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                Mutual Funds and Investment Companies

                Article (91)
                A- A Mutual Fund may be established, and shall have a legal personality with financial and administrative autonomy. As such, it may own and dispose of movable and immovable property, and perform any legal act necessary to realize its objectives, including entering into contracts and issuing securities. The Fund shall have the right to sue and be sued and to authorize any attorney to act on its behalf in legal proceedings.
                B- The purpose of the Mutual Fund is to invest in a portfolio of securities or other financial assets by providing professional management of a collective investment on behalf of the interests of its share or investment unit holders.
                C- The Board shall issue instructions specifying all matters relevant to the Mutual Fund, including its establishment, the requirements and procedures of its registration with the Commission, its capital, the rights of its share or investment unit holders, the conduct and administration of its business, the commissions and fees it charges, the principles and criteria for the diversification of its investments, and the duties and responsibilities of managers of the Fund and its investments.

                Article (92)
                A- An application to register a Mutual Fund shall be filed with the Commission in writing, and shall have enclosed therewith the Mutual Fund’s articles of association. The application shall comply with all the requirements specified by the Commission in accordance with the instructions issued by the Board.
                B- The Board shall issue a decision approving or denying the registration of the Mutual Fund within thirty days from the date of filing the registration application.
                C- Upon issuance of the Board decision approving the registration of the Mutual Fund and payment of the set fees, the Mutual Fund shall be listed in a special registry for this purpose at the Commission, which shall issue the Mutual Fund’s certificate of registration.
                D- The Mutual Fund shall not carry out its activities or sell its shares or investment units before the issuance of its registration certificate by the Commission and completion of the requirements specified by the Board.

                Article (93)
                The board of directors of the Mutual Fund shall appoint a certified auditor to audit the Fund’s account.

                Article(94)
                A- No person shall engage in any activity whereby the moneys of investors are pooled for the purpose of investing in securities or other financial assets, the management of such assets, and sharing profits on such investments, unless such person is organized as a Mutual Fund or an Investment Company in accordance with the provisions of this Law and the regulations, instructions and decisions issued pursuant thereto.
                B- The Board, in accordance with instructions it issues, may exempt from the provisions of Paragraph (A) of this Article, the following:
                1. Banks in respect of their banking activities in accordance with legislation in force;
                2. Insurance companies in respect of their insurance activities, in accordance with legislation in force;
                3. Venture capital companies with fewer than twenty five investors;
                4. Any Shared Investment Account, combined, or co-mingled account maintained by a bank aims exclusively at collective investment of moneys held in separate accounts;
                5. Investment Companies which do not treat the funds of  investors as a joint portfolio for investment in financial assets;
                6. Any other cases determined by the Board in accordance with the requirements of the public interest and the protection of investors.
                C- The Board may exempt any person from the requirements pertaining to Mutual Funds or Investment Companies stipulated in this Law, and in accordance with the provisions of this Law and the regulations, instructions and decisions issued pursuant thereto.

                Article (95)
                A Mutual Fund shall be administered by a board of directors which shall be elected by shareholders at an annual meeting, whereat each share or investment unit shall have one vote, and provided no more than 20% of the board of directors shall be affiliated with an Investment Manager.
                A- The board of directors shall appoint and supervise an Investment Manager to manage the Mutual Fund’s portfolio.

                Article (96)
                A- A Mutual Fund may be organized either as an "Open-end" or as a "Closed-end". The Mutual Fund’s activities shall be governed by instructions issued by the Board in accordance with the provisions of this Law.
                B- If so stipulated by its articles of association, a Closed-end Fund may transform into an Open-end Fund, subject to making the required adjustments according to the provisions of this Law and the regulations, instructions, and decisions issued pursuant thereto.

                Article (97)
                A- An Open-end Fund shall have the authority to issue and repurchase its shares and investment units. The fund’s shares and investment units shall not be transferable except through inheritance or succession.
                B- The price at which an Open-end Fund issues and repurchases its shares and investment units shall be based on the net asset value of the Open – end Fund as at the time of such issue or repurchase.

                Article (98)
                A- A Closed-end Fund shall be organized on the basis of a fixed capital, and its shares or investment units shall be transferable and tradable.
                B- The shares and investment units of a Closed-end Fund may be issued either by public offer or by private placement and may be traded on the Market. Article (99)
                A- The board of directors of an Open-end Fund shall have the right to increase its authorized capital, without the need to obtain the approval of the share or investment unit holders.
                B- The shares or investment units of an Open-end Fund may be issued or repurchased only at the price calculated on the basis of its net asset value, in accordance with the principles prescribed in the instructions issued by the Board.

