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On 16 April 2012 the Central Bank of Bahrain (CBB) approved the establishment of the BisB MMF Company B.S.C.(c)
with the Ministry of Industry and Commerce of Bahrain (MOIC) as a Bahraini Shareholding Company (Closed) and the
registration of the below mentioned retail collective investment undertaking (CIU). The CBB has authorised the BisB
Money Market Fund as a Bahrain domiciled Shariah complaint retail CIU (as defined in the CBB rulebook Module CIU)
and approved the marketing of the BisB Money Market Fund in and from the Kingdom of Bahrain.
The CBB and the MOIC take no responsibility for the accuracy and completeness of the statements and information
contained in this Prospectus or for the performance of the Fund, nor shall they have any liability to any investor or
otherwise for any loss or damage resulting from reliance on any statements or information contained in this Prospectus.
The Directors of the Fund Company, whose names appear in the section headed Board of Directors, state to the best of
their knowledge and belief (having taken all reasonable care to ensure that such is the case) that all information
contained in this Prospectus is in accordance with the facts and does not omit anything which is likely to affect the
importance and completeness of such information.

BisB Money Market Fund


(a Bahrain domiciled Shariah compliant Retail CIU created in accordance with the provisions of Volume7 (Collective Investment Undertakings (CIU) of the Central Bank of Bahrains Rule Book and by an
Instrument issued by BisB MMF Company B.S.C.(c) a closed joint stock company incorporated under the laws of the Kingdom of Bahrain)

Offering of Units at an Initial Subscription Price of USD1 per Unit during the Initial Offering Period and at NAV
per Unit thereafter plus a Subscription Fee of up to 0.25% of the amount invested

BisB MMF Company B.S.C.(c)


Fund Company

Bahrain Islamic Bank B.S.C.


Fund Manager, Operator and Placing Agent

Gulf Custody Company B.S.C.(c)


Administrator, Custodian and Registrar

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This Prospectus is dated 12 June 2012


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Amended on 14 January 2015

IMPORTANT INFORMATION
No broker, dealer or other person has been authorised by the Fund Company, its Directors or the
Fund Manager to issue any advertisement or to give any information or to make any representations in
connection with the offering or sale of Units other than those contained in this Prospectus and, if
issued, given or made, such advertisement, information or representations must not be relied upon as
having been authorised by the Fund Company, its Directors, the Fund Manager or the CBB.
This Prospectus does not constitute, and may not be used for the purposes of, an offer or an invitation
to subscribe for, or otherwise acquire, any Units by any investor in any jurisdiction:
(a)

in which such offer or invitation is not authorised;

(b)

in which the person making such offer or invitation is not qualified to do so; or

(c)

in which it is unlawful to make such offer or invitation.

The jurisdictions in which Units in the Fund may be offered to potential investors is restricted only as
set out in this section headed Important Information.
By giving any Unitholder not less than 3 Business Days' written notice prior to any Dealing Day, the
Fund may redeem the whole or a specified percentage of such Unitholder's Units if the Directors
consider that such Unitholder continuing to hold Units would be detrimental to the pecuniary, taxation,
legal or regulatory interests of the Fund Company, the Fund Manager, the Administrator, the Registrar
or the Custodian or the Unitholders as a whole, or if such holding is in contravention of any of the
prohibitions contained in this Prospectus, the Articles or the Instrument, or if any of the
representations, warranties or statements given by such Unitholder in its Subscription Agreement were
not true or accurate or have ceased to be true or accurate. Without limiting the foregoing, the Fund
may redeem the whole or a specified percentage of a Unitholders Units if the Directors become aware
that a Unitholder is not, or ceases to be, a Unitholder.
Applicants should not treat the contents of this Prospectus as advice relating to legal, taxation,
financial, investment or any other matters.
Applicants must rely upon their own representatives, including their own legal advisers and
accountants, as to legal, tax, investment, financial and related matters concerning the Fund
and the merits and risks of an investment in the Units.
Statements made in this Prospectus are based upon the law and practice currently in force in the
Kingdom of Bahrain, and are subject to change.
By submitting a Subscription Agreement to the Placing Agent, the recipient hereof agrees to be bound
by the foregoing.
The Directors of the Fund Company, whose names appear herein, accept responsibility, both jointly
and severally, for the information contained in this Prospectus.
The Fund and the investments of the Fund are to be approved as Shariah compliant by the
independent Shariah Advisers. None of the Fund, Fund Manager or Placing Agent makes any
representation or warranty, express or implied, with respect to the fairness, correctness, accuracy,
reasonableness or completeness of such determination. It should be noted that differences exist
among Islamic scholars and advisers as to the nature of Shariah compliance and no assurance is
given that other Islamic scholars or advisers would determine that the Fund and its investments are
Shariah compliant.

Notice to Investors
If you are in any doubt about the contents of this Prospectus, you should seek independent
professional financial advice. Remember that all investments carry varying levels of risk and that the
value of your investment may go down as well as up. Investments in this Fund are not considered
deposits and are therefore not covered by the Kingdom of Bahrains deposit protections scheme. The
fact that this collective investment undertaking has been authorised by the CBB does not mean that
the CBB takes responsibility for the performance of these investments nor for the correctness of any
statements or representations made by the operator of this collective investment undertaking.

Contents
Clause
I
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
XIII
XIV
XV
XVI
XVII
XVIII
XIX
XX
XXI
XXII
XXIII

Page
Definitions ............................................................................................................................5
Executive Summary ...........................................................................................................10
Investment Objective, Policies and Restrictions ................................................................12
Overview of Corporate Governance, Supervision and Compliance ..................................14
Shariah Compatibility ........................................................................................................15
Constitution of the Fund Company and the Fund ..............................................................16
Board of Directors ..............................................................................................................17
The Fund Manager, Operator and Placing Agent ..............................................................18
The Custodian, Administrator and Registrar ......................................................................18
Summary of Rights of Unitholders .....................................................................................19
The Application Process ....................................................................................................19
The Allotment Process .......................................................................................................20
Redemptions ......................................................................................................................21
Calculation of Net Asset Value and NAV Per Unit .............................................................23
Reporting to Unitholders ....................................................................................................24
Tax and Exchange Control Considerations .......................................................................24
Actual and Potential Conflicts of Interests .........................................................................25
Risk Factors .......................................................................................................................26
Charges, Fees and Expenses related to the Fund ............................................................30
Material Contracts ..............................................................................................................32
General Information ...........................................................................................................33
Form of Instrument .............................................................................................................34
Form of Redemption Notice ...............................................................................................36

Schedule 1 Conditions of the Units ........................................................................................................38


Schedule 2 Meetings of Unitholders .......................................................................................................44

Definitions
The following definitions apply throughout this Prospectus:
AAOIFI

means the Accounting and Auditing Organisation for Islamic


Financial Institutions

Administrator

means Gulf Custody Company B.S.C.(c) a closed joint stock


company incorporated under the laws of the Kingdom of Bahrain
with commercial registration number 50682 having its registered
office at Gajria Building, 2nd Floor, Building 452A, Road 1010,
Block 410, Sanabis, Kingdom of Bahrain or such other administrator
appointed from time to time by the Fund Company when acting as
Administrator in accordance with the Administration, Custody and
Registrar Agreement, or such other entity appointed to act in such
capacity from time to time by the Fund Company

Administration,
Custody
and Registrar Agreement

means the administration custody and registrar agreement dated


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11 June 2012 entered into by the Fund Company, the
Administrator, Custodian and Registrar and the Fund Manager in
respect of administrative duties pertaining to the Fund, in respect of
custodian duties pertaining to the Fund and in respect of registrar
duties pertaining to the Fund, a summary of which is set out in the
section headed Material Contracts

Aggregate Investment

means the aggregate amount that an Applicant seeks to invest in


the Fund (net of applicable Subscription Fees)

Anti-Money
and Know
Regulations

means the Decree Law No. 4/2001 (and subsequent circulars


issued from time to time) and the CBB Regulation No.
EDBC/6/2002 - Preventing and Prohibiting Money Laundering (as
amended from time to time) and all applicable anti-money
laundering and combating of the financing of terrorism (AML/CFT)
requirements (in accordance with CIU 1.9.7 and CIU 1.9.9) as well
as the anti-money laundering laws, rules and orders applicable to
any Unitholder as they may respectively pertain to any or all of the
Administrator, Registrar, Custodian, Fund Manager, Placing Agent,
Fund or Fund Company

Laundering
Your Client

Applicants

means prospective investors wishing to subscribe for Units

Articles

means the memorandum and articles of association of the Fund


Company

Auditor

means KPMG Fakhro or such other auditor appointed from time to


time

Bahrain

means the Kingdom of Bahrain

Bahrain Islamic Bank

Bahrain Islamic Bank B.S.C. a public joint stock company


incorporated under the laws of Bahrain under CR No.9900

Board of Directors

means the members of the Board of Directors of the Fund


Company. Details of the Board of Directors as at the date of this
Prospectus and their Curricula Vitae are set out in the section
headed Board of Directors

Business Day

means any day on which banks in Bahrain are open for normal
banking and foreign exchange business, excluding Fridays,
Saturdays and public holidays in Bahrain

CBB

means the Central Bank of Bahrain

Custodian

means Gulf Custody Company B.S.C.(c) a closed joint stock


company incorporated under the laws of the Kingdom of Bahrain
with commercial registration number 50682 having its registered
office at Gajria Building, 2nd Floor, Building 452A, Road 1010,
Block 410, Sanabis, Kingdom of Bahrain or such other custodian
appointed from time to time by the Fund Company when acting as
Custodian in accordance with the Administration, Custody and
Registrar Agreement, or such other entity appointed to act in such
capacity from time to time by the Fund Company

Customer Information

means an Applicants required personal information as set out in


the Subscription Agreement and any further information requested
by the Placing Agent, Fund Manager and/or Administrator in order
to ensure compliance with Anti-Money Laundering and Know Your
Client Regulations

Dealing Cut-Off

means Bahrain Islamic Bank branch closing time on each Monday


save where such Monday is not a Business Day, in which case the
Dealing Cut-Off shall occur on the most proximate previous
Business Day

Dealing Day

means each Wednesday save where such Wednesday is not a


Business Day, in which case the Dealing Day shall be the next
following Business Day

Debt Securities

include, but are not limited to, all types of sukuk approved by the
Shariah Advisers

Equities

means shares or stock in the share capital issued by companies


that are listed on exchanges or traded on markets

Establishment Expenses

means the expenses incurred by the Fund during its establishment


detailed in the section headed Charges, Fees and Expenses
Relating to the Fund

Financial Year

means the period commencing on the Initial Closing Date and


ending on 31 December and thereafter, each period commencing
on 1 January and ending on 31 December

Fund

means the BisB Money Market Fund, a Shariah fund established


by the Fund Company under the laws of Bahrain

Fund Assets

means the assets of the Fund, held by the Fund Company on


behalf of Unitholders in the Fund (excluding its BHD 1,000 issued
and paid up share capital) including all monies standing to the credit
of the Units Fund Account and all proceeds of the foregoing

Fund Company

means BisB MMF Company B.S.C.(c) a closed joint stock company


incorporated in Bahrain with commercial registration number 81322

Fund Management
Agreement

means the Fund Management Agreement dated 10 June 2012


entered into by the Fund Company and the Fund Manager in
respect of fund management duties pertaining to the Fund, a
summary of which is set out in the section headed Material
Contracts

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Fund Manager

means Bahrain Islamic Bank B.S.C., or such other fund manager


appointed by the Fund Company to manage the Fund Assets from
time to time

Fund Performance Review


Report

a weekly report prepared by the Fund manager setting out the NAV
of the Fund, the performance of the Fund, a summary of the
investments of the Fund, the total number of Units and assets under
management

GCC

means the Gulf Cooperation Council countries from time to time,


which are as of the date of this Prospectus, Saudi Arabia, United
Arab Emirates, Qatar, Kuwait, Bahrain and Oman

Initial Closing Date

the next Business Day following the day that the Custodian
confirms to the Operator that the Custodian is able to receive funds
from the Operator to invest in the Fund, and the Operator confirms
that they are able to deposit funds in the Fund

Initial Offering Period

means the period commencing on the date of this Prospectus and


ending on the Initial Closing Date

Initial Subscription Price

means USD 1 per Unit

Instrument

means a legal instrument issued by the Fund Company under the


laws of Bahrain. The form of the Instrument is contained in the
section headed Form of Instrument

Investment Objective

means the investment objective of the Fund as set out in the


section headed Investment Objective, Policies and Restrictions

Investment Policy

means the investment policy of the Fund as set out in the section
headed Investment Objective, Policies and Restrictions

Investment Guidelines and


Restrictions

means the investment guidelines and restrictions which apply to the


Fund as set out in the section headed Investment Objective,
Policies and Restrictions

Laws

means all applicable laws and regulations and, if applicable, the


prevailing rules, regulations, requirements, determinations, practice
and guidelines of Bahrain, the CBB and any other organisation to
which the Fund, the Fund Company and the Fund Manager are
subject

Management Fee

means the management fee payable to the Fund Manager as set


out in the section headed Charges, Fees and Expenses related to
the Fund

Material Contracts

means the material agreements entered into by the Fund Company,


as at the date of this Prospectus, all of which are summarised in the
section headed Material Contracts

MENA Region

means the countries of the GCC and the wider Middle East and
Northern Africa

Minimum Holding Period

means the 30 calendar days from the date of issue of any Unit to an
investor

MOIC

means the Bahrain Ministry of Industry and Commerce

NAV or Net Asset Value

means the net asset value of the Fund, i.e. the net value of the
Fund Assets as determined from time to time by the Administrator
in accordance with the valuation methodology set out in the section
headed Calculation of Net Asset Value

NAV Per Unit

is calculated to one hundredth of one US cent by dividing the NAV


by the number of Units in issue

NAV Calculation Formula

means total Fund Assets less total debts and liabilities of the Fund
divided by total number of Units outstanding prior to such Dealing
Day

OECD

means the Organisation


Development

Offer

means the offer of Units to investors pursuant to the terms of this


Prospectus

Operator

means Bahrain Islamic Bank B.S.C.

