant) key information on the admission to trading.

1.4.4. Section 1: The Introduction

The introduction must contain:

• (a) the following information:
• (i) the name and international securities identification number (ISIN) of the Securities; and
• (ii) where applicable, the identity and contact details of the Issuer, including its legal entity identifier (LEI); and
• (iii) where applicable, the identity and contact details of the Person asking for admission to trading on an Authorised Investment Exchange; and
• (iv) the identity and contact details of the Authorised Investment Exchange that approved the Registration Document; and
• (v) the date of approval of the Prospectus; and
• (b) the following warnings:
• (i) the Prospectus Summary should be read as an introduction to the Prospectus; and
• (ii) any decision to invest in the Securities should be based on a consideration of the Prospectus as a whole by the investor; and
• (iii) where applicable, that the investor could lose all or part of the invested capital and, where the investor’s liability is not limited to the amount of the investment, a warning that the investor could lose more than the invested capital and the extent of such potential loss; and
• (iv) civil liability attaches only to those Persons who have tabled the summary including any translation thereof, but only where the summary is misleading, inaccurate or inconsistent, when read together with the other parts of the Prospectus, or where it does not provide, when read together with the other parts of the Prospectus, key information in order to aid investors when considering whether to invest in such Securities.

1.4.5. Section 2: Key information about the Issuer

This section must contain the following information:

• (a) under a sub-section entitled 'Who is the Issuer of the Securities?', a brief description of the Issuer of the Securities, including at least the following:
• (i) its domicile and legal form, its LEI (if applicable), the law under which it operates and its country of incorporation;
• (ii) its principal activities;
• (iii) its major shareholders, including whether it is directly or indirectly owned or controlled and by whom;
• (iv) the identity of its key managing directors;
• (v) the identity of its Auditors;
• (b) under a sub-section entitled 'What is the key financial information regarding the Issuer?' a selection of historical key financial information presented for each financial year of the period covered by the historical financial information, and any subsequent interim financial period accompanied by comparative data from the same period in the prior financial year. Key financial information must, where applicable, include:
• (i) pro forma financial information;
• (ii) a brief description of any qualifications in the audit report relating to the historical financial information;
• (c) under a sub-section entitled 'What are the key risks that are specific to the Issuer?' a brief description in declining order of severity of the most material risk factors (not exceeding 15 risk factors) specific to the Issuer contained in the Prospectus.

1.4.6. Section 3: Key information on Securities

This section must contain the following information:

• (a) under a sub-section entitled 'What are the main features of the Securities?', a brief description of the Securities being admitted to trading on an Authorised Investment Exchange including at least:
• (i) their type, class and ISIN; and
• (ii) where applicable, their currency, denomination, par value, the number of Securities issued and the term of the Securities; and
• (iii) the rights attached to the Securities; and
• (iv) the relative seniority of the Securities in the Issuer’s capital structure in the event of insolvency; and
• (v) any restrictions on the free transferability of the Securities; and
• (vi) where applicable, the dividend or payout policy; and
• (b) under a sub-section entitled 'Where will the Securities be traded?', the identity of all known markets where the Securities are or are to be traded; and
• (c) where there is a guarantee attached to the Securities, under a sub-section entitled 'Is there a guarantee attached to the Securities?', the following information:
• (i) a brief description of the nature and scope of the guarantee; and
• (ii) a brief description of the guarantor, including its LEI; and
• (iii) the relevant key financial information for the purpose of assessing the guarantor’s ability to fulfil its commitments under the guarantee; and
• (iv) a brief description of the most material risk factors pertaining to the guarantor contained in the Prospectus while not exceeding the total of 15 risk factors; and
• (d) under a sub-section entitled 'What are the key risks that are specific to the Securities?', a brief description of the most material risk factors (not exceeding 15 risk factors) in declining order of severity relevant to the Securities contained in the Prospectus.

1.4.7. Section 4: Key information on the admission to trading

This section must contain the following information:

1. (a)     under a sub-section entitled ‘Under which conditions and timetable can I invest in this Security?’, where applicable:
2. (i)       where applicable, the details of the admission to trading on an Authorised Investment Exchange; and
3. (ii)      the plan for distribution; and
4. (iii)     an estimate of the total expenses of the issue, including the estimated expenses charged to the investor by the Issuer; and
5. (b)    where applicable and if different from the Issuer, under a sub-section entitled ‘Who is the person asking for admission to trading?’, a brief description of the Person asking for admission to trading on an Authorised Investment Exchange, including that Person’s domicile and legal form, the law under which it operates and its country of incorporation; and
6. (c)     under a sub-section entitled ‘Why is this Prospectus being produced?', a brief description of the reasons for the offer of Securities and/or the admission to trading on an Authorised Investment Exchange, as well as, where applicable:
7. (i)       the use and estimated net amount of the proceeds;
8. (ii)      an indication of the most material conflicts of interest pertaining to the admission to trading.

1.5.1. The Registration Document

The Registration Document must include the information in relation to the relevant type of Security identified with a “√” in the table in MAR Schedule 1.

1.5.2. The Securities Note

The Securities Note must include the information in relation to the relevant type of Security identified with a “√” in the table in MAR Schedule 2.

1.6.1. Statement in the Supplementary Prospectus as to the right of withdrawal

A Supplementary Prospectus must contain a prominent statement concerning the right of withdrawal, which clearly states:

• (a) that a right of withdrawal is granted to those investors who had already agreed to purchase or subscribe for the Securities before the Supplementary Prospectus was published and where the Securities had not yet been delivered to the investors at the time when the significant new factor, material mistake or material inaccuracy arose or was noted; and
• (b) the period in which investors can exercise their right of withdrawal; and
• (c) whom investors may contact should they wish to exercise the right of withdrawal.

1.6.2. Prospectus Summary to be updated

Where a Supplementary Prospectus is published, the Prospectus Summary must be supplemented, where necessary, to take into account the new information included in the Supplementary Prospectus.

1.7.1. The requirement for an approval

A Prospectus or Supplementary Prospectus must not be published for the purposes of MAR 1.1.1 unless an Authorised Investment Exchange, has approved it or in the case of a Prospectus comprising multiple documents, all the multiple documents.

1.7.2. Approval by the Authorised Investment Exchange

For the purpose of MAR 1.1.1, a Person seeking the approval of an Authorised Investment Exchange to a Prospectus must submit to the Authorised Investment Exchange:

1. (a)     a Prospectus that meets all of the requirements in the Framework Regulations and MAR 1;
2. (b)    a statement identifying where in the Prospectus the information required in the relevant paragraphs of MAR 1 has been included and, where subsequent drafts or versions of the Prospectus are submitted, a marked- up version showing the changes from the previous version submitted to the Authorised Investment Exchange;
3. (c)     if information is incorporated in the Prospectus by reference to another document, a copy of the information;
4. (d)    contact details of two individuals who are sufficiently knowledgeable about the content of the Prospectus to be able to answer queries of the Authorised Investment Exchange during business hours; and
5. (e)    any other information that the Authorised Investment Exchange may require.

1.7.3. Timescales for the submission of the application for approval

The application in MAR 1.7.2 must be submitted to the Authorised Investment Exchange:

(a)    at least 20 business days prior to the intended date on which the applicant expects the Prospectus to be approved; or

(b)    in the case of a Supplementary Prospectus, as soon as reasonably possible.

1.7.4 Approval by the Authorised Investment Exchange

(1)      An Authorised Investment Exchange must not approve a Prospectus or a Supplementary Prospectus (as the case may be) for the purposes of MAR 1.1.1 unless it is satisfied that:

1. (a)the Prospectus or the Supplementary Prospectus meets all the requirements in the Framework Regulations and MAR 1; or
2. (b)when a Prospectus or a Supplementary Prospectus (as the case may be) is produced under legislation in a jurisdiction other than the AIFC, such legislation comprising the rules and practices of an Equivalent Regulated Exchange and the law and practice of the country or territory in which the Equivalent Regulated Exchange is situated:
3. (i)the Prospectus or the Supplementary Prospectus contains information equivalent to that which is required for a Prospectus or a Supplementary Prospectus in the Framework Regulations and MAR 1; and
4. (ii)the offeror meets all the other requirements relating to a Prospectus or a Supplementary Prospectus as prescribed in the Framework Regulations and MAR.

(2)      An Authorised Investment Exchange must approve a Prospectus or Supplementary Prospectus as soon as reasonably practicable.

1.7.5 Approved Prospectus

(1) A Prospectus filed with an Authorised Investment Exchange is not an approved Prospectus for the purposes of MAR 1.1.1 unless the Authorised Investment Exchange has issued the applicant a notice stating its approval:

1. (a)       of the Prospectus or Supplementary Prospectus as the case may be; and
2. (b)      in the case of a Prospectus comprising multiple documents, of all the multiple documents.

