Dubai Multi Commodities Centre (DMCC)

• DMCC Company Regulations

  • Section 1 Interpretation and Application

    • 1. Short Title and Commencement

      1.1 These Regulations are to be referred to as the Dubai Metals & Commodities Centre DMCC Company Regulations, 2003, as the same may be amended from time to time.

    • 2. Interpretation

      2.1 In these Regulations unless the context otherwise requires:—

      2.1.1 “AED” means the lawful currency of the U.A.E.;

      2.1.2 “annual general meeting” has the meaning given in Regulation 44.1;

      2.1.3 “arrangement” includes a reorganisation of the share capital of a company by the consolidation of shares of different classes or by the division of shares into shares of different classes or by both these methods;

      2.1.4 “authority” means the Dubai Metals & Commodities Centre Authority of the Emirate of Dubai and the relevant subdivision(s) thereof;

      2.1.5 “book and paper” includes minutes, financial statements, accounts, deeds, writings and documents;

      2.1.6 “branch” means the branch of a company or any other entity or Body formed outside the Centre pursuant to the laws and regulations applicable in its place of incorporation and carry on business through this branch in side the centre;

      2.1.7 “articles of association” means the Articles of Association of a company as originally passed or as lawfully amended from time to time;

      2.1.8 “commercial transactions law” means the UAE Law No. (18) of 1993 enacting the Commercial Transactions Law;

      2.1.9 “company” means a company to which these Regulations apply by virtue of Regulation 5;

      2.1.10 “debenture” includes debenture stock, bonds and any other securities of a company whether constituting a charge on the assets of the company or not;

      2.1.11 “director” includes an alternate director and any person occupying the position of director by whatever name called and any person in accordance with whose directions or instructions (not being advice given in a professional capacity) the directors of a company have been accustomed to act;

      2.1.12 “document” means information stored in any form of writing, code or visual depiction and the manner in which such information is stored is irrelevant for the purpose of deeming the information to constitute a “document” for the purpose of this definition and a “document” includes summons, notice, order or other legal process and registers;

      2.1.13 “electronic record” means a record generated, communicated, received or stored by electronic, magnetic, optical or other means in an information system or for transmission from one information system to another;

      2.1.14 “electronic signature” means any letters, characters, numbers or other symbols in digital form attached to or logically associated with an electronic record, and executed or adopted with the intention of authenticating or approving the electronic record;

      2.1.15 “financial year” means, in respect of a company, each successive period of twelve months commencing immediately after the end of the previous financial year provided that:

      (a) the first financial year of a company shall commence on the date of its incorporation and shall be for a period of not less than six months, nor more than eighteen months as determined by the company and as notified to the authority in the form prescribed within three months of the date of incorporation of the Company; and

      (b) a company may, by notice to the authority in the form prescribed, specify a new financial year provided that in no case may the financial year of a company exceed eighteen months or be shorter than six months.

      2.1.16 “implementing regulations” means those regulations promulgated by the authority for the purpose of giving effect to or for the better carrying out of these Regulations and includes forms and such other regulations as may be made by the authority from time to time;

      2.1.17 “inaugural meeting” means the meeting required to be held under Regulation 43;

      2.1.18 “law” means, unless otherwise specified, the applicable laws of the U.A.E. from time to time;

      2.1.19 “Decision” means Decision which was issued in 1^st May 2002 relating to the setting up of the Centre and the authority in the Emirate of Dubai;

      2.1.20 “License” means a License issued pursuant to the licensing rules;

      2.1.21 “licensee” has the meaning given to it in the licensing rules;

      2.1.22 “licensing rules” means those rules promulgated by the authority in respect of any trade or business to be engaged in or carried on in the Centre;

      2.1.23 “shareholder” has the meaning given in Regulation 18;

      2.1.24 “memorandum” means the Memorandum of Association of a company, as originally delivered in writing to the authority or as lawfully altered from time to time;

      2.1.25 “officer” in relation to a body corporate, includes director and if one has been appointed, the secretary;

      2.1.26 “ordinary resolution” means a resolution passed by a simple majority of such shareholders as (being entitled to do so) vote in person or, where proxies are allowed, by proxy, at a general meeting of which notice specifying the intention to propose the resolution as an ordinary resolution has been duly given;

      2.1.27 “prescribed” means prescribed by the implementing regulations made under these Regulations;

      2.1.28 “register” means the register of companies maintained by the authority under Regulation 13.1 including the register of shareholders;

      2.1.29 “share” means a share in the issued share capital of a company;

      2.1.30 “special resolution” means a resolution passed by a majority of not less than three-fourths of such shareholders as (being entitled to do so) vote in person or, where proxies are allowed, by proxy, at a general meeting of which notice specifying the intention to propose the resolution as a special resolution has been duly given;

      2.1.31 “U.A.E.” means the Federal State of the United Arab Emirates; and

      2.1.32 “Centre” means the Dubai Metals & Commodities Centre, established in the Emirate of Dubai pursuant to Decision which was issued in 1^st May 2002 and as constituted from time to time.
      2.2 For the avoidance of doubt the provisions of the commercial companies law are specifically unapplied by way of any express provision contrary to such law in these Regulations.
      2.3 Wherever in these Regulations an obligation or duty is placed on a company or a company is authorised to do any act, then unless it is otherwise provided such obligation, duty or act may be carried out by the directors of the company.
      2.4 In these Regulations, unless the context otherwise requires, the singular number shall include the plural and vice versa and the masculine gender shall include the feminine and the neuter and vice versa.
      2.5 The Regulation headings herein are included for convenience of reference only and shall be ignored in the construction or interpretation of these Regulations.
      2.6 In these Regulations the expression “shareholder” includes members and the expression “member” includes shareholders.
      2.7 References in these Regulations to time periods are to be construed in accordance with the Gregorian calendar.
      2.8 References in these Regulations to any requirement for any document to be written, in writing, to be presented in writing or for the giving of any notice are to be construed as satisfied by an electronic record and any references in these Regulations to any requirement for a signature on any document or notice are to be construed as satisfied by an electronic signature which may be proved in any manner.
      2.9 These Regulations have been executed in the English language. In the event of any discrepancy between the English versions of these Regulations and or any other version this English versions shall prevail.

    • 3. Appointment of Legal Registrar and Other Officers

      The authority may by implementing regulations appoint a legal Registrar who shall be a public officer and shall have the powers and discharge the duties conferred or imposed upon him by such implementing regulations and such other officers as may be necessary to assist the Legal Registrar in the exercise of his functions under these Regulations.

      Any functions of the Legal Registrar under these Regulations may, to the extent authorised by him, be exercised by any officer on his staff.

    • 4. Application

      4.1 These Regulations apply to:

      4.1.1 all companies registered under it; and

      4.1.2 any branch of any such company so far as any provision of these Regulations requires it to apply.

  • Section 2 Incorporation of Company

    • 5. Mode of Forming a Company

      5.1 Any one or more persons, by subscribing their names to a Memorandum and otherwise complying with the requirements of these Regulations, may apply to form a company with limited liability.
      5.2 A company shall be considered formed only if and when its name is entered on the register.
      5.3 Such a company shall be a company having the liability of its shareholders limited by the Memorandum to the amount, if any, unpaid on the shares held by them.
      5.4 Each such company formed hereunder shall have UAE nationality, but this does not necessarily lead to the company being entitled to privileges reserved for UAE nationals.

    • 6. Registration of Company

      6.1 No company shall be registered without the consent of the authority which, subject to these Regulations shall be granted in its absolute discretion & no company shall be Carrying on Business at the centre without a DMCC Authority License.

      6.2 Subject to such other regulation of the authority as may be adopted from time to time and to any waiver which the authority may exercise from time to time, any application for consent under Regulation 6.1 shall:

      6.2.1 be made to the authority in such form and manner as the authority may require from time to time; and

      6.2.2 include details of the first directors and, if applicable, the company secretary; and

      6.2.3 include the Memorandum and Articles of Associations of the company; and

      6.2.4 include payment of the relevant registration fee as determined by the authority from time to time; and

      6.2.5 include such other documents or information as the authority may in its absolute discretion require from time to time.
      6.3 The authority may refuse to grant its consent for the registration of a company and where it does so refuse, it shall not be bound to provide any reason for its refusal and its decision shall not be subject to appeal or review in any court.

    • 7. Requirements of Memorandum

      7.1 The Memorandum of every company shall be in English or if written in any other language than the English, accompanied by a certified English translation and must state:—

      7.1.1 the name of the company which in all cases shall be followed by the word “DMCC” as the last word of the name; and

      7.1.2 that the liability of its shareholders is limited; and

      7.1.3 the objects of the company set out with such degree of specificity as the authority may from time to time require; and

      7.1.4 the names, addresses and nationalities of the persons who subscribe their names to the Memorandum; and

      7.1.5 the period, if any, fixed for the duration of the company, or the event, if any, on the occurrence of which the company is to be dissolved; and

      7.1.6 the amount of issued share capital with which the company proposes to be registered, which shall be in AED, and the division thereof into shares of a fixed amount; and

      7.1.7 that the persons who subscribe their names to the Memorandum agree to take such number of shares of the company as may be allotted to them respectively by the provisional directors, not exceeding the number of shares for which they respectively subscribe, and that they agree to satisfy such calls as may be made on them by the directors, provisional directors or promoters in respect of the shares allotted to them.
      7.2 The Memorandum of every company shall be signed by each subscriber in the presence of the Legal Registrar otherwise, it should be authenticated if not signed before the Legal Registrar.
      7.3 A company may not alter the provisions of its Memorandum except in a manner provided in these Regulations.

    • 8. Prohibition of Registration of Companies with Undesirable Names

      8.1 No company shall be registered with a name which in the opinion of the authority is undesirable.

      8.2 Without prejudice to the generality of Regulation 8.1 no company shall, except with the express approval of the authority, be permitted to be registered with a name which:—

      8.2.1 is identical to the name by which another company, is registered or incorporated under these Regulations or so nearly resembles that name as to be likely to deceive unless that company signifies its consent in such manner as the authority may require; or

      8.2.2 contains words which in the opinion of the authority suggests or is likely to suggest the patronage of prominent local persons with no real connection, or connection with any government or authority whether in the Centre, the U.A.E. or elsewhere; or

      8.2.3 contains the word “Dubai”, “Emirates”, “U.A.E.”, “municipal” or “chartered”; or

      8.2.4 any other name which the authority shall from time to time prescribe as “sensitive”; or

      8.2.5 does not contain the word “DMCC”; or

      8.2.6 the use of would constitute a violation of the laws of the U.A.E. from time to time applicable to intellectual property rights; or

      8.2.7 specifies words or expressions for which approval is required from the authority for use by a licensee in the Centre .
      8.3 If, through inadvertence or otherwise, a company on its first registration with a new name is registered with a name which in the opinion of the authority too closely resembles the name by which a company in existence is already registered or a name in respect of which the law applicable to intellectual property rights afford prior protection, the first mentioned company shall, with the approval of the authority, change its name.

    • 9. Change of Name of a Company

      9.1 Subject to Regulations 8.1 and 8.2, a company may by special resolution change its name if the Legal Registrar has, on application, approved in writing, the proposed name. When a company has passed special resolution for a company’s change of name, it shall, within 14 days of the passing of special resolution & Legal Registrar approval, give notice of the said resolution by advertisement in a newspaper prescribed by the Legal Registrar.

      9.2 The Legal Registrar shall, on receipt of a certified copy of the special resolution and evidence of notice referred to in Regulation 9.1 together with such fees as may be prescribed:—

      9.2.1 enter the new name on the register in place of the former name; and

      9.2.2 enter on the register the effective date of the change of name which shall be the date of entry of the new name on the register; and

      9.2.3 issue a new certificate evidencing the change of name.
      9.3 The change of name of a company shall not affect any rights or obligations of the company, or render defective any legal proceedings by or against it, and any legal proceedings that might have been continued or commenced against it in its former name may be continued or commenced against it in its new name.
      9.4 Regulation 8.3 shall apply mutatis mutandis to any name adopted by a company under this Regulation 9.

    • 10. Powers and Objects of a Company — Ultra Vires

      10.1 No act of a company shall be invalid by reason only of the fact that the company was without capacity or power to perform the act.

    • 11. Procedures for Alteration of Memorandum

      11.1 A company may, by special resolution passed at a general meeting of shareholders of which due notice has been given, amend the provisions of its Memorandum but the amendment shall only take effect if and when the same has been accepted for registration by the Legal Registrar.
      11.2 Regulation 6 shall apply to a company wishing to change its Memorandum as if the company were applying to be registered.

    • 12. Articles of Association

      12.1 The administration of every company shall be regulated by Articles of Association and a company may in its Articles of Association make provision for any matter including, but not limited to, the matters set out in Regulation 12.2.

      12.2 A company’s Articles of Association shall be in English or if written in any other language than the English, accompanied by a certified English translation and shall provide for:—

      12.2.1 the transfer of shares and the registration of estate representatives of deceased shareholders; and

      12.2.2 a general meeting of the company at least once in every calendar year; and

      12.2.3 the keeping of its accounts and the laying of financial statements before general meetings of the company; and

      12.2.4 an audit of the accounts of the company for each financial year by an auditor appointed by the general meeting; and

      12.2.5 the duties of the secretary to the company; and

      12.2.6 the number of shareholders required to constitute a quorum at any general meeting of the shareholders of the company; and

      12.2.7 the appointment of a chairman for any general meetings.

      12.3 In addition, a company may at the time of incorporation, or from time to time thereafter make Articles of Association if appropriate to regulate:—

      12.3.1 the transfer of shares (subject to due compliance with the requirement of registration of any such transfers in accordance with these Regulations); and

      12.3.2 the declaration and payment of dividends; and

      12.3.3 the duties and responsibilities of its board of directors and of any other officers with special responsibilities or duties; and

      12.3.4 the manner of appointment of alternate directors; and

      12.3.5 the appointment, functions, duties, remuneration and removal of all agents, officers, and servants of the company, and the security, if any, to be given by them to the company; and

      12.3.6 the date on which the annual meetings of the company shall be held; and

      12.3.7 the calling of meetings of the company, and of the board of directors, the requirements as to proxies and requisite majorities (save where the requisite majority is specified by these Regulations) in voting on any particular matter or class of matters and the procedure to be adopted at such meetings; and

      12.3.8 the quorum at meetings of directors; and

      12.3.9 the conduct in all other particulars of the affairs of the company, as well as for the application of its funds and profits.
      12.4 The persons subscribing their names to the Memorandum of Association of a company shall likewise subscribe their names to the Articles of Association.
      12.5 Subject to an express provision in the Articles of Association to the contrary and to Regulation 12.6, the directors of a company may after its incorporation amend the Articles of Association but any such amendment shall be submitted to a general meeting of the company and to the extent they are approved by a special resolution at such meeting, shall only then take effect if and when the same has been accepted for registration by the Legal Registrar.
      12.6 Regulation 6 shall apply to a company wishing to change its Articles of Association as if the company was applying to be registered.

    • 13. Registration and Re-Registration of Companies.

      13.1 The authority shall maintain a register of companies in such form as it may determine.
      13.2 Where the authority consents to the registration of a company pursuant to Regulation 6.1 and has received or waived the documents under Regulation 6.2, the Legal Registrar may, if he is satisfied that the company will be in compliance with these Regulations, register the Memorandum and Articles of Association and shall then issue one or more certificates showing the name and date of incorporation of the company and any other items the authority may from time to time consider appropriate.
      13.3 From the date of the registration of a company by the Legal Registrar the subscribers to the memorandum, together with such other persons as may from time to time become shareholders of the company, shall be a body corporate by the name contained in the memorandum, capable forthwith of exercising all the functions of an incorporated company, and having perpetual succession but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up limited as is mentioned in these Regulations.

    • 14. Certificate of Registration to be Conclusive Evidence

      14.1 No defect in the formalities leading up to the incorporation of a company shall affect the validity of its incorporation and the certificate of registration shall be conclusive evidence of the due incorporation of the company and the date of its incorporation.

    • 15. Effect of Memorandum and Articles of Association.

      15.1 Subject to these Regulations the Memorandum and the Articles of Association when registered shall bind the company and the shareholders thereof to the same extent as if they respectively had been signed by each shareholder and contained covenants on the part of each shareholder to observe all the provisions of the Memorandum and of the Articles of Association; and
      15.2 All money payable by any shareholder to the company under the Memorandum or Articles of Association shall be a debt due from him to the company.
      15.3 If any company fails to file a Memorandum & Articles of Association or its amendments in accordance with these regulations, it may be required to pay a fine of a maximum of AED 5,000 to be paid to the Legal Registrar.

    • 16. Alterations in Memorandum or Articles of Association Increasing Liability to Contribute to Issued Share Capital Not to Bind Existing Shareholders Without Consent.

      16.1 Notwithstanding anything in the Memorandum or Articles of Association of a company, no shareholder of the company shall be bound by an alteration made in the Memorandum or Articles of Association after the date on which he became a shareholder, if and so far as the alteration requires that shareholder to take or subscribe for more shares than the number held by that shareholder at the date on which the alteration is made, or in any way increases the liability of such shareholder as at that date to contribute to the issued share capital of, or otherwise to pay money to, the company provided that this Regulation 16 shall not apply where the shareholder agrees in writing, either before or after the alteration is made, to be bound thereby.

    • 17. Copies of Memorandum and Articles of Association to be Given to Shareholders

      17.1 A company shall, on being so required by a shareholder, send such shareholder a copy including all alterations to the Memorandum or Articles of Association of the company subject to the payment by the shareholder of the cost thereof.
      17.2 If a company defaults in complying with this Regulation 17.1, the company and every officer of the company may be required to pay a fine of a maximum of AED.5,000.

    • 18. Definition of Shareholder

      18.1 The subscribers to the Memorandum of a company shall be deemed to have agreed to become shareholders of the company and on its registration with the authority shall be entered as shareholders in the register.
      18.2 Every other person who agrees to become a shareholder of a company, and whose name is entered in its register of shareholders, shall be a shareholder of the company.

    • 19. Form of Contracts

      19.1 Contracts on behalf of a company may be made in written or other form by any person acting under its authority, express or implied.
      19.2 A contract made according to this Regulation shall be effectual in law and shall bind the company and its successors and all other parties thereto.
      19.3 A contract made according to this Regulation may be varied or discharged in the same manner in which it is authorised by this Regulation to be made.
      19.4 Where a contract purports to be made by a company or by a person as agent for a company, at a time when the company has not yet been formed, then subject to any agreement to the contrary, the contract shall have effect as a contract entered into by the person purporting to act for the company or as agent for it and such person shall be personally liable on the contract accordingly.
      19.5 Any contract purported to be made in the manner set out in Regulation 19.4 may subsequently be unilaterally adopted by the company and the company shall thereupon become a party thereto to the same extent as if the contract had been made after the incorporation and in substitution for and discharge of the agent or person purporting to act on its behalf.

    • 20. Bills of Exchange and Promissory Notes

      20.1 A bill of exchange or promissory note shall be deemed to have been made, accepted or endorsed on behalf of a company if made, accepted or endorsed in the name of, or by or on behalf or on account of the company by any person acting under its authority and if so endorsed the person signing the endorsement shall not be liable thereon.

    • 21. Execution of Instruments Abroad

      21.1 A company may empower any person, either generally or in respect of any specified matters, as its agent, to execute documents, agreements, deeds or others similar on its behalf in any place whether within or outside the Centre.
      21.2 A document, agreement, deed or other similar instrument signed by such an agent on behalf of the company shall bind the company and have the same effect as if it had been executed by the company itself.

    • 22. Authentication of Documents

      22.1 A document or proceeding requiring authentication by a company may be signed by a director, secretary or other authorised officer of the company.

  • Section 3 Share Capital, Share Transfer and Dividends

    • 23. Company Share Capital Requirements

      23.1 The minimum issued share capital of a company shall be AED.200,000 or such other sum as the authority may specify from time to time.
      23.2 The share capital of a company can be of one class of shares, with all shares being of an equal value, and all shares holding the same rights as to voting, dividends, redemptions and distributions or divided all or any issued shares into several classes or subdivided them into any form of rights to or interests in shares or in form of not carry any voting rights.
      23.3 The Legal Registrar shall issue a company with a certificate if, on an application made to it by the company in the prescribed form, it is satisfied that the company’s share capital is not less than the prescribed minimum, and there is delivered to it a declaration complying with the following Regulation.
      23.4 The declaration must be in the prescribed form and be signed by the shareholders of the company and it must state that the company’s share capital is not less than the prescribed minimum together with such evidence as the Legal Registrar may require that an amount representing such capital has been deposited for the benefit of the company in an account opened in the name of the company under formation with a bank in the UAE holding a commercial banking License from the UAE Central Bank.
      23.5 Unless the authority shall otherwise specifically approve, all capital of a company shall be subscribed in cash only.

    • 24. Payment of Commissions

      24.1 It shall be lawful for a company to pay reasonable commission (within any limits from time to time that may be established by the authority) to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in the company.
      24.2 Except as permitted under Regulation 24.1, no company shall apply any of its shares or capital either directly or indirectly in payment of any commission, discount or allowance to any person in consideration of such person subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in the company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the company, whether the shares or capital be so applied by being added to the purchase money of any property acquired by the company, or the money be paid out of the nominal purchase money or contract price, or otherwise.

    • 25. Issue at a Premium

      25.1 Shares may be issued at a premium (i.e. for a price greater than their nominal value).

    • 26. Application of Premiums Received on Issue of Shares

      26.1 Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account, to be called the “share premium account” and the provisions of these Regulations relating to the reduction of the issued share capital of a company shall, except as provided in this Regulation 26, apply as if the share premium account were paid-up share capital of the company: provided that in the case of an exchange of shares the excess value of the shares acquired over the nominal value of the shares being issued may be credited to a contributed surplus account of the issuing company.

      26.2 The share premium account may, notwithstanding anything in Regulation 26.1 be applied by the company:—

      26.2.1 in paying up un-issued shares of the company to be issued to shareholders of the company as fully paid bonus shares; or

      26.2.2 in writing off:—

      (a) the preliminary expenses of the company; or

      (b) the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company; or

      26.2.3 in providing for the premiums payable on redemption of any shares or of any debentures of the company.

    • 27. Power to Issue Shares

      27.1 Subject to these Regulations and without prejudice to any rights attached to any existing shares, any share may be issued with such rights or restrictions as provided for in a company’s Articles of Association.

    • 28. Power of Company to Alter its Share Capital

      28.1 Subject to provisions in these Regulations, a company, if authorised by an ordinary resolution and by its Articles of Association, may increase its issued share capital by issuing new shares of such amount as it thinks expedient.
      28.2 A company may not without the consent of the Legal Registrar create a share capital denominated in a currency other than United Arab Emirates currency which is AED.

    • 29. Reduction of Issued Share Capital

      29.1 A company, if authorised by a special resolution may, subject to any order made by the authority under Regulation 6, and to its Memorandum and Articles of Association, on such terms as it may decide, reduce its issued share capital in any way, and in particular, without prejudice to the generality of the foregoing power, by:—

      29.1.1 either with or without extinguishing or reducing liability on any of its shares cancel any paid up capital that is lost or underrepresented by available assets; or

      29.1.2 either with or without extinguishing or reducing liability of any of its shares and either with or without reducing the number of such shares pay off any capital that is in excess of the requirements of the company.
      29.2 No company shall reduce the amount of its issued share capital by virtue of Regulation 29.1 unless on the date from which the reduction is to have effect a letter addressed to the Legal Registrar shall be signed by all the directors of the company declaring either that on that date the company is solvent or that all the creditors of the company on that date have expressed in writing their concurrence in the reduction.
      29.3 Where a company reduces the amount of its issued share capital then within fourteen days after the date from which the reduction has effect the company shall file a memorandum, with a copy of the letter referred to in Regulation 29.2 annexed thereto with the authority stating that this Regulation 29 has been duly complied with.

    • 30. Nature and Transfer of Shares

      30.1 Subject to such other regulations as may be made by the authority the shares or other interests of any shareholder in a company shall be personal estate, transferable in a manner provided by the Articles of Association of the company and subject only to the restrictions provided therein.
      30.2 Notwithstanding anything in the Articles of Association of a company, it shall not be lawful for the company to register a transfer of shares in the company unless a proper instrument of transfer has been delivered to the company and the share transferred have been registered by the Legal Registrar.
      30.3 Nothing in this Regulation 30 shall prejudice any power of the company to register as shareholder any person to whom the right to any shares of the company has been transmitted by operation of law.
      30.4 Subject to such other regulations as may be made by the authority, a pledge over the shares or other interests of any shareholder in a company may be created pursuant to the provisions of the applicable laws of the UAE.

    • 31. Transfer by Estate Representative

      31.1 A transfer of the share or other interest of a deceased shareholder of a company made by such person’s estate representative shall, although the estate representative is not himself a shareholder of the company, be as valid as if he had been such a shareholder at the time of the execution of the instrument of transfer.

    • 32. Certificate to be Evidence of Title

      32.1 A certificate of the company specifying any shares held by any shareholder, shall be prima facie evidence of the title of the shareholder to the shares.

    • 33. Bearer Shares Prohibited

      33.1 It shall not be lawful for any company to issue bearer shares.

    • 34. Dividends and Other Distributions

      34.1 A company shall not declare or pay a dividend, or make a distribution out of contributed surplus, if there are reasonable grounds for believing that:—

      34.1.1 the company is, or would after the payment be, unable to pay its liabilities as they become due; or

      34.1.2 the realisable value of the company’s assets would thereby be less than the aggregate of its liabilities and its share capital and share premium accounts.
      34.2 For the purposes of this Regulation, “contributed surplus” includes proceeds arising from donated shares, credits resulting from the redemption or conversion of shares at less than the amount set up as nominal capital and donations of cash and other assets to the company.

  • Section 4 Management and Administration

    • 35. Registered Office of a Company

      35.1 A company shall at all times have a registered office in the Centre to which all communications and notices may be addressed.
      35.2 Notice of every change to the registered office shall be given to the Legal Registrar on the prescribed form (if any) within fourteen days of the company making such change but the change shall only be effective as of the date of registration.

    • 36. Service of Documents

      36.1 A document served in relation to any matter under these Regulations may be served on a company by leaving it at the registered office of the company in the Centre.

    • 37. Publication of Name and Registered Office of Company

      37.1 Every company shall have its name and registered office mentioned in legible characters in all business letters of the company and in all notices and other official publications of the company, and in all bills of exchange, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the company, and in all invoices, receipts and letters of credit of the company.
      37.2 If default is made in complying with this Regulation 37 the company may be required to pay a fine of a maximum of AED. 5,000 to be paid to the Legal Registrar.

    • 38. Restriction on Commencement of Business

      38.1 No company or branch shall commence or carry on business unless licensed to do so by the authority.
      38.2 If default is made in complying with this Regulation 38.1 the company may be required to pay a fine of a maximum of AED. 5,000 to be paid to the Legal Registrar. .

    • 39. Power of the Legal Registrar to Rectify Register

      39.1 If :—

      39.1.1 the name of any person is, without sufficient cause, entered in or removed from the register of shareholders of a company maintained by the Legal Registrar; or

      39.1.2 default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a shareholder,

      39.1.3 any other error or mistake concerning a company is apparent on the register, the person aggrieved, or any shareholder of the company, may apply to the Legal Registrar for rectification of the register maintained by the Legal Registrar.
      39.2 Where an application is made under this Regulation 39 the Legal Registrar may either refuse the application or may rectify the register.
      39.3 On an application under this Regulation 39 the Legal Registrar may decide any question relating to the title of any person who is a party to the application to have his name entered in or removed from the register, whether the question arises between shareholder or alleged shareholders, or between shareholders or alleged shareholders on the one hand and the company on the other hand, and generally may decide any question necessary or expedient to be decided for rectification of the registers.

    • 40. Register to be Evidence

      40.1 The register shall be prima facie evidence of any matters by these Regulations directed or authorised to be inserted therein.

    • 41. First Directors

      41.1 The persons who are nominated as such in the Memorandum or Articles of Association of the company or in the absence thereof, in the official completed application forms for incorporation of the company with the authority shall be the first directors of the company.

    • 42. Inaugural Meeting of Shareholders to Confirm Election of Directors

      42.1 Unless the Memorandum or Articles of Association of the company provide otherwise, the first directors shall convene the inaugural meeting which shall be a general meeting of the shareholders of the company for the purpose of confirming the identity of those who will serve as directors of the company.
      42.2 At least five days’ notice in writing of the inaugural meeting shall be given to each shareholder of the company unless the shareholders unanimously agree to waive such notice; the notice shall specify the place, date and hour at which the meeting is intended to be held and, shall state that at the meeting the shareholders present or represented by proxy will elect the new board of directors.
      42.3 The procedure at a meeting called under this Regulation 42 shall be the same as that for an annual general meeting called under Regulation 43.
      42.4 The quorum for a meeting called under this Regulation 42 shall be a majority of the members of the company, present in person or by proxy.
      42.5 A meeting called under Regulation 42.1 shall be deemed to be the annual general meeting for the year in which it is convened.

    • 43. General Meetings

      43.1 A meeting of shareholders of a company shall be convened at least once in every calendar year; this meeting shall be referred to as the annual general meeting. The exception to this is where the company only has one shareholder, in which case a resolution signed by or on behalf of such shareholder by his duly appointed representative shall serve in place of any requirement to hold or determine any matter at a general meeting.
      43.2 The directors may, whenever they think fit, convene a general meeting; all meetings other than annual general meetings shall be called special general meetings.
      43.3 Notice of all general meetings shall specify the place, the day and hour of the meeting, and, in case of special general meetings, the general nature of the business to be considered.
      43.4 The accidental omission to give notice of a meeting to, or the non-receipt of a notice of a meeting by any persons entitled to receive notice shall not invalidate the proceedings of the meeting.

    • 44. Failure to Hold Annual General Meeting or to Elect Directors

      44.1 If default is made in calling or holding a general meeting in accordance with Regulation 43.1 the directors shall use their best endeavours to call or hold the meeting at the earliest practicable date.
      44.2 If an annual general meeting is not held within three months of the date it should have been held or the required number of directors have not been elected at such a meeting the company may apply to the Legal Registrar to sanction the holding of a general meeting to put the affairs of the company in order. Upon receipt of such an application the Legal Registrar may, in its discretion, make an order allowing the application under such conditions as it thinks fit to impose including ordering the date by which the affairs of the company shall be put in order. 44.3 Subject to Regulation 44.2 if default is made in calling an annual general meeting in accordance with Regulation 43 or to elect the required number of directors at such meeting any creditors or shareholder of the company may, apply to the Court to order the winding-up of the company.

    • 45. Position when Election of Directors Does Not Take Place

      45.1 If the annual general meeting or the election of any directors does not take place at the proper time, it shall be lawful for the company to continue its business and for the existing directors to continue in office.

    • 46. Convening of Special General Meeting on Requisition

      46.1 The directors of a company, notwithstanding anything in its Articles of Association, shall, on the requisition of shareholders of the company holding at the date of deposit of the requisition not less than 10% of such of the paid-up capital of the company which, as at the date of the deposit, carries the right of voting at general meetings of the company, forthwith proceed duly to convene a special general meeting of the company.
      46.2 The requisition must state the purposes of the meeting, and must be signed by the requisitions and deposited at the registered office of the company, and may consist of several documents in like form each signed by one or more requisitions.
      46.3 If the directors do not, within twenty-one days from the date of the deposit of the requisition proceed duly to convene a meeting, the requisitions, or any of them representing more than 10% of the total voting rights of all of them, may themselves convene a meeting, but any meeting so convened shall not be held after the expiration of three months from the said date.
      46.4 A meeting convened under this Regulation 46 of the requisitions shall be convened in the same manner, as nearly as possible, as that in which meetings are to be convened by directors.
      46.5 Any reasonable expenses incurred by the requisitions by reason of the failure of the directors duly to convene a meeting shall be repaid to the requisitions by the company, and any sum so repaid shall be retained by the company out of any sums due or to become due from the company by way of fees or other remuneration in respect of their services to such directors as were in default.

    • 47. Length of Notice for Calling Meetings

      47.1 An annual general meeting shall be called by not less than 21 days notice in writing and a special general meeting called for the passing of a special resolution shall be called by not less than 21 days notice in writing. All other special general meetings shall be called by not less than 14 days notice in writing. The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and shall specify the place, day and time of the meeting, and, in the case of a special general meeting, the general nature of the business to be considered.

      47.2 A meeting of a company shall, notwithstanding that it is called by shorter notice than that specified in Regulation 47.1 be deemed to have been duly called if it is so agreed:—

      47.2.1 in the case of a meeting called as the annual general meeting, by all the shareholders entitled to attend and vote thereat; and

      47.2.2 in the case of any other meeting, by a majority in number of the shareholders having a right to attend and vote at the meeting, being a majority together holding not less than 94% in nominal value of the shares giving a right to attend and vote at the meeting.

    • 48. Telephonic, etc. Meeting

      48.1 Unless the Articles of Association otherwise provide, a meeting of directors or of a committee of directors or of the shareholders or any class thereof may be held by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously, and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

    • 49. Power of the Legal Registrar to Order Meeting

      49.1 If for any reason it is impracticable to call a meeting of a company in any manner in which meetings of that company may be called, or to conduct the meeting of the company in a manner prescribed by the Articles of Association or these Regulations, the Legal Registrar on the application of any director of the company or of any shareholder of the company who would be entitled to vote at the meeting, order a meeting of the company to be called, held and conducted in such manner as the Legal Registrar thinks fit, and where any such order is made may give such ancillary or consequential directions as it thinks expedient.
      49.2 Any meeting called, held and conducted in accordance with an order under Regulation 49.1 shall for all purposes be deemed to be a meeting of the company, duly called, held and conducted.

    • 50. Voting at Meetings

      50.1 Subject to the provisions of this Regulation 50, the Articles of Association of the company and to any rights or restrictions lawfully attached to any different classes of shares if any, at any general meeting each shareholder of the company shall be entitled to one vote for each share held by him; such votes may be given in person or by proxy.
      50.2 Unless otherwise specified in these Regulations, at any general meeting of a company any question proposed for consideration shall be decided on a simple majority of votes or by such majority as the Articles of Association of the company may prescribe, and such majority shall be ascertained in accordance with this Regulation 50.
      50.3 Subject to Regulation 50.5, it shall be lawful for any question proposed for consideration at a general meeting of a company to be decided on a show of hands and in any such case, and subject to any rights or restrictions for the time being lawfully attached to any different classes of shares if any, every shareholder present in person or by proxy at such meetings shall be entitled to one vote and shall cast such vote by raising his hand.
      50.4 At any general meeting of a company a declaration by the chairman that a question proposed for consideration has, on a show of hands, been carried or carried unanimously or by a particular majority or lost and an entry to that effect in a book containing the minutes of the proceedings of the company shall, subject to Regulation 50.5, be conclusive evidence of that fact without proof of the number or proportion of the votes recorded in favour or against such question.

      50.5 Notwithstanding Regulation 50.3, at any general meeting of a company, it shall be lawful, in respect of any question proposed for the consideration of the members, whether before or on the declaration of the result of a show of hands as provided for in Regulation 50.3 for a poll to be demanded by any of the following persons:—

      50.5.1 the chairman of such meetings; or

      50.5.2 at least two shareholders present in person, or represented by proxy and entitled to vote; or

      50.5.3 any shareholders present in person or represented by proxy and holding between them not less than 10% of the total voting rights of all the shareholders having the right to vote at such meeting.
      50.6 Where, in accordance with Regulation 50.5, a poll is demanded, and subject to any rights or restrictions for the time being lawfully attached to any different classes of shares if any, every shareholder present in person or by proxy at such meetings shall have one vote for each share of which such person is the holder or for which such person holds a proxy and such votes shall be counted in such manner as the Articles of Association of the company may provide or, in default of such provision, as the chairman may direct and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded and shall replace any previous resolution upon the same matter which has been the subject of a show of hands.
      50.7 A poll demanded, in accordance with Regulation 50.5, for the purpose of electing a chairman, or on a question of adjournment, shall be taken forthwith and a poll demanded on any other question shall be taken at such time at such meeting as the chairman may direct.
      50.8 In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which such show of hands takes place, or at which such poll is demanded, shall, unless the Articles of Association of the company otherwise provide, be entitled to a second or casting vote.
      50.9 Nothing contained in this Regulation 50 shall be construed as prohibiting a member who is the holder of two or more shares from appointing more than one proxy to represent him and vote on his behalf, whether on a show of hands or on a poll, at a general meeting of the company or at a class meeting.

