Ministerial Decision No. 84/2010

On Governance Restrictions and Corporate Discipline Standards

Amending

Ministerial Decision No. 518/2009 dated 29/10/2009

The Minister of Economy and the Chairman of the Board of Directors of the Emirates Securities and Commodities Authority,

Pursuant to the perusal of the provisions of Federal Law No. 8/1984 on Commercial Companies and the amendments thereof; and

The Civil Transaction Law promulgated by virtue of Federal Law No. 5/985; and

Federal Law No. 22/1995 on the Regulation of the Auditing Profession, and the amending Laws thereof; and

Federal Law No. 4/2000 on the UAE Securities and Commodities Authority (SCA) and the amendments thereof; and

Federal Decree No. 18/2009 on the Formation of the UAE Cabinet; and

Cabinet Decision No. 12/2000 on the Regulation for Listing of Securities and Commodities and the amendments thereof; and

Cabinet Decision No. 13/2000 on the Functioning System of the Securities and Commodities Authority and the amendments thereof; and

Cabinet Decision No. 15/194/2006 on the Formation of the Board of Directors of the Securities and Commodities Authority; and

Ministerial Council for Services Decision No. (3/3) of 2007 on the authorization of the Securities and Commodities Authority (SCA) to receive applications for incorporation of public joint stock companies, to complete and supervise all relevant procedures; and

The Authority Board of Directors Decision no. 3 of 2000 on the Regulation for disclosure and transparency and the amendments thereto; and

The Authority Board of Directors Decision no. 7 of 2002 on the Regulation for the Listing of Foreign Companies; and

The Authority Board of Directors Decision no. (43 / R) of 2008 concerning Joint Listing; and

Decision of the Minister of Economy and the Chairman of the Board of Directors of the Authority no. 518 of 2009 on Governance Rules and Corporate Discipline Standards; and

UAE Central Bank Letter no. 13 - 5 / 087 / 2010 dated 22 / 2 / 2010; and

After consultation and coordination with the concerned bodies in the State:

Has issued the following Decision:

Article 1

The provisions of Article 2 of the Decision of the Minister of Economy and the Chairman of the Board of Directors of the Authority no. 518 of 2009 on Governance Rules and Corporate Discipline Standards shall be replaced by the following provisions:

a- The Securities and Commodities Authority shall be charged with the supervision, control and verification of compliance by companies with the rules and provisions set forth in the present Decision.

b- The provisions of the present Decision shall apply to all companies and institutions for which securities have been listed in a securities market in the State and to the members of the boards of directors thereof.

c- The following shall be excluded from the scope of application of the present Decision:

1- Companies and institutions that are wholly owned by the Federal Government or a local government.

2- Banks, financing companies, financial investment companies, money exchange companies, money brokerage companies that are subject to the control of the Central Bank.

3- Foreign Companies listed in a securities market.

Article 2

The provisions of Clause 1 of Article (6 / b) of the Decision mentioned in the preceding article shall be replaced by the following provisions:

1- Continuously make sure of the independency of the independent members. If the Committee finds out that a member has lost the independency conditions, it shall report the issue to the Company's Board of Directors. The Board of Directors shall notify such member of the reasons of his privation of the capacity of independency by registered mail at his address known to the Company.

The member shall reply to the Board of Directors within fifteen days from the date of his notification.

The Board of Directors shall issue a decision to decide whether the member is independent or not during the first meeting following the reply of such member or after expiration of the time limit mentioned in the preceding paragraph without reply.

If losing said capacity by such member is not intended to result in breaching the minimum number of the independent members in the Board of Directors, this matter shall be taken into consideration upon the formation of the committees.

Without prejudice to the provisions of Article 102 of the Commercial Companies Law , in the event that the Board's Decision of lack of reasons or justifications for the independency of such member is intended to affect the minimum number of independent members in the Board, the Board of Directors shall appoint an independent member to replace the aforesaid member, provided that the General Assembly of the is instantly notified of such appointment during its first meeting to decide upon the adoption of the Board of Directors' Decision.

Article 3

Clause 5 of Article (10) of the Decision on Governance Rules and Corporate Discipline Standards shall be abrogated.

Article 4

The provisions of Clause 5 of Article 12 of the Decision mentioned in the first article shall be replaced by the following provisions:

"The Company shall announce the opening of nominations for the membership of the board of directors by virtue of an announcement to be published in two daily newspapers one of which at least shall be issued in Arabic. The announcement shall indicate that the Company will, at least two weeks prior to the general assembly meeting, publish the nominees' names and details related to the nomination on the Company's bulletin board, website or by any other means approved by the Authority. The Company shall also provide the Authority with a list of the nominees' names.

Nominations for the membership of the Board of Directors shall remain open for at least one month from the date of the announcement.

Each shareholder who meets nomination conditions according to the Law and the Company's articles of association may stand for election to the membership of the board of directors by virtue of an application submitted thereby together with a biography thereof and the quality based on which such shareholder is willing to stand for election".

Article 5

The present Decision shall be published in the Official Gazette and shall come into force from the date of issuance thereof.

Issued in Abu Dhabi

On 07/03/2010 AD

Engineer Sultan bin Saeed Al Mansouri

Minister of Economy

The present Decision was published in the Official Gazette issue no. 507 p 145.