(2)       An approval issued under (1) will remain valid for the period of 12 months from the date on which it is issued.

1.7.6. Publication of a Prospectus

(1)After a Prospectus has been approved by the Authorised Investment Exchange, it must be made available to the public as soon as reasonably practicable, and in any case, at a reasonable time in advance of, or at the latest at the beginning of, the offer of Securities and/or trading on an Authorised Investment Exchange, whichever is earlier.

(2)A Prospectus is deemed to be made available to the public for the purposes of (a) when such a Prospectus is published in an electronic form on the website of the Issuer and/or the Authorised Investment Exchange.

(3)A copy of the Prospectus must be delivered to any potential investor, upon request and free of charge, by the Person seeking to have Securities admitted to trading on an Authorised Investment Exchange.

1.7.8 Text and format of published Prospectus

The text and format of the Prospectus, and any Supplementary Prospectus made available to the public, must at all times be identical to the version approved by the Authorised Investment Exchange.

1.8.1. The requirement for approval

1. A Prospectus or Supplementary Prospectus for the purposes of MAR 1.1.2(1)(a) must be submitted to the AFSA for approval.

1.8.2. Application for approval

For the purposes of MAR 1.1.2(1)(a), a Person seeking the approval of the AFSA to a Prospectus must submit to the AFSA:

1. (a)     a Prospectus that meets all of the requirements in the Framework Regulations and MAR 1;
2. (b)    a statement identifying where in the Prospectus the information required in the relevant paragraphs of MAR 1 has been included and, where subsequent drafts or versions of the Prospectus are submitted, a marked- up version showing the changes from the previous version submitted to the AFSA;
3. (c)     if information is incorporated in the Prospectus by reference to another document, a copy of the information;
4. (d)    contact details of two individuals who are sufficiently knowledgeable about the content of the Prospectus to be able to answer queries of the AFSA during business hours; and
5. (e)    any other information that the AFSA may require.

1.8.3. Timescales for the submission of the application for approval

The application in MAR 1.8.2 must be submitted to the AFSA:

(a)     at least 20 business days prior to the intended date on which the applicant expects the Prospectus to be approved; or

(b)     in the case of a Supplementary Prospectus, as soon as reasonably possible.

1.8.4. Approval by the AFSA

The AFSA will approve a Prospectus which has been filed with it in accordance with MAR 1.8.2 as soon as reasonably practicable.

1.8.5 Approved Prospectus

(1)    A Prospectus filed with the AFSA is not an approved Prospectus for the purposes of MAR 1.1.2(1)(a) unless the AFSA has issued to the applicant a notice stating its approval:

1. (a)       of the Prospectus or Supplementary Prospectus as the case may be; and
2. (b)      in the case of a Prospectus comprising multiple documents, of all the multiple documents.

(2)    An approval issued under (1) will remain valid for the period of 12 months from the date on which it is issued.

1.9.1. Persons liable for the content of a Prospectus

For the purposes of section 70(4) of the Framework Regulations, the following Persons are, subject to MAR 1.9.2, prescribed as liable for a Prospectus and its content:

1. (a)    the Issuer; and
2. (b)   where applicable, the Person seeking to have Securities offered and/or admitted to trading on an Authorised Investment Exchange, if it is not the Issuer; and
3. (c)     where the Person in (a) or (b) is a Body Corporate:
4. (i)       each Person who is a Director of that body corporate at the time when the Securities are being offered in or from AIFC and/or the admission to trading on an Authorised Investment Exchange is sought, as applicable; and
5. (ii)       each Person who has consented to be named, and is named, in the Prospectus as a Director or as having agreed to become a Director of that body either immediately or at a future time, and
6. (d)   each Person who accepts, and is stated in the Prospectus as having accepted, responsibility for the Prospectus or for any part thereof; and
7. (e)   each Person who is deemed to accept responsibility for any part of a Prospectus under these Rules; and
8. (f)     if there is a guarantor or obligor in relation to the issue of Securities:
9. (i)       the guarantor in relation to the information in the Prospectus that relates to the guarantor or its guarantee; or
10. (ii)      the obligor in relation to the information in the Prospectus that relates to the obligor or its obligations; and
11. (g)   each Person not falling within any of the foregoing paragraphs who has authorised the contents of the Prospectus or any part thereof (excluding for the avoidance of doubt an Authorised Investment Exchange).
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1.9.2. Limitations on the application of MAR 1.9.1

(1)A Person who has accepted liability for or authorised only part of the content of any Prospectus under MAR 1.9.1(d) is liable only for that part and only if it is included substantially in the same form and context as the Person agreed to for inclusion in the Prospectus.

(2)Nothing in MAR 1.9.1 makes a Person liable for any part of a Prospectus by reason only of giving advice as to its content in a professional capacity to a Person specified in MAR 1.9.1(a) to (g).

1.10.1. Application

This section sets out the requirements that apply to a Person making an Offer of Securities  that are AIFC ESG Debentures. The Rules and Guidance in this section apply to a Person making an Offer of Sukuk as if each reference to Debenture were a reference to Sukuk.

1.10.2. AIFC ESG Debenture

A Debenture is an AIFC ESG Debenture if the Debenture:

(a)    is the subject of an Offer of Securities; 

(b)    complies with any one of the Qualifying ESG Debenture Standards mentioned in MAR 1.10.3; and

(c)     is subject to external review in accordance with MAR 1.10.4.

1.10.3. Qualifying ESG Debenture Standards

(1)  An AIFC ESG Debenture must comply with:

(a)     the Principles and Guidelines issued by the International Capital Markets Association;

(b)    the Climate Bonds Standard of the Climate Bonds Initiative;

(c)     the European Union Green Bond Standard;

(d)    the Association of Southeast Asian Nations Green Bond Standard; or

(e)    international standards equivalent to paragraph (a), (b), (c) or (d), which are approved by the AFSA.

(2) The AFSA may approve other ESG standards as Qualifying ESG Debenture Standards if:

(a)     the ESG standards are issued by a governmental body, reputable industry association or reputable investment exchange; and

(b)    the ESG standards are published and freely available.

Guidance

(1) The following are examples of available ESG Debentures in accordance with the ESG Debenture Rules established by the AFSA. Issuers are encouraged to align their ESG Debentures with applicable standards irrespective of whether they are expressly listed.

(a)        Green Bonds that comply with International Capital Markets Association Green Bond Principles (GBP) or Climate Bonds Standard of the Climate Bonds Initiative;

(b)        Social Bonds that comply with International Capital Markets Association Social Bond Principles (SBP);

(c)         Sustainability Bonds that comply with International Capital Markets Association Sustainability Bond Guidelines (SBG);

(d)        Sustainability-Linked Bonds that comply with International Capital Markets Association Sustainability-Linked Bond Principles (SLBP) or Climate Bonds Standard of the Climate Bonds Initiative;

(e)        Transition Bonds that comply with International Capital Markets Association Sustainability-Linked Bond Principles (SLBP) or Climate Bonds Standard of the Climate Bonds Initiative;

(f)          Sustainable Development Goals (SDG) Bonds that comply with United Nations Development Program SDG Impact Standards; and

(g)        Blue Bonds that comply with the Practitioner’s Guide to Finance the Sustainable Blue Economy.

(2)  For the purposes of issuing ESG Debentures, eligible projects may refer to official national and recognised market taxonomies as encouraged by the Green Bond Principles of the International Capital Market Association, including:

(a)        Kazakhstan’s Green Taxonomy;

(b)        Climate Bonds Taxonomy of the Climate Bonds Standard of the Climate Bonds Initiative (the Green Projects);

(c)         EU Taxonomy for Sustainable Activities;

(d)        Common Ground Taxonomy;

(e)        ASEAN Taxonomy for Sustainable Finance; and

(f)          Monetary Authority of Singapore Singapore-Asia Taxonomy.

1.10.4. External review

For this rule, a Debenture is subject to external review if the Issuer appoints one or more external review providers to:

(a)  assess through a pre-issuance external review the compliance of the Debenture with Qualifying ESG Debenture Standards; or

(b) verify the content of post-issuance reporting if required by Qualifying ESG Debenture Standards or any direction given by the Issuer under disclosure requirements in the Prospectus or Offer of Securities, which may include either or both of the following:

(i)   a report on the use of proceeds and the sustainability-related impact performance in respect of eligible projects; 

(ii) a report on the performance status in respect of sustainability targets as required by Qualifying ESG Debenture Standards;

Guidance

(1)   The assessment and verification functions of external review providers may be performed by different providers at different points of time and may not need to be performed in all cases.  The requirements outlined in this section apply to the extent required by the specific Qualifying Standard or any direction given by the Issuer.