    • 51. Resolution in Writing

      51.1 Subject to Regulation 51.4, anything which may be done by resolution of a company in general meeting may, without a meeting and without any previous notice being required, be done by resolution in writing signed by, or in the case of a shareholder that a corporation whether or not a company within the meaning of these Regulations, on behalf of, all the shareholders of the company who at the date of the resolution would be entitled to attend the meeting and vote on the resolution.
      51.2 A resolution in writing may be signed by, or, in the case of a shareholder that is a corporation whether or not a company within the meaning of these Regulations, on behalf of, all the shareholders of a company, in as many counterparts as may be necessary.
      51.3 A resolution in writing made in accordance with this Regulation 51 is as valid as if it had been passed by the company in general meeting or by a meeting of the relevant class of members of the company, as the case may be and any reference in any enactment to a meeting at which a resolution is passed or to members voting in favour of a resolution shall be construed accordingly.

      51.4 Regulations 51.1 to 51.3 shall not apply to:

      51.4.1 a resolution passed pursuant to Regulation 62.3; or

      51.4.2 a resolution passed for the purpose of removing a director before the expiration of his term of office under Regulation 69.
      51.5 A resolution in writing signed by all the directors entitled to receive notice of a meeting of the directors or signed by all shareholders of a committee of directors entitled to receive notice of a meeting of a committee is as valid as if it had been passed at a meeting of directors or, as the case may be, Legal Registrar duly called and constituted and any reference in any enactment to a meeting at which a resolution is passed or to directors or a committee of directors voting in favour of a resolution shall be construed accordingly. Such resolution may be in as many counterparts as are necessary.
      51.6 For the purposes of this Regulation 51, the date of the resolution is the date when the resolution is signed by, or on behalf of, the last, as the case may be, director to sign and any reference in any enactment to the date of passing of are solution is, in relation to a resolution made in accordance with this Regulation 51, a reference to such date.
      51.7 A resolution in writing made in accordance with this Regulation 51 shall constitute minutes for the purposes of Regulations 55 and 56.

    • 52. Representation of Corporation at Meetings

      52.1 A corporation, whether a company within the meaning of these Regulations or not, may:—

      52.1.1 if it is a member of another corporation, being a company within the meaning of these Regulations, authorise such person as it thinks fit to act as its representative at any meeting of the company or at any meeting, of any class of shareholders of the company; and

      52.1.2 if it is a creditor (including a holder of debentures) of another corporation, being a company within the meaning of these Regulations, authorise such person as it thinks fit to act as its representative at any meeting of any creditors of the company held in pursuance of these Regulations or of any implementing regulations made hereunder, or in pursuance of the provisions contained in any debenture or trust deed, as the case may be.
      52.2 A person authorised as aforesaid shall be entitled to exercise the same powers on behalf of the corporation which it represents as that corporation could exercise if it were an individual shareholder, creditor or holder of debentures of that other company.

    • 53. Circulation of Shareholders Resolution, etc.

      53.1 Subject to this Regulation 53 it shall be the duty of a company, on the requisition in writing of such number of shareholders as is hereinafter specified, at the expense of the requisitions unless the company otherwise resolves:—

      53.1.1 to give to shareholders of the company entitled to receive notice of the next annual general meeting notice of any resolution which may properly be moved and is intended to be moved at that meeting; and

      53.1.2 to circulate to shareholders entitled to have notice of any general meeting sent to them any statement with respect to the matter referred to in any proposed resolution or the business to be dealt with at that meeting.

      53.2 The number of shareholders necessary for a requisition under Regulation 53.1 shall be:—

      53.2.1 either any number of shareholders representing not less than 10% of the total voting rights of all the shareholders having at the date of the requisition a right to vote at the meeting to which the requisition relates; or

      53.2.2 not less than 5 shareholders.
      53.3 Notice of any such intended resolution shall be given, and any such statement shall be circulated, to shareholders of the company entitled to have notice of the meeting sent to them by serving a copy of the resolution or statement on each such shareholder in any manner permitted for service of notice of the meeting, and notice of any such resolution shall be given to any other shareholders of the company by giving notice of the general effect of the resolution in any manner permitted for giving him notice of meetings of the company: provided that the copy shall be served, or notice of the effect of the resolution shall be given, as the case may be, in the same manner and, so far as practicable, at the same time as notice of the meeting and, where it is not practicable for it to be served or given at that time, it shall be served or given as soon as practicable thereafter.

    • 54. Conditions to be Met Before Company Bound to Give Notice of Resolution

      54.1 A company shall not be bound under Regulation 53 to give notice of any resolution or to circulate any statement unless :—

      54.1.1 a copy of the requisition signed by the requisitions, or two or more copies which between them containing the signatures of all the requisitions, is deposited at the registered office of the company :—

      (a) requiring notice of a resolution, not less than 21 days before the meeting; and

      (b) in the case of any other requisition, not less than one week before the meeting; and

      (c) there is deposited or tendered with the requisition a sum reasonably sufficient to meet the company’s expenses in giving effect thereto,

      provided that if, after a copy of the requisition requiring notice of a resolution has been deposited at the registered office of the company, an annual general meeting is called for a date 21 days or less after the copy has been deposited.

    • 55. Minutes of Proceedings to be Kept

      55.1 Every company shall cause minutes of all proceedings of general meetings and of all proceedings of meetings of its directors to be entered in books kept for that purpose and such minutes shall be signed by the person presiding over the proceedings.
      55.2 Minutes prepared in accordance with Regulation 55.1 shall be kept by the secretary or other officer of the company at the registered office of the company and shall be evidence of the proceedings and until the contrary is proved, the proceedings shall be deemed to have been duly held and convened and the business conducted thereat shall be deemed to be valid.
      55.3 If default is made in complying with this Regulation 55.1 the company may be required to pay a fine of a maximum of AED. 5,000 .

    • 56. Inspection of Minute Books

      56.1 Minutes of general meetings of a company shall be open for inspection by any director of the company without charge for not less than two hours during business hours each day, subject to such reasonable restrictions as the company may impose.
      56.2 Any shareholder or director shall be entitled to be furnished, within seven days after it has made a request to the company, with a copy of any such minutes on the payment of a reasonable charge sufficient to meet the company’s expenses in giving effect thereto.
      56.3 In the case of any such refusal or default, the competent court may by order, compel an immediate inspection of the minutes or direct that the copies required shall be sent to the persons properly requiring them.

    • 57. Keeping of Books of Account

      57.1 Every company shall cause to be kept proper records of account with respect to :—

      57.1.1 all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place; and

      57.1.2 all sales and purchases of goods by the company; and

      57.1.3 the assets and liabilities of the company.
      57.2 The records of account shall be kept at the registered office of the company and shall at all times be open to inspection by the directors.
      57.3 In the case of records of account not being made available for inspection by a director the authority may by order compel immediate inspection of such records.
      57.4 If a company fails to comply with this Regulation 57 the company may be required to pay a fine of a maximum of AED. 5,000 .

    • 58. Duty to Prepare Company Accounts

      58.1 The directors of every company shall prepare for each financial year of the company:

      58.1.1 a balance sheet as at the last day of the year; and

      58.1.2 a profit and loss account in the form prescribed in the company’s Article of Association . Such annual company accounts will form part of the company’s financial statements.
      58.2 In the case of a failure to comply with this Regulation 58 every person who was a director of the company immediately before the end of the period for delivery accounts and reports for the financial year in question is guilty of an offence and may be liable to pay a fine of a maximum of AED.5,000.

    • 59. Financial Statements to be Laid Before General Meeting

      59.1 The directors of every company shall, for each financial year, lay before the company in general meeting:—

      59.1.1 financial statements for such period which shall include:—

      (a) a statement of the results of operations for such period (i.e. a profit and loss account); and

      (b) a statement of retained earnings or deficit; and

      (c) a balance sheet at the end of such period; and

      (d) a statement of changes in financial position for such period; and

      (e) notes to the financial statements and the notes thereto shall be in accordance with Regulation 59.2; and

      (f) such further information as required by these Regulations, any appropriate implementing regulations and the company’s own Memorandum and Articles of Association; and

      59.1.2 the report of the auditors as set out in Regulation 63.2 in respect of the financial statements described in Regulation 59.1.1
      59.2 The notes mentioned in Regulation 59.1.1(e) shall include a description of the generally accepted accounting principles used in the preparation of the financial statements, which principles shall be such accepted accounting principles as may be appointed by the authority under Regulation 59.5 and where the generally accepted accounting principles used are other than those of the Centre, the notes shall identify the generally accepted accounting principles so used.
      59.3 Financial statements shall, before being laid before a general meeting of a company, be signed on the balance sheet page by two of the directors of the company.
      59.4 Notwithstanding Regulation 59.1 if at a general meeting at which financial statements should be laid, the statements have not been so laid, it shall be lawful for the chairman to adjourn the meeting for a period of up to ninety days or such longer period as the shareholders may agree.
      59.5 The authority may appoint generally accepted accounting principles promulgated by an accounting standard setting body which may be either International Accounting Standards (IAS), or such other standards as the authority may determine from time to time.

    • 60. Right to Receive Copies of Financial Statements, Including Balance Sheet, etc.

      60.1 A copy of the financial statements of a company, including every document required by these Regulations or the Articles of Association of the company shall be made available to every shareholder of the company and, if such financial statements and other documents are not sent to each shareholder seven days before the general meeting, any shareholder may move a resolution at the general meeting that it be adjourned for seven days provided that this Regulation 60.1 shall not require the making available of the financial statements and other documents to:—

      60.1.1 any person not entitled to receive notices of general meetings; and

      60.1.2 more than one of the joint holders of any shares; and

      60.1.3 any person whose address is not known to the company.

    • 61. Power to Waive Laying of Accounts and Appointment of Auditor

      61.1 Notwithstanding Regulation 12.2.3 and Regulation 12.2.4, if all shareholders of a company agree that in respect of a particular financial year or other interval no financial statements or auditor’s report thereon need be laid before a general meeting or that no auditor shall be appointed to the close of the next annual general meeting then there shall, subject to any requirement to the contrary under the licensing regulations, be no obligation to lay financial statements for such period or to appoint an auditor until the close of the next annual general meeting, as the case may be.

      61.2 For the purposes of Regulation 61.1 all the shareholders of a company shall be deemed to have agreed at a general meeting if either:—

      61.2.1 all the shareholders are present in person at the meeting and agree; or

      61.2.2 if some of the shareholders are not present in person at the meeting then if the shareholders present in person at the meeting agree and there are produced at the meeting statements in writing signed by the shareholders not present in person stating that they agree.

    • 62. Appointment of Auditor

      62.1 The shareholders of a company at the inaugural meeting shall appoint one or more auditors to hold office until the close of the next annual general meeting, and, if the shareholders fail to do so, the directors shall forthwith make such appointment or appointments.
      62.2 The shareholders of a company at each annual general meeting shall appoint one or more auditors to hold office until the close of the next annual general meeting, and, if an appointment is not so made, the auditor already in office shall continue in office until a successor is appointed.
      62.3 The shareholders, by a special resolution cast at a general meeting of which notice specifying the intention to pass such resolution was given, may remove any auditor before the expiration of his term of office, and shall by a majority of the votes cast at that meeting appoint another auditor in its stead for the remainder of its term.
      62.4 The remuneration of an auditor appointed by the shareholders shall be fixed by the shareholders or by the directors, if they are authorised to do so by the shareholders, and the remuneration of an auditor appointed by the directors shall be fixed by the directors.
      62.5 No person shall be appointed as auditor of a company who is an officer or employee of that company or of an affiliated company or who is a partner, employer or employee of any such officer or employee.

    • 63. Audit

      63.1 The auditor shall audit any financial statements to be laid pursuant to Regulation 59 as will enable the auditor to report to shareholders.
      63.2 Based on the results of the audit under Regulation 63.1 which audit shall be made in accordance with generally accepted auditing standards as defined in Regulation 59.5, the auditor shall make a report to the shareholders.
      63.3 The generally accepted auditing standards referred to in Regulation 63.2 may be those of the Centre, a country or jurisdiction other than the Centre or such other generally accepted auditing standards as may be appointed by the authority under Regulation 59.5 for the purpose of this Regulation 63.3 and where the generally accepted auditing standards used are other than those of the Centre, the report of the auditor shall identify the generally accepted auditing standards used and the auditor’s opinion of this appropriateness and of the general nature, extent and effect of the same.

      63.4 No action shall lie against an auditor in the performance of any function as an auditor contemplated by these Regulations except in the instance of:—

      63.4.1 the company who engaged the auditor to perform such function; or

      63.4.2 any other person expressly authorised by the auditor to rely on his work.

    • 64. Election of Directors

      64.1 The affairs of the company shall be managed by one or more directors who shall be individuals elected in the first place by ordinary resolution at the inaugural meeting and thereafter by ordinary resolution at each annual general meeting of the company.
      64.2 A general meeting of a company may by ordinary resolution authorise the directors of the company to elect or appoint on their behalf an individual or individuals to act as directors up to a maximum determined by the members by ordinary resolution in a general meeting to those elected at the general meeting, but which shall not be more than four.

      64.3 Any individual may be appointed as an alternate director by or in accordance with an ordinary resolution of the shareholders or by a director in such manner as may be provided in the Articles of Association, and the individual so appointed shall have all the rights and powers of the director for whom he is appointed in the alternative, except that he shall not be entitled to attend and vote at any meeting of the directors otherwise than in the absence of such director.

      An alternate director shall only be a director for the purposes of these Regulations and shall only be subject to the provisions of these Regulations insofar as they relate to the duties and obligations of a director when performing the functions of the director for whom he is appointed in the alternative.

      64.4 So long as a quorum of directors remains in office, unless the Articles of Association of a company otherwise provide, any vacancy occurring in the board of directors may be filled by such directors as remain in office. If no quorum of directors remains the vacancy shall be filled at a general meeting of shareholders.

    • 65. Representation of Director by Another Director

      65.1 Subject to any express provision to the contrary in the Articles of Association of the company, a director of the company may appoint another director of the company to represent him and to vote on his behalf at any meeting of the directors of the company provided that a director so appointed:—

      65.1.1 shall not be entitled to vote at any such meeting on behalf of the director who appointed him if the director who appointed him is himself present at that meeting; and

      65.1.2 may, subject to Regulation 65.1.1 vote at any such meeting on his own behalf as well as on behalf of the director who appointed him.

      65.2 An appointment made under Regulation 65.1:—

      65.2.1 shall not have effect unless notice thereof is given in writing to the secretary of the company by the director making the appointment; and

      65.2.2 may be either general or in respect of a particular meeting or meetings specified in the notice of appointment; and

      65.2.3 may be revoked at any time by notice in writing given to the secretary of the company by the director making the appointment.

    • 66. Directors Entitled to Receive Notice of Meetings, etc.

      66.1 The directors of a company shall upon written request deposited at the registered office of the company be entitled to receive notice of, and to attend and be heard at, any or all general meetings.
      66.2 Notwithstanding Regulation 48 (length of notice for calling meetings) a notice given under Regulation 66.1 shall be valid if in all the circumstances, such notice is reasonable

    • 67. Appointment of Secretary

      67.1 The directors of a company may appoint a secretary to the company who may also be a director of the company and who shall hold office in accordance with the Articles of Association.
      67.2 Anything required or authorised to be done by or to the secretary may, if the office is vacant or there is for any other reason no secretary capable of acting, be done by or to any assistant or deputy secretary or, if there is no assistant or deputy secretary capable of acting, by or to any officer of the company authorised generally or specially in that regard by the directors.

    • 68. Register of Directors and Officers

      68.1 Every company shall keep at its registered office a register of directors and officers and the register shall, with respect to the particulars to be contained in it of those persons, comply with Regulation 68.4.

      68.2 The company shall, within the period of fourteen days from the occurrence of:—

      68.2.1 any change among its directors or in its officers; or

      68.2.2 any change in the particulars contained in the register, enter on its register the particulars of the change.
      68.3 The register shall, during the business hours (subject to such reasonable restrictions as the company may impose, so that not less than two hours in each day be allowed for inspection), be open for inspection by shareholders and directors.
      68.4 In the case of a refusal or default, the Legal Registrar may, by order, compel an immediate inspection of the register.

      68.5 The register shall contain the following particulars with respect to each director and officer:—

      68.5.1 in the case of an individual, his first name, surname and address; and

      68.5.2 in the case of a company, its name and registered office.
      68.6 Each company shall file with the Legal Registrar, in a manner to be prescribed by the Legal Registrar, details of any change in the persons or the particulars of the persons who are directors and officers of the company within fourteen days of such change taking place.

    • 69. Removal of Directors

      69.1 Subject to its Articles of Association, the shareholders of a company may, at a special general meeting called for that purpose, remove by ordinary resolution a director, provided that notice of any such meeting shall be served on the director concerned not less than fourteen days before the meeting and such director shall be entitled to be heard at such meeting and provided further that nothing in this Regulation 69 shall have effect to deprive any person of any compensation or damages which may be payable to him in respect of the termination of his appointment as a director or of any other appointment with the company.
      69.2 A vacancy created by the removal of a director at a special general meeting may be filled at that meeting by the election of another director in his place or in the absence of any such election by the other directors.

    • 70. Un-Discharged Bankrupt Not to Take Part in Management of a Company

      70.1 No un-discharged bankrupt in any country may act as director of, or directly or indirectly take part in or be concerned in the management of, any company except with the leave of the Legal Registrar.

    • 71. Prohibition of Loans to Directors without Consent of Shareholders.

      71.1 Without the consent of any shareholders holding in the aggregate not less than 89% of the total voting rights of all the shareholders having the right to vote at any meeting of the shareholders it shall not be lawful for a company to make a loan to any person who is its director or a director of its holding company, or to enter into any guarantee and/or indemnity or provide any security in connection with a loan made to such person as aforesaid by any other person provided that nothing in this Regulation 71 shall apply either :—

      71.1.1 subject to Regulation 71.2 to anything done to provide any such person as aforesaid with funds to meet expenditure incurred or to be incurred by him for the purposes of the company or for the purpose of enabling him properly to perform his duties s an officer of the company; and

      71.1.2 in the case of a company whose ordinary business includes the lending of money or the giving of guarantees in connection with loans made by other persons, to anything done by the company in the ordinary course of that business.

      71.2 The proviso stated at Regulation 71.1 shall not authorise the making of any loan, or quasi-loan or the entering into any guarantee and/or indemnity or credit transaction, or the provision of any security, except either:—

      71.2.1 with the prior approval of the company given at a general meeting at which the purposes of the expenditure and the amount of the loan or quasi loan or the extent of the guarantee and/or indemnity, credit transaction or security, as the case may be, are disclosed; or

      71.2.2 on condition that, if the approval of the company is not given as aforesaid at or before the next following annual general meeting, the loan shall be repaid or the liability under the guarantee and/or indemnity, credit transaction or security shall be discharged, as the case may be, within six months from the conclusion of that meeting.
      71.3 Where the approval of the company is not given as required by any such condition, the directors authorising the making of the loan or quasi loan, or the entering into the guarantee and/or immunity, credit transaction or the provision of the security, shall be jointly and severally liable to indemnify the company against any loss arising there from.

      71.4 A loan shall be deemed to be a loan to a director if it is made to :—

      71.4.1 the spouse or children of a director; or

      71.4.2 a company (other than a company which is a holding company or subsidiary of the company making the loan) which a director, his spouse or children own or control directly or indirectly more than 20% of the capital or loan debt.
      71.5 For the purposes of this Regulation 71 a loan shall not be deemed to have been made in the ordinary course of business of a company if it has not been made on normal commercial terms in respect of interest rates, repayment terms and security.

    • 72. Duty of Care of Officers

      72.1 Every officer of a company in exercising his powers and discharging his duties shall:—

      72.1.1 act honestly and in good faith with a view to the best interests of the company;

      72.1.2 exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances;

      72.1.3 not make a secret profit and must seek to avoid putting themselves in a position where their interests conflict with those of the company; and

      72.1.4 exercise their powers only for the purpose for which they were given.
      72.2 Every officer of a company shall comply with these Regulations and the Articles of Association of the company and with the terms of any service contract entered into between the company and the officer.

      72.3 Without in any way limiting the generality of Regulation 72.1 an officer of the company shall be deemed not to be acting honestly and in good faith if:—

      72.3.1 he fails on request to make known to the auditors of the company full details of:—

      (a) any emolument, pension or other benefit that he has received or it is agreed that he should receive from the company or any of the company’s subsidiaries; or

      (b) any loan he has received or is to receive from the company or any of its subsidiaries;

      72.3.2 he fails to disclose at the first opportunity at a meeting of directors or by writing to the directors:—

      (a) his interest in any material contract or proposed material contract with the company or any of its subsidiaries; or

      (b) his material interest in any person that is a party to a material contract or proposed material contract with the company or any of its subsidiaries.

      72.4 For the purposes of this Regulation 72:—

      72.4.1 a general notice to the directors of a company by an officer of the company declaring that he is an officer of or has a material interest in a person and is to be regarded as interested in any contract with that person is a sufficient declaration of interest in relation to any such contract;

      72.4.2 the word “material” in relation to a contract or proposed contract shall be construed as relating to the materiality of that contract or proposed contract in relation to the business of the company to which disclosure must be made;

      72.4.3 an interest occurring by reason of the ownership or direct or indirect control of not more than 10% of the capital of a person shall not be deemed material.

      72.5 An officer is not liable under Regulation 72.1 if he relies in good faith upon:—

      72.5.1 financial statements of the company represented to him by another officer of the company; or

      72.5.2 a report by a legal advisor, accountant, engineer, appraiser or other person whose profession lends credibility to a statement made by him.
      72.6 Nothing in this Regulation 72 shall be taken to prejudice any provision of the Articles of Association of a company restricting officers of a company from having any interest in contracts with the company.

    • 73. Exemption, Indemnification and Liability of Officers, etc.

      73.1 Subject to Regulation 73.2 a company may in its Articles of Association or in any contract or arrangement between the company and any officer, or any person employed by the company as auditor, exempt such officer or person from, or indemnify him in respect of any negligence, default, breach of duty or breach of trust of which the officer or person may be guilty in relation to the company or any subsidiary thereof.

      73.2 Any provision, whether contained in the Articles of Association of a company or in any contract or arrangement between the company and any officer, or any person employed by the company as auditor, exempting such officer or person from, or indemnifying him against any liability which by virtue of any rule of law would otherwise attach to him in respect of any fraud or dishonesty of which it may be guilty in relation to the company shall be void provided that:—

      73.2.1 nothing in this Regulation 73 shall operate to deprive any person of any exemption or right to be indemnified in respect of anything done or to be done by him while any such provision was in force; and

      73.2.2 notwithstanding anything in this Regulation 73 a company may, in pursuance of any such provision as aforesaid indemnify any such officer or auditor against any liability incurred by him in defending any proceedings, whether civil or criminal in which judgment is given in his favour or in which it is acquitted or when relief is granted to him by a court of competent jurisdiction.

    • 74. Insurance of Officers

      74.1 A company may purchase and maintain insurance for the benefit of any officer of the company against any liability incurred by him under Regulation 72 in his capacity as an officer of the company or indemnifying such an officer in respect of any loss arising or liability attaching to him by virtue of any rule or law in respect of any negligence, default, breach of duty or breach of trust of which the officer may be guilty in relation to the company or any subsidiary thereof and nothing in these Regulations shall make void or voidable any such policy.

    • 75. Liability of Auditor or Officer

      75.1 Where an auditor or an officer is found liable to any person for damages arising out of the performance of any function as such auditor or officer as contemplated by these regulations, then the following provisions of this Regulation 75 shall apply.
      75.2 An auditor or officer may be liable jointly and severally only if it is proved that he knowingly engaged in fraud or dishonesty.

      75.3 In any case other than that contemplated by Regulation 75.2, the liability of the auditor or officer, as the case may be, shall be determined as follows:—

      75.3.1 the Court shall determine the percentage of responsibility of the plaintiff, of each of the defendants, and of each of the other persons alleged by the parties to have caused or contributed to the loss of the plaintiff. In considering the percentages of responsibility, the Court shall consider both the nature of the conduct of each person and the nature and extent of the causal relationship between the conduct and the loss claimed by the plaintiff;

      75.3.2 the liability of the auditor or officer, as the case may be, shall be equal to the total loss suffered by the plaintiff multiplied by the auditor’s or officer’s, as the case may be, percentage of responsibility as determined under Regulation 75.3. hereof.
      75.4 No auditor or officer whose liability is determined under Regulation 75.3 hereof shall have any liability in respect of any judgment entered against any other party to the action.
      75.5 Except where agreed in writing between the parties, where the liability of an auditor or officer has been determined in accordance with Regulation 75.3 no other person shall have any right to recover from such auditor or officer any portion of any judgment entered against such other person in respect of the action.
      75.6 If a director has a personal interest (direct or indirect) in any matter to be discussed at a board meeting, he must formally declare to the other directors in a board meeting that he has such an interest. A director shall be prevented from voting and counting in the quorum on any matter in which he has an interest and it has been declared in accordance with this Regulation 75.6.

    • 76. Directors’ Service Contracts

      76.1 The terms of any service or employment contract for a director that is for a fixed term in excess of 1 year must be approved by an ordinary resolution of the shareholders in general meeting.
      76.2 Any service or employment contract that provides for notice periods of more than 3 months must be disclosed in the annual report of the directors.

  • Section 5 Amalgamations

    • 77. Amalgamation of Companies

      77.1 Two or more companies which are incorporated in the Centre, may, subject to the consent of the Legal Registrar given in its absolute discretion and pursuant to the provisions of these Regulations amalgamate and continue as one company and, if a License to carry on a trade or business activity in the Centre has been granted to one or more of these companies, the Regulations governing such License shall continue in effect for the surviving company, subject to the Legal Registrar’s consent.

    • 78. Survival of Company on Amalgamation of One or More Companies and One or More Outside Companies.

      78.1 One or more companies and one or more bodies incorporated outside of the Centre(each such body hereinafter in this Regulation referred to as a “outside company”) may apply to the Legal Registrar for consent to amalgamate and continue as a company registered in the Centre to which the provisions of these Regulations and any other regulations of the Centre shall apply.
      78.2 An application for consent under Regulation 78.1 shall be in such form, and be accompanied by an application fee and such documents, as the Legal Registrar may determine, including documentary proof, satisfactory to the Legal Registrar, that the Company has obtained all necessary authorisations required under the laws of the country in which it was incorporated to enable it to make the application.

    • 79. Survival of DMCC Company on Amalgamation of one or more Companies and one or more DMCC Companies.

      79.1 One or more companies and one or more DMCC Companies may apply to the Legal Registrar for consent to amalgamate and continue as a DMCC Company (in this Regulation 79 and in Regulations 80 and 81 referred to as “the surviving company”) which the provisions of the laws of the jurisdiction of incorporation of the surviving corporation shall apply.

      79.2 An application for consent under Regulation 79 shall be in such form, and shall be accompanied by an application fee and supported by such documents as the Legal Registrar may determine and such documents shall include:—

      79.2.1 a certified copy of a resolution of the shareholders of each amalgamating company (in this Regulation 79 and in Regulations 80 and 81 referred to as an “amalgamating company”) passed in a general meeting provided that in the case of an amalgamating company, only one shareholder, present in person or by proxy constitutes the necessary quorum; or

      if so authorised by the Articles of Association, a certified copy of a resolution of the Board of Directors of each amalgamating company approving the amalgamation and naming the country or jurisdiction outside the Centre of the surviving company; and

      79.2.2 a declaration signed by an officer of each amalgamating company declaring that there are reasonable grounds for believing that :—

      (a) the amalgamating company is, and the surviving company will be, able to pay its liabilities as they become due; and

      (b) the realisable value of the surviving company ‘s assets will not be less than the aggregate of its liabilities and issued capital of all classes; and

      (c) either no creditor will be prejudiced by the amalgamation or adequate notice has been given to all known creditors of such company and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious; and

      79.2.3 documentary proof, satisfactory to the authority, that each amalgamating company being a DMCC Company (in this Regulation 79 referred to as an “amalgamating DMCC Company “) has obtained all necessary authorisations required under the laws of the country or jurisdiction in which it was incorporated to enable it to make the application.

    • 80. Legal Registrar’s Refusal to Grant Consent Under Regulations 77, 78 or 80.1

      Where the Legal Registrar refuses to grant its consent under Regulations 77, 78 or 79 it shall not be bound to assign any reason therefore, and its decision shall not be subject to appeal or review in any court.

  • Section 6 Winding-Up

    • 81. Modes of Winding-Up

      81.1 The winding-up of a company shall be made in accordance with these regulations as if the company were a limited liability company formed pursuant thereto, with the exception that all rights and responsibilities vested in the competent authority there under shall instead be vested in the authority and all references to the commercial register shall be to the register maintained by the authority.

      The winding up of a company may either be:

      81.1.1 summary under Regulation 81.1.1.1;

      81.1.2 by its creditors under Regulation 81.1.2.1; or

      81.1.3 by the Court under the UAE Commercial Transactions Law No. 18 of 1993 (Volume 5, Bankruptcy and Preventive Composition) and other applicable legislation.

      • 81.1.1.1 Summary Winding Up

        A) Application of this Regulation

        This Regulation applies to the winding up of a company which has no liabilities or which is able to discharge its liabilities in full within six months after the commencement of the winding up and such a winding up is a summary winding up.

        B) Procedure

        B.1.) A company may be wound up under this Regulation by making a statement of solvency in accordance with Regulation (C) blow:

        B.1.1) by passing, within 28 days after the statement has been signed by each of the directors of the company, a Resolution that the company be wound up summarily; and

        B.1.2) by delivering to the Legal Registrar, within 21 days after the Resolution has been passed, a copy of it together with the statement.

        C) A statement of solvency shall be signed by each of the directors and state that, having made full inquiry into the company’s affairs, each of them is satisfied:—

        C.1.) that the company has no assets and no liabilities; or

        C.2.) that the company has assets and no liabilities; or

        C.3.) that the company will be able to discharge its liabilities in full within six months after the commencement of the winding up, as the case may be.

        D)Commencement of summary winding up

        A summary winding up under which assets of the company are to be distributed commences on the passing of the Resolution for summary winding up.

        E) Effect on status of company

        After the commencement of a summary winding up of a company which has assets the corporate state and capacity of the company continue until the company is dissolved but, from the commencement of the winding up, its powers shall be exercised only so far as may be required for the realisation of the assets of the company, the discharge of any liabilities of the company and the distribution of its assets in accordance with Regulation (G).

        F) Fppointment of liquidator

        F.1) On or after the date of commencement of a summary winding up of a company, it may by Resolution appoint a person to be liquidator for the purposes of the winding up.

        F.2) On the appointment of a liquidator all the powers of the directors cease except so far as the Resolution appointing the liquidator or any subsequent Resolution otherwise provides and, subject to any such Resolution and to Regulation (G), all those powers shall thereafter be exercisable by the liquidator.

        G) Gpplication of assets and dissolution

        G.1) On the registration by the Legal Registrar of a statement delivered under Regulation (D) that the company has no assets and no liabilities the company is dissolved.

        G.2) On the registration by the Legal Registrar of a statement so delivered that the company has assets and no liabilities the company shall forthwith proceed to distribute its assets among its shareholders according to their rights or otherwise as provided by the Regulations.

        G.3) On the registration by the Legal Registrar of a statement so delivered that the company will be able to discharge its liabilities in full within six months after the commencement of the winding up the assets of the company shall be applied in satisfaction of the company’s liabilities and, subject to that application, shall be distributed as aforesaid.

        G.4) As soon as the company has completed the distribution of its assets in accordance with Regulation (G.2) or (G.3), it shall deliver to the Legal Registrar a statement signed by each of the directors or, if the distribution has been completed by a liquidator appointed under Regulation (F), by the liquidator, that each director or (as the case may be) the liquidator, having made full inquiry into the company’s affairs, is satisfied that the company has no assets and no liabilities and, upon the registration of the statement, the company is dissolved.

        H) Effect of insolvency

        H.1) This Regulation applies where after the commencement of a summary winding up the directors (or, if there is a liquidator, the liquidator) form the opinion that the company has liabilities which it will be unable to discharge in full within six months after the commencement of the winding up.

        H.2) When that opinion is formed it shall be recorded in the minutes of a meeting of the directors or, as the case may be, by the liquidator.

        H.3) The directors (or, if there is a liquidator, the liquidator) shall:

        H.3.1.) by not less than 14 days’ notice given by post, call a meeting of the creditors of the company to be held within 28 days after that opinion was recorded and the company shall in the notice nominate a person to be liquidator for the purpose of a creditors’ winding up;

        H.3.2.) when that notice is given to the creditors, deliver a copy of it to the Legal Registrar;

        H.3.3.) not less than 10 days before the day for which the meeting is called, give notice of the meeting by advertisement in the newspaper prescribed by the Legal Registrar;

        H.3.4.) during the period before the creditors’ meeting is held, furnish any creditor free of charge with such information concerning the affairs of the company as he may reasonably request; and

        H.3.5.) make out a statement as to the affairs of the company and lay that statement before the creditors’ meeting.

        H.4.) The statement as to the affairs of the company shall be verified by affidavit by some or all of the directors or (if there is a liquidator) by the liquidator.

        H.5.) If there is a liquidator, he shall preside at the creditors’ meeting and, if there is no liquidator, a director nominated by the directors shall preside.

        H.6.) As from the day on which the creditors’ meeting under this Regulation is held the winding up becomes a creditors’ winding up and these Regulations have effect as if that meeting was the meeting of creditors mentioned in Regulation 81.1.2.1.4 .

        H.7.) If the directors or, as the case may be, the liquidator without reasonable excuse fail to comply with their obligations under this Regulation or if a director or, as the case may be, the liquidator fails to comply with Regulation (H.5.) so far as requiring him to preside at the creditors’ meeting, the directors or the director or the liquidator, (as the case may be)commits an offence and may be liable to pay a fine of a maximum of AED.5,000.

        H.8.) A director or liquidator who signs a statement delivered to the Legal Registrar under Regulation (B) or (G) without having reasonable grounds for stating that the company has no liabilities or that it will be able to discharge its liabilities in full within six months after the commencement of the winding up commits an offence and may be liable to pay a fine of a maximum of AED.5,000.

        J) Remuneration of liquidator

        A liquidator appointed under Regulation (F) shall be entitled to receive from the company such remuneration as is agreed between him and the company before his appointment or as is subsequently approved by the company in general meeting or by the court.

        K) Cesser of office by liquidator

        A liquidator appointed under Regulation (F) may be removed from office by a special resolution of the company and shall vacate office if he ceases to be qualified to hold that office.

        L) Termination of summary winding up

        L.1) Where:—

        L.1.a) the summary winding up of a company has commenced;

        L.1.b) the company has not received any contribution from any present or past shareholder pursuant to Regulation 81.1.2.1.21 ;

        L.1.c) the company has not for the purposes of the winding up distributed any of its assets among its shareholders ;

        L.1.d) the company is able to discharge its liabilities as they fall due; and

        L.1.e) termination of the winding up has been approved by a Resolution of the company, the documents described in Regulation (L.2) may be delivered to the Legal Registrar and thereupon the winding up shall forthwith terminate.

        L.2) The documents to be delivered to the Legal Registrar pursuant to Regulation (L.1) are:—

        L.2.a) a certificate signed by all the directors of the company stating that the company:—

        (i) has received no such contribution;

        (ii) has made no such distribution; and

        (iii) is able to discharge its liabilities as they fall due; and

        L.2.b) a copy of the Resolution approving the termination of the winding up.