                Article (100)
                A- The Mutual Fund’s capital shall be divided into shares or investment units with equal entitlements. Owners of such shares or investment units shall be liable only in the amount of their subscription in the Fund’s capital. Payments for the shares or investment units shall be in cash in one installment upon subscription.
                B- A share or investment unit holder of an Open-end Fund may request the Fund to redeem his shares or investment units at a price representing the net value of the shares calculated on the date of redemption less the value of any applicable fees or commissions, calculated in accordance with principles prescribed in instructions issued by the Board.

                Article (101)
                Assets of the Mutual Fund may not be attached to secure or collect any debts of the share or investment unit holders.

                Article (102)
                A- The principles and criteria for diversification of the investments of Mutual Funds and the acceptable types of dealings therein shall be specified in instructions issued by the Board.
                B- Mutual Funds and Investment Companies shall not perform any of the following:
                1. Borrow in an amount equal to or greater than 10% of the value of their net assets;
                2. Invest more than 5% of their assets in the securities of the same Issuer, except for securities issued by the Government or the Central Bank of Jordan, or guaranteed by either;
                3. Own more than 10% of the securities issued by one Issuer;
                4. Invest more than 10% of their assets in securities issued by other Mutual Funds or Investment Companies;
                5. Invest in the securities issued by the Investment Manager of a Mutual Fund or by any company affiliated therewith.
                C- The Board may allow the Mutual Fund or an Investment Company, upon their request, to exceed the limits stipulated in Paragraph (B) of this Article, if it determines that this does not adversely affect public or investor interests.

                Article (103)
                A- A Mutual Fund's investments shall be managed by a licensed Investment Manager, pursuant to a contract concluded between the Mutual Fund and the Investment Manager, subject to the approval of the Mutual Fund’s shares and investment units holders, and in accordance with the conditions prescribed in instructions issued by the Board.
                B- The term of the contract referred to in Paragraph (A) of this Article shall not exceed one year, and shall be renewable subject to approval of the Mutual Fund investment units or shareholders. The contract shall be published and provided to each unit and share holder prior to coming into effect.
                C- The Mutual Fund’s Investment Manager shall not have a direct or indirect beneficial investment interest in any transaction he conducts for the Mutual Fund. No person shall jointly act as the Investment Manager and the Custodian, Investment Trustee or Underwriter for the Mutual Fund.

                Article (104)
                The Investment Manager shall perform the following duties and responsibilities:
                A- Preparing and filing the Mutual Fund’s prospectus with the Commission;
                B- Registering the Mutual Fund’s shares or investment units with the Commission;
                C- Managing the Mutual Fund's investments in accordance with the Mutual Fund’s stated investment policy;
                D- Promoting and marketing the Mutual Fund’s shares or investment units;
                E- Administering the trading in the Mutual Fund’s shares or investment units.

                Article (105)
                Subject to the approval of the Mutual Fund’s board of directors, the Investment Manager shall arrange appropriately for registering and transferring the Mutual Fund’s shares or investment units, calculating its asset and net assets value, holding custody of Mutual Fund assets, auditing the Mutual Fund’s accounts and monitoring and supervising the Mutual Fund’s management in accordance with instructions issued by the Board.

                Article (106)
                A- Subject to the provisions of Article (95) of this Law, no Mutual Fund shall have a Board of Directors comprised of more than 40% of interested persons . For the purposes of this Article, “interested persons ” shall include any member of the board of directors or board of executives, or employee of any Investment Manager, Financial Broker, Dealer, Underwriter, Registered Person, or legal counsel of such Licensed Persons.
                B- An Investment Manager, Custodian, Underwriter, promoter of a Mutual Fund, or any person affiliated therewith shall not carry out any of the following:
                1. sell any security or other assets to such a Mutual Fund, unless such a sale involves solely securities of which the seller is the Issuer and which are part of a public offer to the holders of a class of its securities;
                2. knowingly purchase from such a Mutual Fund any security or other assets except securities of which the Mutual Fund is the Issuer;
                3. borrow any moneys from such a Mutual Fund.
                C- A promoter, an Investment Manager, Custodian, or Underwriter of a Mutual Fund, or any employee or affiliate thereof shall not purchase or sell, directly or indirectly, any security owned or intended to be owned by the Mutual Fund in a manner that violates the instructions that are issued by the Board.





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