(2)   Before appointing an external review provider an Issuer should take reasonable steps to ensure that the external review provider:

(a)    has the required skills, resources, and experience to undertake the review; and

(b)    is independent of, and not subject to any conflict of interest with respect to, the Issuer.

(3)   When arranging for an external review, an Issuer should take into consideration the International Capital Markets Association Guidelines for Green, Social and Sustainability Debentures Reviews. 

(4)   Issuers are expected to ensure that securities admitted to the Official List of an Authorised Investment Exchange comply with both AFSA requirements and the additional requirements imposed by the Authorised Investment Exchange on which the ESG Debentures are admitted.

(5)   Issuers are expected to make publicly available any reports on the use of proceeds, the sustainability-related impact performance or performance status referenced in paragraph (b).

2.2.1. Corporate governance principles

Pursuant to section 82(2) of the Framework Regulations, the principles in MAR 2.2.2 to 2.2.8 are hereby prescribed as “the Corporate Governance Principles”.

Guidance:

Corporate governance principles

(1) The Corporate Governance Principles in this section apply to Reporting Entities as mandatory high level requirements. MAR Schedule 3 sets out best practice standards that may be adopted by a Reporting Entity to achieve compliance with these principles.

(2) The best practice standards in MAR Schedule 3 are designed to provide a degree of flexibility so that a Reporting Entity can achieve outcomes intended by the Corporate Governance Principles whilst taking into account the nature, scale and complexity of its business.

(3) Generally, if a Reporting Entity does not adopt the best practice standards set out in MAR Schedule 3, or adopts them only partially, the AFSA would expect the reasons for doing so and any alternative measures adopted to achieve the outcomes intended by the Corporate Governance Principles to be disclosed in the Prospectus and thereafter pursuant to disclosure required under MAR 2.2.9. Any inaccurate or false representations would breach the prohibition against misleading and deceptive statements in section 75 of the Framework Regulations.

2.2.2. Principle 1 – Board of directors

A Reporting Entity must have an effective Board which is collectively accountable for ensuring that the Reporting Entity’s business is managed prudently and soundly.

2.2.3. Principle 2 – Division of responsibilities

The Board must ensure that there is a clear division between the Board’s responsibility for setting the strategic aims and undertaking the oversight of the Reporting Entity and the senior management’s responsibility for managing the Reporting Entity’s business in accordance with the strategic aims and risk parameters set by the Board.

2.2.4. Principle 3 – Board composition and resources

The Board, and its committees, must have an appropriate balance of skills, experience, independence and knowledge of the Reporting Entity’s business, and adequate resources, including access to expertise as required and timely and comprehensive information relating to the affairs of the Reporting Entity.

2.2.5. Principle 4 – Risk management and internal control systems

The Board must ensure that the Reporting Entity has an adequate, effective, well- defined and well-integrated risk management, internal control and compliance framework.

2.2.6. Principle 5 – Shareholder rights and effective dialogue

The Board must ensure that the rights of shareholders are properly safeguarded through appropriate measures that enable the shareholders to exercise their rights effectively, promote effective dialogue with shareholders and other key stakeholders as appropriate, and prevent any abuse or oppression of minority shareholders.

2.2.7. Principle 6 – Position and prospects

The Board must ensure that the Reporting Entity’s financial and other reports present an accurate, balanced and understandable assessment of the Reporting Entity’s financial position and prospects by ensuring that there are effective internal risk control and reporting requirements.

2.2.8. Principle 7 – Remuneration

The Board must ensure that the Reporting Entity has Remuneration structures and strategies that are well aligned with the long-term interests of the entity.

2.2.9. Annual reporting on compliance

The annual financial report of a Reporting Entity to which this section applies must:

1. (a) state whether the best practice standards specified in MAR Schedule 3 have been adopted by the Reporting Entity for the purposes of complying with the Corporate Governance Principles; and
2. (b) if the best practice standards in MAR Schedule 3 have not been fully adopted or have been only partially adopted explain:
3. (i) why the best practice standards were not adopted fully or adopted only partially, as is relevant; and
4. (ii) what actions, if any, have been taken by the Reporting Entity to achieve compliance with the Corporate Governance Principles to the extent the relevant best practice standards were not adopted, or were only partially adopted; and
5. (c) include a statement by Directors whether or not, in their opinion, the corporate governance framework of the Reporting Entity is effective in promoting compliance with the Corporate Governance Principles, with supporting information and assumptions, and qualifications if necessary. Guidance: Annual reporting on compliance

(1) MAR 2.2.9 reflects the “comply or explain” approach adopted by the AFSA in respect of the Corporate Governance Principles.

(2) With regard to the opinion required under MAR 2.2.9(c), adequate information relating to the corporate governance framework of the Reporting Entity should be included to support the opinion, such as the identity of its chair, any committees of the Board and their role and membership, the chief executive and Persons undertaking key control functions such as the head of compliance, risk control and internal audit and how their independence is achieved.

2.3.1. Application

This section applies to:

(a)      the Board of a Reporting Entity; and

(b)      each individual Director who is a member of such a board.

Guidance: Directors duties and fair treatment of shareholders

(1)   Where a Person referred to in MAR 2.3.1 is required under any legislation applicable to such a Person to comply with a similar or more stringent requirement than the requirements in this section, compliance with those other requirements would be sufficient compliance for the purposes of the relevant requirement in this section.

(2)    For example, in the case of a reduction of share capital, more stringent procedures such as a special resolution (i.e. a vote of at least 75% of the shareholders in voting), may be required under the company law or other legislation applicable to a Reporting Entity in its jurisdiction of incorporation. Where this is the case, compliance with the more stringent requirements applicable to the Reporting Entity suffices for the purposes of compliance with the requirements in this section dealing with a shareholder approval by simple majority in MAR 2.3.8.

2.3.2. Directors’ duties

A Director of a Reporting Entity must act:

1. (a)    on a fully informed basis;
2. (b)    in good faith;
3. (c)     honestly;
4. (d)    with due diligence and care; and
5. (e)    in the best interests of the Reporting Entity and its shareholders.

Guidance: Directors’ duties

In order to meet the obligation to act with due diligence and care, a Director should (amongst other things) ensure that he or she has enough time and capacity available to devote to the job. See also the best practice standards in MAR Schedule 3 which apply to Directors of Reporting Entities who are subject to the Corporate Governance Principles.

The directors' duties contained in the AIFC Companies Regulations applicable to companies incorporated under the regulations should also be carefully considered and adhered to. These include the duty to promote the success of the Company. This is a subjective test – in other words, the duty on a Director is to act in a way he or she considers to be in the best interests of the Reporting Entity to promote its success. Directors of Recognised Companies under the AIFC Companies Regulations should obtain appropriate advice on their duties under the law applicable to that Recognised Company.

2.3.3. Equality of treatment

The Board of a Reporting Entity must ensure equality of treatment of all holders of Securities of a particular class or type in respect of all rights attaching to the Securities of that class or type of Securities.

2.3.4. Reduction of share capital

The Board of a Reporting Entity must ensure that a Reporting Entity does not reduce its Share capital unless:

1. (a)     the reduction does not materially prejudice the Reporting Entity’s ability to pay its creditors;
2. (b)     a public disclosure is made as soon as possible of any proposed change in its capital structure, and, following the redemption of listed Shares, if any, information on such redemption including details of the number of Shares redeemed and the number of Shares of that class outstanding following the redemption.
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2.3.5. Pre-emption rights

The Board of a Reporting Entity must, except where otherwise provided in the constituent documents of the Reporting Entity, ensure that a Reporting Entity provides pre-emption rights under which, on an issue of Shares by the Reporting Entity for cash, the shareholders of the Reporting Entity are offered any Shares to be issued in proportion to their existing holdings prior to the Shares being offered to third parties, unless there is prior approval of the issue of Shares without pre-emption rights by shareholders in meeting, by a majority vote.

2.3.6. Communications with shareholders

(1) The Board of Reporting Entity must ensure that all necessary information and facilities are available to its shareholders to enable them to exercise the rights attaching to the Shares on a well-informed basis.

(2)    Without limiting the generality of the obligation in (1), the Board must ensure that the shareholders:

1. (a)     are provided with the necessary information relating to the matters to be determined at meetings to enable them to exercise their right to vote, including the proxy forms and notice of meetings; and
2. (b)     have access to any relevant notices or circulars giving information in relation to the rights attaching to the Securities.
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2.3.7. Proxy solicitation

The Board of a Reporting Entity must ensure that for each meeting at which shareholders are eligible to exercise voting rights attaching to their Securities, each shareholder is given the right and means to vote by proxy.