Placing Agent

means Bahrain Islamic Bank B.S.C., a public joint stock company


incorporated under the laws of Bahrain and any other placing agent
which is appointed by the Fund Company from time to time

Placing Agreement

means the agreement between the Fund Company and the Placing
Agent, pursuant to which the Placing Agent agrees to act as a
placing agent for the Fund, a summary of which is set out in the
section headed "Material Contracts"

Prospectus

means this Prospectus, as amended from time to time

Redemption

means the redemption of Units the details of which are set out in
Part XIII of the Prospectus

Redemption Notice

means a redemption notice substantially in the form set out in the


section headed Form of Redemption Notice

Redemption Proceeds

means the monies due to Unitholders, following a Redemption of


Units

Registrar

means Gulf Custody Company B.S.C.(c) a closed joint stock


company incorporated under the laws of the Kingdom of Bahrain
with commercial registration number 50682 having its registered
office at Gajria Building, 2nd Floor, Building 452A, Road 1010,
Block 410, Sanabis, Kingdom of Bahrain or such other registrar
appointed from time to time by the Fund Company when acting as
registrar for the Fund or such entity appointed in such capacity from
time to time by the Fund Company

Rulebook

means the CIU Module under the CBB Rulebook Volume 7


(Collective Investment Undertakings (CIU)), as amended by the
CBB from time to time

Shariah Advisers

means the shariah advisers set out in Part V of this Prospectus and
who are appointed by the Fund Company to ensure that the Fund is
and remains Shariah compliant.

Shariah compliant Retail


CIU

means a CIU which complies with the provisions of the Rulebook

for

Economic

Cooperation

and

Strategic Commitment

means the Operators commitment to the Fund at the Initial Offering


Period, as described in the Executive Summary

Subscription Agreement

means the subscription agreement required to be delivered by an


Applicant to the Placing Agent in connection with an application to
subscribe for Units

Subscription Fee

means the subscription fee of up to 0.25% of the Aggregate


Investment

Subscription Price

means USD1 per Unit during the Initial Offering Period and NAV
Per Unit as calculated on the relevant Dealing Day for any offering
subsequent thereafter

Transaction Documents

means this Prospectus, the Subscription Agreement, the Articles


and the documents summarised in the section headed Material
Contracts

Unitholder(s)

means a registered holder of Units in issue from time to time

Units

means the units in the Fund which are in issue from time to time,
which represent the rights of the investors in the Fund

Units Fund Account

means the account in to which an Applicants Aggregate Investment


and Subscription Fees are to be paid, details of which are set out in
the section headed The Application Process

In this Prospectus references to USD are to the lawful currency of the United States of America and
references to BHD are to the lawful currency of the Kingdom of Bahrain.
The information in this Prospectus does not relate to events occurring subsequent to the date
hereof.

II

Executive Summary
The following summary of the terms and conditions of the Fund is qualified in its entirety by the
detailed information included elsewhere in this Prospectus and should be read in conjunction
with the full text of this Prospectus.
The Fund

BisB Money Market Fund is an open-ended fund created by the


Fund Company and established as a Shariah compliant Retail CIU
pursuant to the CBBs regulatory Rulebook.

The Fund Company

BisB MMF Company B.S.C.(c) is a closed joint stock company


incorporated in Bahrain with commercial registration number 81322.

The Fund Manager

Bahrain Islamic Bank B.S.C.

Instrument

a legal instrument issued by the Fund Company under the Laws of


Bahrain a form of which appears under the heading Form of
Instrument.

Investment Objective

The Fund aims to generate capital growth and return capital to its
Unitholders through maintaining a high level of liquidity by investing
in low risk quality Shariah compliant money market instruments.

Investment Policy

means the investment strategy of the Fund to achieve its objective


which is to invest in high-quality Shariah compliant money market
instruments issued by banks, corporations and governments.

Operators Strategic
Commitment

The Operator shall, during the Initial Offering Period, subscribe for a
minimum of 5,000,000 Units, at the Initial Subscription Price of
USD1 per Unit, making a total commitment of USD5,000,000.
The Operator shall not reduce its commitment to less than
5,000,000 Units prior to the expiry of the period ending 12 months
from the Initial Closing Date if the Operator wishes to reduce its
commitment at any time after the Initial Closing Date it shall notify
the Unitholders.
The Operator shall also notify and seek the prior approval of the
CBB in the event that its investment in the Fund is expected to fall
below 5,000,000 Units.
The Operator shall not increase its commitment and/or subscribe
for Units in excess of USD10,000,000.

Subscriptions during the


Initial Offering Period

During the Initial Offering Period, Units shall be offered at the Initial
Subscription Price of USD1 per Unit plus a Subscription Fee of up
to USD0.0025 per Unit, which may be waived by the Placing Agent
in its absolute discretion.

Subscriptions
following
the Initial Offering Period

Following the Initial Offering Period, Units will be offered at NAV Per
Unit on the relevant Dealing Day.

Minimum Applications

Investors are required to apply to invest an amount not less than


25,000 units as their initial investment and not less than 1,000 units
for each subsequent investment.

Minimum Holding Period

Each Unit must be held for a minimum period of 30 calendar days.

Minimum Holding Amount

Any redemption request that will reduce an investors holding in the


Fund to below1,000 units will be deemed to be a request to redeem
the investors entire holding in the Fund. Any such request will only
be considered and processed after the Minimum Holding Period
has expired.

10

Valuation of Units

The initial subscription value is USD1 per unit. Thereafter NAV Per
Unit will be calculated by the Administrator on each Dealing Day in
accordance with Paragraph XIV of this Prospectus.

Currency

The Fund will be denominated in, and the reference currency will
be, USDs.

Financial Reporting

A Fund Performance Review Report will be issued weekly


During the life of the Fund, the Fund shall submit a semi-annual
report which has been reviewed by the Auditor covering the first six
months of the Financial Year to the CBB and to the Unitholders
within 2 months of such period or such other time as agreed
between the Fund and the CBB.
During the life of the Fund, the Fund shall submit an audited annual
report to the CBB and to the Unitholders within 4 months of the end
of each Financial Year.
The semi-annual report and the audited annual report shall be
prepared in accordance with AAOIFI.

Risk Factors

Investment in the Fund carries significant risk, and investment in the


Fund should be regarded as medium to long term in nature and is
only suitable for investors who understand the risks involved.
Unitholders might not recover monies invested. Applicants should
refer to the section headed Risk Factors for a summary of
certain of the risks involved.

Term

The Fund is an open-ended fund with no fixed term. The term of


the Fund shall commence on the next Business Day following the
Initial Closing Date.
The Fund is established for an indefinite period by the Fund
Company. The Fund Company reserves the right to terminate the
Fund at any time without penalty to any party involved in the
following events and after obtaining CBB approval upon the
occurrence of any of the following:
(i)

NAV per unit of the Fund Assets falls below USD 0.5 per unit;
or

(ii)

cancellation of the registration by the CBB; or

(iii) other unavoidable circumstances.


Under Bahrain regulations, termination of the Fund requires prior
approval by the CBB and that reasonable notice be given to
Unitholders. The Directors will endeavour to give Unitholders 3
months prior notice of termination. Neither the death, bankruptcy
nor incapacity of a Unitholder in the Fund nor the bankruptcy or
resignation of the Fund Manager shall terminate the Fund or in any
way affect its continuity.
The Fund can be terminated at the request of the CBB.
Shariah Compliance

The Fund accords with the principles of Shariah. The Fund's


structural framework shall be established under the guidance of the
three Shariah Advisers who will also be appointed to oversee the
compliance with Shariah of the Funds structure, operations,
investments and financing activities. Subject to the Funds
compliance, the Shariah Advisers will issue an annual Shariah
compliance certificate for the Fund. In all cases, the Shariah
11

Advisers will obtain final confirmation of the Shariah compliance of


any relevant aspects of the Fund (for instance structural framework,
individual investments, issues relating to ongoing monitoring, and
any other relevant considerations).
Governing Law

III

The Transaction Documents shall be governed by and construed in


accordance with the laws of the Kingdom of Bahrain save to the
extent these conflict with the rules and principles of Shariah, when
the latter shall prevail and any dispute in relation to these
documents shall be finally determined by arbitration administered
by the Bahrain Chamber for Dispute Resolution (BCDR-AAA) in
accordance with its Arbitration Rules.

Investment Objective, Policies and Restrictions


Investment Objective
The Fund aims to increase its Net Asset Value with the objective of generating returns in excess
of the USD fixed deposit rates by investing in low risk quality Shariah compliant money market
instruments and maintaining a high level of liquidity in GCC and OECD countries.
Investment Policy
The investment strategy of the Fund to achieve its objective is to invest in high-quality Shariah
compliant money market instruments issued by banks, corporations and governments. Such
investments may include: short term deposits in the inter-bank market; Shariah compliant fixed
term deposits with banks; and all types of sukuk issued by the sovereign wealth funds and
corporates and approved by the Shariah Advisers.
Financing Policy
The Fund will only secure external financing if the following conditions are met:
(a)

the purpose of the financing is short term to provide short term liquidity to the fund and
will not be consistently renewed;

(b)

the financing is repayable and repaid out of the assets of the Fund;

(c)

the financing will not be used to acquire assets that are encumbered in any way
including, but not limited to, mortgaged assets; and

(d)

the financing will not exceed 20% of the NAV of the Funds assets.

Liquidity and Minimising Risk


The investment strategy will aim to maintain liquidity in a diverse and low risk portfolio.
Risk will be minimised by ensuring the following restrictions apply to investments by the Fund:
(a)

any exposure to cash and cash equivalents of any single party will not exceed 20% of the
NAV of the Fund Assets;

(b)

exposure to transferable securities of a single party will not exceed 10% of the NAV of the
Fund Assets;

(c)

exposure to transferable securities of a single group of connected parties will not exceed
20% of the NAV of the Fund Assets;

(d)

exposure to sukuk not traded on a recognised exchange will not exceed 10% of the NAV
of the Fund Assets;

(e)

exposure to government and public sector securities issued by a single country in the
GCC or OECD will not exceed 20% of the NAV of the Fund Assets;

(f)

the weighted average maturity of all the assets held by the Fund will not exceed 1 year;
12

(g)

exposure to money market instruments denominated in currencies not pegged to the


USD will not exceed 20% of the NAV of the Fund Assets;

(h)

the minimum investments in money market instruments will be 60% of the NAV of the
Fund Assets;

(i)

exposure to any one country outside of Bahrain, to investments other than money market
instruments, will not exceed 20% of the NAV of the Fund Assets;

(j)

the maximum investment in cash and cash equivalents of the Operator will be 10% of the
NAV of the Fund Assets; and

(k)

the Operator will not be counterparty to any transaction, other than for cash and cash
equivalents,

Restricted Investments
The Fund will not invest or expose itself to the following:
(a)

non Shariah compliant investments;

(b)

securities issued by Bahrain Islamic Bank B.S.C.;

(c)

any asset which involves the assumption of unlimited liability;

(d)

securities issued by entities in which any director or officer of the Fund Company and/or
Bahrain Islamic Bank B.S.C. individually owns more than half of one percent or
collectively owns more than 5% of all the securities issued by that entity;

(e)

any listed or un-listed Equities;

(f)

any sukuk issued by corporations rated below investment grade;

(g)

any type of funds;

(h)

real estate investment trusts;

(i)

commodities;

(j)

financial derivatives;

(k)

short-selling;

(l)

retail finance clients;

(m)

provide any lending including murabaha;

(n)

stock lending arrangements;

(o)

underwriting; and

(p)

financial guarantees.

Investment Guidelines and Restrictions


In implementing the Investment Policy, the Fund Manager will endeavour to ensure that the
Fund Assets comply with the following Investment Guidelines and Restrictions.
Eligible Securities
Shariah compliant:
(i)

short term deposits in the inter-bank market;

13

(ii) fixed term deposits with banks;


(iii) Sovereign, quasi sovereign and/or government owned corporations Sukuk approved
by the Shariah Advisers;
(iv) Sukuk issued by corporates and approved by the Shariah Advisers; and
(v) any other Shariah compliant money market instruments.
Breaches of Investment Guidelines and Restrictions
The Units will not be listed on any exchange nor be traded on the secondary market.
The Investment Policy will be maintained at all times. Any breach within the control of the Fund
Manager resulting in a price change will be rectified immediately.
Changes to Investment Policy
Any amendment to the Investment Policy, any Material Contract and any other change deemed
material by the Fund Manager, will be subject to the prior approval of the CBB.
Unitholders will receive notice of any such amendment unless the directors of the Fund
Company decide they wish to seek Unitholder approval pursuant to clause 11 of Schedule 1 to
the Instrument.