        L.3) Upon the termination of a winding up pursuant to Regulation (L.1) —

        L.3.a) any liquidator appointed for the purpose of the winding up shall cease to hold office; and

        L.3.b) the company and all other persons shall be in the same position, subject to Regulation (L.4), as if the winding up had not commenced.

        L.4) The termination of a winding up pursuant to Regulation (L.1) shall not affect the validity of anything duly done by any liquidator, director or other person, or by operation of law, before its termination.

        L.5) A director who signs a certificate delivered to the Legal Registrar pursuant to Regulation (L.1) above without having reasonable grounds for believing that the statements in it are true commits an offence and may be liable to pay a fine of a maximum of AED.5,000.

      • 81.1.2.1 Creditors Winding Up

        • 81.1.2.1.1 Procedure

          A company, may be wound up under this Regulation if the company so resolves by Resolution.

        • 81.1.2.1.2 Notice of Winding Up

          (i.) When a company has passed a Resolution for a creditors’ winding up, it shall, within 14 days of the passing of the Resolution, give notice of the Resolution by advertisement in a newspaper prescribed by the Legal Registrar.
          (ii.) In the event of failure to comply with this Regulation, the company and every officer of it who is in default commits an offence & may be liable to pay a fine of a maximum of AED.5,000.

        • 81.1.2.1.3 Commencement and Effects of Creditors’ Winding Up

          (i.) A creditors’ winding up is deemed to commence when the Resolution for winding up is passed or, where Regulation (H) applies, when the winding up becomes a creditors’ winding up; and the company shall from the commencement of the winding up cease to carry on its business, except so far as may be required for its beneficial winding up.
          (i.i.) The corporate state and capacity of the company continue until the company is dissolved.
          (i.i.i) A transfer of shares, not being a transfer made to or with the section of the liquidator, and an alteration in the status of the company’s shareholders made after the commencement of the winding up is void.
          (i.i.i.i) After the commencement of the winding up no action shall be taken or proceeded with against the company except by leave of the court and subject to such terms as the court may impose.

        • 81.1.2.1.4 Meeting of Creditors in Creditors’ Winding Up

          (i.) The company shall:—

          (i.a) not less than 14 days before the day on which there is to be held the company meeting at which the Resolution for a creditors’ winding up is to be proposed give by post to its creditors notice calling a meeting of creditors to be held on the same day as, and immediately following the conclusion of, the company meeting and nominating a person to be Liquidator for the purposes of a creditors’ winding up;

          (i.b) give notice of the creditors’ meeting by advertisement in a newspaper prescribed by the Legal Registrar not less than 10 days before the day for which that meeting has been called;

          (i.c) during the period before the creditors’ meeting furnish creditors free of charge with such information concerning the company’s affairs as they may reasonably require.

          (i.i) The directors shall —

          (i.i.a) make out a statement as to the affairs of the company, verified by affidavit by some or all of the directors;

          (i.i.b) lay that statement before the creditors’ meeting; and

          (i.i.c) appoint a director to preside at that meeting, and the director so appointed shall attend the meeting and preside over it.

          (i.i.i) If:—

          (i.i.i.a) the company without reasonable excuse fails to comply with Regulation 81.1.2.1.4 (i);

          (i.i.i.b) the directors without reasonable excuse fail to comply with Regulation 81.1.2.1.4 (i.i); or

          (i.i.i.c) a director without reasonable excuse fails to comply with Regulation 81.1.2.1.4(i.i); so far as requiring him to attend and preside at the creditors’ meeting the company, the directors or the director (as the case may be) commits an offence and may be liable to pay a fine of a maximum of AED.5,000.

        • 81.1.2.1.5 Appointment of liquidator

          (i) The creditors and the company at their respective meetings mentioned in Regulation 81.1.2.1.4 may nominate a person to be
          liquidator for the purpose of the winding up.
          (i.i.) Where a creditors’ meeting is called in accordance with Regulation (H), the person nominated to be liquidator in the notice calling the meeting shall be deemed, for the purposes of this Regulation, to have been nominated as aforesaid by the company.
          (i.i.i.) The person nominated by the creditors, or if no person is nominated by the creditors, the person nominated, or deemed to have been nominated, by the company is appointed liquidator with effect from the conclusion of the creditors’ meeting.

          (i.i.i.i.) In the case of different persons being nominated, a director, member or shareholder or creditor of the company may, within seven days after the date on which the nomination was made by the creditors, apply to the Legal Registrar for an order either:—

          (i.i.i.i.a) directing that the person nominated as liquidator by the company shall be liquidator instead of or jointly with the person nominated by the creditors; or

          (i.i.i.i.b) appointing some other person to be liquidator instead of the person nominated by the creditors.
          (v.) A liquidator appointed under this Regulation shall within 14 days after his appointment give notice thereof signed by him to the Legal Registrar and to the creditors.
          (i.v.) A liquidator who fails to comply with Regulation 81.1.2.1.5 (v.) commits an offence and may be liable to pay a fine of a maximum of AED.5,000.

        • 81.1.2.1.6 Appointment of Liquidation Committee

          (i.) A creditors’ meeting may appoint a liquidation committee consisting of not more than five persons to exercise the functions conferred on it by or under these Regulations.
          (i.i.) If a committee is appointed, the company may, in general meeting, appoint such number of persons not exceeding five as they think fit to act as members of the committee.

          (i.i.i.) The creditors may resolve that all or any of the persons so appointed by the company ought not to be members of the committee; and if the creditors so resolve:—

          (i.i.i.a) the persons mentioned in the Resolution are not then, unless the court otherwise directs, qualified to act as members of the committee; and

          (i.i.i.b) on a application to the Legal Registrar under this provision the Legal Registrar may appoint other persons to act as such members in place of the persons mentioned in the Resolution.

        • 81.1.2.1.7 Remuneration of Liquidator, Cesser of Directors’ Powers, and Vacancy in Office of Liquidator.

          (i) A liquidator in a creditors’ winding up is entitled to receive such remuneration as is agreed between him and the liquidation committee or, if there is no committee, between him and the creditors.
          (i.i.) On the appointment of a liquidator in a creditors’ winding up, all the powers of the directors cease, except so far as the liquidation committee (or, if there is no committee, the creditors) sanction their continuance.
          (i.i.i.) The creditors may at any time remove a liquidator.
          (i.i.i.i) If a vacancy occurs, by death, resignation or otherwise, in the office of a liquidator (other than a liquidator appointed by the court) the creditors may fill the vacancy.

        • 81.1.2.1.8 No Liquidator Appointed

          (i.) This Regulation applies where a creditors’ winding up has commenced but no liquidator has been appointed.

          (i.i.) During the period before the appointment of a liquidator, the powers of the directors shall not be exercised except:—

          (i.i.a) with the sanction of the court;

          (i.i.b) to secure compliance with Regulation 81.1.2.1.4 ; or

          (i.i.c) to protect the company’s assets.
          (i.i.i.) If the directors, without reasonable excuse, fail to comply with this Regulation, they are guilty of an offence and may be liable to pay a fine of a maximum of AED.5,000.

        • 81.1.2.1.9 Costs of Creditors’ Winding Up

          All costs, charges and expenses properly incurred in a creditors’ winding up, including the remuneration of the liquidator, are payable out of the company’s assets in priority to all other claims.

        • 81.1.2.1.10 Arrangement when Binding on Creditors

          (i) An arrangement entered into between a company immediately preceding the commencement of, or in the course of, a creditors’ winding up and its creditors is (subject to the right of appeal under this Regulation) binding :—

          (i.a) on the company, if sanctioned by a Resolution; and

          (i.b) on the creditors, if acceded to by three-quarters in number and value of them.
          (i.i.) A creditor or contributory may, within three weeks from the completion of the arrangement, appeal to the court against it; and the court may thereupon, as it thinks just, amend, vary or confirm the arrangement.

        • 81.1.2.1.11 Meetings of Company and Creditors

          (i.) If a creditors’ winding up continues for more than 12 months, the liquidator shall call a general meeting of the company and a meeting of the creditors to be held at the first convenient date within three months after the end of the first 12 months from the commencement of the winding up, and of each succeeding 12 months, or such longer period as the Legal Registrar may allow, and shall lay before the meetings an account of his acts and dealings and of the conduct of the winding up during the preceding 12 months.
          (i.i.) If the liquidator fails to comply with this Regulation, he commits an offence and may be liable to pay a fine of a maximum of AED.5,000.

        • 81.1.2.1.12 Final Meeting and Dissolution

          (i.) As soon as the affairs of a company in a creditors’ winding up are fully wound up, the liquidator shall make up an account of the winding up, showing how it has been conducted and the company’s property has been disposed of, and thereupon shall call a general meeting of the company and a meeting of the creditors for the purpose of laying the account before the meetings and giving an explanation of it.
          (i.i.) Each such meeting shall be called by not less than 21 days’ notice sent by post, accompanied by a copy of the liquidator’s account.
          (i.i.i.) Within seven days after the date of the meetings (or, if they are not held on the same date, after the date of the later one) the liquidator shall make a return to the Legal Registrar of the holding of the meetings and of their dates.
          (i.i.i.i.) If the copy is not delivered or the return is not made in accordance with Regulation 81.1.2.1.12 (i.i.i.), the liquidator commits an offence and may be liable to pay a fine of a maximum of AED.5,000.
          (v.) If a quorum is not present at either such meeting, the liquidator shall, in lieu of the return required by Regulation 81.1.2.1.12 (i.i.i.), deliver a return that the meeting was duly called and that no quorum was present; and when that return is made the provisions of that paragraph as to the making of the return are, in respect of that meeting, deemed complied with.
          (v.i.) The Legal Registrar on receiving the account and, in respect of each such meeting, either of the returns mentioned above, shall forthwith register them, and at the end of three months from the registration of the return the company is deemed to be dissolved; but the Legal Registrar may, on the application of the liquidator or of an other person who appears to the Legal Registrar to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the Legal Registrar thinks fit.
          (v.i.i.) If the liquidator fails to call a general meeting of the company or a meeting of the creditors as required by this Regulation he commits an offence and may be liable to pay a fine of a maximum of AED.5,000 .

        • 81.1.2.1.13 Powers and Duties of Liquidator

          (i.) The liquidator in a creditors’ winding up may, with the sanction of the liquidation committee (or, if there is no such committee, a meeting of the creditors) :—

          (i.a.) pay a class of creditors in full;

          (i.b.) compromise any claim by or against the company.
          (i.i.) The liquidator may, without sanction, exercise any other power of the company as may be required for its beneficial winding up.

          (i.i.i) The liquidator may —

          (i.i.i.a.) settle a list of contributories (and the list of contributories is prima facie evidence of the persons named in it to be contributories);

          (i.i.i.b.) make calls;

          (i.i.i.c.) summon general meetings of the company for the purpose of obtaining its sanction by Resolution or for any other purpose he may think fit.
          (i.i.i.i.) The liquidator shall pay the company’s debts and adjust the rights of the contributories among themselves.
          (v.) The appointment or nomination of more than one person as liquidator shall declare whether any act to be done is to be done by all or any one or more of them, and in default, any such act may be done by two or more of them.

        • 81.1.2.1.14 Duty to Co-Operate with Liquidator

          (i.) In a creditors’ winding up each of the persons mentioned in Regulation 81.1.2.1.14(i.i.) shall:—

          (i.a.) give the liquidator information concerning the company and its promotion, formation, business, dealings, affairs or property which the liquidator may at any time after the commencement of the winding up reasonably require; and

          (i.b.) attend on the liquidator at reasonable times and on reasonable notice when requested to do so.

          (i.i.) The persons referred to in Regulation 81.1.2.1.14 (i.) are:—

          (i.i.a.) those who are, or have at any time been, officers of the company;

          (i.i.b.) those who have taken part in the formation of the company at any time within one year before the commencement of the winding up; and

          (i.i.c.) those who are in the employment of the company, or have been in its employment within that year, and are in the liquidator’s opinion capable of giving information which he requires; and
          (i.i.i.) If a person without reasonable excuse fails to comply with an obligation imposed by this Regulation, he commits an offence and may be liable to pay a fine of a maximum of AED.5,000.

        • 81.1.2.1.15 Distribution of Company’s Property

          Subject to the provisions of any enactment as to preferential payments, a company’s property shall on winding up be realised and applied in satisfaction of the company’s liabilities pari passu and, subject to that application, shall (unless the articles or law otherwise provide) be distributed among the members according to their rights and interests in the company.

        • 81.1.2.1.16 Qualifications of Liquidator

          (i.) A person who is not an individual is not qualified to act as a liquidator.
          (i.i.) The Legal Registrar may prescribe the qualifications required for any person to act as a liquidator.
          (i.i.i.) An appointment made in contravention of this Regulation is void.
          (i.i.i.i.) A person who acts as liquidator when not qualified to do so commits an offence and may be liable to pay a fine of a maximum of AED.5,000.
          (v.) A liquidator shall vacate office if he ceases to be a person qualified to act as a liquidator.

        • 81.1.2.1.17 Corrupt Inducement Affecting Appointment as Liquidator

          A person who gives or agrees or offers to give to a creditor of a company any valuable benefit with a view to securing his own appointment or nomination, or to securing or preventing the appointment or nomination of some person other than himself, as the company’s liquidator, commits an offence and may be liable to pay a fine of a maximum of AED.5,000.

        • 81.1.2.1.18 Notification by Liquidator of Resignation, etc.

          (i.) A liquidator who resigns, is removed or for any other reason vacates office shall within 14 days after the resignation, removal or vacation of office give notice thereof, signed by him, to the Legal Registrar and in the case of a creditors’ winding up (except where the removal is pursuant Regulation 81.1.2.1.7 (i.i.i.) to the creditors.
          (i.i.) If a liquidator fails to comply with Regulation 81.1.2.1.18 (i.) he commits an offence and may be liable to pay a fine of a maximum of AED.5,000.

        • 81.1.2.1.19 Notification that Company is in Liquidation

          (i.) When a company is being wound up, every invoice, order for goods or services or business letter issued by or on behalf of the company, or a liquidator of the company, being a document on or in which the name of the company appears, shall contain a statement that the company is in liquidation.
          (i.i.) In the event of failure to comply with this Regulation, the company and every officer of it who is in default commits an offence & may be liable to pay a fine of a maximum of AED.5,000.

        • 81.1.2.1.20 Liability as Contributories of Present and Past Shareholders

          When a company is wound up, every present and past shareholder is liable to contribute to its assets to an amount sufficient for payment of its liabilities, and the expenses of the winding up, and for the adjustment of the rights of the contributories among themselves:—

          (i.) a past shareholder is not liable to contribute if he has ceased to be a shareholder for one year or more before the commencement of the winding up;
          (i.i.) a past shareholder is not liable to contribute in respect of a liability of the company contracted after he ceased to be a shareholder;
          (i.i.i.) a past shareholder is not liable to contribute unless it appears to the court that the existing shareholders are unable to satisfy the contributions required to be made by them in pursuance of these Regulations;
          (i.i.i.i.) no contribution is required from a past or present shareholder exceeding the amount (if any) unpaid on the shares in respect of which he is liable;
          (v.) a sum due to a shareholder of the company (in his character of a shareholder) by way of dividends, profits or otherwise is not deemed to be a liability of the company, payable to that shareholder in a case of competition between himself and any other creditor not a shareholder of the company, but any such sum may be taken into account for the purpose of the final adjustment of the rights of the contributories among themselves.

        • 81.1.2.1.21 Disposal of Records

          (i.) When a company has been wound up and is about to be dissolved, its records and those of a liquidator may be disposed of as follows:—

          (i.a.) in the case of a summary winding up, in the way that the company by Resolution directs; and

          (i.b.) in the case of a creditors’ winding up, in the way that the liquidation committee or, if there is no such committee, the company’s creditors, may direct.
          (i.i.) After 10 years from the company’s dissolution no responsibility rests on the company, a liquidator, or a person to whom the custody of the records has been committed, by reason of any record not being forthcoming to a person claiming to be interested in it.
          (i.i.i.) The Legal Registrar may direct that for such period as it thinks proper (but not exceeding 10 years from the company’s dissolution), the records of a company which has been wound up shall not be destroyed.
          (i.i.i.i.) If a person acts in contravention of a direction made for the purposes of this Regulation, he commits an offence and may be liable to pay a fine of a maximum of AED.5,000.

        • 81.1.2.1.23. Powers of Inspectors

          (i.) If inspectors appointed under Regulation 82.1 to investigate the affairs of a company think it necessary for the purposes of their investigation to investigate also the affairs of an other body corporate which is or at any relevant time has been the company’s subsidiary or holding company, or a subsidiary of its holding company or a holding company of its subsidiary, they shall have power to do so; and they shall report on the affairs of the other body corporate so far as they think that the results of their investigation of its affairs are relevant to the investigation of the affairs of the first mentioned company.
          (i.i.) Inspectors so appointed may at any time in the course of their investigation, without the necessity of making an interim report, inform the Legal Registrar of matters coming to their knowledge as a result of the investigation tending to show that an offence has been committed.

        • 81.1.2.1.24. Production of Records and Evidence to Inspectors

          (i.) If inspectors appointed under Regulation 82.1 consider that any person is or may be in possession of information relating to a matter which they believe to be relevant

          (i.a.) to the investigation, they may require him to produce and make available to them all records in his custody or power relating to that matter;

          (i.b.) at reasonable times and on reasonable notice, to attend before them; and

          (i.c.) otherwise to give them all assistance in connection with the investigation which he is reasonably able to give,

          and it is that person’s duty to comply with the requirement.

        • 81.1.2.1.25. Power of Inspectors to Call for Directors’ Bank Accounts

          If inspectors appointed under Regulation 82.1 have reasonable grounds for believing that a director, or past director, of the company or other body corporate whose affairs they are investigating maintains or has maintained a bank account of any description, whether alone or jointly with an other person, into or out of which there has been paid money which has been in any way connected with an act or omission, or series of acts or omissions, which constitutes misconduct (whether fraudulent or not) on the part of that director towards the company or other body corporate or its members, the inspectors may require the director to produce and make available to them all records in the director’s possession or under his control relating to that bank account.

        • 81.1.2.1.26. Inspectors’ Reports

          (i.) The inspectors may, and if so directed by the Legal Registrar shall, make interim reports to the Legal Registrar and on the conclusion of their investigation shall make a final report to the Legal Registrar.

          (i.i.) The Legal Registrar may —

          (i.i.a.) forward a copy of any report made by the inspectors to the company’s registered office;

          (i.i.b.) furnish a copy on request and on payment of the prescribed fee to any person whom the Legal Registrar deems appropriate.

  • Section 7 The Investigation of the Affairs of a Company and the Protection of Minorities

    • 82. Investigation of the Affairs of a Company

      82.1 Appointment of inspectors by Dubai Court

      (i.) Any shareholders or creditors or officers of the company may make an application to the Dubai Court by petition for an order to appoint one or more competent inspectors to investigate the affairs of a company and to report on them as the Dubai Court may direct.

      (i.i.) The Dubai Court may, before appointing inspectors, require the applicant, to give security, to an amount as may be prescribed for payment of the costs of the investigation.

      (i.i.i.) This Regulation applies whether or not the company is being wound up.
      82.2 Regulation 81.1.2.1.22. above shall apply in order to investigate the affairs of a company.
      82.3 All officers and agents of the company shall produce to the inspector all books and documents in their custody or power.
      82.4 An inspector may examine the officers and agents of the company in relation to its business.
      82.5 On the conclusion of the investigation the inspector shall report his opinion to the Dubai Court, and a copy of the report shall be forwarded by the Dubai Court to the company and a further copy may in the Dubai Court’s discretion, at the request of the applicants for the investigation, be delivered to them.
      82.6 All expenses of and incidental to the investigation shall be defrayed by the applicants, unless the Dubai Court directs that they be paid by the company.

    • 83. Alternative Remedy to Winding-Up in Cases of Oppressive or Prejudicial Conduct

      83.1 Any shareholder of a company who complains that the affairs of the company are being conducted or have been conducted in a manner oppressive or prejudicial to the interests of some part of the shareholders, including himself the shareholder may make an application to the court by petition for an order under this Regulation 83.

      83.2 If on any such petition the court is of the opinion:—

      83.2.1 that the company’s affairs are being conducted or have been conducted as aforesaid; and

      83.2.2 that to wind-up the company would unfairly prejudice that part of the shareholders, but otherwise the facts would justify the making of a winding-up order on the ground that it was just and equitable that the company should be wound up, the court may, with a view to bringing to an end the matters complained of, make such order as it thinks fit, whether for regulating the conduct of the company’s affairs in the future, or for the purchase of the shares of any shareholders of the company by other shareholders of the company or by the company and, in the case of a purchase by the company, for the reduction accordingly of the company’s capital, or otherwise.

      83.2.3 Where an order under this Regulation 83 makes an alteration in or addition to any company’s Memorandum or Articles of Association, then, notwithstanding anything in any other Regulation but subject to the provisions of the order, the company concerned shall not have power without the leave of the court to make further alteration in or addition to the Memorandum or Articles of Association as so altered or added to accordingly.

  • Section 8 Branch of Companies

    • 84. Branch of Company or Body Incorporated in or Outside the Centre Not to Carry on Business at the Centre Without a DMCC Authority License.

      84.1 Any company or body shall not engage in or carry on or purport to carry on any trade or business activity in the Centre, except under and in accordance with the licensing regulations and the terms of any License issued pursuant to such licensing regulations.
      84.2 For the purposes of this Section, “engage in or carry on or purport to carry on any trade or business activity in the Centre” includes the engaging in or carrying on any trade or business outside the Centre from a place of business in the Centre.
      84.3 A person who contravenes this Regulation shall be subject to such sanction as may be specified in the relevant licensing rules.

    • 85. Registration of Branch

      85.1 Subject to the provisions of any relevant licensing regulations, an outside incorporated company or body wishing to establish a branch in the Centre shall apply to the Legal Registrar for prior approval to establish a branch in the Centre.

      85.2 Subject to such other regulation of the authority as may be adopted from time to time and to any waiver which the authority may exercise from time to time, an application for approval to establish a branch in the Centre shall:—

      85.2.1 be made to the authority in such form and manner as the authority may require from time to time; and

      85.2.2 be accompanied by the following documents, verified in such manner as the authority may require:—

      (a) a copy of the constituent documents of the outside incorporated company or body; and

      (b) if so required by the Legal Registrar, a copy of the audited accounts of the outside incorporated company or body for the preceding two years, save where the applicant outside incorporated company has been in existence for less than two years in which case a copy of the most recent audited accounts; and

      (c) a copy of a resolution of the board of directors of the outside incorporated company or body to establish a branch in the Centre; and

      (d) a power of attorney from the outside incorporated company or body in favour of the principal representative of the branch; and

      (e) such other documents or information as the authority may in its absolute discretion require from time to time; and

      (f) be accompanied by such fees as may be prescribed from time to time by the authority.

    • 86. Grant or Refusal of Application to Register a Branch

      86.1 The Legal Registrar may on an application duly made in accordance with Regulation 84 after being provided with (or after having waived) all such information, documents and reports as required under that Regulation, grant or refuse the application.
      86.2 Where the Legal Registrar grants an application to the applicant under Regulation 86.1, it shall issue to the applicant a certificate of registration of the branch in the Centre and such certificate shall be admissible in evidence in proceedings under these Regulations without further proof and shall be prima facie evidence of the facts certified or specified therein.
      86.3 Where the Legal Registrar refuses to grant an application to establish a branch it shall give written notice of that fact to the applicant but shall not be bound to provide any reason for its refusal.

    • 87. Prohibition of Registration of Branch with Undesirable Name

      87.1 No branch shall be registered with a name which in the opinion of the Legal Registrar is undesirable.

    • 88. Principal Representatives

      88.1 Every branch shall appoint and maintain a principal representative in the Centre and shall give notice in writing to the Legal Registrar of such particulars of its principal representative as the Legal Registrar may determine.
      88.2 If any particulars of a principal representative required by Regulation 88.1 to be notified to the Legal Registrar are altered the branch shall give in writing to the Legal Registrar particulars of the alteration.

    • 89. Register of Branch

      89.1 The Legal Registrar shall keep a register of branches in such form as it shall determine but which shall show:—

      89.1.1 the name of the branch and, if different, the company or outside incorporated company or body ; and

      89.1.2 the principal place in the Centre from which the branch engages in or carries on any trade or business in the Centre and the address of its registered office outside the Centre; and

      89.1.3 the date and place of incorporation of its parent company; and

      89.1.4 a copy of its certificate of registration.

    • 90. Records to be Kept by Branch

      90.1 Every branch shall keep at the principal place in the Centre from which the mother company engages in or carries on any trade or business in the Centre such records of its acts and financial affairs as will show adequately the trade or business it is engaging in or carrying on or has engaged in or carried on in the Centre.

    • 91. Letterheads and Service of Process of Branch

      91.1 Every branch shall have the following particulars on all letters sent from a place of business in the Centre in connection with its business:—

      91.1.1 its full name as appears on the License obtained from the Legal Registrar to operate in the Centre; and

      91.1.2 the place of incorporation of its parent company; and

      91.1.3 the principal place and address in the Centre from which the branch engages in or carries on any trade or business in the Centre.
      91.2 For the purposes of these Regulations, any process or notice required to be served on an outside incorporated company shall be sufficiently served if served on any person named in the list of persons delivered to the Legal Registrar or if left at a place of business notified to the Legal Registrar.
      91.3 the principal place and address in the Centre or the approved place and address which is outside the Centre from which the branch engages in or carries on any trade or business in or outside the Centre shall be deemed its domicile. The activities it practices shall be subject to the rules & regulations applicable in the Centre.

  • Section 9 General

    • 92. Form of Registers

      92.1 Any book or paper required by these or any other regulations, whether public or private, to be kept and maintained by the authority or a company may be kept by recording the matters in question in bound books, held in electronic form or in any other permanent manner.
      92.2 The authority may in the manner prescribed by it, provide a copy of any entry (and may certify same) in the register to any person who asks for it on payment of the fee prescribed by the authority.
      92.3 Adequate precautions shall be taken for guarding against falsification and facilitating its discovery and where the book or paper is kept in a form otherwise than legible it shall be capable of being reproduced in a legible form.
      92.4 Where in these Regulations or such other regulations as may be made by the authority provision is made for the inspection or reproduction of any book or paper then it shall be treated as a provision to allow inspection or reproduction in a legible form.
      92.5 Copies of minutes referred to in Regulation 55 and financial statements referred to in Regulation 59 shall be preserved in the registered office of the company for a period of not less than six years from the date when they were first required.

    • 93. Authority and Other Officers May Inspect Books Without Charge

      93.1 The authority and any person acting on its behalf shall be exempt from the payment of any fee or charges for inspecting, or copying the register or any books or any books or papers of a company when lawfully entitled so to do.

    • 94. Production and Inspection of Books when Offence Suspected

      94.1 Where, on an application to the authority, it appears to the authority that a breach under these Regulations may have been committed, and that evidence relating to the commission of such breach may be found in any books or papers of or under the control of the company, a direction in writing may be made by the authority requiring the secretary to the company or such other officer or person as may be named in the direction to produce the said books or papers or any of them to a person named in the direction at a place and time so named.
      94.2 When a direction has been made under Regulation 94.1, the person named in the direction to whom the said books or papers are to be produced, shall inspect and may take copies thereof for the purpose of investigating and obtaining evidence of any breach of these Regulations.
      94.3 A person to whom books and papers are produced pursuant to Regulation 94.1 shall on completion of his investigation forward a report of the results thereof to the authority together with all copies of documents made by him pursuant to Regulation 90.

    • 95. Suits and Actions Against the Authority

      95.1 No suit or action shall lie against the authority or any person acting on its behalf in respect of anything done or omitted to be done in its official capacity in good faith without negligence.

    • 96. The Authority to be Indemnified in Respect of Centre Suits

      96.1 The authority shall not be required to prosecute, defend or take part in any proceedings outside the jurisdiction of the Centre unless it is indemnified by or on behalf of the person who wishes the authority to act against any judgment, order or costs that may be awarded against him by deed guarantee or deposit, as it may require.

    • 97. Applications to Court

      97.1 The authority shall, at its absolute discretion, be entitled, at any time, to refer any matter or question that it deems appropriate to a court or arbitral body of its choice.
      97.2 Any application to such a court or arbitral body under these Regulations shall be made in the manner prescribed by the relevant court or arbitral body (as the case may be).
      97.3 Without prejudice to Regulation 97.1, an application may in the first place be heard when the relevant court may direct that the proceedings shall be served on such persons, if any, as it shall think fit and that the application shall be supported by such evidence as the court shall require.

    • 98. Power to Enforce

      98.1 Orders made by any court or arbitral body under these Regulations may be enforced as orders made in an action pending therein.

    • 99. Rules and Implementing Regulations

      99.1 Without prejudice to the specific powers in certain Sections of these Regulations to prescribe matters or issue decisions or implementing regulations and notwithstanding the absence of such powers in certain other Sections of these Regulations, the authority may make implementing regulations from time to time to prescribe any matter to be prescribed under these Regulations or for the better carrying out of these Regulations including by amending or supplementing these Regulations and in particular the authority may make implementing regulations to fix or amend fees and fines for any function or offence performed under these Regulations.
      99.2 These Regulations and any rules and/or implementing regulations made there under may be amended at any time by the authority.

    • 100. Fees

      100.1. There shall be paid to the Legal Registrar by a company the fees referred to in these Regulations.

      100.2. The Authority may by order amend the amount of the fees from time to time. The Legal Registrar may by order require the payment to the Legal Registrar of such fees as may be prescribed in respect of :—

      (i.) the performance by the Legal Registrar of such functions under these Regulations as may be specified in the order, including the receipt by him of any document under these Regulations which is required to be delivered to him; and
      100.3. Where a fee is provided for or charged under this Regulation for the performance of a act or duty by the Legal Registrar, no action need be taken by him until the fee is paid, and where the fee is payable on the receipt by him of a document required to be delivered to him he shall be deemed not to have received it until the fee is paid.
      100.4. The Legal Registrar may prescribe forms to be used for any of the purposes of these Regulations and the manner in which any document to be delivered to the Legal Registrar is to be authenticated.
      100.5. Unless otherwise provided by or under these Regulations, any document delivered to the Legal Registrar by a company pursuant to these Regulations shall be signed by an officer or the secretary of the company.

    • 101. Enforcement of Company’s Duty to Make Returns

      101.1. If a company, having failed to comply with a provision of these Regulations which requires it to deliver to the Legal Registrar any document, or to give notice to him of any matter, does not make good the failure within 14 days after the service of a notice on the company requiring it to do so, the Legal Registrar may make an order directing the company and any officer of it to make good the failure within a time specified in the order.
      101.2. Nothing in this Regulation prejudices the operation of any Regulation imposing penalties on a company or its officers in respect of a failure mentioned above.

    • 102. Legal Registrar may Strike Defunct Company or Branch of Company Off Register

      102.1. If the Legal Registrar has reason to believe that a company or branch of company is not carrying on business or is not in operation, he may send to the company by post a letter inquiring whether the company is carrying on business or in operation.
      102.2. If the Legal Registrar receives an answer to the effect that the company is not carrying on business or is not in operation, or does not within one month after sending the letter receive an answer, send to the company by post, a notice that at the end of three months from the date of that notice the name of the company, unless reason is shown to the contrary, be struck off the register and the company will be dissolved by competent court.
      102.3. If, where a company is being wound up in a creditors’ winding up, the Legal Registrar has reason to believe either that no liquidator is acting, or that the affairs of the company are fully wound up, and the returns required to be made by the liquidator have not been made for a period of six consecutive months, the Legal Registrar shall send to the company or the liquidator (if any) a notice similar to that provided for in Regulation 102.2.
      102.4. At the end of the period mentioned in the notice the Legal Registrar may, unless reason to the contrary is previously shown by the company or a shareholder, creditor or liquidator of it, strike its name off the register; and on the striking off the company is dissolved; but the liability (if any) of every director and shareholder of the company continues and may be enforced as if the company had not been dissolved by competent court.

    • 103. Legal Registrar May Strike Company or Branch of Company off Register

      103.1. Where it appears to the Legal Registrar that:

      103.1.1. a company or branch of company is acting in breach of restrictions on activities; or

      103.1.2. it is necessary to protect the good repute of the Centre as a centre for business activities that a company should be struck off the register, the Legal Registrar may send to the company a letter setting out the reasons for that belief and requesting the company to show reason why it should not be struck off.
      103.2. If within one month after sending the letter the Legal Registrar does not receive a answer, the Legal Registrar may send to the company by post, a notice that at the end of the three months from the date of the notice the company will unless reason is shown to the contrary be struck off the register and the company will be dissolved.
      103.3. At the end of the period mentioned in the notice the Legal Registrar may, unless reason to the contrary is previously shown by the company or a shareholder, creditor or liquidator of it, strike its name off the register, and on the striking off the company is dissolved, but the liability (if any) of every director and shareholder of the company continues and may be enforced as if the company had not been dissolved.
      103.4. Where a company has been dissolved under Regulations 102 or 103, the Authority may, on a application made for the purpose by a liquidator of the company or by any other person appearing to the Authority to be interested, make an order, on such terms as the Authority thinks fit, declaring the dissolution to be void and the Authority may by the order give such directions and make such provisions as seem just for placing the company and all other persons in the same position as if the company had not been dissolved. Thereupon such proceedings may be taken which might have been taken if the company had not been dissolved by competent court.

    • 104. Legal Registrar May Strike Company or Branch of Company off Register for Non Payment of Fees

      104.1. If a company or branch of company has failed to pay any fees required to be paid to the Legal Registrar under Regulation 104 the Legal Registrar may send to the company a letter requiring the company to make the required payment within 30 days failing which the name of the company may be struck off the register.
      104.2. If the company fails to pay the required fee due under Regulation 100 before the expiration of two months from the time specified in Regulation 104.1, the Legal Registrar may strike the name of the company off the Register.
      104.3. A company, the name of which has been struck off the register under Regulation 104.2, remains liable for all claims, debts, liabilities and obligations of the company, and the striking off does not affect the liability of any of its shareholders, directors, officers or agents.
      104.4. If the name of a company has been struck off the register under Regulation 104.2, the company or a creditor, member of liquidator of the company may, within two years following the date of the striking off, apply to the Legal Registrar to have the name of the company restored to the register and, upon payment of all fees due under Regulation 100 and any penalties imposed by the Legal Registrar, the Legal Registrar shall restore the name of the company to the register, the name of the company is deemed never to have been struck off the register.

    • 105. Miscellaneous

      105.1. Any fee or fine incurred under regulations 15.3, 17.2, 37, 38.2 and 105.4 shall be paid to the Legal Registrar.
      105.2. Any fee or penalty payable under these regulations that remains unpaid for 30 days immediately following the date on which demand for payment is made by the Legal Registrar is recoverable at the request of Authority before a Dubai Courts in civil proceedings as a debt due to the Authority notwithstanding the amount sought to be recovered.
      105.3. In case of wrongdoing or any default by the company’s shareholders, Directors, officers, liquidator in compliance with these regulations or any other terms and conditions issued by the Authority the other aggrieved parties have the right to apply to a Dubai Courts or an appropriate body to order an investigation. In this case a company must not exposed by its competitors or other aggrieved parties who are not subject to a duty to pursue its best interests.
      105.4. In the case of any default by the Company or its Shareholders, Directors, officers, liquidator in compliance with these Regulations or any DMCC Rules or the terms and conditions of the Company’s License, Sale & Purchases Agreement, Lease Agreement or any other terms and conditions issued by the Authority the Authority may, in addition to all other rights and privileges hereunder, impose a fine on the Company and / or the Shareholders, Directors, officers, liquidator of AED.1, 000 per day during the period of such non-compliance.
      105.5. Each Company shall be required to comply with all DMCC Rules and with the terms of the License, Lease Agreement and Sale & Purchase Agreement issued or to be issued by the Authority in relation to the Company in question.
      105.6. The penal responsibility for the violations committed by a company and stipulated in these regulations, shall be directed to whoever legally represents the company.
      105.7. The authority may make implementing regulations for carrying out the purposes of these regulations.
      105.8. The authority may amends, alters, cancels, supplements and varies any or all of these regulation as it may consider appropriate from time to time
      105.9. The Authority or the Legal Registrar also reserves the right to relax or waive, either in whole or in part and either unconditionally or subject to such conditions as it deems appropriate, any or all of fee or penalty,any or all of the requirements specified in these Regulations or any DMCC Rules if it considers it appropriate to do so.
      105.10. Any dispute arising on the interpretation or the implementation of these regulations shall be referred to Dubai Courts.

