Disclosure requirements - Investment Funds - United Arab Emirates
Disclosure Category: 2
The investment fund and/or the Registrar are entitled to request disclosure of Clearstream Banking S.A. (“CBL”) clients and /or ultimate beneficial owners of the fund units/shares.
According to the Anti-Money Laundering and Sanction Rules and Guidance (AML), a Fund Manager, or a Fund Administrator is entitled to request disclosure of Clearstream Banking S.A. (“CBL”) clients and /or ultimate beneficial owners of the fund units/shares.
Consent
In order to comply with the local regulatory disclosure requirements, clients with holdings in UAE investment funds must consent and are hereby deemed to consent to the required legal disclosure. Such consent includes the appointment of the requestor (for example, the Fund Manager, Transfer Agent, Regulator) as their attorney-in-fact, under power of attorney, to collect from CBL the required information to be disclosed. Clients who do not provide such authority cannot hold such investment funds or financial instruments in their accounts with CBL.
Disclosure requirements
Clients are advised that the local laws and regulations oblige CBL to disclose the requested information on CBL clients and ultimate beneficial owners to the party that is entitled by law to receive such information.
Fund management companies are allowed to request for a disclosure of underlying clients. Thus, CBL must deliver the information requested from CBL in relation to both CBL and CBL’s clients and ultimate beneficial owners as owners or holders of fund units in the relevant investment fund.
Background and legal basis
The UAE asset managers, UAE undertakings for collective investment in corporate form, and/or the Registrars are entitled to request disclosure of CBL clients and /or ultimate beneficial owners of the fund units/shares to comply with their KYC obligations.
A Fund Manager or a Fund Administrator, as applicable, will be required to obtain disclosure from CBL of its underlying clients in order to open the nominee account(s).
Failure of CBL to provide such disclosure will preclude the Fund Manager or Fund Administrator from opening the nominee account(s).
Obligation to report threshold crossings
In the UAE, fund managers of closed-ended investment funds must report changes in holdings of related parties to the Securities and Commodities Authority (SCA) if the transaction involves 1% or more of the fund's total issued units. A ‘related party’ is defined as someone holding directly or indirectly more than 5% of investment units, representing at least 5% of any unit category.
Sanctions
Non-compliance with the disclosure requirements may result in the fund manager or its agent refusing acceptance of CBL as an investor and/or refusing acceptance of the proposed investment. Each subscription of funds will be subject to KYC obligations.
Across the UAE, anti-money laundering (AML) and sanctions legislation mandates that all investors must be onboarded into Investment Funds in compliance with UAE AML and sanctions laws. Specifically, under the ADGM's Anti-Money Laundering and Sanctions Rules and Guidance (AML), and the DIFC's Anti-Money Laundering, Counter-Terrorist Financing and Sanctions Module (AML), an Authorised Person, including a Fund Manager or Fund Administrator, is strictly prohibited from establishing or maintaining any nominee account controlled by an undisclosed person or held in the name of one person but effectively controlled by another.
Background and legal basis
The legal basis for disclosure requirements may arise from the following:
- UAE:The Securities and Commodities Authority (SCA), which regulates investment funds, fund managers, and nominee structures.
- ADGM: The Financial Services Regulatory Authority (FSRA), which applies a common law framework based on English legal principles.
- DIFC: The Dubai Financial Services Authority (DFSA), which governs investment funds and fund managers in the financial free zone under a common law system
Disclaimer
The information contained in the Disclosure Requirements is based on the legal opinion obtained by CBL that was issued on the 11th April 2025, CBL believes the information to be correct but disclaims any responsibility as to the accuracy and completeness of the information. In the case of discrepancy between the information provided by CBL and the local laws and regulations, the latter shall prevail. The Disclosure Requirements do not constitute legal advice and clients should seek advice from independent professional counsel.
Clients are responsible for ensuring compliance with the disclosure requirements and agree to indemnify and hold harmless CBL, for any loss, expense, liability, damage, or claims, whether direct or indirect, against or incurred by CBL arising out of or resulting from such non-compliance.