IV

Overview of Corporate Governance, Supervision and Compliance


Entity

Description of Role

Board of Directors

Overall responsibility for the management of the Fund rests with the
Directors of the Fund Company. The Directors of the Fund
Company are responsible for this Prospectus including the
preparation of the Investment Objective, Investment Policy and the
Investment Guidelines and Restrictions.

Fund Manager

Under the Fund Management Agreement, the Directors have


delegated certain powers to the Fund Manager, which is
responsible for the day-to-day management of the Fund Assets
(subject to the Investment Objective, the Investment Policy and the
Investment Guidelines and Restrictions).

Custodian, Registrar and


Administrator

Gulf Custody Company B.S.C.(c) shall act as the global custodian


of the Fund Assets and provide administrative and registrar
services to the Fund and, in particular, shall be responsible for
calculating the NAV Per Unit on each Dealing Day.

Placing Agent

The Placing Agent shall be responsible for ensuring investors


compliance with Anti-Money Laundering and Know Your Client
Regulations.

Anti-Money Laundering and Know Your Client Regulations Compliance


The Placing Agent is responsible for the Funds compliance with Anti-Money Laundering and
Know Your Client Regulations.
The Fund Manager shall be granted the discretion to accept or reject applications in whole or in
part, provided that the Placing Agent has confirmed each applications compliance with AntiMoney Laundering and Know Your Client Regulations. Prior to being able to accept an
application, the Placing Agent must first have:
14

to its satisfaction, received all Customer Information together with a duly completed
Subscription Agreement;

received notification from the Administrator of the deposit of the amount an Applicant is
applying to invest, together with the applicable Subscription Fees; and

received a duly completed Subscription Agreement.

The Fund Company, Fund Manager, Administrator and Placing Agent all reserve the right to
require further Customer Information in order to assist with the verification of the identity of any
Applicant or that of the person or entity on whose behalf such Applicant is applying to purchase
Units, and/or such Applicants source of funds.
The Placing Agent shall be responsible for ensuring investors compliance with Anti-Money
Laundering and Know Your Client Regulations.
The Fund reserves the right to disclose information relating to Applicants, any person or entity
on whose behalf an Applicant is applying to purchase Units, and any legal and beneficial
owners of Units to the Funds advisers and service providers and as required by any legal or
regulatory body.

Shariah Compatibility
The Fund Company shall appoint three Shariah Advisers who shall be independent of the Fund
and the Operator to undertake the role of Shariah Advisers to the Fund.
The Fund shall comply with all applicable standards issued by AAOIFI.
The Fund shall ensure that its operations and investments are subject to the compliance
reporting and monitoring of its Shariah Advisers, in accordance with applicable AAOIFI
standards.
The audited annual report of the Fund shall contain a report and opinion from the Funds
Shariah Advisers explaining the work undertaken by the Shariah Advisers to verify compliance
by the Fund with Shariah and give an opinion on the extent of the Funds compliance with the
Shariah.
Shariah Advisers
Shaikh Dr. Nidham Mohammed Saleh Yaquby
Shaikh Yaquby is one of the most renowned and experienced Shariah scholars in the global
Islamic financial industry. He is on the board of numerous financial institutions in Bahrain and
internationally including such names as Dow Jones Islamic Index, AAOFI, HSBC and ABC Islamic
Bank. Shaikh Yaquby has sat on the Shariah board of Bahrain Islamic Bank since 1999. He has
numerous publications to his name and is a highly sought after scholar for lectures and
presentations at various seminars and conferences. Shaikh Yaquby has been presented with many
awards for his services to the Islamic financial industry. He holds his Ph.D. from Lahaye University
and also holds a degree in Economy and Comparison of Religions from the University of McGill,
Montreal, Canada. Shaikh Yaquby is also a holder of several Shariah academic degrees achieved
under the guidance of a number of Shariah scholars and Islamic ulema within and outside Bahrain.
He is also an adjunct professor at International Islamic University in Malaysia.
Shaikh Dr. Abdul Latif Mahmood Al-Mahmood
Shaikh Al-Mahmood is one of the most experienced Shariah scholars in the global Islamic financial
industry. He is a Member of the Shariah Supervisory Board of Takaful International, ABC Islamic
Bank and Joint Shariaa Supervisory Board of AlBaraka Group. Shaikh Al-Mahmood has been on
the Shariah board of Bahrain Islamic Bank as a chairman since 1979. He has been a Preacher at a
number of Bahrains mosques since 1973 and a lecturer in Quran interpretation, jurisprudence and
preaching. He is a regular participant in jurisprudence, educational, economic, intellectual, social
and cultural conferences and seminars. He holds a Ph.D. with distinctive degree of honour from the
University of Ez Zitouna and a Masters degree in comparative jurisprudence from the Faculty of
Shariah & Law of the University of Al Azhar.

15

Sheikh Dr. Osama Mohammed Saad Bahar


Sheikh Bahar is a prominent, highly-respected Shariaa scholar from Kingdom of Bahrain. He is
currently Head of the Shariaa Compliance and Advisory at First Energy Bank, following earlier
senior positions at Islamic banks in Bahrain including Head of Shariaa Compliance at Al Salam
Bank and before that, Shariaa Compliance Officer at ABC Islamic Bank. Sheikh Bahar is also a
Member of the Shariaa Supervisory Board of the Global Banking Corporation, International
Investment Bank, Allianz Global Investors, Allianz Takaful (Bahrain), International Tharawat and
Family Bank; and Shariaa Advisor for Sakana Holistic Housing Solutions and Reef (Real Estate
Finance). Sheikh Bahar was awarded his Doctorate degree from Lahaye University in Holland, his
Master Degree from Al Emam Al Awzae University in Lebanon and his Bachelor degree in Islamic
Shariaa from Prince Abdul Qader University of Islamic Studies in Algeria.

Prohibited Investments
An assessment of the acceptability of each Investment proposed for acquisition will be made on a
case-by-case basis at the discretion of the Shariah Advisers. Investments in and receiving income
from any haram activity by the Fund is prohibited.

VI

Constitution of the Fund Company and the Fund


The Fund
BisB Money Market Fund is an open-ended fund created by the Fund Company and authorised as
a Bahraini domiciled retail CIU by the CBB pursuant to the CBBs regulatory Rulebook.
The Fund Company by legal Instrument will create Units in the Fund which investors will be invited
to subscribe for pursuant to the Subscription Agreement. The Instrument is, governed by and
construed in accordance with the laws of the Kingdom of Bahrain.
Monies raised from subscriptions for Units will be segregated for accounting purposes from the
Fund Companys other assets, by being placed in the Fund Companys Units Fund Account and
will be invested in accordance with the Investment Policy of the Fund.
The Fund Company
BisB MMF Company B.S.C.(c) is a fund company in Bahrain with commercial registration number
81322.
The share capital of the Fund Company is BHD1000 divided into 100 shares of BHD10 each. BisB
and Nader Mohammed Albastaki will each respectively hold 99% and 1% of the shares in the Fund
Company (the latter holding as nominee for BisB).
Role of the Fund Company
The Fund Company is the legal entity which will enter into transactions on behalf of the Fund. The
Fund Company will have primary responsibility for the Fund, including:

appointing a fund manager to make investment and divestment decisions; and

approving and executing Transaction Documents on behalf of the Fund.

The Board of Directors will also be responsible for:

ensuring that investments are made in accordance with the Investment Policy and in
compliance with the Investment Guidelines and Restrictions;

making distributions to Unitholders; and

the overall performance of the Fund.

16

The Fund Company will outsource some of its responsibilities to the Fund Manager pursuant to the
terms of the Fund Management Agreement.

VII

Board of Directors
The Board of Directors is the most senior decision-making body of the Fund. It has overall authority
over, and responsibility for, the operations and management of the Fund. It will therefore exercise
supervision and control of the Fund and the Fund Company including deciding matters of general
policy and reviewing the actions of the Fund Manager, the Custodian, the Registrar, the
Administrator and other professional advisers to the Fund. The Board of Directors will be
responsible for monitoring the performance of the Fund and for considering and, if thought fit,
recommending changes to the Investment Policy or the Investment Guidelines and Restrictions.
The shareholders of the Fund Company may appoint additional Directors and officers from time to
time, subject to CBB approval.
The Directors of the Fund Company as at the date of this Prospectus are:
Abdulrahman Mohamed Abdulmajeed Turki
General Manager, Retail Banking, Bahrain Islamic Bank B.S.C.
Mr. Turki is the General Manager of Retail Banking at Bahrain Islamic Bank. He is a senior banking
professional with over 31 years of experience in various fields of banking industry in Bahrain, Oman
and Qatar. His banking experience started in the areas of Treasury and Investment where he spent
seventeen years with Grindlays Bahrain Bank (later acquired by Al Ahli United Bank) adding a
wealth of knowledge and skills in the field of financial and foreign exchange markets. Mr. Turki then
shifted to the consumer/retail banking within Grindlays Bahrain Bank and subsequently with the
Commercial Bank of Qatar before joining Bahrain Islamic Bank as General Manager, Retail Banking
in 2008. His expertise extends in many core banking fields such as Treasury & Investment,
Marketing & Sales, Product Development, Retail banking, Corporate & Commercial banking, nonresident market and in the Islamic banking sector. Mr. Turki has an MBA from the University of
Strathclyde, Glasgow, Scotland and an Advanced Diploma in Banking Studies from Bahrain Institute
of Banking and Finance. He also has attended, presented and formed part of the discussion panels
at, a large number of courses, seminars, forums and workshops relating to banking and finance.
Abdulrazaq Abdulkhaleq Abdulla Hasan
Assistant General Manager, Central Operations
Mr. Abdulrazaq is a highly experienced banking professional with almost 34 years of banking
experience in various capacities. He has worked for Standard Chartered Bank in Bahrain for over
five years and has been working with Bahrain Islamic Bank for the last 29 years and demonstrates
experience in commercial banking, branch management, marketing, and internal audit. He is
currently an Assistant General Manager for Central Operations and oversees many departments
including International Trade Finance. He specializes in accounting and investment banking and
possesses extensive knowledge of Islamic Trade Finance techniques. Mr. Abdulrazaq has various
internationally recognised accounting qualifications to his credit and has completed the Gulf
Executive program, University of Virginia, Darden Business School, U.S.A. Apart from being a
member of various committees constituted by Bahrain Islamic Bank, he is also a board member of
Benefit Company. He represents Bahrain Islamic Bank on the ICC National Committee in the
Kingdom of Bahrain and is the Co-Vice Chair of the ICC Bahrain Trade Finance Forum.
Nader Mohammed Albastaki
Head of Investments and Financial Institutions, Bahrain Islamic Bank B.S.C.
Mr. Nader is a highly experienced banking professional with almost 13 years of banking experience
in various capacities. His banking experience started in 2000 when he joined the Islamic Division of
Arab Banking Corporation as a credit analyst. In early 2003, he joined Gulf International Bank and
managed a portfolio of trade finance facilities, term loans, contract financing, syndicated loans,
project finance and real estate finance. In August 2008 he left Gulf International Bank as a Vice
President and joined Bahrain Islamic Bank as a Senior Manager of the Treasury and Investment
Division. He currently serves Bahrain Islamic Bank as a Head of Investments and Financial
Institutions. Mr Nader holds Bachelor's degree in Accounting from the University of Bahrain.

17

The Directors will not receive any compensation by the Fund, but will be reimbursed for out-ofpocket expenses reasonably incurred by them in undertaking their duties as Directors by the Fund.
In no circumstance shall the aggregate out of pocket expenses of the Directors together exceed
USD 3,000 per annum.

VIII

The Fund Manager, Operator and Placing Agent


Bahrain Islamic Bank was incorporated in the Kingdom of Bahrain in the year 1979 by Amiri Decree
No.2 of 1979. Bahrain Islamic Bank holds a CBB license to operate as a Retail Islamic bank and it
carries out permitted investment activities pursuant to that licence.
Fund Management Team
Hussain Ebrahim Al-Banna
Senior Dealer, Treasury & Investments, Bahrain Islamic Bank B.S.C.
Mr Al-Banna has more than 8 years of experience as a dealer in treasury and investments. Mr. AlBanna started his banking career with BNP Paribas Bank, Bahrain followed by 3 years with the
Bank of Bahrain and Kuwait. During this period, he managed a USD700 million fixed income
portfolio. He joined Bahrain Islamic Bank in 2008 and is currently a Senior Dealer on the treasury
desk of Bahrain Islamic Bank. His primary responsibilities include trading in foreign exchange,
money markets and fixed income securities. Mr. Al-Banna holds a Bachelors in Banking and
Finance from the University of Bahrain and a Treasury & Capital Markets Diploma from the BIBF.

IX

The Custodian, Administrator and Registrar


Gulf Custody Company B.S.C.(c), has been appointed as:
(a)

the Custodian of the Fund Assets which will be held directly by the Custodian or through
its agents, sub-custodians, or delegates pursuant to the terms of the Administration,
Custody and Registrar Agreement;

(b)

as the Administrator of the Fund pursuant to the terms of the Administration, Custody
and Registrar Agreement. The Administrator is responsible for the general administration
of the Fund, which includes, amongst other things, arranging the calculation of asset
valuations and fees, and administration of invested cash; and

(c)

as the Registrar of the Fund pursuant to the terms of the Administration, Custody and
Registrar Agreement. The Registrar is responsible for providing registrar services in
relation to the Units, which includes, amongst other things, keeping the register of
Unitholders up to date and dealing with requests for and arranging for the issue, transfer,
allotment, redemption, conversion or purchase of Units.