2.3.8. Other matters requiring shareholder approval

(1)The Board of a Reporting Entity must, subject to (2), ensure that a majority of shareholders in voting approves:

(a)      any alteration of the constitutional documents of the Reporting Entity including any alteration to the memorandum of association, articles of association, bylaws or any other instrument constituting the Reporting Entity;

(b)      the appointment or removal of a Director of the Reporting Entity and the terms of such appointment;

(c)      the appointment or removal of the Auditor of the Reporting Entity; and

(d)      the placing of the Reporting Entity into voluntary liquidation;

(2)The requirement in (1) does not apply, subject to any requirements in the constitutional documents of the Reporting Entity, in relation to the appointment or removal of a Director or Auditor of a Reporting Entity in circumstances where the immediate appointment or removal is necessary in the interests of the Reporting Entity.

Guidance: Other matters requiring shareholder approval

The circumstances in which the immediate removal of a Director or Auditor may become necessary include matters affecting that Person’s fitness and propriety, such as professional misconduct of such a Person.

2.4.1. Application

(1)    This section applies to:

1. (a)      the Board of every Reporting Entity; and
2. (b)a Restricted Person in relation to such a Reporting Entity.

(2)   For the purposes of (1)(b), a Person is a Restricted Person in relation to a Reporting Entity if he or she is involved in the senior management of the Reporting Entity.

Guidance: Senior management

Persons are considered as involved in the senior management if they are in a position of authority and influence in making management or executive decisions with regard to the day- to-day management of the business of the Reporting Entity. Some members of the Board, such as executive Directors, will be subject to the requirements in this section because they undertake managerial functions and responsibilities relating to the day-to-day management of the Reporting Entity.

2.4.2. Prohibition on dealing

(1) A Restricted Person must not engage in dealing in the Securities of the Reporting Entity during a closed period except in the circumstances specified in MAR 2.4.4 or MAR 2.4.5.

(2)    The prohibition in (1) applies to any dealing by Restricted Persons whether or not such dealings are with another Restricted Person or any other Person.

2.4.3. Definition of “closed period” and “dealing in Securities”

For the purposes of MAR 2.4.2:

             (a)    a ‘closed period’ is

1. (i)    the period from the relevant financial year end up to and including the time of the announcement or publication of the annual financial statements and/or results; and
2. (ii)    if the Reporting Entity reports on a semi-annual basis, the period from the end of the relevant semi-annual financial period up to and including the time of the announcement or publication of the semi-annual financial statements and/or results; or
3. (iii)  if the Reporting Entity reports on a quarterly basis, the period from the end of the relevant quarter up to and including the time of the announcement or publication of the quarterly financial statements and/or results.
4. (b)    ‘dealing in Securities’ means:
5. (i)      any acquisition or disposal of, or agreement to acquire or dispose of, Securities of the Reporting Entity; or
6. (ii)     entering into a contract (such as a contract for difference) the purpose of which is to secure a profit or avoid a loss by reference to fluctuations in the price of the Securities of the Reporting Entity; or
7. (iii)    the grant, acceptance, acquisition, disposal, exercise or discharge of any option to acquire or dispose of any Securities of the Reporting Entity; or
8. (iv)    entering into, or terminating, assigning or novating any stock lending agreement in respect of the Securities of the Reporting Entity; or
9. (v)     using as security, or otherwise granting a charge, lien or other encumbrance over the Securities of the Reporting Entity; or
10. (vi)    any other transaction including a transfer for no consideration, or the exercise of any power or discretion effecting a change of ownership of a beneficial interest in, the Securities of the Reporting Entity.
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2.4.4. Clearance to deal

(a)    The prohibition in MAR 2.4.2 (a) does not apply in relation to any dealing in Securities where the Restricted Person has obtained prior clearance to deal as provided in (b) and (c).

(b)    For the purposes of (a), prior written clearance to deal in the Securities of a Reporting Entity must be obtained:

1. (i)    from a Director designated by the Board for the purposes of providing clearances to deal; and
2. (ii)    in the case of dealings by the Director designated for the purpose of providing clearances to deal, from the full Board or another Director designated by the Board for the purposes of providing such clearance.

(c)     For the purposes of (a) and (b), a Director of the Reporting Entity must not be given written clearance to deal in any Securities of the Reporting Entity during any period when there exists any matter which constitutes Inside Information unless the Person responsible for granting clearance has no reason to believe that the proposed dealing is or may be in breach of the Framework Regulations or MAR.

2.4.5. Exempt dealings

The prohibition in MAR 2.4.2 (a) does not apply in relation to any dealing in Securities in the Reporting Entity if such dealing by the Restricted Person relates to:

1. (a)     undertakings or elections to take up, or the taking up of, an entitlement under a rights issue or dividend reinvestment offer, or allowing such an entitlement or offer to lapse; or
2. (b)    undertakings to accept, or the acceptance of, a Takeover Offer under Takeover Rules; or
3. (c)    dealings where the beneficial interest in the relevant Security does not change; or
4. (d)    transactions between the Restricted Person and an Associate of such a Person; or
5. (e)    transactions relating to dealings in an Employee Share Scheme in accordance with the terms of such a scheme.

2.5.1. Application

This section applies, subject to MAR 2.5.4, to:

• (a) a Reporting Entity; and
• (b) a Related Party of such a Reporting Entity.

2.5.2. Definitions

In this section, unless otherwise provided:

1. (a) a Person is a Related Party of a Reporting Entity if that Person:
2. (i) is, or was within the 12 months before the date of the Related Party Transaction:

(A) a Director or a Person involved in the senior management of the Reporting Entity or a member of its Group;

(B) an Associate of a Person referred to in (a)(i)(A); or

1. (ii) owns, or has owned within 12 months before the date of the Related Party Transaction, voting Securities carrying more than 5% of the voting rights attaching to all the voting Securities of either the Reporting Entity or a member of its Group; or
2. (iii) is, or was within the 12 months before the date of the Related Party Transaction, a Person exercising or having the ability to exercise significant influence over the Reporting Entity or an Associate of such a Person.
3. (b) a transaction is a Related Party Transaction if it is a transaction:
4. (i) between a Reporting Entity and a Related Party; or
5. (ii) under which the Reporting Entity invests in another Undertaking or asset, or provides financial assistance to another Undertaking, in which a Related Party also has a financial interest; or
6. (iii) between the Reporting Entity and any other Person the purpose or effect of which is to benefit a Related Party; or
7. (iv) of the kind referred to in (i) – (iii) and is between a Subsidiary of a Reporting Entity and a Related Party of the Reporting Entity.

Guidance:

Definitions Any transaction between a Subsidiary of a Reporting Entity and a Related Party is included within the definition of a Related Party Transaction. This is because a Related Party may, through the Reporting Entity, be able to influence terms which are more favourable to the Related Party when transacting with the subsidiary. Such transactions could be detrimental to the interests of the Reporting Entity.

2.5.3. Related party transaction procedures

If a Reporting Entity enters into a Related Party Transaction or a series of Related Party Transactions in any 12-month period and the value of such transaction(s) is greater than 5% of value of the net assets of the Reporting Entity as stated in its most recent financial reports, the Reporting Entity must, no later than the time when the terms of the transaction or arrangement are agreed, make public disclosure which sets out:

1. (a)    the nature of the Related Party relationship;
2. (b)    the name of the Related Party;
3. (c)    the date and the value of the transaction or arrangement; and
4. (d)    any other information necessary to assess whether the transaction or arrangement is fair and reasonable from the perspective of the Reporting Entity and of the stakeholders who are not a Related Party, including minority shareholders and creditors.
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2.5.4. Exemptions

The requirements in this section do not apply to a transaction referred to in MAR 2.5.2(b):

• (a) where the transaction is made in the ordinary course of business and on commercial terms no less favourable than those of an arm’s length transaction with an unrelated party; or
• (b) where it, or any series of transactions with the same Related Party in any 12-month period, does not exceed 0.25% of the value of the net assets of the Reporting Entity as stated in its most recent financial reports; or
• (c) where it is made in accordance with the terms of an Employee Share Scheme or other Employee incentive scheme approved by the Board of the Reporting Entity; or
• (d) where it involves the issue of new Securities for cash or pursuant to the exercise of conversion or subscription rights attaching to Securities issued to existing Shareholders where the Securities are traded on an Authorised Investment Exchange.

3.1.1. Obligation to prepare financial statements

A Reporting Entity must:

1. (a)    prepare and maintain all financial statements in accordance with the International Financial Reporting Standards (IFRS) or other financial reporting standards acceptable to the AFSA;
2. (b)    prepare and file an annual report which meets the requirements in MAR 3.2 for each financial year of the Reporting Entity; and
3. (c)    in addition to the annual report, prepare and file a semi-annual report which meets the requirements in MAR 3.3.1 in respect of Shares, Warrants or Certificates over Shares.

3.1.2 Audit of annual financial statements

The annual financial statements of a Reporting Entity must be audited by an independent, competent and qualified Auditor in accordance with the International Standards on Auditing as issued by the International Auditing and Assurance Standards Board (“IAASB”) or other standards acceptable to the AFSA.