  • DMCC Free Zone Rules and Regulations

1.Introduction

1.1 This is the revised third edition of these Regulations, which supersede the first edition 2002 and second edition 2006.

1.2 The Authority is a Government of Dubai free zone authority established by Decision No. 4 of 2002 (as amended), and is dedicated to enhancing commodity trade flows through Dubai. In order to achieve this goal, the Authority has been granted ownership of, and jurisdiction to develop, manage and govern an area of land on which the Authority has created a purpose built development known as Jumeirah Lakes Towers, associated enterprise zones (which currently include Jewellery & Gemplex and Enterprise Zones 1-4), JLT Infrastructure, Parking Garages and various other areas of land that are yet to be developed, which together comprise the Free Zone. Through the implementation of the best practice and governance procedures outlined in these Regulations, the Authority aims to become the world’s leading commodity focused economic free zone and an indispensible partner for its member companies, and to establish an exclusive governance regime throughout the Free Zone that sets a world-class standard for the long-term management and administration of similar communities.

1.3 The map annexed as Schedule 2 sets out the current extent of the Free Zone. In addition to the areas described in section 1.2.above, the Free Zone may also include various other sub-developments that are created from time to time by the Authority, either from the land currently owned and governed by the Authority or any other land that may in the future be granted to it.

1.4 These Regulations set out the principal rules and regulations applicable within the Free Zone. Although these Regulations apply to all those who live, work and operate within the Free Zone, there are other mandates, laws and regulations that will also have application. These Regulations must be read in conjunction with those other mandates, laws and regulations (as amended or introduced from time to time), including, without limitation (together referred to as “Applicable Rules”):

a) Law No. (4) of 2001 in respect of Free Zones;

b) Decision No. (4) of 2002 on Establishing The Dubai Commodities and Metals Centre Issued in Dubai, 1 May 2002 and Rule No. (1) of 2003 Amending Certain Provisions of Rule No. (4) of 2002;

c) Rule No. (4) of 2002 for Organising Operations at DMCC;

d) The JLT Master Community Declaration, Master Community Rules and the JLT Master Community Planning Regulations, Development Guidelines and Design Control Regulations;

e) The HSEQ Manual;

f) The DMCC Company Regulations No. (1/03) 2003;

g) DMCC Leasing Procedures – ALMAS/AU/AG/JGX;

h) DMCC Procedures related to Registration;

i) DMCC Procedures related to Licensing ;

j) DMCC Signage and Advertising Regulations;

k) DMCC Hotel Levy Policy;

l) DMCC Fit-out Policy;

m) DMCC Car Parking Policy;

n) Any subsequent lawful amendment to the above mandates, laws and regulations;

o) Any UAE Federal Law (to the extent they apply to the Free Zone);

p) Any applicable Dubai laws to the extent they apply to the Free Zone and insofar as these do not interfere with the overriding principles contained within these Regulations, Authority policy or the Authority’s rights and obligations to govern the Free Zone pursuant to the DMCC Establishment Law as determined by the Authority pursuant to section 3.5(g) of these Regulations;

q) Any binding contractual documentation (including real estate sale and purchase agreements) containing obligations in favour of the Authority or otherwise connected to the Free Zone or related law or policy. For the avoidance of doubt, the obligations contained in such agreements apply in addition to and not in substitution for these Regulations; and

r) Any other rules, laws, policies and procedures issued by the Authority from time to time.

1.5 The Authority may also issue notices and implement additional policies from time to time in order to sustain and support its aim of implementing best practice, governance and management procedures for the Free Zone and ensuring consistency and certainty for affected parties. The provisions of any such notice or policy are mandatory on all entities and persons operating, living and working within the Free Zone and must be complied with at all times. Ignorance is no defence for non-compliance and those affected must keep themselves up to date with any amendments to these Regulations and any other notices or policies issued by the Authority or the Chairman from time to time. Such notices and policies may include procedures relating to the use of JLT Infrastructure, the levying and collection of JLT Infrastructure Levies, management of sub-communities within the Free Zone, the management and control of those living, working or otherwise undertaking any activity within the Free Zone, Free Zone planning requirements, the jurisdiction of the Authority and any other matter that in the Authority’s sole and exclusive opinion is required to achieve the objectives set out in or contemplated by these Regulations.

1.6 These Regulations come into force on the date of issue and will be reviewed and updated by the Authority as and when considered appropriate. Amendments to the Regulations will be issued by circular. Circulars, notices and the latest edition of the Regulations can also be obtained online at www.dmcc.ae. It is the duty of any person or entity operating, working or living within the Free Zone to check for updates to the Regulations and any new or amended notices and policies issued from time to time.

2. DEFINITIONS

In this document the following defined terms shall have the following meanings:

Administration Fees means such fees levied by the Authority from time to time (in its sole discretion) for coordinating and managing its various activities within the Free Zone;

AED means the United Arab Emirates Dirham, being the lawful currency of the UAE;

Agent and Agents means any entity or entities authorised by the Authority to provide services to the Free Zone on the Authority’s behalf;

Applicable Rules means the rules applicable in the Free Zone which includes without limitation those set out in section 1.4 hereof;

Authority means the Dubai Multi Commodities Centre Authority, which pursuant to the DMCC Establishment Law has governance over the Free Zone including Jumeirah Lakes Towers, Enterprise Zone 1, Enterprise Zone 2, Enterprise Zone 3, Enterprise Zone 4 and such other sub-developments as may be created within the Free Zone from time to time;

BCC means a Building Completion Certificate;

Built Up Area means the built up area of the relevant building as specified in the Authority’s Design Control Regulations;

Chairman means the chairman or executive chairman of the Authority as the case may be;

Contractor means an individual or entity performing work in the Free Zone on behalf of a Licensee, and who is subject to any conditions governing such work put in place by the Authority from time to time;

DMCC Establishment

Law includes Decision No. (4) of 2002 on Establishing The Dubai Commodities and Metals Centre Issued in Dubai on 1 May 2002 and Rule No. (1) of 2003 Amending Certain Provisions of Rule No. (4) of 2002;

Freehold means the grant of a freehold interest in office space, a commercial unit, a retail unit, outdoor storage space, residential unit or development land within the Free Zone from which a Licensee may undertake the activities specified in its Licence;

Free Zone means the purpose built development known as Jumeirah Lakes Towers, associated enterprise zones (which currently include Jewellery & Gemplex and Enterprise Zones 1-4), JLT Infrastructure, Parking Garages and various other areas of land that are yet to be developed with the entire territory being delineated on the map attached to these Regulations at Schedule 2, and any other area that may from time to time be included as part of the territory comprising the Free Zone including the JLT Infrastructure;

Gross Revenue means the total revenue received from any source by a Hotel in each calendar year of business operation, before deduction of costs or expenses of any kind or nature whatsoever;

Hotel Levy means a percentage of a Hotel’s Gross Revenue as determined by the Authority from time to time;

Hotel Operator means the entity granted a Licence by the Authority to operate a Hotel within the Free Zone;

Hotel means the hotel the subject of any Licence granted to a Hotel Operator;

JLT means Jumeirah Lakes Towers;

JLT Infrastructure means the areas within the Free Zone including:

i. roads, pathways, walkways and promenades;

ii. open areas, lakes and gardens;

iii. power, water, sewerage, telecommunications and other utility related facilities;

iv. such parts of any Parking Garage structures that incorporate access roads, pathways, car-park facilities and other services and facilities for the benefit of buildings located off a Parking Garage structure;

1. all other associated areas and services that are from time to time notified by the Authority as being areas under its ownership, maintenance, management and administration for the benefit of all owners, occupiers and licensees in the Free Zone; and
2. any other parts of the Free Zone not available for sale or sold into separate freehold ownership to third parties;

JLT Infrastructure Levy means a fee determined and levied by the Authority from time to time as a contribution towards the overall expenses of the Authority for the construction, provision and use of the JLT Infrastructure, which will be levied by the Authority through its nominated Agent, and which is described in the MCD as the Provisional Master Community Service Charge or Master Community Service Charge;

JOP Law means Law No.27 of 2007 relating to Jointly Owned Property in the Emirate of Dubai;

Lease means a lease of office space, a commercial unit, a retail area, a retail unit, indoor storage, outdoor storage, outdoor space, residential unit or development land within the Free Zone from which a Licensee may undertake the activities specified in its Licence;

Licence means the authorisation granted to a Licensee to undertake certain business activities within the Free Zone;

Licensee means a person or entity licensed to conduct activities under a Licence;

MCD means the Master Community Declaration for the Free Zone, as issued or amended from time to time;

NOC means a No Objection Certificate;

Notice means a notice issued by the Authority pursuant to these Regulations;

Owners Association means an association of owners established under the JOP Law;

Parking Garages means those areas of the Free Zone outlined on the map annexed as Schedule 2, that the Authority has dedicated to the provision of parking and ancillary facilities in order to support the development of residential, office and retail communities including those developed by Sub-developers to whom the Authority may have granted the use of those areas on agreed terms;

Registration means the registration of a company, family office, limited liability partnership or any other entity by the Authority for undertaking business activities within the Free Zone pursuant to a Licence;

Regulations means the rules and regulations applicable within the Free Zone as set out or referred to in this document including without limitation the Applicable Rules and any other rules, regulations, policies or guidelines issued by the Authority from time to time;

Relevant Authorities means the Authority or other relevant authority that (subject to the DMCC Establishment Law and in the sole opinion of the Authority pursuant to the DMCC Establishment Law) may have jurisdiction over a particular issue concerning the Free Zone;

Sub-Developer means a person or entity authorised by the Authority to carry out residential, retail or commercial development within an agreed part of the Free Zone;

Tariff means the tariff of fees, levies and penalties applicable to the Free Zone published by the Authority from time to time attached to these Regulations at Schedule 1; and

UAE means the United Arab Emirates.

3. GOVERNANCE OF THE FREE ZONE

3.1 The Free Zone is managed and governed by the Authority. The Authority was granted jurisdiction over the Free Zone pursuant to the DMCC Establishment Law, and is mandated to create policies and procedures appropriate for the nature of the Free Zone, its residential and business communities and owners, occupiers and invitees in order to broadly achieve the objectives specified in the DMCC Establishment Law.

3.2 The Chairman has the power to supervise the activities of the Authority, lay down rules and regulations for the operation and management of the Free Zone, review and amend such rules and regulations at his discretion and implement the provisions of all laws and decisions under which the Authority has been established.

3.3 The Authority’s policy is to govern the Free Zone and make use of the land on which the Free Zone is situated in a manner that best promotes the long term economic and strategic potential of the Free Zone, ensure consistency of application of these Regulations and other applicable laws, regulations and policies, obtain an appropriate return from its investment in planning, constructing and maintaining the JLT Infrastructure, achieve clarity in the setting and levying of the JLT Infrastructure Levy, set appropriate and consistent expectations for those living, working and doing business in the Free Zone and make the decisions necessary to support these objectives.

3.4 The above policy is supported by the rights and obligations granted to the Authority pursuant to the DMCC Establishment Law. These include

a) a commitment to provide superstructure, JLT Infrastructure, buildings and services to those living, working and operating within the Free Zone;

b) the right to own, sell and lease real estate within the Free Zone;

c) the right to render services within the Free Zone and collect fees and charges for such services; and

d) to do anything else it sees as being necessary to achieve its objectives for the overall well being and management of the Free Zone, including issue policies in relation to the use of JLT Infrastructure, structure special forms of property ownership within the Free Zone, levy the JLT Infrastructure Levy, issue fines and sanctions relating to the non-compliance with these Regulations and other applicable agreements, rules and legislation, set appropriate planning strategies and generally make decisions regarding the operation of the Free Zone in its sole discretion.

3.5 The Authority’s policy and commitment to those living, working, operating and doing business in the Free Zone is to comply with the above obligations and exercise the above rights through:

a) Investment in JLT Infrastructure: The Authority has planned and constructed, and continues to own and manage, the JLT Infrastructure for the long-term mutual benefit of those living, working, operating and doing business within the Free Zone, together with implementing appropriate policies to ensure consistency of ownership and access to the JLT Infrastructure across the entire Free Zone for the long term benefit of the community;

b) Ownership of JLT Infrastructure: The Authority has implemented and is authorised pursuant to the DMCC Establishment Law to retain ownership of the JLT Infrastructure or any part of it. The Authority’s current policy is that (subject to the Authority’s right to alter, re-zone or sell parts of the Free Zone as it sees fit) the JLT Infrastructure cannot be alienated from the Authority and is not subject to any communal or joint ownership. This meets the Authority’s objective of ensuring the JLT Infrastructure will be consistently managed and maintained, and available for use by those living, working or operating within the Free Zone on agreed terms;

c) Sub-development: The Authority has designated certain parts of the Free Zone that it considers does not include JLT Infrastructure, as development areas. This is intended to allow for the construction of residential, retail and commercial spaces by the Authority or Sub-Developers, and the sale or lease to third parties in order to allow for the growth and development of the general Free Zone community. The Authority may from time to time alter, extend or redevelop certain parts of the Free Zone in order to achieve the aims of this policy;

d) Certainty of JLT Infrastructure Levies: The Authority has introduced a policy for the calculation and levying of the JLT Infrastructure Levy payable by those who benefit from the JLT Infrastructure. This is intended to help ensure that all users make a fair and equitable contribution to the JLT Infrastructure’s upkeep and regeneration;

e) Compliance with Laws and Authority Policies: The Authority has introduced policies to ensure that all those living, working, operating and undertaking any business or commercial activity within the Free Zone comply with these Regulations and any Applicable Rules and other applicable contracts, rules, laws or policies. In order to ensure consistent compliance, the Authority levies fines and penalties against those the Authority deems to be non-compliant on such terms as it deems appropriate from time to time. The Authority also retains the authority and jurisdiction to make any other decision, levy any other penalties or issue any other sanctions it deems appropriate and the Authority may also levy sanctions in accordance with section 17 of these Regulations in respect of any breach of any of the Applicable Rules;

f) Free Zone Planning: The Authority’s policy is to coordinate, manage, monitor and dictate all planning and zoning policies within the Free Zone. This includes the right to determine and amend different use areas (including adding to or removing JLT Infrastructure at its sole discretion), approve subdivisions, issue planning and design approvals, determine built up areas, approve, issue and register affection and site plans, issue related plot and registration numbers and consent to the change of use of any areas of the Free Zone on such terms as it deems appropriate from time to time;

g) Determination of Jurisdiction: Pursuant to rights granted to it under the DMCC Establishment Law and/or the Applicable Rules, the Authority reserves the right to consider and determine those matters and issues within the Free Zone that it has jurisdiction over, and those matters and issues it chooses to allow a Relevant Authority to have jurisdiction over. The Authority’s policy is that the Authority will generally reserve jurisdiction over all matters concerning the Free Zone but it may, on a case by case basis and at its sole discretion, choose to temporarily cede jurisdiction to a Relevant Authority for matters of convenience or practicality, or where the ceding of such jurisdiction does not have the effect of undermining any current policy of the Authority as may be recorded in these Regulations and/or any Applicable Rules.

3.6 The Authority considers that these policies will best achieve the objectives set out in the DMCC Establishment Law. For the avoidance of doubt:

a) those individuals and entities purchasing a freehold interest in real estate within the Free Zone will not be granted any ownership interest in the JLT Infrastructure by the Authority;

b) all JLT Infrastructure remains the property of the Authority and is not jointly owned or communal property under the JOP Law or otherwise;

c) the Authority has the power and discretion to calculate and levy the JLT Infrastructure Levy without reference to any other body or authority;

d) any disputes in relation to use of JLT Infrastructure, the quantum of the JLT Infrastructure Levy or any other matter contemplated by these Regulations must be dealt with pursuant to section 18 of these Regulations or any dispute resolution provisions contained within the relevant contractual documentation; and

e) these Regulations and the Applicable Rules take precedence over any rules, policies, procedures or governance documentation put in place over any individual sub-developments within the Free Zone, whether by a Sub-Developer or Owners Association, and whether in relation to the JOP Law or other related or relevant legislation as may be issued from time to time.

3.7 All those living, working, operating and doing business within the Free Zone are deemed to acknowledge and consent to the Authority’s jurisdiction and right to govern the Free Zone on the terms set out in these Regulations and its right to construct, own and manage the JLT Infrastructure as contemplated by Authority policy and the MCD.

3.8 Notwithstanding the Authority’s policies, rules and regulations and/or individual payment obligations in relation to JLT Infrastructure and the JLT Infrastructure Levy, those living, working, operating and doing business within the Free Zone acknowledge that they may also be subject to and liable for additional fees, charges and levies from Sub-Developers, Owners Associations, Relevant Authorities or other bodies. Such additional fees, charges and levies may arise from:

a) the use and maintenance of common areas within a specific building pursuant to the JOP Law or other applicable legislation issued from time to time;

b) the ownership of a Freehold or Lease interest in a specific building;

c) any other applicable law or regulation; or

d) any contractual obligation.

Such costs will be calculated and levied independently of the Authority although may for ease of administration and payment incorporate the JLT Infrastructure Levy as a component of such cost depending on the Authority’s collection policy at that time. The Authority reserves the right, if required, to review, query and amend any charges that the Authority in its sole discretion deems unreasonable.

4.2 The Authority has the sole and exclusive right to approve or decline any application for Registration or the grant of a Licence in the Free Zone by any person or entity and accepts no liability for any loss arising as a result of such decision.

4.3 All entities and persons undertaking commercial activities within the Free Zone must have a valid Lease or Freehold interest, and be validly registered and hold a Licence. Licences must be renewed on or before expiry in accordance with the procedures set out in section 5.8.

4.4 All entities and persons registered and licensed to undertake commercial activities within the Free Zone may only conduct such activities as are authorised by the terms of their Licence.

4.5 Licensees must conduct all or a substantial part of their business or operations within the Free Zone in order to maintain a valid Licence and Registration.

4.6 The manufacture and marketing of any contraband items is strictly forbidden, including any item that is prohibited by the laws of the UAE.

4.7 All Free Zone Administration Fees are payable in advance in accordance with the rates and charges set out in the Tariff in force from time to time.

4.8 Persons and entities who commit (either intentionally or unintentionally) violations of these Regulations will be subject to the penalties set out in the Tariff and/or such other fines and sanctions as may be issued by the Authority pursuant to its current policies and procedures or as otherwise determined. The Authority may levy fines and issue sanctions against any entities or persons (including Contractors and Sub-Developers) who the Authority considers are in breach of these Regulations and/or the Applicable Rules or who otherwise cause nuisance, disturbance or disruption to the community or the JLT Infrastructure. The Authority reserves the right to issue such fines and sanctions for such behaviour or activity following reasonable warning, even if such behaviour or activity is not specifically prohibited by any of the Authority’s current published policy.

5. FREE ZONE LICENSES

5.1 The categories of Licence available within the Free Zone are as follows:

Trading Licence: To carry out trading activities specified in the Licence;

Service Licence: To carry out service activities specified in the Licence; and

Industrial Licence: To carry out light manufacturing activities as specified in the Licence.

5.2 Licensees whose activities fall under different categories should apply for separate licences for each category of activity.

5.3 Licences to operate in the above categories are only valid in the Free Zone.

5.4 To qualify for and to hold a Licence, the applicant must:

• hold a valid Registration from the Authority ; and
• be in possession of a valid Lease or Freehold as defined herein; and
• not be in contravention of any aspect of the Regulations or any other laws, rules and regulations applicable within the Emirate of Dubai and the Federal Laws of the UAE.

5.5 The Authority may, upon the grant of a Licence or any time thereafter, issue a written notice to the Licensee that the Licence is subject to one or more conditions or restrictions that it believes are necessary or desirable to protect the interests of the Free Zone, other Licensees, the general public or the Authority along with a written statement explaining the imposition of any such conditions or restrictions.

5.6 The Authority must be notified immediately, and within a maximum time of two weeks, of any changes which impact upon the accuracy of a Licence (including but not limited to change of address, telephone numbers, shareholders, manager, the authorised signatory or the business activity). A written notice specifying such change must be submitted to the Authority together with the appropriate fee as specified in the Tariff and a request to the Authority to issue an updated Licence.

5.7 No Licensee may undertake any activities covered by a change of activity application unless and until the Authority has approved the amendment and issued a new Licence.

5.8 Licences are valid for a minimum period of 12 months from the date of issue. Licences must be renewed no later than 30 days prior to the date of expiry of the current Licence. Failure to do so will attract a fine as set out in the Tariff and may also lead to permanent revocation of the Licence, the declining of an application for renewal and/or company de-Registration.

5.9 In applying for a Licence renewal the Licensee must:

• continue to comply with the provisions set out in sections 5.4 and 5.5; and
• be able to demonstrate that it is in financial good standing by submitting its latest audited financial statements or audit certificate; and
• provide evidence that the Licensee is not in arrears in respect of any rent, JLT Infrastructure Levy, fines or any other charges that may be due and payable to the Authority or any other entity or body in connection with its Lease or Freehold or any other matter relating to the Free Zone; and
• pay the renewal fee as specified in the Tariff.

1. 6. CANCELLATION, REVOCATION OR SUSPENSION OF A LICENCE

6.1 The Authority may cancel or revoke a Licence immediately upon written notice to a Licensee either upon the Licensee’s request or in accordance with section 6.2 below.

6.2 The Authority may revoke a Licence immediately upon written notice if a Licensee:

• is found to have provided inaccurate or misleading information regarding its business or operations;
• has acted or is acting in breach of, or in a manner which is contrary to, the terms of the applicable Licence, these Regulations, all other regulations applicable within the Free Zone or any Dubai or Federal Laws;
• has violated one or more provisions of the Regulations or a condition of its Licence;
• has or is behaving in a manner which shows a disregard to these Regulations, the Authority or any applicable laws;
• is not operating or otherwise carrying on any business;
• has not submitted the requisite application or renewal documents;
• has not paid any fees, rent, levies, fines, service or other charges in the Tariff when due and payable to the Authority; or
• is or has acted in a manner which the Authority believes is detrimental or prejudicial to the reputation and interests of the Authority, the Free Zone or the interests of any other Licensee or the general public.

6.3 If a Licence is cancelled or revoked, all outstanding matters relating to that Licence (including but not limited to payment of outstanding dues) must be settled by the Licensee regardless of whether the cancellation process was initiated by the Licensee or the Authority. No refunds of licence fees or any items paid according to the Tariff will be made for cancellations or revocations of licences.

7. FREE ZONE FREEHOLDS AND LEASES

7.1 All applications for a Licence must be made in conjunction with an application for commercial property, including but not limited to, a Freehold or Lease of either office space, commercial unit, warehouse space or development land within the Free Zone from which the Licensee can operate. Licensees are not permitted to operate from residential properties and a Freehold or Lease of a residential property shall be deemed insufficient for the grant of a Licence.

7.2 The rent, JLT Infrastructure Levy and all other charges and terms and conditions will be as specified in the Lease agreement or Freehold sale and purchase agreement, as applicable.

7.3 Licensees owning the Freehold or holding a Lease of office space, commercial unit space or warehouse space within the Free Zone must ensure that their space is fitted out in accordance with the Authority’s Fit-Out Policy (as issued from time to time) and physically functional within such time as may be agreed from the commencement date of their Licence.

7.4 Licensees wishing to construct their own facilities to their own specification and design can do so by purchasing or leasing a plot of prepared land of the required area for that purpose. All construction works must be in accordance with the Authority’s Planning Regulations and Development Guidelines and the Authority’s Construction Health, Safety and Environment (HSE) Guidelines and completed so that premises are physically functional and operationally ready within such time as may be agreed from the commencement date of the Licence. Building and Operation Controls are further expanded on in section 9 of these Regulations.

7.5 Licensees are not permitted to share or sub-lease their premises without the prior written approval of the Authority. The Authority reserves the right to reject any application for a sub-lease and to charge a fee annually for each approved sub-lease, in addition to the Licence fee.

7.6 The Authority has the ultimate right and jurisdiction to charge and collect the JLT Infrastructure Levy referred to in these Regulations and/or the MCD from all those owning a Freehold or having a Lease in the Free Zone, without recourse to any other authority.

8. TERMINATION OF A DMCC LEASE

8.1 The termination process for a DMCC Lease requires that all outstanding matters relating to that Lease (including but not limited to payment of outstanding dues) must be settled by the Licensee regardless of whether the termination process was initiated by the Licensee or the Authority.

8.2 In the event of termination of a DMCC Lease, the Licensee must ensure that the leased premises are fully vacated and restored and handed back in their original condition (including removal of all signage and making good any damage) by the termination date (unless otherwise agreed with the Authority). Any waste material must be properly and safely disposed of in accordance with the requirements of all Relevant Authorities.

8.3 Once a Licensee has vacated and cleared its leased premises it must issue a written notice to the Authority, which will then arrange for inspection of the leased premises as soon as reasonably practicable. If the inspection reveals that the leased premises have not been fully vacated and properly cleared the Authority may, amongst other things, continue to charge a rent to the Licensee.

9. BUILDING AND OPERATION CONTROLS

9.1 Licensees constructing their own facilities must liaise with the Relevant Authority, Agent(s), or any other authorities nominated by the Authority pursuant to section 3.5(g) of these Regulations in order to obtain the necessary inspections and approvals once construction work has been completed, including but not limited to obtaining a NOC if required by the Authority. Once the construction works have been completed, the Authority requires a BCC from the Relevant Authority and/or any other relevant approvals before allowing occupation of the facilities and authorising connection of any services. Any NOC for a BCC will not be issued by the Authority, or occupation or service connection authorised, if any re-submission or other related fees are outstanding.

9.2 Licensees that have constructed their own facilities on development land or who have fitted out warehouse, commercial unit or office space are required to liaise with the Authority, its Agent(s) or any other Relevant Authorities nominated by the Authority in order to obtain an Operation Fitness Certificate (“OFC”) before commencing operations. If a Licensee is required to hold an OFC for the premises it operates from, it may not, under any circumstances, commence business operations unless it is in receipt of a valid OFC.

9.3 No sign board(s) or name plate(s) shall be erected without the prior written approval of the Authority.

9.4 All signage shall be in accordance with the Authority’s Signage and Advertising Regulations, as may be amended from time to time.

10. INSPECTION OF PREMISES

10.1 The Authority or its nominated Agent(s) may conduct inspections of a Licensee’s premises from time to time to monitor compliance with these Regulations and to review operations, staff and premises layout, the terms of the applicable Licence and any Lease or other agreement between the Authority and the Licensee. The Authority will endeavour to arrange any such inspection so that the potential for disturbance or disruption to the Licensee’s business is minimised.

10.2 Notwithstanding clause 10.1 of these Regulations, the Authority reserves the right to enter a Licensee’s premises at any time without prior notice:

• in the event of fire or flood or any other matter which presents an actual or suspected threat to the safety and security of the Free Zone or any person or property within the Free Zone;
• in the event there is a discharge of substances from the premises which are or are believed to be noxious or otherwise offensive;
• if the Authority has reason to suspect that the Licensee is in serious breach of the terms of its Licence(s), Lease or any provisions of these Regulations;
• if the Authority reasonably believes such entry is justified in order to protect the interests of the Authority, any other Licensee or the general public.

10.3 Neither the Authority nor its authorised agents or employees shall be held liable for any loss or damage resulting from the proper performance of their duties.

10.4 Inspections of a Licensee’s premises or any other part of the Free Zone by third parties or outside organisations (other than Agent(s) nominated by the Authority or Governmental Authorities working under the authority of the Authority) are expressly prohibited unless the authority has given prior written consent to such inspection. If a Licensee is approached by a third party or outside organisation for inspection of its premises or any part of the Free Zone it should notify the Authority immediately.

10.5 Licensees must extend, and ensure that their officers extend, all such cooperation and assistance as the Authority’s authorised agents or employees may require to properly perform their duties in relation to any entry and inspection.

10.6 Licensees who fail to extend cooperation or assistance to the Authority’s authorised agents or employees or otherwise seek to obstruct or hinder such persons from performing their duties in any way will be liable for a fine and penalties as specified in the Tariff.

11. INSURANCE

Property

11.1 All Licensees and owners of residential units are required to hold and maintain valid policies of insurance as set out in their Licence and/or the Lease and/or Freehold sale and purchase agreement and these Regulations

11.2 The Authority may at its discretion arrange property all-risks insurance and third party liability insurance in respect of all property owned by the Authority including the JLT Infrastructure, the costs of which will form part of the JLT Infrastructure Levy.

11.3 Licensees are required to maintain their own policy of insurance in accordance with the terms of their Lease or Freehold sale and purchase agreement to cover the contents of any leased or freehold property and the Licensees’ vehicles. Neither the Authority, its affiliates, business units or any of their employees, officers or agents will be liable for any loss or damage to any property from any leased or freehold premises or vehicles, due to any reason, including without limitation, theft or natural calamity.

11.4 All Sub-Contractors and any other legal or beneficial owners of plots of land under development must hold valid contractor’s all risks insurance policies as well as third party insurance policies on terms acceptable to the Authority and provide a copy of such policy to the Authority on reasonable written notice.

Third Party Liability/Public Liability

11.5 All Licensees must hold and maintain a valid Third Party Liability (or Public Liability) Insurance policy in respect of their business operations in accordance with limits as advised by the Authority from the commencement date of the Licence.

11.6 A copy of the Third Party Liability/Public Liability Policy referred to in clause 11.5 must be forwarded to the Authority together with a certificate issued by the insurance provider advising the date of expiry and agreeing to give the Authority 30 days notice of the expiry of that policy.

Workman’s Compensation Insurance

11.7 All Licensees must hold and maintain a valid Workmen’s Compensation insurance policy to cover permanent injury/disability and all related medical expenses in accordance with the provisions of the UAE Labour Law.

11.8 A copy of the Workman’s Compensation insurance policy referred to in clause 11.7 must be forwarded to the Authority together with a certificate issued by the insurance provider advising of the date of expiry and and agreeing to give the Authority 30 days notice of the expiry of that policy.

12. EMPLOYMENT AFFAIRS

General

12.1 The Authority will provide employment related services to Licensees subject to the provisions of these Regulations. Such services may include, without limitation, the processing of entry permits, employee sponsorship and visa services, work permits and other matters concerning employees.

12.2 An employee of a Licensee may not work outside the Free Zone prior to written approval by the Authority and any other concerned authority having jurisdiction over such matters in the place where the employee intends to work.

12.3 An employee of a Licensee must not work inside the Free Zone until they have been provided with an Employment Card and a residency and access card by the Authority.

12.4 The Authority may, in its absolute discretion, set limits on the number of employees for a particular Licensee.

Employee Sponsorship

12.5 Where the Authority stands as the sponsor for Licensees’ employees such sponsorship will not confer any obligation of an employer on the Authority. The Licensee will, at all times, remain the employer of all sponsored employees and will be primarily responsible for the payment of wages, benefits and all other obligations and duties owed to the sponsored employees under the terms of the employment contract or at law. The Authority will not be liable to a Licensee under any circumstances for any act, default or omission on the part of a sponsored employee.

12.6 Licensees requiring the Authority to stand as sponsor for their employees must provide a cash deposit in a sum to determined by the Authority from time to time for each sponsorship and enter into a Personnel Secondment Agreement with the Authority.

12.7 The cash deposit will be released if the Licensee’s company closes down for any reason including liquidation and/or if the sponsored employee does not receive his or her end of service dues for whatever reason.

12.8 The number of visas to be issued to a Licensee is to be determined at the absolute discretion of the Authority based on the Licence activity and size of the premises the Licensee is operating from.

12.9 Licensees must ensure that all employees comply with the general laws and customs of the UAE and these Regulations.

12.10 The Authority may terminate the sponsorship of any sponsored employee on reasonable written notice to the Licensee if:

• the Licensee has failed to renew its Licence or Lease;
• the Licensee becomes insolvent or otherwise enters into liquidation;
• the Licensee is not operating or otherwise carrying on business;
• the sponsored employee has failed to abide by the laws of the UAE or is or has acted in a manner which the Authority reasonably believes is detrimental or prejudicial to the reputation and interests of the Authority, the Free Zone, the Emirate of Dubai or Federal Laws of the UAE; or
• any other reason that the Authority may, in its sole discretion, determine.

Alternative Sponsorship Options

12.11 Personnel not sponsored by the Authority may be permitted to work for a Licensee subject to the laws of the Emirate of Dubai, UAE Federal Laws and any rules and regulations applicable in the Free Zone.

Entry Permits and Visas

12.12 The Authority will, upon request, arrange for the procurement of entry permits and residence visas for employees and, if applicable, their dependants on behalf of all Licensees. The fees applicable for processing such permits will be as per the Tariff and will be payable in advance at the time of submitting the permit application.

12.13 Licensees wishing to employ personnel, other than nationals of GCC countries, are required, in the first instance, to apply for an entry permit. All unused entry permits must be returned to the Authority for cancellation.

12.14 There are certain travel documents and passports which are not acceptable for entry into the UAE. If in doubt, clarification on such restrictions should be obtained from the Authority or the Department of Naturalisation and Residency Dubai (“DNRD”) before applying for an entry permit or residency visa.

Employment Cards

12.15 All employees of a Licensee will be issued with an Employment Card which provides a unique identification for each employee and also serves as a permit to work in the Free Zone.

12.16 Licensees must immediately notify the Authority of the cessation of an employee’s contract of employment so that the Employment Card can be cancelled and all Employment Cards or access passes which have been issued to an employee must be returned promptly.

12.17 If an Employment Card or access pass relating to the Free Zone is lost or stolen this must be immediately notified to the Authority. Replacement of Employment Cards will be issued subject to the payment of the applicable fee as specified in the Tariff. Failure by a Licensee to notify the Authority of a lost or stolen access pass will attract a fine as set out in the Tariff.

13. EMPLOYER/EMPLOYEE RELATIONSHIP

13.1 Licensees will be responsible for discharging all of their duties in relation to their employees in accordance with Federal Law No. 8 of 1980 (as amended) (the “Labour Law”). The Labour Law will apply to all persons employed in the Free Zone in addition to the provisions of this section 13.

Recruitment

13.2 All costs of recruitment and other employment related services must be born solely by the Licensee. Under no circumstances may a Licensee, recruitment agent, subcontractor or other third party working directly or indirectly on behalf of the Licensee recharge or pass all or any part of such costs to a recruited employee as part of a transfer fee, visa fee or any other claim, charge or expense whatsoever.

13.3 The Authority may investigate any claim that employees have paid or were required to pay any fees or charges to a Licensee recruitment agent, subcontractor or other third party working directly or indirectly on behalf of the Licensee, either by its own volition or as a result of any complaint by an employee or any other third party. Such investigation may include interviews of relevant personnel. If the Authority’s investigation substantiates such claims the Authority may amongst other things:

• Impose a fine upon the Licensee in accordance with the Tariff; and/or

• Require the Licensee to immediately reimburse the recruited employee an amount equal to any fees or charges paid by the recruited employee together with such interest and other compensation as the Authority may consider to be fair and reasonable in the circumstances.

Contract of Employment

13.4 A Licensee must have a written contract of employment with each employee. The terms and conditions of such contract of employment are a matter of negotiation between the Licensee and the employee. The contract of employment must, as a minimum, comply with the provisions of the Labour Law.

Working hours

13.5 All Licensees will be bound by the provisions of the Labour Law in relation to working hours (including provisions relating to overtime, Ramadan timing and summer working.)