Gulf Custody Company B.S.C.(c) is a directly owned subsidiary of Gulf Company K.S.C. which is
an independent financial institution catering to conventional and Islamic mutual funds of various
categories from its offices in Kuwait, Bahrain and Oman. It provides a comprehensive and wide
range of high quality and cost effective services to both clients and fund managers covering the
MENA Region markets with a dedication to accuracy, completeness and timeliness.
Gulf Custody Company B.S.C.(c) is an established provider of custody, administration and
registry services to funds and investment portfolios. They are an independent financial institution
catering to conventional and Islamic mutual funds of various categories from their office in
Bahrain and the parent company in Kuwait (Gulf Custody Company K.S.C.). Their clients range
from small start-up funds to large asset managers. Gulf Custody Company B.S.C.(c) deals with
a wide variety of fund categories and structures and is committed to providing quality service to
its clients.
The Custodian and Administrator may appoint a third party to perform any or all of their
respective obligations under the Administration, Custody and Registrar Agreement. Such
appointment is subject to certain conditions which include the Custodian and/or the
Administrator, as may be relevant, having taken all reasonable care, including ensuring that
each third party holds the necessary licences and approvals to, and has the requisite expertise
to, carry out such duties. Notwithstanding any permitted delegation, the Custodian and/or the
Administrator as the case may be, shall remain liable to the Fund Company for all acts and

18

omissions of any such third party it appoints and for the fulfilment and discharge of its
obligations and liabilities under the Administration, Custody and Registrar Agreement.

Summary of Rights of Unitholders


Unitholders have the rights and obligations set out in the Instrument, this Prospectus and other
Transaction Documents. The legal rights of Unitholders are summarised below.
Title to Units
A register of Unitholders is maintained by the Registrar and ownership of Units shall be evidenced
by entries on the register of Unitholders. Certificates will not be issued.
Pro-rata beneficial interest in the Fund Assets
Units shall at all times provide Unitholders with a beneficial interest in the Fund Assets, pro rata to
the number of outstanding Units held by the Unitholder. The Units will rank pari passu in all
respects with each other.

Limited Liability
Units shall only be issued fully paid and the liability of Unitholders is limited to the amount invested
at the time their Units were issued.
Accumulation of Dividend Income
Any income received by the Fund Company, on behalf of the Fund, will be accumulated into the
Fund Assets, increasing the NAV Per Unit, save for where the Fund Manager elects to declare a
dividend. The Fund Company shall seek the prior approval of the CBB to declare and to distribute
any dividend.
Weekly Redemptions
Unitholders are entitled to apply to redeem some or all of their Units on each Dealing Day, save that
each Unit must be held for a minimum period of 30 calendar days.
Voting rights
Unitholders shall not be entitled to vote at meetings of the Fund Company. Unitholders shall be
entitled to vote at meetings of the Unitholders convened in accordance with Schedule 2 of the
Instrument.

XI

The Application Process


Applications will be processed on the Initial Closing Date and thereafter weekly on each Dealing
Day.
In order to apply to invest in the Fund, an Applicant must complete the following steps:
Delivery of Documents
Deliver by hand, courier or facsimile (with original hand delivered or couriered) the following
documents to the Placing Agent at any of its branches:
(a)

a duly completed and executed Subscription Agreement;

(b)

the Customer Information set out in the Subscription Agreement; and

(c)

all additional information and documentation requested by the Placing Agent, Fund
Manager and Administrator to ensure compliance with Anti-Money Laundering and Know
Your Client Regulations.

19

Payment of Aggregate Investment and Subscription Fees


Pay into the Units Fund Account (details below) without deduction, an amount calculated as follows:
The aggregate amount that the Applicant wishes to invest in Units in the Fund (the Aggregate
Investment)
Plus
A Subscription Fee of up to 0.25% of the amount intended to be invested in the Fund (the
Subscription Fee)
Units Funds Account
Investors should note that in order for cleared funds to be received in Bahrain by the specified
payment deadline payment will need to be made into their Bahrain Islamic Bank B.S.C. bank
account for value at least one Business Day prior to the deadline
All subscription monies must originate from an account in the name of the applicant. Payments from
a third party will not be accepted.

XII

The Allotment Process


Acceptance of Applications
The Fund Manager shall have the discretion to accept or reject applications in whole or in part,
provided that the Placing Agent has ensured each applications compliance with Anti-Money
Laundering and Know Your Client Regulations. Prior to being able to accept an application, the
Fund Manager must first have:

to its satisfaction, received all Customer Information together with a duly completed
Subscription Agreement; and

received notification from the Administrator of the deposit of the amount an Applicant is
applying to invest, together with the applicable Subscription Fees into the Units Fund
Account.

Subject to the receipt of the items above, the Fund Manager will have full discretion to accept or
reject applications for Units. Where the Fund Manager accepts an application after a Dealing
Cut-Off (but before the relevant Dealing Day), the application will be processed on the first
Dealing Day following the next Dealing Cut-Off, save that the Fund Manager has the discretion
to process the application on the earlier occurring Dealing Day where it has given prior notice to
the Administrator.
The Registrar shall send acceptance letters to Applicants advising them of whether their
application has been accepted in whole or in part or rejected outright.
Units are issued on a forward-pricing basis. This means that, to the extent that an application is
accepted in whole or in part by the Fund Manager before a Dealing Cut-Off, the Fund Manager
shall procure that Units are issued to the Applicant by reference to the Subscription Price on the
next Dealing Day following that Dealing Cut-Off and will procure the payment of Subscription
Fees relating to issued Units to the Placing Agent(s) to whom such fees are due. Any such
Subscription Fees will be paid to the relevant Placing Agent(s) for their absolute use and benefit
and shall not form part of the Fund Assets.
Fractional Units shall not be issued.
The rights attached to Units are summarised in the section headed Summary of Rights of
Unitholders and are set out in full in the Instrument.
Rejected Applications
To the extent that an application to invest in the Fund is rejected, the Fund Manager shall
ensure that such funds and related Subscription Fees are returned to the Applicant by interbank transfer to the account from which such monies originated, at the risk and expense of the
Applicant, less bank charges and without accounting for profit earned thereon.
20

Fractional Units shall not be issued. All rounding benefits will be retained by the Fund.
Ownership Restrictions
Investors may subscribe for Units provided that legislation or regulations in Bahrain and/or in
their country of citizenship, residence, domicile, or incorporation permit them to do so.
Minimum Applications
Applicants are required to apply to invest not less than 25,000 units at the time of their first
investment in the Fund and not less than 1,000 units at the time of any future investment.
However, the Fund Manager may, at its discretion, accept subscriptions below these thresholds
provided always that the minimum initial investment shall at no time be less than 25,000 units.
Minimum Holding Period
Each Unit must be held for the Minimum Holding Period and Redemption is not permitted during
the Minimum Holding Period.

XIII

Redemptions
The Redemption Process
Applications for Redemptions may only be made after the expiry of the Minimum Holding Period
by lodging a Redemption Notice with the Fund Manager. Applications for Redemption are
subject to the acceptance of the Fund Manager (acting on behalf of the Fund Company).
Applications for Redemption or subscription must be received by the Placing Agent by Dealing
Cut-Off.
Redemptions will be processed weekly on each Dealing Day, provided that the Fund Manager
has accepted, in whole or in part, a Redemption Notice before the most recently occurring
Dealing Cut-Off.
Redemption Proceeds will be valued at NAV on the relevant Dealing Day.

A detailed description of the Redemption process is set out below.


The total number of units redeemed on any given Redemption date will not exceed 10% of all
the Units in the Fund at that Redemption date.
The Fund Manager or the Administrator may require the signature of the Unitholder on the
relevant Redemption Notice to be independently verified to its satisfaction. The Fund will not
pay Redemption Proceeds to any third party.
To the extent that a Redemption Notice is accepted in whole or in part by the Fund Manager
before a Dealing Cut-Off, the Fund Manager shall procure that Units are redeemed by reference
to the NAV at market close on the next Dealing Day.
Redemption Notices will be irrevocable except in the event of a suspension of Redemptions.
Further, the Fund Manager reserves the right to refuse Redemption payment to a Unitholder if it
suspects or is advised that the payment of any Redemption Proceeds to such Unitholder might
result in a breach or violation of any applicable Anti-Money Laundering and Know Your Client
Regulations or other laws or regulations by any person in any relevant jurisdiction, or such
refusal is considered necessary or appropriate to ensure the compliance by the Administrator
with any such laws or regulations in any relevant jurisdiction. No party shall be liable to the
Unitholder for any loss suffered by the Unitholder as a result of the refusal to pay or delay of
payment of Redemption Proceeds as a result of that party seeking to comply with Anti-Money
Laundering and Know Your Client Regulations.

21

Redemption Proceeds
The Redemption Proceeds for each redeemed Unit will be the NAV Per Unit at market close on
the Dealing Day following the first Dealing Cut-Off after the Redemption Notice has been
accepted by the Fund Manager, save as adjusted by the mechanism described below.
Further, the Fund Manager may arrange for a revaluation of Units by the Administrator if it
considers that the NAV per Unit calculated at market close on any relevant Dealing Day does
not accurately reflect the true value of the Units.
Redemption Fees
A Unitholder will not pay a redemption fee for redeeming its Units.
Minimum Holding Period
Each Unit must be held for the Minimum Holding Period and Redemption is not permitted during
the Minimum Holding Period.
Minimum Holding Amount
Any Redemption request that will reduce the NAV of a Unitholders holding in the Fund to below
the Minimum Holding Amount will be deemed to be a request to redeem the Unitholders entire
holding in the Fund. Any such request will be considered and processed after the Minimum
Holding Period has expired.
Payment of Redemption Proceeds
Redemption Proceeds shall normally be paid to Unitholders within 3 Business Days of the
relevant Dealing Day.
Redemption Proceeds will be paid in USD rounded to the nearest cent. Redemption Proceeds
will be paid by telegraphic transfer to the Unitholder's nominated Bahrain Islamic Bank B.S.C.
bank account under the Unitholders name. The Fund Manager may instruct the Administrator at
the request of Unitholder to pay Redemption Proceeds in another currency at the expense and
risk of the Unitholder.
Redemption Notices sent by Facsimile
Redemption Notices may be submitted to the Fund Manager by facsimile provided originals
follow promptly. Unitholders are reminded that if they choose to send a Redemption Notice by
facsimile, they bear the risk of it not being received. Neither the Directors, the Fund Manager,
nor the Administrator accept any responsibility for any loss resulting from the non-receipt or
illegibility of any Redemption Notice sent by facsimile or for any loss caused in respect of any
action taken as a consequence of such facsimile instructions believed in good faith to have
originated from properly authorised persons.
Suspension of Redemptions and Payment of Redemption Proceeds
Due to any possible adverse economic, political or regulatory conditions or currency
fluctuations, the Directors reserve the right to suspend the Redemption of Units in exceptional
circumstances where, in the reasonable judgement of the Directors, Redemption of Units at
such times as such conditions prevail would materially and adversely affect and prejudice the
interests of continuing Unitholders. The Directors may withhold Redemption Proceeds from
persons whose Units have been redeemed prior to such suspension until after the suspension is
lifted, such right to be exercised in circumstances where the Directors believe that to make such
payments during the period of suspension would materially and adversely affect and prejudice
the interests of continuing Unitholders.
The right of any Unitholder to require the Redemption of Units will be suspended during any
period when the calculation of the NAV is suspended by the Directors.
The CBB and the Unitholders will be notified by the Fund Manager when the suspension ends.

22

Compulsory Redemption
By giving any Unitholder not less than 5 Business Days' written notice prior to any Dealing Day,
the Fund may redeem the whole or a specified percentage of such Unitholder's Units if the
Directors consider that such Unitholder continuing to hold Units would be detrimental to the
pecuniary, taxation, legal or regulatory interests of the Fund Company, the Fund Manager, the
Administrator, the Registrar or the Custodian or the Unitholders as a whole, or if such holding is
in contravention of any of the prohibitions contained in this Prospectus, the Articles or the
Instrument, or if any of the representations, warranties or statements given by such Unitholder
in its Subscription Agreement were not true or accurate or have ceased to be true or accurate.
Without limiting the foregoing, the Fund may redeem the whole or a specified percentage of a
Unitholders Units if the Directors become aware that a Unitholder is not, or ceases to be, a
Unitholder.

XIV

Calculation of Net Asset Value and NAV Per Unit


Net Asset Value and NAV Per Unit shall be calculated by the Administrator by reference to the
last available traded prices for each Fund Asset on the relevant Dealing Day. For an asset for
which a market price is not available, the value will be based on the estimated realisable value
to be determined by the Administrator in conjunction with the Fund Manager. For other types of
assets, the method of valuation will be determined by the Directors and Administrator of the
Fund.
In calculating the Net Asset Value and the NAV Per Unit, the Administrator shall apply the
following valuation methodology.
The Net Asset Value per Unit will be calculated by the Administrator in conjunction with the
Custodian and in accordance with generally accepted AAOIFI standards using the NAV
Calculation Formula.
The assets of the Fund are separate from the Fund Company. This NAV Calculation Formula
will apply at each subscription and Redemption.
Debts and liabilities to be deducted when calculating NAV by applying the relevant formula set
out in this Prospectus and will include but not be limited to the following:
(a)

management and other fees and expenses of the Fund Manager accrued but not yet
paid;

(b)

any expense allowance for the Funds estimated annual audit, legal and other fees;

(c)

expenses and fees of the Administrator, Custodian and Registrar;

(d)

fees and expenses of the Directors;

(e)

reserves authorised or approved by the Directors or the Fund Manager for duties and
charges or taxes or contingencies (accrued where appropriate on a day-to-day basis);

(f)

other liabilities of the Fund of whatsoever nature (which shall, where appropriate, be
deemed to accrue from day-to-day) including any outstanding payments on any Units
previously redeemed and, as from the record date in respect thereof, any dividends
declared and not paid, and contingent liabilities (if any) being valued in such manner as
the Directors may determine from time to time in any particular case; and

(g)

all costs relating to any litigation in which the Fund or the Fund Company (acting in
relation to the Fund) is involved.