3.1.3. Financial reporting standards

[deleted]

3.2.1. Contents of annual financial report

(1)   The annual report which is required to be produced by a Reporting Entity pursuant to section 84 of the Framework Regulations must include the information specified in (2).

(2)   In respect of the financial year to which the annual report relates, it must contain:

1. (a)financial statements audited in accordance with MAR 3.1.2;
2. (b)a review of the operations during the year and the results of those operations;
3. (c)details of any significant changes in the Reporting Entity’s state of affairs during the financial year;
4. (d)details relating to the Reporting Entity’s principal activities during the year and any significant changes in the nature of those activities during the year;
5. (e)details of any matter or circumstance that has arisen since the end of the year that has significantly affected or may significantly affect the Reporting Entity’s operations in future financial years and the results of those operations; or the Reporting Entity’s state of affairs in future financial years;
6. (f)likely developments in the Reporting Entity’s operations in future financial years and the expected results of those operations;
7. (g)a statement by the Auditor of the Reporting Entity as to whether in the Auditor’s opinion the financial statements represent a true and fair view of the financial position of the Reporting Entity;
8. (h)a statement by Directors whether or not, in their opinion, the business of the Reporting Entity is a going concern, with supporting assumptions or qualifications if necessary;
9. (i)details relating to the identity and holdings of any Connected Person of the Reporting Entity; and
10. (j)annual reporting on compliance with the Corporate Governance Principles pursuant to MAR 2.2.9 by the Reporting Entity, if it is a Reporting Entity to which section MAR 2.2.9 applies.

Guidance

With regard to the opinion required under the obligation in MAR 3.2.1(2)(h), the AFSA recognises that while the financial statements will be prepared by Persons other than the Directors, the Board has overall responsibilities to ensure the integrity and independence of the financial reporting process.

3.2.2 Signing of the annual report

The annual report must be signed by at least two Directors of the Reporting Entity or approved by a body competent to decide on such matters under the Reporting Entity’s constitutive documents and/or applicable law.

3.2.3. Signing of the annual financial report

[deleted]

3.3.1. Preparation of the semi-annual financial report

A Reporting Entity to which the obligation in MAR 3.1.1(c) applies must prepare a semi-annual report:

1. (a) for the first six months of each financial year or period; and if there is a change to the accounting reference date, prepare such report in respect of the period up to the old accounting reference date; and
2. (b) in accordance with the applicable IFRS standards or other standards acceptable to the AFSA.

3.3.2. Contents of the semi-annual financial report

A Reporting Entity must ensure that the semi-annual report includes:

1. (a)     an indication of important events that have occurred during the first six months of the financial year, and their impact on the financial statements;
2. (b)     a description of the principal risks and uncertainties for the remaining six months of the financial year;
3. (c)     a condensed set of financial statements, an interim management report and associated responsibility statements; and
4. (d)     where financial statements have either been audited or reviewed by Auditors, statements to that effect.
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3.3.3. Signing of the semi-annual financial report

A semi-annual report must be signed by at least two Directors of the Reporting Entity or approved by a body competent to decide on such matters under the Reporting Entity’s constitutive documents and/or applicable law.

3.4.1. Obligation to make market disclosure

(1)    Where a Reporting Entity is required by to prepare any of the following reports:

1. (a)      its annual report;
2. (b)      its semi-annual report. 

it must do so in the time periods specified in MAR 3.4.2.

(2)    Reporting Entities that are Issuers of Exempt Securities (except where such Exempt Securities have been subsequently offered to the public) are required to prepare and disclose in the time periods specified in MAR 3.4.2:

1. (a)       audited annual financial statements pursuant to MAR 3.1.1(a) and MAR 3.1.2; and
2. (b)      interim financial statements or management account statements for the first six months of the financial year.

3.4.2. Time period for making market disclosure

(1)   A Reporting Entity must disclose its required annual and semi-annual reports within the following time periods:

1. (a)       in relation to its annual report: as soon as possible after the financial statements have been approved, but no later than 150 days after the end of the financial period; and
2. (b)      in relation to its semi-annual report: as soon as possible and in any event no later than 75 days after the end of the period to which the report relates.

(2)   A Reporting Entity which is an Issuer of REMS Shares pursuant to MAR 1.3.1(c) for the first time may postpone disclosure of the first annual report and the first semi-annual report by two (2) months from the due dates specified above.

3.5.1. Accounting reference date

(1)   A Reporting Entity must not change its accounting reference date as specified in its most recent Prospectus unless it has obtained the prior approval of the AFSA in accordance with the requirements in (b).

(2)    A Reporting Entity that proposes to change its accounting reference date must:

1. (a)notify the AFSA of its proposal at least 28 business days prior to making such a change; and
2. (b)obtain the AFSA prior approval for the proposed change.

3.5.2. Disclosure of changes to accounting reference date

A Reporting Entity must, where there is a change to its accounting reference date, disclose to the market:

1. (a)     the change to its accounting reference date as soon as possible; and
2. (b)      if it is a Reporting Entity in relation to Shares, a second interim report within six months of the old accounting reference date if the change of the accounting reference date extends the annual accounting period to more than 14 months.
3. 
   

4.1.1. Appointment of sponsors

Where the AFSA chooses to exercise the power under section 85 of the Framework Regulations to require a Reporting Entity or a Person that intends to have Securities admitted to an Official List or admitted to trading on an Authorised Investment Exchange to appoint an Authorised Firm or Ancillary Services Provider to act as a sponsor, the AFSA will notify the relevant Person in writing.

Guidance The AFSA will not require a Person that intends to have Securities admitted to the Official list of Securities or admitted to trading on an Authorised Investment Exchange to appoint a sponsor unless the Person (a) does not have a proven track record or (b) has been in operation for less than 3 (three) years, but not including cases where such Person meets one of the following criteria:

1. (i) the Person falls within the definition of Exempt Offerors or Financial Institution; or
2. (ii) the Securities of the Person have been admitted to the Official List or admitted to trading on an Equivalent Regulated Exchange.

4.1.2. Procedures relating to appointment of sponsors

(a) A Person required to appoint a sponsor must, prior to appointing a sponsor:

1. (i) take reasonable steps to ensure that the proposed sponsor has the required knowledge, experience, qualifications and resources to carry out its obligations under MAR; and
2. (ii) notify the AFSA of the proposed sponsor’s name, its business address and an address in the AIFC for the service of documents.

(b) If requested by the AFSA, a Person appointing a sponsor must provide the AFSA with information about the knowledge, experience, qualifications and resources of the appointed or proposed sponsor.

4.1.3. Independence of sponsors and their employees

• (a) 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.
• (b) A Person must notify the AFSA 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.

4.1.4. AFSA’s power of direction

Where, in the opinion of the AFSA, a sponsor appointed by a Person is not suitable, or where a sponsor has not been appointed or has resigned, the AFSA may direct the Person to appoint or replace a sponsor.

4.1.5. Obligations of a sponsor

A sponsor appointed pursuant to MAR 4.1.1 must:

• (a) satisfy itself to the best of its knowledge and belief, having made due and careful enquiry that the Person who is seeking or intends to seek to have Securities admitted to trading on an Authorised Investment Exchange has satisfied all applicable conditions for offering Securities and other relevant requirements under the Framework Regulations and MAR; and
• (b) provide to the AFSA any information or explanation known to it in such form and within such time limit as the AFSA may reasonably require for the purpose of verifying whether the Person seeking to have Securities admitted to trading on an Authorised Investment Exchange complies or has complied, with the applicable requirements in the Framework Regulations and MAR; and
• (c) take other steps required in writing by the AFSA.

4.1.6. Sponsor’s obligation when aware of non-compliance

Where a sponsor becomes aware of a failure by the Person seeking to have Securities admitted to trading on an Authorised Investment Exchange to comply with its obligations under MAR and the Framework Regulations, the sponsor must without undue delay:

• (a) notify the Person seeking to have the Securities admitted of the failure and take reasonable steps to ensure it rectifies the failure within a reasonable time; and
• (b) if the Person does not or is unable to rectify the failure as soon as practicable notify the AFSA of that fact.

4.1.7. Duty of care of sponsors

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

4.1.8. Co-operation with sponsors

A Person who is required to appoint a sponsor in respect of the admission of Securities to trading on an Authorised Investment Exchange must take reasonable steps to ensure that it and its Employees:

• (a) provide such assistance as the sponsor reasonably requires to discharge its duties; and
• (b) give the sponsor right of access at all reasonable times to relevant records and information; and
• (c) do not interfere with the sponsor’s ability to discharge its duties; and
• (d) do not provide misleading or deceptive information to the sponsor; and
• (e) 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.