Basic Work Rules

13.6 All Licensees should establish a set of basic work rules for the benefit of all employees. As a minimum, such work rules should include details of working hours, employee health and safety in the workplace, employee conduct and the Licensees grievance and disciplinary procedures.

Employee Passports

13.7 All Licensees are reminded that employee passports are the property of the issuing country. No Licensee may hold the passport of an employee without the employee’s prior and genuine consent. Where an employee has consented to a Licensee holding his or her passport the Licensee must have effective procedures and controls in place to ensure that retained passports are held in a safe and secure facility and can and will be returned to the employee promptly at the employee’s request.

Medical Insurance

13.8 All Licensees must procure and maintain a medical insurance policy for all of its employees in accordance with applicable law. Evidence of a valid medical insurance policy must be provided to the Authority upon request.

Termination of Employment

13.9 Where an employee’s contract of employment is terminated or expires and is not renewed both the Licensee and the employee must deliver a signed letter of confirmation, in such format as may be specified by the Authority from time to time, conforming that the employment has terminated and that the Licensee has paid and the employee has received all sums due and owing to the employee (including, without limitation, any applicable end of service gratuity payment). Failure by the Licensee to promptly notify the Authority of a terminated employee will attract a fine as set out in the Tariff.

Absconding Employees

13.10 If an employee is absent from work without approval for seven (7) consecutive days or is otherwise believed to have absconded from his or her employment the Licensee must promptly file a report of such unauthorised absence with the Authority. The Licensee will be liable to pay all applicable fines (e.g. immigration fines) and fees (as set out in the Tariff) in relation to such absconding employee.

13.11 Failure by the Licensee to promptly notify the Authority of an absconding employee will attract a fine and penalties as set out in the Tariff.

Employee Accommodation

13.12 Where Licensees provide their employees with accommodation either within or outside of the Free Zone they must, in all circumstances and as a minimum, comply with the Guide for General Standards of Group Labour Accommodation and Services attached to it in the UAE as approved by Cabinet Resolution No. 13 of 2009 (as amended).

TRAFFIC AFFAIRS

14.1 The roads within the Free Zone are treated as public highways for licensing and Registration purposes. The Authority may request a Licensee to produce evidence that all drivers, operators and vehicles are properly licensed and registered with the Dubai Roads and Transport Authority (“RTA”) or other UAE Governmental Authority.

14.2 All vehicles must be roadworthy and in compliance with all applicable laws, rules and regulations in the UAE pertaining to vehicle safety. Drivers violating any provisions of this section 14 will be reported to the Dubai Police and may be subject to penalties imposed by the RTA and/or Dubai Police.

14.3 All vehicles must adhere to the Authority’s and other relevant regulations concerning parking in the Free Zone. Vehicles may only be parked at authorised locations which may be subject to charges. Any vehicle found to be parking in breach of regulations or in an unauthorised location anywhere within the Free Zone will be reported to the Relevant Authorities and will be liable for a fine as set out in the Tariff.

15. HEALTH, SAFETY AND ENVIRONMENT (HSE)

General

15.1 All entities or persons (including contractors and Sub-Developers) working or operating within the Free Zone must comply with the rules, regulations and guidelines set out in the JLT HSEQ Manual. The JLT HSEQ Manual provides a basic framework for insuring excellence in health, safety and environmental performance and the protection of persons and property within the Free Zone.

15.2 All Licensees that have purchased or leased development land are required to comply with Green Building Regulations issued by the Authority or any relevant regulatory authority. All Licensees are expected to monitor their operations and be able to demonstrate that their operations meet or improve upon the standards for sustainability established by the Authority or any relevant regulatory authority from time to time.

Accidents and Emergencies

15.3 All Licensees are required to provide the Authority with written details of an authorised person that may be contacted 24/7 in the event of any fire, flood or other emergency. Such contact may either be the Licensee’s general manager or another authorised individual.

15.4 In the event an emergency situation arises and the Licensee’s premises are unmanned, unguarded, closed or locked the Authority reserves the right to make a forced entry to such premises where there is reasonable justification to do so or where a failure to act could result in significant losses or damage.

15.5 All accidents which occur at a Licensee’s premises and which result in a person needing medical attention must be reported to the Authority within three (3) days of the date of the accident. Failure to inform the Authority of such accidents within the timeframe will attract a fine as set out in the Tariff.

15.6 Following receipt of an accident report the Authority may carry out a site investigation to determine the cause of the accident and whether action has been taken to prevent a recurrence. If such investigation reveals that an accident has occurred due to a breach of the Regulations the Authority may issue a violation notice and/or impose a fine in accordance with the Tariff.

Waste Management

15.7 All Licensees must adhere to the Authority’s and other relevant regulations concerning waste management. Waste may only be disposed of at authorised locations. Any person, company or organisation found to be dumping waste at an unauthorised location anywhere in the Free Zone will be reported to the authorities and will be liable for a fine as set out in the Tariff.

15.8 All domestic and municipal waste generated in office premises leased from the Authority must be disposed of in the appropriate containers provided by the Authority.

15.9 All waste which is classified as being hazardous or industrial waste must be handled and disposed of expressly in accordance with the requirements for such waste types established by the Authority and any Relevant Authority.

15.10 All Licensees that are producing or likely to produce hazardous waste must declare the same to the Authority in the form and manner prescribed by the Authority from time to time. Once such declaration has been reviewed and approved by the Authority the declaration must be submitted to the relevant environmental authority appointed by the Authority for further processing.

HSE Violations

15.11 Regular HSE inspections shall be carried out by the Authority. If such inspections reveal any violations of these Regulations or unsafe practices, the Authority may issue an HSE Violation Notice (“HVN”) to the concerned party. Such notice may be accompanied by a fine in accordance with the Tariff depending on the severity of the violation.

15.12 In case of serious violations or repeated incidents which may place personnel at risk of harm, the Authority may order all work or operations associated with such risk to be stopped immediately until proper corrective action is taken by the party concerned.

16. HOTEL LEVIES

16.1 All Hotels operating within the Free Zone are required to pay the Authority an annual Hotel Levy. The Hotel Levy shall be payable by the Hotel Operator quarterly in arrears. The Hotel Operator shall be responsible for the timely and accurate calculation and payment of the Hotel Levy to the Authority on such terms as the Authority may direct from time to time.

16.2 A Hotel’s obligation to pay the Hotel Levy commences from the date on which the Hotel obtains its BCC.

16.3 Hotels are also required to pay JLT Infrastructure Levies. The amount of the JLT Infrastructure Levy shall be invoiced separately from the Hotel Levy but may be discounted from the Hotel Levy contribution subject to the JLT Infrastructure Levy having being paid in full and proof of payment provided. The Hotel Operator shall pay the JLT Infrastructure Levy to an Agent appointed by the Authority from time to time. JLT Infrastructure Levies for Hotels shall be calculated by the Authority based on a Hotel’s Built Up Area (including any hotel apartments attached to the Hotel).

16.4 If the Hotel Operator fails to pay the Hotel Levy or JLT Infrastructure Levy in accordance with the Authority’s policy from time to time, the Authority has the right to claim those sums from the owner of the Hotel plot on which the Hotel is situate, and on such terms as the Authority deems appropriate based on its current policy.

16.5 All Hotel Operators and Hotel managing bodies are required to furnish the Authority with a Certificate issued by a reputable and internationally recognised firm of auditors, confirming that the Gross Revenue has been accurately calculated, and furnish the Authority or its Agent with a Manager’s Cheque for the total Hotel Levy payable for the previous year by no later thirty (30) calendar days from the end of the respective year. The Authority reserves the right to verify the calculation of the Hotel Levy at the cost of the Hotel Operator (should any discrepancy in the calculation of the Gross Revenue be found). Hotel Operators shall cooperate with the Authority and provide whatever information is requested by the Authority in verifying such calculation.

16.6 Falsification of figures or any failure to cooperate with the Authority in order to verify the amount of the Hotel Levy, and in particular depicting a lower Gross Revenue than realized, will attract such fines and penalties as the Authority may deem appropriate at the time, and which the Hotel Operator agrees to pay in addition to any underpayment of the Hotel Levy.

17. VIOLATION OF REGULATIONS

17.1 Ignorance of any provision of these Regulations, Licence and/or any of the Applicable Rules will not be accepted as an excuse for lack of compliance with the relevant provisions.

17.2 Any Licensee which is found to be in violation of any provision of these Regulations shall be guilty of an offence which, if not remedied within the time frame required by, and to the satisfaction of the Authority, shall render the Licensee liable to fines and sanctions in accordance with these Regulations, or such other sanctions as the Authority may implement from time to time.

17.3 All those committing violations deemed by the Authority as “serious” will be automatically subject to a fine as specified in the Tariff and/or suspension or revocation of Licence and de-Registration. Where an offence is not explicitly covered in the Tariff then the Authority may levy an appropriate fine or penalty that is commensurate with the severity of the offence and the level of loss, damage and/or inconvenience caused by the offence. The payment of any fine or penalty shall be in addition to and not in substitution of any civil and/or criminal penalties that may apply.

17.4 All fines, charges or other financial penalties imposed upon a Licensee or any other party in accordance with these Regulations, if unpaid after a period of 90 days, may be set off from any money owed by the Authority or its subsidiaries to the Licensee, added to the Licence renewal fees or recovered from the Licensee as a debt.

18.1 Any dispute or objection (“Dispute”) arising from the Authority’s application of these Regulations and/or in applying the Applicable Rules including the levying of any fine or issuance of any sanction may, at the written request of the disputing party, be raised with any committee established by the Authority for dealing with such Dispute from time to time (“Committee”).

18.2 In making its decision regarding any such Dispute, the Committee will apply the current Free Zone policy and procedures as issued from time to time. The disputing party agrees it will be bound by the decision of the Committee

18.3 Nothing contained in this clause 18 shall prevent a party to a contract with the Authority or the Authority itself from seeking a judgment in the appropriate forum set out in that contract.

18.4 Nothing contained in this clause 18 shall prevent the Authority from taking action through competent courts to enforce these Regulations or any part thereof against any person.

19.2 Unless specifically provided otherwise by the Authority, rights arising under these Regulations are cumulative and do not exclude rights provided by law or at contract.

19.3 If any provision of these Regulations is finally resolved by a competent judicial body, having jurisdiction in respect thereto, to be invalid, unenforceable or illegal, the other provisions of these Regulations shall remain in full force.

19.4 If any invalid, unenforceable or illegal provision of these Regulations would be valid, enforceable or legal if some part of it were deleted, the provision shall apply with whatever modification is necessary to give effect to the Authority’s intention in respect of such provision.

19.5 To the extent there is any conflict between the explicit provisions set out herein and those contained in any of the Applicable Rules then to the maximum extent permissible at law, the provisions set out herein shall prevail.

Please note that Knowledge Dirham fees will be added to all the stated charges upon any payment.

SCHEDULE 2
FREE ZONE MAP

• DMCC Application Forms

• By-Laws of Dubai Diamond Exchange

  • Article (1) Name and Address

    • 1.1

      The name of the exchange shall be “Dubai Diamond Exchange” and is referred to hereinafter as “DDE”.

    • 1.2

      The principal office of DDE shall be at Dubai Metals and Commodities Centre in the Emirate of Dubai, U.A.E. It shall be permissible to open branches and representative offices for DDE within the Emirate of Dubai, by a decision of the Board of Directors, after obtaining the approval of the competent authorities in the Emirate of Dubai.

  • Article (2) Objectives and Powers

    • 2.1

      The objectives of DDE shall be to:

      (a) promote the interests and development of the diamond, precious stone and related jewellery industries in the Middle East and adjacent regions;
      (b) encourage and maintain just and equitable principles of trade in diamonds, precious stones and related jewellery amongst its members;
      (c) eliminate abuses and unfair trade practices in relation to such trade;
      (d) disseminate accurate and reliable information concerning such trade;
      (e) cooperate with governmental agencies and other relevant parties within the United Arab Emirates and abroad in the establishment and maintenance of institutional arrangements conducive to the ethical and economic welfare of these industries;
      (f) provide arbitration tribunals to settle differences and controversies amongst its members, and between its members and other parties, in relation to trading in diamonds, precious stones and related jewellery;
      (g) provide for disciplinary proceedings to be taken against members for breach of trade ethics or of honourable conduct;
      (h) provide, regulate and maintain suitable premises in the Emirate of Dubai for its activities.

    • 2.2

      DDE has all the powers required to achieve its objectives as set out above, including without limitation the power to:

      (a) acquire, own and possess and to sell, lease, mortgage or otherwise dispose of all such properties both moveable and (to the extent permitted by law) immovable as may be necessary or conducive to the attainment of DDE’s objectives;
      (b) open bank accounts, to obtain loans and financial facilities necessary for achieving its objectives, and to provide its assets as a security for the same;
      (c) provide all kinds of services to its members and others, and to impose and collect fees against the services provided thereby;
      (d) invest its funds in the form, activities and/or projects as may be deemed appropriate by its Board of Directors;
      (e) join in association with any similar body, including the World Federation of Diamond Bourses (hereinafter referred to as “WFDB”), agreeing that its members shall be required hereby to comply with the rules and regulations of such body
      (f) carry out any other function as may be deemed by its Board of Directors necessary and required for achieving its objectives.

      The aforesaid objectives shall be carried out by DDE, through its Board of Directors, in accordance with rules and regulations issued by Dubai Metals and Commodities Free Zone Authority, and the laws and regulations of the United Arab Emirates applicable in the Emirate of Dubai.

  • Article (3) Membership

    • 3.1 Categories of Membership

      3.1.1 There shall be two categories of membership of DDE:

      (a) Individual Membership which shall be available for natural persons satisfying the qualifications specified in Clause (3.2.2) hereunder;

      (b) Corporate Membership which shall be available for entities satisfying the qualifications specified in Clause (3.2.3) hereunder.
      3.1.2 Without prejudice to Clause (3.1.1) above, during a period of two years immediately following the creation of DDE, the Board of Directors may admit certain natural persons to Individual Membership who shall be known as Founder Members and have all the rights and obligations of Individual Members admitted in accordance with Clause (3.2) hereunder.

    • 3.2 Admission to Membership

      3.2.1 Application for membership with DDE does not automatically constitute acceptance thereof by the Board of Directors, as such application shall be subject to the requirements and qualifications determined by the Board of Directors, from time to time, in respect thereof.

      3.2.2 Individual Membership:

      A natural person may be admitted to Individual Membership of DDE, if he or she has:

      (a) attained the age of 21 years at the time of submitting the application for membership;

      (b) been engaged in the diamond, precious stone or related jewellery industry for a period of at least two years at the time of submitting the application for membership;

      (c) an unblemished trade reputation;

      (d) been interviewed by the Membership Committee of the Board of Directors;

      (e) submitted to the Secretary of DDE a complete Application Form along with all supporting documents and the Application Fee, as prescribed by the Board of Directors;

      (f) been proposed for membership by a member of DDE in good standing, and seconded by one other person who is either a member of DDE or a member of a bourse affiliated with the WFDB;

      (g) provided such evidence of financial good standing as the Board of Directors may from time to time require;

      (h) provided the Membership Committee with all other documents and information required by the Membership Committee or the Board of Directors.

      (i) it has provided the Secretary of DDE with an acknowledgment and undertaking duly signed by an authorized signatory of the entity, as requested by the Membership Committee, in form and contents acceptable to the Board of Directors of DDE, confirming to be bound by and be subject to the mandatory arbitration provisions contained in these By-Laws in respect of any and all claims and disputes arising from or related to the diamond, precious stone or related jewellery business, including tort claims, with other members of DDE and with members of other diamond bourses which are part of the WFDB in accordance with DDE’s By-Laws and the By-Laws and Rules of WFDB.

      3.2.3 Corporate Membership:

      An entity duly registered and existing in the United Arab Emirates may be admitted to Corporate Membership of DDE, if

      (a) it is engaged in, or proposes to engage in, the diamond, precious stone or related jewellery industry;

      (b) it has an unblemished trade reputation;

      (c) at least one of its partners, directors, officers or controlling shareholders (hereinafter referred to as the “representative” of the entity) is an Individual Member of DDE in good standing;

      (d) it has submitted to the Secretary of DDE a complete Application Form along with all supporting documents and the Application Fee, as prescribed by the Board of Directors;

      (e) it has provided such valid constitutive documents and satisfactory evidence of financial good standing in form and contents as the Board may from time to time require;

      (f) it has provided the Secretary of DDE with an acknowledgment and undertaking duly signed by an authorized signatory of the entity, as requested by the Membership Committee, in form and contents acceptable to the Board of Directors of DDE, confirming to be bound by and be subject to the mandatory arbitration provisions contained in these By-Laws in respect of any and all claims and disputes arising from or related to the diamond, precious stone or related jewellery business, including tort claims, with other members of DDE and with members of other diamond bourses which are part of the WFDB in accordance with DDE’s By-Laws and the By-Laws and Rules of WFDB.

      (g) it has provided an undertaking duly signed by an authorized signatory on behalf of the entity confirming its acceptance of responsibility for all actions of its representative or representatives, as well as a financial guarantee for the representative by name;

      (h) it has provided the Membership Committee with all other documents and information required by the Membership Committee or the Board of Directors.
      3.2.4 Admission to DDE membership shall be by resolution of the majority of the Board of Directors, following advice from the Membership Committee.
      3.2.5 The list of the names of all applicants for Individual and Corporate Memberships shall be posted at DDE head office for a period of ten days prior to the Membership Committee interview of the applicant. During the posting period and for a period of five days thereafter any member may object in writing to the admission of the applicant and the Membership Committee shall take into consideration such written objection(s). The aforesaid provisions of this Clause (3.2.5) shall apply in case of any change in the named representative.
      3.2.6 Any person whose application is rejected may again apply for membership after six months from the date of the Board of Directors decision in respect thereof.
      3.2.7 All new members shall be on probation for a period of two years commencing from the date of issuing the decision of the Board of Directors in acceptance thereof, and the Board of Directors shall be entitled to terminate and/or cancel such membership at any time within this period for any reason whatsoever.
      3.2.8 Any member may resign from the membership with DDE by sending a written notice of not less than 30 (thirty) days to the Secretary. Such member shall be responsible for all obligations and duties of a member in good standing in connection with any transaction or matter which arose or which was initiated, in part or in whole, prior to such member’s suspension or termination, including but not limited to arbitration.
      3.2.9 Should a member who is a representative of a partnership or corporation withdraw from that entity, it shall be the obligation of the withdrawing member as well as the entity itself to immediately notify the Secretary in writing of such withdrawal by hand against receipt, or by certified mail, return receipt requested.

    • 3.3 Membership Rights

      3.3.1 Individual Members of DDE in good standing shall be entitled to:

      (a) represent themselves in their business dealings as a “Member of the Dubai Diamond Exchange”;

      (b) enter the trading floor of DDE for the purpose of dealing with other members in diamonds, precious stones and/or related jewellery;

      (c) attend and vote at meetings of members convened in accordance with these By-Laws;

      (d) participate in the election of Directors to be elected by the members of DDE;

      (e) enjoy other benefits and privileges as shall be determined by the Board of Directors from time to time, at its sole discretion.

      3.3.2 Corporate Members of DDE in good standing shall be entitled to:

      (a) represent themselves in their business dealings as a “Member of the Dubai Diamond Exchange”;

      (b) through their representative, as defined in Clause (3.2.3 (c), engage in trading on the trading floor of DDE in diamonds, precious stones and related jewellery;

      (c) enjoy other benefits and privileges as shall be determined by the Board of Directors from time to time, at its sole discretion.

    • 3.4 Membership Obligations

      Members of DDE shall be obliged to:

      (a) conduct their business dealings in diamonds, precious stones and related jewellery in accordance with the laws of the relevant jurisdictions and in accordance with high standards of business ethics;
      (b) comply with these By-Laws, in particular those relating to arbitration, as duly amended from time to time;
      (c) refrain from trading in, offering or promoting conflict diamonds;
      (d) pay to DDE such annual subscriptions and other financial commitments as the Board of Directors may determine from time to time.

    • 3.5 Disciplinary Action Against Members

      3.5.1 If the Board of Directors has reason to believe that a member has committed any of the following:

      (a) failure to pay on time all amounts due to his/her/its creditors;

      (b) failure to pay on time the membership fee to DDE,

      (c) failure to pay fines imposed by DDE, as well as, any other amounts due from such member to DDE;

      (d) breached of these By-Laws and/or the rules and regulations issued by the Board of Directors from time to time;

      (e) failure to meet his/her business obligations;

      (f) receipt of a petition in bankruptcy or any involuntary petition in bankruptcy, making an assignment for the benefit of creditors;

      (g) failure to comply with a decision or awards of the arbitration tribunals;

      (h) intentionally making an untrue claim;

      (i) avoiding arbitration by going to court against another member;

      the Board of Directors may conduct an investigation of that member. Thereafter, the Floor committee shall have the authority to decide on fines up to USD 1,000 (AED 3,680). Fines above USD 1,000 (AED 3,680) must be approved by the Board.

      3.5.2 The Secretary shall give written notice, by hand against receipt, or by certified mail, return receipt requested, of the date, time and place of such investigation to:

      (a) the member who is the subject of the investigation;

      (b) the complainant, if any

      (c) any known witnesses.
      3.5.3 The member shall have the opportunity to file a written answer to the charges within five days after being served personally or by mail and to present witnesses, documentation or other evidence in his defence and cross-examine any witnesses that may testify against him.
      3.5.4 The member shall be entitled to request the recusal of any member of the Board of Directors from the meeting or meetings conducting the investigation, on grounds stated, and the Board of Directors (including the Director concerned) shall make a decision thereon which shall be final and binding.

      3.5.5 Should the Board of Directors find the member guilty of the alleged misdemeanours the Board shall have the right to determine such disciplinary action it deems fit in its absolute discretion, including one or more of the following:

      (a) specific performance, such as a letter of apology or return of property;

      (b) a fine payable to DDE;

      (c) a compensatory fine, payable to an aggrieved party;

      (d) suspension of membership for a specified period;

      (e) expulsion.
      3.5.6 Any member whose membership is suspended or who is expelled as a result of a failure on part of such member to pay his creditors their respective dues on time, may be reinstated by the Board of Directors upon the satisfaction of the Board of Directors that such member has settled the due amounts or has reached a settlement agreement in settlement of the same. Each case shall be handled individually at the sole discretion of the Board of Directors.
      3.5.7 The membership of any member who is suspended for non-payment of his membership fees, fines or any other amounts due to DDE shall be automatically terminated if such member fails to pay the outstanding amounts within two months from the date of suspension.
      3.5.8 Any member who was suspended or terminated for reasons other than non-payment of dues and resignation may, after a period of 2 (two) years from his suspension or termination, apply for membership in DDE in the same manner and under the procedure applicable at the time of applying for the new membership.
      3.5.9 Whenever any member is suspended or terminated, such member shall be responsible to all obligations and duties of a member in good standing in connection with any transaction or matter which arose or which initiated, in part or in whole, prior to such member’s suspension or termination, including but not limited to arbitration.

  • Article (4) Finances

    • 4.1

      The registration fees, the annual membership fees, as well as, all applicable fines and all other financial obligations of members towards DDE shall be determined by the Board of Directors, and be placed on the advertisement board at DDE head office.

    • 4.2

      DDE shall operate an account or accounts with such bank(s) in the Emirate of Dubai as the Board of Directors shall determine from time to time and all funds of DDE shall be deposited in the name of DDE in such accounts.

    • 4.3

      The Board of Directors shall arrange for annual financial statements and annual report to members to be prepared and shall appoint a certified auditor to examine the books and accounts of DDE and issue an annual report and balance sheet.

  • Article (5) The Management of DDE

    • 5.1

      Subject to Clause (5.5), DDE shall be managed by a Board of Directors consisting of nine members; five appointed by Dubai Metals and Commodities Centre Authority (hereinafter referred to as “Appointed Directors”) and four elected by the members of DDE in accordance with these By-Laws (hereinafter referred to as “Elected Directors”).

    • 5.2

      Each Elected Director shall serve on the Board of Directors for a period of two years commencing from the date of election thereof with the maximum of three consecutive terms. The members of the Board of Directors shall assume office the following business day following their election or appointment, as applicable, and shall continue in the office until their successors shall be properly elected and assume office. Any vacancy that may occur among the Elected Directors shall be filled for the remaining term thereof by the remaining members of the Board of Directors appointing any DDE member in good standing to the position.

    • 5.3

      The tenure of the first Board of Directors shall start from the first Annual General Meeting and shall last for two years.

    • 5.4

      Dubai Metals and Commodities Centre Authority may appoint Alternate Directors for Appointed Directors.

    • 5.5

      Dubai Metals and Commodities Centre Authority shall be entitled to replace any one or more of the Appointed Directors at any time by a written notice to the Secretary. If Dubai Metals and Commodities Centre Authority replaces an Appointed Director who serves as the Chief Executive Officer, then the Board of Directors shall, at its first meeting following the replacement, appoint a new Chief Executive Officer from amongst the Appointed Directors.

    • 5.6

      (a) Every second year, at a time to coincide with the Annual General Meeting referred to in Clause (6.1), the Secretary of DDE shall arrange for an election to be held to determine the Elected Directors for the following 2 (two) year term.
      (b) Any Individual Member in good standing and not disqualified under Clause (5.2) shall be eligible to stand as a candidate for the office of Elected Director, provided his candidacy is proposed by an Individual Member in good standing, and seconded by at least one Individual Member in good standing, provided that such nomination is received in writing by the Secretary not less than 5 (five) working days.
      (c) The election for Elected Directors shall be conducted by a ballot amongst those Individual Members attending the Annual General Meeting.

    • 5.7

      The first Board of Directors of DDE comprising 9 (nine) persons shall be appointed by Dubai Metals and Commodities Centre Authority, and shall serve for a period of two years commencing from the date of appointment thereof.

    • 5.8

      All resolutions of the Board of Directors shall be determined by simple majority, unless otherwise specified in these By-Laws. All decisions adopted by the Board of Directors shall be by an open ballot, unless any two members of the Board of Directors call for a secret ballot. The members of the Board of Directors shall at their first meeting elect a Chairman and a Vice Chairman from amongst themselves. The Chairman shall not have the right to exercise a casting vote at meetings of the Board of Directors.

    • 5.9

      Meetings of the Board of Directors shall be held at such a place and hour as the Board of Directors may determine. Special meetings of the Board may be called at any time by the Chief Executive Officer, Chairman of the Board or upon written request by a majority of members of the Board of Directors, upon 7 (seven) business days’ written notice to each member of the Board of Directors.

    • 5.10

      The Board shall be authorized to:

      (a) hold meetings at such times and places as it may deem proper;
      (b) appoint committees, on particular subjects, from amongst its members and other members of DDE;
      (c) devise and carry into execution such other measures as it may deem proper to promote the objectives of DDE and to best protect the interest and welfare of the members;
      (d) cooperate with governmental agencies in all matters concerning the diamond, precious stone and related jewellery industry;
      (e) fine, suspend or terminate any member or group of members;
      (f) adopt rules and regulations, consistent with these By-Laws, for the management and conduct of DDE;
      (g) delegate any of its powers to any member of the Board of Directors or to any committee of such members.

    • 5.11

      Should any member of the Board of Directors fail to attend three consecutive meetings of the Board, the Secretary shall send him a written notification in respect thereof, and unless the said member shall provide an excuse satisfactory to the Board of Directors justifying his absence, the Board of Directors shall declare his office vacant and elect his successor as provided in these By-Laws.

    • 5.12

      The Chief Executive Officer shall be appointed by the Board of Directors from amongst the Appointed Directors. The Chief Executive Officer shall have all the authority required to manage and act on behalf of DDE as specified in these By-Laws. The authority of the Chief Executive Officer shall include, but not be limited to, the following:

      (a) managing the day-to-day operations of DDE;
      (b) negotiating and signing all types of contracts, transactions, arrangements and dealings with third parties in the name of and on the behalf of DDE;
      (c) employing all persons as may be required by DDE and to determine their salaries and benefits, as well as other terms and conditions of such employment, and shall be entitled to terminate such employment;
      (d) opening, operating and closing all bank accounts in relation to DDE and conducting all dealings with banks and financial institutions and to sign all applications and documents for such purposes and to obtain credit facilities and loans required for DDE to achieve its objectives;
      (e) determining the financial planning of DDE;
      (f) pledging, mortgaging and otherwise charging the assets of DDE for the purposes of raising and providing the financial facilities deemed necessary by the Board of Directors;
      (g) paying all costs, charges and expenses related to DDE and giving receipts and discharges in respect of any amount paid to DDE;
      (h) suing on behalf of DDE, attaching properties of debtors, referring cases to arbitration, appointing lawyers and otherwise taking all legal measures to protect the interests of the Company whether as plaintiff, respondent, party to arbitration or otherwise;
      (i) representing DDE and signing on its behalf, without limitation, before all governmental offices and departments;
      (j) delegating all or part of his powers, as he shall deem fit.

      The Chief Executive Officer shall exercise the powers and authorities listed above in accordance with the general policies determined by the Board of Directors.

    • 5.13

      The Board shall appoint a Secretary who shall record or cause to be recorded all votes and minutes of all proceedings in books to be kept for that purpose. The Secretary shall cause proper notice to be given of all the meetings of the Board of Directors and committees. The Secretary shall have charge of the general secretarial work of the various committees and of the DDE.

    • 5.14

      No official of DDE, in the due and correct performance of his/her official duties, shall be held responsible in any manner whatsoever for any decisions or be subject to any legal actions for decisions or actions taken on behalf of DDE.

    • 5.15

      The Board of Directors shall establish several standing committees to assist it and the Chief Executive Officer in the discharge of their responsibilities. The Chairman and CEO are ex-officio members of all committees. Initially DDE shall have the following committees with members from the Board of Directors or members in good standing of DDE, appointed from time to time by the Board of Directors .

      (a) The Membership Committee, which shall consist of at least three members of DDE and be responsible for examining and assessing applications submitted by individuals and entities for membership with DDE including interviewing such applicants, and providing the Board of Directors with recommendations in respect thereof. The Membership Committee may, in its complete discretion, request any member at any time to resubmit current information relating to the matters referred to in sub-clause (3.2.2 (g) or (3.2.3 (e), as the case may be.
      (b) The House Committee, which shall consist of at least three members of DDE and shall be responsible for supervision of all the assets of DDE, exclusive of financial assets and for supervision of all facilities of DDE offices.
      (c) The Floor Committee, which shall consist of at least three Individual Members of DDE and shall have the authority to temporarily exclude a member from entering DDE trading room for a period not exceeding 5 (five) days subject to the Board od Directors ratification, and/or to fine a member up to the sum of AED 5,000/- (Five Thousand UAE Dirhams) and/or to recommend to the Board of Directors to institute disciplinary proceedings against a member where a member causes a disturbance or conducts himself/herself in DDE trading room in a manner unbecoming of a member of DDE.
      (d) The Business Development Committee, which shall consist of at least three Individual Members of DDE and shall develop strategies and plans to execute DDE mission, to identify opportunities for the business development of DDE and to contribute to developing an effective network for DDE.

    • 5.16

      Special meetings can be called when deemed necessary, and shall consist of a minimum of 6 (six) directors.

    • 5.17

      At the board of directors meetings, a quorum shall consist of 5 (five) directors.

  • Article (6) Meetings of the Members

    • 6.1

      There shall be an Annual General Meeting of the membership of DDE during the first quarter or each year for the rendering of annual reports of the Board of Directors and the appointed auditor, for declaration of the result of the election of the Elected Directors, if required, and for such other matters of which notice has been given. At all meetings, except as otherwise stated in these By-Laws, a resolution may be passed by a majority of the votes cast at such meetings.

    • 6.2

      Special general meetings of the membership may be called by:

      (a) Chairman of the Board
      (c) the Chief Executive Officer; or
      (d) the Board of Directors, by resolution at a duly convened meeting or upon the written request of a majority of the Board of Directors; or
      (e) by petition to the board of directors bearing the signatures of 45% of individual members verified by the Secretary of DDE. The Board of Directors will then decide if a meeting is required.

    • 6.3

      An Inaugural Annual General Meeting shall be held as soon as is convenient following the establishment of DDE to elect the Members of the Arbitration Committee referred to in Article (7) of these By-Laws

    • 6.4

      Special general meetings shall be called only to consider a specific subject, which must be stated in the notice of the meeting.

    • 6.5

      Whenever notice is required to be given to any member, except as provided for herein, such notice shall be deemed to have been given from and at the time, when said notice, in writing, shall have been sent to the member by hand against receipt, or by certified mail, return receipt requested, addressed to the member at his/her latest known place of business or residence, as the same shall appear upon the books of DDE. It shall be the responsibility of each member to report in writing any change of address and phone number of his/her business and residence to the Secretary.

    • 6.6

      At all meetings of the general membership, a quorum shall consist of 40% of the individual membership of DDE. If there shall be no quorum at a duly called meeting, then a second meeting shall be duly called within ten days thereafter. At such second meeting, all business may be transacted when there is a quorum of 20%. At general meetings the Chairman shall not have the right to exercise a casting vote.

  • Article (7) Arbitration Committee and Arbitration Procedures

    • 7.1 Arbitration Committee

      7.1.1 An Arbitration Committee shall be established consisting of seven Individual Members of DDE in good standing who shall be elected to hold office as such by members at the Annual General Meeting and who have been nominated in writing not less than 5 (five) working days prior to the Annual General Meeting by an Individual Member proposing and an Individual Member seconding, both of whom shall be entitled to vote.
      7.1.2 Such candidates for election shall be listed on a ballot paper which shall be issued to each Individual Member present at the Annual General Meeting and entitled to vote.
      7.1.3 An Individual Member shall not cast a number of votes greater than 7 (seven) and shall not be entitled to allocate more than 1 (one) vote to any candidate and in the event that he does so his ballot paper shall be deemed to be spoilt and the votes cast shall be disallowed.
      7.1.4 The Seven candidates securing the highest number of votes shall be deemed and declared to be elected.
      7.1.5 Two scrutineers appointed by the Meeting shall count the ballot papers and their decision shall be final.
      7.1.6 Where there is a tie between two or more candidates and there are insufficient vacancies in respect of such candidates, a further ballot shall be taken in order to select the number of persons required from those tied as aforesaid.
      7.1.7 The seven members so elected shall hold office until the Annual General Meeting in the second year following their election, subject to their completing any Arbitration proceedings in progress.

      7.1.8 If for any reason whatsoever there are less than seven candidates standing for election then:

      (a) All such persons shall forthwith be declared elected, and

      (b) In respect of the shortfall, such Annual General Meeting shall be entitled notwithstanding anything to the contrary contained herein, to appoint eligible Individual Members to hold office or to authorize immediate nominations for a further ballot or to authorize the Board of Directors to fill such shortfall by co-option.
      7.1.9 The Secretary shall not less than 5 (five) working days before the date of the Annual General Meeting post on the DDE notice board a list of candidates for election to the Arbitration Committee.
      7.1.10 The Board of Directors shall appoint a Chairman from the members elected to the Committee. The Chief Executive Officer may not be elected to the Arbitration Committee.

    • 7.2 Arbitration Proceedings

      7.2.1 The function of the Arbitration Committee shall be to act as arbitrators for the purpose of determining disputes as more fully set out hereunder.
      7.2.2 Any member who alleges a dispute with another member may request arbitration by lodging in writing with the Secretary details of such dispute and the relief sought against the other member. The Secretary shall notify the Chief Executive Officer thereof and he in turn may in conjunction with one Elected Director instruct the Secretary to refer the dispute to the Chairman of the Arbitration Committee who shall convene a meeting of the Committee, where at least 3 (three) members shall be present to consider the matter. Should any non-member of DDE allege a dispute with a member the Secretary shall refer the matter to the Board of Directors in accordance with sub-clause (7.3.4) below.
      7.2.3 At the said meeting of the Arbitration Committee, the Committee shall decide whether a prima facie case exists, and if not, the Secretary shall in writing advise the member who may not proceed with his dispute. If the Committee decides that a prima facie case exists it shall then decide whether or not to refer the dispute to be heard in accordance with DDE’s arbitration procedures. If it decides not to so refer, the Secretary shall in writing inform both the complainant member, who may thereafter take such legal action as he wishes, and the defendant member. Such decision by the Committee shall be binding.