The value of all assets and liabilities denominated in a currency other than the USD will be
converted to the USD at the closing exchange rate on the Dealing Day.
The Net Asset Value of the Fund and the Units will be expressed in USDs and will be calculated
to one hundredth of one USD0.01.

23

Suspension of Valuation
Calculation of the NAV Per Unit and Net Asset Value may be suspended by the Directors on the
occurrence of any one of the following:
(a)

a breakdown in the systems and or means of communication usually employed to


determine the value of the Fund Asset or Subscription Process or Redemption Proceeds
or when for any other reason the value of the Fund Asset or Subscription Price or
Redemption Proceeds cannot be ascertained in a prompt or accurate manner;

(b)

the business operations of the Fund Manager and/or Gulf Custody Company B.S.C.(c) in
respect of the Fund are substantially interrupted or closed as a result of or arising from
pestilence, acts of war, terrorism, insurrection, revolution, civil unrest, riot, strikes, or acts
of God or similar; or

(c)

the Directors resolving to wind-up the Fund.

For the avoidance of doubt, when calculating NAV for the purpose of calculating fees set out
under the section headed Charges, Fees and Expenses related to the Fund, the NAV
Calculation will take into account such fees which have accrued prior to the time of calculation.

XV

Reporting to Unitholders
Unitholders will be sent semi-annual statements of account.
Weekly Reporting
On a weekly basis after the Initial Offering Period, the Fund Manager will make available a Fund
Performance Review Report on the website of the Fund Manager.
During the life of the Fund, the Fund shall submit a semi-annual report which has been reviewed
by the Auditor covering the first six months of the Financial Year to the CBB and to the
Unitholders within 2 months of such period or such other time as agreed between the Fund and
the CBB.
During the life of the Fund, the Fund shall submit an audited annual report to the CBB and to
the Unitholders within 4 months of the end of each Financial Year.
Semi-Annual Regulatory Reporting
During the life of the Fund, the Fund shall submit a semi-annual report which has been reviewed
by the Auditor covering the first six months of the Financial Year to the CBB and to the
Unitholders within 2 months of such period or such other time as agreed between the Fund and
the CBB.
Annual Regulatory Reporting
During the life of the Fund, the Fund shall submit an audited annual report to the CBB and to
the Unitholders within 4 months of the end of each Financial Year.
Accounting Standards
The semi-annual report and the audited annual report shall be prepared in accordance with all
applicable standards issued by AAOIFI.

XVI

Tax and Exchange Control Considerations


The following is a general description of certain tax and currency control laws relating to the
Units in Bahrain, and does not purport to be a comprehensive discussion of the tax treatment of
the Units and the Fund Assets.
This general description of taxation is based upon the tax law in Bahrain and the regulations
thereunder, each as in effect on the date of this Prospectus. This general description is subject
to any subsequent change in law and regulations that may come into effect as of such date.

24

Applicants should consult their own tax advisers as to applicable tax laws and specific tax
consequences of acquiring, owning and disposing of Units.
Foreign exchange controls
There are no currency or exchange control restrictions currently in force under Bahraini law and
the free transfer of currency into and out of Bahrain is permitted, subject to any international
regulations in force from time to time.
Bahrain Taxation
As at the date of this document, there is no corporate tax, income tax, withholding tax or capital
gains tax payable by the Fund under the laws of Bahrain. There are also no currency or
exchange control restrictions in force under the laws of Bahrain and the free transfer of currency
into and out of Bahrain is permitted. In the event that there is any material amendment or
change to the laws of Bahrain in connection with the matter referred to above, the Fund
Company shall notify the Unitholders of such amendment or change in the next report that is
circulated to Unitholders after such amendment or change has come to the attention of the Fund
Company.
Applicants must be aware that as a result of changing law or practice or unfulfilled expectations
as to how the Fund or Unitholders will be regarded by tax authorities in different jurisdictions,
the tax consequences for Applicants may be other than stated. Applicants should consult their
own professional advisers on the possible tax consequences of subscribing for, purchasing,
holding or selling Units under the laws of their countries of citizenship, residence, ordinary
residence or domicile.
Other Jurisdictions
The Fund may be liable to tax on its income or stamp duty on its transactions in jurisdictions
other than Bahrain in which it has income arising to it and in which it conducts transactions.
There may be income taxes, withholding taxes, or capital gains taxes payable by the Fund in
such other jurisdictions. There may also be currency or exchange control restrictions in such
other jurisdictions.
Unitholder Taxation
Applicants should ascertain from their professional advisers the consequences of acquiring,
holding, redeeming, transferring or selling Units under the relevant laws of the jurisdictions to
which they are subject, including any tax consequences and exchange control requirements.

XVII

Actual and Potential Conflicts of Interests


Fund Manager
The Fund Manager shall at all times act in the best interests of the Fund and the Fund
Company, so far as is reasonably practicable having regard to its obligations to other third
parties.
In accordance with CBB regulation, the Fund Manager shall not:

guarantee, endorse or otherwise become directly or contingently liable for the obligations
or indebtedness of any person, except in accordance with the Prospectus;

acquire any asset which involves the assumption of any liability which is unlimited;

invest in any security in a company or other undertaking, if any director or officer of the
Fund Company (or of any relevant person and its affiliates) individually owns more than
half a per cent of the total nominal amount of all the issued securities of that class; or
collectively the directors or officers of the Fund Company (or of any relevant person and
its affiliates) owns more than 5 per cent of those securities; nor

invest in other collective investment undertakings of Bahrain Islamic Bank B.S.C..

25

The Fund investing in the cash and cash equivalents of the Operator, within the limits
prescribed under the investment policy in this Prospectus, may involve a potential conflict with
the Fund Managers duty to the Fund Company. Other than this investment, the Fund Manager,
nor any associated company of the Fund Manager, will effect any transaction in which the Fund
Manager or an associated company has, directly or indirectly, a material interest or a
relationship of any description with another party, which may involve a potential conflict with the
Fund Managers duty to the Fund Company.
All transactions undertaken by the Fund Manager shall be on an arms length basis with
all parties including the Operator.
The Fund Manager shall not be liable to account to the Fund Company for any profit,
commission or remuneration made or received from any arms length transaction or any
connected transaction. The Management Fee, shall not be abated thereby.
Board of Directors
The Board of Directors will be officers or employees of the Operator. All such relationships will
be disclosed to, and recorded by, the Fund Company. Each Director undertakes that should a
conflict of interest arise as a result of the aforementioned, the Fund Company and Director will
seek to resolve such conflict fairly and in the best interests of the Fund Company and the Fund.
Service Providers
The Administrator, the Registrar and the Custodian will not be devoting their full business efforts
to the activities of the Fund. This may involve a conflict of interest with respect to the
commitment of resources.

XVIII

Risk Factors
No guarantee or representation is made that the Fund will achieve its Investment
Objective or that a Unitholder will not lose all or a substantial portion of its investment.
Investment results may vary substantially on a monthly, quarterly or annual basis and
an investment in the Fund does not constitute a complete investment program.
The value of the Units and the income from such Units may decline as well as rise and
Applicants should carefully review and evaluate the merits and the risks and the other
information contained in this document before making a decision to invest in the Fund.
If you are in any doubt about the contents of this Prospectus you should consult your
stockbroker, bank manager, solicitor, accountant or other independent financial adviser.
The Units have not been registered under the securities laws of any jurisdiction. The
resale or transfer of the Units is restricted as set forth in this Prospectus. There is no
secondary market for the Units, nor is one expected to develop.
The risks set out below are the risks which are considered to be material but are not the
only risks relating to the Fund or an investment in the Fund. There may be additional
material risks that the Directors do not currently consider to be material or of which the
Directors are not aware.
INVESTMENT RISKS
General Risk
There is no assurance that the Investment Objective of the Fund will be achieved. Investors
should be aware that by investing in the Fund, there is no guarantee of any income distribution,
returns or capital appreciation.
Bahrain domiciled Shariah compliant Retail Collective Investment Undertakings are regulated
by the CBB and are subject to regulatory disclosure and reporting requirements.
Legislative and Regulatory Risk
The structure of the issue of the Units is based on Bahrain law and administrative practice in
effect as at the date of this Prospectus. No assurance can be given as to the impact of any

26

possible change to Bahrain law or administrative practice after the date of this Prospectus, nor
can any assurance be given as to whether any such change could adversely affect the ability of
the Fund to make payments to Unitholders.
The legislative framework in some markets where the Fund may invest is only beginning to
develop the concept of legal/formal ownership and of beneficial ownership or interest in debt
instruments. Consequently, the courts in such markets may consider that any nominee or
custodian as registered holder of securities would have full ownership thereof and that a
beneficial owner may have no rights whatsoever in respect thereof.
Economic Risk
Global, regional and national economic conditions may impact on the value of the Units. In a
recessionary environment, a security may need to be sold at a discount to the fair market value
of the security. This in turn could depress the NAV and the growth of the Fund. Generally, all
investments are subject to a degree of economic risk depending on the nature of the
investment instrument, market, sector and other factors.
Inflation Risk
Inflation can erode the real rate of return on an investment i.e. the return received after taking
away inflation. Inflation is one of the major risks to investors over a long term period and
results in uncertainty over the future value of investments.
Conflict of Interest Risk
Investments in the cash and cash equivalent of the Operator may give rise to conflict of interest
risk. The Fund Manager will endeavour to mitigate this risk by undertaking all transactions at an
arms length basis.
SECURITIES RISKS
Default Risk
Investment in Debt Securities may involve a certain degree of default risk with regards to
issuers. Default risk is the risk of loss due to an issuers non or untimely payment of the
investment amount as well as the returns on investment. Such defaults can cause a decline in
the value of the defaulted Debt Securities and impact on the NAV of the Fund.
Counterparty Risk
When the Fund conducts transactions it may be exposed to risks relating to the credit standing
of its counterparties and their ability to fulfil the conditions of the contract that it enters into with
them. The Fund Manager will endeavour to minimise this risk by performing credit research
and analysis to determine the creditworthiness of its counterparty prior to entry into
transactions.
Company Specific Risk
There are many specific risks which apply to individual companies that may affect the growth of
the Fund. Examples include the possible effect on a company of losing a key executive or the
unforeseen entry of a new competitor. As a consequence the price of any issuance by that
company may fall, and subsequently affect the growth of the overall Fund. The Fund Manager
aims to minimise this risk by adhering to the Investment Restrictions.
Currency Risk
The Fund will invest in securities and other assets denominated in a variety of currencies but its
NAV will be quoted in USD. Accordingly, Unitholders may bear the risk of adverse movements
in the USD exchange rate against the currencies in which investments are denominated and
against the Unitholders own base currency.

27

Political Risk
The financial operations of the Fund can be adversely affected by any downturn in general
economic conditions or by world events. Political events and uncertainties can adversely affect
world markets and consequently the Funds ability to earn positive returns for Unitholders.
Non-compliance to Shariah
The Fund and the investments of the Fund are to be approved as Shariah compliant by the
independent Shariah Advisers. None of the Fund Manager or Placing Agent makes any
representation or warranty, express or implied, with respect to the fairness, correctness,
accuracy, reasonableness or completeness of such determination. It should be noted that
differences exist among Islamic scholars and advisers as to the nature of Shariah compliance
and no assurance is given that other Islamic scholars or advisers would determine that the
Fund and its investments are Shariah compliant. In the event that the status of such Shariah
compliance should change then the Fund Manager and Placing Agent accept no liability in
relation to such change but the Fund Manager will inform each Unitholder of such change.
The investments of the Fund are to be Shariah compliant. This means that the investments will
be selected on the basis, inter alia, of religious aspects, and none of the Fund Manager or
Placing Agent make any representation or warranty, express or implied, as to how this
selection process might have a positive or negative impact on the value of the investment or
with respect to the performance of such Shariah compliance strategy.
Applicants should not rely on the pronouncement of the Shariah Advisers on the compliance of
the Fund and the investments with Shariah in deciding whether to become a Unitholder.
Applicants should consult their own Shariah advisors as to whether the Fund and the
investments are compliant with Shariah. By becoming a Unitholder, an Applicant is deemed to
have represented that it is satisfied that the Fund will not contravene Shariah principles.
Furthermore, each Unitholder shall be deemed to have represented that it has not relied on any
representation by the Fund as to the Shariah compliance of the Fund or its investments, and
has independently made (or will make) its own assessment that the Fund is Shariah compliant.
Each Unitholder shall also be deemed to have waived any right to raise any objections or
defenses on the basis that the Fund or any investments are not in compliance with the precepts
and principles of Shariah.
Authentication of Securities and Nomineeship
There may be particular difficulties in establishing the authenticity of securities settled in the
regions in which the Fund may invest.
Accordingly, although the Custodian (or its appropriate sub-custodians) on behalf of the Fund
will endeavour to check that, on its face, any such instrument appears genuine, no
responsibility can be taken for verifying the validity or authenticity of any security instrument.
The legislative framework in some GCC markets is only beginning to develop the concept of
legal/formal ownership and of beneficial ownership or interest in securities. Consequently, the
courts in such markets may consider that any nominee or custodian as registered holder of
securities would have full ownership thereof and that a beneficial owner may have no rights
whatsoever in respect thereof.
Dependence on the Fund Manager
The Fund is dependent on the diligence, skill and network of its Fund Manager and its senior
management and business contacts. They, together with other investment professionals, will
evaluate, negotiate, structure, realise, monitor and service the Funds investments. The
performance of the Fund Manager cannot be guaranteed. Unitholders will not be entitled to
contribute to the management of the Fund and will have no influence on the operations and
decisions of the Fund. Therefore, the success of the Fund is substantially dependent upon the
continued personal efforts of the individuals employed by the Fund Manager who will
exclusively manage the Fund. It cannot be expected that all of the individual employees of the
Fund Manager will continue to be available to the Fund throughout its term. The loss of any
one, some or all of these key personnel or difficulties in attracting and retaining such personnel
could materially adversely affect the Funds performance.