4.1.9. Notifying the AFSA of failure to co-operate

A sponsor must notify the AFSA of any non-co-operation by the Person seeking to have Securities admitted to trading on an Authorised Investment Exchange or by the Employees of that Person.

4.1.10. Termination of appointment

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

4.1.11. Resignation of sponsor

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

4.2.1. Appointment of a compliance adviser

Where the AFSA chooses to exercise power under section 85 of the Framework Regulations to require a Person to appoint an Authorised Firm or Ancillary Services Provider to act as a compliance adviser, the AFSA will notify the relevant Person in writing. Guidance The AFSA may require the appointment of a compliance adviser where a Reporting Entity has been held to have breached the Acting Law of the AIFC and/or Authorised Market Institutions Rules.

4.2.2. Procedure for appointing a compliance adviser

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 MAR; and
• (b) notify the AFSA 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.

4.2.3. Provision of information to the AFSA

If requested by the AFSA, a Reporting Entity appointing a compliance adviser must provide the AFSA with such information as it may require including information regarding knowledge, experience, qualifications and resources of the compliance adviser.

4.2.4. Conflicts of interest

A Reporting Entity must notify AFSA 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.

4.2.5. Appointment of a compliance adviser for a specified period

• (a) The AFSA 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 Framework Regulations and MAR.
• (b) 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 AFSA advises the Reporting Entity in writing that a compliance adviser is no longer required.

4.2.6. Obligation of a Reporting Entity to rectify failure

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

• (a) take reasonable steps to rectify the failure as soon as practicable; and
• (b) if the Reporting Entity does not or is unable to rectify the failure as soon as practicable notify the AFSA of that fact.

4.2.7. Provision of information to the AFSA

A Reporting Entity must provide to the AFSA any information in such form and within such time as the AFSA 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 Framework Regulations and MAR.

4.2.8. Co-operation with the AFSA

A Reporting Entity must take reasonable steps to ensure its compliance adviser cooperates in any investigation conducted by the AFSA 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.

4.2.9. Co-operation with compliance advisers

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

• (a) provide such assistance as the compliance adviser reasonably requires to discharge its duties;
• (b) give the compliance adviser right of access at all reasonable times to relevant records and information;
• (c) do not hinder or interfere with the compliance adviser’s ability to discharge its duties; and
• (d) do not withhold information that would assist the compliance adviser advising the Reporting Entity of its duties;
• (e) do not provide misleading or deceptive information to the compliance adviser; and
• (f) 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.

4.2.10. Termination of appointment

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

4.2.11. Resignation of compliance adviser

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

5.1.1. Conduct amounting to Market Abuse

The following conduct, wherever it occurs and whether engaged or participated in directly or indirectly, amounts to Market Abuse for the purposes of section 86 of the Framework Regulations:

• (a) unlawful disclosure of Inside Information;
• (b) engaging or attempting to engage in Insider Dealing;
• (c) recommending that another Person engage in Insider Dealing;
• (d) inducing another Person to engage in Insider Dealing; and
• (e) engaging or attempting to engage in Market Manipulation.

5.1.2. Conduct not amounting to Market Abuse

The following conduct does not amount to Market Abuse for the purposes of section 86 of the Framework Regulations:

(a) disclosure of Inside Information made in the course of a Market Sounding;

(b) the behaviour described in MAR 5.3.4 to 5.3.6; and

(c) accepted market practices established under MAR 5.4.4.

(d) conduct of another activity which occurs outside the AIFC unless it affects the AIFC markets or their users.

5.2.1. Definition of Inside Information (general)

Inside information is information of a precise nature which:

• (a) has not been made public;
• (b) relates directly or indirectly, to one or more Issuers or to one or more Investments; and
• (c) would, if it were made public, be likely to have a significant effect on the prices of those Investments or on the price of related Investments.

Guidance: Inside Information An intermediate step in a protracted process will be Inside Information if, by itself, it satisfies the criteria of Inside Information.

5.2.2. Definition of Inside Information (execution of orders

For Persons charged with the execution of orders concerning Investments, Inside Information:

(a) has the meaning given in MAR 5.2.1 (Definition of Inside Information (general); and

(b) is information conveyed by a client and relating to the client’s pending orders in Investments which:

(i) is of a precise nature; and

(ii) relates directly or indirectly, to one or more Issuers or to one or more Investments; and

(iii) if it were made public, would be likely to have a significant effect on the prices of those Investments, the price of related spot commodity contracts, or on the price of related Investments.

5.2.3. Definition of Information of a ‘precise nature’

Information will be deemed to be of a precise nature if it:

(a) indicates a set of circumstances which exists or which may reasonably be expected to come into existence, or an event which has occurred or which may reasonably be expected to occur; and

(b) is specific enough to enable a conclusion to be drawn as to the possible effect of that set of circumstances or event on the prices of the Investments or the related Investments.

Guidance:

Precise information In the case of a protracted process that is intended to bring about, or that results in, particular circumstances or a particular event, those future circumstances or that future event, and also the intermediate steps of that process which are connected with bringing about or resulting in those future circumstances or that future event, may be deemed to be precise information.

5.2.4. Definition of Information likely to have a ‘significant effect’

Information which, if it were made public, would be likely to have a significant effect on the prices of Investments means information which a reasonable investor would be likely to use as part of the basis of his or her investment decisions.

5.2.5. Unlawful disclosure of Inside Information

Unlawful disclosure of Inside information occurs where:

• (a) a Person specified in MAR 5.2.6 possesses Inside Information and discloses that information to any other Person, except where the disclosure is made in the normal exercise of an employment, a profession or duties; or
• (b) a Person (‘A’) to whom a recommendation to engage in Insider Dealing is made or who is induced to engage in Insider Dealing, within the meaning of MAR 5.3.2, discloses the recommendation or inducement to another where A knows or ought to know that the recommendation or inducement was based on Inside Information.

5.2.6. Persons possessing Inside Information

MAR 5.2.5 (a) applies to:

• (a) any Person who possesses Inside Information as a result of:
• (i) being a member of the administrative, management or supervisory bodies of the Issuer; or
• (ii) having a holding in the capital of the Issuer; or
• (iii) having access to the information through the exercise of an employment, profession or duties; or
• (iv) being involved in criminal activities;
• (b) any Person who possesses Inside Information other than under the circumstances specified in (a) where that Person knows or ought to know that the information is Inside Information.

5.3.1 Definition of Insider Dealing

The following amount to Insider Dealing:

• (a) the use, by a Person who possesses Inside information, of that information by acquiring or disposing of, for its own account or for the account of a third party, directly or indirectly, Investments to which that information relates; or
• (b) the use of Inside Information by cancelling or amending an order concerning Investments to which the information relates where the order was placed before the Person concerned possessed the Inside Information; or
• (c) the use of recommendations or inducements to engage in Insider Dealing MAR 5.3.2 (Recommending or Inducing Insider Dealing), where the Person using the recommendation or inducement knows or ought to know that it is based on Inside Information.

5.3.2. Recommending or Inducing Insider Dealing

A Person (‘A’) recommends another Person (‘B’) to engage in Insider Dealing or induces B to engage in Insider Dealing, where A possesses Inside Information and:

• (a) recommends, on the basis of that information, that B acquires or disposes of Investments to which that information relates, or induces B to make such an acquisition or disposal; or
• (b) recommends, on the basis of that information, that B cancels or amends an order concerning Investments to which that information relates, or induces B to make such a cancellation or amendment.

5.3.3. Persons to whom MAR 5.3.2 and MAR 5.3.1 apply

MAR 5.3.1 (Definition of Insider Dealing) and MAR 5.3.2 (Recommending or inducing Insider Dealing) apply:

• (a) to any Person who possesses Inside Information as a result of:
• (i) being a member of the administrative, management or supervisory bodies of the Issuer; or
• (ii) having a holding in the capital of the Issuer; or
• (iii) having access to the information through the exercise of an employment, profession or duties; or
• (iv) being involved in criminal activities;
• (b) to any Person who possesses Inside Information other than under the circumstances specified in (a) where that Person knows or ought to know that the information is Inside Information; or
• (c) where the Person in (a) or (b) is a legal Person, in addition to that legal Person, to the natural Persons who participate in the decision to carry out the acquisition, disposal, cancellation or amendment of an order for the account of the legal Person concerned.

