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Securities Off Market Transfer for Financing (Islamic Murabaha) in Abu Dhabi Securities Exchange

Regulations

16 Dec 2018

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Contents First: Regulations ............................................................................................................. 2 Second: Rules ................................................................................................................... 2 Third: Procedures ............................................................................................................ 3 Fourth: Fees ....................................................................................................................... 3 Fifth: Sanctions and Violations .................................................................................... 3 Security Off Market Transfer Request Form for Financing ........................ 5 Investor Number Issue Application Form ....................................................... 6

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Having taking cognizance of: Federal Law No. (4) of 2000 regarding the Emirates Securities and Commodities Authority and Market, as amended; Emirate of Abu Dhabi Federal Law No. (3) of 2000 concerning the establishment of Abu Dhabi Securities Exchange, as amended; SCA’s Board of Directors Resolution No. (2 / BC) of 2000 regarding the Abu Dhabi Securities Exchange Membership Regulation; SCA’s Board of Directors Resolution No. (2) of 2001 regarding the Trading, Clearing, Settlement, transfer and Custody of Securities, as amended; SCA’s Board of Directors Resolution No. (3 / BC) of 2001 regarding Abu Dhabi Securities Exchange Operation Regulation, as amended; SCA’s Board of Directors Resolution No. (27) of 2014 concerning the Securities Brokerage Regulation, as amended; SCA’s Board of Directors Chairman Resolution No. (26 / BC) of 2016 on the Regulation of certain Activities and Financial Services and Trading Mechanisms; and the Resolutions and Instructions issued by Abu Dhabi Securities Exchange; SCA’s Board of Directors Chairman Resolution No. (12 / BC) of 2016 on Amending the Regulation of Trading, Clearing, Settlement, Transfer and Custody of Securities, and the Regulation of Abu Dhabi Securities Exchange Operation; and Regulations, Resolutions and Instructions issued by Abu Dhabi Securities Exchange Board, Securities Off Market Transfer for Financing (Islamic Murabaha) in Abu Dhabi Securities Exchange Regulations have been certified.

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First: Regulations

Article (1) The following terms and expressions shall have the meanings ascribed thereto hereunder, unless the context otherwise requires: State: United Arab Emirates. SCA: Securities and Commodities Authority. ADX: Abu Dhabi Securities Exchange. Securities: Shares, bonds and securities issued by joint stock

companies, bonds and treasury bills issued by the Federal Government or Local Governments, public bodies and establishments of the State and any other financial instruments approved by SCA.

Islamic Murabaha Transactions:

Settlement of securities transactions related to (Islamic Finance Agreements) through transfer of Securities in ADX from the Financial Institution to the Investor.

Financial Institution:

Any Financial Institution authorized to lend or finance within the State, in accordance with Islamic Law (SCFI).

Second: Rules

Article (2) 1. ADX may reject the request of securities transfer (transfer) if the regulations in force

in SCA or ADX’s procedures are not considered or at the request of SCA or the judicial authority.

2. Transfer of securities by ADX shall not constitute an approval therefrom or notification thereto or to SCA of any of the necessary regulatory and legal requirements related to the disclosure of the rates of ownership and limits.

3. ADX’s role is limited to transfer of Securities from the Financial Institution to the Investor, pursuant to the Islamic Finance Agreement in accordance with SCA’s law and regulations and ADX’s procedures.

4. SCA and ADX neither shall be liable for the (Islamic Finance Agreement) nor held liable towards the parties thereof for the validity, suitability, obligations or rights of the parties, or any dispute arising between them regarding the implementation of such Agreement.

Article (3)

The Financial Institution and the Investor shall, as to Islamic Murabaha Transaction, Indemnify ADX for any violation of the regulations, rules, or procedures issued by SCA or ADX.

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Article (4) The Financial Institution shall fill in the form prepared by ADX in order to be qualified and to obtain an investor number allocated for Murabaha Transactions as per the provisions of these Regulations.

Third: Procedures Article (5)

Request Transfer of Ownership from Financial Institution to Investor: 1. Financial Institution shall submit an Application of Islamic Murabaha to ADX - in

accordance with the form prepared by ADX – to transfer securities from the Financial Institution to the Investor. Such Application shall be signed by the Financial Institution and the Investor.

2. A true copy of the Islamic Murabaha Transaction signed by the parties shall be attached to the Application.

3. The Financial Institution shall pay the due fee for completing the Islamic Murabah Transaction. The transfer of ownership may only be made after ensuring that the fee is deposited into ADX’s account and a copy of deposit is provided to ADX for ADX’s registers purposes.

Article (6)

1. ADX shall, after verifying the Investor’s ownership ratio, transfer Securities, subject of Islamic Murabaha Transaction, from the Financial Institution’s account to the Investor’s account.

2. The cash settlement between the Financial Institution and the Investor shall be made directly without interference on the part of ADX and the latter shall bear no liability.

Fourth: Fees 1. ADX shall collect a fee of (0,002) of the value of the securities which ownership is

transferred in accordance with the Islamic Finance Agreement and a minimum of AED (100).

2. The last closing price of the security shall be adopted on the date preceding the day of the transfer or the purchase price specified by the parties to the transfer, whichever is higher.

3. ADX shall monthly transfer commissions due and payable to SCA for the operations carried out in accordance with the provisions of these Regulations, amounting to (0,0005) of the value of each transfer of ownership.

4. The fee shall be paid to ADX by bank transfer to ADX account, or through any other mechanism determined by ADX, with a copy of the deposit order or confirmation under a letter.

Fifth: Sanctions and Violations

If any of these Regulations is violated, ADX may take the following actions: 1. Warning.

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2. Take necessary measures in coordination with the violator to correct any violation of the limits of ownership.

3. Suspend or cancel the execution of any Transaction in case of violation of SCA’s law and regulations or ADX’s procedures and Regulations, or based on serious reasons and without prejudice to others of good faith.

4. Impose penalties and violations in accordance with ADX’s regulations, without violation of SCA’s law and regulations.

5. Refer the violator to SCA to take appropriate actions.

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Security Off Market Transfer Request Form for Financing

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Investor Number Issue Application Form