28

Changes in Taxation
Any change in the Funds tax status, or in taxation legislation in any of the GCC countries,
could affect the value of the investments and the Funds ability to achieve its Investment
Objective or alter the post tax returns to Unitholders. Each Unitholder should carefully review
and evaluate its own taxation position by consulting an independent professional adviser.
Exchange Controls
The Fund may from time to time purchase investments that will subject the Fund to exchange
controls or withholding taxes in various jurisdictions. In the event that exchange controls or
withholding taxes are imposed with respect to any of the Funds investments, the effect will
generally reduce the income received by the Fund on its investments. Moreover, there is no
guarantee that appropriate counterparties will be found for foreign exchange transactions or
that suitable rates of exchange will be obtained.
Competitive Environment
The Fund Manager expects that a number of other entities will compete with it to make the
types of investments that it plans to make. Competition for investment in Debt Securities may
have the effect of increasing the price which the Fund will need to pay in order to make a
desired investment. Furthermore, some competitors may be substantially larger and have
greater financial, technical, transaction, execution and marketing capabilities than will be
available to the Fund. Some competitors may have a lower cost of capital and access to
funding sources that are not available to the Fund, which may give rise to competitive
disadvantages for the Fund with respect to investment opportunities. Competitors may also
have existing portfolio companies or other enterprises which, when combined with a potential
investment, may give rise to synergistic benefits for that competitor, enabling it to pay a price
higher than the Fund would be prepared to pay. A failure by the Fund to compete effectively
with other entities operating in this environment may result in the loss of opportunities, which
could have a material adverse effect on the Funds business, results of operations and/or
financial condition.
Liquidity Risk
Securities issued by smaller companies and/or in emerging markets and/or frontier markets
may be traded less frequently than those issued by larger companies or in developed markets;
there is a greater risk that the Fund may have more difficulty valuing such investments and
disposing of them in a timely manner at a reasonable price, and such investments may
therefore have an adverse impact on the performance of the Fund.
FUND RISKS
Limited Track Record
The Fund and the Fund Manager are recently established entities with no track record.
Therefore, the Fund is subject to all of the business risks and uncertainties associated with any
new business enterprise, including the risk that the Fund will not achieve its Investment
Objective and that the value of a Unitholders investment in the Fund could decline
substantially. There can be no assurance that the Fund will be able to achieve any of the
returns referred to in this document. Unitholders will be relying on the ability of the Fund
Manager to identify, negotiate and structure the investments to be made by the Fund.
Regulatory Approvals and Permits
The failure to obtain or to continue to comply with all necessary approvals, licences or permits,
including renewals thereof or modifications thereto, may adversely affect the Funds
performance or the ability of the advisers to perform their services on behalf of the Fund, as
could delays caused in obtaining such consents due to objections from third parties.
Redemption Price
The price at which Units are redeemed will be calculated by reference to unaudited NAV
calculations. To the extent the audited NAV in respect of the year in which such Redemption
takes place differs from such unaudited NAV, continuing Unitholders will bear the economic
risk.

29

Suspension of Redemption Rights


Due to possible adverse economic, political or regulatory condition or currency fluctuations, the
Fund reserves the right to suspend the Redemption of Units where the Fund believes the
conditions would materially and adversely affect and prejudice the interests of continuing
Unitholders. The Fund may withhold payments to persons whose Units have been redeemed
prior to such suspension until after the suspension is lifted, such right to be exercised in
circumstances where the Fund believes that to make such payment during the period of
suspension would materially and adversely affect and prejudice the interest of continuing
Unitholders.
Fees and Expenses
The Fund will incur fees and expenses regardless of whether it is profitable. The Fund must
therefore make significant profits from its investments to avoid depletion or exhaustion of its
assets from such expenses.
Conflicts of Interest
Conflicts of interest exist in the structure and operation of the Fund's business as described in
the section headed Actual and Potential Conflicts of Interest.
The foregoing factors do not purport to be a complete explanation of all the risk factors
involved in investing in the Fund. In particular, the performance of the Fund may be
affected by changes in the market and/or economic conditions and in legal, regulatory
and tax requirements.

XIX

Charges, Fees and Expenses related to the Fund


Establishment Expenses
The Fund will be liable for the costs and expenses associated with the establishment of the
Fund Company and the Fund, issuing the Units and preparing and publishing this Prospectus,
including all legal, advisory, marketing and other costs and expenses incurred in the
establishment of the Fund. The establishment expenses will not exceed USD 150,000.
Under the standards of AAOIFI, the establishment expenses of the Fund need to appear in the
accounts of the Fund when incurred. However, the Board of Directors of the Fund Company
have decided that, it is in the best interests of the Unitholders to amortize the establishment
expenses over a period not less than one operational year of the Fund. Deviating therefore from
the aforementioned AAOIFI standard may result in different NAVs. Where different NAVs do
result, the Auditors will qualify their opinion in this regard in the annual accounts or make
required disclosures depending on the nature and level of materiality of the non-compliance.
The Board of Directors and the Fund Manager believe their will be no material adverse affect on
the Net Asset value of the Fund if there is such non-compliance of such AAOIFI standard by
extending time period for amortizing establishment expenses.
Management Fee
The Fund Manager shall be paid a fee of up to 0.5% per annum of the NAV of the Fund (net of
any applicable tax but gross of the Management Fee), calculated in USDs. This fee shall be
accrued on a weekly basis with reference to the most recently calculated NAV and shall be paid
monthly in arrears by the 5th Business Day of the following month.
Subscription Fees
A Subscription Fee of up to 0.25% of the amount an Applicant invests in the Fund may be levied
by any Placing Agent in its sole discretion.
Where Units are allocated to Applicants, Subscription Fees paid in respect of such Units will
become payable to the Placing Agent. To the extent that an application to invest in the Fund is
rejected, the Fund Manager shall ensure that relevant Subscription Fees are returned to the
Applicant by inter-bank transfer to the account from which such monies originated, at the risk
and expense of the Applicant, less bank charges and without accounting for profit earned
thereon.

30

Custodian and Administration Fees


The Custodian and Administrator will be paid up to 0.15 % per annum of the Funds NAV
subject to an annual minimum fee of USD 28,000 (USD twenty-eight thousand) pursuant to the
Administration, Custody and Registrar Agreement. The Custodian and Administration Fee will
be payable quarterly but accrued on a weekly basis.
Registrar Fee
The Registrar will receive annual fees of USD 3,000 (USD three thousand) for the first 200
Unitholders and USD20 for each Unitholder in excess of 200 per annum pursuant to the
Administration, Custody and Registrar Agreement.
This fee shall accrue and be paid at the same time as the Custodian and Administration Fees.
Shariah Advisers Fees
Each Shariah Adviser will be entitled for BHD 500 in consideration of attending the annual
Shariah Advisers meeting, with additional hourly fees of BD 100 per hour for any additional
meetings may be required subject to maximum of 6 additional hours per year.
Other Expenses of the Fund
The Fund Company shall be responsible to pay for, and shall so far as permitted by the Laws,
reimburse the Fund Manager from the Fund Assets for, reasonable out of pocket expenses
relating to the following:

all expenses of every nature of or incidental to deposits of cash made by the Fund;

any stamp and other duties, taxes, governmental charges, commissions, brokerage,
transfer fees, registration fees and other charges payable in respect of the acquisition,
holding or realisation of any Fund Assets and any foreign exchange transactions carried
out in connection therewith;

all taxes and corporate fees payable by the Fund to any governmental or other authority
or to any agency of such government or authority whether in Bahrain or elsewhere;

the Fund Managers legal and professional expenses incurred in relation to the
negotiation, preparation and settling of the Fund Management Agreement and the proper
performance of their duties thereunder and all legal and professional expenses incurred
or to be incurred in the preparation of any documents amending the provisions of such
agreements or establishing the Fund or the Fund Company;

all audit fees of the Fund Assets and legal expenses in connection with the Fund Assets;

all expenses incurred in connection with the calculation of the value of the Net Asset
Value and NAV Per Unit;

all expenses of and incidental to producing, printing and posting or otherwise despatching
the yearly and half yearly report and accounts of the Fund and any report of the
Directors, Fund Manager and/or auditors therewith;

profit on and charges and expenses incurred by the Fund Manager in arranging, and
arising out of, all external financings obtained by the Fund;

all expenses paid by the Fund Manager towards directors and officers insurance or
professional indemnity insurance that is obtained for the benefit of the directors, officers
and employees of the Fund Manager;

all charges for postage, telephone and faxing incurred by the Fund Manager in the proper
performance of its duties;

31

all other expenses payable to the Fund Manager by the Fund (pursuant to the Prospectus
or otherwise) but so that the liability of the Fund is limited to expenses authorised to be
paid out of the assets of the Fund by the Laws; and

all expenses associated with the provision and maintenance of the office facilities.

Without prejudice to the above, the Fund Manager shall bear all day-to-day expenses incurred
by it in the carrying out of its duties under the Fund Management Agreement.

XX

Material Contracts
Any material amendment to a Material Contract including the changing of any service provider
to the Fund Company shall only be made with the prior approval of the CBB and notification to
each Unitholder.
The Fund Company and the Fund Manager have entered into the following contracts which are
or may be material to Applicants:
(a)

A Fund Management Agreement between the Fund Company and the Fund Manager
pursuant to which the Fund Company has appointed the Fund Manager as discretionary
fund manager of the Fund Assets, with the authority to manage the Fund Assets in
accordance with the terms of this Prospectus. The Fund Management Agreement
contains detailed provisions relating to the responsibilities of the Fund Manager.

(b)

A Placing Agreement between the Fund Company and the Placing Agent pursuant to
which the Placing Agent has been appointed by the Fund Company as its agent to
promote, market, offer and/or seek subscriptions for the Units.

(c)

An Administrator Custody and Registrar Agreement between the Fund Company, the
Fund Manager and Gulf Custody Company B.S.C.(c) pursuant to which:

(d)

(i)

the Administrator has been appointed to act as the Funds Administrator to provide
administrative services to the Fund Company. The role and responsibilities of the
Administrator are set out in the Administrator, Custody and Registrar Agreement;

(ii)

the Custodian has been appointed to act as the Fund's custodian. The roles and
responsibilities of the Custodian are set out in the Administrator, Custody and
Registrar Agreement; and

(iii)

the Registrar has been appointed to act as Registrar and to provide registry
services to the Fund Company. The role and responsibilities of the Registrar are
set out in the Administrator, Custody and Registrar Agreement.

An Auditor Letter of Engagement between the Fund Company and KPMG Fakhro who
have been appointed as auditor to the Fund and the Fund Company.

General Information on Material Contracts


The appointment of the Funds service providers, including the Fund Manager, the
Administrator, the Registrar, the Custodian and the Auditor will not be terminated or termination
will not come into effect without prior approval of the CBB.
Save for each of the material contracts described above, neither the Fund Company nor the
Fund Manager has entered into any contracts which are or may be material to Applicants.
All Material Contracts referred to in this Prospectus shall be available for inspection at the
offices of the Operator of the Fund Manager at the following address:
Bahrain Islamic Bank B.S.C.
Al Salam Tower
Diplomatic Area
Manama
Kingdom of Bahrain

32

XXI

General Information

Approval from the CBB will be sought prior to any change in the Investment Policy, the
Prospectus, any Material Contract, any change of the Operators identity or the identities
of any of the Directors of the Fund Company, any merger, division or termination of the
Fund, or any other issues which may affect the Unitholders. Unitholders will be informed
within 14 Business Days of any such change.

The Fund Company is not engaged in any litigation or arbitration and no litigation,
arbitration or claim is known to the Directors to be pending or threatened against it.

As at the date of this Prospectus, the Fund Company has no loan capital (including term
loans) outstanding or created but un-issued, nor any outstanding mortgages, charges or
other borrowings or indebtedness in the nature of borrowing, including bank overdrafts
and liabilities under acceptances or acceptance credits, hire purchase commitments,
guarantees or other contingent liabilities.

The Directors have stated that the Fund Company has been incorporated and registered
in Bahrain and that at the date of this Prospectus the Fund Company has not
commenced business and no accounts have been made up and no dividends have been
declared.

Copies of the Prospectus, the Material Contracts, the Instrument, the Articles and the
financial statements are available for inspection by investors who are recipients of this
Prospectus without charge, during normal business hours at the registered office of the
Fund Company.

The Fund Company is not and does not intend to be registered or licensed in any
jurisdiction or with any supervisory or regulatory authority outside Bahrain.