      7.2.4 Should the Committee decide to refer the dispute to arbitration:—

      (a) A date for the hearing may be fixed (or subsequently fixed by the Committee Chairman if not then convenient).

      (b) An arbitration panel of 3 (three) Committee members may be fixed (or subsequently fixed by the Committee Chairman if not then convenient).

      (c) A referee shall be selected unless the Committee instructs the Committee Chairman to select a Referee.

      7.2.5 The Secretary shall in writing inform the complainant member of the decision of the Committee and shall further inform him:—

      (a) of his right to submit to a Referee in accordance with DDE ByLaws in an endeavour to settle the dispute;

      (b) of the date of the hearing and the names of the proposed arbitrators in respect of whom he shall have the right to object without cause to the appointment of any one such arbitrator which right may be exercised only once;

      (c) of his right to request the recusal of any one arbitrator on good cause shown to the Committee whose decision thereon shall be final and binding;

      (d) of any defence or counterclaim lodged by the defendant member when same is received.

      7.2.6 The Secretary shall in writing inform the defendant member:—

      (a) of the dispute and the relief sought;

      (b) of the Committee’s decision to refer the dispute to arbitration;

      (c) of his right to submit to a Referee in accordance with DDE ByLaws in an endeavour to settle the dispute;

      (d) of his duty to lodge in writing his defence in the dispute and details of any counter claim that he may have;

      (e) of the date of the hearing and the names of the proposed arbitrators, in respect of whom he shall have the right to object without cause to the appointment of any one such arbitrator which right may be exercised only once;

      (f) of his right to request the recusal of any arbitrator on good cause shown to the Committee whose decision thereon shall be final and binding.
      7.2.7 In cases of urgency the Committee or the Arbitration Panel shall be entitled to dispense with the above procedures provided that no parties are prejudiced in the conduct of the arbitration.
      7.2.8 In the temporary absence of a member of the Committee the Board of Directors shall be entitled to appoint one of its members to fill such position temporarily.
      7.2.9 Any member, including the arbitrators, who participates in an arbitration hearing in any capacity, shall be required and undertakes to keep all the proceedings secret.

      7.2.10 No legal representation at an arbitration hearing shall be allowed to any party unless:

      (a) he shall have applied timeously for the right to have such representation; and

      (b) The Arbitration Committee considers in its sole and absolute discretion that the nature or complexity of the matter in dispute warrants such representation, in which event all parties shall be entitled to such representation.

    • 7.3 Jurisdiction

      7.3.1 Every member of DDE shall be deemed by virtue of his being such to have submitted himself to the reference to and decision by the Arbitration Committee of any dispute as if he had signed a Deed of Submission to the arbitration and decision by the Committee. He shall be deemed to have consented to the arbitration being held in the Emirate of Dubai.
      7.3.2 A member of DDE who institutes legal proceedings against any other member of DDE concerning a dispute that should have properly been referred to DDE for arbitration and which legal proceedings have not been authorized as contemplated by Clause (7.2.3) above shall himself be guilty of a breach of these By-Laws and shall be liable to disciplinary action. A member against whom such legal proceedings have been instituted shall have and retain all his rights to have the dispute dealt with as contemplated by these By-Laws.
      7.3.3 The nature of any dispute which shall be submitted to arbitration shall be any dispute between members (defined as in sub-clause (7.3.2) above) arising from or forming part of any transaction or negotiation or act or omission howsoever connected directly or indirectly with or relating to the diamond of precious stones or related jewellery industry, trade or undertakings.

      7.3.4 Notwithstanding anything hereinbefore contained the Board of Directors shall be entitled in its discretion to apply the provisions of these By-Laws to a dispute alleged and relief sought by a non-member of DDE against a member who has consented in writing for such dispute and relief sought being referred to DDE.

      (a) This provision shall be deemed to be a stipulation for the benefit of such non-member and in the event of this provision being applied, such non-member shall acknowledge in writing that he agrees to be bound by the terms of these By-Laws and the Arbitration proceedings.

      (b) The Board of Directors or the Committee or the Arbitration Panel may levy such charges against such non-member as it deems fit and may require any or all of such charges to be deposited in advance.
      7.3.5 The Arbitrators may make use of legal or other expert assistance in the discharge of their duties, provided always that having obtained such assistance they exercise their own independent judgement on all matters including that in respect of which they sought assistance, and insofar as costs are incurred in seeking such assistance, they may make a suitable award to cover such costs.
      7.3.6 Save as herein provided, Arbitration proceedings are subject to the relevant laws of the United Arab Emirates.
      7.3.7 The Arbitrators shall determine the process to be followed in the presentation and adjudication of any dispute provided always that the process to be followed is fair and affords each party an adequate opportunity to state his case.
      7.3.8 The decision of the arbitrators shall in any dispute be final and binding upon the parties thereto. Neither they, DDE or any of its officials shall be liable to any party for any act or omission relating to an arbitration proceeding or the performance of any functions or duties thereunder.
      7.3.9 Each member shall be bound by the arbitration rules of the WFDB and in particular Article (4) of its Inner Rules, and where required by local laws, subject to the mutual binding of a member of another bourse likewise being so bound.

  • Article (8) By-Laws

    • 8.1

      These By-Laws may be amended only by proposals submitted to the Board of Directors, and recommended by the Board of Directors to a general meeting of members. In order for such an amendment to take effect it must be approved at such general meeting by not less than two-thirds of the members present and entitled to vote. A quorum at any meeting called for such purpose shall be 25% of the membership. If such Quorum is not present, then another meeting shall be called as herein provided. At such second meeting, any amendment may be passed by a two-thirds vote of the members present and entitled to vote.

    • 8.2

      Any proposed amendment of these By-Laws, must be posted on the DDE notice board for a period of 14 (fourteen) days prior to the meeting at which it is to be considered.

  • Article (9) Dissolution

    DDE may be dissolved:

    (a) by a decision of the Board of Directors of Dubai Metals and Commodities Centre Authority based upon the recommendation of the Board of Directors of DDE, or
    (b) at a duly called special general meeting. Notice of said meeting must be sent to each member in good standing by hand against receipt, or by certified mail, return receipt requested. DDE shall be considered dissolved if 80% of the membership at this meeting shall signify, by written ballot, their consent to dissolve. In the event that DDE is dissolved, all assets of DDE shall be converted into cash and shall be distributed as ordered by the outgoing Board of Directors.

  • Article (10) Restraint of Trade

    DDE shall not adopt any resolution, rule, regulation or By-Laws, which illegally attempts to restrain trade or violate the law.

  • Article (11) Visiting Dealers

    • 11.1

      The Board of Directors may determine rules and procedures that shall govern the conditions on which Visiting Dealers may be permitted to enter the DDE trading floor.

  • Article (12) Other Issues

    • 12.1

      Issues not covered by the provisions of these By-Laws may be addressed and regulated by regulations issued by the Board of Directors to be published at the head office of DDE.

• DGR Rules & Regulations

  • Rules Concerning the Issuance, Endorsement and Transfer of Dubai Gold Receipts

    THESE RULES are dated [•], 2004 and made between:

    (1) Dubai Multi Commodities Centre Authority, an authority established by the Government of Dubai with a business address at Level 4, Emirates Towers, PO Box 48800 Dubai, United Arab Emirates (“DMCC“); and
    (2) The DGR Members (as defined below).

    • 1. Definitions and Interpretation

      • 1.1 Definitions

        In these Rules, unless the context or subject matter otherwise requires:—

        “Allocated Goods” means Goods identified in the DGR relating thereto as being allocated to their Legal Owner and to be stored separately from the Goods of other Legal Owners.
        “Alternative Local Jurisdiction” has the meaning given to such term in Clause 14.1(b) (Governing law).
        “Amendment Notice” has the meaning given to such term in Clause 9.4 (Amendment of the Rules).
        “Annual Membership Fee” has the meaning given to such term in Clause 2.2 (DGR System membership).
        “Application Fee” has the meaning given to such term in Clause 2.2 (DGR System membership).
        “Certification Lapse Date” means the date shown on the DGR to which that CMI Certification relates as the date on which that CMI Certification is due to lapse.
        “CMI” means a DGR Member lawfully engaged in the business of providing collateral management or inspection services in respect of commodities and who certifies the accuracy of the description of Goods on the DGR relating to those Goods.
        “CMI Annual Return” means a report on the business activities of a CMI during the 12 months preceding the date of such report and relating to the carrying out of the duties of such CMI under these Rules.
        “CMI Certification” means a statement by a CMI on the face of a CMI-Certified DGR confirming as accurate the description of Goods referred to in that CMI-Certified DGR.
        “CMI-Certified DGR” means a DGR containing a statement by a CMI confirming the accuracy of the description of the Goods described in that DGR.
        “Confidential Information” means DGR System Information and Transaction-specific Information.
        “DGR” or “Dubai Gold Receipt” means a receipt representing Goods stored at a vault owned or operated by a DGR Issuing Member and issued by that DGR Issuing Member through the DGR System and held by DMCC.

        “DGR Issuing Member” means a DGR Member lawfully engaged in the business of:

        (a) storing or arranging for the storage of gold bars, gold coins,gold jewellery, gold scrap or other gold merchandise; or

        (b) for profit and registered by DMCC as an authorised issuer of DGRs.
        “DGR Issuing Member Annual Return” means a report on the business activities of a DGR Issuing Member during the 12 months preceding the date of such report and relating to the carrying out of the duties of such DGR Issuing Member under these Rules.
        “DGR Member” means a person who has duly executed a Letter of Adherence and has been registered as a DGR Member by DMCC.

        “DGR Member-specific Information” means Transaction-specific Information and any information or documents provided in or in connection with:

        (a) (in the case of a prospective DGR Member) an application for membership in the DGR System;

        (b) (in the case of a DGR Issuing Member) a DGR Issuing Member Annual Return; or

        (c) (in the case of a CMI) a CMI Annual Return.
        “DGR Rules” means these rules as amended or supplemented from time to time in accordance with clause 9.4 (amendment to the rules).
        “DGR Secretariat” means the business unit of DMCC which is responsible for the management of the DGR System.
        “DGR System” means the web-based collateral management warehouse receipt system owned by DMCC and managed by the DGR Secretariat.
        “DGR System Information” means any specification, technical description, computer code, or similar information relating to the design, construction or operation of the DGR System.
        “Emirate” means each of the Emirates of Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah and Umm Al Quwain.
        “Expiring Membership Notice” has the meaning given to such term in Clause 2.3(c)(i)(Revocation or resignation of membership).

        “Goods” means gold bars, gold coins, gold jewellery, gold scrap, any gold merchandise or any [silver bars]:

        (a) stored by or under the control of a DGR Issuing Member on behalf of an Originator (or which have been or are about to be so stored);

        (b) which are of a category that has been approved by DMCC to be the subject of DGRs; and

        (c) which are Allocated Goods or Non-Allocated Goods.
        “Insolvency Proceedings” has the meaning given to such term in Clause 6.7 (Undertaking and warranty).
        “ICC Rules” has the meaning given to such term in Clause 11 (Dispute Resolution).
        “Issuer-Certified DGR” means a DGR which is not a CMI-Certified DGR and which contains no Qualification to the description of the Goods described in that DGR.

        “Legal Owner” means

        (a) in the case of a DGR which has not been endorsed by way of transfer, the Originator; and

        (b) in the case of a DGR which has been endorsed by way of transfer, the Transferee to whom the DGR was most recently endorsed.
        “Letter of Adherence” means a letter, substantially in the form of Schedule 1 (Form of Letter of Adherence) addressed by a prospective DGR Member to the DMCC Secretariat confirming the undertaking of that prospective member to abide by these Rules.
        “Non-Allocated Goods” means Goods which are accepted by the relevant DGR Issuing Member as capable of being fungible and which have not been identified as Allocated Goods in the DGR relating thereto.
        “Non-System Gold Receipt” means any receipt issued by a DGR Issuing Member relating to the storage of gold, silver or related goods and which is not a DGR.
        “Originator” means, in respect of Goods, the first person to whom a DGR is issued by a DGR Issuing Member in respect of those Goods and who is registered by DMCC as a DGR Member.
        “Pre-Pledged DGR” means a DGR on which the DGR Issuing Member who issued that DGR has indicated that the Goods to which the DGR relates have been pledged, pursuant to a Standing Pledge Instruction (Goods in Transit), to a Security Beneficiary named in the DGR.
        “Pledge Acceptance” means, in respect of a Pledge Notification or Standing Pledge Instruction (as the case may be), a message sent via the DGR System by the Security Beneficiary referred to in that Pledge Notification or Standing Pledge Instruction, referring to that Pledge Notification or Standing Pledge Instruction, and stating that it accepts the security referred to therein.
        “Pledge Notification” means a notification sent by the Legal Owner of a DGR to DMCC via the DGR System and substantially in the form of Schedule 2 (Form of Pledge Notification), instructing DMCC to hold that DGR as pledge security for the benefit of the Security Beneficiary referred to in that Pledge Notification.

        “Qualification” means any part of the description of Goods in a DGR which refers:

        (a) to the Goods as “said to be”; or

        (b) to the container(s) in which they are stored as “said to contain”.
        “Resignation Notice” has the meaning given to such term in Clause 9.4(b) (Amendment of the Rules).
        “Revocation Notice” has the meaning given to such term in Clause 2.3 (Revocation or resignation of Membership).
        “Secured Obligation” means an obligation of a Legal Owner to a Security Beneficiary and secured in favour of that Security Beneficiary by way of pledge and endorsement of the DGR representing those Goods.

        “Security Beneficiary” means a DGR Member:

        (a) on whose behalf DMCC holds a DGR in its possession by way of possessory pledge; and/or

        (b) in whose favour the DGR is endorsed by way of security.
        “Security Endorsement” means an endorsement of a DGR by way of security in favour of a Security Beneficiary in accordance with Clause 8.3 (Security Endorsement).
        “Security Release (Part of Goods)” means a release of the Secured Liabilities owed by a Legal Owner to a Security Beneficiary in respect of a specified portion of the Goods to which a DGR Relates, to be sent by that Security Beneficiary to the relevant DGR Issuing Member (with a copy to DMCC and the Legal Owner) via the DGR System and substantially in the form of Schedule 5 (Form of Security Release (Part of Goods)).
        “Security Release (All Goods)” means a release of the Secured Liabilities owed by a Legal Owner to a Security Beneficiary in respect of all Goods to which a DGR relates, to be sent by that Security Beneficiary to DMCC (with a copy to the relevant DGR Issuing Member and the Legal Owner) via the DGR System and substantially in the form of Schedule 6 (Form of Security Release (All Goods)).
        “Standard DGR” means a DGR containing a Qualification and which is not a CMI-Certified DGR.
        “Standing Pledge Instruction” means a Standing Pledge Instruction (Existing DGR) or a Standing Pledge Instruction (Goods in Transit).
        “Standing Pledge Instruction (Existing DGR)” means a notice, substantially in the form of Part A of Schedule 3 (Standing Pledge Instruction) from a prospective Transferee to DMCC, referring to a DGR and instructing DMCC, following the endorsement of that DGR by way of transfer to that prospective Transferee, to hold that DGR by way of pledge in favour of, and endorse it by way of security to, the Security Beneficiary named in that Standing Pledge Instruction.
        “Standing Pledge Instruction (Goods in Transit)” means a notice, substantially in the form of Part B of Schedule 3 (Standing Pledge Instruction) from a prospective Originator to the DGR Issuing Member to whom Goods clearly described in such notice are expected to be delivered, instructing that DGR Issuing Member to issue in respect of those Goods and after such Goods have been received at the relevant warehouse(s), a Pre-Pledged DGR naming as Security Beneficiary the person who proposes to finance those Goods.
        “Transaction Fee” has the meaning given to such term in Clause 2.2 (DGR System membership).

        “Transaction-specific Information” means information concerning:

        (a) volume, quantity, storage or delivery of Goods;

        (b) the identity of parties transacting in respect of DGRs; or

        (c) without limitation, any other information relating to a transaction conducted in relation to a DGR in accordance with these Rules.
        “Transfer Endorsement” means an endorsement of a DGR by DMCC on behalf of the Legal Owner of that DGR in favour of a Transferee, in accordance with Clause 7.1 (Transfer Endorsement).
        “Transferee” means a DGR Member to whom a DGR is endorsed otherwise than by way of security.
        “Transferor” means a DGR Member who endorses a DGR otherwise than by way of security.

      • 1.2 Construction

        (a) Any reference in these Rules to:

        (i) an “action” includes a claim or counter claim for set-off, damages or specific performance and any other discretionary remedy;

        (ii) a “certified copy” means a copy of the relevant document certified as being a true and accurate copy;

        (iii) a “day” means the 24 hour period from 12.00 midnight (Dubai time) to 12.00 midnight (Dubai time) on the following day;

        (iv) A “description” includes the type, grade and quality of the thing described but excludes its quantity, and “described“, “describes” and any other such derivations shall be construed in the same way;

        (v) a “person” includes any person, firm, company, corporation, government, state or agency of a state or any association, trust or partnership (whether or not having separate legal personality) or two or more of the foregoing;

        (vi) a “purchaser” means a person who buys Goods represented by a DGR or a person who has a security interest in those Goods in his capacity as Security Beneficiary and “to purchase” shall be construed accordingly;

        (vii) a thing is done “in good faith” within the meaning of these Rules when it is undertaken with honest intent, whether it be done negligently or not.
        (b) References importing the masculine gender shall include the feminine gender and vice versa.
        (c) Save where the context requires otherwise, words importing the singular number include the plural number and vice versa.
        (d) Clause and Schedule headings are for ease of reference only.

    • 2. DGR System Ownership and Membership

      • 2.1 Ownership of DGR System and Use of Distinguishing Marks

        (a) The DGR System is a web-based warehouse receipt system owned by DMCC and managed by the DGR Secretariat.
        (b) Membership in or use of the DGR System does not confer on DGR Members any ownership rights in the DGR System and DGR Members may not hold themselves out as being owners of the DGR System.
        (c) DGR Members may only use logotypes, symbols or other distinguishing marks of DMCC or the DGR System with the prior written consent of the DMCC Secretariat.
        (d) DGR Members shall not make any statement to any person other than DMCC concerning the specifications, characteristics, capabilities or performance of the DGR System other than as contained in any marketing literature produced by or for DMCC, unless DMCC has given its prior written approval of that statement.

      • 2.2 DGR System Membership

        (a) Subject to the requirements of paragraph (b) below, any corporate entity, firm or individual wishing to become a DGR Member will be considered for membership following its submission to the DMCC Secretariat of:

        (i) a duly executed Letter of Adherence; and

        (ii) such information as DMCC may require in connection with the legal and financial status and business history of that prospective member (including, without limitation, its trading licence), in form and substance satisfactory to DMCC.

        A person shall only become a DGR Member when registered as such by DMCC (following countersignature by DMCC of such person’s Letter of Adherence), and DMCC may, in its absolute discretion, decide whether or not to accept an applicant as a DGR Member.
        (b) Any DGR Member owning or managing vaults or arranging for the storage of gold, silver or related goods within the United Arab Emirates may also apply to become a DGR Issuing Member. DGR Issuing Member applications shall be made on the application form approved by DMCC from time to time for that purpose and must be accompanied by such information as may be requested by DMCC from time to time. A DGR Member shall only become a DGR Issuing Member when registered as such by DMCC.
        (c) By becoming a DGR Member, the relevant person agrees to abide by the terms and conditions set out in these Rules.

        (d) Fees are payable for membership and use of the DGR System, comprising:

        (i.) A non-refundable application fee (the “Application Fee“);

        (ii.) an annual membership Fee (the “Annual Membership Fee“); and

        (iii.) a fee payable in respect of each transaction conducted on the DGR System (the “Transaction Fee“),

        each as determined by DMCC from time to time.
        (e) Membership in the DGR System is not transferable.

      • 2.3 Revocation or Resignation of Membership

        (a) Without prejudice to the rights of any other DGR Member in connection with these Rules, DMCC may revoke the membership of any DGR Member in the DGR System if:

        (i) that DGR Member has committed a breach of these Rules which in the opinion of DMCC is material and:

        (A) is not capable of remedy; or

        (B) was capable of remedy but was not remedied within 30 days following the date of a notice to remedy sent by DMCC via the DGR System to such DGR Member;

        (ii) that DGR Member has failed to pay any Annual Membership Fee or Transaction Fee due from it pursuant to these Rules within 14 days following the date of a notice to pay sent by DMCC via the DGR System to such DGR Member; or

        (iii) it comes to the attention of DMCC that any warranty deemed to be given by such DGR Member was untrue at the time that it was so deemed to be given.
        (b) A DGR Member may resign its membership in the DGR System by written notice to DMCC to that effect.

        (c) Immediately following a revocation or resignation of membership pursuant to paragraph (a) or (b) (as the case may be) above:

        (i) DMCC shall publish a notice of such revocation or resignation (an “Expiring Membership Notice“) to all DGR Members via the DGR System; and

        (ii) From the date of that Expiring Membership Notice, the DGR Member the subject thereof:

        (A) shall, if he is a DGR Issuing member, cease to have any rights to issue DGRs and any DGRs already issued by it shall no longer be capable of endorsement (whether by transfer or security); and

        (B) may not have DGRs issued or endorsed (whether by way of transfer or security) by or to him.

        (d) Revocation or resignation (as the case may be) of membership shall take effect:

        (i) in the case of a DGR Issuing Member, immediately after all DGRs issued by that DGR Issuing Member have been cancelled;

        (ii) in the case of a Legal Owner, immediately after all DGRs issued or endorsed by way of transfer to such Legal Owner have been cancelled or transferred to another DGR Member; and

        (iii) in the case of a Security Beneficiary, immediately after all pledges and Security Endorsements in its favour have been released.
        (e) Each DGR Member who is not a Security Beneficiary shall remain liable for Annual Membership Fees and Transaction Fees due from him under these Rules from the date of an Expiring Membership Notice issued in respect of that DGR Member and until the effectiveness of the resignation or revocation of membership (as the case may be) of such DGR Member. A Security Beneficiary in respect of whom an Expiring Membership Notice has been issued shall not be liable for any fees accrued after the date of such Expiring Membership Notice.
        (f) No refund or rebate of any Annual Membership Fee or Transaction Fee will be given to DGR Members who resign their membership or whose membership is revoked.
        (g) A former DGR Member may be considered for readmission as a DGR Member at the sole discretion of DMCC.

    • 3. DGR Issuance

      (a) DGRs may only be issued by DGR Issuing Members. Issuance shall be made online to the DGR System. Each DGR must contain the following information, entered into the relevant fields:

      (i) name and address of Originator;

      (ii) the name and location of the vault where the Goods are stored;

      (iii) the date of issue of the DGR;

      (iv) whether the Goods are Allocated Goods or Non-Allocated Goods;

      (v) a statement that the Goods to which that DGR refers will be delivered:

      (A) to the Originator or to his order; or

      (B) to any other Legal Owner to whom the DGR is endorsed by way of transfer from time to time; or

      (C) to any Security Beneficiary to whom the DGR is endorsed by way of security from time to time;

      (vi) the rate of storage and/or other DGR Issuing Member applicable charges and fees;

      (vii) the description of the Goods or of the packages containing them;

      (viii) the quantity of the Goods;

      (ix) (in the case of a CMI-Certified DGR only) a statement by a named CMI confirming the accuracy of the description of the Goods described in that DGR, including the Certification Lapse Date (if any); and

      (x) any other information DMCC stipulates from time to time.
      (b) A DGR Issuing Member shall be liable to any person injured thereby for all damage caused by the omission from a DGR of any of the terms required pursuant to this Clause 3.
      (c) A DGR Issuing Member may insert in a DGR any other terms and conditions, provided they are not contrary to the provisions of these Rules and do not reduce his obligations in respect of the relevant Goods.
      (d) No provision shall be inserted in a DGR that it is non-negotiable. If such a provision is inserted then it shall be deemed void.

      (e) A DGR may only be altered or cancelled:

      (i) (if it is not held by way of pledge for, and/or endorsed by way of security to, a Security Beneficiary) with the prior consent of the Legal Owner of that DGR; or

      (ii) (if it is held by way of pledge for, and/or endorsed by way of security to, a Security Beneficiary) with the prior consent of that Security Beneficiary,

      such consent to be delivered in either case via the DGR System; or

      (iii) (in the case of a CMI-Certified DGR bearing a Certification Lapse Date) in order to extend the Certification Lapse Date in accordance with these Rules.

      (f) A DGR shall only be recognised as a CMI-Certified DGR if:

      (i.) it shows on its face a CMI Certification from the CMI referred to in that DGR; and1

      (ii.) it contains no Qualification,

      and no DGR containing a CMI Certification and a Qualification shall be issued into or dealt with within the DGR System.
      (g) A CMI Certification may not expire before the cancellation of the DGR to which it relates unless that CMI Certification was given or renewed subject to a Certification Lapse Date shown on the face of the DGR to which it relates.
      (h) A CMI-Certified DGR shall automatically become a Standard DGR on the Certification Lapse Date (if any) relating thereto, unless the CMI which certified that CMI-Certified DGR gives DMCC and the relevant Issuing Member prior notice via the DGR System of a later Certification Lapse Date for that CMI-Certified DGR, and that later Certification Lapse Date is annotated thereon on or before the Certification Lapse Date which it replaces.

    • 4. Appointment of DMCC as Agent for DGR Members

      • 4.1 Appointment by Originators

        Each Originator irrevocably and unconditionally:

        (a) appoints DMCC as its agent:

        (i) to hold all DGRs issued into the DMCC system by DGR Issuing Members in respect of Goods stored on behalf of that Originator; and

        (ii) to endorse each DGR representing Goods stored on behalf of that Originator:

        (A) by way of transfer to such subsequent Legal Owner as it may notify to DMCC via the DGR System; or

        (B) by way of security to such Security Beneficiary as it may notify to DMCC via the DGR System; and

        (b) accepts that following the endorsement of a DGR by way of security to a Security Beneficiary:

        (i) DMCC will hold that DGR on behalf of that Security Beneficiary and DMCC will have no further duty to the Originator under Clause 4.1(a)(i) in respect of that DGR; and

        (ii) that Security Beneficiary shall have the right:

        (A) to access all information concerning that DGR via the DGR System; and

        (B) to obtain a certified copy of the DGR from DMCC (whether or not delivery of such copy is demanded by a court of competent jurisdiction) and DMCC shall be authorised to deliver that copy to the Security Beneficiary without having to obtain the permission of the Originator to do so; and

        (C) to delivery of the Goods to which that DGR relates if the Originator defaults under the Secured Obligation against which those Goods are secured.

      • 4.2 Appointment by Transferees

        Each Transferee irrevocably and unconditionally:

        (a) appoints DMCC as its agent:

        (i) to hold all DGRs endorsed by way of transfer to such Transferee; and

        (ii) to endorse each DGR endorsed by way of transfer to such Transferee:

        (A) by way of transfer to such subsequent Legal Owner as it may notify to DMCC via the DGR System; or

        (B) by way of security to such Security Beneficiary as it may notify to DMCC via the DGR System; and

        (b) accepts that following the endorsement of a DGR by way of security to a Security Beneficiary:

        (i) DMCC will hold that DGR on behalf of that Security Beneficiary and DMCC will have no further duty to the Transferee under Clause 4.2(a)(i) in respect of that DGR; and

        (ii) that Security Beneficiary shall have the right:

        (A) to access all information concerning that DGR via the DGR System; and

        (B) to obtain a certified copy (or, in the absolute discretion of DMCC, the original) of the DGR from DMCC (whether or not delivery of such copy or original is demanded by a court of competent jurisdiction) and DMCC shall be authorised to deliver that copy or original to the Security Beneficiary without having to obtain the permission of the Originator to do so; and

        (C) to delivery of the Goods to which that DGR relates if the Transferee defaults under the Secured Obligation against which those Goods are secured.

      • 4.3 Appointment by Security Beneficiaries

        Each Security Beneficiary irrevocably and unconditionally appoints DMCC as its agent:

        (a) to hold on its behalf the original of any DGR issued in respect of Goods which are pledged to that Security Beneficiary;
        (b) to endorse by way of transfer or by way of security to such subsequent Legal Owner or other Security Beneficiary (as the case may be) as it may notify to DMCC via the DGR System; and

        (c) to release any security over a DGR following receipt by DMCC (via the DGR System) of:

        (i) a copy of a Security Release (Part of Goods) sent by such Security Beneficiary to the relevant DGR Issuing Member; or

        (ii) a Security Release (All Goods).

      • 4.4 Delivery of DGRs

        Without prejudice to the rights of the Security Beneficiaries under Clause 4.2, DMCC undertakes to deliver to each Legal Owner a certified copy of any DGR which has not been endorsed by way of security and is required for the purpose of enforcing the obligation of the relevant DGR Issuing Member to deliver to the Legal Owner the Goods described in that DGR.

      • 4.5 Liability of DMCC

        Each DGR Member confirms that the liability of DMCC for acting as its agent hereunder shall be limited by Clause 12 (Limitation of Liability of DMCC).

    • 5. Access to DGR System

      (a) DGR Members are entitled to access and use the DGR System to:

      (i) obtain information relating to DGRs in which they have an interest (whether by way of security or ownership); and

      (ii) give instructions relating to DGRs in which they have an interest and in accordance with the provisions of these Rules.
      (b) In addition to the rights of DGR Members set out at paragraph (a), DGR Issuing Members are entitled to access and use the DGR System for the purpose of issuing DGRs.
      (c) Access to the DGR System will be permitted through the DGR System secure server connection. Each DGR Member may access this system using the encrypted password and user ID issued to it from time to time by the DGR Secretariat.
      (d) Originators and Transferees shall have on-screen access to each DGR currently issued to their name or to their order, regardless of whether such DGR is held by way of pledge for, and/or endorsed by way of security to, a Security Beneficiary.
      (e) A Security Beneficiary shall have on-screen access to each DGR for so long as it is held by way of pledge for, and/or endorsed by way of security to, that Security Beneficiary.
      (f) An Issuing Member shall always have on-screen access to a DGR relating to Goods which are currently stored for another DGR Member in a vault operated and/or controlled by that DGR Issuing Member.
      (g) DMCC shall always have access to all DGRs issued into the DGR System.

    • 6. Rights and Obligations of DGR Issuing Members and CMIS

      • 6.1 Storage of Goods

        (a) DGR Issuing Members must agree to store Goods in respect of which a DGR has been issued in a secure vault without limit as to quantity or period of storage.
        (b) Except as provided in paragraph (c) below, a DGR Issuing Member shall keep the Goods so far as possible separate from Goods of other depositors, and from other Goods of the same depositor for which a separate DGR has been issued, so as to permit at all times the identification and re-delivery of the Goods deposited.
        (c) A DGR Issuing Member may commingle Non-Allocated Goods with other Non-Allocated Goods of the same kind and grade. The Legal Owners of the commingled Non-Allocated Goods shall own the entire mass of such Goods in common and each Legal Owner shall be entitled to such amount thereof as originally deposited by him.
        (d) A DGR Issuing Member shall be liable for any loss or damage to Goods (including any unexplained loss or damage) caused by his failure to exercise such care in regard to them as a reasonably careful owner of similar goods would exercise.
        (e) A CMI shall be liable to the Legal Owner of, and any Security Beneficiary with a right of security over, Goods described in a CMI-Certified DGR and the description of which was certified by or on behalf of that CMI, whether by an agent or employee the scope of whose actual or apparent authority includes the certification of DGRs, for damages caused by the failure of the Goods to correspond with the description thereof in the DGR at the time of its issue.
        (f) A DGR Issuing Member shall indemnify a CMI against all liability incurred by that CMI under paragraph (e) to the extent that liability arises due to the act or omission of that DGR Issuing Member before the Certification Lapse Date (if any) relating to the DGR in respect of which that CMI incurs liability.

        (g) A DGR Issuing Member shall be liable to the Legal Owner of, and any Security Beneficiary with a right of security over, Goods described in:

        (i) a CMI-Certified DGR for damages caused by any material discrepancy between the quantity of Goods stated on that CMI-Certified DGR and the actual quantity of the Goods;

        (ii) an Issuer-Certified DGR for damages caused by:

        (A) any material discrepancy between the quantity of Goods stated on that Issuer-Certified DGR and the actual quantity of the Goods; or

        (B) the failure of the Goods to correspond with the description thereof in the DGR; and

        (iii) a Standard DGR for any material discrepancy between the quantity of Goods stated on that Issuer-Certified DGR and the actual quantity of the Goods.

      • 6.2 Delivery of Goods

        (a) A DGR Issuing Member may only deliver Goods to:

        (i) their Legal Owner if the DGR relating to those Goods has not been pledged and/or endorsed by way of security to a Security Beneficiary; or

        (ii) the Security Beneficiary to whom the DGR relating to those Goods is pledged and/or endorsed by way of security.

        (b) Each DGR Issuing Member undertakes:

        (i) to deliver Goods covered by any DGR on demand to the Legal Owner of those Goods if:

        (A) the DGR Issuing Member’s lien (if any) over those Goods is satisfied; and

        (B) the Security Beneficiary (if any) in favour of which the relevant DGR has been pledged and/or endorsed by way of security has posted via the DGR System, for viewing by that DGR Issuing Member and DMCC, a Security Release (All Goods) in respect of the Goods to which that DGR relates;

        (ii) immediately after receipt of a Security Release (Part of Goods), to deliver to the Legal Owner the Goods referred to in such Security Release (Part of Goods) as being released if the DGR Issuing Member’s lien (if any) over those Goods is satisfied;

        (iii) on demand from the Security Beneficiary to whom a DGR is pledged and/or endorsed by way of security but subject to satisfaction of the DGR Issuing member’s lien (if any), to deliver to that Security Beneficiary the Goods to which that DGR relates;

        (iv) immediately upon the termination of the lease of the vault in which it stores Goods, or upon forced closure of that vault as a result of regulatory action, to deliver those Goods to:

        (A) their Legal Owners to the extent the DGR(s) relating to those Goods have not been pledged and/or endorsed by way of security to a Security Beneficiary; or

        (B) any Security Beneficiary to whom a DGR relating to those Goods is pledged and/or endorsed by way of security; and

        (v) following delivery of Goods to a Legal Owner or to a Security Beneficiary, to post a notice via the DGR System to DMCC, the Legal Owner and (if applicable) the Security Beneficiary confirming delivery of the Goods to the Legal Owner or the Security Beneficiary (as the case may be).
        (c) Failure by the DGR Issuing Member to deliver Goods in compliance with a demand by their Legal Owner or (as the case may be) by a Security Beneficiary with rights over those Goods, and in accordance with the conditions applying in Clause 6.2(b) (Delivery of Goods), shall constitute a breach of these Rules.

        (d) If Goods have lawfully been disposed of:

        (i) to satisfy a DGR Issuing Member’s lien pursuant to Clause 6.6(Enforcement of DGR Issuing Member’s lien); or

        (ii) by way of delivery to a Security Beneficiary or Legal Owner (as the case may be) in accordance with Clause 6.2(b),

        and the DGR Issuing Member has cancelled the DGR relating thereto, such DGR Issuing Member shall not be liable for failure to deliver the Goods to the person who was the Legal Owner immediately before such disposal.

      • 6.3 Title to Goods

        No title to Goods can accrue to the DGR Issuing Member after the issue of a DGR in relation to those Goods other than:

        (a) pursuant to a transfer made to that DGR Issuing Member by a Legal Owner at the time of or after the storage of the relevant Goods; or
        (b) arising from the DGR Issuing Member’s lien and following the issue of an order from a court of competent jurisdiction in that regard.