5.3.4. Behaviour that does not constitute Insider Dealing

A Person (‘A’) who is or who has been in possession of Inside Information will not be deemed to have used that information for acquisition or disposition of Investments merely because A is or was in possession of Inside Information:

• (a) Where A is a legal Person and A:
• (i) has established, implemented and maintained adequate and effective internal arrangements and procedures that effectively ensure that neither the natural Person who made the decision on its behalf to acquire or dispose of Investments to which the information relates, nor another natural Person who may have had an influence on that decision, was in possession of the Inside Information; and
• (ii) has not encouraged, made a recommendation to, induced or otherwise influenced the natural Person who, on behalf of the legal Person, acquired or disposed of Investments to which the information relates.
• (b) Where A:
• (i) for the Investments to which the information relates, is a Market Maker or a Person authorised to act as a counterparty, and the acquisition or disposal of Investments to which that information relates is made legitimately in the normal course of the exercise of its function as a market maker or as a counterparty for those Investments; or
• (ii) is authorised to execute orders on behalf of third parties and the acquisition or disposal of Investments to which the order relates, is made to carry out such an order legitimately in the normal course of the exercise of that Person’s employment, profession or duties;
• (c) Where A conducts a transaction to acquire or dispose of Investments and that transaction is carried out in the discharge of an obligation that has become due in good faith and not to circumvent the prohibition against Insider Dealing and:
• (i) that obligation results from an order placed or an agreement concluded before the Person concerned possessed Inside Information; or
• (ii) that transaction is carried out to satisfy a legal or regulatory obligation that arose, before the Person concerned possessed Inside Information.

5.3.5. Behaviour that does not constitute Insider Dealing – public takeover

It will not be deemed from the mere fact that a Person is in possession of Inside information that that Person has used that information and has thus engaged in Insider Dealing:

• (a) where such Person has obtained that Inside Information in the conduct of a public takeover or merger with a company and uses that Inside information solely for the purpose of proceeding with that merger or public takeover; and
• (b) provided that at the point of approval of the merger or acceptance of the offer by the shareholders of that company, any Inside Information has been made public or has otherwise ceased to constitute Inside Information.

5.3.6. Behaviour that does not constitute Insider Dealing – use of own knowledge

The mere fact that a Person uses its own knowledge that it has decided to acquire or dispose of Investments in the acquisition or disposal of those Investments will not of itself constitute use of Inside Information.

Guidance:

Behaviour that does not constitute Insider Dealing Notwithstanding the provisions in MAR 5.3.4 to MAR 5.3.6, an infringement of the prohibition of Insider Dealing may still be deemed to have occurred if the AFSA establishes that there was an illegitimate reason for the orders to trade, transactions or behaviours concerned.

5.4.1. Market Manipulation

Market Manipulation comprises the activities set in MAR 5.4.2 and includes the conduct set out in MAR 5.4.3.

5.4.2. Market Manipulation Activities

The following activities constitute Market Manipulation:

• (a) entering into a transaction, placing an order to trade or any other behaviour which:
• (i) gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of, a Security; or
• (ii) secures, or is likely to secure, the price of one or several Securities at an abnormal or artificial level; unless the Person entering into a transaction, placing an order to trade or engaging in any other behaviour establishes that such transaction, order or behaviour have been carried out for legitimate reasons, and conform with an accepted market practice MAR 5.4.4 (Accepted Market Practice); and
• (b) entering into a transaction, placing an order to trade or any other activity or behaviour which affects or is likely to affect the price of one or several Securities, which employs a fictitious device or any other form of deception or contrivance; and
• (c) disseminating information through the media, including the internet, or by any other means, which gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of, a Security, or secures, or is likely to secure, the price of one or several Securities, at an abnormal or artificial level, including the dissemination of rumours, where the Person who made the dissemination knew, or ought to have known, that the information was false or misleading; and
• (d) transmitting false or misleading information or providing false or misleading inputs in relation to a benchmark where the Person who made the transmission or provided the input knew or ought to have known that it was false or misleading, or any other behaviour which manipulates the calculation of a benchmark.

5.4.3. Market Manipulation Behaviour

The following conduct constitutes Market Manipulation:

• (a) the conduct by a Person, or Persons acting in collaboration, to secure a dominant position over the supply of or demand for a Security which has, or is likely to have, the effect of fixing, directly or indirectly, purchase or sale prices or creates, or is likely to create, other unfair trading conditions; and
• (b) the buying or selling of Securities, at the opening or closing of the market, which has or is likely to have the effect of misleading investors acting on the basis of the prices displayed, including the opening or closing prices; and
• (c) the placing of orders to a trading venue, including any cancellation or modification thereof, by any available means of trading, including by electronic means, such as algorithmic and high-frequency trading strategies, and which has one of the effects referred to in MAR 5.4.2(a) or (b), by:
• (i) disrupting or delaying the functioning of the trading system of the trading venue or being likely to do so; or
• (ii) making it more difficult for other Persons to identify genuine orders on the trading system of the trading venue or being likely to do so, including by entering orders which result in the overloading or destabilisation of the order book; or
• (iii) creating or being likely to create a false or misleading signal about the supply of, or demand for, or price of, a Security, in particular by entering orders to initiate or exacerbate a trend;
• (d) the taking advantage of occasional or regular access to the traditional or electronic media by voicing an opinion about a Security (or indirectly about its Issuer) while having previously taken positions on that Security and profiting subsequently from the impact of the opinions voiced on the price of that instrument without having simultaneously disclosed that conflict of interest to the public in a proper and effective way.

5.4.4. Accepted Market Practice

The activities referred to in MAR 5.4.2(a) will not constitute Market Manipulation if the Person entering into a transaction, placing an order to trade or engaging in any other behavior establishes that such transaction, order or behavior have been carried out for legitimate reasons, and conform with an accepted market practice as established by the AFSA.

5.5.1. Definition of Market Sounding

The following constitute Market Sounding:

• (a) the communication of information, prior to the announcement of a transaction, in order to gauge the interest of potential investors in a possible transaction and the conditions relating to it, such as its potential size or pricing, to one or more potential investors by:
• (i) an Issuer; or
• (ii) a secondary offeror of a Security, in such quantity or value that the transaction is distinct from ordinary trading and involves a selling method based on the prior assessment of potential interest from potential investors; or
• (iii) a third party acting on behalf or on the account of a Person referred to in (i) or (ii); and
• (b) disclosure of Inside Information by a Person intending to make a takeover bid for the Securities of a company or a merger with a company to parties entitled to the Securities, will also constitute a market sounding, provided that:
• (i) the information is necessary to enable the parties entitled to the Securities to form an opinion on their willingness to offer their Securities: and
• (ii) the willingness of parties entitled to the Securities to offer their Securities is reasonably required for the decision to make the takeover bid or merger.

5.5.2. Disclosure of Inside Information in the course of Market Sounding

Disclosure of Inside Information made in the course of Market Sounding will be deemed to be made in the normal exercise of a Person’s employment, profession or duties (and will not constitute unlawful disclosure of Inside Information (MAR 5.2.65) provided that the Person making the disclosure complied with the requirements in MAR 5.5.3 (Requirements on a Person conducting or intending to conduct Market Sounding).

5.5.3. Requirements on a Person conducting or intending to conduct Market Sounding

A market participant must:

• (a) prior to conducting a Market Sounding, consider whether the Market Sounding will involve the disclosure of Inside Information and make a written record of its conclusions and reasons thereof; and
• (b) before making the disclosure of Inside Information:
• (i) obtain the consent of the Person receiving the Market Sounding to receive Inside Information; and
• (ii) inform the Person receiving the market sounding that he is prohibited from using that information, or attempting to use that information, by acquiring or disposing of, for his own account or for the account of a third party, directly or indirectly, Securities relating to that information; and
• (iii) inform the Person receiving the market sounding that he is prohibited from using that information, or attempting to use that information, by cancelling or amending an order which has already been placed concerning a Security to which the information relates; and
• (iv) inform the Person receiving the market sounding that by agreeing to receive the information he is obliged to keep the information confidential; and
• (c) make and maintain a record of all information given to the Person receiving the Market Sounding, including the information given in accordance with points (i) to (iv), and the identity of the potential investors to whom the information has been disclosed, including but not limited to the legal and natural Persons acting on behalf of the potential investor, and the date and time of each disclosure. The disclosing market participant must provide that record to the competent authority upon request; and
• (d) provide its written record to the AFSA upon request; prior to conducting a Market Sounding.

5.5.4. Information which ceases to be Inside Information

Where information that has been disclosed in the course of a Market Sounding ceases to be Inside Information according to the assessment of the disclosing market participant, the disclosing market participant must inform the recipient accordingly, as soon as possible and maintain a record of the information given to the recipient.

5.5.5. Record Keeping

The disclosing market participant must keep the records referred to in MAR 5.5.3 and 5.5.4 for a period of at least five years.

6.1.1. Obligation to disclose Inside Information to the public

A Reporting Entity must inform the public as soon as possible of Inside Information which directly concerns that Reporting Entity.