This Prospectus, the Subscription Agreement, the Placing Agreement, and the Fund
Management Agreement are to be governed by and construed in accordance with the
laws of Bahrain save to the extent these conflict with the rules and principles of Shariah,
when the latter shall prevail and any dispute in relation to these documents shall be
finally determined by arbitration administered by the Bahrain Chamber for Dispute
Resolution (BCDR-AAA) in accordance with its Arbitration Rules.

The Administration, Custody and Registrar Agreement referred to as a Material Contract


is to be governed by and construed in accordance with the laws of Bahrain save to the
extent these conflict with the rules and principles of Shariah, when the latter shall prevail
and any dispute in relation to this document shall be finally determined by exclusive
jurisdiction of the courts of the Kingdom of Bahrain.

33

XXII

Form of Instrument
The following is the form of Instrument entered into by the Fund Company to create the
Units under the laws of Bahrain.
THIS INSTRUMENT is made this_________day______________2012
By BisB MMF Company B.S.C.(c) (the Fund Company) whose registered office is Al Salam
Tower, Diplomatic Area, Manama, Kingdom of Bahrain.
WHEREAS the Fund Company has by a resolution of its shareholders passed on the date
hereof, created as of such date, a nominal amount of up to [] Units in the BisB Money Market
Fund (the Fund), as unsubordinated obligations of the Fund Company to be constituted as
hereinafter provided; and
WHEREAS the principal purpose of the Fund is to invest Fund Assets subject to the Investment
Guidelines and Restrictions and in accordance with the Investment Policy as set out in the
Prospectus, manage, restructure and supervise such Fund Assets and engage in such other
activities incidental or ancillary thereto as the Fund Company deems necessary or advisable.
Such principal purpose shall not be amended or altered without the consent of the Unitholders.
NOW THIS INSTRUMENT WITNESSETH and the Fund Company HEREBY DECLARES as
follows:

Interpretation
Capitalised terms in this Instrument shall be given the meaning assigned to them in the
Prospectus issued by the Fund Company in respect of the Fund and dated [] 2012, unless the
context otherwise requires.

Terms and Conditions

2.1

Each of the Units represents an undivided beneficial ownership interest in the Fund Assets held
on trust by the Fund Company for the holders of such Units. Unitholders are entitled to the
benefit of, are bound by, and are deemed to have notice of, all of the provisions of the
Transaction Documents applicable to them.

2.2

The Units, the Unitholders, (as may be registered from time to time) the Fund and the Fund
Company will be subject to and bound by the Subscription Agreement, the Prospectus and the
Transaction Documents.

2.3

Units will be issued during the Initial Offering Period at a Subscription Price of USD1 per Unit, at
NAV per Unit thereafter.

2.4

The rights of each Unitholder in respect of Units held by it will rank pari-passu with all other
Unitholders equally and rateably without discrimination or preference.

2.5

Dates and periods of time are according to the Gregorian calendar.

2.6

This Instrument and the Units shall be governed by and construed in accordance with the laws
of Bahrain and disputes in respect thereof shall be finally determined by arbitration administered
by the Bahrain Chamber for Dispute Resolution (BCDR-AAA) in accordance with its Arbitration
Rules.

2.7

The Fund and the Fund Company shall be under no obligation to distribute or repay any amount
to any Unitholder, unless at the time of each such distribution or repayment, all liabilities of the
Fund and the Fund Company to persons or entities other than Unitholders shall have been paid
or, in the good faith determination of the Fund Company, there shall remain in the Fund Assets
sufficient liquid assets to pay such liabilities.

2.8

The Unitholders shall have no personal obligation for the debts, liabilities, or obligations of the
Fund or the Fund Company, except as provided in this Instrument or in any applicable Laws. A

34

Unitholder shall be liable only to pay the Subscription Price and Subscription Fee (if any) for
each Unit purchased. The Fund Company shall otherwise be fully responsible for all of the
debts, liabilities and obligations of the Fund, although this liability shall be limited to its share
capital and the assets held by it on behalf of the Fund.

IN WITNESS whereof this Instrument has been entered into the day and year first above
written.

SIGNED

for and on behalf of

BisB MMF Company B.S.C.(c)

in the presence of:

35

XXIII

Form of Redemption Notice


To:
Bahrain Islamic Bank B.S.C.
Al Salam Tower
Diplomatic Area
Manama
Kingdom of Bahrain

I/We refer to the Subscription Agreement and Prospectus issued in relation to the BisB Money
Market Fund (the Fund). Terms defined in the Prospectus issued in respect of the Fund and
dated ________________2012 shall have the same meaning where used in this Redemption
Notice.

REDEMPTION
I/We give you notice that we request that the following Redemption should be made in respect
of the Fund and the Units set out below:
No. of Units: _____________________________________________________
I/We understand that any redemption request that will reduce my/our holding in the Fund to
below 1,000 units will be deemed to be a request to redeem my/our entire holding in the Fund.
Any such request will only be considered and processed after the Minimum Holding Period has
expired (30 calendar days).

PAYMENT DETAILS
I/We request you to transfer the Redemption Proceeds to my/our bank account with Bahrain
Islamic Bank B.S.C. as below:

Unitholder Account Name: _________________________________________


Unitholder Account Number: _______________________________________

I/We confirm that the terms and conditions of our subscription do not permit any third party
payments and that we are the only beneficiary of the account stated as above.
If this Redemption Notice is submitted by facsimile we acknowledge that it is done at our risk of
it not being received as well as us bearing the responsibility for any loss resulting from the nonreceipt or illegibility of any Redemption Notice sent by facsimile or for any loss caused in
respect of any action taken as a consequence of such facsimile instructions believed in good
faith to have originated from properly authorised persons.
Where bank account details above are other than that notified to the Fund Manager at the time
of subscription, we undertake to provide independent verification of the signature as set out
below, if so requested by the Fund Manager.
I/We acknowledge that this Redemption Notice is subject to the acceptance by the Fund
Manager and the terms of the Prospectus and the Transaction Documents.

36

The undersigned has executed this Redemption Form as of the date written above.
Signature of Unitholder

Signature of Joint Unitholder

_________________________________

____________________________________
(If Applicable)

Name of Unitholder
Name of Joint Unitholder,
____________________________________
Title
____________________________________
(Not applicable in case of Individuals)

____________________________________
(If Applicable )

R.I.M. No: ______________________________________________________


Placing Agent / Accepted By: ______________________________________
Signature Verified By: ____________________________________________
Checked By: ____________________________________________________
Branch: ________________________________________________________

37

Schedule 1
Conditions of the Units
Part I
1

Register

1.1

A Register of Unitholders (the Register) will be kept by the Fund Company and a copy held by
the Registrar and the Fund Manager, both as appointed by the Fund Company from time to
time and there shall be entered in such Register:
(a)

the names and addresses of the Unitholders;

(b)

the number of Units held by each Unitholder;

(c)

the date upon which the name of each such Unitholder is entered in the Register in
respect of the Units standing in his name;

(d)

the serial number comprised in each Unit issued (if any);

(e)

the date on which any transfer is registered and the name and address of the
transferee; and

(f)

the date on which any Redemption is processed.

1.2

Any change of the name or address of any Unitholder shall forthwith be notified to the Fund
Company and thereupon the Register shall be updated accordingly.

1.3

Except as required by the Laws and subject to the terms set out in the Prospectus, the Fund
Company will recognise each Unitholder as the absolute owner of the Units in respect of which
he is registered and every Unitholder will be recognised by the Fund Company as entitled to
his Units free from any equity, set-off or counter-claim on the part of the Fund Company
against the original, or any intermediate holder of such Units.

1.4

The Fund Company shall not be bound to take notice or see to execution of any trust whether
express, implied or constructive, to which any Unit may be subject.

1.5

A receipt duly given in accordance with the provisions of this Instrument, for any monies
payable in respect of any Unit or the payment by cheque or warrant sent by post pursuant to
Condition 12, shall be a good discharge to the Fund Company notwithstanding any notice it
may have, whether express or otherwise, of the right, title, interest or claim of any other
person to, or in such Unit or monies. No notice of any trust, whether express, implied or
constructive, shall be entered in the Register in respect of any Unit.

Units
Each Unit shall be in registered form.

Transfer of Units

3.1

Subject to the Conditions of this Instrument, Unitholders may transfer their Units (the Sale
Units) subject to receiving the prior written consent of the Fund Company acting in its sole
discretion.

3.2

Notwithstanding the foregoing, transfers to US Persons are prohibited, and the Fund Company
may in its sole discretion refuse to accept any transfers. Prior to the registration of any transfer
the Directors may require from a proposed transferee or transferor such documentation,
certifications, notifications, agreements, warranties or legal opinions of duly qualified counsel
as they may require and such other information as the Directors may consider appropriate to

38

ensure the proposed Unitholder or transferee would be entitled to hold Units and that all
applicable laws will be or would have been complied with.
3.3

Unitholders wishing to transfer their Units to third parties must serve a notice of transfer to the
Fund Company and the Registrar in the form required by the Fund Company.

3.4

The transferring Unitholder shall bear all costs and expenses arising in connection with any
such transfer to be considered by the Fund Company, including (without limitation) reasonable
legal fees arising in relation thereto.

3.5

Transfers of fractions of Units will not be permitted.

3.6

Any new Unitholder shall be bound by all of the provisions of this Instrument and, as a
condition of giving its consent to any transfer to be made in accordance with the provisions of
this Condition 3, the Fund Company may require the proposed Unitholder to acknowledge its
assumption (in whole or in part) of the obligations of the transferring Unitholder by entering
into a deed of adherence and/or novation in a form satisfactory to the Fund Company. Neither
the Fund nor the Fund Company shall incur any liability for allocations and distributions made
in good faith to the transferring Unitholder until the written instrument of transfer has been
received by the Fund and recorded in the Register and the effective date of the transfer has
passed.

3.7

The Fund Company shall have power to impose such restrictions and conditions as it
considers necessary (including, without limitation, delivery of any certificates or other
documents by any transferor or transferee) for the purpose of ensuring that none of the Units
of the Fund are acquired, beneficially owned or held by any Unitholder in breach of any law or
requirement of any country or governmental authority, by a person who by virtue of any such
law is not qualified to hold such Units or by any person whose holding of those Units might in
the opinion of the Directors cause or be likely to cause a pecuniary or tax disadvantage to the
Fund or any Unitholder.

Redemption

4.1

Unitholders will be entitled to request that the Fund Company redeem some or all of the Units
held by them in the Fund in accordance with the terms of the Prospectus.

4.2

By giving any Unitholder not less than 3 Business Days' written notice prior to any Dealing
Day, the Fund may redeem the whole or a specified percentage of such Unitholder's Units if
the Directors consider that such Unitholder continuing to hold Units would be detrimental to
the pecuniary, taxation, legal or regulatory interests of the Fund Company, the Fund Manager,
the Administrator, the Registrar or the Custodian or the Unitholders as a whole, or if such
holding is in contravention of any of the prohibitions contained in this Prospectus, the Articles
or the Instrument, or if any of the representations, warranties or statements given by such
Unitholder in its Subscription Agreement were not true or accurate or have ceased to be true
or accurate.

4.3

Any costs incurred in implementing such compulsory redemptions shall be deducted from the
relevant Redemption Proceeds.

Term

5.1

The Fund is an open-ended fund with no fixed term.

5.2

The term of the Fund shall commence on the next Business Day following the Initial Closing
Date.

5.3

The Fund may be terminated at the request of the CBB.

39

Income Distribution

6.1

During the life of the Fund, no income will be distributed (save for where the Fund Manager
elects to declare a dividend) and any income shall be reinvested in the Fund.

6.2

Subject to the provisions of the Laws, the declaration of the Directors as to the amount of the
net realised capital gains of the Fund shall be conclusive.

6.3

No income payable in respect of a Unit shall bear profit against the Fund.

6.4

On termination of the Fund, the Net Asset Value of the outstanding Units will be distributed as
soon as possible after accounting for the expenses and charges in relation to the winding up
of the Fund. It is possible that at the termination of the Fund, despite the Fund Manager
having used its reasonable endeavours to realise Fund Assets, that some Fund Assets may
remain unrealised. The Fund Company will effect the distribution of such unrealised Fund
Assets in specie. Distributions in specie may also be made to the Fund Manager in payment
of the fees contemplated in the Fund Management Agreement.

6.5

The Fund Company in general meeting or the Directors may by resolution specify that any
distribution, allotment or issue to Unitholders shall be paid or made to the persons registered
as the holders of Units at the close of business on a particular date, notwithstanding that it
may be a date before or after that on which the resolution is passed, and thereupon the
distribution, allotment or issue shall be paid or made to the holders of Units in accordance with
their respective holdings registered on that date.

6.6

Distributions in specie of unrealised investments shall be made at or as soon as practicable


following termination of the Fund and shall be made so that each Unitholder and the Fund
Manager shall receive a proportionate amount of the whole of each class of investments
available for distribution. If this method of distribution is for any reason impracticable, those
persons shall receive a proportionate amount of each class of unrealised investments
available for distribution, together with a balancing payment in cash.

6.7

If a distribution in specie is made under this Condition 6, the Fund Company shall take
reasonable steps to procure that as soon as practicable after that distribution, legal title to the
unrealised investments to which a Unitholder or the Fund Manager, as the case may be, is
entitled is duly transferred. The costs of such transfers shall, where possible, be borne out of
the proceeds derived from the disposition of other Fund Assets.