      • 6.4 Delivery of Goods and Cancellation of DGRs

        (a) A DGR Issuing Member shall:

        (i) recall and/or cancel any Non-System Gold Receipt before issuing the DGR to which such Non-System Gold Receipt relates; and

        (ii) immediately following delivery to the Legal Owner or the Security Beneficiary of all of the Goods to which a DGR relates, cancel that DGR,

        failing which such DGR Issuing Member shall be liable to anyone who purchases the DGR for value in good faith for any failure to deliver all the Goods referred to in that DGR.
        (b) Where a DGR Issuing Member delivers part of the Goods for which he had issued a DGR and fails immediately to cancel that DGR and issue a replacement DGR in respect of the Goods not delivered, he shall be liable to anyone who purchases that DGR for value in good faith, for failure to deliver all the goods specified in that DGR, whether such purchaser acquired title to the DGR before or after the delivery of any portion of the Goods by the DGR Issuing Member.

      • 6.5 DGR Issuing Member’s Lien

        (a) Subject to paragraph (b) below, a DGR Issuing Member may have a lien on Goods deposited in a vault under his control (whether or not such Goods are subject to security in favour of a Security Beneficiary) for:

        (i) all lawful charges for storage (or arranging for storage) of the Goods;

        (ii) all lawful claims for money advanced (including interest thereon);

        (iii) insurance, transportation, labour, weighing, coopering and other charges and expenses arising in relation to such Goods; and

        (iv) all reasonable charges and expenses for notice and advertisements of sale and for the sale of the Goods where default has been made in satisfying the DGR Issuing Member’s lien,

        and its enforcement is subject to Clause 6.6 (Enforcement of DGR Issuing Member’s lien).

        (b) A DGR Issuing Member’s lien may apply to any Goods:

        (i) stored or arranged to be stored by that DGR Issuing Member on behalf of the Legal Owner of those Goods and against which the lien is asserted; and

        (ii) in respect of which the DGR has been pledged and/or endorsed in favour of a Security Beneficiary,

        provided that the existence of that lien has been duly noted on the DGR relating to those Goods.

        (c) A DGR Issuing Member loses its lien upon Goods:

        (i) by surrendering possession thereof; or

        (ii) by refusing to deliver the Goods to their Legal Owner or (as the case may be) to a Security Beneficiary with security rights over those Goods who in either case has satisfied that DGR Issuing Member’s lien and has demanded delivery of the Goods in accordance with Clause 6.2(b) (Delivery of Goods).

      • 6.6 Enforcement of DGR Issuing Member’s Lien

        (a) A DGR Issuing Member wishing to enforce its lien shall send a notification via the DGR System to the relevant Legal Owner and simultaneously (if applicable) to any Security Beneficiary with a security interest in the relevant Goods as noted on the DGR System, containing:

        (i) a statement of the DGR Issuing Member’s claim, showing the sum due at the time of the notice and the date or dates when it became due;

        (ii) a demand that the amount of the claim as stated in the notice, and of such further claim as shall accrue, shall be paid within 14 days from the delivery of the notification; and

        (iii) a statement that unless the claim is paid within the time specified the DGR Issuing Member will seek an order from a court of competent jurisdiction for the sale of the Goods by auction.

        (b) Subject to any limitations set out in the relevant court order, and at any time before the Goods are sold, any person claiming a right of property or possession therein may pay the DGR Issuing Member the amount necessary to satisfy his lien and to pay the reasonable expenses and liabilities (including court costs) incurred in serving notices and advertising and preparing for the sale up to the time of such payment. If the DGR Issuing Member’s lien is so satisfied, he shall:

        (i) deliver the Goods:

        (A) to the Security Beneficiary with security rights over those Goods; or

        (B) (if there is no Security Beneficiary and the Legal Owner has made the relevant payment), to the Legal Owner of the Goods,

        (otherwise the DGR Issuing Member shall retain the Goods according to the terms of the original contract of deposit, but subject always to directions from a court of competent jurisdiction); and

        (ii) acknowledge satisfaction of his lien via the DGR System.
        (c) The remedy for enforcing a lien herein provided does not preclude such remedies as may be available to the DGR Issuing Member under applicable law to recover any part of the DGR Issuing Member’s claim that is not satisfied by the proceeds of the sale of the relevant Goods.

      • 6.7 Undertaking and Warranty

        (a) Each DGR Issuing Member undertakes:

        (i) to submit to DMCC a duly completed DGR Issuing Member Annual Return in the form prescribed by DMCC from time to time; and

        (ii) before issuing any DGR, to cancel all Non-System Gold Receipts issued by it or by a vault operator in whose vault the DGR Issuing Member has arranged for the storage of the Goods to which that DGR relates.

        (b) Each DGR Issuing Member and CMI shall be deemed to warrant, immediately before issuing each DGR that it issues and each CMI shall be deemed to warrant, immediately before certifying a description of Goods in a CMI-Certified DGR, that:

        (i) the information contained within the most recent DGR Issuing Member Annual Return (in the case of a DGR Issuing Member) or CMI Annual Return (in the case of a CMI) is true and up to date;

        (ii) (in the case of DGR Issuing Members only) all Non-System Gold Receipts referred to in sub-paragraph (a)(ii) have been cancelled or recalled;

        (iii) no action, legal proceedings or other procedure or step has been taken in relation to:

        (A) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of such DGR Issuing Member or CMI (as the case may be);

        (B) a composition, assignment or arrangement with any creditor of such DGR Issuing Member or CMI (as the case may be);

        (C) the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of such DGR Issuing Member or CMI (as the case may be) or any of its assets; or

        (D) (except in respect of any enforcement proceedings which are fully and finally released within 30 days of commencement or are frivolous or being contested by such DGR Issuing Member or CMI (as the case may be) in good faith), the enforcement of any security over any assets of such DGR Issuing Member or CMI (as the case may be),

        (together, “Insolvency Proceedings“) or any analogous procedure or step has been taken in any jurisdiction; and

        (iv) all permits, licences and compliance certificates required in order to enable such DGR Issuing Member or CMI (as the case may be) to comply with its obligations under these Rules are in full force and effect.
        (c) Each DGR Member undertakes to inform DMCC of any decision as a result of which that DGR Member is to merge with another entity and will not be the surviving entity.

    • 7. Transfer Endorsement

      • 7.1 Transfer Endorsement

        (a) A DGR may be endorsed by way of transfer to another DGR Member. A Transfer Endorsement shall be effected in manuscript by DMCC on the instruction of the Legal Owner of the Goods to which the relevant DGR refers. The wording of such endorsement shall be substantially in the form set out in Part A of Schedule 4 (Form of Transfer Endorsement).
        (b) Subsequent Transfer Endorsements may be made by DMCC on behalf of each successive Legal Owner.

        (c) A Transferee acquires by virtue of a Transfer Endorsement in his favour:

        (i) such title to the Goods as the Transferor had ability to convey to a purchaser in good faith for value; and

        (ii) the benefit of the obligation of the DGR Issuing Member to hold the Goods for him according to the terms of the DGR as if the DGR Issuing Member had contracted directly with him, subject always to the rights of:

        (A) a DGR Issuing member by virtue of a lien over the Goods to which the relevant DGR refers; and

        (B) a Security Beneficiary as created by:

        (x) the appointment of DMCC by the Legal Owner and the Security Beneficiary to hold that DGR by way of pledge for the Security Beneficiary; and/or

        (y) a Security Endorsement of that DGR in favour of that Security Beneficiary.
        (d) Where a Legal Owner contracts to transfer a DGR, the proposed Transferee acquires the right to compel him to endorse the DGR by way of transfer in his favour. Such endorsement shall be carried out by DMCC upon receipt of matching instructions from each of the parties concerned. The transfer shall take effect from the time the endorsement is made.

      • 7.2 No Liability for Breaches of Previous Legal Owners

        A Transferee shall not be liable for any failure on the part of the DGR Issuing Member or any previous Legal Owner to fulfil their respective obligations (other than non-payment of any DGR Issuing Member’s lien on Goods to which a DGR relates).

    • 8. Security

      • 8.1 Types of Security Interest

        Security may be created over a DGR in favour of a single Security Beneficiary by way of pledge and Security Endorsement. A DGR may not be held by way of pledge for one Security Beneficiary and endorsed by way of security in favour of a second Security Beneficiary at the same time.

      • 8.2 Pledge Security

        (a) A pledge is created over a DGR:

        (i) by way of a Pledge Notification from the Legal Owner of that DGR, instructing DMCC to hold that DGR by way of pledge for the Security Beneficiary named in that notification and to endorse that DGR to that Security Beneficiary by way of security;

        (ii) pursuant to a Standing Pledge Instruction (Existing DGR) from the prospective Transferee of that DGR, instructing DMCC, if and when the DGR is endorsed by way of transfer to the prospective Transferee, to hold that DGR by way of pledge for the Security Beneficiary named in that notification and to endorse that DGR to that Security Beneficiary by way of security; or

        (iii) upon issue, if that DGR is a Pre-Pledged DGR.

        (b) Upon receipt by DMCC, via the DGR System, of:

        (i) a Pledge Notification from the Legal Owner of the DGR described therein;

        (ii) a Standing Pledge Instruction (Existing DGR) from the prospective Transferee of that DGR; or

        (iii) a Pre-Pledged DGR,

        DMCC shall hold that DGR for the benefit of the Security Beneficiary named in the Pledge Notification, Standing Pledge Instruction (Existing DGR) or Pre-Pledged DGR, as the case may be.
        (c) The Security Beneficiary named in any Pledge Notification, Standing Pledge Instruction (Existing DGR) or Pre-Pledged DGR, as the case may be, shall be deemed to have agreed to the appointment of DMCC as holder of the DGR described in that Pledge Notification, Standing Pledge Instruction (Existing DGR) or Pre-Pledged DGR, as the case may be, for the purpose of the pledge contemplated thereby.

      • 8.3 Security Endorsement

        Upon receipt of:

        (a) a Pledge Notification from the Legal Owner of a DGR;
        (b) a Standing Pledge Instruction (Existing DGR) from the prospective Transferee of that DGR; or
        (c) a Pre-Pledged DGR,

        DMCC shall endorse by way of security the Pre-Pledged DGR or the DGR described in the Pledge Notification or Standing Pledge Instruction (Existing DGR) (as the case may be). Such endorsement shall be effected in manuscript on that DGR substantially in the form set out in Part B of Schedule 4 (Form of Security Endorsement).

      • 8.4 Annotation of Security Interest

        The creation of security by way of pledge and Security Endorsement:

        (a) shall, immediately following receipt of a Pledge Acceptance from the Security Beneficiary referred to in the Pledge Notification or Standing Pledge Instruction (as the case may be), be noted in the appropriate information field in the relevant DGR within the DGR System, such annotation to include the date on which such security was created and the name of the Security Beneficiary in whose favour it was created; and
        (b) is subject to cancellation without notice if, within seven days after the date of the Pledge Notification or Standing Pledge Instruction (as the case may be), a Pledge Acceptance has not been received from the Security Beneficiary referred to in that Pledge Notification or Standing Pledge Instruction.

      • 8.5 Enforcement of Security

        (a) A Security Beneficiary is entitled to such remedies as are available at law to enforce its rights over Goods represented by a DGR. Nothing within these Rules shall be construed as providing a Security Beneficiary with any remedy which is inconsistent with any federal law of the United Arab Emirates or any applicable local law of any Emirate.
        (b) If a Legal Owner fails to satisfy a Secured Obligation, the Security Beneficiary to whom that Secured Obligation is owed may demand delivery of the Goods to which the relevant DGR relates.
        (c) A Security Beneficiary releasing a Secured Obligation does not represent or warrant the genuineness of the DGR to which such Secured Obligation relates.

      • 8.6 Release of Security

        (a) Subject to Clause 8.4(b) (Annotation of security interest), security over a DGR may only be released by the Security Beneficiary with the benefit of that security.
        (b) The release of security over all Goods to which a DGR relates shall take the form of Schedule 6 (Form of Security Release (All Goods), to be communicated by the Security Beneficiary via the DGR System to DMCC with a copy to the DGR Issuing Member which issued that DGR and to the Legal Owner of that DGR. DMCC shall then indicate on that DGR that it is no longer subject to the Security Endorsement noted thereon, together with the date on which such Security Endorsement was cancelled.

        (c) The release of security over part of the Goods to which a DGR refers shall take the form of Schedule 5 (Form of Security Release (Part of Goods), to be communicated by the Security Beneficiary via the DGR System to the DGR Issuing Member which issued that DGR, with a copy to DMCC and to the Legal Owner of that DGR Each Security Release (Part of Goods) shall:

        (i) state which of the Goods are to remain subject to security; and

        (ii) instruct the relevant DGR Issuing Member to:

        (A) cancel that DGR; and

        (B) issue a new DGR to the Legal Owner or to his order (without any endorsement by way of security in favour of that Security Beneficiary) in respect of the portion of the Goods which is to be released from security; and

        (C) issue a further DGR to the Legal Owner or to his order in respect of the portion of the Goods which is to be held by way of pledge for, and endorsed by way of security to, that Security Beneficiary; and

        (iii) instruct DMCC to hold the DGR referred to in Clause 8.6(c)(ii)(C) by way of pledge for, and to endorse that DGR by way of security to, that Security Beneficiary.

        (d) Following the receipt of a Security Release (Part of Goods), the DGR Issuing Member which issued the relevant DGR shall cancel that DGR and issue new DGRs in accordance with the Security Release (Part of Goods) and Clause 8.6(b) (Release of Security). DMCC shall then:

        (i) mark as cancelled the DGR which is to be replaced;

        (ii) hold the DGR referred to in Clause 8.6(c)(ii)(B) for the benefit of the Legal Owner until such time as a Pledge Notification is issued in respect of that DGR or that DGR is cancelled (whichever occurs sooner); and

        (iii) hold the DGR referred to in Clause 8.6(c)(ii)(C) by way of pledge for, and endorse that DGR by way of security to, the Security Beneficiary referred to in the Security Release (Part of Goods), until such security is released in accordance with Clause 8.6 (Release of Security) or that DGR is cancelled (whichever occurs sooner).

    • 9. Miscellaneous Provisions

      • 9.1 Implied Warranties

        (a) Each DGR Member shall be deemed to warrant, on each date on which it issues any instructions or notices through the DGR System, that these Rules are legal, valid and binding obligations of such DGR Member and do not conflict with its constitutional documents or any laws, judgments, regulations, licences, permits or agreements binding on it.

        (b) By instructing DMCC:

        (i) to effect a Transfer Endorsement;

        (ii) to effect a Security Endorsement; or

        (iii) to hold a DGR on behalf of a Security Beneficiary,

        the person giving such instructions warrants:

        (A) that he has a legal right to endorse the DGR;

        (B) that he has no knowledge of any fact which would impair the validity or value of the DGR; and

        (C) that he has title to the Goods and that the Goods are fit for the purpose for which they are intended.
        (c) Each CMI shall be deemed, on each date on which it issues a CMI Certification, to warrant that the Goods are accurately described in the CMI-Certified DGR on which that CMI Certification is made.

        (d) Each DGR Issuing Member shall be deemed, on each date on which it issues a DGR, to warrant:

        (i) that the quantity of the Goods stated in that DGR is accurate; and

        (ii) (in the case of an Issuer-Certified DGR only) that the description and quantity of the Goods stated in that Issuer-Certified DGR are accurate.

      • 9.2 Force Majeure

        (i) None of DMCC nor any DGR Member or DGR Issuing Member shall be liable for any failure, hindrance or delay in performance in whole or in part of its obligations under these Rules if such failure, hindrance or delay arises out of events or circumstances beyond its control.
        (ii) To the extent permitted by law, none DMCC nor any DGR Member or DGR Issuing Member shall be liable for any special, incidental, consequential, indirect or punitive losses or damages, interest or attorneys fees whether or not caused by the fault or neglect of it and whether or not it had knowledge that such losses or damages might be incurred.
        (a) A DGR Issuing Member does not assume any liability as to the authenticity or assay characteristics of any Goods.

        (b) The events or circumstances referred to in paragraph (a):

        (i) may include, but are not limited to, acts of God or the public enemy, acts of a civil or military authority, embargoes, fire, flood, labour dispute, unavailability or restriction of computer or data processing facilities or energy supplies, and any other causes beyond the parties reasonable control; :

        (ii) (A) war, civil war, revolution, rebellion, insurrection, or civil strife therefrom, or any hostile act by or against a belligerent power; (B) capture, seizure, arrest, restraint or detainment (piracy excepted), and the consequences thereof or any attempt thereat; (C) derelict mines, torpedoes, bombs or other derelict weapons of war;

        (iii) (A) the use of any chemical, biological, bio-chemical or electromagnetic weapon, (B) the use or operation, as a means for inflicting harm, of any computer, computer system, computer software program, malicious code, computer virus or process or any other electronic system, (C) ionizing radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or from the combustion of nuclear fuel; (D) the radioactive, toxic, explosive or other hazardous or contaminating properties of any nuclear installation, reactor or other nuclear assembly or nuclear component thereof; (E) any weapon or device employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter, or (F) the radioactive, toxic, explosive or other hazardous or contaminating properties of any radioactive matter. The exclusion in this sub-clause (iii) does not extend to radioactive isotopes, other than nuclear fuel, when such isotopes are being prepared, carried, stored, or used for commercial, agricultural, medical, scientific or other similar peaceful purposes;

        (iv) any act of terrorism or any action taken in controlling, preventing, suppressing or in any way relating to any act of terrorism. An act of terrorism means an act, including but not limited to the use of force or violence and/or the threat thereof, of any person or group(s) of persons, whether acting alone or on behalf of or in connection with any organization(s) or government(s), committed for political, religious, ideological or similar purposes including the intention to influence any government and/or to put the public, or any section of the public, in fear; and

        (v) shall (in the case of any DGR Member) be promptly notified by the DGR Member party prevented, hindered or delayed from performing any of its obligations under these Rules to the party with the benefit of such obligation and to DMCC via the DGR System.

      • 9.3 Disclosure of Information

        DMCC shall have authority to supply any information concerning a DGR Member and its transactions relating to DGRs to:

        (a) any regulatory body which is entitled to receive or request any such information; and
        (b) any other person to which DMCC is, in its reasonable opinion, legally required to disclose such information.

      • 9.4 Amendment of the Rules

        (a) DMCC may from time to time amend these Rules by notice delivered to the DGR Members via the DGR System (an “Amendment Notice“). Any such amendment shall take effect on the day falling 14 days after the date of the Amendment Notice (or on such later date as DMCC may specify) and may take effect so as to apply to the interests of Legal Owners and Security Beneficiaries in DGRs issued at the time such amendment comes into effect if DMCC so determines.
        (b) Any DGR Member who does not wish to be bound by an Amendment Notice may resign his membership in the DGR System by written notice to the DMCC Secretariat within 14 days after the date of that Amendment Notice (a “Resignation Notice“). Following receipt of that Resignation Notice, DMCC shall publish an Expiring Membership Notice in respect of such DGR Member, to whom paragraphs (c), (d) and (e) of Clause 2.3 (Revocation or resignation of membership) shall then apply.
        (c) Following delivery by a DGR Member of a Resignation Notice in accordance with paragraph (b), all DGRs in which that DGR Member has an interest shall be governed by the version of the Rules in force immediately before the Amendment Notice which immediately preceded that Resignation Notice.

      • 9.5 Validity of Rules and Action

        If at any time any provision of these Rules becomes illegal, invalid or unenforceable in any respect the legality, validity or enforceability of the remaining provisions of these Rules shall in no way be affected or impaired thereby.

      • 9.6 Paper Records

        DMCC shall print and retain each DGR in order to effect Transfer Endorsements and/or Security Endorsements thereon.

      • 9.7 Notices

        (a) All notices required to be given by any DGR Member to another DGR Member or to DMCC under these Rules shall be delivered via the DGR System, and DMCC shall have access to any notice sent by such DGR Member by the DGR System.
        (b) If a DGR Member is to send a notice to another DGR Member or to DMCC via the DGR System and is unable to do so, such notice shall be sent by fax with a paper copy to be delivered by courier to the fax number and address listed for the relevant DGR Member or DMCC (as the case may be) in the DGR System.
        (c) Notices shall be deemed delivered when the sender receives a confirmation of fax or electronic transmission (as the case may be), unless such confirmation of transmission is received after 3pm (Dubai time), in which case such notice shall be deemed delivered on the next day.
        (d) The addressee of a notice deemed delivered in accordance with these Rules shall act in accordance with the terms of that notice unless he can prove that he did not receive that notice.

    • 10. Breaches

      • 10.1 Breach by Originator or Subsequent Legal Owner

        Any person who:

        (a) (being an Originator) deposits Goods to which he does not have title or upon which there are security rights in favour of another (other than a lien arising in favour of the relevant DGR Issuing Member by such deposit); or
        (b) (being an Originator or subsequent Legal Owner of the same Goods) instructs DMCC to endorse by way of transfer or security a DGR in respect of those Goods without disclosing his want of title or the existence of the lien or other security to the Transferee or Security Beneficiary (as the case may be),

        may have his membership revoked in accordance with Clause 2.3 (Revocation or resignation of membership).

      • 10.2 Breach by DGR Issuing Member

        A DGR Issuing Member who:

        (a) issues a DGR without having in his possession or control the Goods for which such DGR is issued;
        (b) issues a DGR for Goods knowing that it contains any false statement (including any failure to disclose a joint interest in those Goods);
        (c) issues a duplicate or additional DGR for goods knowing that a former DGR for the same Goods or any part of them is outstanding and uncancelled; or
        (d) delivers Goods without instructing DMCC to cancel the DGR relating to those Goods immediately after such delivery,

        may have his membership revoked in accordance with Clause 2.3 (Revocation or resignation of membership).

    • 11. Dispute Resolution

      The parties hereto agree to negotiate in good faith to resolve any dispute arising between them in respect of these Rules. If any dispute continues unresolved for more than 60 days from the day on which such negotiations commenced, or on such sooner date as may be agreed by the relevant parties, it shall be referred to arbitration in Dubai under the auspices of the Dubai Chamber of Commerce and Industry, in accordance with the Rules of Arbitration of the International Chamber of Commerce (the “ICC Rules“), the ICC Rules being incorporated into this clause by reference. The number of arbitrators shall be three and the arbitration shall be conducted in English. In the event of any inconsistency between the ICC Rules and applicable law and procedure in the Emirate of Dubai, the inconsistency shall be resolved by reference to applicable law and procedure in the Emirate of Dubai.

    • 12. Limitation of Liability of DMCC

      • 12.1 Limitation of Liability

        To induce DMCC to act hereunder, it is further agreed by each DGR Member that:

        (a) DMCC shall not be under any duty to give the DGRs held by it hereunder any greater degree of care than it gives its own similar property.
        (b) These Rules expressly set forth all the duties of DMCC with respect to any and all matters pertinent hereto, and shall not be interpreted so as to impose any implied duties or obligations on DMCC. DMCC shall not be bound by the provisions of any prior agreement with any DGR Member to the extent that such prior agreement conflicts with these Rules.
        (c) The benefit of the performance by DMCC of its obligations under these Rules is conferred upon DGR Members as principals and upon no other persons. It is not the intention of DMCC or DGR Members to confer any benefit on or give any right to enforce any provisions of these Rules to any person who is not a DGR Member.
        (d) DMCC shall not be liable, for any loss, liability, claim, action, damages or expense arising out of or in connection with its performance of or failure to perform any of its obligations under these Rules save as are caused by its own negligence or wilful default.
        (e) DMCC shall be entitled to rely upon any order, judgment, certification, demand, notice, instrument or other writing delivered to it hereunder without being required to determine the authenticity or the correctness of any fact stated therein or the propriety or validity or the service thereof. DMCC may act in reliance upon any instrument or signature believed by it to be genuine and on any communication received through the DGR System or any other written medium (whether electronic or otherwise). DMCC may assume that any person purporting to give receipt or advice or make any statement or execute any document in connection with the provisions hereof has been duly authorised to do so.

        (f) In the event of any disagreement between DGR Members resulting in adverse claims or demands being made in connection with any DGR, or in the event that DMCC is in doubt as to what action it should take hereunder, DMCC shall be entitled not to carry out any action in respect of that DGR until DMCC shall have received:

        (i) a final non-appealable order of a court of competent jurisdiction directing delivery of the Goods to which the relevant DGR relates, or the endorsement of that DGR; or

        (ii) a written agreement executed by the relevant DGR Members directing delivery of the Goods to which the relevant DGR relates, or the endorsement of that DGR,

        in which event DMCC shall:

        (A) instruct the relevant DGR Issuing Member to dispose of those Goods; or

        (B) endorse those DGRs,

        in either case in accordance with such order or agreement. Any court order shall be accompanied by a legal opinion by counsel for the presenting party satisfactory to DMCC to the effect that said opinion is final and non-appealable. DMCC shall act on such court order and legal opinions without further question.

      • 12.2 Indemnity

        Each DGR Member undertakes to indemnify DMCC against all losses, liabilities and claims (including legal fees and disbursements incurred in respect therewith) incurred by DMCC or alleged by any other DGR Member against DMCC and arising out of any breach by such DGR Member of:

        (a) its obligations under these Rules; or
        (b) any duty of care owed by that DGR Member to DMCC as a DGR Member,

        except to the extent that such losses, liabilities or claims arise out of DMCC’s gross negligence or deliberate misconduct.

    • 13. Confidentiality

      (a) Each DGR Member undertakes not to disclose any Confidential Information (other than Confidential Information that has entered the public domain through no fault of such DGR Member) to any person:

      (i) other than its employees, agents and advisors (subject to each such employee, agent and advisor agreeing (mutatis mutandis) in the terms of this Clause 13(a) not to disclose the Confidential Information;

      (ii) other than as may be compelled to be disclosed in a judicial or administrative proceeding or as otherwise required by law;

      (iii) (in the case of Transaction-specific Information) without the prior written consent of all other DGR Members which are party to the relevant transaction; or

      (iv) (in the case of DGR System Information) without the prior written consent of DMCC.

      (b) DMCC undertakes not to disclose any DGR Member-specific Information (other than DGR Member-specific Information that has entered the public domain through no fault of DMCC):

      (i) to any person other than its employees, agents and advisors (subject to each such employee, agent and advisor agreeing (mutatis mutandis) in the terms of this Clause 13(b) not to disclose the DGR Member-specific Information;

      (ii) other than as may be compelled to be disclosed in a judicial or administrative proceeding or as otherwise required by law;

      (iii) without the prior written consent of the DGR Member(s) to which such DGR Member-specific Information relates; or

      (iv) other than as may be reasonably required by DMCC for the preparation of periodic transaction volume reports relating to DGRs.

    • 14. Governing Law and Jurisdiction

      • 14.1 Governing Law

        (a) Subject to Clause 14.1(b) (Governing Law), the laws of the Emirate of Dubai and all applicable laws of the United Arab Emirates shall govern all disputes arising under these Rules.
        (b) In the case of a dispute concerning Goods stored in any Emirate other than the Emirate of Dubai (an “Alternative Local Jurisdiction“) the laws of the Alternative Local Jurisdiction and all applicable laws of the United Arab Emirates shall govern, but only to the extent that the dispute concerns those Goods.

      • 14.2 Jurisdiction

        Without prejudice to Clause 11 (Dispute Resolution), each DGR Member agrees that any disputes arising under these Rules shall be subject to the jurisdiction of the courts of the Emirate of Dubai or any Alternative Local Jurisdiction, as the case may be, and each DGR Member submits to the jurisdiction of those courts.

        These Rules have been entered into and take effect from on the date stated at the beginning of these Rules.

    • Signatories to the Rules

      DUBAI MULTI COMMODITIES CENTRE AUTHORITY

      By:

      [Other signatories to be added in conformed copy as updated from time to time, on the basis of executed Letters of Adherence]

    • Schedule 1 Form of Letter of Adherence

      [On headed paper of prospective DGR Member]

      [Date]

      To: DMCC Secretariat
      Dubai Multi Commodities Centre Authority

      For the attention of: [•]

      Dear Sirs

      Application for membership in DMCC’s Dubai Gold Receipts System

      1. We refer to the Rules Concerning the Issuance of Dubai Gold Receipts dated [•], 2004, as amended from time to time (the “DGR Rules“).
      2. Save as indicated herein, capitalised terms used in this Letter of Adherence shall have the meaning given to them in the DGR Rules.
      3. This is a Letter of Adherence for the purpose of the DGR Rules.
      4. In consideration for being accepted as a DGR Member, we irrevocably and unconditionally agree to be bound by the DGR Rules and undertake to fulfil our obligations thereunder.
      5. Our fax number and address for the purpose of Clause 9.6 (Notices) of the DGR Rules are [fax number] and [address]. We confirm our agreement to DMCC publishing this fax number and address in the DGR System for viewing by other DGR Members for the purpose of Clause 9.6 (Notices) of the DGR Rules. Notices are to be marked for the attention of [•].
      6. This Letter of Adherence shall be governed by the laws of the Emirate of Dubai and all applicable laws of the United Arab Emirates and we hereby submit to the jurisdiction of the courts of the Emirate of Dubai for the purpose of all disputes arising out of the DGR Rules.

      Yours faithfully

      ______________________
      [Name of prospective DGR Member]

      Acceptance

      In consideration of the promise given in Paragraph 4 above, we hereby accept the application of the above-named person as a DGR Member.

      ______________________
      Dubai Multi Commodities Centre Authority

    • Schedule 2 Form of Pledge Notification

      [To be delivered via the DGR System]

      [Date and serial number]¹

      To: DMCC Secretariat
      Dubai Multi Commodities Centre Authority

      For the attention of: [•]²

      Dear Sirs

      Pledge Notification

      1. We refer to the Rules Concerning the Issuance of Dubai Gold Receipts dated [•], 2004, as amended from time to time (the “DGR Rules“), and DGR number [insert unique DGR number] issued in our name or to our order (the “DGR“).
      2. Save as indicated herein, capitalised terms used in this Pledge Notification shall have the meaning given to them in the DGR Rules.

      3. Subject to receipt of a Pledge Acceptance from the Security Beneficiary (as defined below), we hereby irrevocably instruct you to:

      (a) hold the DGR by way of pledge for the benefit of [insert name of Security Beneficiary] (the “Security Beneficiary“); and

      (b) endorse the DGR by way of security in favour of the Security Beneficiary,

      until such time as the Security Beneficiary releases all or part of its security over the DGR pursuant to a Security Release.

      Yours faithfully

      [Legal Owner]

      Pledge Acceptance

      We hereby accept the security referred to in Pledge Notification number [•] dated [•]. [Security Beneficiary]

      ---

      ¹ To be generated automatically by DGR System

      ² Configure so as to generate a copy notice to the Security Beneficiary, in order to prompt a Pledge Acceptance.

    • Schedule 3 Forms of Standing Pledge Instruction

      • Part 1 Form of Standing Pledge Instruction (Existing DGR)

        [To be delivered via the DGR System]

        [Date and serial number]³

        To: DMCC Secretariat
        Dubai Multi Commodities Centre Authority
        For the attention of: [•]⁴

        Dear Sirs

        Standing Pledge Instruction (Existing DGR)

        1. We refer to the Rules Concerning the Issuance of Dubai Gold Receipts dated [•], 2004, as amended from time to time (the “DGR Rules“), and DGR number [insert unique DGR number] issued in the name of [Transferor] or to their order (the “DGR“).]
        2. Save as indicated herein, capitalised terms used in this Pledge Notification shall have the meaning given to them in the DGR Rules.
        3. We anticipate that [Transferor] will instruct DMCC to endorse the DGR by way of transfer to us, in return for our instructing you to pledge the DGR in favour of the person financing the purchase price of the Goods to which the DGR refers.

        4. We hereby irrevocably instruct you, if and when the DGR has been endorsed by way of transfer to us or to our order, and following receipt by you of a Pledge Acceptance from the Security Beneficiary (as defined below) to:

        a. hold the DGR by way of pledge for the benefit of [insert name of Security Beneficiary] (the “Security Beneficiary“); and

        b. endorse the DGR by way of security in favour of the Security Beneficiary,

        until such time as the Security Beneficiary releases all or part of its security over the DGR pursuant to a Security Release.

        Yours faithfully
        [Transferee]

        Pledge Acceptance

        We hereby accept the security referred to in Standing Pledge Instruction (Existing DGR) number [•] dated [•].

        [Security Beneficiary]

        ---

        ³ To be generated automatically by DGR System

        ⁴ Configure so as to generate a copy notice to the Security Beneficiary, in order to prompt a Pledge Acceptance.

      • Part 2 Form of Standing Pledge Instruction (Goods in Transit)

        [To be delivered via the DGR System]

        [Date and serial number]⁵

        To: [DGR Issuing Member]

        For the attention of: [•]]⁶

        Standing Pledge Instruction (Goods in Transit)

        Dear Sirs

        1. We refer to the Rules Concerning the Issuance of Dubai Gold Receipts dated [•], 2004, as amended from time to time (the “DGR Rules“), and [description of Goods] (the “Goods“) in transit to [name of vault] operated by [DGR Issuing Member] (the “DGR Issuing Member“) in respect of which a Pre-Pledged DGR is expected to be issued in our name or to our Order (the “DGR“).
        2. Save as indicated herein, capitalised terms used in this Pledge Notification shall have the meaning given to them in the DGR Rules.

        3. We hereby irrevocably instruct you, immediately following receipt by you of the Goods, to:

        (a) issue a Pre-Pledged DGR to us or to our order, indicating on its face that such Pre-Pledged DGR is pledged for the benefit of [insert name of Security Beneficiary] (the “Security Beneficiary“); and

        (b) instruct DMCC to:

        a. hold the DGR by way of pledge for the benefit of the Security Beneficiary; and

        b. endorse the DGR way of security in favour of the Security Beneficiary,

        until such time as the Security Beneficiary releases all or part of its security over the DGR pursuant to a Security Release.

        Yours faithfully
        [Prospective Originator]

        Pledge Acceptance

        We hereby accept the security referred to in Standing Pledge Instruction (Goods in Transit) number [•] dated [•].

        [Security Beneficiary]

        ---

        ⁵ To be generated automatically by DGR System

        ⁶ Configure so as to generate a copy notice to the Security Beneficiary, in order to prompt a Pledge Acceptance.

    • Schedule 4 Forms of Transfer Endorsement and Security Endorsement

      • Part 1 Form of Transfer Endorsement

        “The rights to which this document relates are hereby endorsed by way of transfer to [insert name of Transferee] or to his order with effect from [insert date of endorsement], subject to the rights of [insert name of Security Beneficiary]⁷ “.

        ---

        ⁷ Insert reference to Security Beneficiary only if DGR has been pledged.

      • Part 2 Form of Security Endorsement

        “The rights to which this document relates are hereby pledged for the benefit of, and endorsed by way of security to, [insert name of Security Beneficiary] or to his order with effect from [insert date of endorsement]“.

    • Schedule 5 Form of Security Release (Part of Goods)

      [To be delivered via the DGR System]

      [Date and serial number]⁸

      To: [Name of DGR Issuing Member]
      For the attention of: [•]

      Copy: DMCC Secretariat
      Dubai Multi Commodities Centre Authority

      [Legal Owner]⁹

      Dear Sirs

      Security Release (Part of Goods)

      1. We refer to the Rules Concerning the Issuance of Dubai Gold Receipts dated [•], 2004, as amended from time to time (the “DGR Rules“), and DGR number [•] issued in the name of [insert Legal Owner] (the “Legal Owner“) or to order and pledged to [insert name of Security Beneficiary] pursuant to Pledge Notification number [•] dated [•] (the “DGR“).
      2. Save as indicated herein, capitalised terms used in this Security Release (Part of Goods) shall have the meaning given to them in the DGR Rules.

      3. We hereby irrevocably instruct you to:

      a. cancel the DGR;

      b. issue a new DGR to the Legal Owner in respect of [insert quantity of Goods being released from security], without any endorsement to us by way of security; and

      c. issue a new DGR to the Legal Owner in respect of [insert Goods remaining secured], such new DGR to be held by DMCC by way of Pledge for, and endorsed by way of security to, us as Security Beneficiary in accordance with Clause 8.6(c)(ii)(C) of the DGR Rules.