6.1.2. Requirements for public disclosure of Inside Information

The Reporting Entity:

• (a) must ensure that the Inside Information is made public in a manner which enables fast access and complete, correct and timely assessment of the information by the public; and
• (b) must not combine the disclosure of Inside Information to the public with the marketing of its activities; and
• (c) must post and maintain on its website for a period of at least five years, all Inside Information it is required to disclose publicly.

6.1.3. Delaying disclosure

A Reporting Entity may delay disclosure of Inside Information to the public provided that all of the following conditions are met:

• (a) immediate disclosure is likely to prejudice the legitimate interests of the Reporting Entity; and
• (b) delay of disclosure is not likely to mislead the public; and
• (c) the Reporting Entity is able to ensure the confidentiality of that information.

6.1.4. Delaying disclosure – protracted processes

In the case of a protracted process that occurs in stages and that is intended to bring about, or that results in, a particular circumstance or a particular event, a Reporting Entity may delay the public disclosure of Inside Information relating to this process, subject to MAR 6.1.3.

6.1.5. Obligation to notify the AFSA and the Authorised Investment Exchange of delayed disclosure

Where a Reporting Entity has delayed the disclosure of Inside Information under MAR 6.1.3 or MAR 6.1.4, it must inform the AFSA and the Authorised Investment Exchange that disclosure of the information was delayed and must provide a written explanation of how the conditions set out in MAR 6.1.3 were met, immediately after the information is disclosed to the public.

6.1.6. Obligation to disclose to the public when confidentiality is no longer ensured

Where disclosure of Inside Information has been delayed in accordance with MAR 6.1.3 or MAR 6.1.4 and the confidentiality of that Inside Information is no longer ensured, the Reporting Entity must disclose that Inside Information to the public as soon as possible.

Guidance: Obligation to disclose to the public when confidentiality is no longer ensured MAR 6.1.6 would apply to situations where a rumour explicitly relates to Inside Information the disclosure of which has been delayed in accordance with MAR 6.1.3 or MAR 6.1.4 where that rumour is sufficiently accurate to indicate that the confidentiality of that information is no longer ensured.

6.1.7. Disclosure of Inside Information in the normal course of the exercise of an employment, profession or duties

Where a Reporting Entity, or a Person acting on their behalf or for their account, discloses any Inside Information to any third party in the normal course of the exercise of an employment, profession or duties as referred to in MAR 5.2.5 (Unlawful Disclosure of Inside Information):

1. (a)     they must make complete and effective public disclosure of that information, simultaneously in the case of an intentional disclosure, and promptly in the case of a non-intentional disclosure; but
2. (b)    the obligation in (a) does not arise where the Person receiving the information owes a duty of confidentiality, whether such duty is based on law, regulations, on articles of association or on a contract.

6.2.1. Obligation to draw up insider lists

A Reporting Entity, or a Person acting on its behalf or on its account, must draw up a list of all Persons who have access to Inside Information and who are working for them under a contract of employment, or otherwise performing tasks through which they have access to Inside Information, such as advisers, accountants or credit rating agencies (Insider List).

6.2.2. Reporting Entity is responsible for complying with MAR 8.2.2 (Obligation to draw up insider lists)

Where another Person acting on behalf or on the account of the Reporting Entity assumes the task of drawing up and updating the Insider List, the Reporting Entity remains fully responsible for complying with MAR 6.2.21 (Obligation to draw up insider lists).

6.2.3. Contents of the Insider List

The Insider List must include at least:

• (a) the identity of any Person having access to Inside Information; and
• (b) the reason for including that Person in the Insider List; and
• (c) the date and time at which that Person obtained access to Inside Information; and
• (d) the date on which the insider list was drawn up.

6.2.4. Persons on the Insider List

A Reporting Entity, or a Person acting on its behalf or on its account, must take all reasonable steps to ensure that any Person on the Insider List acknowledges in writing the legal and regulatory duties entailed and is aware of the sanctions applicable to Insider Dealing and unlawful disclosure of Inside Information.

6.2.5. Updating the Insider list

A Reporting Entity, or a Person acting on its behalf or on its account, must update the Insider List promptly, including the date of the update, in the following circumstances:

• (a) where there is a change in the reason for including a Person already on the Insider List; and
• (b) where there is a new Person who has access to Inside Information and needs, therefore, to be added to the Insider List; and
• (c) where a Person ceases to have access to Inside Information. Each update must specify the date and time when the change triggering the update occurred.

6.2.6. Provision of Insider Lists to the AFSA

Reporting Entities or any Person acting on their behalf must provide the Insider List to the AFSA as soon as possible upon its request.

6.2.7. Record Keeping

A Reporting Entity, or a Person acting on its behalf or on its account, must retain the Insider List for a period of at least five years after it is drawn up or updated.

6.3.1. Notification of transactions

Persons discharging managerial responsibilities within a Reporting Entity must notify the Reporting Entity and the AFSA, in accordance with the rules in MAR 6.3, of every transaction conducted on their own account relating to the Shares or debt instruments of that Issuer or to derivatives or other Securities linked thereto.

6.3.2. Transactions on behalf of Persons discharging managerial responsibilities

Transactions that must be notified under MAR 6.3.1 (Notification of transactions) must also include:

• (a) the pledging or lending of Securities by or on behalf of a Person discharging managerial responsibilities, save that a pledge, or a similar Security interest, of Securities in connection with the depositing of the Securities in a custody account does not need to be notified, unless and until such time that such pledge or other Security interest is designated to secure a specific credit facility; and
• (b) transactions undertaken by Persons professionally arranging or executing transactions or by another Person on behalf of a Person discharging managerial responsibilities, including where discretion is exercised.

6.3.3. Content of notification

The notification of transactions referred to in MAR 6.3.1 must contain the following information:

• (a) the name of the Person;
• (b) the reason for the notification;
• (c) the name of the relevant Reporting Entity;
• (d) a description and the identifier of the Security;
• (e) the nature of the transaction(s) (e.g. acquisition or disposal), indicating whether it is linked to the exercise of Share option programmes or to the specific examples set out in MAR 6.3.2 (Transactions on behalf of Persons discharging managerial responsibilities);
• (f) the date and place of the transaction(s); and
• (g) the price and volume of the transaction(s). In the case of a pledge whose terms provide for its value to change, this should be disclosed together with its value at the date of the pledge.

6.3.4. Notification to be made promptly

The notification in MAR 6.3.1 must be made promptly and no later than three business days after the date of the transaction.

6.3.5. Disclosure to the public

The Reporting Entity must ensure that the information that is notified in accordance with MAR 6.3.1 is made public promptly and no later than three business days after the transaction in a manner which enables fast access to the information on a non-discriminatory basis.

6.3.6. Notifying Persons discharging managerial responsibilities of their obligations

Reporting Entities must notify the Person discharging managerial responsibilities of their obligations under MAR 6.3.1 (Notification of transactions).

6.3.7. List of Persons discharging managerial responsibilities of their obligations

A Reporting Entity must draw up a list of all Persons discharging managerial responsibilities.

6.3.8. Closed period

A Person discharging managerial responsibilities within a Reporting Entity must not conduct any transactions on their own account or for the account of a third party, directly or indirectly, relating to the Shares or debt instruments of the Reporting Entity or to derivatives or other Securities linked to them during a closed period as defined in MAR 2.4.3.

6.3.9. Discretion to permit trading with the closed period

A Reporting Entity may allow a Person discharging managerial responsibilities within it to trade on its own account or for the account of a third party during a closed period either:

• (a) on a case-by-case basis due to the existence of exceptional circumstances, such as severe financial difficulty, which require the immediate sale of Shares; or
• (b) due to the characteristics of the trading involved for transactions made under, or related to, an Employee Share Scheme or saving scheme, qualification or entitlement of Shares, or transactions where the beneficial interest in the relevant Security does not change.

6.4.1. Investment recommendations

Persons who produce or disseminate investments recommendations or other information recommending or suggesting an investment strategy must take reasonable care to ensure that such information is objectively presented, and to disclose their interests or indicate conflicts of interest concerning the Investments to which that information relates.

6.4.2. Dissemination of statistics

Public institutions disseminating statistics or forecasts liable to have a significant effect on financial markets must disseminate them in an objective and transparent way.

6.4.3. Disclosure or dissemination of information in the media

For the purposes of MAR 5.2.6.6, MAR 5.4.2(c), MAR 6.4.1 and MAR 6.4.2, where information is disclosed or disseminated and where recommendations are produced or disseminated for the purpose of journalism or other form of expression in the media, such disclosure or dissemination of information must be assessed taking into account the rules governing the freedom of the press and freedom of expression in other media and the rules or codes governing the journalist profession, unless:

• (a) the Persons concerned, or Persons closely associated with them, derive, directly or indirectly, an advantage or profits from the disclosure or the dissemination of the information in question; or
• (b) the disclosure or the dissemination is made with the intention of misleading the market as to the supply of, demand for, or price of Securities.