Management and Administration

7.1

Except as otherwise expressly provided herein or by law, the Fund Company shall have
exclusive responsibility for the management and control of the activities and affairs of the Fund
and shall have the power and authority to do all things necessary to carry out the purpose and
objectives of the Fund.

7.2

Without prejudice to the generality of the foregoing, the Fund Company shall have full power
and authority on behalf of the Fund and with the power to bind the Fund or any special
purpose vehicle or joint venture of the Fund and without prior consultation with any of the
Unitholders, to:
(a)

make investments consistent with the purpose of the Fund;

(b)

sell all or any part of a Fund Asset, whether for cash or other securities and on such
reasonable terms as the Fund Company shall determine to be appropriate;

(c)

cause the Fund Company to pay all expenses, debts and obligations of the Fund;

(d)

engage such employees, agents, lawyers, accountants, custodians, brokers, investment


and financial advisers and consultants as is reasonably necessary or advisable in
relation to the affairs of the Fund and, without limiting the authority herein, to appoint a
fund manager, administrator, custodian, registrar and placing agent on terms described
in the Transaction Documents or otherwise as directed by a resolution passed at a
40

meeting of Unitholders, and the members of the Board of Directors shall be indemnified
out of the assets of the Fund for any loss suffered as a result of the actions of such
appointees;
(e)

authorise the Custodian to open, maintain and close bank accounts and custodian
accounts for the Fund in any jurisdiction and to draw cheques and other orders for the
payment of monies;

(f)

enter into agreements with any and all persons, entities and governmental agencies
with respect to the financing and operating of the Funds business upon such terms that
the Fund Company deems appropriate;

(g)

commence or defend any litigation relating to the Fund or to any of the Fund Assets;

(h)

do all acts it deems necessary or appropriate to further the Funds business or for the
protection and preservation of the Fund Assets;

(i)

determine the appropriate accounting method or methods to be used by the Fund


Company in accordance with AAOIFI standards;

(j)

cause the Fund Company to enter into transactions in which the Fund Manager or
affiliates have, directly or indirectly, a material interest and which may involve a potential
conflict with the Fund Managers duty to the Fund Company including, but not limited to,
transactions which involve the purchase or sale of any property or securities to or from
the Fund Company, and transactions in which (i) services will be rendered for or by the
Fund Manager, or (ii) fees or commissions will be received by the Fund Manager or its
affiliates from the Fund Company; and

(k)

enter into, make and perform such contracts, agreements and other undertakings and to
do all such other acts as it may deem necessary and advisable for or as may be
incidental to the conduct of the business of the Fund and the Fund Company.

7.3

The Fund Company shall take all actions which may be necessary or appropriate for the
continuation of the Funds valid existence as a Shariah compliant retail collective investment
undertaking under the laws and regulations of Bahrain and of each other jurisdiction in which
such existence is necessary to protect the limited liability of the Unitholders or to enable the
Fund to conduct the business in which it is engaged.

Indemnification
The Directors of the Fund Company and its officers, employees and any other agent of the
Fund Company shall be indemnified out of the Fund Assets against claims, liabilities, costs
and expenses, including reasonable legal fees, incurred by them by reason of their activities
on behalf of the Fund, except where arising as a consequence of their breach of the terms of
any agreement under which they are appointed, gross negligence, fraud or wilful default.

Fund Companys Obligations

9.1

Fund Companys Obligations


The Fund Company covenants that, among other things, for so long as any Unit is
outstanding, it shall not (except, in all cases, as contemplated in the Transaction Documents):
(a)

sell, transfer, assign, participate, exchange or otherwise dispose of, or pledge,


mortgage, hypothecate or otherwise encumber (by security interest, lien (statutory or
otherwise), preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever or otherwise) or permit such to occur or suffer such to
exist, any part of its interests in any of the Fund Assets;

(b)

use the proceeds of the issue of the Units for any purpose other than as set out in the
Prospectus;

41

10

(c)

have any subsidiaries;

(d)

redeem any of its shares or pay any dividend or make any other distribution to its

(e)

olders;

(f)

put to its directors or shareholders any resolution for or appoint any liquidator for its
winding up or any resolution for the commencement of any other bankruptcy or
insolvency proceeding with respect to it unless the Fund is terminated and all
distributions are made; or

(g)

enter into any contract, transaction, amendment, obligation or engage in any business
or activity other than:
(i)

the acquisition, ownership, management and disposal of the Fund Assets as


provided in the Transaction Documents; and

(ii)

such other matters which are incidental thereto.

Dissolution
The Fund Company reserves the right to terminate the Fund at any time without penalty to any
party involved in the following events, and after obtaining the CBBs approval, in the event of:
(i) cancellation of the Funds registration with the CBB; or (ii) withdrawal of the Fund Managers
licence from the CBB, or its dissolution, or (iii) the occurrence of any other unavoidable
circumstances preventing the Fund from maintaining or implementing its Investment Policy.
Under Bahrain Law, termination of the Fund requires notification to the CBB and that
reasonable notice be given to Unitholders. The Directors will endeavour to give Unitholders
three (3) months prior notice of termination.
The death, bankruptcy or incapacity of a Unitholder will not terminate the Fund or in any way
affect its continuity.
Upon liquidation of the Fund, the Fund Company shall wind up the affairs of the Fund and
proceed within a reasonable period of time to sell or otherwise liquidate the assets of the Fund
and, after paying or making due provision by the setting up of reserves for all liabilities to
creditors of the Fund, to distribute the Fund Assets among the Unitholders in accordance with
the provisions for making of distributions set forth herein. The valuation of the Fund Assets
shall be done on the date of termination of the Fund in accordance with the Funds past
practice.

11

Amendments
Amendment to this Instrument shall only have effect if passed at a meeting of Unitholders in
accordance with the provisions of the Second Schedule to this Instrument.
Any amendments to the Investment Policy, the Material Contracts and other changes which
are deemed as material by the Fund Manager will be subject to Unitholder approval in
accordance with the provisions of the Second Schedule to this Instrument.

12
12.1

Notices and Communications


A notice or other communication given hereunder (a Notice) shall be:
(a)

in writing;

(b)

in the English language; and

42

(c)

sent by the Permitted Method (as defined below) to the Notified Address (as defined
below).

The Permitted Method means any of the methods set out in the first column below, the
second column sets out the date on which a notice given by a Permitted Method shall be
deemed to be given (provided the notice is properly addressed and sent in full to the Notified
Address):
(1) Permitted Method

(2) Date on which Notice deemed given

Personal delivery

When delivered to the Notified Address

Pre-paid airmail

Six Business Days after posting

Facsimile transmission

On completion of transmission and receipt of a valid


transmission receipt

Email

On despatch of the Notice from the senders out-box

12.2 The Notified Addresses of each Unitholder shall be as notified to the Fund Company by the
relevant Unitholder. The Notified Addresses of each of the Fund Company, the Fund
Manager, the Administrator, the Registrar and the Custodian unless otherwise notified to the
Unitholders, are as set out below:
Name of party

Address

Facsimile
number

Email Address

Marked for the


attention of:

Fund Company

Al Salam Tower

+973 17532872

nader.albastaki
@bisb.com

Nader Albastaki

Diplomatic Area
BisB MMF
Company
B.S.C.(c)

Manama

Fund Manager

Al Salam Tower

Placing Agent

Diplomatic Area

Khairunnesa
Fakhroo

Kingdom of
Bahrain

Bahrain Islamic
Bank B.S.C.

Manama

Administrator,
Custodian &
Registrar

2nd Floor Gajria


Building,
Building 452A,
Road 1010
Block 410
Sanabis,

Gulf Custody
Company
B.S.C.(c)

khairunnesa.fak
hroo@bisb.com

+97317532872

nader.albastaki
@bisb.com
khairunnesa.fak
hroo@bisb.com

Nader Albastaki
Khairunnesa
Fakhroo

Bahrain

+973 17382555

malhoori@gulfc
ustody.com

Mohammed AlHoori
Huma Muzaffar

hraja@gulfcusto
dy.com

Kingdom of
Bahrain

43

Schedule 2
Meetings of Unitholders
1

The Directors may, with prior notification to the CBB and other concerned authorities, at any
time convene a meeting of the Unitholders at such place as the Directors shall determine, for
the following purposes:
(a) to sanction any modification or compromise of the rights of the Unitholders against the
Fund proposed or agreed to by the Fund Company, whether such rights arise under
this Instrument the Prospectus, the Subscription Agreement, the Articles or otherwise;
and
(b) to assent to any modification of the provisions of this Instrument (including this
Schedule) proposed or agreed to by the Fund Company.

At least fifteen Business Days notice (exclusive of the day on which the notice is served or
deemed to be served and of the day of the meeting for which the notice is given) of every
meeting shall be given to the Unitholders. The notice shall specify the place, day and hour of
the meeting and the general nature of the business to be transacted. The accidental omission
to give notice to, or the non-receipt of notice by, any of the Unitholders shall not invalidate the
proceedings at any meeting.

The quorum for a general meeting of Unitholders shall be the attendance in person or by
proxy of Unitholders who together hold more than two thirds of the issued and unredeemed
Units. If the quorum provided for in the preceding paragraph shall not be obtained the
Unitholders may be summoned for another meeting to be held within thirty calendar days
following the date of the first meeting. The said second meeting shall be valid irrespective of
the number of the issued Units held by the Unitholders present.

The person nominated in writing by the Fund Company shall preside at every meeting as
Chairman and, if no such person is nominated (or if at any meeting the person nominated
shall not be present within 15 minutes after the time appointed for holding the meeting), the
Unitholders present shall choose one of their member to be Chairman. Any Director and the
Auditors and legal advisers of the Fund and Fund Company and any other person authorised
in that behalf by the Fund Company may attend any meeting.

The Chairman may with the consent of any meeting at which a quorum is present (and shall if
so directed by the meeting) adjourn the meeting from time to time and from place to place, but
no business shall be transacted at any adjourned meeting, except business which might
lawfully have been transacted at the meeting from which the adjournment took place.

At any meeting a resolution put to the vote of the meeting shall be decided on a poll of all
those Unitholders present at such a meeting. Each Unitholder will be entitled to one vote per
Unit held. A resolution of the general meeting shall only be valid if Unitholders representing
more than two thirds of the outstanding Units approve it.

Unitholders shall be entitled to appoint a proxy to represent them at Unitholders meetings and
to vote on their behalf. The instrument appointing a proxy shall be in writing under the hand of
the appointer, or of his attorney, duly authorised in writing or, if the appointer is a corporation,
either under the seal or under the hand of an officer or attorney so authorised.

A person appointed to act as a proxy need not be a Unitholder.

An instrument of proxy shall be in any form which the Directors shall approve. A proxy shall
be deemed to include the right to demand or join in the demanding of a poll. A proxy shall be
valid for any adjournment of the meeting as well as for the meeting to which it relates, and
need not be witnessed and shall be lodged with the Fund Company not less than forty-eight
hours before the meeting, adjourned meeting or poll, as the case may be, and shall be valid
only for the meeting, adjourned meeting or poll referred to therein.
44

10

A vote given in accordance with the terms of an instrument of proxy shall be valid
notwithstanding the previous death or insanity of the principal, or revocation of the proxy, or of
the authority under which the proxy was executed, provided that no notice in writing of such
death, insanity or revocation shall have been received by the Fund Company before the
commencement of the meeting or adjourned meeting at which the proxy is used.

11

Any fund, company or corporation which is a registered holder of any of the Units may by
resolution of its directors, or other governing body, authorise any person to act as its
representative at any meeting of the Unitholders and such representative shall be entitled to
exercise the same powers on behalf of the fund, company, or corporation which he represents
as if he were the registered holder of the Units.

12

Resolutions passed at a meeting of the Unitholders, duly convened and held in accordance
with this Instrument, shall be binding upon all the Unitholders whether or not present at the
meeting, and each of the Unitholders shall be bound to give effect thereto accordingly.

13

Minutes of all resolutions and proceedings at every meeting of the Unitholders shall be made
and duly entered in books to be provided for that purpose by the Fund Company. Any such
minutes, if purporting to be signed by the Chairman of the meeting, shall be conclusive
evidence of the matters therein stated and, until the contrary is proved, every such meeting in
respect of the proceeding of which minutes have been made shall be deemed to have been
duly held and convened and all resolutions passed thereat to have been duly passed.

45

The Fund Company, Fund Manager and Advisers


FUND COMPANY
BisB MMF Company B.S.C.(c)
Al Salam Tower
Diplomatic Area
Manama
Kingdom of Bahrain
FUND MANAGER, OPERATOR AND PLACING AGENT
Bahrain Islamic Bank B.S.C.
Al Salam Tower
Diplomatic Area
Manama
Kingdom of Bahrain
ADMINISTRATOR, CUSTODIAN AND REGISTRAR
Gulf Custody Company B.S.C.(c)
2nd Floor Gajria Building
Building 452A, Road 1010, Block 410
Sanabis
Kingdom of Bahrain
AUDITOR
KPMG Fakhro
P.O. Box 710
12th Floor, Fakhro Tower
Manama
Kingdom of Bahrain
LEGAL ADVISERS
Norton Rose (Middle East) LLP
48th Floor West Tower
Bahrain Financial Harbour
P.O. Box 20437
Manama
Kingdom of Bahrain
As to matters of Bahraini law
ASAR - Al Ruwayeh & Partners
12th Floor, Al Rossais Tower
Diplomatic Area 317, Road No. 1704
Building No. 283
P.O. Box 20517
Manama
Kingdom of Bahrain

46