      Yours faithfully

      [Security Beneficiary]

      ---

      ⁸ To be generated automatically by DGR System.

      ⁹ Copy notices to be generated automatically by DGR System.

    • Schedule 6 Form of Security Release (All Goods)

      [To be delivered via the DGR System]

      [Date and serial number]¹⁰

      To: DMCC Secretariat
      Dubai Multi Commodities Centre Authority

      Copy: [Name of DGR Issuing Member]
      For the attention of: [•]

      [Legal Owner] ¹¹

      Dear Sirs

      Security Release (All Goods)

      1. We refer to the Rules Concerning the Issuance of Dubai Gold Receipts dated [•], 2004, as amended from time to time (the “DGR Rules“), and DGR number [•] issued in the name of [insert Legal Owner] (the “Legal Owner“) or to order and pledged to [insert name of Security Beneficiary] pursuant to Pledge Notification number [•] dated [•] (the “DGR“).
      2. Save as indicated herein, capitalised terms used in this Security Release (All Goods) shall have the meaning given to them in the DGR Rules.
      3. We hereby release our security over the Goods referred to in the DGR and hereby irrevocably instruct DMCC to amend the DGR to indicate that it is not pledged or endorsed by way of security, and indicate on the DGR that it is no longer subject to the Security Endorsement noted thereon, together with the date on which such Security Endorsement was cancelled.

      Yours faithfully

      [Security Beneficiary]

      ---

      ¹⁰ To be generated automatically by DGR System.

      ¹¹ Copy notices to be generated automatically by DGR System.

• Dubai Pearl Regulations

  These Rules & Regulations (“the Rules”) are dated the 1^st June 2008.

  • Article (1) Name and Address

    • 1.1

      The name of the exchange shall be “Dubai Pearl Exchange” and is referred to hereinafter as “DPE”.

    • 1.2

      The principal office of DPE shall be at Dubai Multi Commodities Centre in the Emirate of Dubai, U.A.E.

  • Article (2) Objectives and Powers

    • 2.1

      The objectives of DPE shall be to:

      (a) promote the interests and development of the Pearl Industry in the Middle East and adjacent regions. Throughout these Rules the expression “Pearl Industry” shall mean the natural and cultured pearl industry together with the related jewellery industry;
      (b) encourage and maintain just and equitable principles of trade within the Pearl Industry amongst its Members;
      (c) eliminate abuses and unfair trade practices in relation to such trade;
      (d) disseminate accurate and reliable information concerning such trade;
      (e) cooperate with governmental agencies and other relevant parties within the United Arab Emirates and abroad in the establishment and maintenance of institutional arrangements conducive to the ethical and economic welfare of these industries;
      (g) provide for disciplinary proceedings to be taken against Members for breach of these Rules;
      (h) Provide, regulate and maintain suitable premises in the Emirate of Dubai for its activities.

    • 2.2

      DPE has all the powers required to achieve its objectives as set out above, including without limitation the power to:

      (a) provide services to its Members (‘Members’) and third party Visiting Traders as it, in its sole discretion deems fit, and to impose and collect fees against such services provided;
      (b) invest its funds in the form, activities and/or projects as may be deemed appropriate by its Management Team;
      (c) join in association with any similar body agreeing that Members shall be hereby required to comply with the rules and regulations of such body;
      (d) carry out any other function as may be deemed by the Management Team to be necessary for achieving its objectives.

      The above objectives shall be carried out by DPE, in accordance with those rules and regulations issued by Dubai Multi Commodities Centre Authority and the laws and regulations of the United Arab Emirates as shall be applicable in the Emirate of Dubai from time to time.

  • Article (3) Membership

    • 3.1 Categories of Membership

      3.1.1 There shall be three categories of DPE membership:—

      (a) Individual Membership which shall be available for natural persons satisfying those qualifications specified in Article 3.2.2 below;

      (b) Corporate Membership which shall be available for corporate entities satisfying those qualifications specified in Article 3.2.3 below;

      (c) Affiliate Membership which shall be available for corporate entities satisfying those qualifications specified in Article 3.2.4 below.

    • 3.2 Application for Membership

      3.2.1 All membership applications shall be dealt with by DPE’s Membership Committee. Application for membership with DPE does not automatically constitute acceptance thereof by the Membership Committee and such application shall be subject to those requirements and qualifications determined by the Membership Committee from time to time in respect thereof.

      3.2.2 Individual Membership:

      A natural person may be granted Individual Membership if they have:—

      (a) attained the age of 21 years at the time of submitting the application for membership;

      (b) been engaged in the Pearl Industry for a period of at least two years at the time of submitting the application for membership;

      (c) an unblemished trade reputation;

      (d) been interviewed by the Membership Committee;

      (e) submitted to the Membership Committee a fully completed Application Form along with all supporting documents and the Application Fee;

      (f) in their possession 2 (two) trade references from the following sources: an existing DPE Member, a person/corporation of good standing and repute active in the Pearl Industry or a Pearl Industry association recognised for this purpose by DPE;

      (g) provided the Membership Committee with all other documents and information as may be requested;

      (h) it has provided the Membership Committee with a signed undertaking unconditionally agreeing to be bound by and to be subject to those arbitration provisions contained in these Rules.

      3.2.3 Corporate Membership:

      An entity duly registered and existing in any jurisdiction may be granted Corporate Membership if:—

      (a) it is engaged in, or proposes to engage in, the Pearl Industry;

      (b) at least one of its directors/shareholders satisfies the criteria set out in Articles 3.2.2 (a), (b) and (d) above.

      (c) it, and its directors/officers, has an unblemished trade reputation;

      (d) it has submitted to the Management Committee a fully completed Application Form along with all supporting documents and the Application Fee;

      (e) it has in its possession 2 (two) trade references from the following sources: an existing DPE Member, a person/corporation of good standing and repute active in the Pearl Industry or a Pearl Industry association recognised for this purpose by DPE;

      (f) it has provided the Membership Committee with a signed undertaking unconditionally agreeing to be bound by and to be subject to those arbitration provisions contained in these Rules.

      (g) it has provided the Membership Committee with all other documents and information as may be requested.

      3.2.4 Affiliate Membership

      A bank, financial institution or other Pearl Industry service entity and licensed to conduct business with respect to financing, marketing or other services in support of the Pearl Industry and/or coloured stones industry may be granted Affiliate Membership if it satisfies those financial and other criteria for Affiliate Membership as shall established by the Membership Committee from time to time and:

      (a) it is an active and reputable entity that supports the Pearl Industry;

      (b) it has an unblemished trade reputation;

      (c) it has submitted to the Membership Committee a fully completed Application Form along with all supporting documents (including its valid constitutive documents) and the Application Fee;

      (d) it has submitted such references and letters of recommendation in support of its application from banks, Individual Members, Corporate Members, Affiliate Members or other reputable sources as the Membership Committee may consider acceptable; and

      (e) it has provided an undertaking duly signed by an authorised signatory, confirming its agreement to be bound by and be subject to the provisions of these Rules.
      3.2.5 Admission to DPE membership shall rest solely with the Membership Committee. In the event that the Membership Committee decides to reject an application for membership, neither the Membership Committee nor DPE shall be obligated to disclose the reason for such rejection.
      3.2.6 The list of the names of all applicants for Individual, Corporate and Affiliate memberships shall be posted at the DPE offices for a period of ten days prior to the Membership Committee interview of any applicant.
      3.2.7 Any Member may resign from the membership of DPE by sending a written notice of not less than 30 (thirty) days to the DPE. Such Member shall be responsible for all its obligations and duties in relation to the period up to the effective date of its resignation. DPE shall not be liable to refund any Membership Fee(s) either in whole or in part in the event that a Member elects to resign from the DPE.

    • 3.3 Membership Rights

      3.3.1 Individual Members shall be entitled to:

      (a) represent themselves in their business dealings with third parties as a Member of DPE;

      (b) enter the trading floor of DPE for the purpose of dealing with other Members in the Pearl Industry;

      (c) enjoy other benefits and privileges as shall be determined by the DPE from time to time, at its sole discretion.

      3.3.2 Corporate Members shall be entitled to:

      (a) represent themselves in their business dealings with third parties as a Member of the DPE;

      (b) through any of their maximum of 3 (three) nominated representatives, engage in trading on the trading floor of DPE in pearls and related jewellery;

      (c) enjoy other benefits and privileges as shall be determined by the DPE from time to time, at its sole discretion.

      3.3.3 Affiliate Members shall be entitled to:

      (a) represent themselves in their business dealings with third parties as an Affiliate Member of the DPE; and

      (b) enjoy such benefits and privileges as shall be determined by the DPE from time, at its sole discretion.

    • 3.4 Membership Obligations:

      Members shall be obliged to:

      (a) conduct their business dealings in pearls and related jewellery in accordance with the laws of the Emirate of Dubai and the federal laws of the UAE applicable therein;
      (b) comply with these Rules, as duly amended from time to time;
      (c) comply with such other rules, regulations or policies as may be issued by the Dubai Multi Commodities Centre or the Dubai Multi Commodities Centre Authority from time to time;
      (d) pay to DPE upon demand and without deduction or set-off, annual membership fees together with such other monies as may be required under these Rules.

    • 3.5 Disciplinary Action Against Members

      3.5.1 The DPE may terminate, with immediate effect, the membership of any Member who has:—

      (a) failed to pay on time any/all amounts, fines, fees due to the DPE despite the issuance of two written reminder notices by the DPE in respect of such amounts; or

      (b) failed to pay on time to other Members or Visiting Traders any monies arising out of trades conducted with those Members or Visiting Traders and which are not the subject of any dispute under Article 7 below.

      (c) failure to pay fines imposed by DPE, as well as, any other amounts due from such Member to DPE;

      (d) breached any provision of (i) these Rules or any amendment thereto;

      (e) breached any provision of any Dubai Multi Commodities Centre Authority rules, regulations or policies as may be issued from time to time; or

      (f) breached any provision of any DPE rules, regulations or policies as may be issued from time to time; or

      (g) received a petition in bankruptcy or any involuntary petition in bankruptcy, making an assignment for the benefit of creditors; or

      (i) been convicted of any criminal offence; or

      (j) committed any act or omission which, in the sole discretion of the DPE, has or may have, the effect of bringing the reputation of the DPE and/or Dubai Multi Commodities Centre and/or Dubai Multi Commodities Centre Authority into disrepute.
      3.5.2 The DPE shall reserve the right to, in its sole discretion, suspend for such period of time as it deems fit, the membership of any Member in the event of any breach under Article 3.5.1 above. The implementation of any suspension under this Article 3.5.2 shall be without prejudice to any later decision to terminate the membership of such Member. During any period of suspension a Member may not carry out any trades within the DPE or utilise any DPE facilities.

  • Article (4) Fee Determination

    • 4.1

      The registration fees, the annual membership fees, as well as, all applicable fines and all other financial obligations of Members towards DPE shall be determined by the DPE and communicated to Members.

  • Article (5) The Management of DPE

    • 5.1

      DPE shall be managed by a Management Team appointed by Dubai Multi Commodities Centre Authority. The Management Team shall comprise a total of 3 managers (“Managers”).

    • 5.2

      The tenure of the Management Team shall commence from its date of appointment and shall continue for an indefinite term.

    • 5.3

      Dubai Multi Commodities Centre Authority may appoint an Alternate Manager for any individual Manager from time to time.

    • 5.4

      Dubai Multi Commodities Centre Authority shall be entitled, in its sole discretion, to replace any one or more of the Managers at any time.

    • 5.5

      The Management Team shall be authorised to:

      (a) hold meetings at such times and places as it may deem proper;
      (b) appoint committees on particular subjects;
      (c) devise and carry into execution such other measures as it may deem proper to promote the objectives of DPE and to best protect the interest and welfare of the Members;
      (d) cooperate with governmental agencies in all matters concerning the Pearl Industry;
      (e) fine, suspend or terminate any Member(s);
      (f) adopt such further rules and regulations, as it deems appropriate for the management and conduct of DPE;
      (g) delegate any of its powers to any individual Manager (s) sitting on the Management Team;
      (h) opening, operating and closing all bank accounts in relation to DPE and conducting all dealings with banks and financial institutions and to sign all applications and documents for such purposes and to obtain credit facilities and loans required on behalf of DPE to achieve its objectives;
      (i) pledging, mortgaging and otherwise charging any assets held for the benefit of DPE for the purposes of raising and providing the financial facilities deemed necessary by the Management Team;
      (j) suing on behalf of DPE, attaching properties of debtors, referring cases to arbitration, appointing lawyers and otherwise taking all legal measures to protect the interests of the DPE whether as plaintiff, respondent, party to arbitration or otherwise.

    • 5.6

      A General Manager who shall be a member of the Management Team, shall be appointed by the Management Team and shall have the authority to carry out the:—

      (a) managing the day-to-day operations of DPE;
      (b) negotiating and signing all types of contracts, transactions, arrangements and dealings with third parties to be entered into by Dubai Multi Commodities Centre Authority on behalf of DPE;
      (c) the arrangement of the employment of persons at the DPE and to determine their salaries and benefits, as well as other terms and conditions of such employment, and shall be entitled to terminate such employment;
      (d) determining the financial budgets of DPE;
      (e) paying all costs, charges and expenses related to DPE and giving receipts and discharges in respect of any amount paid to DPE;
      (f) representing DPE and signing on its behalf, without limitation, before all governmental offices and departments;
      (g) delegating all or part of their powers, as they shall deem fit.

      The General Manager shall exercise the powers and authorities listed above in accordance with the general policies determined by the Management Team and Dubai Multi Commodities Centre Authority from time to time.

    • 5.7

      The Management Team shall record or cause to be recorded all votes and minutes of all proceedings in books to be kept for that purpose.

    • 5.8

      Special meetings can be called when deemed necessary, and shall consist of a minimum of any two Managers.

    • 5.9

      At Management Team meetings, a quorum shall consist of 2 Managers, one of which shall comprise the General Manager.

  • Article (6) Visiting Traders

    • 6.1

      DPE acknowledges that Members may wish to carry out trades with non-Members within DPE’s premises.

    • 6.2

      Any Member seeking to carry out trades under Article 6.1 must with first complete in full a ‘Visiting Trader Application Form’. In the event that such application is approved by DPE, the applying Member shall be allocated a specific Trading Room for a specific time and date. The non-Member shall, upon entering DPE’s premises on the allotted time and date shall then be duly accorded ‘Visiting Trader’ status.

    • 6.3

      In the event that a Members Visiting Trader Application Form is rejected, such rejection shall be communicated in writing to the Member concerned. DPE shall not be obligated to disclose the reason for such rejection to the Member or the proposed Visiting Trader.

    • 6.4

      Members shall be liable at all times for any/all acts or omissions carried out by their Visiting Traders.

    • 6.5

      Visiting Traders shall be subject to these Rules from the time the Visiting Trader Application Form is approved under Article 6.2 above.

    • 6.6

      Under no circumstances shall any part of these Rules be construed as expressly or impliedly conferring Membership status on any Visiting Trader.

  • Article (7) Arbitration

    • 7.1 Arbitration Proceedings

      For the purposes of this Article 7.1 the expression “Party” shall mean a party to a dispute and the expression “Parties” shall mean the plural form.

      In the event of any dispute arising out of or in connection with these Rules or any trade carried out on the DPE, the Parties shall use their best endeavours to settle such dispute within a period of thirty (30) days failing which the dispute or difference shall be finally settled by arbitration in accordance with the Rules of Commercial Conciliation and Arbitration of the Dubai International Arbitration Centre (“DIAC”).

      The arbitration tribunal shall consist of three (3) arbitrators. Within thirty (30) days notice by any one Party to the other of its demand for arbitration, which demand shall also set forth the name of its arbitrator, the other Party shall select its arbitrator and so notify the demanding Party, then within thirty (30) days thereafter, the two arbitrators so selected shall select a third arbitrator. In the event of the selected arbitrators failure to agree upon and select a third arbitrator within thirty (30) days, the Director General of the DIAC shall appoint the third arbitrator. In the event of a default by either of the Parties in dispute to name its arbitrator, the arbitrator so appointed by the non-defaulting Party shall have the power to proceed to arbitrate and determine the matters of disagreement as if he was an arbitrator appointed by both Parties in dispute for that purpose.

      The seat of the arbitration shall be the Emirate of Dubai. The arbitration proceedings and award shall be conducted and written in the English language.

      The arbitration award shall be final and binding on both Parties and not subject to any appeal

  • Article (8) Amendment to Rules

    • 8.1

      These Rules may be amended by DPE in its sole discretion at any time, such amendments shall come into force 2 (two) working DPE days.

  • Article (9) Dissolution

    • 9.1

      DPE may be dissolved at any time and for whatever reason by a decision of the Dubai Multi Commodities Centre Authority.

  • Article (10) Other Issues

    • 10.1

      Issues not covered by the provisions of these Rules may be addressed and regulated by regulations issued by the DPE from time to time, such regulations to be published at the head office of DPE.

  • Article (11) Trade Facilitator Only

    • 11.1

      DPE shall operate to facilitate the conduct of private trades between buyers and sellers. DPE does not provide any guarantee to Members or Visiting Traders as to any level of trade which may be enjoyed be them in trading on the DPE and nothing in these Rules shall be construed as creating any guarantee, surety or indemnity from DPE to any Member or Visiting Trader regarding the amount of trade that may be realised by them on the DPE.

  • Article (12) No Liability

    • 12.1

      DPE shall not be liable for:—

      12.1.1 the loss of or theft of any stock or inventory from the DPE’s premises and belonging to any Member or Visiting Trader; and/or
      12.1.2 any damage howsoever caused to any stock or inventory belonging to any Member or Visiting Trader whilst such stock/inventory is stored on the DPE’s premises

      where such loss, theft or damage is:—

      12.1.3 caused due to the negligence, recklessness or deliberate act or omission of a Member or Visiting Trader; and/or
      12.1.4 caused/occasioned following 17:00hrs on any DPE Working Day. For the purposes of this Article 12, ‘DPE Working Day’ shall mean Sunday to Thursday, 08:30 hours to 16:30 hours.

  • Article (13) Anti-Money Laundering

    • 13.1

      DPE reserves the right to increase the scope, nature, detail and frequency of any anti-money laundering checks/procedures that it carries out against Members and/or Visiting Traders from time to time.

    • 13.2

      DPE reserves the right to incorporate into these Rules or append thereto, any resolution, directive or policy issued by any competent authority and concerning anti-money laundering.

  • Article (14) DPE Trading Room Cancellations

    • 14.1

      Members shall provide the DPE with 5 DPE working days written notice of any cancellations regarding those dedicated DPE Trading Rooms reserved by them.

    • 14.2

      DPE shall have the discretion to levy a fines against Members failing to comply with Article 14.1 above. Details as to such fines shall be published by the DPE from time to time.

• Dubai Gems Club Regulations

  These Rules & Regulations (“the Rules”) are dated the 1^st June 2008.

  • Article (1) Name and Address

    • 1.1

      The name of the association shall be “Dubai Gems Club” and is referred to hereinafter as “DGC”.

    • 1.2

      The principal office of DGC shall be at Dubai Multi Commodities Centre in the Emirate of Dubai, U.A.E.

  • Article (2) Objectives and Powers

    • 2.1

      The objectives of DGC shall be to:

      (a) promote the interests and development of the Coloured Stone Industry in Dubai, the Middle East and adjacent regions. Throughout these Rules the expression “Coloured Stone Industry” shall mean the coloured stone industry together with the coloured stone jewellery industry;
      (b) encourage and maintain just and equitable principles of trade within the Coloured Stone Industry amongst its Members;
      (c) eliminate abuses and unfair trade practices in relation to such trade;
      (d) disseminate accurate and reliable information concerning such trade;
      (e) cooperate with governmental agencies and other relevant parties within the United Arab Emirates and abroad in the establishment and maintenance of institutional arrangements conducive to the ethical and economic welfare of these industries;
      (g) provide for disciplinary proceedings to be taken against Members for breach of these Rules;
      (h) Provide, regulate and maintain suitable premises in the Emirate of Dubai for its activities.

    • 2.2

      DGC has all the powers required to achieve its objectives as set out above, including without limitation the power to:

      (a) provide services to its Members (‘Members’) and third party Visiting Traders as it, in its sole discretion deems fit, and to impose and collect fees against such services provided;
      (b) invest its funds in the form, activities and/or projects as may be deemed appropriate by its Management Team;
      (c) join in association with any similar body agreeing that Members shall be hereby required to comply with the rules and regulations of such body;
      (d) carry out any other function as may be deemed by the Management Team to be necessary for achieving its objectives.

      The above objectives shall be carried out by DGC, in accordance with those rules and regulations issued by Dubai Multi Commodities Centre Authority and the laws and regulations of the United Arab Emirates as shall be applicable in the Emirate of Dubai from time to time.

  • Article (3) Membership

    • 3.1 Categories of Membership

      3.1.1 There shall be three categories of DGC membership:—

      (a) Individual Membership which shall be available for natural persons satisfying those qualifications specified in Article 3.2.2 below;

      (b) Corporate Membership which shall be available for corporate entities satisfying those qualifications specified in Article 3.2.3 below;

      (c) Affiliate Membership which shall be available for corporate entities satisfying those qualifications specified in Article 3.2.4 below.

    • 3.2 Application for Membership

      3.2.1 All membership applications shall be dealt with by DGC’s Membership Committee. Application for membership with DGC does not automatically constitute acceptance thereof by the Membership Committee and such application shall be subject to those requirements and qualifications determined by the Membership Committee from time to time in respect thereof.

      3.2.2 Individual Membership:

      A natural person may be granted Individual Membership if they have:—

      (a) attained the age of 21 years at the time of submitting the application for membership;

      (b) been engaged in the Coloured Stone Industry for a period of at least two years at the time of submitting the application for membership;

      (c) an unblemished trade reputation;

      (d) been interviewed by the Membership Committee;

      (e) submitted to the Membership Committee a fully completed Application Form along with all supporting documents and the Application Fee;

      (f) in their possession 2 (two) trade references from the following sources: an existing DGC Member, a person/corporation of good standing and repute active in the Coloured Stone Industry or a Coloured Stone Industry association recognised for this purpose by DGC;

      (g) provided the Membership Committee with all other documents and information as may be requested;

      (h) it has provided the Membership Committee with a signed undertaking unconditionally agreeing to be bound by and to be subject to those arbitration provisions contained in these Rules.

      3.2.3 Corporate Membership:

      An entity duly registered and existing in any jurisdiction may be granted Corporate Membership if:—

      (a) it is engaged in, or proposes to engage in, the Coloured Stone Industry;

      (b) at least one of its directors/shareholders satisfies the criteria set out in Articles 3.2.2 (a), (b) and (d) above.

      (c) it, and its directors/officers, has an unblemished trade reputation;

      (d) it has submitted to the Management Committee a fully completed Application Form along with all supporting documents and the Application Fee;

      (e) it has in its possession 2 (two) trade references from the following sources: an existing DGC Member, a person/corporation of good standing and repute active in the Coloured Stone Industry or a Coloured Stone Industry association recognised for this purpose by DGC;

      (f) it has provided the Membership Committee with a signed undertaking unconditionally agreeing to be bound by and to be subject to those arbitration provisions contained in these Rules.

      (g) it has provided the Membership Committee with all other documents and information as may be requested.

      3.2.4 Affiliate Membership

      A bank, financial institution or other Coloured Stone Industry service entity and licensed to conduct business with respect to financing, marketing or other services in support of the Coloured Stone Industry and/or coloured stones industry may be granted Affiliate Membership if it satisfies those financial and other criteria for Affiliate Membership as shall established by the Membership Committee from time to time and:

      (a) it is an active and reputable entity that supports the Coloured Stone Industry;

      (b) it has an unblemished trade reputation;

      (c) it has submitted to the Membership Committee a fully completed Application Form along with all supporting documents (including its valid constitutive documents) and the Application Fee;

      (d) it has submitted such references and letters of recommendation in support of its application from banks, Individual Members, Corporate Members, Affiliate Members or other reputable sources as the Membership Committee may consider acceptable; and

      (e) it has provided an undertaking duly signed by an authorised signatory, confirming its agreement to be bound by and be subject to the provisions of these Rules.
      3.2.5 Admission to DGC membership shall rest solely with the Membership Committee. In the event that the Membership Committee decides to reject an application for membership, neither the Membership Committee nor DGC shall be obligated to disclose the reason for such rejection.
      3.2.6 The list of the names of all applicants for Individual, Corporate and Affiliate memberships shall be posted at the DGC offices for a period of ten days prior to the Membership Committee interview of any applicant.
      3.2.7 Any Member may resign from the membership of DGC by sending a written notice of not less than 30 (thirty) days to the DGC. Such Member shall be responsible for all its obligations and duties in relation to the period up to the effective date of its resignation. DGC shall not be liable to refund any Membership Fee(s) either in whole or in part in the event that a Member elects to resign from the DGC.

    • 3.3 Membership Rights:

      3.3.1 Individual Members shall be entitled to:

      (a) represent themselves in their business dealings with third parties as a Member of DGC;

      (b) enter the trading floor of DGC for the purpose of dealing with other Members in the Coloured Stone Industry;

      (c) enjoy other benefits and privileges as shall be determined by the DGC from time to time, at its sole discretion.

      3.3.2 Corporate Members shall be entitled to:

      (a) represent themselves in their business dealings with third parties as a Member of the DGC;

      (b) through any of their maximum of 3 (three) nominated representatives, engage in trading on the trading floor of DGC in pearls and related jewellery;

      (c) enjoy other benefits and privileges as shall be determined by the DGC from time to time, at its sole discretion.

      3.3.3 Affiliate Members shall be entitled to:

      (a) represent themselves in their business dealings with third parties as an Affiliate Member of the DGC; and

      (b) enjoy such benefits and privileges as shall be determined by the DGC from time, at its sole discretion.

    • 3.4 Membership Obligations

      Members shall be obliged to:

      (a) conduct their business dealings in pearls and related jewellery in accordance with the laws of the Emirate of Dubai and the federal laws of the UAE applicable therein;
      (b) comply with these Rules, as duly amended from time to time;
      (c) comply with such other rules, regulations or policies as may be issued by the Dubai Multi Commodities Centre or the Dubai Multi Commodities Centre Authority from time to time;
      (d) pay to DGC upon demand and without deduction or set-off, annual membership fees together with such other monies as may be required under these Rules.

    • 3.5 Disciplinary Action Against Members

      3.5.1 The DGC may terminate, with immediate effect, the membership of any Member who has:—

      (a) failed to pay on time any/all amounts, fines, fees due to the DGC despite the issuance of two written reminder notices by the DGC in respect of such amounts; or

      (b) failed to pay on time to other Members or Visiting Traders any monies arising out of trades conducted with those Members or Visiting Traders and which are not the subject of any dispute under Article 7 below.

      (c) failure to pay fines imposed by DGC, as well as, any other amounts due from such Member to DGC;

      (d) breached any provision of (i) these Rules or any amendment thereto;

      (e) breached any provision of any Dubai Multi Commodities Centre Authority rules, regulations or policies as may be issued from time to time; or

      (f) breached any provision of any DGC rules, regulations or policies as may be issued from time to time; or

      (g) received a petition in bankruptcy or any involuntary petition in bankruptcy, making an assignment for the benefit of creditors; or

      (i) been convicted of any criminal offence; or

      (j) committed any act or omission which, in the sole discretion of the DGC, has or may have, the effect of bringing the reputation of the DGC and/or Dubai Multi Commodities Centre and/or Dubai Multi Commodities Centre Authority into disrepute.
      3.5.2 The DGC shall reserve the right to, in its sole discretion, suspend for such period of time as it deems fit, the membership of any Member in the event of any breach under Article 3.5.1 above. The implementation of any suspension under this Article 3.5.2 shall be without prejudice to any later decision to terminate the membership of such Member. During any period of suspension a Member may not carry out any trades within the DGC or utilise any DGC facilities.

  • Article (4) Fee Determination

    • 4.1

      The registration fees, the annual membership fees, as well as, all applicable fines and all other financial obligations of Members towards DGC shall be determined by the DGC and communicated to Members.

  • Article (5) The Management of DGC:

    • 5.1

      DGC shall be managed by a Management Team appointed by Dubai Multi Commodities Centre Authority. The Management Team shall comprise a total of 3 managers (“Managers”).

    • 5.2

      The tenure of the Management Team shall commence from its date of appointment and shall continue for an indefinite term.

    • 5.3

      Dubai Multi Commodities Centre Authority may appoint an Alternate Manager for any individual Manager from time to time.

    • 5.4

      Dubai Multi Commodities Centre Authority shall be entitled, in its sole discretion, to replace any one or more of the Managers at any time.

    • 5.5

      The Management Team shall be authorised to:

      (a) hold meetings at such times and places as it may deem proper;
      (b) appoint committees on particular subjects;
      (c) devise and carry into execution such other measures as it may deem proper to promote the objectives of DGC and to best protect the interest and welfare of the Members;
      (d) cooperate with governmental agencies in all matters concerning the Coloured Stone Industry;
      (e) fine, suspend or terminate any Member(s);
      (f) adopt such further rules and regulations, as it deems appropriate for the management and conduct of DGC;
      (g) delegate any of its powers to any individual Manager (s) sitting on the Management Team;
      (h) opening, operating and closing all bank accounts in relation to DGC and conducting all dealings with banks and financial institutions and to sign all applications and documents for such purposes and to obtain credit facilities and loans required on behalf of DGC to achieve its objectives;
      (i) pledging, mortgaging and otherwise charging any assets held for the benefit of DGC for the purposes of raising and providing the financial facilities deemed necessary by the Management Team;
      (j) suing on behalf of DGC, attaching properties of debtors, referring cases to arbitration, appointing lawyers and otherwise taking all legal measures to protect the interests of the DGC whether as plaintiff, respondent, party to arbitration or otherwise.

    • 5.6

      A General Manager who shall be a member of the Management Team, shall be appointed by the Management Team and shall have the authority to carry out the:—

      (a) managing the day-to-day operations of DGC;
      (b) negotiating and signing all types of contracts, transactions, arrangements and dealings with third parties to be entered into by Dubai Multi Commodities Centre Authority on behalf of DGC;
      (c) the arrangement of the employment of persons at the DGC and to determine their salaries and benefits, as well as other terms and conditions of such employment, and shall be entitled to terminate such employment;
      (d) determining the financial budgets of DGC;
      (e) paying all costs, charges and expenses related to DGC and giving receipts and discharges in respect of any amount paid to DGC;
      (f) representing DGC and signing on its behalf, without limitation, before all governmental offices and departments;
      (g) delegating all or part of their powers, as they shall deem fit.

      The General Manager shall exercise the powers and authorities listed above in accordance with the general policies determined by the Management Team and Dubai Multi Commodities Centre Authority from time to time.

    • 5.7

      The Management Team shall record or cause to be recorded all votes and minutes of all proceedings in books to be kept for that purpose.

    • 5.8

      Special meetings can be called when deemed necessary, and shall consist of a minimum of any two Managers.

    • 5.9

      At Management Team meetings, a quorum shall consist of 2 Managers, one of which shall comprise the General Manager.

  • Artcle (6) Visiting Traders

    • 6.1

      DGC acknowledges that Members may wish to carry out trades with non-Members within DGC’s premises.

    • 6.2

      Any Member seeking to carry out trades under Article 6.1 must with first complete in full a ‘Visiting Trader Application Form’. In the event that such application is approved by DGC, the applying Member shall be allocated a specific Trading Room for a specific time and date. The non-Member shall, upon entering DGC’s premises on the allotted time and date shall then be duly accorded ‘Visiting Trader’ status.

    • 6.3

      In the event that a Members Visiting Trader Application Form is rejected, such rejection shall be communicated in writing to the Member concerned. DGC shall not be obligated to disclose the reason for such rejection to the Member or the proposed Visiting Trader.

    • 6.4

      Members shall be liable at all times for any/all acts or omissions carried out by their Visiting Traders.

    • 6.5

      Visiting Traders shall be subject to these Rules from the time the Visiting Trader Application Form is approved under Article 6.2 above.

    • 6.6

      Under no circumstances shall any part of these Rules be construed as expressly or impliedly conferring Membership status on any Visiting Trader.

  • Article (7) Arbitration

    • 7.1 Arbitration Proceedings

      For the purposes of this Article 7.1 the expression “Party” shall mean a party to a dispute and the expression “Parties” shall mean the plural form.

      In the event of any dispute arising out of or in connection with these Rules or any trade carried out on the DGC, the Parties shall use their best endeavours to settle such dispute within a period of thirty (30) days failing which the dispute or difference shall be finally settled by arbitration in accordance with the Rules of Commercial Conciliation and Arbitration of the Dubai International Arbitration Centre (“DIAC”).

      The arbitration tribunal shall consist of three (3) arbitrators. Within thirty (30) days notice by any one Party to the other of its demand for arbitration, which demand shall also set forth the name of its arbitrator, the other Party shall select its arbitrator and so notify the demanding Party, then within thirty (30) days thereafter, the two arbitrators so selected shall select a third arbitrator. In the event of the selected arbitrators failure to agree upon and select a third arbitrator within thirty (30) days, the Director General of the DIAC shall appoint the third arbitrator. In the event of a default by either of the Parties in dispute to name its arbitrator, the arbitrator so appointed by the non-defaulting Party shall have the power to proceed to arbitrate and determine the matters of disagreement as if he was an arbitrator appointed by both Parties in dispute for that purpose.

      The seat of the arbitration shall be the Emirate of Dubai. The arbitration proceedings and award shall be conducted and written in the English language.

      The arbitration award shall be final and binding on both Parties and not subject to any appeal

  • Article (8) Amendment to Rules

    • 8.1

      These Rules may be amended by DGC in its sole discretion at any time, such amendments shall come into force 2 (two) working DGC days.

  • Article (9) Dissolution

    • 9.1

      DGC may be dissolved at any time and for whatever reason by a decision of the Dubai Multi Commodities Centre Authority.

  • Article (10) Other Issues

    • 10.1

      Issues not covered by the provisions of these Rules may be addressed and regulated by regulations issued by the DGC from time to time, such regulations to be published at the head office of DGC.

  • Article (11) Trade Facilitator Only

    • 11.1

      DGC shall operate to facilitate the conduct of private trades between buyers and sellers. DGC does not provide any guarantee to Members or Visiting Traders as to any level of trade which may be enjoyed be them in trading on the DGC and nothing in these Rules shall be construed as creating any guarantee, surety or indemnity from DGC to any Member or Visiting Trader regarding the amount of trade that may be realised by them on the DGC.

  • Article (12) No Liability

    • 12.1

      DGC shall not be liable for:—

      12.1.1 the loss of or theft of any stock or inventory from the DGC’s premises and belonging to any Member or Visiting Trader; and/or
      12.1.2 any damage howsoever caused to any stock or inventory belonging to any Member or Visiting Trader whilst such stock/inventory is stored on the DGC’s premises

      where such loss, theft or damage is:—

      12.1.3 caused due to the negligence, recklessness or deliberate act or omission of a Member or Visiting Trader; and/or
      12.1.4 caused/occasioned following 17:00hrs on any DGC Working Day. For the purposes of this Article 12, ‘DGC Working Day’ shall mean Sunday to Thursday, 08:30 hours to 16:30 hours.

  • Article (13) Anti-Money Laundering

    • 13.1

      DGC reserves the right to increase the scope, nature, detail and frequency of any anti-money laundering checks/procedures that it carries out against Members and/or Visiting Traders from time to time.

    • 13.2

      DGC reserves the right to incorporate into these Rules or append thereto, any resolution, directive or policy issued by any competent authority and concerning anti-money laundering.

  • Article (14) DGC Trading Room Cancellations

    • 14.1

      Members shall provide the DGC with 5 DGC working days written notice of any cancellations regarding those dedicated DGC Trading Rooms reserved by them.

    • 14.2

      DGC shall have the discretion to levy fines against Members failing to comply with Article 14.1 above. Details as to such fines shall be published by the DGC from time to time.